Daily Archives: March 13, 2009

Would Direxion Financial Bull 3X Consider Reverse Split? (FAS, FAZ)

broken-money-merger-image2Day traders, ETF investors, hedgers, swing traders, and more have been using the Direxion financial leveraged ETF’s as their go-to trades in the financial sector.

Direxion Financial Bull 3X Shares (NYSE: FAS) is the triple-bullish leverage ETF for financials, and the Direxion Financial Bear 3X Shares (NYSE: FAZ) is the triple-bearish leveraged ETF for financials.  These funds have only been trading since November 2008, but in order to curb some of the price parameters and the volatility of these ETFs, we wonder whether they WOULD THEY CONSIDER A REVERSE SPLIT?
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Posted on: March 13, 2009 – 2:53 pm in Banking, ETF, Financial Stocks, Stock Splits, ,

Lower Rig Counts Again, Lower Supply… (BHI, OIL, OIH, USO)

oil-well-image3offshore-rig-pic1Baker Hughes Inc. (NYSE: BHI) just released its weekly rig counts.  Despite the fact that oil has recovered handily off its lows, it seems that oil rig operators still are not enthusiastic about operating rigs.

  • U.S. Rig Count at 1,126; down 44 from last week and down 666 year-over-year.
  • Canadian Rig Count at 220; down 79 from last week and down 290 year-over-year.
  • US Offshore rig count is 47; down 4 from last week and down 13 year-over-year.

All the oil ETF’s are still down on the day, although they look off the lows:

  • iPath S&P GSCI Crude Oil Total Return Index ETN (NYSE: OIL) is down 1% at $18.10;
  • Oil Services HOLDRs (NYSE: OIH) is down 1.2% at $72.48;
  • United States Oil (NYSE: USO) is down 1% at $27.94.

Our call is out to 2010, but Baker Hughes is one of our own energy picks which we feel can double by the end of 2010.  Baker Hughes has been down all morning along with oil prices and after Credit Suisse downgraded the firm to neutral from outperform.

Jon C. Ogg

Posted on: March 13, 2009 – 12:41 pm in ETF, Oil & Gas, , , ,

IBM: Big Blue Goes Green and Blue (IBM)

water-imageIBM Corp. (NYSE: IBM) is expanding into the water business. One part of the effort is to develop a smart grid of sensors and software to help manage water systems. The other part of the plan appears to be creating improved technologies to support water systems.
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Posted on: March 13, 2009 – 10:53 am in Technology Companies, Water,

NRG-Exelon-Reliant: Merger Soap Opera Continues (NRG, EXC, RRI)

money-stack-image31The CEO and Chairman of NRG Energy, Inc. (NYSE:NRG) have sent a letter to stockholders pointing out the weaknesses in the buyout offer from Exelon Corporation (NYSE:EXC). Earlier this month, Exelon announced that it received tenders for 51% of NRG shares. NRG countered with an offer to buy the retail business of Reliant Energy Inc. (NYSE:RRI).
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Posted on: March 13, 2009 – 8:43 am in Mergers and Buy Outs, Utilities, , ,

The FAS and FAZ Make Stock Market Volatility Look Like Child’s Play

Since Monday, when several news items (1. Citigroup (NYSE: C) said it would be profitable, 2. Fed Chairman Bernanke addressed mark-to-market issues, and 3. Barney Frank said he expects to see the uptick rule back sometime within a month) sparked a rally in financials, volatility in two 3x leveraged ETF’s has been off-the-charts. The Financial Bull 3x (NYSE: FAS) and Financial Bear 3x (NYSE: FAZ), two fairly new ETF’s, have had double-digit percentage moves in 2 of the last 4 trading days.

