Posted By optiondragon for myhappytrading.com, a site made by traders for traders, join us for free!
From Briefing.com
Periodicals Wrap-Up for Tuesday, September 23rd
WALL STREET JOURNAL: It took a financial crisis for the Federal Reserve to change its rules and concerns about a shortage of capital at banks influenced its latest move, according to the Wall Street Journal. Now it hopes there will be a greater move to buy into banks by private equity firms, government investment funds and others…A number of smaller investment banks who rely less on being risk takers are expected to survive and prosper, the Wall Street Journal reported. Firms such as Piper Jaffray Cos. (PJC), Raymond James Financial (RJF), Thomas Weisel Partners Group (TWPG), and Jefferies Group (JEF) are some…FINANCIAL TIMES: The Financial Times reported that Washington Mutual (WM) was yesterday under increased pressure from regulators to reach a deal with prospective buyers. If no buyer emerges soon, the Office of Thrift Supervision could push to form a deal that would split the bank between several banks. People familiar said that while talks are continuing with potential buyers, it is unclear whether any intend to make a bid…REUTERS: Bankruptcy expert and investor Wilbur Ross told the Reuters Restructuring Summit that the actions taken by the Fed to stabilize the financial system do not address the “root of the problem” and that a recession could last at least through next year; Wilbur said that a great deal of what happens to the economy will depend on what the new U.S. administration does…
Asian Markets Wrap-Up for Tuesday, September 23
Stocks dropped in a majority of Asian countries, as shares were dragged down by skyrocketing commodity prices and renewed fears about a recession. JAPAN: The Nikkei 225 gained 1.42% to 12,090.59 .Financial shares led the advance on hopes that America’s plan to bail out banks will work. Brokerage Nomura Holdings (NMR) jumped 9.58%, while Mitsubishi UFJ (MTU), a bank, rose 4.2%. Mizuho Financial Group (MFG), another bank, added 2.9%. Honda Motor (HMC) surged 5.1%, while robot manufacturer Fanuc (FANUF) gained 3.6%. CHINA: The CSI 300 Index sank 3.81% to 2,123.48. Airlines lost ground, as China Southern Airlines (ZNH) retreated 5.3%, Air China (AIRYY) declined 4.4%, and China Eastern Airlines (CEA) fell 7.7%. Real estate developer China Vanke (CVKEF) lost 7.6%, and Poly Real Estate Group, another developer, dropped 5.3%. Oil producer PetroChina (PTR) jumped 3.9% after oil prices increased sharply yesterday. Gold mining companies rallied, with Shandong Gold Mining Co. and Zhongjin Gold Corp. both gaining 10%. AROUND ASIA: Hong Kong’s Hang Seng index fell 3.87%, while Australia’s S&P/ASX 200 retreated 1.93%, but South Korea’s KRX 100 gained 1.24%… India’s Tata Motors (TTM), which acquired Jaguar and Land Rover from Ford (F), said the units lost a combined $383M from January to June 1.
The government is ignoring the main problem, Ross says-Reuters
Wilbur Ross, a bankruptcy expert and investor, said that none of the recent moves by the U.S. government to shore up the financial system deal with the root of the problem - the inability of many Americans to make their mortgage payments. Ross predicts that the U.S. economy could be in a recession through 2009.
Government wants Washington Mutual to sell itself-FT
Regulators reportedly pressured Washington Mutual (WM) yesterday to sell itself, inside sources said. The Office of Thrift Supervision was encouraging the bank to sell itself quickly, inside sources said. If no single buyer acquires the bank soon, the regulator may try to engineer a deal that would split the bank into several parts.
U.S. equity futures weaken
U.S. equity futures weakened after a report from CNBC said that today was a “make or break day” for the government’s bailout package. Earlier today Fed Chairman Bernanke and Treasury Secretary Paulson urged Congress to take swift action in approving the rescue package. The hope is the deal will help the financial sector absorb billions of dollars of bad mortgages and other risky assets, and help steer the ailing economy back onto solid ground. Both Bernanke and Paulson are scheduled to testify before law makers this morning beginning at 9:30 am.
