Wang’s Happy Trading

Posted By Optiondragon for myhappytrading.com, a site made by traders for traders, join us for free and read other awesome market articles from our community and write your own!!

From Briefing.com

Periodicals Wrap-Up for Thursday, October 2nd
WALL STREET JOURNAL: According to people familiar with the matter, the Wall Street Journal reported that Eli Lilly (LLY) is in advanced talks to acquire ImClone (IMCL) for nearly $6.1B. A formal offer may lead Bristol-Myers Squibb (BMY) to increase its $62 a share bid for ImClone…FINANCIAL TIMES: The Financial Times reported that troubled U.S. insurer American International Group (AIG) is preparing a large sale of assets, though executives have reportedly yet to decide which parts of its portfolio of global operations to sell. Interested parties — including sovereign wealth funds, private equity groups and U.S. and European insurers — are said to be positioning themselves to pick out assets including some of AIG’s large operations in Japan and Asia and some of its U.S. insurance businesses….The Financial Times also reported that EDF is looking to trump a deal for Berkshire Hathaway’s (BRK.A) MidAmerican Energy to take over Constellation Energy (CEG) for $4.7B and is said to be nearing a deal with private equity group KKR for EDF. EDF will reportedly meet in the next two weeks to approve a revived approach with KKR and is hoping Warren Buffett will be forced to bow out of the deal due to increasing pressure on Constellation’s board to consider other offers…REUTERS: Sony (SNE) said its PlayStation 3 video came console and the portable PSP are set to meet full-year sales targets and are selling faster than expected. Reuters reported that driven by solid demand for video games and the appeal of the Blu-ray disc movie system in the devices, Sony expects to meet its targets even if the current economic environment hurts holiday demand…

Asian Markets Wrap-Up for Thursday, October 2
Automobile manufacturers and commodity companies led a decline in a majority of Asian stocks, following extremely weak U.S. vehicle sales reports for September and continued investor concerns about a global economic slowdown. JAPAN: The Nikkei 225 slumped 1.88% to 11,154.76. Honda Motor (HMC) retreated 4.5%, Mazda (MZDAF) sank 12%, and Toyota (TM) lost 3.4%. Nippon Steel (NISTY) dropped 8.5% and JFE Holdings (JFEEF), another steel maker, fell 8.8%. Construction equipment maker Hitatchi Construction tumbled 15%. On a positive note, mobile phone company NTT DoComo (DCM) advanced 4.2%. HONG KONG: Shares rallied, led by Ping An Insurance (PNGAY) and utilities. The Hang Seng Index rose 1.08% to 18,211.11. Ping An Insurance announced that it abandoned its plan to buy 50% of European bank Fortis’ asset management unit, and Ping An jumped 14%. Electric utility CLP added 3%, and Hongkong Electric Holdings (HGKGY), another utility, gained 2.5%. Mobile phone maker Foxconn (FXCNF) rallied 16% as bargain hunters bought the beaten up stock. AROUND ASIA: China’s CSI 300 added 0.91%, but Taiwan’s Taiex declined 1.05% and South Korea’s KRX 100 dropped 1.47%…Australia announced that it had a trade surplus of $1.1B in August.

Senate passes bailout bill
A bill to provide authority for the Federal Government to purchase and insure certain types of troubled assets for the purposes of providing stability to and preventing disruption in the economy and financial system and protecting taxpayers, to amend the Internal Revenue Code of 1986 to provide incentives for energy production and conservation, to extend certain expiring provisions, to provide individual income tax relief, and for other purposes.

Auto loans, leases are hard to find-WSJ
So much for easy credit when buying an automobile. These days auto dealers, auto finance companies and other lenders can’t find money to lend to buyers, reports the Wall Street Journal. No matter what your credit it’s nearly impossible to get a loan. “You have to just about be walking on water to get financed,” says Mike Jackson, AutoNation (AN) CEO, who adds that the subprime market is “basically almost closed” but “even with our prime customers, banks are looking for a reason to say no.” There are exceptions–Toyota (TM) and BMW are in pretty good shape–but even the used car market is suffering.

