Mar 15, 2010

Daily Markets - Financial News And Opinions

Daily Markets - Financial News And Opinions

The 10 Keys To Short-Selling Profits

Posted: 15 Mar 2010 05:01 PM PDT

Short sellers took a lot of flak for their alleged role in the stock market meltdown of 2008-2009, getting blamed for artificially depressing stock prices, exaggerating the impact of the bad economic news rolling out of Washington and exacerbating the volatility that intensified the financial panic experienced by investors and the general public.

That last allegation was particularly troublesome to market regulators, especially after stock-market researcher Birinyi Associates traced a sudden … [visit site to read more]


It Could Be Time For China To Back Down

Posted: 15 Mar 2010 04:05 PM PDT

Throughout the media, mainstream and otherwise, and especially since the financial crisis, are discussions of China's growing importance… be it in new billionaires or in strengthening political allies. However, Ambrose Evans-Pritchard takes a different tack. When it comes to the current issue of Chinese yuan appreciation in particular, he questions whether China's aggressive ire may have risen a little too far too fast.
From The Telegraph:
"China's premier Wen Jiabao is … [visit site to read more]

Inflation Explosions In A Financial Action Film

Posted: 15 Mar 2010 04:00 PM PDT

There was an interesting item in The 5- Minute Forecast which read, "Within 12 years, the largest item in the federal budget will be interest payments on the national debt," which is pretty scary for guys like you and me, especially if you are, like me, a paranoid, frightened and angry little man who sees nothing but complete catastrophe looming up, rising up out of the mists like a fearful Gorgon to turn you to stone, because the federal government is borrowing and spending too, too, too … [visit site to read more]

Economists To Miss The Next Financial Crisis

Posted: 15 Mar 2010 04:00 PM PDT

Beware the Ides of March…and the rest of the year too!
This is the day Caesar was assassinated. What's it to us?
Well, it just reminds us that things go wrong. Even when you're on top of the world. There are always countercurrents…undercurrents, beneath the surface, where you don't see them…plots…conspiracies…and just bad luck.
On the surface, the US economy is recovering. Well, not even. It is stabilizing.
The Dow has been creeping up. It rose 12 points on Friday. Gold fell $6. … [visit site to read more]

Ciena Retains Neutral Rec

Posted: 15 Mar 2010 03:55 PM PDT

Following the release of Ciena Corporation's (NASDAQ:CIEN) first quarter fiscal 2010 results on March 4, 2010, analysts have made both positive and negative revisions to their estimates.
Linthicum, Maryland-based CIENA is an original equipment manufacturer (OEM) of optical networking equipment, software and services. The company specializes in transitioning legacy communications networks to converged, next-generation architectures, capable of delivering a broader mix of high-bandwidth … [visit site to read more]

First Solar Sells Project

Posted: 15 Mar 2010 03:39 PM PDT

First Solar Inc. (NASDAQ:FSLR) has sold a 30 megawatt (AC) photovoltaic solar power project to Southern Company (NYSE:SO) and Turner Renewable Energy.
 
The Cimarron I photovoltaic solar power project is adjacent to the Vermejo Park Ranch in northern New Mexico . First Solar is developing the project and is providing engineering, procurement and construction (EPC) services.
 
First Solar will also provide operation and maintenance services under a 25-year contract. The facility will supply … [visit site to read more]

Dodd Unveils Reform Bill, Financial ETF (XLF) Yawns

Posted: 15 Mar 2010 03:37 PM PDT

Legislation overhauling regulation of the U.S. financial system, some 18 months in the making, took another step towards becoming a reality on Monday when Senator Christopher Dodd, chairman of the Senate Banking Committee, unveiled a draft bill outlining the framework for new regulatory infrastructure. Several components of the latest bill presented more stringent than had previously been expected, and painted a somewhat frightening picture of a "new normal" for Wall Street executives.
Most … [visit site to read more]

Kroger Upped From Underperform

Posted: 15 Mar 2010 03:22 PM PDT

We recently upgraded our recommendation on Kroger Company (NYSE:KR) to Neutral from Underperform with a target price of $23.00.
 
Kroger's dominant position among the nation's largest grocery retailers enables the company to sustain top-line growth, expand store base and boost market share. The company's fourth-quarter 2009 total revenue (including fuel center sales) rose 7.2% to $18,554.5 million.
 
