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From Briefing.com
Periodicals Wrap-Up for Wednesday, August 27th
WALL STREET JOURNAL: The Wall Street Journal reported that ConocoPhillips (COP) is expected to sell for $800M the rest of its 600 company-owned gasoline stations to PetroSun West LLC…FINANCIAL TIMES: Lehman Brothers’ (LEH) headquarters in New York City may be worth more than $1.3B, according to the Financial Times. Lehman paid $700M for the 38 story building in 2001. The firm is not believed to be interested in selling the building, but it may look to sell parts of its $40B commercial real estate portfolio…British mining company Rio Tinto (RTP) is looking to pursue joint ventures around the world with Chinese state-owned aluminum company Chinalco, Rio said yesterday. The Financial Times reported that Rio is also interested in using its relationship with Chinalco to increase its presence in China…CHARLOTTE OBSERVER: The Charlotte Observer reported that an agreement with Wachovia (WB) that would give more severance to former Golden West employees at the company is set to expire on October 1; however, according to the agreement that outlined Wachovia’s purchase of Golden West, the timing of planned layoffs could reduce this severance…
Asian Markets Wrap-Up for Wednesday, August 27
Asian stocks were higher as about half of the markets there advanced…JAPAN: The Nikkei 225 Stock Average fell 25.75, or 0.2%, to 12,752.96, while the broader Topix index lost 5.66, or 0.5%, to 1,223.69. Mitsubishi Estate Co. (MITEY) was down 2.1% to Y2,375. Sohken sank 12% to Y14,100. Toyota (TM) dropped 2.7% to Y4,770. Honda (HMC) lost 2.2% to Y3,530. Nippon Paper jumped 5.1% to Y311,000. Eisai Co. (ESALY) was up 4% to Y4,170. Astellas Pharma gained 1.7% to Y4,780…AUSTRALIA: The S&P/ASX 200 Index advanced 3.70, or 0.1%, to 5,011.20. Australian Wealth Management tumbled 15 cents, or 9.4%, to A$1.45. Babcock & Brown Infrastructure Group fell 10 cents, or 15%, to 57 cents. Centro Properties Group slid 1.5 cents, or 8.6%, to 16 cents. Macquarie Group plunged A$4.44, or 9.6%, to A$41.61. Woodside Petroleum (WOPEY) added A$1.92, or 3.4%, to A$58.42. Santos (STOSY) was up 81 cents, or 4.4%, to A$19.40…AROUND ASIA: In Hong Kong, the Hang Seng Index rose 408.06, or 1.9%, to 21,464.72. China Mobile (m/quote/CHL">CHL) was up 3.5% to HK$96.55. Jiangxi Copper jumped 9.5% to HK$12.64. PetroChina Co. (PTR) leapt 3.4% to HK$10.30. Dah Chong Hong Holdings increased 17 cents, or 8.4%, to HK$2.20. Ports Design sank HK$2.64, or 12 %, to HK$19.36. Sinofert Holdings gained 28 cents, or 6.4%, to HK$4.68…In South Korea, Hyundai Heavy lost 2.9% to 237,000 won after announcing plans to seek a majority stake in Daewoo Shipbuilding & Marine Engineering Co, as are several other competitors. The state-run Korea Development Bank and Korea Asset Management Corp. is selling its 50.4% share in Daewoo. Daewoo’s shares added 1.9% to 35,350 won.
Lehman says three PE firms remain in bidding for unit-FT
Three private equity firms — Kohlberg Kravis Roberts, Bain Capital and Hellman & Friedman — remain in the running for Lehman’s (LEH) asset management unit, according to Lehman. People familiar with the discussions say Lehman has been gauging interest in the arm and has been soliciting bids from the firms even though it has not reached a final decision on whether it will sell the unit. Lehman is also said to be considering other options to raise cash, including selling a stake in itself or selling its commercial real estate portfolio.
FDIC may need short-term loans from the U.S. Treasury-WSJ
“I would not rule out the possibility that at some point we may need to tap into [short-term] lines of credit with the Treasury for working capital, not to cover our losses, but just for short-term liquidity purposes,” says Sheila Bair, chairman of the Federal Deposit Insurance Corp., although she says that that would not be likely in the “near term.” Any loans would be repaid once a failed bank’s assets were sold. The FDIC also has a $30B credit line with the Treasury which has never been used and she doesn’t expect to do that, according to the Wall Street Journal. On June 30, the FDIC had a “problem” list of 117 banks that could fail, up from 90 at the end of March.
The dollar falls as gold and oil gain
Issues in focus before the open: Durable goods orders for the month of July were surprisingly up 1.3%, above the expected 0.2%. Fannie Mae (FNM) and Freddie Mac (FRE) are both up more than 10% as investors continue to question whether the mortgage companies will require a government bailout. Gold futures rose more than 1% this morning as the dollar fell, boosting dollar denominated gold prices, and as rising crude oil prices increased gold’s appeal as a hedge against inflation. Gold for December delivery rose $10.40, or 1.3%, to $838.50 an ounce in early trading. The dollar index slid 0.7%. Crude oil was trading up 1.7% at $118.26 a barrel on forecasts tropical storm Gustav will strengthen as it enters the Gulf of Mexico this weekend. Weekly mortgage applications rose for the first time in three weeks. The Market Composite Index was 421.6, an increase of 0.5% on a seasonally adjusted basis. The rise came as interest rates fell. The average contract interest rate for 30-year fixed-rate mortgages decreased to 6.44% from 6.47%.
