Monthly Archives: April 2009

Determining When Higher Rates Are Coming

money-stack-image58This week’s FOMC statement and ‘less-bad’ recent economic data brought up an interesting notion now that the Federal Reserve seems to be at least a bit less negative on the economy.  Ditto on the prospects for a recovery and for a balance between inflation and deflation.  You can’t quite interpret the data nor the official statement as ‘rosy,’ but it also sounds like the Fed governors have been able to get off the anti-depressants since their last meeting.  The question comes down to exactly when the FOMC will get off this ‘targeted Fed Funds rate’ in a 0.00% to 0.25% range and when we will have a real fed funds rate again that is higher.  A look at the CBOT Fed Fund Futures signals that this policy will probably go to 0.25% after the summer and there may be a very slight chance that this could be near 0.50% by the end of the year.
Read More »

Posted on: April 30, 2009 – 2:01 pm in Bonds, Economy

Apple (AAPL) iPhone Thrashes Competition In Customer Satisfaction

sunset26The evidence keeps mounting that competing with the Apple (AAPL) iPhone is a losing game.

According to the new JD Power survey of customer satisfaction among smartphone owners, the iPhone beat competition from LG, HTC, Palm (PALM), RIM (RIMM) maker of the Blackberry, and Motorola (MOT). Motorola finished dead last. The only category in which the iPhone was bested was battery function. Read More »

Posted on: April 30, 2009 – 12:07 pm in Research, Telecom, Wireless, , , , ,

Public Companies To Benefit From DigitalGlobe IPO (DGI, MS, OZM, ORB)

money-stack-image57DigitalGlobe, Inc. may be the next high tech initial public offering, and it looks like several public companies will stand to benefit from it.  This is a high-resolution satellite image operation that will trade under the “DGI” ticker on the New York Stock Exchange.  We have a tentative launch indication of mid-May.  Morgan Stanley (NYSE: MS), Och-Ziff Capital Management (NYSE: OZM), Orbital Sciences Corporation (NYSE: ORB) are the public companies which are all listed as shareholders of DigitalGlobe, although these are just a few among the lot of other listed owners and insiders.
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Posted on: April 30, 2009 – 12:05 pm in IPOs, Satellite, , , ,

Goverment Says Chrysler Bankruptcy Will Be Easy, Pigs Also Fly

bear47The Administration is talking like it has the judge who will preside over the Chrysler Chapter 11 in its pocket. Obama recently made the comment that “it will be a quick trip through bankruptcy.”

The government also indicated that it was close to finishing a deal with Fiat to manage Chrysler and get a 20% stake in the company which could eventually grow to 35%. This means that the car company’s wandering CEO Robert Nardelli is out of work again. Read More »

Posted on: April 30, 2009 – 11:33 am in Autos, Law

As Hulu Picks Up Steam, Disney (DIS) Climbs On Board (GOOG)(NWS)(GE)

blue-hills9Hulu, the large premium video site owned by GE’s (GE) NBC Universal, News Corp. and Providence Equity Partners, is growing faster than most analysts expected. According to comScore, Hulu had more than 380 million videos viewed last month, putting it behind only Google’s (GOOG) YouTube property and News Corp (NWS). Based on all online videos viewed in the US in March,” Hulu accounted for 2.6 percent of videos viewed, but 4.9 percent of all minutes spent watching online video. ” The site’s content, mostly from TV and films, have long run times. Read More »

Posted on: April 30, 2009 – 10:49 am in Internet, Media, , , ,

Pandemic Winners and Losers

Swine flu can be both misfortune and opportunity.

By Martha C. White of The Big Money

The outbreak of the H1N1 influenza strain (otherwise known as the ickier-sounding “swine flu”) has major political and
public-health ramifications, but it’s also causing agita for the business sector.

While there’s still a lot of uncertainty about the global spread of H1N1—can it be contained? will it grow deadlier as it mutates?—there are some market precedents that offer a clue about how commerce and industry might be affected. The SARS outbreak that swept Asia in 2002 and 2003, as well as the more recent cases of avian flu in 2006, offer some insights.

TBM takes a look at which industries stand to win and lose from the would-be pandemic.  read more……

Posted on: April 30, 2009 – 9:58 am in Uncategorized

Gold Miners Struggling with Costs, Gold Prices (NEM, ABX, GDX)

gold-image1Lower prices for copper and gold hit Newmont Mining Corp. (NYSE:NEM) hard in the first quarter of 2009. Barrick Gold Corp. (NYSE: ABX) is also getting hit after its report, and all of this is acting to drag down even the Market Vectors Gold Miners ETF (NYSE: GDX).