Kroger's customer-centric business model provides a strong value proposition to … [visit site to read more]

Visa Initiated As Neutral

Posted: 15 Mar 2010 03:06 PM PDT

Recently, we have initiated coverage on Visa Inc. (NYSE:V) with a Neutral recommendation. The company's fiscal first quarter 2010 earnings of 99 cents per share were substantially ahead of the Zacks Consensus Estimate of 91 cents due to better pricing, an increased number of processed transactions, higher cross border volumes and a lower tax rate. However, credit card growth remained tepid due to the overall economic hangover and new U.S. regulations.
 
Visa enjoys an industry leading … [visit site to read more]

Muni Bond ETF Debate: Active or Passive?

Posted: 15 Mar 2010 03:01 PM PDT

Should an exchange traded fund (ETF) be created to beat the benchmark index or outperform it? Municipal bond ETF providers are butting heads over the polemical issue of whether ETFs should offer an investor pure exposure or provide investment know how.

As it stands, the majority of providers such as BlackRock, State Street Global Advisors, Van Eck Global and Invesco Powershares believe passive is the way to go. Those landing on the active side of things include providers such as PIMCO, Grail … [visit site to read more]

TRW Auto Gets Rating Upgrades

Posted: 15 Mar 2010 02:52 PM PDT

Standard & Poor’s Ratings Services has upgraded its corporate credit rating on TRW Automotive Holdings Corp. (NYSE:TRW) to "B+” from "B,” still four notches below investment grade. The upgrade was based on the company's stronger performance in 2009.
Last week, Moody’s Investors Service (NYSE:MCO) lifted the corporate family and probability of default ratings of TRW to "B2″ from "B3″ and of senior secured credit facilities to "Ba2″ from "Ba3″ based on the same reason. The overall … [visit site to read more]

Rating Action On Regions

Posted: 15 Mar 2010 02:40 PM PDT

In yet another sign of dwindling confidence about the company's performance, Standard and Poor's (S&P) on Friday lowered the ratings of Regions Financial Corp. (NYSE:RF) to "BBB-” from "BBB.”

Regions, a regional bank, has a high percentage of commercial mortgage exposure (24% as on Dec 31, 2009) in its loan portfolio. Commercial borrowers generally refinance and roll over the balances into new loans. But tightening credit standards mean that a dwindling number of borrowers would stand … [visit site to read more]

Jacobs Wins Middle East Contract

Posted: 15 Mar 2010 02:30 PM PDT

Jacobs Engineering Group Inc. (NYSE:JEC) won a contract from Marafiq to serve as project management contractor (PMC) for Marafiq’s ongoing investment program in Saudi Arabia. The contract value was not disclosed.

Jacobs will provide PMC services for a number of projects in the industrial cities of Jubail and Yanbu, under a framework that will be in effect for three years, extendable by another three years.

Work includes conceptual design, front-end engineering, design and construction … [visit site to read more]

$6.6 Million From TCBI Warrants

Posted: 15 Mar 2010 02:17 PM PDT

The Treasury announced on Friday that it has received net proceeds of $6.6 million from the sale of warrants it had obtained as part of its investment in Texas Capital Bancshares Inc. (NASDAQ:TCBI) through the Troubled Asset Relief Program (TARP) during the height of the financial crisis. TCBI had repaid the entire $75 million of bailout money it had received from the government in January 2009.
 
The Treasury auctioned 758,086 warrants at $8.85 each. The final price was above the floor price … [visit site to read more]

Daily ETF Roundup: JJC Slides, UUP Jumps

Posted: 15 Mar 2010 02:05 PM PDT

A week full of highly-anticipated events got off to a sluggish start Monday, as most major benchmarks finished little changed in light trading. Perhaps the biggest news of the day came from Moody's, which released a report noting that the margin of error for the U.S. losing its AAA rating has "substantially diminished." Elsewhere, President Obama took his campaign for health care overhaul on the road, while Senator Dodd unveiled a bill with potentially serious ramifications for big banks … [visit site to read more]

The Great Credit Squeeze Is Not Yet Behind Us

Posted: 15 Mar 2010 02:01 PM PDT

If you think that the sovereign debt crisis is mostly behind us … that America’s federal deficit is turning into a non-issue … or that we can just go back to business as usual … you’d better consider the drama now unfolding in the hard numbers just released last week:

February deficit: In February alone, the official U.S. federal deficit was a monstrous $221 billion, far greater than anything we have ever experienced in history.

