Daily Archives: April 9, 2009

Rig Counts vs. Oil Prices: Equilibrium Is Near (BHI)

Baker Hughes (NYSE: BHI) has released its weekly rig count. The overall count between the U.S. and Canada did post another drop despite the notion that oil prices have risen back to where many new projects would be profitable. But the good news is that there was a pause in the U.S. in the report a week ago, and there was a pause in the Canadian drops this week.

The U.S. Rig Count is down 38 from last week at 1,005; down 810 year-over- year.

The Canadian Rig Count up 8 from last week at 83 down 29 year-over-year.

The US Offshore rig count is 48, up 4 from last week; down 14 year-over-year.

This is far from good news on the production side, but it seems that there is finally a stabilization taking place now that the price of oil is back up to profitable levels for drillers.

Economists might even start thinking that equilibrium is starting to be found. At least the first signs of it.

Jon C. Ogg

Posted on: April 9, 2009 – 2:37 pm in Oil & Gas

GE (GE) Adds $10 Billion In Market Cap On Earnings Optimism

GE (GE) is surging based on the assumption that results from Wells Fargo (WFC) are an indication that earnings from the conglomerate’s financial services business will be relatively strong.

The stock is trading up 8% at $11.50 and has added about $10 billion in market cap today.

GE is also being pushed higher by general optimism that the overall economy may have bottomed and word out of China, one of the company’s largest markets, that GDP growth there has begun to click up again. GE’s infrastructure business relies heavily on business in developing markets. Read More »

Posted on: April 9, 2009 – 1:42 pm in Conglomerates, Earnings,

Will Q2 Be Better For Consumer Electronics Or Just Apple (AAPL)

apple-logo1Apple (AAPL) is up today, but so is almost everything else. The company is getting special attention from investors because Credit Suisse  upgraded its view of the firm’s prospects for the second quarter.

Apparently, demand for iPhones and Macs is better than expected. Read More »

Posted on: April 9, 2009 – 12:57 pm in Consumer Electronics, PC Companies, Technology, , ,

The Slow Death of the VIX

The CBOE Volatility Index, or the VIX or the ‘fear index,’ has been rolling over and dying because of the rally we have seen over the last five-week period.  The DJIA is currently back at 8,000 and the S&P 500 is almost flirting with 850 again. Whether or not the VIX is dead will depend on how stocks act from here on out, but we are currently looking like we are going to have set a consecutive gain of 5 weeks in a row if the levels all close today at these current levels.  Here is the graphic from Stockcharts.com:

Read More »

Posted on: April 9, 2009 – 10:13 am in Index, Technical Analysis, Trading Alert

Something Else To Blame on AIG!

The government is now insuring insurers. Guess who’s at the center of the drama.

By Chadwick Matlin of The Big Money

In honor of spring cleaning, it’s worth taking inventory of what’s underneath the TARP. We’ve got some disgruntled banks, some rusted-out car manufacturers, and the morbidly obese AIG, which seems to get smellier every day. And, oh, what’s this newest addition? Life insurers? Who let them in here?

These days, the TARP is acting more like a big tent. When Henry Paulson and friends originally designed the Troubled Asset Relief Program, it was only supposed to be used to facilitate auctions for toxic assets. But then everybody and their mother needed saving and we only had so many facilities to provide capital, so the TARP became an all-purpose, $700 billion behemoth. Adding in life insurers, as the Wall Street Journal is reporting the government plans to do, is just more proof that the TARP’s mission creep has turned it into a refugee camp. But before welcoming life insurers into the fold (likely costing tens of billions of dollars), it’s worth stopping to ask why they were invited into the TARP in the first place. The answer should come as little surprise: It all has to do with AIG.

Read more…

Posted on: April 9, 2009 – 10:00 am in Uncategorized

Equity One Joins REITs In Raising Cash (EQY)

money-stack-image24Equity One, Inc. (NYSE:EQY) joined the ranks of REITs wanting to raise cash to pay down debt.  The REIT priced 6.5 million shares of common stock at $14.30 per share.  This will bring in about $89.0 million before expenses.
Read More »

Posted on: April 9, 2009 – 9:17 am in REIT, Secondary Offering,

Bill Ackman’s Target (TGT) Fund Rose 48% Last Month

Bill Ackman’s Pershing Square’s fund that invests solely in Target (NYSE: TGT) saw its value gain 48% in March. For the month of March, Target saw its shares rise by 21%, but Ackman’s Target focused fund typically moves by twice the move of Target because Ackman employs two-times leverage by using derivative type contracts, such as options. Ackman’s Pershing Square owns 26.8 million shares of Target and more in options, uses two-times leverage in the fund.