SEC extends short selling ban to no later than October 17-WSJ
Two weeks ago the SEC stopped short selling of about 1,000 stocks and now will extend it for three days past whenever the $700B bailout plan becomes law, but no later than 11:59 pm on October 17, according to the Wall Street Journal. Also, hedge fund managers will have to disclose their short positions until the 17th, and then the hedge fund rule will be permanent.

AIG’s assets are likely to attract several potential buyers-FT
AIG (AIG) is preparing to launch a sale of its assets that will probably draw interest from a number of sovereign wealth funds, private equity firms, and U.S. and European insurers. AIG’s executives still haven’t decided which of its operations to sell, but some potential buyers are already planning to bid for its most attractive units.

Beijing tightens visa restictions on Macau visitors-AFP
Reports say that China has placed more visa restrictions on visitors to Macau in an effort to hault the gaming growth. Visitors from Guangdong, one of the main sources of tourists to Macau, will now be allowed to visit once every three months instead of once every two weeks previously. Andy Wu, president of the Travel Industry Council of Macau, said numbers would still be up 10 percent this year, the South China Morning Post report said.

U.S. equity futures continue to point to a lower open
Futures continue to point to a lower open. The LIBOR rate in London has risen for the fourth straight day despite the Senate’s approval of the bailout package last night. The interest rate is what banks charge each other to borrow and the increase signals that banks have not yet started to lend to each other. In addition, the ECB announced this morning that they would keep interest rates in Europe unchanged at 4.25%. The hope is that the rates will eventually ease to help unclog the log jam in the credit markets.

Wolfson hit by “material reduction” in iPhone order intake-The Guardian
Wolfson Microelectronics, which makes semi-conductors for Apple’s (AAPL) iPhone and handsets for LG and Samsung, has warned of a “material reduction” in orders over the last few days. The company reduced its Q4 revenue forecast as a result of the general economic environment, although Wolfson cautioned that this is not “reflective of any material design loss”.

Analysts Upgrade Summary for Thursday, October 2nd
MOST NOTEWORTHY: UBS AG (UBS), Sovereign Bancorp (SOV) and Longtop Financial (LFT) were today’s noteworthy upgrades: Deutsche Bank upgraded shares of UBS to Buy from Hold following the company’s Q3 update as they believe the quarter marks a turning point. Friedman Billings upgraded Sovereign Bancorp to Market Perform from Underperform as they believe the company’s deposits are showing stability despite the massive sell-off. Kaufman Bros. raised Longtop Financial to Buy from Hold on valuation as they believe Chinese software service stocks now reflect the investment risks…OTHER UPGRADES: Lear (LEA) was upgraded to Hold from Sell at Citigroup. DISH Network (DISH) was lifted to Hold from Sell at Soleil. Merrill raised BP Plc (BP) and Total SA (TOT) to Neutral from Underperform. :

Analysts Downgrade Summary for Thursday, October 2nd
MOST NOTEWORTHY: Epicor Software (EPIC), eBay (EBAY) and Con-Way (CNW) were today’s noteworthy downgrades: Jefferies downgraded shares of Epicor Software to Hold from Buy following the acquisition offer by Elliott Associates on valuation as they believe the company has limited options. The firm does not expect a bidding war and can’t see EPIC management accepting the offer. Morgan Stanley downgraded eBay to Equal Weight from Overweight citing checks that indicate deteriorating trends are worst than expected. Con-Way was downgraded to Neutral from Buy at Goldman and to Neutral from Overweight at JP Morgan following the company’s reduced Q3 guidance…OTHER DOWNGRADES: Juniper (JNPR) and Pediatrix Medical (PDX) were downgraded to Market Perform from Outperform at Morgan Keegan. Merrill cut StatoilHydro (STO) to Underperform from Neutral. HSBC (HBC) was lowered to Market Perform from Outperform at Keefe Bruyette.