Back in the 1980s, for example, President Reagan was … [visit site to read more]

T. Rowe Price To Buy China AMC

Posted: 15 Mar 2010 02:00 PM PDT

Investment firm T. Rowe Price Group Inc. (NASDAQ:TROW) is in advanced talks to buy a stake in Asset Management Co. ("China AMC”) from its holding company Citic Securities.

Citic Securities, which is aggressively seeking licenses for margin trading and short selling, has orders from the regulators to reduce its ownership in China AMC to 49% or below. Currently, it owns 100% of China AMC. To comply with regulators, Citic Securities must sell majority ownership of China AMC. The deal will be valued … [visit site to read more]

Northgate Minerals Corp (AMEX:NXG) – Soon Building A “Great Source Of Wealth Creation”

Posted: 15 Mar 2010 02:00 PM PDT

Northgate Minerals Corp (AMEX:NXG), the Vancouver-based gold and copper producer with operations in Canada and Australia, has been reporting mixed news of late… posting a fourth quarter net loss on charges, but also recently producing its two millionth gold ounce.
Chris Mayer, editor of Agora Financial's research newsletter Mayer's Special Situations, has been able to cut through the noise to make several determinations today:
"We got earnings out of gold miner, Northgate Minerals … [visit site to read more]

Two Problems For China, One Solution

Posted: 15 Mar 2010 02:00 PM PDT

"What I don't understand," China Premier Wen Jiabao said, "is depreciating one's own currency, and attempting to pressure others to appreciate, for the purpose of increasing exports. In my view, that is protectionism."
There was a time, long ago – like way back in 2007 – when the only mud slung from the Far East came from the hands of "radical" professors and low-level government officials.
A year ago – almost to the day – Wen expressed his first formal "concern" … [visit site to read more]

Video: NYSE Closing Bell Market Monitor: WMT, XOM, PVH

Posted: 15 Mar 2010 01:51 PM PDT

The latest in news, commentary, and information on what’s moving the US equities markets. Watch this broadcast LIVE at 4:00 pm EST daily @ “http://www.nyx.com/marketmonitor” … [visit site to read more]

Qualcomm Looking For India

Posted: 15 Mar 2010 01:45 PM PDT

Qualcomm Inc. (NASDAQ:QCOM), the largest mobile chipset developer of the world for CDMA technology, is planning to bid for upcoming broadband wireless access (BWA) spectrum in India. The auction is likely to take place in 2011.  Ministry of Telecommunication of the Indian Government is exploring several options to auction the available spectrum for next-generation high-speed 3G networks.

Growing market traction of 3G wireless devices in India is likely to spur growth at Qualcomm. At present, … [visit site to read more]

SIRIUS XM Refinancing Debt

Posted: 15 Mar 2010 01:30 PM PDT

Sirius XM Radio Inc. (NASDAQ:SIRI) is going to offer $800 million of senior notes in a private placement. These notes will bear a coupon of 8.75% and mature in 2015. The company will use the proceeds to pay down a portion of the $1.8 billion of debt maturing in 2013. This move will boost the company's liquidity position.

Liberty Media Corp. (NASDAQ:LCAPB), an affiliate of the issuer, intends to purchase $150 million of the notes in the offering. The size of the new issue was increased from an … [visit site to read more]

European Autos To Face Lower Sales

Posted: 15 Mar 2010 01:18 PM PDT

The European Automobile Manufacturers’ Association has revealed that automakers in the European Union should expect to face slumping sales in 2010 on top of a 17% decline in sales to 15.2 million vehicles in 2009 as the industry has yet to recover from the global economic crisis.
The decline in sales will be more pronounced for passenger cars, especially in countries where fleet renewal schemes have ended, while commercial vehicle registrations are expected to be flat.
In 2009, truck production … [visit site to read more]

Suncor Downed To Underperform

Posted: 15 Mar 2010 01:06 PM PDT

We are downgrading Suncor Energy (NYSE:SU) shares to Underperform from Neutral, reflecting its weak near- to medium-term production outlook and the Petro-Canada acquisition-related risks.
 
