16 – April – 2009 – 24/7 Wall St.

Daily Archives: April 16, 2009

Direxion Launches FAS/FAZ-Like ETFs For T-Bonds (FAS, FAZ, TYD, TYO, TMF, TMV)

Direxion is at it again with triple-leverage ETFs. If you love trading the financial stocks for triple leverage via the Direxion Financial Bull 3X Shares (NYSE: FAS) or shorting them with triple leverage via the Direxion Financial Bear 3X Shares (NYSE: FAZ), then you have some new trading vehicles to use for bonds. You can now be long or short the US 10-Year or US 30-Year Treasury Bonds.

Direxion Daily 10-Year Treasury Bull 3X Shares (NYSE: TYD)
Direxion Daily 10-Year Treasury Bear 3X Shares (NYSE: TYO)
Direxion Daily 30-Year Treasury Bull 3X Shares (NYSE: TMF)
Direxion Daily 30-Year Treasury Bear 3X Shares (NYSE: TMV)

These were all very thinly traded so far, but they are probably unknown to almost everyone. It will be interesting to see how these trade once the FOMC does not have its near-Zero rate policy on the short end of the curve and when there is a big economic number move.

Jon C. Ogg

Posted on: April 16, 2009 – 5:29 pm in Bonds, ETF, Economy, IPOs, FAS, FAZ, TMF, TMV, TYD, TYO

GE Full Earnings Primer (GE)

General Electric Co. (NYSE: GE) is on deck for earnings Friday morning. While the whole market has been hanging on to the financial stocks, GE has been trading like a financial stock rather than like an old world conglomerate. The Thomson Reuters estimates are for $0.21 EPS and $39.0 billion in revenue. We are not really interested in the numbers unless there are major surprises either way. But the individual metrics here offer far more insight into the stock than the earnings.
Read More »

Posted on: April 16, 2009 – 4:16 pm in Conglomerates, Earnings, Financial Stocks, GE

Google Slides Past Gatekeepers (GOOG)

Google Inc. (NASDAQ: GOOG) is out with its first quarter earnings report. The search and online ad giant posted earnings at $5.16 EPS and $4.07 billion in ex-TAC revenues. Estimates from Thomson Reuters were $4.93 EPS and $4.08 billion in revenues. The individual metrics were as follows:

Posted on: April 16, 2009 – 3:13 pm in Earnings, Entertainment, Internet, Technology Companies, GOOG

Google’s Earnings Controversy (GOOG, YHOO, BIDU)

This afternoon’s earnings report from Google Inc. (NASDAQ: GOOG) is perhaps one of the most anticipated earnings releases so far this earnings season for Q1-2009. Google could steer almost every tech and media company after the report as it is still one of Wall Street’s darlings. But the most correlated are likely to be Yahoo! Inc. (NASDAQ: YHOO), Baidu, Inc. (NASDAQ: BIDU) and more.
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Posted on: April 16, 2009 – 1:14 pm in Earnings, Internet, Media, BIDU, GOOG, YHOO

Best Performing Sectors This Week: Cancer Stocks, Home Furnishing, Aircraft Leasing

Posted on: April 16, 2009 – 12:07 pm in Business Services, Exchange, Industry, AER, AYR, CEGE, CME, DNDN, GERN, PIR, WSM

Regions Claims Profitability, Slips A Mickey To Bears (RF)

Regions Financial Corp. (NYSE: RF) filed its annual meeting presentation this morning in an SEC filing, and in that filing, C. Dowd Ritter, Chairman, President and CEO, announced that Regions will report a profit for the quarter ended March 31, 2009. Regions gave preliminary information prior to the scheduled earnings announcement date, but it noted that investors should not expect future quarter guidance in advance of scheduled quarterly earnings announcement dates.

Posted on: April 16, 2009 – 10:55 am in Banking, Dividend, Earnings, RF

Introducing the Tarp-o-Meter

Keeping track of who’s paying back.

By Gabriel Beltrone and Natalie Matthews of The Big Money

Ever drive by your local church or United Way office and see one of those huge motivational thermometers, showing just how far the community has to go before it meets its big goal? At TBM, that’s kind of how we feel about the Troubled Assets Relief Program, or TARP. With all those hundreds of billions of dollars doled out to the poor, deserving banking sector, we, along with patriotic leaders like Goldman Sachs, would like to see every penny restored to the taxpayer, and soon.

