Mar 11, 2010

Daily Markets - Financial News And Opinions

Daily Markets - Financial News And Opinions

Statistical Color

Posted: 11 Mar 2010 05:47 PM PST

Although I’m not an economist, I spend a lot of time trying to figure out which way the economic winds are blowing. For a country as large, diverse, and globally connected as the United States, it can be quite challenging deciding which trends and data points are relevant at any given point in time, and which are extraneous, untimely, incomplete, or misleading. It doesn’t help, of course, that many so-called experts in Washington and on Wall Street (along with their enablers in the media) are … [visit site to read more]


Forex Trading: EUR/USD Testing Resistance Again

Posted: 11 Mar 2010 05:33 PM PST

The EUR/USD is again has tested the descending trendline resistance we examined yesterday on the 4-hr chart, with the 4-200hr moving average directly above that line and the 1.37 handle.  The trendline had held yesterday and the pair is continuing to test it early in the Asian session. The signals on this chart might suggest a break through as the moves lower from the last few hits have been less significant than the ones before.

However on the daily chart we this … [visit site to read more]

Q&A On Emerging Markets With Mark Mobuis

Posted: 11 Mar 2010 05:01 PM PST

A recent Q&A with Mark Mobius, Templeton Asset Management’s emerging markets guru, follows below, courtesy of the company’s Market Views newsletter.
What are the pros and cons of investing directly in emerging market equities and bonds as opposed to companies based in developed markets with emerging markets operations?
By directly investing in emerging market equities you obtain full exposure to emerging markets while with investing in developed market companies with emerging … [visit site to read more]

Telefonica SA (NYSE:TEF) – May Get Offered An “Unprecedented Deal”

Posted: 11 Mar 2010 05:00 PM PST

Forbes' recently released list of billionaires shows a Latin America telecom owner at the top of the list, and also a Brazilian, Eike Batista, cracking the top 10 at number eight. It gives you the distinct impression that there's something in those markets worth looking into. One colleague who is intimately familiar with the Spanish-speaking and Brazilian telecommunications market in Latin America is financial editor Jim Nelson of the Lifetime Income Report. Today he issued an urgent … [visit site to read more]

Five Reasons To Be Skeptical About Target-Date ETFs

Posted: 11 Mar 2010 04:01 PM PST

Are you planning to retire someday? Unless you are already retired the answer is almost certainly “Yes.” It’s the American Dream!

Of course, there’s nothing magical about age 65. Some people end their careers earlier and busy themselves in different ways. Others enjoy their work so much they keep on going as long as their health allows.

In either case, you probably have some idea when you’ll want to retire. And you probably consider it when planning your investment strategy - or at least … [visit site to read more]

Tata: The Name You See All Over India

Posted: 11 Mar 2010 04:00 PM PST

Yesterday was another dull day on Wall Street. The Dow rose 2 points. Oil held at $81. Gold didn't move enough for us to remember, one way or another.
The recovery continues…or so says the mainstream financial press. But the economy is still losing jobs…and people are still getting poorer.
NEW YORK (CNNMoney.com) – The percentage of American workers with virtually no retirement savings grew for the third straight year, according to a survey released Tuesday.
The percentage of workers … [visit site to read more]

Cartoon: How China Sees The World

Posted: 11 Mar 2010 03:21 PM PST

Source: The Economist, May 19, 2010 (hat tip: Atlantic Asset … [visit site to read more]

Cartoon: Laws To Curtail Credit Card Charges, But…

Posted: 11 Mar 2010 03:01 PM PST

Source: Dave Granlund, Comics.com, March 9, … [visit site to read more]

Bet Against The Majority. Buy Gold.

