Submitted By Optiondragon
From Briefing.com
Periodicals Wrap-Up for Wednesday, July 16th
WALL STREET JOURNAL: People familiar with the issue said that European regulators are gearing up to file new antitrust charges against Intel (INTC). The charges, the Wall Street Journal reported, would allege Intel gave major European retailers an incentive not to sell Computers that use Advanced Micro Devices (AMD) chips…NEW YORK TIMES: The New York Times reported that News Corp’s (NWS) New York Post and The Daily News, owned by Mortimer Zuckerman, are exploring a print pact and have been in talks to find ways to combine some business functions of the papers, according to people briefed on the matter…SAN FRANCISCO BUSINESS TIMES: According to sources, the San Francisco Business times reported that Washington Mutual (WM) may be planning more layoffs in September. It is unclear how many employees will be affected and from which departments…BLOOMBERG: In an effort to preserve capital, data compiled by Bloomberg showed that troubled mortgage companies Fannie Mae (FNM) and Freddie Mac (FRE) may cut dividends after more than $11B in combined losses since last year…Three people familiar with the matter said that the SEC subpoenaed Wall Street investment banks including Goldman Sachs (GS), Deutsche Bank (DB) and Merrill Lynch (MER) in its hunt and crack down on suspected manipulation of Bear Stearns and Lehman Brothers (LEH) shares. Bloomberg reported that two of the people said the SEC, which yesterday curtailed short selling in financial stocks, is looking for e-mails and trading records and is also examining whether securities firms have “adequate controls” to deal properly with misconduct…
Wall Street firms subpoenaed by SEC-Bloomberg
Three people familiar with the matter said that the SEC subpoenaed Wall Street investment banks including Goldman Sachs (GS), Deutsche Bank (DB) and Merrill Lynch (MER) in its hunt and crack down on suspected manipulation of Bear Stearns and Lehman Brothers (LEH) shares. Bloomberg reports that two of the people said the SEC, which yesterday curtailed short selling in financial stocks, is looking for e-mails and trading records and is also examining whether securities firms have “adequate controls” to deal properly with misconduct.
Awarding tanker contract to Boeing could hurt America, Northrop CEO warns-FT
There will be “dire consequences” to America’s alliance with Western Europe if the U.S. decides for political reasons not to award a $35B Air Force tanker project to Northrop Grumman (NOC) and its European partner EADS, Northrop Grumman’s CEO warned. Northrop and EADS (EADSF), which are competing with Boeing (BA) for the contract, originally won the deal. However, the U.S. Department of Defense decided to reopen the competition for the deal, after flaws were found in the process used to award the contract to Northrop and EADS.
I say BS to this, that they are spewing, how can using US taxpayer money to create more US jobs be wrong.
NOC is a short idea on a break of $64.46 pivot line.
Toyota to lower its 2008 sales target-NHK
Toyota (TM) said it will reduce its 2008 global sales target by 3.6%, due to high gasoline prices and the weak U.S. economy. The company now hopes to sell 9.5M vehicles this year, compared with its prior target of 9.85M.
Fannie Mae and Freddie Mac could terminate their dividends-Bloomberg
Fannie Mae (FNM) and Freddie Mac (FRE) may eliminate their dividends, Bloomberg predicted after examining data from the companies.
Did Goldman pressure the shares of Lehman Brothers and Bear Stearns?-WSJ
Alan Schwartz, former head of Bear Stearns, and Richard Fuld Jr., who runs Lehman Brothers (LEH), want to know if Goldman Sachs Group (GS) had anything to do with the manipulation of their shares, reports the Wall Street Journal. “You’re not going to like this conversation,” Mr. Fuld apparently told Goldman CEO Lloyd Blankfein. Then he proceeded to say that their was “noise” that Goldman traders spread negative rumors about Lehman. If true, and it affected Lehman share price, it’s illegal..Schwartz supposedly made a similar call. Blankfield denied having any knowledge of alleged manipulation.
Is Lehman Brothers likely to go private?-WSJ
Lehman Brothers Holdings (LEH) shares have been taking a beating but yesterday they were up over 6%. Is the firm going private? Not only is that not likely but a larger bank probably won’t help them out either, according to the Wall Street Journal’s “Heard on the Street”, which gives an admittedly pessimistic look at what either route would take to work. Lehman’s severe problems, especially real estate losses and a possible recapitalization of the firm, make any potential option a difficult move.
