RSS Updates
Email UpdatesEveryone loves to follow Apple Inc. (NASDAQ: AAPL), particularly ahead of its big investor and developer conferences. And if you track the top website rankings of the top 100 and top 1,000 overall websites by popularity, you know that if it isn’t everyone loving porn it is a large percentage of the online population. Sometimes the old notion of “No PR Is Bad PR” might not apply. But maybe it does. You probably won’t find Steve Jobs or other Apple executives at this event, but a company called iPorn is hosting an “un-Official After Party” for next week’s Apple iPhone World Wide Developer Conference (WWDC).
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Daily Archives: June 4, 2009
Even Porn Gets Self Promotion Via Apple WWDC (AAPL)
Angelo Mozilo Charged With Insider Trading (BAC)
CNBC’s David Faber just reported that the SEC will be charging former Countrywide CEO Angelo Mozilo with insider trading and disclosure violations for stock sales from 2006 and beyond. Interestingly enough, Faber noted that criminal charges will NOT accompany the charges. Former executives Sambol and Sieracki are also to be charged with failure to disclose material information. We’ll follow up after more information is made available. So far, there has been no impact at all in Bank of America Corporation (NYSE: BAC) as shares are still up 4.5% at $11.72 on the day.
As far as the fate of any personal tanning machines, no word was given.
Jon C. Ogg
June 4, 2009
Refiners’ Second Take: Valero’s Risk of Irreparable Harm (VLO, MRO, HES, TSO, SUN, TOT, VSUNQ)
Valero Energy Corp. (NYSE: VLO) may have caused some irreparable harm to itself and to shareholders this week. Losing money is just not something that the investing public was ready to stomach. Dumping news of a large secondary offering right on top of projecting a loss was no different than pouring salt and peroxide on your kid’s cut hand when he wasn’t looking. This has added pressure on other refiners such as Marathon Oil Corporation (NYSE: MRO), Hess Corporation (NYSE: HES), Tesoro Corporation (NYSE: TSO), and Sunoco Inc. (NYSE: SUN). Valero has always had what always looked like a dirt cheap price to earnings ratio, and now you know why. This may have put some serious future questions on the sector, even if much of this news is company-specific.
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Mortgage Rates At Level That Could Stall Any Housing Recovery
Freddie Mac has announced a sharp increase in the 30-year fixed-mortgage rate. Information released by the agency says that rates moved to 5.29% for the week ending today, up from 4.91% a week ago.
A mortgage banking expert told Reuters, “Any additional rate increases will significantly hurt the home purchase and refinance markets, which will really hurt the economic recovery,” said Alan Rosenbaum, president of Guardhill Financial. Read More
Axsys Buyout Looks On The Cheap (AXYS, GD)
General Dynamics (NYSE: GD) entered into a definitive agreement to acquire Axsys Technologies, Inc. (NASDAQ: AXYS) in a deal that is at a high premium if you consider the recent rally. But this merger price is a rather low premium to recent trading, and it is a very unexciting premium if you compare the price to yesterday’s $50.00 close. The $54.00 per share offer comes to roughly $643 million for a ‘whopping’ 8% premium, and the transaction has been approved by the boards of directors of both companies. We have several reasons to believe that this merger may need to command a higher price premium despite what the companies have agreed to.
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Unemployment Insurance Buckles After Years of Underfunding
Half a million Americans lost their jobs in April, meaning there are now officially 14 million unemployed workers, the highest percentage in 25 years, and the strain on the unemployment system is beginning to show.
A compromise dating back to 1935 means each state has its own unemployment insurance system, with wide latitude to set taxes and benefit levels. As state systems buckle under the weight of skyrocketing unemployment, the fault lines of the current structure have been brought into stark relief.
States have been left on their own to financially founder or prosper, and benefits vary nearly as much as the health of state systems. Read More
Palm (PALM) Pre Won’t Do Sprint (S) Much Good
Morgan Stanley does not think that the new Palm (PALM) will do much for Sprint (S). The reasoning is that the carrier will sell about 1.5 million units of the Pre in the first six month after its launch, but 70% of those will be upgrades.
The research arm of the investment bank likes AT&T’s (T) chances with the Apple (AAPL) iPhone. A new version of the handset will probably be out in a month. The iPhone only has 2% of the US cellphone market. Read More
CEOs Growing More Confident
There is a growing confidence among Chief Executive Officers. A report by Chief Executive magazine noted that there is another strong resurgence in May from responses by top executives. The reading for May came in up 9% to 75.7. There are no estimates for this number, but that is a gain of 48% from the lows seen in just February.
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What Is Time, Inc. Worth?
There have been rumors recently that Time, Inc., the Time Warner (TWX) publishing division and the largest magazine operation in the country, might be spun off to shareholders in much the same fashion that AOL will be toward the end of the year.