Posted: 11 Mar 2010 03:00 PM PST

I was laid out on the couch, which I remember distinctly because my wife was yelling, "If you're going lay down on the couch instead of doing something around the house to help me out, at least take your damned shoes off!" and I was using the remote to idly flip through the channels on TV, hoping to catch something in the vein of happy mindlessness, maybe something in the Gilligan's Island-Bewitched genre, so that I did not have to keep track of a complicated plot and/or a bewildering … [visit site to read more]

CONMED Remains At Neutral

Posted: 11 Mar 2010 02:52 PM PST

We recently maintained our Neutral rating on CONMED Corporation (NASDAQ:CNMD) with a target price of $24 based on a P/E of roughly 19.4x our fiscal 2010 EPS estimate of $1.24.
CONMED Corporation reported fourth quarter fiscal 2009 earnings per share of 37 cents, surpassing the Zacks Consensus Estimate of 32 cents and the year-ago earnings of 34 cents. In fiscal 2009, earnings per share were $1.00, lower than the year-ago earnings of $1.54.
Total sales in the fourth quarter increased 6.4% year over … [visit site to read more]

PIMCO Preps To Boost Bond ETF Lineup

Posted: 11 Mar 2010 02:41 PM PST

PIMCO, the bond fund giant that has quickly become a major player in the fixed income ETF space, is looking to expand its ETF presence even further. The Newport Beach, California-based firm has filed for SEC approval on six new bond ETFs, including:

PIMCO 0-3 Year Banking Sector Corporate Bond Index Fund: This ETF would be based on an index consisting of investment grade corporate debt securities issued by banking institutions with remaining maturities less than three years. Vanguard currently … [visit site to read more]

AIG Unit’s Fate Hangs In The Balance

Posted: 11 Mar 2010 02:23 PM PST

Taiwan’s financial regulator has set five conditions for the American International Group Inc.’s (NYSE:AIG) Nan Shan deal, according to Reuters. The Financial Supervisory Commission (FSC) is expected to give a report to Taiwan’s parliament this Thursday.
Last October, AIG agreed to sell its Taiwan life insurance company, Nan Shan Life, to China Strategic and Hong Kong-based financial services firm Primus Financial. Nan Shan has a third position by market share in Taiwan and has more than 4 … [visit site to read more]

Huntington Reaffirms 2010 Guidance

Posted: 11 Mar 2010 02:08 PM PST

In a regulatory filing with the Securities and Exchange Commission yesterday, Huntington Bancshares Inc. (NASDAQ:HBAN) reaffirmed its 2010 guidance. As announced concurrent with the fourth-quarter earnings release on Jan 22, 2010, Huntington expects to return to a profitable quarterly performance at some time in 2010, which would be earlier than most analysts expect, the company said.
During the fourth quarter earnings release, the company also said that it expects charge-offs and loan loss … [visit site to read more]

Throw The Book At Former Obama Car Czar Steven Rattner

Posted: 11 Mar 2010 02:01 PM PST

Does crime pay on Wall Street?

When those implicated in 'pay to play’ schemes on Wall Street are not dealt with in truly appropriate fashion, everybody loses. Why? We end up with a loss of confidence not only in the markets, but even moreso a loss of confidence in our judicial system. I am not so naive as to think that our fields of justice are level, but that doesn’t mean we should not pursue that goal and highlight inequities when and where we see them.

Those engaged in financial … [visit site to read more]

The Ins And Outs Of Chinese Gold Reserves

Posted: 11 Mar 2010 02:00 PM PST

Here we go again. Markets have caught a chill after signs of inflation fever in China. And that's not even the half of it. Let's dive in…
Consumer price inflation in China hit a 16-month high in February – a 2.7% year-over-year increase. China's National Bureau of Statistics was quick to put out a statement reassuring everyone that "price rises this year will be moderate and controllable," but that's not enough to calm traders looking for excuses to feel jittery.
And any news … [visit site to read more]

Video: NYSE Closing Bell Market Monitor: C, ZLC, SNV

Posted: 11 Mar 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]

DaVita’s Bright Outlook

Posted: 11 Mar 2010 01:53 PM PST

Last month, DaVita Inc. (NYSE:DVA), a leading provider of dialysis services in the United States to patients suffering from chronic kidney failure (also known as end stage renal disease (ESRD)), announced its financial results for the fourth quarter and fiscal year ended Dec 31, 2009. Earnings estimates for 2010 are on the rise following the release of strong fourth quarter and full year 2009 results.
The company earned $1.06 per share, which was well above the year-ago earnings of 94 cents. For … [visit site to read more]