So, here’s our newest bailout tracking feature—the TARP-o-Meter. Going forward, we’ll use the TARP-o-Meter to display just how much money publicly funded banks have returned to Treasury coffers.

Go to the Meter….

Posted on: April 16, 2009 – 10:08 am in Uncategorized

Buffett Housing Play: Pay Mortgage If You Lose Your Job (BRK-A)

Berkshire Hathaway Inc. (NYSE: BRK-A) is known for investing in and owning many businesses which Warren Buffett believes or believed had a time horizon of “forever” even if they closed the stock market. In this he actually has some homebuilder exposure and exposure to the building products side of the housing sector. It owns Clayton Homes, and Clayton has built more than 1,000,000 homes since 1934. Clayton is following the path of some automakers: paying for your mortgage if you lose your job.
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Posted on: April 16, 2009 – 9:53 am in Buffett, Conglomerates, Financial Stocks, Housing, BRK-A, BRK-B

Kinder Morgan And Broader LP Distribution Conundrum (KMP, EPD, ENB, BSR)

There could be some trouble ahead in at least some of the entities in the pipeline business and the practice of distributions from LP’s if you look at operating numbers and the trends in oil and energy prices versus distributions to holders of the companies. Kinder Morgan Energy Partners, L.P. (NYSE: KMP) has reported a cash distribution per common unit of $1.05 per unit and distributable cash flow of $0.97 per unit, compared with a distribution of $0.96 per unit and distributable cash flow of $1.12 per unit in the first quarter of 2008. The company reported net income of $0.15 per common unit, less than half analysts’ expectations of $0.31 per common unit. Revenue of $1.79 billion was also way off estimates of $2.87 billion.

Kinder Morgan attributed the declines to low prices for crude oil, lower transportation volumes in the refined products business, and reduced steel handling in the company’s bulk terminals business. We wanted to see how this compares to what is expected for earnings and distributions (dividends) competitors such as Enterprise Products Partners LP (NYSE: EPD) and Plains All American Pipeline LP (NYSE: PAA). Given the results for Kinder Morgan, there are still questions on the earnings versus the dividends.
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Posted on: April 16, 2009 – 9:33 am in Dividend, ETF, Oil & Gas, BSR, ENB, EPD, KMP

Sunoco and Holly, Tulsa Refinery Hot Potato (SUN, HOC)

Sunoco, Inc. (NYSE: SUN) has signed a definitive agreement with a subsidiary of Holly Corporation (NYSE: HOC) to sell Holly its 85,000 barrel/day refinery in Tulsa, Oklahoma, for $65 million. The sale includes the refinery’s crude oil inventory, which will be priced at market value on the day the deal closes. Sunoco expects the deal to close on June 1st.
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Posted on: April 16, 2009 – 8:41 am in Mergers and Buy Outs, Oil & Gas, HOC, SUN

Bearish Dendreon (DNDN) Analyst Throws In The Towel, Upgrades to Hold

The bearish Dendreon (Nasdaq: DNDN) analyst at Brean Murray is throwing in the towel and turning slightly more bullish. The firm upgraded the stock from Sell to Hold, following this week’s positive PROVENGE data. The firm said management’s bullish account of the data, despite the absence of any data presentation, will likely be justified by the data to come at the AUA conference on April 28.

Yingli Taking the Money (YGE)

Chinese solar panel maker Yingle Green Energy Holding Company Limited (NYSE:YGE) has taken a loan of $50 million from a credit line established earlier this year with ADM Capital and the China Export-Import Bank. ADM Capital receives 4,125 warrants to purchase Yingli shares in five pieces, beginning April 7, 2009, at a price of $5.64/share. The warrants expire on April 30, 2012, and at that time Yingli must purchase all unexercised warrants at $7/warrant. Yingli gets to decide if it will pay cash or issue shares to make the payment.
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Posted on: April 16, 2009 – 8:29 am in Alternative Energy, Green Biz, YGE

AMR & Southwest Battle For Hindenburg Earnings (LUV, AMR)

Southwest Airlines Co, (NYSE: LUV) is getting to see some selling this morning after its earnings report. Actually, that is after its losses. Southwest is not used to this and you can’t help but wonder if the airliner has become just another air carrier. AMR Corp. (NYSE: AMR) posted a much wider loss than Southwest has seen, yet its stock rose substantially and is up again this morning.
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Posted on: April 16, 2009 – 8:14 am in Airlines, Earnings, Transports, Uncategorized, AMR, LUV