Read more….

Posted on: April 9, 2009 – 9:05 am in Uncategorized,

More Financial Regulations, More Financial Failures

By John Tamny of RealClearMarkets

Back in 2000 and 2001, the first stage of the Internet era ran aground in an ugly way. From Webvan to theGlobe.com to eToys, investors saw their stakes in these once high-flyers reduced to nothing.

What’s important is that the dying companies were allowed to fail. Internet firms had no real regulatory oversight to speak of, nor does Silicon Valley to this day, so when problems arose, investors and employees had to respectively accept their losses and move on. Their losses were their own.

Read more…

Posted on: April 9, 2009 – 9:03 am in Uncategorized

Fuel Cells Get Nod in Connecticut (FCEL)

money-stack-image22FuelCell Energy, Inc. (NASDAQ:FCEL) has received final approval from the Connecticut Department of Public Utility Control to build 9 plants that will together generate 27.3 megawatts of electricity. The state issued preliminary approval of the plants last month. The plants are included in Connecticut’s Project 150 which required the state to sign energy purchase agreements for 150 megawatts of clean power.
Read More »

Posted on: April 9, 2009 – 8:27 am in Alternative Energy, Green Biz,

Some Good News in Alternative Energy (APWR, GE)

A-Power Energy Generation Systems, Ltd. (NASDAQ:APWR) is a Chinese maker of distributed power generation systems and, just recently, wind turbines. The company reported fourth quarter and full-year 2008 results before the market opened this morning.
Read More »

Posted on: April 9, 2009 – 8:20 am in Alternative Energy, Earnings, Green Biz, ,

March’s Retail Winners (BKE, FRED, GYMB, HOTT, JCP, TJX)

money-stack-image20We are still seeing overall weak trends in the retail sector.  This is no shock based upon the overall drop in the economy and the growing army of unemployed workers out there.  But there are  some retail winners out there.  Companies such as Buckle Inc. (NYSE: BKE), Fred’s Inc. (NASDAQ: FRED), Gymboree Corp. (NASDAQ: GYMB), Hot Topic (NASDAQ: HOTT), J.C. Penney Company (NYSE: JCP), and The TJX Companies Inc. (NYSE: TJX)  posted strong March same-store sales.
Read More »

Posted on: April 9, 2009 – 8:13 am in Apparel, Retail, Trading Alert, , , , , ,

Now Almost 6 Million In Continuing Jobless Claims

jobless-line-pic22The weekly jobless claims is still a dismal reading.  Thankfully, it was just a tad less dismal than before. The new drop came in at -20,000 from 674,000 to 654,000.  The expected drop was -9,000.  The bad news on this front is the 5.84 million in continuing jobless claims.  That represents another 95,000 gain.  We can come in under expectations all we hope, but consistent additions of 600,000 and 650,000 claims per week will create a society that even higher taxes won’t be able to support.  Ten percent unemployment looks more and more like a certainty rather than an aggressive forecast.  Enough said.

Jon C. Ogg

Posted on: April 9, 2009 – 7:39 am in Economy, Labor & Unions

Direxion Financial & Financials Win On Wells Fargo (WFC, BAC, JPM, C, FAS)

money-stack-image19Wells Fargo & Co. (NYSE: WFC) is going to be taking the bank stocks significantly higher, particularly the Direxion Financial Bull 3X Shares (NYSE: FAS).  The company is releasing earnings on April 22, but it now has issued guidance that will please even the naysayers on Wall Street.  Shares are flying pre-market and are taking up shares of Bank of America Corporation (NYSE: BAC), JPMorgan Chase & Co. (NYSE: JPM), and even Citigroup, Inc.(NYSE: C).
Read More »

Posted on: April 9, 2009 – 7:19 am in Banking, Earnings, Financial Stocks, Trading Alert, , , , ,

Easter Kills Wal-Mart (WMT), Stock Dives

bank13Wal-Mart’s (WMT) same-store sales were light, by a lot.

