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From Briefing.com
Periodicals Wrap-Up for Tuesday, September 9th
WALL STREET JOURNAL: As Alan Fishman takes over as CEO of troubled Washington Mutual (WM), he has his eye on profitability but knows it won’t be easy. There’s also a memorandum of understanding with the Office of Thrift Supervision that the company has approved, according to the Wall Street Journal. The agreement means WaMu must report in with plans, forecasts and results several times a year…It’s not getting any easier at Lehman Brothers Holdings (LEH). Their earnings estimate was cut by Merrill Lynch and its hopes for an investment from the Korean Development Bank hit a roadblock as concerns grew that the Korean government may block a deal, according to the Wall Street Journal. Those factors caused the firm’s stock to slump 13% yesterday, and the shares are down about 80% this year. Today begins with the firm cutting over 1,000 more jobs…SAN FRANCISCO CHRONICLE: Eli Harari, the CEO of SanDisk (SNDK) downplayed rumors that Samsung may be looking to acquire the company, although he did not rule out partnerships or an acquisition. During an interview with the San Francisco Chronicle, Harari said the flash memory chip maker has the financial strength to weather the economic turmoil alone, particularly because fewer competitors are currently entering the market, decreasing for now the need for the company to be acquired…NIKKEI: Financial institutions in Japan will keep their Fannie Mae (FNM) and Freddie Mac (FRE) securities but remain cautious about the future of the securities, the Nikkei reported. The Japanese financial institutions own more than 15 trillion Yen worth of Fannie Mae and Freddie Mac…
The Fannie, Freddie bailout: Enthusiasm but for how long?-WSJ
Fannie Mae (FNM) and Freddie Mac (FRE) short term debt appears safe. But what about debt that matures after next year? asks the Wall Street Journal’s “Heard on the Street”. There’s a great deal of uncertainty as a new president and Congress will have to confront the bailout. “The uncertainty about those ultimate decisions creates uncertainty for every single fixed-income investor [except short term debt] ” said a note from James Vogel at FTN Financial. What direction will all this take? It’s unclear.
Asian Markets Wrap-Up for Tuesday, September 9
Stocks dropped in most Asian countries on concerns about a global economic slowdown. JAPAN: Shipping and commodity stocks led the decline, as the Nikkei 225 sank 1.77%, to 12,400.65. Shipping company Mitsui O.S.K. Lines retreated 6.9%, while one of the company’s competitors, Nippon Yusen (NPPYF), fell 4.5% and Kawasaki Kisen Kaisha (KAKKF), another shipping company, sank 5.9%. Mitsui & Co., (MITSY) a trading company which holds stakes in oil fields, slumped 8.1%. Sumitomo Trust (STBUF), a bank, declined 4.8%. CHINA: Shares gained, with airlines leading the advance on lower fuel prices. The CSI 300 Index added 0.59% to 2,139.15. Air China (AIRYY) gained 3.4%, while China Eastern Airlines (CEA) rose 4.3% and China Southern Airlines (ZNH) increased 3%. Property developer China Vanke (CVKEF) reported that its apartment sales fell 35% last month, and the stock dropped 1.3%. AROUND ASIA: Hong Kong’s Hang Seng Index lost 1.46%, while South Korea’s KRX 100 sank 1.58% and Indonesia’s Jakarta Composite retreated 3.89%… An index measuring the confidence of Australia’s business community increased slightly in August, but the index was still just above its lowest level in seven years.
Google is supporting a plan to provide Internet access to the world’s poor-FT
Google (GOOG) is helping to provide Internet access to hundreds of millions of people in Africa and other developing countries. The Internet search giant, in partnership with cable TV tycoon John Malone and HSBC (HBC), is launching at least 16 satellites that will provide Internet access to people in developing countries who currently cannot access the Web. The project will cost $750M.
Hedge funds become risk adverse and flee to cash-NY Post
Hedge funds are not hedging their bets. Instead, they’re backing off risk to avoid losses in the current market conditions and moving into cash. That includes J.P. Morgan Chase’s (JPM) Highbridge Capital and Harbinger Capital, which manages $21B, to name two. They’re cutting back on borrowed money: “Markets are irrational and the best thing to do when markets are irrational is to move into cash, increase liquidity and take down risk,” says one Harbinger executive.
U.S. equity futures continue to point to a higher open
Futures continue to point to a higher open. Crude oil however continues to decline, and is down $1.50 a barrel. OPEC has suggested that it will not announce production cuts when it meets later today. Comments from Saudi Arabia, the cartel’s largest member, have been lees vocal than some of its smaller members about cutting production. In addition, it no appears that Hurricane Ike will not be the force that it had been forecast to be as it looks to be on a track that will miss the Gulf of Mexico.
Google-GOOG added to Alpha List@PIPR
Piper believes that despite investor concerns, GOOG will report an in-line September quarter. Piper has a Buy rating and $785 target on the stock.