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Posted on: April 30, 2009 – 9:15 am in Commodities, ETF, Earnings, Luxury, Metals, , ,

First Solar Moves Closer To The Double (FSLR, TAN, SPWRA, ESLR)

solar-panel-pic13Maybe there’s some life left in the solar industry after all. First Solar, Inc. (NASDAQ:FSLR) reported EPS for the first quarter of 2009 of $1.99, blowing past estimates of $1.50 and tripling EPS of $0.57 for the first quarter of 2008. Revenue hit $418.2 million, more than double last year’s quarterly revenues of $196.9 million, and higher than estimates of about $404 million.  This is also running up the key solar ETF, the Claymore/MAC Global Solar Energy (NYSE: TAN).
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Posted on: April 30, 2009 – 8:43 am in Alternative Energy, ETF, Earnings, Green Biz, , , ,

Implosion Alert: SEQUENOM, Lessons of Destroyed Credibility (SQNM)

burning-money-pic33SEQUENOM, Inc. (NASDAQ: SQNM) looks like the newest implosion of a hopeful company.  The company was supposed to have the Holy Grail for detection of Down syndrome.  After yesterday’s close, the company announced that its expected launch of its SEQureDx™ Down syndrome test was delayed.   The net effect is far worse than that.  And then some.
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Posted on: April 30, 2009 – 8:33 am in Biotech, Cult Stock, Medical, Trading Alert,

Motorola (MOT) Stays Crippled

bear46Motorola (MOT), the cult stock of losers and former target of Carl Icahn’s wrath, posted poor earnings yet again.

For the first quarter, revenue at the handset and telecom equipment company was $5.371 billion down from $7.448 billion in the period last year. Its net loss went from $194 million to $231 million. At least the company has cash on its balance sheet–$6.1 billion in cash and sigma funds. Read More »

Posted on: April 30, 2009 – 8:01 am in Earnings, Telecom, Wireless,

Exxon Sees Wrath of Low Oil Prices (XOM)

exxon-logoExxon Mobil Corp. (XOM) got to see exactly what the impact of lower oil prices does to the top-line.  The company posted earnings of $0.92 EPS, which is down from $2.02 a year ago.  To show the net effect, this means that net income was $4,55 billion rather than the report of $10.89 billion a year ago.  Thomson Reuters had estimates pegged at $0.95 EPS.
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Posted on: April 30, 2009 – 7:58 am in Earnings, Oil & Gas,

Power Generation Results Mixed (D, XEL, NRG, EXC, RRI)

power-lines-image4Three large electric utilities reported earnings this morning, and the results are could be better, but they could also be worse.  Dominion Resources, Inc. (NYSE:D) and NRG Energy, Inc. (NYSE:NRG) were up following their reports.
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Posted on: April 30, 2009 – 7:48 am in Earnings, Utilities, , , ,

The Jobless Becoming Larger Than Any Standing Army

jobless-line-pic4The change in weekly jobless claims came in at 631,000 for this last week.  That is a drop of 14,000, but that also comes after a revision of the week before to 645,000 rather than the preliminary 640,000 reported.  That is also about 9,000 less than the 640,000 consensus estimate from Bloomberg.  The problem is the continuing claims of those who are becoming full-time repeat recipients of weekly jobless claims.  That number of continuing claims is in uncharted territory with another gain of 133,000 to 6,271,000.  We will not get the report for unemployment in April for another week, and the expectations on this front are continuing to look ugly.  If this jobs data continues, economists are going to have a hard time explaining just how much of a lagging indicator that employment really is.

JON C. OGG

Posted on: April 30, 2009 – 7:42 am in Economy, Labor & Unions

When Trade Isn’t Free, Neither Are Our Work Choices

By John Tamny of RealClearMarkets

“Starvation, pauperism, and insufficient supply can only be removed from the masses by increasing the quantity to be divided among the masses.”Anti-Corn Law League, “A Plea for the Total and Immediate Repeal of the Corn Laws,” 1841.

When trade is considered by economists and commentators, too often the discussion centers on countries. This evolves from the misbegotten notion that countries, rather than individuals, trade.

