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Toyota (TM) will make large cuts in its North American operations as sales in the region continue to fall. Given the strength of the Japanese company’s balance sheet, the moves speak volumes about how bad the US car market is expected to be for the rest of this year and perhaps 2010. Read More
Daily Archives: February 12, 2009
As Auto Recession Deepens, Toyota (TM) Cries “Uncle”
New Bailout Plan, Paying The Neighbor’s Mortgage, Rallies Market
The market rallied strongly into the close on news that the Administration was planning to offer financial help to deserving homeowners who are falling behind on their mortgages.
According to Reuters, “The Obama administration is hammering out a program to subsidize mortgage payments for troubled homeowners who have gone through a standardized re-appraisal and affordability test.”
That means some taxpayers will be helping cover the mortgage of the person who lives next door to them. In a perverse way that works out. A foreclosure hurts the value of every home in its neighborhood.
Douglas A. McIntyre
Dow Chemical Dividend Lesson For GE (DOW, GE, MMM)
How Far Could $5 Billion Go?
Dow Chemical Co. (NYSE: DOW) probably would have had a much better day if the market did not plunge at the end of the day. In university finance classes they teach you that cutting dividends is a bad move, but that isn’t the case when the yield has gone parabolic and when companies have to go into preservation mode. This is something that we suspect General Electric Co. (NYSE: GE) will follow soon.
Read More
The 52-Week Low Club (NYT)(CHTR)(COF)(GIL)
The New York Times Company (NYT) Concerns about advertising persist. Down to $4.05 from 52-week high of $21.14.
Gildan Activewear (GIL) Bad earnings outlook. Plunges to $7.24 from 52-week high of $42.74.
Capital One Financial (COF) Still worries that some banks will fail. Drops to $11.45 from 52-week high of $63.50.
Charter Communications (CHTR) Plans to file for Chapter 11. Drops to $.0245 from 52-week high of $1.68.
Douglas A. McIntyre
Major Wind Project, Hot Air? (ITC, NWE)
Thinking big can be a blessing or a curse. In the case of green power generation, big ideas can be hard to translate into workable plans because we have so little experience with scaled-up projects. Well now, thanks to ITC Holdings Corp. (NYSE:ITC), we’ll get an opportunity to see what happens on a big project.
Coming Clean With Solar Woes (AMAT, JASO, SPWRA, SOLR, STP, FSLR, TAN)
"Future, Or Fracture?"
Last year was the year that alternative energy was set to take the world over. High energy prices and election promises made green energy look like it had unlimited growth. Then came the massive drop in energy prices. Then came the recession. Then came the lack of credit. Combine all that with lower stock valuations and this is looking like solar companies will get hit with a wave of rolling blackouts.
Applied Materials Inc. (NASDAQ:AMAT) gave us the impression that what we are setting up for is the third wave of negatives for the sector. What we saw out of JA Solar Holdings Co. Ltd. (NASDAQ: JASO) only adds fuel to that fire. SunPower Corporation (NASDAQ:SPWRA) and GT Solar International Inc. (NASDAQ: SOLR) are both up since their earnings, but these might not be representative of the whole group. Investors’ negative bias toward te will effect earnings expectations for Suntech Power Holdings Co., Ltd. (NYSE: STP) next week and First Solar, Inc. (NASDAQ: FSLR) the following week.
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Entergy Pulls Remarketing Offer (ETR)
Entergy Corporation (NYSE:ETR) was unable to find buyers for $500 million worth of Senior Notes that are a component the company’s 7.625% Equity Units (NYSE:ETRPrA) due February 11, 2011. It has canceled the remarketing period for the notes.
The bad news is that Entergy had reported its fourth quarter earnings including the remarketed shares. Because that didn’t happen, the company will need to include the shares in its per share calculations for 2008, “causing the number of shares to increase compared to the amount reflected in the release.”
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Can.. Or Will John Malone Save SIRIUS? (SIRI, SATS, LINTA, DTV)
"Somebody, Help Me!!! Please!!!"
If you thought that the SIRIUS XM Radio Inc. (NASDAQ: SIRI) situation couldn’t get more complex, it could. It has. Reports of it getting ready for bankruptcy, and then getting a controlling debt investment from EchoStar Corp. (NASDAQ: SATS) and Charles Ergen only made matters worse. And now this morning comes reports that SIRIUS XM is in talks with Liberty Media Interactive (NASDAQ: LINTA).
Read More
General Motors (GM) Bondholders Pushing For More
General Motors (NYSE: GM) bondholders are requesting more money in exchange for forgiving billions in debt and are threatening to push the company into bankruptcy if they don’t get it, according to reports from the Detroit News.
In order to satisfy terms of the government bailout, GM is working with bondholders on a complicated debt exchange to cut its debt by two-thirds to $9.2 billion. To help get there, bondholders would have to accept 30 cents on the dollar, but they are demanding 50 cents on the dollar, which would mirror the value of concessions being negotiated with the UAW.
