Posted By optiondragon for myhappytrading.com, please visit us and join for free!
From Briefing.com
Periodicals Wrap-Up for Friday, September 5th
WALL STREET JOURNAL: In an effort to cut costs, the Wall Street journal reported that Dell (DELL) is looking to sell its computer factories around the world and has reportedly approached contract computer manufacturers with offers to sell the plants. A person familiar with the matter believes Dell will sell most, or all, of the plants “within the next 18 months”…NEW YORK TIMES: According to people close to the negotiations, the New York Times reported that Altria Group (MO) is in advanced talks to acquire UST Inc. (UST) for more than $10B. The companies are planning to work through the weekend to try and complete a deal as soon as Monday. Exact terms of the deal are not known…NEW YORK POST: The New York Post reported that Jon Asgeir Johannesson, the chairman of Baugur Group, is unlikely to acquire Saks (SKS) this year, according to sources…EDAILY: According to the Korean online news provider Edaily, Samsung is looking to acquire SanDisk Corp. (SNDK), after shares of the company have fallen from the global slowdown. Samsung has hired JPMorgan (JPM) to advise on the potential acquisition. Seagate Technology (STX) had previously shown interest in SanDisk’s solid state drive business…
Asian Markets Wrap-Up for Friday, September 5
Asian stocks declined for the fifth straight day over concerns of a global slowdown as all markets there fell…JAPAN: The Nikkei 225 Stock Average slipped 345.43, or 2.8% to 12,212.23, while the Topix Index lost 30.81, or 2.6%, to 1,170.84. Komatsu (KMTUY) was down 4.4% to Y1,922. Mazda sank 6.9% to Y527. Nintendo (NTDOY) dropped 2.8% to Y51,800. Resona slumped 7.7% to Y93,700. Mizuho Financial Group (MFG) fell 6.4% to Y413,000. Mitsubishi UFJ Financial Group (MTU) was down 5.4% to Y750. Sony (SNE) lost 4.2% to Y3,880…AUSTRALIA: The S&P/ASX 200 Index retreated 102.40, or 2.1%, to 4,877.10. National Australia Bank (NABZY) tumbled 4.3% to A$23.60. Commonwealth Bank of Australia, dropped 3.1% to A$41.59. Westfield slid 2.3% to A$17.25. James Hardie Industries (JHX) was down 1.8% to $4.91. Fortescue slumped 7.3% to A$6.39. Rio Tinto Group (RTP) tumbled 1.4% to A$110.08. Indophil Resources NL fell 42.5 cents, or 36%, to 76.5 Australian cents…AROUND ASIA: In Hong Kong, the Hang Seng Index declined 456.20, or 2.2%, to 19,933.28. Sun Hung Kai (SUHJY) slumped 6.1% to HK$95.10. Henderson Land Development Co. (HLDCY) plunged 6.2% to HK$43.75. Cheung Kong (Holdings) (CHEUY) tumbled 5.7% percent to HK$105.10. Sino Land Co.(SNLAY) was down 5.5% to HK$12.28. Li & Fung lost 2.4% to HK$22.55. Techtronic Industries Co. (TTNDY) dropped 3.9% to HK$7.36. PetroChina Co. (PTR) lost 25 cents, or 2.6%, to HK$9.33. Angang Steel Co. retreated 69 cents, or 7.5%, to HK$8.56. Kingway Brewery Holdings sank 17 cents, or 16%, to 88 Hong Kong cents.
China’s central bank must obtain more capital-NY Times
China’s central bank is low on capital, since the value of its investments in U.S. Treasury bonds and American mortgage-backed debt has declined sharply. As a result, China is less likely to allow its currency to continue rising against the U.S. dollar, experts say.
Airlines want credit card help; Card companies up the ante-WSJ
Desperate for cash, airlines are looking to their credit card companies, who themselves are under tremendous financial pressure, for help. The result, reports the Wall Street Journal is that the card companies are demanding better terms than usual. But because they need each other to keep turning out cash, hard bargaining is under way.”The airlines have a lot of control in these negotiations because they have the brand and the currency, but the banks have a lot more negotiating power than they used to,” says Megan Bramlette with Auriemma Consulting Group.
Apple-AAPL: Expect next Tuesday’s event to be iPod centric@AMTR
Am Tech has low expectations for a break-through announcement at next Tuesday’s event.
