Wang’s Happy Trading

Posted by Optiondragon for myhappytrading.com

From Briefing.com

Periodicals Wrap-Up for Friday, September 26th
WALL STREET JOURNAL: Marking the largest failure in U.S. banking history, the Wall Street Journal reported that federal regulators struck a deal to sell the bulk of Washington Mutual’s (WM) operations to JP Morgan Chase (JPM). Under the terms of the deal, JP Morgan will pay $1.9B to the government for Washington Mutual’s banking operations and will also assume its loan portfolio, which has about $307B in assets. JP Morgan also plans to raise $8B in new capital and write down about $31B of bad loans…BUSINESSWEEK: BusinessWeek reported that Kroger (KR), the nation’s largest grocery operation, is faring well in these tough economic times. Joseph Agnese of Standard & Poor’s, who rated the shares a Buy, sees sales rising 12% to $78.4M in FY09 and said Kroger adapts its marketing strategy to appeal to all kinds of grocery shoppers who may be feeling the pinch these days…Researcher MatrixUSA rated Amerigroup (AGP) a Strong Buy, noting that the stock is undervalued given its very strong sales and earnings performance…One stock enjoying uninterrupted expansion despite the weak economy or financial crisis is Accenture (ACN), which has been able to deliver solid growth due to its long-term contracts with clients in 48 countries…CNBC: Hedge fund executives said that several Wall Street firms are marketing a new hedging product that will allow investors to short stocks on the banned short sale list. CNBC reported that Citigroup (C) officials are among those involved in launching the new technique, which utilizes derivatives…BLOOMBERG: Hedge fund managers anticipate that client withdrawals from their funds will accelerate significantly, after hedge funds’ average returns dropped 8% during the period from January through September 19, Bloomberg reported. Among the hedge funds suffering the worst years in their history are Ken Griffin’s Citadel Investment Group and Steven Cohen’s SAC Capital Advisers…

Asian Markets Wrap-Up for Friday, September 26
Asian stocks retreated as the $700B U.S. bailout plan was held up and Washington Mutual (WM) fell to J.P. Morgan Chase (JPM) after the U.S. closed the bank…JAPAN: The Nikkei 225 Stock Average dropped 113.37, or 0.9%, to 11,893.16, while the broader Topix index fell 6.06, or 0.5%, to 1,147.89. Mitsui O.S.K. tumbled 6.3% to Y946. Kawasaki Kisen Kaisha slid 7.2% to Y670. Sumitomo Mitsui added 0.3% to Y689,000. Mizuho Financial Group (MFG) gained 1.1% to Y468,000. T&D Holdings was down 0.5% to Y5,850. KDDI was up 5% to Y631,000. Takeda Pharmaceutical Co.increased 4.2% to Y5,670…CHINA: The CSI 300 Index rose 20.13, or 0.9%, to 2,243.66. Tsingtao Brewery leapt 5.9% to Y16.83. China United Telecommunications Corp. increased 0.7% to 5.47yuan. Vanke, was up 10% to 6.53 yuan. China Petroleum & Chemical Corp. (SNP) dropped 0.14 yuan, or 1.3%, to 10.68. PetroChina Co. (PTR) slid 0.17 yuan, or 1.3%, to 12.84. Ping An Insurance lost 2.99 yuan, or 8.3%, to 33.27…AUSTRALIA: The S&P/ASX 200 Index declined -22.60, or -0.46%, to 4,904.80. Babcock & Brown lost 2.5% to A$2.31. BHP Billiton (BHP) fell 1.5% to A$35.84…AROUND ASIA: In Hong Kong, the Hang Seng Index retreated -252.34, or -1.33%, to 18,682.09.

Morgan Stanley lost a large amount of hedge fund business-FT
A large number of hedge funds deserted Morgan Stanley (MS) and moved their business to other banks following the collapse of Lehman Brothers (LEH) last week, inside sources say. As a result, Morgan Stanley lost almost a third of the assets in its prime brokerage unit, amounting to hundreds of billions of dollars, the sources say.

New product will allow investors to circumvent the anti-short selling rule-CNBC
Hedge fund executives say that several Wall Street firms are marketing a new hedging product that will allow investors to short stocks on the banned short sale list. Citigroup (C) officials are among those involved in launching the new technique, which utilizes derivatives.

Israel looks to bomb nuclear sites in Iran-The Guardian
According to senior European diplomatic sources, in May, President George W. Bush told then Israeli prime minister Ehud Olmert that he would not support Israel in launching a military strike on Iran’s nuclear sites. Sources believe Bush did not give Olmert the “green light” because of concern over a likely retaliation by Iran, which would likely feature attacks on U.S. military, and concern that Israel would not be successful in disabling Iran’s nuclear facilities. Bush’s indication that he would not change his mind on the matter may curb speculation the government could be looking to prepare an “October surprise” before November’s presidential election.

U.S. equity futures continue to point to a lower open
U.S. equity futures continue to point to a lower open as lawmakers continue to blame each other for the breakdown of the bailout talks. The demise of Washington Mutual (WM), the largest bank to fail in U.S. history, is also weighing on the markets. J.P.Morgan Chase (JPM), which is acquiring the assets of WaMu, is pricing a secondary offering of shares of stock this morning to help finance the deal. The final reading on GDP for the second quarter was released today and showed that the country grew at a 2.8% pace versus the expected 3.3%.

