Jan 14, 2010

Daily Markets - Financial News & Opinions

Daily Markets - Financial News & Opinions

The S&P 500 Must Hold This Level

Posted: 14 Jan 2010 03:45 PM PST

This is how the boy who cried “wolf!” must have felt.

For the past few weeks… er, make that months… I’ve been arguing the rally off the March lows is unsustainable. It’s the beneficiary of phony government stimulus and not the result of true economic improvement. When the stimulus ends, so will the rally.

And for the past few weeks… er, months… I’ve been waking up every morning with egg on my face. Stocks keep trudging higher, like Sherpas climbing Mt. Everest, and my e-mail keeps … [visit site to read more]


Let’s Introduce The Financial Crisis Inquiry Commission To FINRA

Posted: 14 Jan 2010 03:27 PM PST

This morning the Financial Crisis Inquiry Commission is questioning FDIC Head Sheila Bair, SEC Chair Mary Schapiro, Attorney General Eric Holder, and Assistant Attorney General Lanny Breuer.  We continue to hear from Bair, Schapiro, Holder, and Breuer about what changes are and will be occurring in the financial regulatory future more than we hear about what occurred in the past. A few questions about the regulatory past have not truly drilled down and they’ve been easily parried by … [visit site to read more]

Wall Street Brings It On Itself

Posted: 14 Jan 2010 02:38 PM PST

We seem to have come a long way from this time last year, when Wall Street was on its death bed in desperate need of a bailout. Storied brokerage houses such as Bear Stearns, Lehman Brothers and Merrill Lynch had disappeared altogether, while many other household-name titans of finance such as Citigroup (C) and Bank of America (BAC) were deemed “too big to fail” and had to be propped by the U.S. Treasury.
The turnaround in the market from its March '09 lows and the subsequent economic … [visit site to read more]

Daily ETF Roundup: UNG Retreats, EWJ Jumps

Posted: 14 Jan 2010 02:17 PM PST

The financial sector was in focus on Friday as Obama unveiled a plan to tax 50 banks, insurance firms, and broker-dealers in a plan to recoup $90 billion dollars of government funds. Signs of a recovery continued to emerge, and major benchmarks reached 15-month highs. After hours, Intel reported stronger than expected earnings, setting the stage for another strong session to close the week.
The ETFdb 60 Index, a benchmark measuring the performance of asset classes available through ETFs, was … [visit site to read more]

Intel Soundly Beats Estimates

Posted: 14 Jan 2010 02:10 PM PST

Those who expected strong earnings data from Intel Corp. (INTC) this afternoon — which is to say practically everybody — were not disappointed. Intel brought $10.6 billion in revenue (up 13% sequentially) for its fiscal 4th quarter on a whopping record gross margin of 65% and Operating Income up $958 million year over year. Yes, the comparibles to the 2009 fourth quarter were going to be easy to beat; Intel trounced them.
Intel’s 4th quarter EPS was 40 cents per share, soundly beating the … [visit site to read more]

Cartoon: Greed That Caused The Economy To Collapse

Posted: 14 Jan 2010 02:01 PM PST

Source: Ed Stein, Comics.com, January 13, … [visit site to read more]

Foreclosures Of The Future

Posted: 14 Jan 2010 02:00 PM PST

It's hard to picture 2.8 million homes. That's about how many detached homes are in all of Pennsylvania or Illinois. It's also how many homes were lost to foreclosure in 2009.
There were 3.9 million foreclosure filings last year, RealtyTrac reports today, 2.8 million of which resulted in foreclosure. That's a record dating back to at least 2005 — when RealtyTrac started keeping track. We say it's safe to call this one another "worst since the Great Depression" statistic.
Worse … [visit site to read more]

Dubai’s Newest, Most Brilliant Development Project

Posted: 14 Jan 2010 01:58 PM PST

Not an emirate known for taking the most practical approach to real estate development, Dubai's latest effort of constructing a "22-mile-long indoor mountain range" has had to take a back seat to budgetary reality. Or, so says a parody from The Onion.
The new story describes its seemingly endless mission of providing every perk that is completely incongruent with natural life in the middle of the desert:
"'This is a very sad day for the emirate of Dubai,' Crown Prince Hamdan bin … [visit site to read more]

