Submitted By Optiondragon
Nelly Furtado– Say it Right
Periodicals Wrap-Up for Monday, June 9th
WALL STREET JOURNAL: The LiveTV unit of JetBlue Airways (JBLU) is buying Verizon Communications’ (VZ) Airfone network, the Wall Street Journal reported…As Lehman Brothers Holdings (LEH) is about to report a second quarter loss of about $2B, the firm is closing in on raising over $5B in new capital, the Wall Street Journal reported. Once source of Lehman’s new funding is reportedly the New Jersey Division of Investment…FINANCIAL TIMES: The Financial Times reported that General Electric’s (GE) NBC Universal and British private equity firm GMT Communications Partners are expected to soon acquire Bigpoint, a German-based computer games website…INDEPENDENT: According to the Independent, the credit crunch has cost the jobs of about 100 bankers at Barclays (BCS). The bank cut about 20 individuals on the leveraged finance team and will reportedly cut 80 more in investment banking and IT support..
Where’s the market’s recession rally?-WSJ
Recessions usually spark market rallies, but a combination of factors, including earnings forecasts, interest rates and the economic outlook, are not able to create any sparks this time, according to the Wall Street Journal “Heard on the Street.” The column suggests that the current difficult economic conditions have about six months to go, or more. Commenting on Friday’s new unemployment numbers, Merrill Lynch economist David Rosenberg wrote that they suggest “we are barely half-way through this downturn.” And if earnings continue to disappoint, stock valuations may face a nasty downturn. Hope may come if the Fed can help to turn things around with further interest rate cuts. One thing’s sure: Pickers of stocks aren’t getting any help.
Blackberry touch screen may steal 3G thunder-Engadget
Thunder, the forthcoming Research in Motion (RIMM) touchscreen, may put the brakes on the 3G iPhone this week.
Global bond markets are very pessimistic about growth and inflation-WSJ
“More bond markets are at extremes,” says Alan Ruskin, the head international strategist at RBS Greenwich Capital. “We’ve got a world divided between people saying we’re concerned about the inflation repercussions of high oil…and those worried about the growth implications.” And the warning signals are everywhere, reports the Wall Street Journal. In Europe, there’s concern over a deep economic slowdown. In China and India, worries are over inflation. Markets worldwide are falling. Another indicator: short-term interest rates are much higher than long-term rates, which is unusual and troubling about the state of economies. “We’re no longer looking at one harmonized world,” says Mohamed El-Erian, at Pacific Investment Management Co. The “shock embedded in the energy and food-price increases has caught countries around the world in different economic and financial circumstances.”
U.S. equity futures now point to a higher open; Lehman to raise about $6B
U.S. equity futures are pointing to a slightly higher open. Lehman Brothers Holdings (LEH) announced that they planned to raise $6B billion in capital through a stock offering. They also expect a second quarter loss of about $2.8B due to the credit crisis. The credit crisis reminders have been hitting the markets for the past week and lead to weakness in the financial sector and ultimately to the rest of the market. Shares of Lehman Brothers are currently down more than -7.5%.
Pre-Market Movers: Ahead of the Bell
The action is focused in a few select names this morning. There have been very rapid price jumps in a number of issues though with very light volume. Two-sided volatility looks to be the order of the day. The volume leader to the downside this morning is Lehman (LEH), trading down (-7.8%) after announcing a wide Q2 loss of (-$5.14) per share. Volume is extremely heavy at over 5M shares by 8AM. Third Wave (TWTI) is up +5.9% after Hologic (HOLX) agreed to buy the company at $11.25 per share. Stock is trading 15c below that level. Apple (AAPL) is trading up +0.7% ahead of the start of the company’s World Wide Developer Conference. The shares are likely to be very volatile around the keynote which is gamed in real time. Only the very nimble should trade the name around the event as information advantage is the key. Expectations are for a big 3G iPhone announcement. The risk given the recent rise in share price is that the announcement underwhelms. Vertex Pharmaceuticals (VRTX) is trading up +10.73% after the company announced positive results in an interim analysis of PROVE 3 (see note here for details). The shares were active last week ahead of this news. Iconix Brand (ICON) is trading down (-8.5%) after the company lowered FY08 EPS estimates significantly below consensus this morning. China Sunergy (CSUN) is trading down (-4%) after filing a $300M mixed securities shelf. The solar sector has been extremely volatile in recent sessions. Exide (XIDE) is trading up +4.06% after reporting much better than expected Q4 earnings before the bell.
MUR upgraded to Buy from Neutral@GSCO
Goldman upgraded MUR citing the company’s exposure to the Kikeh field and higher oil prices. Target to $115 from $105.
GMXR initiated with a Buy, target $67@CSTI
Collins Stewart believes the company’s drilling program will continue to drive both strong production and proved reserves growth.
Shale plays have been hot and could continue to be so although most are overbought.
VMW: Target to $70 from $60 following checks@UBSW
UBS’s checks indicate the virtualization market remains healthy and that business with the largest distributors are on plan. Shares are Neutral rated.
