These are some of the upgrades and positive analyst calls we are seeing this Wednesday morning:
Jon C. Ogg
October 1, 2008
These are some of the downgrades and cautious analyst calls we are seeing this Wednesday morning:
Jon C. Ogg
October 1, 2008
Hope dies hard. A lot of Wall St. analysts still think that earnings from the S&P 500 companies will be up in aggregate in Q4 2008 compared with the same quarter last year.
There is an extremely good chance that the projection will be wrong.
To a large extent, the earnings math will depend on financial companies because they have such a significant part of the pie. If the government bailout works and Paulson buys assets at a full price, banks may get a reprieve. However, they may be faced with other consumer write-offs and falling underwriting, M&A, and LBO revenue. Some LBO loans may still have to be accounted for and that is not likely to help.
While the market was busy looking at all of those "For Sale" signs around most neighborhoods, it forgot that people also put three or four expensive cars in their driveways and bought $5,000 home entertainment centers.
Someone has to pay for all of that hardware, but it is not going to be the people who bought it. They are broke and jobless. The repo men are being sent from car loan companies and Best Buy (BBY) to get the stuff back. Unfortunately, used cars and consumer electronics have not held their value.
The rule about scandals was set a long time ago. A company or individual can create a scandal. Government rules and regulations are, by definition, scandal-proof. They are sanctioned by the high priests of federal agencies. Questioning their validity or legitimacy is futile.
The SEC and Financial Accounting Standards Board have decided that the rules by which banks and brokers value illiquid securities are a bit too onerous. It was an error for them to have been so stringent in the past. Changing the size of the playing field can fix that, even if it muddles the measurement of asset problems at financial companies.
Detroit is getting its $25 billion in loan guarantees from the federal government. Ford (F), GM (GM), and Chrysler did not have access to enough capital to upgrade their plants without outside help.
The capital gives the Big Three the opportunity to move from SUV production to fuel-efficient sedans. The theory is sound. Gas prices will stay high from here on out. Competing using a line of 15 MPG pick-up trucks is out of the question.
According to Reuters, a Senate plan to vote on the bailout package pushed US markets up.
Reuters reports that the FDIC would like to increase the value of the accounts it insures.
Reuters reports that the SEC gave management more flexibility in the use of mark-to-market accounting at financial companies
The Nikkei rose 1% to 11.368. Canon rose on expectations that the US economy may improve.
Nomura was up 8% and Mitsubishi UFJ Financial over 3%.
Markets in China were closed.
Data from Reuters
Douglas A. McIntyre
| Today’s top tickerspy Indexes | |
| Domestic Telecom ... | +2.6% |
| Stem Cell Stocks | +2.3% |
| Pain Management S... | +2.1% |
| Ethanol and Biofu... | +1.9% |
| Savings and Loan ... | +1.8% |
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