Android rumored to have Amazon apps-VentureBeat
VentureBeat reports that they spotted T-Mobile’s HTC-built G1 over the weekend and that it was running an Amazon (AMZN) music and video store application running on it.
Research in Motion-RIMM: Expect strong outlook, but risks loom@PACS
PacCrest’s checks point to disappointing September sell-through, flat with August. PacCrest expects November quarter quarter guidance to top expectations on new product launches, but the firm still sees risks to current sub add trends, ASPs, and higher-than-expected operating expenses.
SEC Chairman Cox speaks on Turmoil in US Credit Markets on 9/23
Chairman Cox appears before the Senate Banking, Housing & Urban Affairs at 9:30am
Google-GOOG: First Android powered mobile phone to be launched Sept. 24@CSTI
Collins Stewart believes that GOOG’s mobile platform Android will fully blossom in about 3 years and will likely see a very fast adoption of mobile Internet usage. They think that by 2011, Android can be a $5B in incremental ad revenue opportunity for Google on global basis. Collins rats GOOG Buy with a $615 target.
AutoZone-AZO Q4 solid, continue to recommend shares@GABE
Gabelli believes AZO posted good Q4 results and that industry fundamentals remain intact. The firm maintains a Buy rating and finds the valuation compelling.
U.S. Banks: Lack of liquidity is damaging consumer, corporate credit@OPCO
Oppenheimer believes that the credit crunch has intensified to such an extent that the U.S. government bailout plan has little chance of improving banks’ fundamentals in the near to medium term. The firm reduced their estimates for Citigroup (C), Banc of America (BAC), JPMorgan (JPM), Wachovia (WB), and Wells Fargo (WFC).
CME Group-CME seems to be benefiting from short sale ban@WCHV
Wachovia thinks that CME’s equity indices are drawing record volumes as a result of the ban on short selling financial stocks. The firm thinks CME may have Q3 EPS of $4 per share if current equity trends continue and they maintained their Outperform rating.
JMP Group-JMP submits request to be removed from short selling list
The company letter follows: Dear Chairman Cox: Please accept this submission as JMP Group Inc’s formal request to be removed from the list of financial firms subject to the prohibition on short selling pursuant to the terms of the Securities and Exchange Commission’s Securities Exchange Act of 1934 Release No. 34-58592, as amended.-Over the past several quarters, the capital markets have been faced with unprecedented challenges. Broad uncertainty has resulted in an extremely high level of volatility in the equity markets, which has been easily observed in the dramatic swings in the share prices of financial stocks. As the financial marketplace undergoes rapid and profound changes, the SEC has had the difficult task of protecting the capital markets. It is JMP Group’s belief that in this tumultuous environment, the SEC should take strong actions against market participants that violate securities law. It is also our belief, however, that restricting the ability of the U.S. capital markets to function freely, through emergency task orders, is unnecessary and can have unintended negative consequences. It is essential for the SEC to work with market participants to ensure that existing regulations against improper short selling and the dissemination of false or misleading information are strictly enforced. However, we do not support the imposition of a temporary freeze on short selling of financial stocks, or any stock that is borrowed and delivered in accordance with existing rules. Short selling is an essential tool that provides liquidity to the capital markets. Short selling is also a fundamental risk management tool that is used by pension funds, endowment funds, non-profit organizations, foundations, and many other sophisticated institutional investors. We believe this extraordinary market environment demands extraordinary action. As such, we are requesting that our stock be taken off the list of publicly traded securities…
SunTrust Banks-STI downgraded to Neutral from Outperform@BARD
Baird downgraded STI citing valuation.