Amylin Pharma-AMLN: Believe risk to Byetta label remains@BOFA
Banc of America believes there remains a risk to the label of Byetta that could result in additional downside to both sales and AMLN’s stock price. Shares remain Buy rated.
First Solar-FSLR: Company is attractive for long-term investors@OPCO
After hosting marketing meetings with First Solar, Oppenheimer thinks it may take six months for the company to justify its valuation, and they maintained their Market Perform rating.
Amylin Pharma-AMLN downgraded to Sell from Hold@Natixis
Illumina-ILMN sell-off a buying opportunity@COWN
The firm said there is little news flow to account for the 5% drop yesterday and that investors appear to be concerned regarding ILNM’s post-equity offering M&A strategy. The firm expects ILMN to pursue smaller tuck-in acquisition and not deploy a material amount of the capital all at once. Shares are Outperform rated.
Google-GOOG October volatility Flat at 39; shares near four-month low
GOOG closed at $474.16. GOOG October option implied volatility of 39 is near its 26-week average according to Track Data, suggesting non-directional price movement.
SINA Corp-SINA was top Chinese portal for Olympic coverage@KBRO
Kaufman Bros. reports that third party data sources indicate that SINA was the top Chinese portal in terms of Olympic coverage, and the firm thinks the data reinforces their belief that SINA has the highest market share among Chinese portals. The firm maintained their Buy rating.
Goldman Sachs-GS estimates lowered on industry weakness@MSCO
Morgan Stanley lowered its GS Q3 EPS estimate to $1.65 from $3.00, below the Street’s $2.54 estimate, citing industry wide weakness. Shares are Overweight rated.
Amylin Pharma-AMLN: Additional safety issues create uncertainty@STFG
After Amylin and Eli Lilly (LLY) announced four additional deaths of patients taking Byetta, Stanford expects a black box warning to be placed on Byetta, and the firm maintained their Hold rating on Amylin.
Amylin Pharma-AMLN: Expect shares to test low $20’s over next few months@SBSH
Citigroup believes the disclosure of four additional deaths will continue to provide bad press for Byetta and LAR. The firm thinks investor expectations for Byetta and LAR are too high and that the stock will test the low $20’s over the next few months. Shares remain Sell rated.
(Important note on how to use this upgrade/downgrade list with analyst comments and news….you must parse out the factual data (Factual data is the most important) from the opinionated data and always take all analyst comments with a grain of salt. Do not follow blindly with their recommendations. Remember that technicals are the most powerful force in short term direction for stock prices due to the law of supply and demand.)
Jim Cramer’s “Mad Money”
Cramer believes the housing market will bottom in Q3′09, based on an analysis of the charts of the seven largest home builders. He said the charts clearly show the top of the market in July, 2005, one year before the “beginning of the end” in July 2006. Given that 12-month lead, Cramer identified the bottom for the homebuilders on July 17 of this year. As a result, Cramer is predicting it will take 309 days before the housing market bottoms. In a new segment called “In The Ring,” Cramer pitted home improvement superstore Lowe’s (LOW) against its biggest rival, Home Depot (HD), to determine which company is the one to own. He compared the just past growth, marketshare, future growth/expansion prospects and each company’s dividend. His final conclusion: buy Lowe’s and sell Home Depot. In a second installment of “In The Ring,” Cramer compared Pfizer (PFE) to bellwether Johnson & Johnson (JNJ) to see who came out on top. He noted that Drugs are not as safe as a Utility in this environment. Cramer said the key things to look for with drug stocks are growth, patent protection/expirations and invention or pipelines. Cramer gave the prize to Johnson & Johnson, and said while Pfizer may look cheap, it isn’t. Next, Cramer talked with Robert Gross, chair/CEO of Monro Muffler (MNRO) to see if the tightening credit markets means people are keeping their cars longer. Gross confirmed Cramer’s theory, as he is seeing an uptick in business as people with older cars look for more expensive repairs and many are investing in increase maintenance to help add fuel economy. Gross also said the the market still looks great for acquisitions, and with nine recent transactions already completed, he still looks for more in the coming months. Cramer thinks Monro is a buy. LIGHTNING ROUND: (Bullish) T; CALM; FCX. (Bearish) F; X; LL.
Fast Money Position recap- First Moves: Guy says go long XOM, Tatro likes FXI, Jon likes AXL.
Adami Owns (AGU), (BTU), (C), (GS), (INTC), (MSFT), (NUE); Tatro Owns (C), (GS); Quint Tatro Is The Principal Of Tatro Capital; Tatro Capital Owns (QQQQ), (SSO), (SPY), (FXI), (XLF), (IHI); Jon Najarian Owns (C), (EXM), (JPM), (UNG); Jon Najarian Owns (AAPL) Calls, (MRVL) Calls, (RMBS) Calls, (EWH) Calls; Jon Najarian Owns (PTEN) Call Spread; Terranova Owns (AAPL), (RIMM), (EOG), (VLO), (YHOO), (NOV), (KOL), (GS), (POT), (SA), (FCX); Terranova Owns (AIG) Puts.
Dog Days of Summer make trading slow. Hurricane Gustav looks to head right for the energy complex and this should drive energy prices and shares higher in the short term. We also have oil inventories at 7:30 am PT. Some of our Gurus have UNG and energy shares already.
Taking it easy and looking for high probability plays. Great Luck and Happytrading!
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