Thanks to a facile approach to what is a very basic concept, we’re as a result bombarded with strange notions of trade “surpluses” and “deficits” as though free exchange could be anything but a positive. Happily, as former Fed Chairman Alan Greenspan has reminded us, for “the world as a whole, of course, exports must equal imports, and the world consolidated current account balance is always zero.”

Read more…

Posted on: April 30, 2009 – 7:19 am in Uncategorized

Top 10 Analyst Upgrades & Downgrades (BHP, COST, DRIV, GT, PX, PZN, RAI, ROK, VIP, VMC)

These are ten of the top analyst upgrades and downgrades we have seen from Wall Street early this Thursday morning:

BHP Billiton (BHP) Started as Outperform at RBC.
Costco (COST) Cut to Neutral at UBS.
Digital River (DRIV) Raised to Perform at Oppenheimer.
Goodyear Tire (GT) Cut to Hold at Citigroup.
Praxair (PX) Raised to Overweight at JPMorgan.
Pzena Investment (PZN) Raised to Overweight at JPMorgan.
Reynolds American (RAI) Cut to Neutral at UBS.
Rockwell Automation (ROK) Cut to Underperform at Baird.
Vimpel Comm (VIP) Cut to Neutral at UBS.
Vulcan Materials (VMC) Cut to Sell at Citigroup.

JON C. OGG

Posted on: April 30, 2009 – 6:53 am in Analyst Calls, , , , , , , , , ,

In A Race For The Economic Bottom, EU Pulls Ahead Of US

r218533_8550256The US may have believed it had cornered the market for economic misery with back-to-back quarterly GDP drops of over 6%.

But, Europe refuses to be bested. What it may not be able to match in GDP, it has matched in unemployment, posting an 8.9% number for March. Read More »

Posted on: April 30, 2009 – 5:19 am in International Markets

A Government Bailout For IPOs

bank45The venture capital community has made a self-serving request of the federal government, but is may not be entirely without merit.

The industry’s trade association “called for lower taxes and loosened listing rules, to galvanize the pace of IPOs for when the economy improves,” according to Reuters. The VCs are trapped in their investments in a number of private companies. At this point, some of these VCs are running low on money, and taking some of the operations in which they have money public is the only possible way out unless they can sell their investments in M&A transactions. In the current credit crisis, that won’t happen. Read More »

Posted on: April 30, 2009 – 5:02 am in IPOs, Private Equity

Bondholders Ditch GM (GM) And Chrysler

oil11Nearly everyone who could keep GM (GM) and Chrysler out of Chapter 11 has gone along with supporting  painful restructuring plans. The UAW and managements at the two companies have given up a great deal. The federal government is willing to risk tens of billions of dollars in taxpayer money to keep the firms from being run aground.

The creditors of the two companies, however, appear to be willing to see the No.1 and No.3 US car companies go into bankruptcy. Is it any wonder? Read More »

Posted on: April 30, 2009 – 4:42 am in Autos, Labor & Unions,

Ken Lewis Keeps His Day Job (BAC)

bank44Ken Lewis got a slap on the hand. Shareholders of Bank of America (BAC) voted to separate the chairman’s role from the CEO’s and the bank’s board was forced to elect a new chairman, Walter E. Massey, a college president who has been on the firm’s board for so long that he is as responsible for the bank’s trouble as anyone else involved in the company’s governance.

Despite some brief humiliation, Lewis got the one things he wanted: he still runs Bank of America and has a rubber-stamp board that supports him. Read More »

Posted on: April 30, 2009 – 4:26 am in Banking, Management Change, , ,

The Fed: Things Will Get Better, If Everything Goes As Planned

bear45The market continues to stage an improbable rally which should have been affected by concerns about the spread of the Swine flu virus and the fact that several large American banks may need tremendous infusions of capital. GDP numbers issued by the government were also shockingly bad. The economy contracted 6.1% in the first quarter which was more than any of the estimates of sane analysts. This GDP drop followed a drop of 6.3% in the last quarter of 2008. Experts tried to calm the masses by saying that some of the fall-off was due to a dip in inventories. That could mean that as those inventories are replenished in this quarter, economic activity will pick up. The logic is circular to the extent that a poor GDP figure is a sign that the economy may not pick up and hence, inventories will not be replaced. Read More »

Posted on: April 30, 2009 – 3:56 am in Economy