Watson Set To Top Expectations

Posted: 14 Jan 2010 01:56 PM PST

Watson Pharmaceuticals, Inc. (WPI) recently announced that it expects 2009 earnings to meet or exceed guidance provided by the company in Nov. 2009. The company had earlier guided towards earnings in the range of $2.50 - $2.58 per share.
Watson also announced that it expects revenues to increase 9% year over year to $2.7 billion in 2009. The company's shares reacted positively to the news, with the stock gaining roughly 3.5% since the announcement.
The statement, which was made at the 28th … [visit site to read more]

Video: NYSE Closing Bell Market Monitor: LAB, DPZ, MED

Posted: 14 Jan 2010 01:55 PM PST

The latest in news, commentary, and information on what’s moving the US equities markets. … [visit site to read more]

WFC Reorders Fund Offering

Posted: 14 Jan 2010 01:37 PM PST

In an effort to re-align its product portfolio, on Wednesday, Wells Fargo & Co.'s (WFC) investment manager division, Wells Fargo Funds Management, LLC and its affiliate Evergreen Investment Management Company, LLC announced their intention to reduce the size of their mutual fund offering from 177 to 128 products, thereby removing 49 products from the consolidated portfolio.
Also, Wells Fargo is mulling to do away with the "Evergreen Investments” brand, but continue with its advisory … [visit site to read more]

American Axle Expects Profit

Posted: 14 Jan 2010 01:20 PM PST

American Axle and Manufacturing (AXL) stated that it anticipates a profit in the fourth quarter of 2009. With this, the auto components manufacturer would report its second profitable quarter in about two years.
American Axle expects sales of $1.5 billion in 2009, close to the Zacks Consensus Estimate of $1.54 billion. The news prompted the share price to rise more than 7% after the market closed on Wednesday (and pulled back 2% today).
American Axle had posted a net loss of 18 cents (before … [visit site to read more]

H-P Joins Microsoft In The Clouds

Posted: 14 Jan 2010 01:02 PM PST

Cloud computing is the new buzzword for big tech companies across the globe. This new technology is opening up a plethora of business opportunities to tech companies, while helping the end-user streamline their day-to-day workflow without investing much on the hardware upgrade.
Sensing the huge opportunities for growth in this segment, technology majors Hewlett-Packard Company (HPQ) and Microsoft Corporation (MSFT) have entered into a three-year agreement to jointly invest $250.0 million … [visit site to read more]

Ultimate Guide To Agricultural ETFs: Agriculture ETF Investing 101

Posted: 14 Jan 2010 01:00 PM PST

Following the massive injections into capital markets in recent years, inflation has become a major concern of many investors, and the quest to uncover assets that offer portfolio protection against a potential uptick in the CPI has taken on many forms. While inflation-protected bonds are the instrument of choice for some, others have turned their attention to commodities, hoping that the addition of hard assets to a portfolio will reduce overall volatility and provide a hedge against … [visit site to read more]

Prudential Initiated As Neutral

Posted: 14 Jan 2010 12:46 PM PST

We are initiating our coverage on the shares of the Prudential Financial Inc. (PRU) with a Neutral recommendation.
Prudential has one of the best collections of businesses in the U.S. life insurance sector, with strong positions in high margin businesses and a significant diversification. Though there was a drag on revenues in 2008 due to the volatile economic environment, the company has consistently increased its revenues over the past several quarters. With a right mix of business and … [visit site to read more]

More On The Budget Deficit

Posted: 14 Jan 2010 12:26 PM PST

After writing my post yesterday about the Treasury budget numbers for December (see here), I have decided to dig a little bit deeper in to the trends in revenues and outlays so far in this fiscal year, relative to the first three months of the 2009 fiscal year.
While I would encourage you to read the previous post, here is a quick wrap-up:
In the first three months of this fiscal year, the red ink has totaled $388.5 billion, up from $331.5 billion in fiscal 2009. However, total spending, both … [visit site to read more]