Daily ETF Roundup: UNG Slides, EWJ Surges

Posted: 11 Mar 2010 01:47 PM PST

A barrage of economic data and reports of some major M&A activity gave markets a boost on Thursday, although volume was relatively light for most securities. The number of idled U.S. workers applying for jobless benefits fell by 6,000 last week, and Devon Energy reported that British oil giant BP had agreed to buy its international and deepwater Gulf of Mexico Portfolio for $7 billion. Trading in Citigroup represented nearly one fourth of the markets overall volume following bullish … [visit site to read more]

Anadarko To Reduce $1B Debt

Posted: 11 Mar 2010 01:38 PM PST

Anadarko Petroleum Corporation (NYSE:APC) initiated a cash tender offer to buyback $1 billion of its outstanding debt. The tender offer consists of two separate offers: an Any and All Offer and a Maximum Tender Offer.
The first offer seeks to purchase any and all of the 6.750% Senior Notes due May 2011, originally issued by Anadarko Finance Company, a wholly-owned subsidiary.
Under the terms of the second offer, Anadarko will purchase the 6.875% notes, the 6.125% notes and the 5% notes, due … [visit site to read more]

UTX Share Buyback, F-35 Update

Posted: 11 Mar 2010 01:23 PM PST

The Board of Directors for United Technologies Corp. (NYSE:UTX) authorized a share buy-back program for up to 60 million shares of the company, worth approximately $4.3 billion at current prices.
The new authorization supersedes a previous program, approved in Jun 2008, which is nearing completion. The company repurchased $1.1 billion of its shares during 2009 and expects 2010 repurchases to total $1.5 billion.

Update on Pratt Engine for F-35 Fighter
Meanwhile, the cost escalation on the … [visit site to read more]

Cliffs Takes Steps To Reduce Debt

Posted: 11 Mar 2010 01:06 PM PST

Mining company Cliffs Natural Resources Inc. (NYSE:CLF) yesterday announced that it has priced its public offering of $400 million worth of 5.9% senior notes due March 2020. The company plans to use the net proceeds for general corporate purposes, which could include funding capital expenditures, paying down debt or repaying a portion of the company’s term loan under its credit facility, raised for the Amapa Project in Brazil. The offering is expected to close on March 17, 2010.
Cliffs' total … [visit site to read more]

The Safety Downsides To Globalization

Posted: 11 Mar 2010 01:05 PM PST

China, "workshop to the world," produces low-priced goods that have overwhelmed the global economy with value… except for some notable exceptions.
Historically, it's a nation that's not always held to the same health or safety standards to which US manufacturers, for example, are obligated to uphold. Occasionally it's resulted in disastrous consequences.
In a sometimes-accurate parody of the failures, "Buy, Buy American Pie," written and performed by the Capitol Steps, … [visit site to read more]

Emerging Market ETFs: Does High Growth Lead To High Returns?

Posted: 11 Mar 2010 01:01 PM PST

Thanks to the promise of high growth, emerging market exchange traded funds (ETFs) have been the darlings of the investing world since the economic recovery first sprang to life. But whether it’s roundly true that emerging markets will always outperform developed ones is another question altogether.

Emerging economies have a much healthier balance sheets compared to the developed world, remarks Chris Sholto Heaton for IndexUniverse. Emerging markets should produce higher returns that reflect … [visit site to read more]

Nasdaq Adds Newedge Clearing

Posted: 11 Mar 2010 12:47 PM PST

As reported by the Reuters on Wednesday, Nasdaq OMX Group Inc.'s (NASDAQ:NDAQ) majority-owned International Derivatives Clearing Group (IDCG) has added Newedge USA, LLC, the world's largest multi-asset brokerage and clearing firm, for offering a central counterparty clearing of Interest Rate Swap (IRS) products. IRS, a significant financial risk management tool, has the largest $400 trillion market in the over-the-counter (OTC) derivative sphere.
Nasdaq continues to perform and expand its net … [visit site to read more]

