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From Briefing.com
Periodicals Wrap-Up for Thursday, September 11th
WALL STREET JOURNAL: A report to be released today by the Senate Permanent Subcommittee on Investigations alleges that over the past decade a number of Wall Street firms, including Morgan Stanley (MS), Lehman Brothers Holdings (LEH), Citigroup (C), and Merrill Lynch (MER) helped foreign hedge fund investors avoid paying billions of taxes in the U.S., the Wall Street Journal reported…Lehman Brothers Holdings CEO Richard Fuld is hopeful that yesterday’s moves to shore up the firm’s shaky finances will put the firm back on solid footing. One longtime friend offered insight as to what it has been like for the Lehman chairman and CEO, according to the Wall Street Journal: “To have to tear down some of the businesses and discharge a number of the people and jettison the things he has built over the years is a terrible blow,” says George Ball, head of Sanders Morris Harris Group. “But the market has changed. And while that isn’t Dick’s fault, he has, as a result, been a step slow in carrying out things that the market says he has to.”…FINANCIAL TIMES: In a process that could generate bids of nearly $1.5B, the Financial Times reports that First Reserve, an energy-focused private equity firm, is soliciting bids for Brand Energy (BEI) and has accepted first-round bids for the scaffolding provider, people closer to the sale process said…CNET: According to a source familiar with the plans, CNet reports that Microsoft (MSFT) and Research in Motion (RIMM) will announce today a search partnership. Under alleged terms of the deal, BlackBerry customers will be able to use Microsoft Live Search as their search engine of choice and MLS will be an option on RIM’s mobile portal…
Asian Markets Wrap-Up for Thursday, September 11
Stocks dropped sharply in most Asian countries, due to concerns about banks’ losses and reduced global economic growth. JAPAN: The Nikkei 225 sank 1.98% to 12,102.50. Brokerage firm Nomura Holdings (NMR) lost 5.9%, and Shinko Securities fell 6.6%. Mizuho Financial (MFG), a bank, declined 5.3%. A number of manufacturing companies sank, with Mitsubishi Heavy Industries (MHVYF) dropping 5.5%, Sumitomo Heavy Industries (SOHVF) retreating 5.3%, and Mazda (MZDAF) tumbling 10%. CHINA: Commodity companies and financials led stocks downward. The CSI 300 Index sank 3.32% to 2,072.13. China Merchants Bank tumbled 8.9%, Industrial & Commercial Bank of China fell 4.7%, and China Construction Bank dropped 3.2%. Meanwhile, Zijin Mining (ZIJMF) lost 4.7% and Shandong Gold Mining Co., dropped 4.2%. AROUND ASIA: South Korea’s KRX 100 fell 1.76%, while Indonesia’s Jakarta Composite Index lost 0.79%, and Taiwan’s Taiex dropped 3.19%…Taiwan announced a $5.6B spending and tax cut stimulus package.
Bush administration may look to bring Fannie, Freddie on to budget-Bloomberg
According to the White House budget office and the U.S. Treasury Department, the Bush administration is considering how to include the $5.2T in debt from Fannie Mae (FNM) and Freddie Mac (FRE) into the federal budget. Should the inclusion occur, this would not necessarily “translate into an explicit government backing” for the $3.5T of mortgage guarantees and $1.7T in unsecured debt.
Morgan Stanley to increase its growth in China-WSJ
Market slowdown or not Morgan Stanley (MS) is picking up its pace for business growth in China, according to the Wall Street Journal. Says Wei Sun Christianson, CEO of the firm’s China operation: “In the long run, we do believe China is going to be unstoppable; not only that, it will be unimaginable in terms of the pace of growth.”
U.S. declines to provide Israel aid that could help it attack Iran-Haaretz
The U.S. has refused Israeli requests for a large number of “bunker-buster” bombs, and refueling planes over the past few months, because the American government is concerned that Israel would use the equipment to attack Iran, according to the Israeli newspaper Haaretz.. The U.S. has also refused to grant Israel permission to utilize an air corridor to Iran because it is concerned about an Israeli attack on the Islamic Republic. If the U.S. does not grant these Israeli requests, it will be very difficult for Israel to attack Iran, Haaretz believes.
U.S. equity futures continue to point to a lower open
U.S. equity futures continue to point to a lower open. Concerns over the woes in the financial sector, global economic slowdowns and a hurricane approaching the Gulf of Mexico are some of the reasons why the markets are expected to open down. The mood on Wall Street is also somber as it marks the seventh anniversary of the 9/11 tragedy. The Commerce Department released its trade balance report which showed a deficit of -62.2B versus an expected -58.0B. The Labor Department released its weekly report on jobless claims and it showed that initial jobless claims were 445,000 versus an expected 444,000.
Potash prices firming, raising 2009 EPS estimates for potash producers@MLCO
Merrill said potash supplies have tightened further with the strike at Potash Corp and that Canadian producer supplier are at all-time record lows, which should lead to price increases in the fall. Additionally, the firm expects China to settle its 2009 contract at $900/mf cft with Canadian and Russian producers, which could prove low. The firm has raised 2009 EPS estimates for Potash producers.
AMAG Pharmaceuticals-AMAG: Remain positive on ferumoxytol approval@NEED
Following management presentations at conferences, Needham remains positively inclined towards ferumoxytol’s chances for FDA approval in October. The firm reiterates a Buy rating with an $80 target.
Intel-INTC: Checks indicate slowing PC demand@JMPS JMP Securities lowered their EPS estimate for Intel’s 2008 to $1.19 from $1.23 after their checks with Taiwanese manufacturers showed weaker demand in the PC desktop and notebook supply chains. The firm maintained their Market Perform rating.