PC & IBM To Collaborate On Clouds

Posted: 14 Jan 2010 12:16 PM PST

According to sources, Panasonic Corp. (PC) announced an agreement with International Business Machines Corp. (IBM) under which the latter will provide Panasonic with its Lotus web-based email service and new cloud software for calendars, file sharing, social networking and web meetings.
Management did not provide any comment on the deal and the financial terms were not disclosed. This deployment will be one of the largest cloud computing contracts to date. For IBM, this win is of immense … [visit site to read more]

Ambac Sues Credit Suisse

Posted: 14 Jan 2010 12:00 PM PST

Ambac Assurance Corp, a unit of Ambac Financial Group Inc. (ABK) has sued Credit Suisse Group (CS), alleging the company misrepresented the risks of mortgage-backed securities in a deal Ambac insured in 2007. Ambac claimed that many of the loans involved were fraudulent, based on misstatements of income or occupancy.
Ambac increased its estimate of remediation recoveries on residential mortgage backed securities (RMBS) transactions due to breaches of representations and warranties by … [visit site to read more]

The End Of Extend And Pretend

Posted: 14 Jan 2010 12:00 PM PST

Attention REIT investors! The commercial real estate is a disaster-in-the-making – both for property investors and for the thousands of American banks that are carrying outsized exposure to commercial borrowers.
Commercial real estate borrowers and their lenders face a mountain of debt maturities over the next few years. And re-financing this debt will be next to impossible, thanks to soaring vacancy rates and plummeting property values. "Zombie buildings" are popping up all over the … [visit site to read more]

Key Price Levels: SPY, DIA, QQQQ, And IWM

Posted: 14 Jan 2010 11:56 AM PST

It has been many months since I have looked at the key price levels on the ETF’s that represent the major market indices. This used to be a regular feature back in the early days of this rally. I have recently renewed my interest in this methodology of determining significant turning points as these key price levels tend to represent important areas of support and resistance.

Key price levels are points where buying and selling are most likely to take place. With over 40 years of back tested … [visit site to read more]

No Briggs & Stratton Surprises

Posted: 14 Jan 2010 11:44 AM PST

Briggs & Stratton Corporation (BGG) reported fiscal second quarter earnings of 6 cents per share, which is in-line with the Zacks Consensus Estimate. Quarterly earnings were flat compared to last year as a decline in revenue was offset by lower manufacturing costs and lower engineering, selling, general and administrative costs.
The company reported net sales of $393.0 million for the second quarter of fiscal 2010, which was 17.7% lower than last year's sales of $477.5 million. The … [visit site to read more]

As The Oil Contango Unwinds… Here’s How To Profit From Shipping Rates

Posted: 14 Jan 2010 11:42 AM PST

Thursday, January 14, 2010: Issue #1175
If there's one thing we've learned over the past year or two, it's that there are plenty of charlatans who'll exploit any edge they can to make a quick buck.
From "flash trading" to bundling dodgy mortgage-backed securities, these Gordon Gekko wannabes often leave the little guys on the sidelines, while the big institutions skim all the profits.
But today, we're going to turn the tables on them. Here's how…
The Oil Contango: How To … [visit site to read more]

STLD Making 1st Iron Nuggets

Posted: 14 Jan 2010 11:27 AM PST

Steel Dynamics, Inc. (STLD), the sixth-largest steel maker in the US, has commenced the production of the first batch of iron nuggets at the Mesabi Nugget facility at Hoyt Lakes, Minnesota, using the ITmk3® process developed by Kobe Steel Ltd. of Japan. This is the world’s first commercial production of nuggets using the ITmk3 process.
Steel Dynamics has built the Minnesota nugget plant in cooperation with Kobe Steel, which has licensed the technology and provided equipment and technical … [visit site to read more]

Continuing Jobless Claims Fall

Posted: 14 Jan 2010 08:43 AM PST

The initial claims for unemployment insurance report was a mixed bag. The numbers are always a bit flaky around the holiday season, so there will still be a fair amount of uncertainty about the real state of the job market for at least a few more weeks.
Initial claims rose by 11,000 to 444,000 last week. However, the 4-week moving average — which takes out some of the big volatility in the week-to-week numbers, and is even more important than normal around the holidays — fell by 9,000 to … [visit site to read more]
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