Analysts Downgrade Summary for Friday, September 5th
MOST NOTEWORTHY: Merrill Lynch (MER), STMicroelectronics (STM) and Captaris (CAPA) were today’s noteworthy downgrades: Goldman Sachs downgraded shares of Merrill Lynch to Sell from Neutral and added the stock to the Conviction Sell List as they expect additional write-downs and believe the stock has the highest price to book multiple among the large cap brokers they cover. Goldman lowered their target on MER shares to $22 from $28.50. UBS cut STMicroelectronics to Sell from Neutral on concerns over excess inventories and the company’s joint venture with Ericsson (ERIC). B. Riley downgraded Captaris to Neutral from Buy to reflect the acquisition by Open Text (OTEX), as they do not expect a materially higher bid to emerge…OTHER DOWNGRADES: Allied Irish Bank (AIB) was lowered to Hold from Buy at Deutsche Bank. Societe Generale (SCGLY) was downgraded at Lehman to Equal Weight from Overweight. Astec Industries (ASTE) was downgraded to Neutral from Buy at Piper.
Analysts Initiation Summary for Friday, September 5th
MOST NOTEWORTHY: FGX International (FGXI), Felcor Lodging (FCH) and AutoZone (AZO) were today’s noteworthy initiations: Jefferies believes FGX International’s market-leading position in over-the-counter readers should benefit from favorable demographics and a mix shift from more expensive Rx glasses. The firm started shares with a Buy rating and $17 target. Baird initiated Felcor Lodging with a Neutral rating and $8 target, citing slowing industry trends and its higher cost balance sheet. Friedman Billings reinitiated AutoZone with a Market Perform rating and $131 target. The firm believes the company’s slowing earnings growth and likely peak margins make the valuation fair at best at current levels…OTHER INITIATIONS: Morgan Stanley started Potash (POT) and Waters (WAT) with Overweight ratings and a $280 target and $81 target, respectively. Scripps Networks (SNI) was initiated with a Neutral rating and Merrill Lynch. Lehman assumed Aruba Networks (ARUN) and Ciena (CIEN) with Equal Weight ratings.
Analysts Upgrade Summary for Friday, September 5th
MOST NOTEWORTHY: GrafTech (GTI), Navistar (NAV) and Reinsurance Group of America (RGA) were today’s noteworthy upgrades: Jefferies upgraded shares of GrafTech to Buy from Hold as they believe electrode pricing increases should more than offset the increase in raw material costs over the next year. The firm raised their target to $30 from $22. JP Morgan upgraded Navistar to Overweight from Neutral following the strong Q3 report and raised outlook. UBS upgraded Reinsurance Group of America to Buy from Neutral based on the 9/11/08 split-off from MetLife (MET), long-term mortality margins, and a conservative investment portfolio. The firm increased RGA’s target to $82 from $55…OTHER UPGRADES: Goldman added Devon Energy (DVN), Quest Software (QSFT) and Transocean (RIG) to the Conviction Buy List. Monsanto (MON) was raised to Outperform from Neutral at Credit Suisse.
Apple-AAPL: Believe company’s gross margin guidance is far too conservative@BERN
While Bernstein believes several moves by Apple will put downward pressure on Apple’s gross margins in its 2009, the firm thinks the iPhone’s growth will raise the company’s gross margins by 150 basis points in its 2009. The firm maintained their Market Perform rating.
Wells Fargo-WFC may not be able to continue performing well@BERN
Bernstein believes Wells Fargo’s business mix and geography make it susceptible to being hurt by the problems in consumer credit and the California housing market. The firm thinks the positive aspects of the company are reflected in the share price and they maintained their Market Perform rating.
Review of U.S. Economic Data for Friday, September 5th
Non-farm payrolls contracted by 84,000 in August, more than the 75,000 decline forecast by economists, the Labor Department said. Job losses totaled 160,000 in June and July. The rise in the unemployment rate was unexpected. The unemployment rate rose to 6.1% in August; economists forecast the unemployment rate would be 5.8%. Average hourly earnings increased 0.4% to $18.14 vs. forecasts of an 0.3% gain. The average workweek was 33.7 hours.
Leap Wireless-LEAP: See potential for upside to Q3 results@PACS
PacCrest’s August checks reveal continued momentum and they now see upside to their Q3 net sub addition estimate of 145K. The firm views LEAP as attractive and maintains an Outperform rating.
Agricultural Products: AGU, CF, IPI, MOS, & POT initiated @MSCO
Morgan Stanley believes the recent 35% correction in fertilizer stocks and the implication on fundamentals is “unfounded.” The firm does not expect peak earnings until 2011, rather than 2008 as indicated by the market. The firm initiated AGU, MOS, and POT with Overweight ratings and CF and IPI with Equal Weight ratings.