Apple iPhone 3G teardown shows production cost at $174.33-iSuppli
According to a teardown analysis as well as examinations by analysts, iSuppli’s preliminary estimate for production costs of Apple’s (AAPL) 8 GB iPhone 3G is $174.33. This is nearly identical to iSuppli’s $173 BOM predicted in its virtual teardown in late June.
Amazon to release Kindle 2.0 this fall-TechCrunch.com
Kindle, an e-reader from Amazon.com (AMZN), will release new, updated models this fall. The e-reader allows easy access to electronic books that can be downloaded and read on a Kindle.
COF: Estimates and target to be updated after 7/17 EPS results@FBRC
The firm believes the company does not have a positive catalyst for credit quality in the N-T to generate any share price appreciation. Despite the stock trading at historically low multiples, credit costs are projected to increase in the 2H08 with further increases in 2009. Target price $38 with Underperform rating reiterated.
MI reports Q2 EPS ($1.52) vs. consensus of ($1.56)
U.S. equity futures continue to point to a lower open; CPI released
U.S. equity futures continue to point to a lower open. The earnings reports that have been released so far have been encouraging but investors remain concerned about the slowdown of the economy and inflation. The consumer price index which was released and showed that prices increased 1.1% during the month of June versus an expected 0.7% gain. When the volatile components of food and energy were taken out of the equation, prices increased 0.3% versus an expected 0.2%. The report had little effect on the futures and they remain slightly lower.
JNJ: Solid results, but see challenges ahead@LEER
After Johnson & Johnson reported higher than expected Q2 EPS, Leerink Swann believes that tight cost controls are increasing the company’s margins. However, the firm believes that the company will be challenged over the next year by the patent expirations of Risperdal and Topamax, as well as a new player in the U.S. DES market. The firm reiterated their Market Perform rating.
SINA: Concerns of a post-Olympic slowdown are overdone@SUSQ
Susquehanna said concerns that the Chinese economy will have a post-Olympic slowdown are overdone and that the Internet sector should continue to have secular growth that overrides macro issues. Shares of SINA are Positive rated.
SPWR: Expect a solid Qtr, concerns overdone@COWN
Cowen expects SPWR to report a solid quarter and to maintain/increase 2008/09 targets. The firm believes concerns regarding Spanish and U.S. market exposure are overdone. Shares are Outperform rated.
NTRS reports Q2 EPS $1.35 ex items vs. consensus of $1.05
Reports Q2 revenue $1.09B vs. consensus of $1.01B. The provision for credit losses was $10.0 million in the current quarter and net charge-offs totaled $4.7 million.
INTC: Solid quarter, but margins were lower than expected@JMPS
After Intel reported results that JMP Securities views as solid, the firm notes that the company’s gross margins were lower than they expected. JMP Securities maintained their Market Perform rating, as they believe the company’s valuation is fair.
First Solar-FSLR announces 2 California solar projects
First Solar, Inc. announced that Southern California Edison has selected First Solar to engineer and supply the PV power plant system for a 2 megawatt project to be installed on the roof of a commercial building in Fontana, CA. This is the first installation in SCE’s plan to install 250 megawatts of solar generating capacity on large commercial rooftops throughout Southern California over the next five years. SCE began installation of this initial project on July 14, 2008, and expects to connect the PV power plant to the grid in September 2008. In March, SCE, with California Governor, Arnold Schwarzenegger, announced the five-year solar PV installation project, which is the largest rooftop solar program ever proposed by a U.S. utility.
RIG: Would continue to buy more shares of the company@OPCO
After Transocean was awarded $3B of contracts from Petrobras (PZE), Oppenheimer states that Transocean is still one of their top picks, due to what they see as its attractive valuation, strong deepwater profile, and strong free cash flow.
RIMM downgraded to Underperform from Hold@NEED
See fair value at $87.
Dry Bulk Shipping: Expect sentiment to stay negative through summer@BOFA
Banc of America expects sentiment surrounding the group to remain negative in the near-term but believes valuations are attractive and thinks vessel demand and freight rates should be strong by the end of the summer. The firm’s favorite ideas are Navios Maritime (NM), Genco (GNK) and TBS International (TBSI).