BNY Mellon Acquires BHF

Posted: 11 Mar 2010 12:33 PM PST

As part of its initiative to expand its global market share, Bank of New York Mellon Corp. (NYSE:BK) is acquiring Germany’s BHF Asset Servicing GmbH for $343 million.
The deal, which is expected to close in the third quarter of 2010, will make BNY Mellon the second largest organization in fund administration in Germany. With this acquisition, BNY Mellon’s combined German business will have $642 billion in assets under custody. Also, the deal is expected to be accretive to BNY Mellon’s earnings … [visit site to read more]

Three Reasons Why The Cocoa ETF (NIB) Is Leaving Investors Bitter

Posted: 11 Mar 2010 12:28 PM PST

Many commodities have surged in recent weeks–especially base metals such as copper–on hopes of a continued economic recovery and increased demand from both emerging and developed markets. But not all resources have participated in the recent surge; many of the "soft" commodities, including sugar and cocoa, have slumped. After soaring to finish 2009, the iPath Dow Jones-AIG Cocoa Total Return Sub-Index ETN (NIB) has dropped nearly 14% since the beginning of the year. This weakness is … [visit site to read more]

Initiating Symantec With Neutral

Posted: 11 Mar 2010 12:18 PM PST

We are initiating coverage on Symantec Corporation (NASDAQ:SYMC) with a Neutral rating and a price target of $18.00, representing a P/E multiple of 12.9x our 2010 EPS estimate. We believe Symantec Corp. is fairly valued at its current P/E multiple of 12.6x our 2010 EPS estimate of $1.39, which is a substantial discount to the industry average. Historically, the stock has traded in a 5-year trailing twelve month P/E range of 9.5x to 27.5x, and we expect the company to trade in the same range going … [visit site to read more]

Target Price Raised For Wells Fargo

Posted: 11 Mar 2010 12:03 PM PST

On Tuesday, we raised the target price of Wells Fargo & Company (NYSE:WFC) to $30.00 from $29.00 after the company posted strong fourth-quarter results, paving the way for an optimistic 2010 ahead. The company’s fourth-quarter earnings came in significantly ahead of the Zacks Consensus Estimate, aided by strong growth in revenue and deposits, though offset by higher credit losses.
Wells Fargo has a diverse geographic and business mix that enables it to sustain consistent earnings growth, … [visit site to read more]

Capitalize On The Smartphone Trend With These ETFs

Posted: 11 Mar 2010 12:01 PM PST

As consumers start to loosen the grip on their wallets and search for a solution to fuel their appetite for innovation, the technology sector is likely to reap the benefits.

The technology sector as a whole is relatively broad based.  Of all the sub-sectors included in the sector, those which are involved, either directly or indirectly, with smartphones will likely benefit the most.  According to a research study, the surge in global demand for phones like the Apple (NASDAQ:AAPL) iPhone and the … [visit site to read more]

Uranium And Specialty Metals: A Few Of My Favorite Things, Part II

Posted: 11 Mar 2010 12:00 PM PST

Uranium – One of the best investments you can make right now is to pick up relatively secure, low-cost uranium – the feedstock for nuclear reactors.
The demand for uranium is building in intensity like a heap of hot coals. There are already 436 reactors up and running today. And there is a surge in demand coming in the next decade from the hundred or so new reactors expected to come online. Yet the industry is about 400 million pounds short of meeting that demand, as shown in the chart … [visit site to read more]

Nabi Beats Zacks Estimate

Posted: 11 Mar 2010 11:48 AM PST

Nabi Biopharmaceuticals (NASDAQ:NABI) reported fourth quarter fiscal 2009 (ended Dec 26, 2009) earnings of 2 cents per share (from continuing operations). This was well above the Zacks Consensus Estimate of a loss of 11 cents.
The company suffered a loss of 10 cents (from continuing operations) in the year-ago quarter (ended Dec 27, 2008). Nabi’s loss of 37 cents (from continuing operations) for full year 2009 was against a loss of 44 cents (from continuing operations) in 2008. The Zacks Consensus … [visit site to read more]

Forex Trading: USD/JPY Pressed Up Into An Area Of Resistance

Posted: 11 Mar 2010 11:33 AM PST

The USD/JPY is holding for a second full day inside the Goalposts of the 100MA (90.14) and 200 Day moving averages (91.90.) The positive US data from this morning likely helped the pair stay inside. We will need to look at a shorter timeframe to see if there is potential for a move higher.