ITG upgraded to Neutral from Sell@GSCO
Goldman upgraded ITG based on valuation. Target $45.
Brokers: Exposure to monolines could be greater than $10B for big three@OPCO
Oppenheimer believes that while Citigroup (C), Merrill Lynch (MER), and UBS (UBS) have already taken in aggregate close to $10B in marks against their monoline exposures, additional write-downs could be in excess of $10B following the downgrades of MBIA (MBI) and AMBAC (ABK).
POT: Esimates and target raised to $285 from $235@GSCO
Goldman cites higher potash prices for the changes.
Best Upgrade this morning and should move the Ag plays MOS, IPI, AGU, MON
MCO: May be Weak today on Potential SEC Action
Bloomberg reported this morning that there is a possibility that the SEC may ban Moody’s (MCO), S&P and Fitch from advising investment banks on how to get top rankings on asset-backed securities. There may be additional action as well forcing disclosure of all data that is used to determine a rating. This would allow competitors to grade bonds without compensation from the underwriter. The shares are already technically weak. This additional fundamental negative in terms of restricting business or removing information advantage, or both, may push shares lower. Support levels to watch as potential downside objectives are at $38.54, $37.78, $37.00, $36.43, $35.84, $35.05. Resistance is at $39.55, $39.78, $40.41.
MER: Weak Spot to Watch: Brokers
In the early pre-market the fallout from Lehman’s (LEH) negative earnings announcement is having a knock-on effect with other brokers. So far the significant volume and price loss is in Merrill Lynch (MER) which is down (-2.63%). Support levels to watch as potential downside objectives are at $37.67, $37.11, $36.51, $35.91, $35.28, $34.75. Resistance based on current pre-market price is at $38.28, $38.88, $39.49.
BRCM: Buy shares up to $30, reiterate Outperform@FBRC
Friedman Billings check’s indicate BRCM’s business remains robust with Q2 tracking above at or above the midpoint of its revenue strength. The firm expects BRCM to move higher but prefers MRVL on valuation and the company’s margin turnaround.
AMLN: Positive LAR data over weekend@FBRC
Friedman Billings said AMLN presented positive LAR data over the weekend, which reiterates the drugs strong profile. Shares are Outperform rated.
AMLN: Continue to avoid shares@COWN
Cowen said there was few surprises in DURATION-1 data at the ADA and that Byetta and LAR resulted in similar weight loss. The firm remains skeptical that AMLN can outperform given increasing competition in coming years. Shares are Neutral rated.
US Stocks upgraded to Overweight from Underweight@LEHM
Note that Lehman downgraded European stocks to Underweight from Overweight.
Nice global note for US equities.
Hess Corp-HES added to Conviction Buy List; maintain Buy@GSCO
MOS added to Conviction Buy List; maintain Buy@GSCO
Weekly subtractions from the Investor’s Business Daily-100
The following are subtractions from the Investors Business Daily-100 list for the week of June 6: Syniverse Holdings (SVR), Darwin Professional Underwriters (DR), EOG Resources (EOG), Aeropostale(ARO), Suncor Energy (SU), Vimpel-Communications (VIP), Transocean Inc. (RIG), LKQ Corp. (LKQX).
Weekly additions to the Investors Business Daily-100
The following are additions to the Investors Business Daily- 100 list for the week of June 6: NVE Corp.(NVEC), Venoco Inc.(VQ), Joy Global Inc. (JOYG), Penn Virginia Corp. (PVA), Core Laboratories(CLB), Atheros Communications (ATHR), Compania de Minas Buenaventura SA (BVN), Robbins & Myers Inc (RBN).
Fast Money position position recap- Adami Owns (AGU), (C), (BTU), (GS), (INTC), (MSFT), (NUE); Finerman Owns (GS), Finerman’s Firm Owns SPX Index Puts; Finerman’s Firm And Finerman Own (HD); Finerman’s Firm Owns (SUN), (TSO), (VLO), (MSFT), (AAPL), (NYX),(PPH),TIPs; Finerman’s Firm And Finerman Own (C), (C) Leap; Finerman’s Firm Is Short (IYR), (IJR), (MDY), (SPY), (IWM), (BIG); Macke Owns (WMT), (INTC), (MSFT), (DIS); Najarian Owns (AAPL), (BHI), (CHK), (HD), (HPQ), (TSO), (XLF), (NOK), (AMLN), (ENER); Najarian Owns (LEH) Puts; Najarian Owns (NUE) Calls, (AA) Calls; Seymour Owns (HAL).
Watching for a bounce today after the huge selloff on Friday. Watching and focusing on the Ag plays today- POT, MOS, AGU, IPI, MON, MOO and others. Going to watch AAPL of course for the Developers Conference. It should be volatile and I expect to stay out of it until I can get a sense of direction. AAPL could be real choppy going into the event and after the announcement or lack thereof. Watching how financials act with the LEH news, GS as another proxy. Keep your eyes on the goal, be positive, stay smart and pick plays with a high probability of success. Great Luck and Great trading.