LEH: View a potential management buyout as unlikely@BERN
Bernstein said the costs of a potential management buyout of LEH would be too high as it would result in extremely high leverage ratio and a likely credit rating downgrade. The firm believes LEH will look to raise more capital instead. Shares are Market Perform rated.
V estimates raised on operating leverage potential@PIPR
Piper raised their estimates for Visa as they believe the company has more operating leverage potential than its guidance suggests. The firm maintains a Neutral rating on the stock due to valuation.
Chicago Bridge & Iron-CBI volatility Elevated into lower guidance & charge
CBI, was trading at $31.39 in after market trading last night, below its close of $36.39. CBI lowered guidance for 2008 and will take a Q2 pretax charge of $317 million on cost over runs associated with two LNG projects in the UK. Goldman Sachs say’s “Lowering rating to Neutral on nagging execution risk.” CBI August option implied volatility of 66 is above its 26-week average of 53 according to Track Data, suggesting larger price movement.
Cleveland Cliffs-CLF & Alpha Natural-ANR host a conference call at 9am on 7/16
Conference call to discuss CLF acquiring all outstanding shares of ANR for about $10B in cash and stock
Alpha Natural-ANR volatility Elevated into CLF $10 billion buyout
CLF will acquire all outstanding shares of ANR in a cash and stock transaction valued at $10 billion. ANR stockholders will receive 0.95 CLF common shares and $22.23 in cash. Based on CLF closing price on July 15, ANR shares would receive $128.12 per share. ANR August option implied volatility of 86 is above its 26-week average of 64 according to Track Data, suggesting larger price movement.
Cleveland Cliffs-CLF and Alpha Natural-ANR announce merger agreement
Cleveland-Cliffs Inc and Alpha Natural Resources, Inc. announced that each company’s Board of Directors has approved a definitive merger agreement under which Cleveland-Cliffs will acquire all outstanding shares of Alpha in a cash and stock transaction valued at approximately $10 billion. Under the terms of the agreement, for each share of Alpha common stock, Alpha stockholders would receive 0.95 Cleveland-Cliffs common shares and $22.23 in cash. Based on Cleveland-Cliffs’ closing stock price on July 15, 2008, Alpha stockholders would receive $128.12 per share, which represents a premium of 35% to Alpha’s closing stock price on July 15, 2008.
S&P 500-SPX: Pivot Points
The following are the pivot points for the S&P 500 (SPX). Pivot High: 1224.585, Pivot Low: 1191.325. These were calculated using the DeMark method. It is generally believed to be bullish when price breaks out above the pivot high or bearish when price breaks down below the pivot low.
Nasdaq 100 Index-NDX: Pivot Points
The following are the pivot points for the Nasdaq 100 Index (NDX). Pivot High: 1844.735, Pivot Low: 1779.715. These were calculated using the DeMark method. It is generally believed to be bullish when price breaks out above the pivot high or bearish when price breaks down below the pivot low.
Dow Jones Industrials Index-DJX: Pivot Points
The following are the pivot points for the Dow Jones Industrials Index (DJX). Pivot High: 11043.105, Pivot Low: 10747.145. These were calculated using the DeMark method. It is generally believed to be bullish when price breaks out above the pivot high or bearish when price breaks down below the pivot low.