Analysts Initiation Summary for Thursday, October 2nd
MOST NOTEWORTHY: The Ocean Shipping sector, Casella Waste (CWST) and InfoSpace (INSP) were today’s noteworthy initiations: Oppenheimer initiated the Ocean Shipping sector with a Neutral view. The firm thinks the potential for near-term downside has mostly been priced in after significant stock price declines since May and recommends actively trading the sector. The firm initiated Capital Product Partners (CPLP), Genco Shipping (GNK), and Diana Shipping (DSX) with Outperform ratings due to compelling valuations. The firm also started General Maritime (GMR) and Nordic American Tanker Shipping (NAT) with Perform ratings and assumed coverage of DryShips (DRYS) with a Perform rating. Casella Waste was initiated with a Hold rating and $14 target at Stanford, citing the company’s leverage, maturing debt, and the current macroeconomic environment. InfoSpace was assumed with a Hold rating and $11 target at Kaufman Bros. The firm believes it will be difficult for the company to slow its market share losses…OTHER INITIATIONS: Merrill started Methode Electronics (MEI) with an Underperform rating and $8 target. Huntington Bancshares (HBAN) and Zions Bancorp (ZION) were initiated at Morgan Keegan with Market Perform ratings.

Jim Cramer’s “Mad Money”
Cramer said the pundits against the $700B bailout package are dead wrong on the facts. He said he’s tired of hearing how this option or that option just won’t work. He asked those opposed to the bailout plan to “Tell us what will work.” Cramer said he understands that it might be difficult for investors to think about stocks at a time when they’re worried about losing their jobs or their home, but he feels the market now represents a great value for the long term. He said Monday’s sell-off was a clear sign to sell stocks, but the rally yesterday was a sign to buy them. Cramer said he’s taking the middle ground, staying defensive with consumer stocks and high dividend stocks while looking for real bargains amidst the rubble. Cramer said he’s “never seen a company so cheap in his life,” like KBR Inc.(KBR). Cramer said the decline in price is not due to the fundamentals, but rather to fears that a Democratic president would cut defense, as well as hedge funds being forced to liquidate their positions to cover redemptions. KBR has a $15B backlog, about $9 per share in cash and trades at just 7.5x its forward earnings. Cramer says, KBR continues to secure new business and grow its backlog. He also noted that in April, 2009 KBR will be eligible to sell itself, making it a prime takeover target for a multitude of companies. Cramer said the stock would fetch a $33 price target and a 118% gain in the stock. And, giving KBR the same valuation as previous deals, Cramer said the stock could fetch as much as $55 a share in a takeout. LIGHTNING ROUND: (Bearish) SIG; X; HON; JEF; AUY; ACI.

Fast Money position recap- First Moves: Guy likes long NVN, Pete likes NCC, Jeff likes long Berkshire Hathaway.
Macke Owns (MSFT), (WMT), (HAS), (UUP); Adami Owns (AGU), (BTU), (C), (GS), (INTC), (MSFT), (NUE); Najarian Owns (WB); Najarian Owns (AAPL) And (AAPL) Puts; Najarian Owns (BIIB) Calls; Najarian Owns (GS) Call Spread; Najarian Owns (MS) And (MS) Puts; Najarian Owns (NCC) Calls; Najarian Owns (XLF) Call Spread; Terranova Owns (MA), (AAPL), (EOG), (FCX), (FTO), (GS), (KOL), (NOV), (POT), (X),  (VLO), (YHOO); Terranova Owns (MS) And Is Short (MS) Call; Terranova Owns (AIG) And (AIG) Puts.

Still keeping nimble and taking things a day at a time. Can you really trust the politicians and make a market move and hold it overnight? See you in the trading room….