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From Briefing.com
Periodicals Wrap-Up for Thursday, October 9
WALL STREET JOURNAL: Wal-Mart (WMT) initiated a retail price war, lowering the price of popular toys to $10. Target (TGT) and Amazon.com (AMZN) matched the price cuts… Inside the recent $700B U.S. bailout plan were changes to the tax code which effectively eliminate a “favorite tax-deferral dodge” of hedge funds… According to people familiar with the situation, talks between Citigroup (C), Wells Fargo (WFC) and Wachovia (WB) over the best way to divide Wachovia’s assets were stalled on a few key issues… According to people familiar with the situation, National City (NCC) is in talks with a “number of banks” over the possibility of a sale of the company… BLOOMBERG: Unidentified sources said that Blackrock (BLK) and Pimco have submitted proposals to manage the mortgage-backed securities in the Treasury’s $700B rescue program… HANDELSBLATT: According to an internal email to management, SAP (SAP) is said to be considering radical cost-cutting measures that will examine what missions and acquisitions are absolutely necessary…
Asian Markets Wrap-up for Thursday, October 9
Asian stocks snapped a five-day decline, gaining today after four of the region’s central banks — China, South Korea, Hong Kong and Taiwan — cut interest rates in an effort to limit the economic impact of the current financial crisis. JAPAN: Most stocks rose after the rate cuts. Nomura Holdings rose 5%, Nintendo (NTDOY) rose 13%, its daily limit. Mitsubishi rose 5%. CHINA: China’s benchmark index, the CSI, fell below 2,000 for the first time in three weeks, as energy and steel companies fell on concerns the economic slowdown will cut demand for their products. Coal producer China Shenhua Energy fell -4.2%, steelmaker Baoshan Iron & Steel fell -2.9%, and property developer China Vanke fell -3.9%. OTHER MARKETS: Indonesian stocks were suspended from trading following a 10% drop yesterday. India was closed for a holiday.
National City in talks with ‘number of banks’ over possible sale-WSJ
According to people familiar with the situation, National City (NCC) is in talks with a “number of banks” over the possibility of a sale of the company. Possible buyers include PNC Financial Services Group (PNC) and Bank of Nova Scotia (BNS).
Worst could be over for banks-WSJ
The U.S. financial system’s biggest problem, the lack of borrowing ability, may soon pass, thanks to “a range of commitments by Western governments.” The governments’ determination will likely create a bear market, rather than a financial Armageddon. However, there is still plenty of pain to come for bank stocks.
DryShips-DRYS CEO “sets record straight” on value of new ships
George Economou, Chairman and CEO of DryShips, was interviewed today by Barry D. Parker of BDP1 Consulting. The interview focused on DryShips’ recent strategic expansion with the addition of 9 Capesize drybulk carriers and two Ultra Deep Water drillships.The CEO said-” I would like to clarify a point that might have been overlooked in yesterday’s presentation. DryShips paid the sellers for their equity in these nine Capes with 19.4 million of new shares of DryShips. This is an all stock deal for DryShips, there is no cash consideration to be paid since the sellers including myself got a fixed number of shares, 19.4 million, not cash. The number of shares the seller gets does not adjust with the actual share price at the time of closing. The transaction value that was mentioned in the presentation illustrates purely a theoretical data point and was based on the previous day’s closing price. When the transaction was done, it was at a level about 10% below third party valuations we had received. So if you take into consideration yesterday’s share price, this discount is a lot higher, making the transaction even more attractive for DryShips.If you want to put a price on the deal as of yesterday’s close at $20.88 the transaction value is worth $884 million for all ships, which is a heavy discount to today’s asset prices. Another point to add with respect to the 9 Capes, is that DryShips has minimal further cash outlays and these vessels have already financing in place, therefore there is no need to secure additional financing.”
MSFT estimates cut on lower PC forecasts at Morgan Stanley
Morgan Stanley cut MSFT estimates citing lower PC industry forecasts. Shares are Equal Weight rated. Target to $29 from $33.
Apple reportedly launching first sub-$1000 laptop-Inquisitr
According to a reliable source, some Apple (AAPL) retailers have been given the price list for the company’s new laptop line and it includes an $800 laptop. The price sheets include 12 price points with prices between $800-$3,100 vs. the current 8 price points.