Good News, Only Over 6 Million Jobless

There may be some good news on the jobless claims front. We saw a drop of 53,000 on the weekly jobless claims. The new number was ‘only’ 610,000 for the week. This would have been awful in the past or in any normal economy. Still, it is a drop and indicates that the rate of change is compressing in the jobs and unemployment data.
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Posted on: April 16, 2009 – 7:44 am in Economy, Labor & Unions

Sun Ready To Resume Talks, Should IBM Even Listen? (JAVA, IBM, HPQ)

Sun Microsystems Inc. (NASDAQ: JAVA) is seeing a bit of excitement this morning on word that it is ready to resume talks with IBM (NYSE: IBM). We have been under the belief that this was coming after speaking with several technology contacts. This is also on the heels of a report that Hewlett-Packard (NYSE: HPQ) is launching new servers next week in its new push to take market share in the sector.

Posted on: April 16, 2009 – 7:33 am in Mergers and Buy Outs, Rumors, Technology Companies, Trading Alert, HPQ, IBM, JAVA

Whatever GDP’s Path, Don’t Expect a Bull Recovery

By John Tamny of RealClearMarkets

A recent survey of economists in the Wall Street Journal pointed to economic recovery beginning in September. The problem here is that true economic growth is about productive economic activity, not GDP numbers that presume the U.S. economy is an entity unto itself.

The simple truth is that individuals don’t just start producing at a certain point as economists assume. In that sense, the notion of resumed activity at a date certain should be taken with a grain of salt.

Starbucks Catching Another Downgrade (SBUX)

Shares of Starbucks Corp. (NASDAQ: SBUX) are getting hit by an analyst downgrade this morning. If it sounds like a repeat call mistaken for yesterday’s downgrade, it isn’t. Not really. This morning we have seen a downgrade out of UBS.
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Posted on: April 16, 2009 – 7:11 am in Analyst Calls, Food, Retail, Trading Alert, SBUX

Earlybird Analyst Upgrades & Downgrades (AEP, CME, FNFG, KFT, LSTR, RGLD, SD, SBUX, TRI)

We still have well over two-hours until the opening bell this Thursday morning. So far we have seen many select upgrades and downgrades from Wall Street analysts. Here is what we have seen so far:

American Electric (NYSE: AEP) Raised to Overweight at JPMorgan.
CME Group Inc. (NYSE: CME) Cut to Market Perform at William Blair.
First Niagara Financial Group Inc. (NASDAQ: FNFG) Raised to Outperform at KBW.
Kraft Foods (NYSE: KFT) Cut to Neutral at UBS.
Landstar System Inc. (NASDAQ: LSTR) Cut to Neutral at Baird.
Royal Gold (NASDAQ: RGLD) Raised to Sector Perform at CIBC.
SandRidge Energy, Inc. (NYSE: SD) started as Buy at SunTrust Robinson.
Starbucks (NASDAQ: SBUX) Cut to Neutral at UBS.
Thomson Reuters (NYSE: TRI) Cut to Sell at Goldman Sachs.

Jon C. Ogg

Posted on: April 16, 2009 – 6:14 am in Analyst Calls, AEP, CME, FNFG, KFT, LSTR, RGLD, SBUX, SD, TRI

JPMorgan Chase Shows How It’s Done (JPM, FAS)

JPMorgan Chase & Co. (NYSE: JPM) rose about 7% yesterday ahead of this morning’s earnings announcement along with other major financial stocks, and now we know why. Jamie Dimon and friends at one of the strongest US-banks posted earnings at $0.40 EPS vs. $0.32 estimates from Thomson Reuters; and revenues came in at $26.9 billion rather than the estimates of $22.96 billion. So far, this is good enough that it is running the wild Direxion Financial Bull 3X Shares (NYSE: FAS) ETF.
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Posted on: April 16, 2009 – 5:51 am in Banking, Brokerage Firms, ETF, Earnings, Financial Stocks, FAS, JPM

Nokia (NOK) Sales Crater, Handset Industries Shudders

It won’t be a nice day to go to work at Motorola (MOT), Samsung, or Sony Ericsson. Their larger competitor, Nokia (NOK) said it sold 19% fewer phones in the first quarter than it did in the same period a year ago. Total units shipped dropped to 93.2 million.

The company said first-quarter net income fell 82% to 122 million euros. Revenue collapsed 27% to 9.3 billion euros. Read More »

Posted on: April 16, 2009 – 5:36 am in Telecom, Wireless, AAPL, MOT, NOK, PALM, RIMM

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