Jan 7, 2010

Daily Markets - Financial News & Opinions

Daily Markets - Financial News & Opinions

Getting That Vacant Look

Posted: 07 Jan 2010 11:04 AM PST

Many of the government efforts to help the housing market, such as the Fed buying up fully one quarter of all the mortgage-backed securities backed by Fannie Mae (FNM), Freddie Mac (FRE) and Ginnie Mae, as well as the "first time” homebuyer tax credit, are designed to move people from being renters to being owners. But while there are some ancillary benefits to neighborhoods of most people owning rather than renting, it really does not solve the problem.
What it does is cause there to be … [visit site to read more]


Chart Of The Day: Subpar Recoveries Follow Financial Recessions

Posted: 07 Jan 2010 11:01 AM PST

“Economic cycles associated with financial traumas such as banking crises or asset price collapses tend to have deeper downturns and weaker upturns. The current uptrend in US economic growth should be sustained, but the rebound will remain subdued compared to recent recoveries,” said BCA Research.
The chart below illustrates the typical recovery patterns following financial and non-financial recessions respectively. As they say, a picture paints a thousand words … Should the … [visit site to read more]

Parasites, Bureaucracy And Soviet Boots

Posted: 07 Jan 2010 11:00 AM PST

The real economy declines. The parasites multiply. See chart below…
First, a look at the markets:
Stocks went nowhere yesterday. Maybe the feds had taken the day off; MarketWatch charges them with manipulating share prices.
Gold, however, staged a $17 rally. The correction in the gold market may be over. Or it may not. This market has more surprises in store; we're certain of it.
"I think you're wrong about something," begins a letter from a Dear Reader. "You act as though … [visit site to read more]

Thermo Fisher Initiated As Neutral

Posted: 07 Jan 2010 06:00 AM PST

We recently initiated coverage on Thermo Fisher Scientific, Inc. (TMO) with a Neutral recommendation. We rate the stock as Neutral with a target price of $50 based on a P/E of 15.0x our fiscal 2010 EPS estimate of $3.33. 

Thermo Fisher reported third quarter fiscal 2009 earnings per share of 78 cents, surpassing both the Zacks Consensus Estimate and the year-ago earnings of 76 cents. Net sales in the reported quarter declined 2% year over year to roughly $2.5 billion. In terms of … [visit site to read more]

Canada Presses UBS For Client List

Posted: 07 Jan 2010 05:41 AM PST

Canada continues to pursue UBS AG (UBS) for the details of Canadian clients who have accounts in the Swiss bank. The Canadian government is negotiating with the Swiss Bank since September last year. However, Canada's Revenue Minister Jean-Pierre Blackburn has warned that, if required, Canada will take UBS to court to extract the details of indigenous clients.
 
Blackburn said on Tuesday that around 96 Canadian clients of UBS have voluntarily disclosed their UBS accounts to Canada's … [visit site to read more]

IRS Plans To Regulate Tax Preparers

Posted: 07 Jan 2010 05:24 AM PST

The Internal Revenue Service (IRS) plans to regulate the U.S tax preparers from the 2011 tax season. This includes mandatory registration, competency testing and continuing education requirements for tax preparers.
 
Tax preparers, such as H&R Block Inc. (HRB) and Jackson Hewitt Tax Service Inc. (JTX) may need to satisfy these requirements.
 
According to the IRS, over 80% of Americans use a tax preparer or tax software for filing their tax returns. The new regulation is … [visit site to read more]

Video: Market Movers: AA, SHLD, BAC, GME, LEN

Posted: 07 Jan 2010 03:08 PM PST

The latest news and information on U.S. stocks that are moving the market. … [visit site to read more]

MetLife Vends $2.5B Notes

Posted: 07 Jan 2010 10:07 AM PST

Yesterday, MetLife Global Funding I, a unit of MetLife Inc. (MET), announced a two-part sale of its notes worth $2.5 billion. The first part includes $1 billion of notes at an issue price of $100, maturing on July 13, 2011. These 18-month floating-rate notes will bear a rate of interest at 3-month Libor rate plus 40 basis points. Interest on the notes is payable quarterly in equal installments, commencing on April 13, 2010.
 