Jobless claims come in higher than forecasted
Stock futures continue to point to a higher open, helped by the positive earnings surprise by IBM (IBM). Asian markets closed higher overseas as several banks joined the rate cutting party. Europe is trading higher as well, as the ECB president hinted that more rate cuts may be occur in the future. U.S. investors received jobless claims data with the report showing a loss of 478k jobs versus the expected loss of 475k jobs. The continuing claims came relatively in-line with expectations at 3.6M. Investors will also receive data later in the day when the EIA natural gas storage change numbers and the wholesale inventory numbers are released.
Priceline.com-PCLN estimates and target lowered at Goldman
Goldman lowered PCLN estimates due to dollar strength and weaker outlook for global travel. The analyst added that PCLN’s valuation reflects earnings weakness. Shares are Buy rated. Target to $100 from $145.
AAPL is not escaping weakening consumer spending, says BMO Capital at BMO Capital
BMO Capital recently visited or spoken with sales reps at Apple and AT&T stores in the U.S. and U.K. The analyst said, for the first time in years, reps are indicating that sales have slowed, especially in CPUs. The firm said there is no indication that iPhone run rates have slowed, but decided to cut their 2009 iPhone forecasts. The firm rates shares Outperform. Target $120.
Research in Motion-RIMM fundamentals remain strong, says Oppenheimer
Oppenheimer believes RIMM’s touch screen Storm enhances the company’s position with improved features, functionality and user experience. They think the product is a game changer and expect sentiment to improve as the company delivers on its strong portfolio. Shares remain Outperform rated.
Google-GOOG downgraded to Hold from Buy at Soleil
Soleil downgraded shares as they believe Google’s cost management may lag revenue weakness and that the falling stock price implies employee defections. The firm lowered their target to $350 from $580.
Steel: AKS, X, & STLD downgraded; CMC upgraded at Goldman
Goldman lowered steel and scrap metal price forecasts due to deteriorating demand. The firm downgraded AKS to Sell from Neutral, X and STLD to Neutral from Buy, and upgraded CMC to Buy from Neutral citing valuation. The firm recommends the Pair Trade of Long NUE and Short AKS.
United Therapeutics-UTHR pullback could be a buying opportunity, says Stanford
Stanford continues to see a 75% chance of success for Oral Remodulin after speaking with two additional FREEDOM-C investigators. The firm thinks the recent share weakness could be a buying opportunity ahead of the trial date due in 3-5 weeks. Shares remain Buy rated
GOOG Q3 results should be solid, says Stanford
Stanford thinks Google’s Q3 results will likely be near consensus as market share gains and volume growth should offset weakened advertising demand. However, the firm lowered their 2009 estimate to $23.85 from $24.70 to reflect the economic slowdown. Shares remain Buy rated with a $430 target.
Art market may soon see problems-WSJ
The “Heard on the Street” column reported that the art market may soon see problems, as it normally lags behind the stock market by six to 18 months. As liquidity problems increase, prices for art will suffer, which will effect auctioneers such as Sotheby’s (BID).
Research in Motion-RIMM positive comments, reiterate Buy at Merrill Lynch
Merrill reiterates their Buy rating on RIMM citing valuation and new product offerings. Target reduced to $80 from $120.
Research in Motion may be vulnerable to a take-over bid-Seeking Alpha
Research In Motion (RIMM) recently had a market capitalization of $83B. But currently, the company’s market cap is down to $32.5B. This would make it hard for the company to “resist an opportunistic takeover offer from the likes of Microsoft (MSFT).” Other possible suitors include Hewlett Packard (HPQ), Nokia (NOK), IBM (IBM) and Google (GOOG), but Microsoft is the most likely, with its resources and desire to expand.