Read more…

Posted on: March 13, 2009 – 8:32 am in Uncategorized, , ,

Dissing RIM, Blessing Palm (RIMM, PALM)

Research in Motion Ltd. (NASDAQ: RIMM) is not participating in this morning’s rally.  This stock had a good week as shares closed yesterday at $41.46 after having traded under $36.00 on Monday.  Research firm ThinkEquity has put a Sell rating on the stock over concerns about growing competition.  Interestingly enough, Palm Inc. (NASDAQ: PALM) was upgraded this morning.
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Posted on: March 13, 2009 – 8:03 am in Analyst Calls, Telecom, Wireless, ,

Upside of Recession: Lower Trade Deficit

money-stack-image29There appears to be an upside of the recession.  The “International Trade” data, which is the US Trade Deficit, is shrinking.  The report for January 2009 came in at -$36.03 billion.  The consensus estimates were higher, as Dow Jones had a forecast of $37.3 billion and Bloomberg had an  estimate of $38.1 billion.  This may be the sixth consecutive month of shrinking unless revision data changed that.  Economists harped over how this data was always too large as we were sending dollars overseas away from the U.S.  Lower oil prices and less buying of goods may actually have an upside to it, if there is really any upside to the recession.

Jon C. Ogg

Posted on: March 13, 2009 – 7:38 am in Economy

American Apparel Secures Needed Investment (APP)

money-stack-image28American Apparel, Inc. (NYSE Alternext: APP) has confirmed reports of an outside private equity investment.  The retail apparel player got $80 million with Lion Capital LLP.  This should satisfy most of the concerns which have been around the company.
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Posted on: March 13, 2009 – 7:23 am in Private Equity, Retail, Secondary Offering,

Top Analyst Upgrades (ALU, AGN, AMAG, EIG, JPM, LOGI. MCD, PALM)

money-stack-image27These are the top analyst upgrades and positive research calls we have seen from Wall Street this Friday morning with about two hours until the market opens:

Alcatel-Lucent (ALU) Raised to Outperform at Baird.
Allergan (AGN) Started as Buy at UBS.
AMAG Pharma (AMAG) Started as Buy at Citigroup.
Employers Holdings (EIG) Raised to Outperform at KBW.
JPMorgan Chase (JPM) Started as Outperform at Baird.
Logitech (LOGI) Raised to Neutral from Underperform at B of A Merrill.
McDonald’s (MCD) Raised to Outperform at Baird.
Palm (PALM) Raised to Outperform at RBC.

JON C. OGG

Posted on: March 13, 2009 – 6:38 am in Analyst Calls, , , , , , ,

China Admits US Debt Is Losing Favor

bank13Analysts who watch the interest rates that the US must pay on its debt should have felt a little shiver yesterday. The Chinese government, the largest holder of Treasuries, expressed some doubt about the turnaround of the American economy and came a bit too close to stating that US paper might be becoming less attractive as the government borrowing to stimulate the economy and save financial institutions makes American debt a more risky investment. Read More »

Posted on: March 13, 2009 – 6:03 am in Economy

Goldman Sachs Dumps Wal-Mart From Conviction Buy List (WMT)

walmart-logoWal-Mart Stores (NYSE: WMT) is indicated lower after Goldman Sachs  removed the world’s largest retailer from the Conviction Buy List.  Goldman still has a “Buy” rating on the stock.  The concern that the firm may need to raise guidance after its latest sales data was an issue Goldman noted.  The target in the note is $55.00.  It is still way too early to have an accurate read on where Wal-Mart will open, but shares look down close to 2% at $48.10 in very early indications.  Its 52-week range is $46.25 to $63.85.

JON C. OGG

Posted on: March 13, 2009 – 5:50 am in Analyst Calls, Retail,

On Berkshire: Loses AAA, Buffett Salary & No AIG (BRK-A, AIG)

buffett-image1There has been quite a lot of news on Berkshire Hathaway Inc. (NYSE: BRK-A) and Warren Buffett in the last 12 hours.  Bond and credit ratings agency Fitch downgraded the conglomerate.  Buffett also outlined how he refused to invest in or rescue American International Group Inc. (NYSE: AIG).
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Posted on: March 13, 2009 – 5:37 am in Buffett, Conglomerates, ,

Will GE (GE) Dump Forecasts After Debt Downgrade?

bank14It is an interesting theory, but it may not be plausible.