Now looking at the USD/JPY on a 1 Hour chart, it is pressed up into an area of resistance at the moment. The pair has been making higher lows, running above the 100 Hour moving average for a few days now. … [visit site to read more]

Investing In Gold During A Fed-Induced Bounce

Posted: 11 Mar 2010 11:30 AM PST

Stocks up, gold down.
Once again yesterday, investors demonstrated their preference for paper over the shiny yellow metal. The Dow Jones Industrial Average notched a slight 3-point gain, while gold tumbled about $17 an ounce.
This divergence between stocks and gold is not enormous, but it is telling. Most investors believe the credit crisis is a mere memory, and that an economic recovery is underway.
Your editor is not persuaded by this conventional wisdom. As a homegrown Californian, your … [visit site to read more]

CA Grabs Nimsoft

Posted: 11 Mar 2010 11:30 AM PST

Leading information technology (IT) management software company CA Inc. (NASDAQ:CA) recently disclosed that it has entered into an agreement to acquire privately-held software company Nimsoft, Inc. in an all-cash deal valued at $350 million.
The company provides IT performance and availability monitoring software solutions for emerging enterprises and other managed service providers. This acquisition will help CA to access a number of smaller-companies served by Nimsoft, which generates revenue in … [visit site to read more]

DexCom Loss Down On Up Revs

Posted: 11 Mar 2010 11:15 AM PST

DexCom, Inc. (NASDAQ:DXCM) reported a net loss of 25 cents per share in the fourth quarter of 2009, a couple cents narrower than the Zacks Consensus Estimate for a net loss of 27 cents and significantly narrower than the year-ago net loss of 49 cents. The significant improvement in financial results was due to higher revenues.
Full year net loss came in at $1.21, well below the year-ago net loss of $2.00. Revenues increased 202% to $29.7 million, with product revenues increasing 122% to $18 … [visit site to read more]

A Year After The Bear Market Bottom: Stock Moves To Make Now

Posted: 11 Mar 2010 11:01 AM PST

With the Standard & Poor’s 500 Index up nearly 70% from the post-financial-crash low it set on March 9, 2009, U.S. stocks on Tuesday recorded their second-strongest showing ever for the first 12 months of a bull market.

But that near-record-setting performance brings to light two key issues.

First, despite the numbers that stand as evidence of the market’s stunning surge, many still-shell-shocked investors refuse to label this as a true “bull market.”
And second, no matter how … [visit site to read more]

Treasury Sells WFSL Warrants

Posted: 11 Mar 2010 10:59 AM PST

The Treasury announced Wednesday that it has received net proceeds of $15.4 million from the sale of warrants it obtained as part of its investment in Washington Federal Inc. (NASDAQ:WFSL) through the Troubled Asset Relief Program (TARP) during the height of the financial crisis. In May 2009, WFSL repaid the entire $200 million of bailout money it had received from the government.
The Treasury auctioned 1.71 million warrants at $9.15 each. The final price was above the floor price of $5 per warrant … [visit site to read more]

How Long Will China Support The US Dollar?

Posted: 11 Mar 2010 10:47 AM PST

China says it is continuing to buy US bonds "every day." It doesn't have much choice. It earns money by selling things abroad. In fact, exports in February were up more than 40% over February '09. This leaves it with a lot of foreign money – most of it in dollars. What can it do with so much money?
China has quietly bought stakes in America's leading companies…and in various businesses all over the world. But the only way large amounts of US dollar cash can be readily and safely … [visit site to read more]

Video: Crude Trades In A Tight Range

Posted: 11 Mar 2010 10:45 AM PST

Front month crude prices remained steady following a clash between weak jobless claims data, low inventories, and a trade balance improvement. … [visit site to read more]

Merck Ests Revised Downward

Posted: 11 Mar 2010 10:44 AM PST

Earnings estimates for Merck & Co. (NYSE:MRK) are on the lower side following the release of fourth quarter and full-year 2009 results. The company's earnings per share (EPS) came in at 79 cents (excluding non-recurring items), marginally beating the Zacks Consensus Estimate of 78 cents but lower than 87 cents reported in the year-ago period. Full-year earnings declined 5% to $3.25.
For the full year, Merck reported a 15% rise in revenues to $27.4 billion, which included Schering-Plough … [visit site to read more]