Plains Gains On Acquisitions (PAA)
We’ve said before that the way pipeline companies grow is by building or buying more pipelines. In its earnings report for the fourth quarter, Plains All American Pipeline LP (NYSE: PAA) proves the point. The company reported net earnings per diluted common unit of $0.56, up from $0.47 in the same period a year ago. Revenue for the quarter totaled $5.08 billion, compared with $6.55 billion a year ago.
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A Little Relief From Retail Sales
Retail sales were much better than expected which leaves economists to ponder if it is the beginning of a recovery trend in one of the industries hardest hit by the recession.
U.S.retail sales in January were the best they have been in more than a year, bouncing off after six straight months of declines, according to the Commerce Department. Read More
Jobless Claims Continue Blistering Pace
The weekly jobless claims data has surpassed the dreaded 600,000 mark. The last week’s unemployment lines were down 8,000 to 623,000. We had weekly jobless claims numbers expected as 610,000 versus an unrevised 626,0000 last week according to Bloomberg consensus estimates.
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Coke (KO) Comes Through, With China Out In Front
If only the stock market was made up of companies like Coke (KO), McDonald’s (MCD), P&G (PG), and Wal-Mart (WMT). But, it isn’t. They are among the few firms which can still claim to be “recession proof”. Coke showed again today that it belong in that class. Read More
Tim Geithner Offers Paralysis, Not Solutions
By John Tamny RealClearMarket
Desperate to sell his economic plan in order to be crowned a “winner” in a political culture that equates stature with one’s ability to fleece the taxpayers, Barack Obama defended his vision on Monday given his view that “The federal government is the only entity left with the resources to jolt our economy back to life.
Top Pre-Market Analyst Upgrades (AXYS, CRXL, DFT, LVLT, LGND, NOC, OXGN, PFE)
These are some of this morning’s top pre-market analyst upgrades and positive research calls from Wall Street this Thursday morning with over two hours until the market opens:
- Axsys Technologies (AXYS) Raised to Overweight at JPMorgan.
- Crucell (CRXL) Started as Buy at Jefferies.
- DuPont Fabros Technology (DFT) Raised to Outperform at Wachovia.
- Level 3 Communications (LVLT) Raised to Hold at Stanford.
- Ligand Pharmaceuticals (LGND) Started as Buy at Merriman Curhan Ford.
- Northrop Grumman (NOC) Raised to Outperform at Bernstein.
- Oxigene (OXGN) Started as Buy at Merriman Curhan Ford.
- Pfizer (PFE) Raised to Outperform at Leerink Swann.
Jon C. Ogg
February 12, 2009
Top Pre-Market Analyst Downgrades (ASML, GSIC, LVLT, NYX, PACR, PBR, PT, QGEN, SAP, TGH)
These are this Thursday’s early bird analyst downgrades and negative research calls with more than two hours until the market opens:
ASML (ASML) Cut to Neutral at B of A Merrill Lynch.
GSI Commerce (GSIC) Cut to Hold at Jefferies.
Level 3 Communications (LVLT) Cut to Underweight at JPMorgan.
NYSE Euronext (NYX) Cut to Hold at Citigroup.
Pacer International (PACR) Cut to Underperform at Baird.
Petrobras (PBR) Cut to Hold at Citigroup.
Portugal Telecom (PT) Cut to Underweight at Morgan Stanley.
Qiagen (QGEN) Cut to Neutral at Credit Suisse.
SAP (SAP) Cut to Underperform at FBR.
Textainer (TGH) Cut to Market Perform at Wachovia.
JON OGG
February 12, 2009
Will GM (GM) Get The Cash It Needs From China?
Maybe GM (GM) won’t have to turn to Congress for a big rescue package. Putting in money may be of benefit to a company outside the US government.
One of China’s largest car companies is looking at GM with an interest in getting a large piece of a joint venture in the world ’s most populous country. Given that a China-government backed firm, Chinalco, just put $19.5 billion into Rio Tinto (RTP), a long-term gamble on GM may be another move to buy valuable assets for little money and benefit when the economy recovers. Read More
Is The Fed Going Back On A Promise?
One of the cornerstones of the government bailing out the credit markets was that the Fed would buy up Treasuries and other bond instruments in an attempt to help improve the markets in these types of debt.
If the plan was essential to re-building the financial markets, then the economy is in for another problem.
Does Rio Tinto (RTP) Deal Put Alcoa (AA) In Play?
The Chinese government-controlled mining and metals company Chinalco is putting $19.5 billion into publicly traded peer Rio Tinto (TRP). A billion dollars of the cash will go to buying back a piece of RTP owned by Alcoa (AA).
If China believes that it is getting a piece of RTP’s assets on the cheap, it is right.
The Math For Three-And-A-Half Million Jobs
Congress, well-fed and self-satisfied, can catch its wind now. It has put together a $789 billion stimulus package to get the economy on the road again. The most interesting and obtuse comment about the new plan came from Senator Harry Reid, who said the legislation would create 3.5 million jobs.
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Today’s top tickerspy Indexes Platinum and Pall... +2.9% Pollution Control... +2.7% Department Store ... +2.6% Wind Energy Stock... +2.5% Canadian Mining S... +2.5% 
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