Some analysts think that GE (GE) will use a downgrade of its debt by S&P as cover for reducing forecasts for earnings out of its large financial unit. It would be an admission by the conglomerate’s management that the ratings agency knew more about the company’s prospects than the company did. Read More »

Posted on: March 13, 2009 – 5:18 am in Conglomerates, Earnings,

Europe Says It Has Spent Enough To Save Economy

winter6European nations are sick of spending money to stimulate the economy. Or, more likely, they are running out of access to capital and simply don’t want to admit it.

At the G20 summit, where the US and several Asian nations said that they were ready to pony up more cash to save the world, most countries on the continent demurred. Read More »

Posted on: March 13, 2009 – 5:03 am in International Markets

More Price Pressure On OPEC

oil3OPEC wants to keep cutting production and enforce production cuts is has already made so that none of its members try to dodge the cartel’s limits to pick up a little extra cash.

The effort to get oil prices back up and get more money flowing to OPEC members who are becoming increasingly desperate for cash got a blow as estimates of crude consumption for this year were cut. Read More »

Posted on: March 13, 2009 – 4:48 am in Oil & Gas

Fixing The Car Industry By Fixing Cars (F)(GM)(TM)

oil2America’s car companies are still operating on the premise that the new car market will recover in a year or two. It may not rebound from its current annual run-rate of 10 million light vehicles to more than 16 million where it was three years ago, but surely it will get back to 14 million to 15 million.

There are several reasons this may not happen and they will make being in the business of making and selling new cares less attractive even when the recession ends.  The US car companies will have to augment what they do now to become profitable and remain profitable because the business that they were in for a century has changed too much. Read More »

Posted on: March 13, 2009 – 4:10 am in Autos, , ,

In The Blink Of An Eye, The Economy Got Better

bear8The market rally over the last few days based its activity on just a few events, but the press and investors have grabbed them and are holding on for dear life.

The first trigger for the elation was a comment by one of the least respected executives in the recent history of Wall St.  Vikram Pandit, who many think ran Citigroup (C) into the ground. He said recently that the bank had been profitable for the first two months of the year. If this week marks the bottom of the stock market and the beginning of the end of the recession, his words will join “Remember The Alamo” and “The British Are Coming” in the history books. Read More »

Posted on: March 13, 2009 – 4:03 am in Economy, , , ,

AAPL (AAPL) Weekly Headline Roundup: March 9-13

sunset3It’s been quite a week for Apple news and AAPL shares. Here are the key headlines aggregated from 24/7 Wall St. partner Apple Investor News:

• The big news involved incessant rumors about Apple ordering 10-inch touchscreens for a new product. Based on a DigiTimes report, normally a good source, this rumor has legs. Is it Apple’s netbook? Probably not, despite all the coaxing from media speculators.

• Related analyst comment: Wednesday on CNBC Piper Jaffray’s Gene Munster guesses the touchscreen chatter is pointing to a new “Mac tablet” intro by year’s end. Read More »

Posted on: March 13, 2009 – 3:56 am in Consumer Electronics, Hardware, PC Companies, Software,

Media Digest 3/13/2009 Reuters, WSJ, NYTimes, FT, Bloomberg

bank12According to Reuters, investors in GE (GE) are still worried that the stock will not recover to its highs of last year.

Reuters reports that Madoff pleaded guilty of 11 charges of fraud.

Reuters reports that US lawmakers are looking at pay for performance legislation which would apply to corporate executives.

Reuters reports that China’s premier said that the nation’s growth target would be hard to meet.

Reuters reports that Citigroup (C) will nominate new board members.

Reuters reports that GM (GE) would survive March with no US aid.

Reuters reports that many Americans remain optimistic even in the recession according to a poll. Read More »

Posted on: March 13, 2009 – 3:07 am in Press Digest, , , , , , , , , , , , ,

Asia Markets 3/13/2009

winter5Markets in Asia were mostly higher.

The Nikkei rose 5.2% to 7,569.

The Hang Seng rose 3.9% to 12,473.

The Shanghai Composite was off .2% to 2,129.

Data from Reuters.

Douglas A. McIntyre

Posted on: March 13, 2009 – 2:32 am in International Markets