The second part includes $1.5 billion of notes at an issue … [visit site to read more]

11 Corporate Bonds Yielding 8% Or More

Posted: 07 Jan 2010 10:01 AM PST

Given the moderate economic recovery, the outlook for corporate bonds has improved dramatically. On one hand, the rate of defaults initially anticipated during the apocalypse in early 2009 will surely be much lower than feared. Conversely, bond prices have rallied, bringing many double-digit yield opportunities back to earth. However, there are still several recognizable blue-chip names with decent ratings (BBB and better) that exceed 8% yield with the opportunity for upside on the bond … [visit site to read more]

ZymoGenetics Raising Money

Posted: 07 Jan 2010 04:49 AM PST

ZymoGenetics Inc. (ZGEN) recently announced that it will sell 12 million shares of its common stock in a public offering. The underwriters will have a 30-day option to purchase up to a further 1.8 million shares of common stock to cover any over-allotments. The sole manager for the offering is Leerink Swann. The public offering amounts to approximately 17% of ZymoGenetics' total outstanding shares of about 69.3 million as of Oct 30, 2009.
 
The offer, which has not yet been priced by … [visit site to read more]

Video: Dollar Rise Continues Again

Posted: 07 Jan 2010 02:48 PM PST

The US dollar continued to rise this session following an improvement in jobless claims figures. … [visit site to read more]

Ev3 Completes Catheter Recall

Posted: 07 Jan 2010 04:35 AM PST

ev3, Inc. (EVVV) recently completed a voluntary Class I recall of its TrailBlazer Support Catheter. The catheter was recalled as a result of the device cracking near its marker band. ev3 received these complaints from physicians during the initial limited market release of the device in the U.S. The company initiated the recall of these devices from November 2009.
 
ev3 recalled roughly 350 individual catheters and at present has the possession of all the affected units. The company has … [visit site to read more]

Morgan Stanley Wins Lawsuit

Posted: 07 Jan 2010 04:18 AM PST

Morgan Stanley (MS) recently announced that it has won a legal case for breach of contract against its former subsidiary, Discover Financial Services (DFS) along with a compensation amount of about $800 million that the latter owed to Morgan Stanley.
 
The case was filed by Morgan Stanley in 2008 when Discover refused to pay a specified amount to the former as part of their spin-off agreement in 2007. The agreement entitled Morgan Stanley to a share of $1.2 billion from the $2.75 … [visit site to read more]

New Year, New Life?

Posted: 07 Jan 2010 09:17 AM PST

Fundamentals
Gold futures have been steadily climbing over the past three weeks on a reversal in the Dollar and positive economic signs. The precious metal may, however, face pressure if the Fed hints at increasing interest rates, which could bolster the Dollar. Further signs of economic strengthening can be seen as a near-term positive for Gold, as it hints at inflationary conditions. Over the long-term, stronger conditions would likely force the Fed to raise rates on concerns that the low … [visit site to read more]

Cephalon’s Nuvigil Under Pressure

Posted: 07 Jan 2010 09:02 AM PST

Cephalon Inc.'s (CEPH) Nuvigil remains under pressure as yet another generic company is seeking to market a generic version of the drug. Watson Pharmaceuticals, Inc. (WPI) recently confirmed that it has filed an abbreviated new drug application (ANDA) with the US Food and Drug Administration (FDA) seeking approval to market its generic version of four dosage strengths (50 mg, 100 mg, 150mg, 200 mg, and 250mg) of Nuvigil.
 
Watson believes it is first to file on the 100 and 200 mg … [visit site to read more]

Brazil To Benefit From The New Carry Trade?