Recently, the company informed that a fire at its largest oil sands project in Alberta would only be fixed by early April. This will cut Suncor's production rates during February and March below the company's earlier guidance.
 
Additionally, post the Petro-Canada acquisition (completed on August … [visit site to read more]

Lan Airlines Indicators Up

Posted: 15 Mar 2010 12:47 PM PDT

LAN Airlines S.A. (NYSE:LFL) and its subsidiaries have reported preliminary traffic statistics and punctuality indicators for February 2010.

System passenger traffic for February increased 9.6%. International passenger traffic accounted for approximately 69% of total passenger traffic. The data considers flight cancellations on February 27 and 28 due to the shutdown of the Santiago International Airport following the earthquake that struck Chile on February 27, 2010.

Domestic passenger traffic … [visit site to read more]

Home Builders Index Drops

Posted: 15 Mar 2010 12:47 PM PDT

The National Association Of Homebuilders sentiment index fell to 15 in March from 17 in February. While the index is well off its record low of 8 set back in January 2009, it remains very depressed. The index is set up so any reading below 50 indicates contraction, and the current rate is well below anything seen prior to the Great Recession (although the history only goes back to 1983).
The builders index is a pretty good leading indicator of housing starts. The graph below (from … [visit site to read more]

Health Care 2010 And 1994, And The Political Lessons Of History

Posted: 15 Mar 2010 12:37 PM PDT

Health care reform is necessary, and House Democrats should vote for it because it's best for the nation.
They should also remember the political lessons of history. To paraphrase Mark Twain, history doesn't repeat itself but it does rhyme. As the White House and the House Democratic leadership try to line up 216 votes to pass health care reform — and as Republicans, aided by the National Association of Manufacturers and abetted by fierce partisans like Newt Gingrich, try to kill it – I … [visit site to read more]

Optimistic On Cytori Therapeutics

Posted: 15 Mar 2010 12:33 PM PDT

Last week, Cytori Therapeutics (NASDAQ:CYTX) was notified by the U.S. FDA that they will be required to conduct a clinical program prior to final approval of its Celution System. This was in-line with our expectations. Management plans to meet with the FDA in the next few months to discuss the requirements necessary for the Pre-Market Approval (PMA) program.
Assuming the meeting takes place this second quarter, Cytori should be in position to file the investigation device exemption (IDE) and … [visit site to read more]

AIG Holds Back $21M In Bonuses

Posted: 15 Mar 2010 12:22 PM PDT

American International Group Inc. (NYSE:AIG) will hold back $21 million in retention bonuses to its former employees, according to a Wall Street Journal report.
The company, which will pay out $46 million today in retention bonuses to about 70 employees, both former and current, has made the cut to meet a target imposed by Kenneth Feinberg, the U.S. Treasury Department’s compensation czar. The payout will go to the employees of its financial products unit. This unit's performance was … [visit site to read more]

TEO Misses, But Profit Soars

Posted: 15 Mar 2010 12:16 PM PDT

Telecom Argentina (NYSE:TEO) reported fourth-quarter earnings per ADS of 53 cents, missing the Zacks Consensus Estimate of 67 cents. However, reported net income from continuing operations more than tripled year-over-year to P$399 million (US$105 million), boosted by healthy growth from broadband and mobile segments. For 2009, net profit rose 46% year-over-year to P$1.4 billion (US$377 million). 

Consolidated revenue for the quarter increased 19% year-over-year to P$3.36 billion (US$885 … [visit site to read more]

Shale Natural Gas Resources: Why Europe Doesn’t Stand Much Of A Chance In This Department

Posted: 15 Mar 2010 12:11 PM PDT

It's time to start paying attention to the big, bad oil companies again. And not because the black gold has pushed past $80, either.
Their latest dash for deals signals a shift in how they hunt for new energy sources.
For a long time, the big oil companies believed that shale natural gas resources weren't big enough. So they focused their multi-billion dollar exploration budgets on finding the next big oil field instead.
They never even came close, though they did end up fighting over the … [visit site to read more]

Verizon LTE Phone In Mid-2011?