Analysts Initiation Summary for Friday, September 26th
MOST NOTEWORTHY: Idexx Laboratories (IDXX), Urban Outfitters (URBN) and Hersha Hospitality (HT) were today’s noteworthy initiations: Suntrust initiated Idexx Laboratories with a Neutral rating, citing slowing organic revenue growth, valuation and a slowing lab business. Jefferies initiated Urban Outfitters with a Hold rating and $33 target. The firm prefers to stay on sidelines due to valuation and macro risks. Hersha Hospitality was assumed with a Market Perform rating and $7.50 target at Keefe Bruyette. The firm believes near-term demand trends in New York City could slow…OTHER INITIATIONS: Ecolab (ECL) was initiated at Baird with a Neutral rating and $54 target. KeyBanc assumed ENGlobal (ENG) with a Hold rating. Piper initiated Pentair (PNR) with a Neutral rating and $39 target.

Analysts Downgrade Summary for Friday, September 26th
MOST NOTEWORTHY: Research in Motion (RIMM), Vitran (VTNC), Saia, Inc (SAIA) and Mentor (MNT) were today’s noteworthy downgrades: Deutsche Bank downgraded Research in Motion to Sell from Hold after the company reported Q2 results to reflect a deceleration in growth and margin pressures. RIMM’s target was lowered to $70 from $120. RBC Capital downgraded Research in Motion to Sector Perform from Outperform citing reduced margin visibility and the slowing macroeconomic environment. Stephens downgraded Vitran and Saia to Equal Weight from Overweight to reflect the company’s deteriorating demand and pricing environment. Vitran’s target was cut to $15 from $22 and Saia’s was lowered to $16 from $24. Mentor was downgraded to hold from Buy at Jefferies to reflect continued weakness in the breast implant market and the potential for lowered guidance. Mentor’s target was lowered to $31 from $36…OTHER DOWNGRADES: Merrill cut ING Group (ING) to Underperform from Neutral. CF Industries (CF) was downgraded at Citigroup to Hold from Buy. Liberty Interactive (LINTA) was lowered to Sell from Hold at Natixis.

Analysts Upgrade Summary for Friday, September 26th
MOST NOTEWORTHY: Assurant (AIZ), R.H. Donnelly (RHD) and Consol Energy (CNX) were today’s noteworthy upgrades: Merrill believes Assurant is well-positioned to weather the turmoil in the capital markets environment and cites the company’s defensive characteristics for the upgrade. The firm upgraded shares to Buy from Neutral. Deutsche Bank upgraded R.H. Donnelly to Hold from Sell to reflect the company’s cost cuts and its ability to buy back bonds at discounted prices. Citigroup raised Consol Energy to Buy from Hold on valuation as they are seeing no fundamental deterioration in coal…OTHER UPGRADES: Research in Motion (RIMM) was upgraded to Neutral from Underperform at Credit Suisse. Raymond James raised shares to Outperform from Market Perform. Penske Automotive (PAG) was upgraded to Add from Neutral at Calyon. ICF International (ICFI) was lifted to Overweight from Equal Weight at Stephens.

AGU price target cut to $105 from $145@RBCM
RBC Capital said there is no change in their fundamental outlook for AGU but lowered their price target to $105 from $145 due to current stock market conditions. Shares are Outperform rated.

POT target cut to $250 from $375@RBCM
RBC Capital said there is no change in their fundamental outlook for POT but lowered their price target to $250 from $375 due to current stock market conditions. Shares are Outperform rated.

CF Industries-CF downgraded to Hold from Buy@SBSH
Citigroup downgraded shares to reflect the falling price of urea, a solid nitrogen product. Target to $128 from $215.

Agrium-AGU downgraded to Hold from Buy@SBSH
Citigroup downgraded shares to reflect the falling price of urea, a solid nitrogen product. Target to $86 from $119.

Terra Industries-TRA downgraded to Hold from Buy@SBSH
Citigroup downgraded shares to reflect the falling price of urea, a solid nitrogen product. The firm also removed TRA from their Top Picks Live List. Target to $44 from $66.

Jim Cramer’s “Mad Money”
Jim Cramer dug through the details of Treasury Secretary Henry Paulson’s bailout plan to determine who the biggest winners will be. While Cramer still told investors to use caution, sell into strength, and cut back at least 20% of their portfolios, he sees some obvious winners once the Paulson plan is signed into law. Winners: Bank of America (BAC) which has already written down the value of the loans it acquired through its merger with Countrywide, and is currently in the process of doing the same with the assets it received from Merrill Lynch (MER); Wachovia (WB) as the CEO Bob Steel’s previous government experience will enable him to take advantage of the plan by splitting Wachovia into good and bad components and sell off the bad parts quickly to the government; and Goldman Sachs (GS) as it has the currency and capital to become a big international bank. He speculated that Goldman might consider buying Wachovia, which is now valued at just half Goldman’s marketcap. But Cramer said the biggest winner of the plan is the American taxpayer, who will likely turn a profit on the mortgages bought by the government. Cramer pegs the losers as: the suppliers to Boeing (BA) as the company is now entering its thrid week of a labor strike. He put Boeing, along with all of its suppliers, squarely in the Thursday “Sell Block” segment. Boeing suppliers: Spirit AeroSystems (SPR), Rockwell Automation (ROK), Precision Castparts (PCP), Goodrich (GR) and Hexcel (HXL) - are all at risk from a lengthy strike. Cramer took the pulse of the home interiors market by talking with Ethan Allen (ETH) chair/CEO Farooq Kathwari. Kathwari admitted that the current economic situation is the toughest he’s ever seen, but said that his company has the ability to survive it. He said Ethan Allen’s success lies in the fact that it prepared for the downturn, and used the slump to prepare for the next business cycle. Cramer said that Ethan Allen is the only furniture company he’s ever recommended. He’s a fan of the company’s new Website, advertising initiative and 3.5% dividend yield. LIGHTNING ROUND: (Bullish) WIN; RIMM. (Bearish) HUN; M; Q.