For the four weeks of March, revenue was actually down 2% to $36.2 billion. International sales killed results by dropping 15% to $8.1 billion. Read More »

Posted on: April 9, 2009 – 7:13 am in Retail,

Early Bird Analyst Calls (BBBY, BBT, FHN, LCAPA, OIIM, RF, STI, UHS)

These are some of the early bird analyst upgrades and downgrades we have seen on Wall Street this Thursday morning ahead of the long weekend:

Bed Bath & Beyond (NASDAQ: BBBY) Cut to Neutral at SunTrust Robinson Humphrey.
BB&T (NYSE: BBT) Cut to Underperform at KBW.
First Horizon National (NYSE: FHN) Cut to Underperform at KBW.
Liberty Media Capital (NASDAQ: LCAPA) Raised to Buy at Deutsche Bank.
O2 Micro (NASDAQ: OIIM) Cut to Underweight at Morgan Stanley.
Regions Financial (NYSE: RF) Cut to Market Perform at KBW.
SunTrust (NYSE: STI) Raised to Outperform at KBW.
Universal Health (NYSE: UHS) Raised to Outperform at Credit Suisse.

Jon C. Ogg

Posted on: April 9, 2009 – 6:19 am in Analyst Calls, , , , , , , ,

TARP Revisit: Were Life Insurers On the Brink? (MET, PRU, HIG, LNC, GNW, AIG)

burning-money-pic13There is one question that keeps making the rounds after the news of yesterday’s TARP bailout money inclusion being offered to life insurers.  Are these really close to falling into the abyss, all over again?  You will see the large gains racked up yesterday, but there is a lot more to this than may meet the eye.

Insurer (Ticker)………… Gain… Mkt Cap.. Comment (year stock drop)
MetLife, Inc. (MET)……… 2.36%.. $20.2B.. down almost 66%
Prudential Financial (PRU).. 7.74%.. $10.1B.. down almost 75%
Hartford Financial (HIG)…. 13.5%.. $3.12B.. down over 80%
Lincoln National (LNC)…… 32.80%. $2.3B… rose on debt repayments
Genworth Financial (GNW)…. 11.48%. $1.0B… down almost 90%

The questions and discussions that came from the financial community to us yesterday about the TARP money were not so much around the “freshness” of the data.  Some insurers had been in line for months.  The TARP was meant to allow for inclusion of some insurers which had bank holding companies, and some insurers had been complaining that they were being left out or being put at a competitive disadvantage after American International Group Inc. (NYSE: AIG) was receiving so much bailout money.  The issue boils down to liquidity, capitalization, and the sheer need of more capital.
Read More »

Posted on: April 9, 2009 – 5:08 am in Banking, Financial Stocks, Politics, Regulation, , , , , ,

No Auto Industry Recession In China (GM)(TM)(HMC)

water-lilies4If only US car companies could do all of their business in China. The economy there must be better than has been reported. In March, a record 1.1 million light vehicles left showrooms. That means that more cars were sold in China during the month than were sold in the US. Read More »

Posted on: April 9, 2009 – 4:56 am in Autos, China, , ,

Acer Heats Up PC Wars

blue-hills3Acer has decided that the way to get share from competitors and increase sales in a recession is to go down market and sell PCs at prices that will draw in even financially taxed consumers.

The move by the Taiwan-based company makes sense, but it forces the industry into a price war at the lowest end of the business where margins are already squeezed. Read More »

Posted on: April 9, 2009 – 4:43 am in PC Companies, ,

Morgan Stanley (MS): Why Investors Don’t Understand Financial Stocks

bank12The Wall Street Journal reports that Morgan Stanley (MS) lost money in the first quarter. The reason appears to be a perverse accounting rule, not unlike those that have plagued bank financial reporting for several quarters.

According to the paper, “Because of the accounting treatment on some bonds issued by Morgan Stanley before the financial crisis erupted, the New York company is expected to take a hit of $1.2 billion to $1.7 billion on the bonds when it reports quarterly results later this month.” Read More »

Posted on: April 9, 2009 – 4:29 am in Accounting, Banking,

Nintendo Strikes Back

water-lilies3Nintendo executives are almost certainly upset that the Sony (SNE) PlayStation outsold the company’s Wii gaming system in Japan last month. The Wii has held a large margin in unit sales for several quarters.

Nintendo does not intend to take the news lying down. It will launch the latest version of  the “Wii Sports” in June. Read More »

Posted on: April 9, 2009 – 4:05 am in Consumer Electronics, Video Games, ,