Zions Bancorp-ZION downgraded to Hold from Buy@SBSH
Citigroup downgraded shares on valuation. Target remains $47
Jim Cramer’s “Mad Money”
After advising viewers to sell 20% of their portfolios on Friday, Cramer said it’s time to put that money into gold stocks such as Agnico-Eagle Mines (AEM), Barrick Gold (ABX) or an ETF that mimics the price of gold. Cramer says fundamentals for gold are strong, with worldwide demand for gold still increasing across the globe. Cramer said owning gold makes sense whether the Treasury Secretary Henry Paulson’s financial bailout plan succeeds or fails. If it fails, he said, the financial system will completely freeze up, leaving gold as the only safe harbor. If the Paulson plan does pass Congress, investors need to be concerned about inflation. Cramer welcomed Sen. Kit Bond (R., Missouri) to the show to find out details of the government’s bailout plan for the U.S. financial system. Bond said Congress needs to act responsibly. He said there needs to be accountability for those in charge, more transparency of the transactions and greater government oversight of the financial industry. Cramer remained vigilant on the issue of rating home loans based on their vintage, the credit scores of the borrower and the location of the property. Cramer talked about the market being dysfunctional. He’s not sure what to make of a market where firms like Goldman Sachs (GS), which he also owns for his Action Alerts PLUS portfolio, and once the benchmark of solid financial firms, and one that did not make any mistakes or get involved in sub-prime mortgages, can teeter on brink of collapse. However, with the likely passage of the bailout plan, Cramer said firms like Goldman have gone from risky stocks to cheap stocks. He recommended what he called solid banks like Wells Fargo (WFC) and US Bancorp (USB). Cramer also recommended consumer stocks as a defensive play in uncertain times. And he said that real estate, the asset that caused all of the problems, is starting to look better and better. Given how the market is acting however, Cramer advised waiting for the next big pullback before buying in. LIGHTNING ROUND: Cramer prefaced the segment by saying, while he may be positive on some names, he is not advising investors buy them at this time - he said wait on the sidelines and continue to move your portfolio to mostly cash. (Bullish) FLR; MDR; JOYG. (Bearish) ACGL; SPW; FLY; FLEX.
Fast Money position recap- First moves: Tim likes long EEV, Guy likes JNJ, Karen likes MSFT, Pete likes MYL.
Adami Owns (AGU), (BTU), (C), (GS), (INTC), (MSFT), (NUE); Pete Najarian Owns (AAPL) And (AAPL) Puts; Pete Najarian Owns (ETFC), (MYL); Pete Najarian Owns (MS) And (MS) Puts; Pete Najarian Owns (RIMM) Call Spread; Pete Najarian Owns (TSO) Call Spread; Pete Najarian Owns (WB) Put Spread; Finerman Owns (GS); Finerman’s Firm Owns (RIG), (PDE), (WM), (MO), (MSFT), (SUN), (TSO), (VLO); Finerman’s Firm Is Short (VNO), (WFC), (IYR), (IJR), (MDY), (SPY), (IWM), (BBT), (COF); Seymour Owns (AAPL), (COP), (ETFC), (MER), (TSO); Seygem Asset Management Owns (PTR), (EEV).
Volume has dried up due to the short selling rules and also from traders and investors waiting for the Rescue Plan. I am wondering if this will all be futile and we are just going to drift lower even after the plan is announced and detailed. The root of the problem is homeowners unable to refinance or able to lower their mortgage payments and keeping them in their homes. There are many loans which are adjusting higher and forcing owners to leave theri homes or cut back their spending drastically. If we can help homeowners deal with their adjusting loans and mortgages then we can help the economy as a whole by indirectly supporting consumer spending. IMO another stimulus bill is much needed. Going to stay nimble for the foreseeable future, the market is real choppy and volatile. Pick plays with a high probability of success, have focus and patience, run technicals through supply and demand. Great lusck, Happytrading and see you in our trading room at myhappytrading.com.
Did you like this article?
Submitted By 
's