MasterCard-MA initiated with a Strong Buy, target $340@BUCK
Visa-V initiated with an Accumulate, target $90@BUCK
Jim Cramer’s “Mad Money”
Cramer said he believes Thursday will be a landmark day for wind. Cramer said wind power is the cheapest form of renewable energy. He said the entire wind power industry could get a boost on Thursday when the Texas Public Utility Commission makes an important ruling that would create eight renewable energy zones in Texas, significantly boosting wind power in the state. Cramer said the decision will likely set the precedent for other states to get behind wind power. Cramer revisited his index of 10 wind power stocks levered to the growth of wind power created on May 28. Since its creation, the “Wind-ex” is down 11.8% along with the overall markets. But Cramer said after Thursday’s expected ruling, the wind story will get better than ever. The “Mad Money” Wind-ex includes Trinity Industries (TRN), Tomas & Betts (TNB), Owens Corning (OC), Clipper Windpower (CRPWF), Kaydon Corp (KDEN), Broadwind Energy (BWND), Woodward Governor (WGOV), MasTec (MTZ), Vestas Wind Systems (VWDRY) and Otter Tail (OTTR). Cramer said the poor performance of the Wind-ex stocks has nothing to do with the wind power business, but rather with the industrial components of all of the companies. He reminded viewers that as wind power accounts for larger portions of their earnings, the other divisions will account for less. He views the current weakness in the stocks as a valid pullback and a buying opportunity. Cramer added Quanta Services (PWR) to the “Mad Money” Wind-Ex. Last mentioned by Cramer on Nov. 15, 2007 at $27.28, and is up 6.3% since that recommendation. He said that Quanta, which builds and maintains energy infrastructure, is poised to take advantage of the coming boom in wind power. According to Cramer, the U.S. will invest $1.5 trillion on energy infrastructure between now and 2030, and Quanta will be a beneficiary. Quanta, which currently has $5.2B of work in its backlog, sports only a $5B marketcap. Cramer said whenever a company’s backlog meets or exceeds its total marketcap, it’s worth a look. Cramer would buy Quanta under $29. Shares of Eaton (ETN), a stock he’s championed in recent weeks, got pounded today after it lowered its annual guidance by 20c. He talked with Sandy Cutler, Eaton’s chairman, president and CEO. Cutler said he lowered the company’s guidance in recognition of a potential global economic slowdown. Cutler said market overreacted. He said he still sees overall strength in Eaton’s global electrical and hydraulics business. Cramer said he’s standing behind Eaton and agreed the declines today were just an over-reaction. LIGHTNING ROUND: (Bullish) FMX; RIG; APA. (Bearish) APP; AER.
Cleveland Cliffs-CLF initiated with a Buy, target $180@KEYB
KeyBanc believes the pullback in CLF shares is an attractive entry point given acceleration of North American Iron Ore pellet contract pricing and increased pellet production into 2009.
Exco Resources-XCO explores possible joint venture opportunies
EXCO Resources, Inc. announced that it has engaged Goldman, Sachs & Co. to explore possible joint venture opportunities with various interested parties to enhance exploitation and development of its East Texas/North Louisiana and Appalachia operating areas.
V & MA: Industry checks support continued growth and margin upside@UBSW
UBS’s checks indicate June volumes remain strong and they remain bullish on V and MA given revenue, margin, and EPS strength, and likely upside. V and MA are Buy rated but the firm prefers V at current levels.
Fast Money position recap: First Moves- Jeff likes ATVID, Guy likes JNJ, Tim likes VIP, Joe likes AMZN.
Macke Owns (USO), (GS), (INTC), (MSFT), (WMT), (ATVID); Adami Owns (AGU), (C), (BTU), (GS), (INTC), (MSFT), (NUE); Seymour Owns (AAPL), (F), (INTC), (MER), (MSFT), (TSO); Seygem Asset Management Owns (EEM), (VIP); Terranova Owns (YHOO), (INTC), (RIMM),(SU), (VLO), (IYT), (XLF), (LUV), (BNI), (CME), (GOOG), (FCX); Terranova Is Short 30 Year U.S. Bond Futures (Sept.); Terranova Owns Dollar Index Futures (Sept.); Terranova Owns (SA).
All eyes on the dollar (UUP) and oil. The buyout of ANR has nearly completed my trade on ANR in my LT portfolio! Traded and owned this name since the low $40’s so I am happy about the long volatile trek up. Now CLF is the stud to watch. The coal names should see some action as well as FSLR and the solar sector (ENER, SPWR) on the news of SC Edison deal. We were just talking about this late in the trading day in our trading room! Specifically about FSLR and SPWR too. Here is the article about the solar land grab going on right now. In our trading room we share info, trade ideas, important facts and articles like these all day and in realtime. Oh and I’ve been discussing the uptick rule removal as a big problem since last year and was the only one to say something about it before everyone else and it took them a year to figure it out….sheeesh! I am going to let the market range out in the morning and then look for opportunities. Pick plays with a high probability of success, run technicals through support and resistance, plan the trade and trade the plan!
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