Jim Cramer’s “Mad Money”
Cramer said the worldwide interest rate cuts today should help banks in the short term, but they are far too late and shallow to make any difference for stocks in 2008, and it would still take two years for the markets to recover. He called for several more rate cuts to completely remove the chance of a depression from the table. In the near term, Cramer advised viewers to be cautious and stay in a capital preservation mode. He told them again to sell into any strength in the markets and to continue to raise cash throughout the remainder of 2008. Then, Cramer checked in with Quanta Services (PWR) chair/CEO John Colson. Cramer last recommended Quanta, which he owns for his charitable trust, on July 15 at $29 a share. Since then, the company’s shares have fallen to under $19 a share, and that has Cramer worried. Colson said Quanta has not been affected by the market meltdown, noting its business has been going strong. He said the recent wind tax credit extension passed by Congress will help Quanta. Colson said Quanta’s fundamentals remain strong, and he’s seen no cutbacks or cancellations of any wind power projects. Cramer said Quanta is much better today than it was when he recommended it in July. He attributed the decline in the stock price to nothing more than relentless hedge fund selling. LIGHTNING ROUND: (Bullish) FRO; NAT; DE; NVS; APC; VZ. (Bearish) DRYS; ABB; AIB; EMR; GT; RIG.
Fast Money position recap - Macke Owns (MSFT), (WMT), (BNI), (MCD): Adami Owns (AGU), (BTU), (C), (GS), (INTC), (MSFT), (NUE); Najarian Owns (AAPL) And (AAPL) Puts; Najarian Owns (FCX) Call Spread; Najarian Owns (GS) Call Spread; Najarian Owns (MS), Owns (MS) Puts, Is Short (MS) Calls; Najarian Owns (NOK) And Is Short (NOK) Calls; Najarian Owns (RIMM) Call Spread; Najarian Owns (WB) Calls; Najarian Owns (XLF) Call Spread; Najarian Owns (IWM) Puts; Finerman Owns (GS); Finerman’s Firm Owns (MSFT), (NOK), (DEO), (PM), (MO); Finerman’s Firm Is Short (IYR), (IJR), (MDY), (SPY), (IWM), (COF), (BBT), (USO).
Staying nimble and watching for signs of a tradeable rally soon, we are waaaay oversold and could see a lil bounce back. we are in a mess but our traders in the room have been doing very well…here is one trader Bagger Vance’s recent results (Bagger is a swing trader/position trader). Our group is experienced and highly intelligent and nimble when watching this market, is yours? Check out myhappytrading.com and check out our Trading Room of hundreds of traders sharing ideas and thoughts about the market in realtime.
Oct. 8
Bagger Vance IWM ($55.00) Sold to Close IWTVF Oct 58 put, at $3.60 +58%
Bagger Vance RL ($52.00) Sold to Close RLWK Nov 55 put, at $7.00 +75%
Bagger Vance DIA ($94.00) Sold to Close DAVVR Oct 97 put, at $5.20 +86%
Bagger Vance AMZN ($60.00) Sold to Close ZQNVL Oct 60 put, at $4.50 +55%
Bagger Vance STT ($41.25) Sold to Close STTVH Oct 40 put, at $4.80 +9%
Bagger Vance UBS ($3.50) Sold to Close UBSSW Nov 18 put, at $3.50 +9%
Bagger Vance BAC ($21.00) Sold to Close BACVE Oct 25 put, at $4.00 +95%
Bagger Vance SPY ($113.40) Sold to Close SPYVH Oct 112 put, at $4.25 +42%
Bagger Vance ERTS ($34.50) Sold to Close EZQWH Nov 40 put, at $6.40 +60%
September 29, 2008
Bagger Vance ERTS ($37.00) Sold to Close EZQVG Oct 35 put, at $1.35 +59%
Bagger Vance JNPR ($21.30) Sold to Close JUXVE Oct 25 put, at $4.20 +163%
Bagger Vance BK ($28.00) Sold to Close BKVG Oct 35 put, at $7.20 +129%
Bagger Vance AMZN ($66.00) Sold to Close ZQNVD Oct 73 put, at $8.80 +138%
Bagger Vance HD ($23.00) Sold to Close HDVY Oct 28 put, at $3.00 +36%
Bagger Vance IBM ($113.40) Sold to Close IBMVC Oct 115 put, at $6.20 +88%
Bagger Vance IBM ($113.00) Sold to Close IBMVC Oct 115 put, at $6.20 +68%
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