Starbucks (SBUX) finally admitted what every man, woman, and child over 13-years-old already knows–no one in his right mind will pay more than $1 for a cup of coffee no matter what a barrista puts in it. That goes for 18-year-old single malt.
The company’s admission is also a sign that founder and CEO Howard Schultz can do nothing to save Starbucks. The model of expensive drinks does not marry well with a deep recession.
24/7 Wall St. interviewed Jesse Toprak, Executive Director of Industry Analysis at Edmunds.com.
One of the largest issues looking at November domestic vehicle sales is whether bankruptcy rumors are pushing buyers away from American cars. The answer so far is "no".
Edmunds forecasts for November show GM (GM) sales dropping 28% compared to 24% for Toyota (TM), 29% for Nissan, and 28% for the total industry. See Edmunds November forecasts here.
Hewlett-Packard (HPQ) had spoiled any surprise about its earnings by telegraphing the numbers weeks ago.
It made good on its promises.
HP posted financial results for its fourth fiscal quarter ended Oct. 31, 2008 with net revenue of $33.6 billion, up 19% from a year earlier. In the fourth quarter, GAAP operating profit was $2.7 billion and GAAP diluted earnings per share was $.84, up from $.81 in the prior-year period.
Landamerica (LFG) Merger deal with Fidelity National Financial falls apart and RBC Capital downgrades the stock. The daily double. Plunges to $.47 from 52-week high of $53.23.
Health Management Associates (HMA) Jumpy trading. No big news. Falls to $.80 from 52-week high of $.8.20.
Crosstex Energy (XTEX) No news. Continues several day sell-off. Down to $3.20 from 52-week high of $34.50.
List seems short, but markets are up 6%.
Douglas A. McIntyre
S&P does not appear to be willing to bet that the new administration will want to or be able to bail out GM (GM), Ford (F), and Chrysler.
If the credit rating agency is right, the chances are growing that one or more of the companies will default on its debt.
The market may be cheering the Citigroup (C) bailout, but one of the bank’s top analysts suggested that the cork go back in the bottle. There won’t be any party between now and New Year’s.
According to MarketWatch, "Citing declining earnings outlooks and "extraordinary risk aversion," Citigroup U.S. equity strategist Tobias Levkovich cut his targets for the S&P 500 He now sees the S&P 500 ending the year at 850, down from 1,200 previously and only 10 points higher than its current levels. By the end of 2009, the index of large capitalization companies should rebound modestly to 1,000 — instead of the 1,300 previously targeted.
Douglas A. McIntyre
Pershing Square Capital is walking away from its idea of creating a REIT tied to locations owned by retailer Target (TGT). The capital markets may just be too horrible.
Whatever the reason, the market is trading Target up big. Shares have risen 11% to $31.24.
One of the culprits that analysts point to as a cause of the falling stock market is hedge funds which have to pay back money owed to banks and cover redemptions by their shareholders.
The process may only be half way over.
General Motors (NYSE: GM) and Tiger Woods are calling their current endorsement deal quits. The company and the world’s greatest golfer have agreed to an amicable separation which will end his endorsement of GM effective on December 31.
Hewlett-Packard (NYSE: HPQ) is expected to report earnings after the close of trading today. Last week, the company gave guidance which was ahead of plan and gave guidance farther out on the curve than any of the major tech companies have offered. But there are still issues surrounding the company and the industry which extend far and wide. These issues could even put that prior guidance at risk even if the economy in early 2009 does not get as bad as we expect.
Nortel Networks Corp. (NYSE: NT) is one of the telecom equipment and networking stocks which just has not been able to get its act together. It has also been unable to find any serious friends as times for the sector and the economy are going against it. So at a time when the economy is going against it and when the company was not even able to do well when times were good for its sector, what are the company’s options?
Oil company share prices have been in near free fall for the past six months. Exxon Mobil (NYSE:XOM) is off about 20% from its 52-week highs and ConocoPhillips (NYSE: COP) is off about 50%, but both are doing better than a basket of emerging economy stocks. CNOOC Ltd (NYSE:CEO) is down 68% for the past 52-weeks, PetroBras (NYSE:PBR) is off 77%, Repsol YPF (NYSE:REP) is down 57%, and PetroChina (NYSE:PTR) is off 64%. The drop in crude prices, down more than 65% since the July peak, is the main culprit. But even as crude prices continue to slide, share prices for these companies are beginning to make a comeback.
Whole Foods Market, Inc. (NASDAQ: WFMI) is in an interesting spot right now. The company’s growth has peaked for now due to the economy and a curtailing of expansion plans. It also has some issues with its already-completed Wild Oats merger. The company also sits in a spot of the economy where it could be vulnerable to margin pressures. But there are some merits to WFMI as well now that the stock has come so far down.
Existing-home sales for October resumed falling and the median prices showed the largest drop on record. Existing home sales fell to 4.98 million annualized, lower than estimates of 5.0 to 5.13 million.
After the close Friday, Bill Gate’s Cascade Investment and the Bill & Melinda Gates Foundation disclosed they raised their stake in AutoNation, Inc. (NYSE: AN) to 10%, or 17,757,788 shares. The Gates’ groups held a 5.5% stake, 9,903,588 shares, as of July 17, 2008, according to the original 13G filing. A 13G indicates a passive investment of 5% or greater.
Eddie Lampert’s ESL Partners also disclosed that he raised his stake in AutoNation to 45%, or 79,587,656 shares.
Royal Dutch Shell (NYSE:RDS.A/B) has been hit with two issues at once. While neither is going to bust the company, multiple problems hitting at once is a bad omen. The oil and gas giant’s Shell India subsidiary is having trouble selling a cargo of LNG. According to Platt’s, Shell’s storage facility in India is full and there are no takers for a cargo that has been on-board a ship for more than 30 days. To add fuel to the fire, one of the company’s big bets in Alaska has so far been nothing more than a bust.
This weekend, Barron’s wrote an article noting that shares of Berkshire Hathaway Inc. (NYSE: BRK-A) were finally cheap. After closing at $90,000 on Friday and seeing a low of $74,100 last week, the publication believes that the stock looks cheap. Keep in mind that over the last year or so shares have traded as high as $150,000.
The Paulson/Bernanke bailout is now spreading across the financial system like a prairie fire in a stiff wind.
AIG (AIG) got one deal. A number of banks got a piece of another deal, the $700 billion Paulson "special needs of banks" program. Now, Citigroup is getting a back-stop of over $300 billion for its toxic assets and $27 billion or so in additional money from the government in preferred shares. If those sums are not adequate, it is a reasonable bet that the Treasury will be back.
The Fed, Treasury, and FDIC are using the Citi plan an a guinea pig, and it the test works, the program could spread.
These are some of the top pre-market analyst upgrades, downgrades, and initiations we are seeing early this Monday morning with more than two hours until the open:
Jon C. Ogg
November 24, 2008
It looks as though not quite all the mergers are dead on the medical tech and biotechnology front. Johnson & Johnson (NYSE: JNJ) announced that it is acquiring Omrix Biopharmaceuticals, Inc. (NASDAQ: OMRI). The $438 million cash tender offer will pay $25.00 per share to Omrix holders.
| Today’s top tickerspy Indexes | |
| Home Furnishing R... | +14.1% |
| Ethanol and Biofu... | +5.1% |
| Electronics Retai... | +2.1% |
| Diabetes Stocks | +2.0% |
| Memory Chip Stock... | +2.0% |
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