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From Briefing.com
Periodicals Wrap-Up for Thursday, August 28th
WALL STREET JOURNAL: Last month Toyota Motor Corp. (TM) cut its 2008 sales forecast, and now it has cut it for next year to 9.7M vehicles from 10.4M, or 2% over 2008, the Wall Street Journal reported…The Wall Street Journal also reported that a growing number of record companies are avoiding Apple’s (AAPL) iTunes, saying it hurts overall sales and has in many ways turned the industry into a singles business…CRAIN’S: According to a notice posted on the Web sight of the Association of Flight Attendants, Crain’s reported that UAL Corp’s (UAUA) United Airlines will cut 1,550 jobs, cutting capacity in response to higher fuel prices…B92: B92 reported that the Pepsi Investments Company, a Pepsi (PEP) subsidiary, has acquired Marbo Produkt, a Serbian chips and snacks manufacturer, according to the Serbian Business Registry website…
Flattery unwanted: Lehman admits using Bernstein research information-WSJ
Lehman Brothers Holdings (LEH) has admitted in a letter to clients that it copied parts of two 2007 research reports written by Sanford C. Bernstein & Co., and has issued an apology, reports the Wall Street Journal. The information was about virtualization technology, used without permission and it didn’t indicate its original source. It was circulated in march 2008.
Asian Markets Wrap-Up for Thursday, August 28
Asian stocks were mixed, as rallies in commodity shares largely offset losses in technology and other sectors. JAPAN: Shares ended mixed, as the Nikkei 225 inched up 0.1%, to 12,768.25, but the broader Topix Index inched down 0.3% to 1,219.53. Real estate companies dropped after the chairman of a major Japanese homebuilder forecast that more property companies would go bankrupt. Real estate company Mitsui Fudosan slumped 3.1%, and developer Sumitomo Realty & Development Co. lost 2.5%. Shipping companies declined, with Mitsui O.S.K. dropping 1.6% and Inui Steamship (INUIF) losing 2.5%. Retail bank Acom (ACUMY) jumped 8.8%, after a newspaper reported that Mitsubishi UFJ Financial Group (MTU) would raise its stake in Acom to 40% from 15%. CHINA: Shares advanced, led by consumer stocks. The CSI 300 Index climbed 0.5%, to 2,335.86. Midea Electric advanced 6.9% after it said its 1H08 profit increased. Gree Electric Appliances, which also reported higher 1H08 profits, added 1%. Spirits maker Kweichow Moutai rose 1%, as the company reported that its 1H08 profit jumped 164%. AROUND ASIA: South Korea’s KRX 100 Index sank 1.35%, while Australia’s S&P/ASX 200 Index advanced 1.10% and Taiwan’s Taiex Index lost 0.67%…Toyota (TM) reduced its 2008 sales growth forecast to 2.1% from 5.6%…China Telecom (CHA) reported that its 1H08 profit dropped 4%.
U.S. equity futures now point to a higher open
U.S. stock futures turned higher after the release of the GDP Q2 figures which were revised up to 3.3%, above the expected 2.7%. Also released was the weekly jobless claims which fell 10,000 to 425,000. The DJIA futures are higher, up 48 points to 11,545, the Nasdaq is up 6.8 points to 1908, and the S&P 500 is up 5.5 points to 1287. Gold futures are also higher this morning for a third session as a weaker dollar spurred demand for gold as an investment alternative, and tensions over Russia triggered buying gold as a safe haven.
Google forced to defeature Android-All Things Digital
In an effort to launch the Android mobile platform before the end of the year, Google (GOOG) has been forced to cut out some of the features originally intended to be a part of it, according to “Digital Daily”. According to the Android Develoeprs Blog, Google will no longer include APIs for Bluetooth and the GTalk instant-messaging service in Android 1.0. Android engineer Nick Pelly commented, saying “…We plain ran out of time.”
Fannie Mae-FNM capital and reserves better than investors perceive@LEHM
Lehman expects FNM to make it through the housing downturn without the need to raise more capital. The firm said FNM’s capital and reserves are better than perceived and that the company should be profitable in late 2010. Shares are Overweight rated. Target to $20 from $46.
Brokers: Q3 estimates lowered for GS, LEH, and MS@KBWI
Keefe Bruyette lowered their Q3 estimates for Goldman Sachs (GS), Lehman (LEH), and Morgan Stanley (MS) to reflect residential mortgage/other asset write-downs, weaker investment banking revenues, and lower trading revenues. The firm lowered LEH’s Q3 estimate to ($3.66) from 26c, GS’s estimate to $2.17 from $4.00, and MS’s estimate to 73c from 78c.
Deere-DE expands plans to increase production of large tractors
Deere & Company said it plans to further expand manufacturing capacity of its large, high- horsepower tractors - adding to a project announced earlier this year for facilities in Waterloo, Iowa. Deere said the investment will help the company meet its expectations for market demand worldwide in coming years. Deere said the new initiative will invest approximately $97 million in areas that are core to the business and offer a competitive advantage, such as the Waterloo foundry, engine, and drive train operations
SunPower-SPWR upgraded to Outperform from Sector Perform@PACS
Pacific Crest upgraded shares as they expect positive data points in the back half of 2008, including strong Q3 results as they believe the company has been successful raising prices. Target $116.