Posted: 07 Jan 2010 08:46 AM PST

We had more probing higher in the non-dollar currencies only to see the gains wipe away at the end of the day, yesterday. Still, as I told a radio audience in Oregon yesterday, traders, investors, etc. still believe the euro (EUR) is worth more than the dollar by quite a bit… Gold also gave back some gains overnight…
Speaking of the euro… The European Central Bank (ECB) has already shrunk their balance sheet by 9.5%. Talk about being more credible than the Fed… The Fed, on the other … [visit site to read more]

Dynavax Buys Symphony

Posted: 07 Jan 2010 03:44 AM PST

Recently, Dynavax Technologies Corp. (DVAX) completed the acquisition of Symphony Dynamo, Inc. in a stock deal. Under this agreement, Dynavax issued 13 million shares of its common stock to Symphony. The company in return received $20 million in cash as well as rights to its own hepatitis C and cancer treatments held by Symphony. In the event of Dynavax partnering the programs for hepatitis C and cancer therapy, Symphony stands to receive half of the first $50 million received from any … [visit site to read more]

WisdomTree Plans Active Currency ETFs

Posted: 07 Jan 2010 08:32 AM PST

WisdomTree, the New York-based ETF issuer best known for its fundamentally-weighted domestic and international ETFs, is looking to expand its line of currency products. In a recent filing with the SEC, WisdomTree highlighted two new funds that would offer unique exposure to the U.S. dollar.
The first proposed ETF is the WisdomTree Rising Dollar Fund, which would seek to benefit from appreciation in the U.S. dollar relative to a selected basket of non-U.S. currencies. Up to 15 currencies, … [visit site to read more]

New PML Cases For Biogen Drug

Posted: 07 Jan 2010 03:28 AM PST

Biogen Idec Inc. (BIIB) recently announced that 4 more cases of progressive multifocal leukeoencephalopathy (PML), a potentially deadly brain infection, were observed in November in patients taking its multiple sclerosis drug Tysabri.
 
This brings the total number of PML cases to 28. The company will be providing information on additional cases of PML observed in the month of December shortly. Tysabri is the second multiple sclerosis product in Biogen's portfolio and is a major … [visit site to read more]

Australian Dollar: The Bias Remains Bullish

Posted: 07 Jan 2010 08:18 AM PST

Update on supports and resistances. … [visit site to read more]

Canadian Dollar: Caution

Posted: 07 Jan 2010 08:18 AM PST

Update on supports and resistances. … [visit site to read more]

ETP Offers Common Units

Posted: 07 Jan 2010 08:12 AM PST

Energy Transfer Partners L.P. (ETP) – a natural gas and propane gas distributor – priced the public offering of 8.5 million common units at $44.72 per unit, with a 30-day over-allotment option for an additional 1.3 million units. The partnership plans to use the net proceeds from this offering to pay back the outstanding indebtedness under its revolving credit facility, to finance capital expenditures associated with pipeline construction projects, and for general partnership purposes. … [visit site to read more]

Investing In Russia: Steer Clear Of This Debt-Saddled “BRIC” Bully

Posted: 07 Jan 2010 07:58 AM PST

These days, you don't have to look far to read about success stories within the "BRIC" nations.
However, while Brazil, India and China enjoy solid growth, the remaining member – Russia – has fallen to the bottom of the pack.
And with good reason.
Having gained significant investment popularity before the global financial crisis hit, it's no coincidence that Russia began to fall on hard times around the same time that the recession took hold and oil prices dropped from the $140 … [visit site to read more]

Forex Trading: USDCHF

Posted: 07 Jan 2010 07:58 AM PST

Video: Alcoa Gets Downgraded

Posted: 07 Jan 2010 12:53 PM PST

Alcoa (AA) was downgraded this session from buy to hold by Citigroup. … [visit site to read more]

Will Backwardation Boost UNG?

Posted: 07 Jan 2010 07:50 AM PST

In 2009, billions of investor dollars flooded into the United States Natural Gas Fund (UNG) in an attempt to capitalize on an anticipated jump in price as the clean-burning fuel becomes the energy source of the future. Spot gas prices finished the year little changed — down less than 1% — but UNG lost more than half its value, as the complexities of a futures-based strategy ate into returns. Despite seeing more than $5.6 billion in cash inflows, UNG finished 2009 with $4.6 billion in … [visit site to read more]

Video: Asian Markets In The Red

Posted: 07 Jan 2010 12:47 PM PST

In a reversal of yesterdays trading session, each of the major Asian/Pacific markets was in the red today following a decline in domestic banks. … [visit site to read more]

Microsoft At CES 2010

Posted: 07 Jan 2010 02:43 AM PST

Microsoft Corporation's (MSFT) keynote at the 2010 Consumer Electronics Show (CES) held few surprises. Although management did have announcements in computing, gaming and entertainment, there was no elaboration of the cell phone strategy, which might be discussed next month at the Mobile World Congress in Barcelona.
 
