ABBA - Money, Money, Money
Our prayers to all those affected by ABBA’s loss recently from the passing of their drummer, Ola Brunkert.
From briefing.com
The Wall Street Journal writes that the Clear Channel (CCU) buy-out is in trouble.
The FT writes that shares in Merrill Lynch (MER) fell over concerns about CDO write-offs
Reuters writes that Toyota (TM) is unlikely to make 2008 sales targets.
Fannie Mae (NYSE: FNM) raised to Outperform at KBW.
Freddie Mac (NYSE: FRE) raised to Outperform at KBW.
The Inquirer is reporting that AMD (NYSE: AMD) is cutting 5% more of its staff.
This may be an indication that the chip company will miss its numbers for the first quarter.
FDX reports Q3 EPS $1.26 vs. consensus of $1.22
Reports Q3 revenue $9.44B vs. consensus of $9.11B. FDX sees sees Q3 EPS $1.60-$1.80 vs. consensus of $1.95.
From flyonthewall.com Commodities Overview: Sudden Impact
Overnight commodities of all kinds were down sharply across the board. Agricultural (Wheat especially on the back of better weather in Australia), Industrial metals, Energy and Precious Metals. We had noted there was a risk that the Fed’s tip of the hat to inflation might have an adverse impact on commodity prices. To be sure the appreciation of the dollar off its low (up around 4% from that ultimate low as this is written) has had some impact. But we are seeing range moves that are breathtaking and completely unprecedented in some cases. Wheat for example was lock limit down yesterday, Gold looks like it has effectively collapsed, covering a range in price equal to several weeks if not months in a 24 hour period. Crude too has broken its uptrend despite bullish fundamental news. Is this all the result of the dollar? We don’t think so. It is possible that we are seeing a collapse in speculative positions and perhaps some leveraged funds are rapidly unwinding. We may see prices return to equilibrium if that is the case within a few days. If we do not we are into some interesting territory. Inflationary pressures would most certainly ease in the US if commodities reverse their five year climb which would be great news for the US. We would likely however see extreme downward pressure in emerging and developing markets that are inversely correlated to dollar movement and very sensitive to commodity price shifts. We could see extreme downward moves in China (which appears to be the case today), Brazil, Canada, Australia which are all heavily commodity dependent. The dark side to this scenario is if this collapse in commodities is telling us something about broader economic conditions on the demand side. If that is the case, this move down would suggest few asset classes offer a safe haven. That would be bad news for everyone. The cross-currents of expiration are likely also having some impact so next week is going to be important. If this is some technical unwind then prices may quickly revert, though the previous uptrends are snapped so that becomes an unknown. If it is the start of something else, we should know by the end of next week or deeper into April.
GOOG: Estimates & target to $530 from $675@RBCM RBC Capital lowered GOOG’s 2008 EPS estimate to $18.83 from $19.90 and 2009 estimate to $22.13 from $24.76. The firm believes GOOG’s quarter looks light in the US but strong internationally. The firm said GOOG remains a share gainer but does not see any meaningful near-term catalysts and sees downside risk to 2008 Street estimates. Shares are Outperform rated.
IMCL: Expect Erbitux to reaccelerate in next 12-18 months@GSCO
Goldman said IMCL is well positioned to maximize Erbitux’s commercial potential and launch potential in Japan in October 2008.
LEH: Do not see LEH going the way of Bear Stearns@BOFA
Banc of America left a meeting with LEH’s CFO feeling the company’s liquidity issues are under control in the near-term. They maintain a Neutral rating on the stock.
Some traders intentionally spread false rumors about U.K.’s HBOS-U.K. Times
Stock market manipulators in the U.K. yesterday tried to spread a rumor that HBOS (HBOOF), which owns the country’s biggest mortgage lender and the Bank of Scotland, had asked the Bank of England for a multi-billion pound emergency loan. HBOS’s shares plunged more than 17% in 20 minutes, and the Bank of England denied the rumor. Unscrupulous traders may be making money by spreading such rumors, authorities believe, and the U.K.’s Financial Services Authority said it would crack down on these traders.
APC: Recommend buying ahead of the analyst meeting@SBSH
Citigroup believes APC will increases its production guidance at next week’s analyst conference and recommends investors buy the stock ahead of the meeting. They maintain a Buy rating and $72 target.
MF Global warns clients that margin on CFDs is increasing-Telegraph
Yesterday, MF Global (MF), one of London’s leading brokers, informed its clients that the ‘margin’ on contract for differences was increasing on certain stocks and demanded clients put up significantly more cash to cover derivative positions or else close them. Traders believe that this move could result in increase market volatility as many clients will likely be forced to close their positions. According to a senior MF Global salesman, the company has been finding it ‘increasingly difficult to finance highly-leveraged positions.
X upgraded to Buy from Neutral@GSCO
Target to $150 from $128.
GS raising alot of steel sector plays with higher estimates for most.
Mad Money- Cramer likes WY. As a final note, Cramer warned viewers to steer clear of what he now calls the “Four Horsemen of the Apocalypse.” They include: UBS (UBS), Merrill Lynch (MER), CitiGroup (C) and Washington Mutual (WM). LIGHTNING ROUND: (Bullish) MAT; T; AMX; DNA; CAT; RIO; FCX. (Bearish) MVL; VSH; NWL; BX; FIG; ADS; MLNM; CMI; NCC; RAD.
Art Cashin is saying that the focus is switching from the brokers to the hedge funds. Rumors could strat swirling around them now. The deleveraging process could take some time, we need end to the landmines and constant reversals. S&P 500 1295 level is the key support to watch, it has to hold or we are going lower. The market wants to bottom thats the feeling he gets.
The commodites esp. oil seems to be under pressure again, the strengthening dollar and weak economy are a couple reasons. Short USO, UNG, XLE, OIH, FXI, BUCY, JOYG, AMZN, short commodity plays, look for strength for the steel plays with the GS upgrade but if it falters that would be a sign of major weakness and short opportunities, long DUG, long FXP, short financials.
Be nimble today since it is the final day of opex, don’t read to much into today’s market moves but move with the market. Good luck and great trading, remember the zone.
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