Baidu.com-BIDU recent weakness a good entry point@SUSQ
Susquehanna reiterates their Positive view and said share weakness provides and good entry point.
Yeah maybe after it shows some support technically…..
Solar estimates lowered to account for the weakening Euro@CSTI
Collins Stewart says the solar modular maker companies derive a high percentage of sales in Euro, so a weakening Euro will negatively impact ASPs and revenue. However, the firm believes hedging strategies will temper the impact on net earnings and EPS. Despite the estimate revisions lower, Collins maintains a positive view on the fundamentals of the solar industry.
Alpha Natural-ANR volatility Elevated; CLF buyout spread suggests risk CLF announced the acquisition of ANR on July 16. ANR stockholders will receive 0.95 CLF common shares and $22.23 in cash. ANR closed at $65.91. CLF closed at $71.96. ANR October option implied volatility of 97 is above its 26-week average of 70 according to Track Data, suggesting larger price movement.
MasterCard-MA weakness an overreaction, earnings outlook is bullish@RHCO
Suntrust said investors have overreacted to concerns regarding a global economic slowdown and the impact on MA. The analyst said MA has a bullish earnings outlook and that signficant EPS upside will drive upside.
Follow-up: LEH downgraded to Neutral from Buy@GSCO
Goldman downgraded LEH citing uncertainty regarding the company’s future initiatives. Target to $7 from $22.
Goldman Sachs-GS estimates lowered again following Lehman results@DBAB
Deutsche Bank lowered their estimates for GS again following Lehman’s (LEH) results to reflect negative marks on principal investments, weak capital markets, and less hedge fund activity. Deutsche lowered their Q3 estimate to $1.60 from $2.40 and maintains a Hold rating on the stock.
SunPower-SPWR: Maintain Buy rating from PG&E’s solar PV purchase@DBAB
Deutsche Bank believes PG&E’s purchase power from SunPower and OptiSolar is an endorsement of solar PV as a cost competitive renewable energy source at a utility scale. The firm thinks SPWR is one of the few companies that can open new markets for solar PV.
GTX Inc.-GTXI: Expect positive data that will increase chance for approval@WCHV
Wachovia expects GTX to report positive data on its Acapodene treatment on September 16. The firm thinks the data will raise the chances that the treatment will be approved and they maintained their Outperform rating.
Jim Cramer’s “Mad Money”
Cramer said its never been harder to buy anything commodity related. That’s because these stocks are completely under the control of large hedge funds. With the end of the quarter nearing and fund redemptions on the rise, Cramer said there’s a rush to get out of the commodity stocks like he’s never seen before. Cramer still contended that the commodity stocks have fallen far greater than that of their underlying commodities. Foster Wheeler (FWLT), he noted, has $10 a share in cash, and trades at just 6x its earnings. Cramer said until worldwide demand increases, or some of the smaller commodity companies get takeover bids, there will be no end in site for just how low these companies will trade. In the wake of the surprise positive preannouncement from Fedex (FDX), Cramer said now is the time to revisit the restaurant stocks. As oil prices continue to fall, Cramer expects upside surprises from the largest and strongest restaurant chains such as Darden Restaurants (DRI). he said the company has lowered guidance so far that it sets the stage for it to “under-promise” and “over-deliver.” Cramer said Darden has many things playing in its favor, including falling raw costs and cheaper gas prices. He also mentioned the company’s 2.6% dividend yield and stock buyback programs as added reasons to own the stock. Cramer talked with Andrew Littlefair, president and CEO of Clean Energy Fuels (CLNE), which he feels is amidst a multi-year move as natural gas becomes a serious contender for our country’s alternative fuel needs. Cramer again recommended Clean Energy as his No. 1 speculative natural gas pick. SUDDEN DEATH: (Bullish) FMC. (Bearish) WFR; SSW. LIGHTNING ROUND: (Bullish) RIMM; WB; USB; CHFC; TIVO. (Bearish) VLO; NCC.
Fast Money market recap- Jeff likes a gold short, Guy ikes CELG, Karen likes SeaDrill Ltd, Pete likes KR as a buy.
Macke Owns (WMT), (MSFT), (UUP); Adami Owns (AGU), (BTU), (C), (GS), (INTC), (MSFT), (NUE); Najarian Owns (AAPL) And (AAPL) Collar; Najarian Owns (KR) Calls; Najarian Owns (RIMM) Call Spread, (XLE) Call Spread; Najarian Owns (XLF) Collar; Najarian Owns (LEH) Put Spreads; Najarian Owns (MS) And Is Short (MS) Calls; Finerman Owns (GS); Finerman’s Firm Owns (MSFT), (TSO), (VLO), (AEO); Finerman’s Firm Is Short (BAC), (WFC), (XLF), (IYR), (IJR), (MDY), (SPY), (IWM), (KSS); Finerman’s Firm Owns (DNA) Calls, (IRF) Calls; Finerman’s Firm Owns Shares Of SeaDrill Limited.
LEH is tanking again and the worst finanicals are not getting any support from buyers…..AIG, LEH, MER, WM are all on the ropes and are getting pressed on. The LEH drop in unreal. I am short most of these financials and will be taking profits. Solars look weak and vulnerable and shippers. Hurricane Ike is moving through and causing some angst. I’m keeping nimble taking quick trades and managing my longer term portfolio which is majorly short. This week has been busy and very historic. Rememberance to those lives lost in 9/11, we miss you….we love you.
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