Research in Motion-RIMM: Expect investor sentiment to improve@RBCM
RBC Capital expects investor sentiment to rise from improving visibility into upcoming product launches. The firm reiterates their Outperform rating.
Google takes steps to protect user privacy-Blog
Google (GOOG) said: “Today, we’re announcing a new logs retention policy: we’ll anonymize IP addresses on our server logs after 9 months. We’re significantly shortening our previous 18-month retention policy to address regulatory concerns and to take another step to improve privacy for our users.”
Celgene-CELG: View recent pullback as a buying opportunity@WBLR
William Blair believes the recent weakness in CELG shares offers an attractive entry point to initiate or build positions. Shares remain Outperform rated.
MasterCard-MA upgraded to Outperform from Market Perform@AVON
Wachovia-WB calls bailout of Fannie Mae-FNM, Freddie Mac-FRE a “new wild card”
This comment was made at the Lehman Brothers Global Financial Services Conference.
(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 says a nationalized Fannie Mae (FNM) and Freddie Mac (FRE) breaks the current viscious housing cycle, slowing foreclosures and finally allowing home prices to stabilize. Freddie and Fannie, said Cramer, account for almost 50% of all of the bad loans. The end result will be lower mortgage rates for everyone, he said. Cramer said the double-digit decline in home prices since 2005 is finally coming to an end. He reiterated his prediction that a bottom in home prices is just 296 days away. Cramer said the time is now right to consider buying bank stocks that will benefit from their strong deposit bases going forward. He reiterated buys on JPMorgan Chase (JPM), US Bancorp (USB), Wells Fargo (WFC) and Bank of America (BAC). He added Wachovia Bank (WB) to the list. Cramer returned to his “Wall of Shame” list of the worst CEOs to make a few changes. He removed Washington Mutual (WM) CEO Kerry Killinger, following his ouster this past weekend by the company’s board of directors. Cramer quickly filled the vacancy on the “Wall of Shame” with what he called the “3 Stooges” in the analyst community: Bruce Harding of Lehman Brothers (LEH), Marco Villegas of JP Morgan Chase (JPM) and Bradley Ball of Citigroup (C). He said all of them had buy recommendations on Freddie Mac and Fannie Mae going into the takeover of the companies. Cramer talked with New Jersey Gov. Jon Corzine about what the takeover of Freddie Mac and Fannie Mae means to the markets. Corzine said the regulators should have moved earlier on many of the problems. Corizine cautioned that home price relief may not be visible until possibly next spring or later. LIGHTNING ROUND: (Bullish) LINE; BMY; BRS. (Bearish) IMA; PFE; X.
Fast Money position recap- First Moves: Jeff likes RIMM as a buy at $100 with a stop at $95, Guy likes long URBN, Karen likes FLS, Pete likes NVO.
Macke Owns (DIS), (WMT), (MSFT) Adami Owns (AGU), (BTU), (C), (GS), (INTC), (MST), (NUE); Najarian Owns (NVO); Najarian Owns (AAPL) And (AAPL) Collar; Najarian Owns (LEH) Put Spread And (LEH) Call Spread; Najarian Owns (MER) Put Spread; Najarian Owns (MS) And Is Short (MS) Calls; Najarian Owns (NOK) And Is Short (NOK) Calls; Najarian Owns (RIMM) Call Spread; Najarian Owns (XLF) And (XLF) Collar; Finerman Owns (GS); Finerman’s Firm And Finerman Own (FLS); Finerman’s Firm And Finerman Own (C) Leaps; Finerman’s Firm Owns (HUN) Leaps; Finerman’s Firm Owns (MO), (MSFT), (NOK), (SUN), (TSO), (VLO), (GE); Finerman’s Firm Is Short (XLF), (IYR), (IJR), (MDY), (SPY), (IWM), (BAC), (COF); Finerman’s Firm Is Short (BBT) And Owns (BBT) Puts.
Market reacted positively yesterday to the FNM/FRE news but is IMO still confused about the full implications and that could take more time to fretter out. Commodities are still dropping and there should be weakness there today. Looking at shorts there and the Agriculture fert sector. IPI, MOS, AGU, POT, TRA, CMP are all vulnerable to a further breakdown. LEH is particularly weak this morning and could have a breakdown. Financials are showing some softness after yesterday’s rally and could weaken further due to LEH. Yesterday felt like a “Fed Day” and I am going to be nimble til a true trend direction is chosen but we could see more range boundness for the foreseeable future. Pick plays with a high probability of success, have focus and patience, run technicals through supply and demand. Great Luck and Happytrading!
Think in Fractals, the market and nature are run on formulas.
Rainbows frame a peculiar lava formation at Ol Doinyo Lengai, a volcano in Tanzania. Maasai goddess Eng’al, who signals her wrath with eruptions and drought, is said to inhabit the summit.
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