Cautious Outlook On McKesson

Posted: 11 Mar 2010 10:27 AM PST

McKesson Corp. (NYSE:MCK) reported in-line results for the third quarter of fiscal 2010. Earnings came in at $1.19 per share, in line with the Zacks Consensus Estimate, and 13% above the year-ago profit of $1.05. Meanwhile, revenues increased 4% to $28.3 billion, driven by the strong performance of the Distribution Solutions business.
Although the Distribution Solutions segment grew 4% to $27.5 billion, the loss of two customer buying groups in the U.S. continued to impact the performance of this … [visit site to read more]

Video: Market Movers: SNV, CNK, ZLC, JTX, DPS, BBBY

Posted: 11 Mar 2010 10:09 AM PST

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

Trade Deficit Falls, But…

Posted: 11 Mar 2010 10:08 AM PST

The nation’s trade deficit fell in January to $37.3 billion from a downwardly revised $39.9 billion in December. It did so, however, for the “wrong reason.”
We saw a bigger decline in imports, which dropped by $3.1 billion or 1.69% to $180.0 billion, than we did in exports, which fell by $0.5 billion or 0.35%, to $142.7 billion. It is the wrong reason because both imports and exports fell. We want to see an expansion in world trade, not a contraction.
With the dramatic increase in both imports … [visit site to read more]

More Billionaires In China Than Any Other Nation… Except The US

Posted: 11 Mar 2010 10:05 AM PST

Forbes has revealed its annual list of top billionaires and big gains have been made in Asia. China, for the first time ever, has the most billionaires outside the US when Hong Kong is included.
Notably, a decline in the number and wealth of US billionaires is continuing. The total number of US billionaires is down to 40 percent from 45 percent last year. Also, this year's number one, worth $53.5 billion, is Mexican telecom and conglomerate business owner Carlos Slim. Though, as would be … [visit site to read more]

State Street’s Russia ETF (RBL) Begins Trading Today

Posted: 11 Mar 2010 10:05 AM PST

The SPDR S&P Russia ETF (RBL) began trading on Thursday, becoming just the second U.S.-listed ETF offering exposure to one of the world's largest countries and most unique economies. RBL will seek to track the performance of the S&P Russia Capped BMI Index, a float adjusted market cap-weighted benchmark consisting of publicly-traded companies domiciled in Russia.
Russia's Economy
Russia's commodity-intensive economy was battered during the recent downturn as demand for raw … [visit site to read more]

Video: Weak Jobless Claims Figures Lead To Dollar Decline

Posted: 11 Mar 2010 09:53 AM PST

Investors have steered clear of the US dollar this session following weak US jobless claims figures. … [visit site to read more]

TiVo Upped To Neutral

Posted: 11 Mar 2010 09:35 AM PST

We are upgrading TiVo Inc. (NASDAQ:TIVO) to Neutral from our previous Underperform rating on its better-than-expected fourth-quarter 2010 results driven by higher revenues. 

TiVo recently reported a net loss of 9 cents per share for the fourth quarter of fiscal 2010, 3 cents above the Zacks Consensus Estimate of a loss of 12 cents per share but down from the prior-year quarter. The company had reported a loss of 4 cents per share in the fourth quarter of 2009 due to higher R&D and … [visit site to read more]

Video: BMW’s February Sales

Posted: 11 Mar 2010 07:49 AM PST

BMW AG announced that its February sales figures … [visit site to read more]

Stock Market News Briefs: Intuitive Surgical, Inc.

Posted: 10 Mar 2010 09:00 PM PST

Warning! Earnings season is upon us. Does an earnings report make you nervous about the directional move of a stock? If it doesn’t, it probably should. Many stocks will react in a big way to the news surrounding an earnings report. The challenge is knowing ahead of time which direction the stock will go. If anyone out there has this mastered, please let me know.

This quandary of choosing direction, along with many other scenarios that cause us to expect a large move in price, without a … [visit site to read more]
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