Computing
 
Despite recent rumors regarding a touchscreen mobile computer called the Courier, Microsoft did not highlight the device at the CES. Instead, the … [visit site to read more]

Initial Claims Rise Slightly

Posted: 07 Jan 2010 02:42 AM PST

Initial claims for unemployment insurance rose to 434,000, an increase of 1,000. That, however, comes on the heels of a very large drop last week, and both weeks have some holiday distortions in them.

Given the week-to-week volitility in the numbers, it is best to look at the 4-week moving average. There, the news is significantly better. The 4-week average fell by 10.250 to 450,250. Since the 4-week average is well above the level of this week and last week on the single-week basis, it … [visit site to read more]

Why You Should Expect Small-Caps To Shine (Again) In 2010

Posted: 07 Jan 2010 02:42 AM PST

Thursday, January 7, 2010: Issue #1170
The well-documented, post-recession rally for small-caps is not a sprint. It's more of an endurance test, like a marathon.
But don't just take my word for it. Take a look at the hard data…

On average, small-caps outperform their large-cap neighbors for a full three years coming out of a recession, according to Morningstar.
Coming off particularly nasty slowdowns, small-caps boast even more endurance. For example, after the 1973-1974 recession, … [visit site to read more]

Video: NYSE Opening Bell Market Monitor: HSY, BAC, AA

Posted: 07 Jan 2010 12:38 PM PST

The latest in news, commentary, and information on what’s moving the US equities markets. Watch this broadcast LIVE at 9:30 am EST daily @ “http://www.nyx.com/marketmonitor” … [visit site to read more]

Invesco To Offer 7M Shares

Posted: 07 Jan 2010 02:31 AM PST

Invesco Mortgage Capital Inc. (IVR) said on Wednesday that it intends to commence a public offering of 7 million shares of its common stock.
 
Invesco Mortgage will grant the underwriters a 30-day option to purchase up to 1.05 million additional shares to cover over-allotments.
 
The company intends to use the proceeds from the offering for additional acquisitions of residential and commercial mortgage-backed securities and mortgage loans and other general corporate … [visit site to read more]

“Overdrive” To Drive Sprint 4G

Posted: 07 Jan 2010 02:17 AM PST

Sprint Nextel (S) has confirmed that it will market the new dual-mode (operating on 3G and 4G networks) wireless router called "Overdrive” in the US. Manufactured by Sierra Wireless (SWIR), the device will be available exclusively for Sprint's high-speed wireless customers starting January 10, 2010, for $99.99 after a $50 mail-in-rebate under a two-year service contract. The unlimited 3G/4G data plan will cost $60 per month.    
 
The upcoming 3G/4G router … [visit site to read more]

Forex Trading: EURUSD Continues To Consolidate With A Lower Bias. Bear Flag Eyed.

Posted: 07 Jan 2010 07:04 AM PST

There is more talk of the bear flag forming in the EURUSD.  The bottom trendline comes in at the 1.4273.  A break should be accompanied by additional selling momentum.  Keep the level in mind. 

Off the shorter term 5 minute chart, the price remains with a bearish bias as the price remains below the 100 bar MA on the 5 minute chart. The current level comes in at the 1.4343 after testing the moving average level once this morning in the NY session.  If the price can … [visit site to read more]

Forex Trading: NZDUSD Testing 100 Hour MA Support

Posted: 07 Jan 2010 01:54 AM PST

The NZDUSD has been rallying for the last 3 or so weeks. During that time the price has been able to track above the 100 hour MA . Over the last 3 days, the price is consolidating and over the last 6 hours the pair is testing this moving average hard. The current 100 hour MA comes in at the 0.7320 level. .  The low for the day comes in at the 0.7312.  These levels are key support. A move below should lead to further downside momentum for the pair with a target being the 38.2% … [visit site to read more]
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