CombiMatrix-CBMX: Small company in a hot sector - BusinessWeek
CombiMatrix (CBMX) is a small biotech on the rise. The company is in a hot sector: DNA diagnostics, developing DNA microarrays for chips that let labs analyze many genes at once. Sales in Q2 for CombiMatrix jumped 55%, to $2.1M. Raymond Myers of investment firm Emerging Growth Equities, puts the market for the tests at $1B. He rates the stock a buy.
Jim Cramer’s “Mad Money”
Cramer says, the bull market is out there. Cramer reiterated his belief that the markets will not fall below the lows set on July 15 and that a bottom is forming thanks to lower oil and natural gas prices. He listed 6 reasons why he feels investors should see the light at the end of the tunnel. (1) A bottom is forming in the housing stocks, signaling a bottom in the housing market that he says is coming in 300 days. (2) The FDIC has announced a plan to fix ailing banks. (3) Both presidential candidates are likely to lower individual tax rates, which will help spark consumer spending. (4) Commodity prices have crashed across the board, helping to lower the raw costs. (5) price of gasoline is coming down even lower than Cramer first expected. (6) Wal-mart (WMT), a place where millions of Americans shop, is showing some strength. Given these 6 reasons, Cramer told investors to begin looking for bargains amid the chaos in the markets. Shares of H&R Block (HRB) took a huge hit Thursday, down 9.7% after the company missed earnings estimates by 5c. Cramer said HRB may be attractive, even in the off-season. His thesis rests on the belief that no matter who becomes president in November, Americans will see a new tax code. Cramer called the weakness a buying opportunity, especially in light of its 2.3% dividend and stock buyback program. SELL BLOCK: Cramer compared Hovnanian Enterprises (HOV) to rival Toll Brothers (TOL), after the company’s abysmal earnings report. Cramer said Hovnanian’s run is over and said he heard nothing positive on the earnings call. Next, Cramer talked with Howard Atkins, Sr. Exec VP and CFO of Wells Fargo (WFC), about the controversy surrounding the company’s $1.75B bond offering earlier this year. Atkins characterized the offering as an institutional offering, noting it was pretty standard for Wells Fargo. Atkins went on further to call the deal very successful for Wells, calling its tax-deductible nature appealing for all who bought in. Cramer remains bullish on the stock. SUDDEN DEATH: (bearish) VCLK; CIR. LIGHTNING ROUND: (Bullish) UPS; BQI; HWAY; DE; FRO; NAT; HMC; HAL; NBR. (Bearish) FDX; WPI; GME; MEE; DSX; GM; UDRL.
Fast Money position recap- First Moves: Jeff likes long POT with a $145 stop, Karen likes IRF calls, Pete likes MCD. Macke Owns (WMT), (UUP), (ATVI), (MSFT), (CY), (EMC): Adami Owns (C), (GS), (INTC), (AGU), (BTU), (MSFT), (NUE): Finerman Owns (GS): Finerman’s Firm Owns (AAPL) Call: Finerman’s Firm Owns (AEO), (MSFT), (NOK), (SUN), (TSO), (VLO), (JCP), (JNJ), (RIG), (PDE); Finerman’s Firm And Finerman Own (C) Leaps; Finerman’s Firm Is Short (BAC), (XLF), (IYR), (IJR), (MDY), (SPY), (IWM), (COF), (WFC), (BBT), (WB); Finerman’s Firm Owns (JCG) Calls. (IRF) Calls: Pete Najarian Owns (AAPL) And (AAPL) Collar; Pete Najarian Owns (LEH) Call Spread, (LEH) Put Spread; Pete Najarian Owns (LMT) Put Spread; Pete Najarian Owns (MS) And Is Short (MS) Calls; Pete Najarian Owns (NOK) And Is Short (NOK) Calls; Pete Najarian Owns (XLF) And (XLF) Collar.
The market is in trouble here. We discussed in the trading room yesterday about how if Bill Gross, a major player in the financial landscape, decides to no longer play in the sandbox and buy bank bonds and the SWF (Sovereign Wealth Funds) decide not too the banking system could slowly freeze again as the banks need to raise more capital. Bill wants Hank Paulson to pull out the bazooka or else. Hank cannot do anything without Bush’s approval. The system needs government intervention now. Let’s see if they are watching and listening.
The China news is unreal IMO from the NY Times. You have to keep and eye on FXI stabilization otherwise they could crash. Let’s hope that does not occur.
Did you like this article?
Submitted By 
's