Posted: 15 Mar 2010 12:01 PM PDT

Verizon Communications Inc. (NYSE:VZ) has hinted that it may roll out handsets based on the Long-Term Evolution (LTE) wireless broadband standard by mid-2011. This is about six months earlier than previous expectations and roughly three to six months following the carrier's planned 4G LTE network launch. 

According to the company's chief technology officer, the initial LTE handsets will feature dual radio chipsets, which will enable the phones to run on both LTE and the existing CDMA … [visit site to read more]

JDS Uniphase Corp. Is Yet Another Rising Star In The Broadband Revolution

Posted: 15 Mar 2010 12:01 PM PDT

We keep getting good news with respect to the broadband revolution.  If you have not read my prior posts, do not miss this special report on it. These developments are revolutionizing the tech world right now and we are at the very inception of an explosive and highly profitable trend.

For starters, both the U.S. economy and the global economy are faring much better than most of the market expected.  In fact, last Friday we saw February’s retail sales blow away even the most optimistic … [visit site to read more]

The First American Brain Drain

Posted: 15 Mar 2010 12:00 PM PDT

Baris Guzel is the kind of fellow who used to find his future in America. Not anymore.
Guzel is a 25-year-old student from Turkey working on his master's degree in engineering management at Duke University. He and four friends plan to launch a company offering a free online tool that would allow website operators to poll their readers.
It might work, it might not. That's what American entrepreneurship is all about. Or it used to be. Unfortunately for America, Guzel is thinking about opening … [visit site to read more]

Homebuilder ETFs Head-To-Head: XHB Vs. ITB

Posted: 15 Mar 2010 12:00 PM PDT

Homebuilders were among the hardest hit sectors during the recent recession, as steep declines in demand for new properties brought this once-booming industry to a standstill. However, the combination of legislative initiatives (such as the home buyer tax credit) and record low interest rates have breathed life into a sector that was recently left for dead. This optimism is visible in the performance of two homebuilder ETFs that are currently available to U.S. investors; the SPDR Homebuilders … [visit site to read more]

Video: Continental To Do Away With Free Food

Posted: 15 Mar 2010 11:56 AM PDT

Continental Airlines announced Monday that it will part ways with free meals for certain flights as it looks to cut costs & add revenue. Instead, Continental will offer passengers the option to purchase food. … [visit site to read more]

ETF First From First Trust: Platinum, Copper Miner ETFs

Posted: 15 Mar 2010 11:37 AM PDT

First Trust, the ETF issuer best known for its line of quant-based AlphaDEX funds, introduced two new ETFs last week that tap into an increasingly popular investment strategy. The First Trust ISE Global Platinum Index Fund (PLTM) and First Trust ISE Global Copper Index Fund (CU) join a number of other ETFs focused on mining stocks, but are the first to specifically target these metals.
PLTM is based on an index that includes global stocks actively engaged in some aspect of platinum group … [visit site to read more]

Video: Crude Plummets On Dollar & Economic Recovery Concerns

Posted: 15 Mar 2010 11:32 AM PDT

Front month crude prices took a dive this session as the US dollar strengthened and concerns continued to grow over economic recoveries for some nations. … [visit site to read more]

Forget Data Mining… Here’s The Only Stock Market Predictor That Actually Works

Posted: 15 Mar 2010 11:23 AM PDT

Monday, March 15, 2010: Issue #1216
There are lots of theories about how to predict future stock market performance.
Most of them are the sheerest nonsense.
There is, in fact, only one indicator that virtually guarantees you will be on the right side of the market.
But first, let's look at the most popular source of misconceived market predictions: Data Mining…
Data-Mining Investing Strategies… Don't Expect Reliable Answers
Every year, investors pour billions of dollars into data-mining … [visit site to read more]

Analyst Interviews: Coal Industry Review And Outlook

Posted: 14 Mar 2010 10:00 PM PDT

Our near-term (6-18 months) outlook for the coal industry has improved somewhat from our previous neutral sentiment to a more positive undertone. Various recent economic indicators suggest that the U.S. economy appears to be stabilizing.
Of late, coal prices have been recovering, prompted by increased U.S. and Chinese coal consumption. The unusually cold winter in parts of the U.S. and the restart of steel production in China have led an increase in the demand for coal. We expect 2010 to be a … [visit site to read more]
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