Airlines: Estimates and targets raised@LEHM
Lehman raised estimates for the Airlines based on reduced fuel costs and capacity reductions. The firm raised price targets for the following: Overweight rated DAL ($18 from $8.50), JBLU ($9 from $5.50), NWA ($19 from $10) and UAUA ($26 from $16.50); Equal Weight rated AAI ($4.50 from $4), ALK ($28 from $17), AMR ($22 from $7.50), LCC ($12 from $4); and Underweight rated CAL ($22 from $9.50)
Follow-up: AMLN upgraded to Buy from Neutral@MLCO
Merrill upgraded AMLN based on valuation. Target lowered to $27 from $34.
Energy Conversion-ENER reports Q4 EPS 24c vs. consensus of 16c
Reports Q4 revenue $82.4M vs. consensus of $77.47M.
Energy Conversion-ENER sees Q1 revenue $95M-$98M vs. consensus of $87.86M
Sees FY09 revenue $455M-$485M vs. consensus of $443.06M. Solar product sales for the first quarter are expected to be $89 to $91 million and $430 to $450 million for fiscal 2009. For the first quarter, gross margin is expected to be about 31 percent, and between 33 and 35 percent for the second half of the fiscal year. Restructuring costs are expected to be between $1.7 and $2.0 million for the first quarter and $2.5 to $3.0 million for fiscal 2009. Preproduction costs are expected to be between $1.5 and $1.9 million for the first quarter and between $7.0 and $9.0 million for fiscal 2009.
Sears Holding-SHLD reports Q2 EPS 50c vs. consensus of 33c, including items
Reports Q2 revenue $11.76B vs. consensus of $11.71B. Sears second quarter 2008 results include the positive impact of the reversal of a $62 million ($37 million after tax or 29c per diluted share) reserve because of the overturning of the previously disclosed February 2, 2007 adverse jury verdict relating to the redemption of certain Sears, Roebuck and Co. bonds in 2004. Excluding this item, earnings per diluted share were 21c for the second quarter of fiscal 2008.
(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 told viewers its time to buy J. Crew (JCG). Cramer made his recommendation despite a botched quarter and an abysmal stock performance this year. It’s down 46% since December. He put a 12-month $35 price target on the stock. Cramer said he believes J. Crew’s recent earnings miss was due in large part to problems with the company’s Website. With the overhaul of the Website nearing completion, Cramer said the retailer should regain its footing. Cramer put his support behind CEO Mickey Drexler, who he said is a “stand-out”, and who was once responsible for the turnaround at Gap Stores (GPS) and founded Old Navy. Cramer said J. Crew may still go lower from here, but feels the momentum will swing upward once the 12 analysts who currently rate the company as a hold begin to see the light and upgrade the stock. While the overall retail environment remains bad, with slowing store traffic, Cramer said only Urban Outfitters (URBN), TJ Maxx (TJX) and J. Crew have the ability to buck the trend and head higher. For his “In The Ring” segment, Cramer pitted CVS Caremark (CVS) against Walgreen (WAG), to determine which drugstore giant is the better buy. Cramer said drugstores offer safety and consistency in uncertain markets. Cramer compared the companies growth, same-store-sales, and their growth strategies. In the end, Cramer said Walgreen comes out on top as CVS is complex and exhibiting poor execution. MAD MAIL: Cramer clarified an earlier “Sudden Death” call to sell Banco Santander-Chile (SAN). He said he still likes Santander but he meant to say he recommended selling the European bank Banco Santander (STD). He told a second viewer not to invest in any single home building stock, but instead to invest in a home building index if they feel home builders are on the rise. SUDDEN DEATH: (Bullish) DWSN; BMY; EGN. LIGHTNING ROUND: (Bullish) EMR; CSCO; GTI; VZ; GOOG; CMI. (Bearish) TNH; ABK; ABD.
Fast Money Position Recap- Joe likes EXM long, Guy likes EMC, Tatro likes long SMN, Jon likes NTAP based on recent options action.
Adami Owns (AGU), (BTU), (C), (GS), (INTC), (MSFT), (NUE); Jon Najarian Owns (C), (JPM); Jon Najarian Owns (AAPL) And (AAPL) Calls; Jon Najarian Owns (ALF) Calls, (NTAP) Calls, (RMBS) Calls, (EWH) Calls, (UNG) Calls; Tatro Owns (C); Quint Tatro Is The Principal Of Tatro Capital; Tatro Capital Owns (FXI), (SHLD), (XHB), (XLF), (SMN); Tatro Capital Is Short (MON), (MOS), (POT), (RIMM); Terranova Owns (POT), (NOV), (SA), (GS), (KOL), (EOG), (VLO), (FCX), (RIMM), (AAPL), (X); Terranova Owns (AIG) Puts; Terranova Owns Dec. 2008 RBOB Gasoline Crack Futures.
Futures in positive territory this morning with more range boundness for the market. The market really hasn’t gone anywhere for the past month frustrating some bulls and bears alike. Going into the holiday weekend I don’t expect anything drastic as traders await next week’s return of more traders and investors. What has been working is playing the ranges and market neutral strategies, going long on strong support levels and shorting at strong resistance levels. When this market finally decides to go one way or the other it should be a strong move due to the length of consolidation. All eyes on Hurricane Gustav and energy prices and companies. Pick plays with a high probability of success, have focus and patience, run technicals through support and resistance. Great Luck and Happytrading!
Think Fractally, patterns are present in nature and in the market, both are run on formulas.
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