What is Time, Inc. worth? Probably $3.5 billion, unless TWX management decides to cut costs at the operation to significantly improve margins. In the first quarter of the year, Time, Inc. did a bit worse than breakeven on $822 million in revenue. Assuming some pick-up in advertising revenue in the last quarter of the year, the company will probably have 2009 revenue of $3.5 billion and operating income of $250 million. Read More
Intel & Wind River: Much More Than Meets The Eye (INTC, WIND, MSFT, IBM, TXN)
Intel Corporation (NASDAQ: INTC) has made what many will consider as a strange merger, but there is more to this merger than meets the eye and this will give Intel higher ticket sales with high margins. The processing giant will acquire Wind River Systems Inc. (NASDAQ: WIND) in an all-cash buyout valued at $11.50 per share. This comes to $884 million in the total.
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First Drop in Continuing Jobless Claims Since January
The Labor Department has just released its weekly jobless claims data at 621,000. The prior week’s reading was revised to 625,000 from a prior reading of 623,000. The consensus estimates from Bloomberg were for 620,000 for this week’s data. This data is too in-line to matter, but there is a big silver lining in the army of unemployed workers.
The continuing jobless claims posted the first actual decline since the first week in January. The reading slid by 15,000 to 6.735 million. Keep an eye on this figure. If it can continue sliding, then the worst in the employment situation has either been seen or is very near.
Jon C. Ogg
June 4, 2009
Goldman Sachs (GS) Moves Oil Price Target To $85
It took Goldman Sachs (GS) long enough to raise its target price for oil to $85. The investment bank waited until crude was close to $70 after a fairly fast increase from under $40 just a little over three months ago.
The price of crude has quickly become the largest threat to the economic recovery and if it goes well above $80, it is hard to imaging the it will not effect consumer spending and margins at many businesses.
Douglas A. McIntyre
Top Analyst Upgrades (FINL, FTI, FL, BEN, GS, KEY, NDAQ, NOK, NRG, VIP)
These are the top pre-market analyst upgrades and positive research calls we have seen from Wall Street firms early this Thursday morning with more than two hours until the market opens:
Finish Line (FINL) Started as Outperform at Oppenheimer.
FMC Technologies (FTI) Raised to Outperform at FBR.
Foot Locker (FL) Started as Outperform at Oppenheimer.
Franklin Resources (BEN) Started as Buy at Deutsche Bank.
Goldman Sachs (GS) Raised to Outperform at Bernstein.
KeyCorp (KEY) Raised to TopPick at RBC.
NASDAQ (NDAQ) Started as Buy at Deutsche Bank.
Nokia (NOK) Started as Outperform at Baird.
NRG Energy (NRG) Raised to Buy at Jefferies.
Vimpel Communications (VIP) Raised to Overweight at Morgan Stanley.
JON C. OGG
Top Analyst Downgrades & Cautious Calls (ATHN, ETFC, LM, MICC, TKC, AMTD, YUM)
These are the top pre-market analyst downgrades or cautious notes we have seen early this Thursday morning from Wall Street brokerage firms with more than two hours until the market opens:
Athenahealth (ATHN) Started as Neutral at Baird.
E*TRADE (ETFC) Started as Hold at Deutsche Bank.
Legg Mason (LM) Started as Sell at Deutsche Bank.
Millicom (MICC) Cut to Equal Weight at Morgan Stanley.
Turkcell (TKC) Cut to Equal Weight at Morgan Stanley.
TD Ameritrade (AMTD) Started as Hold at Deutsche Bank.
YUM! Brands (YUM) Started as Hold at Jefferies.
Jon C. Ogg
Yahoo! (YHOO) Does Not Need Microsoft (MSFT) Deal, Unless It Wants A Higher Share Price
Carol Bartz, Yahoo!’s (YHOO) new CEO, says the portal company does not need a deal to combine its search engine operations with Microsoft’s. Yahoo! has about 20% market share in the US to Redmond’s 8%. Read More
United (UAUA) Doubles Down
The International Air Transport Association says that its forecast that the world’s airlines will loss $4.7 billion this year appears to be much too low. Passenger and freight loads are still well down compared to two years ago. Oil prices are rising much faster than projected. Read More
Wal-Mart (WMT) Becomes The Nation’s New Employment Agency
Many big-box retailers including Best Buy (BBY), Target (TGT), and Costco (COST) are struggling as the recession beats down their same-store sales. General retailers such as Sears (SHLD) are not faring any better. That means that the layoffs in the retail industry, which have already been extensive, are likely to continue, especially if the 2009 holiday season is weak.
Wal-Mart (WMT) is at the other end of the spectrum, by itself. The world’s largest retailer says it will add 22,000 jobs at US Wal-Mart stores this year. That is down slightly from 2008, but in an economy that is forcing hundreds of thousands of people out of work each month, it is extremely impressive. Read More
Regulating Risk Is Risky Business
“Certainly do not give a systemic regulator the job of determining when the next financial crisis will hit,” Alan Greenspan said in a speech at the American Enterprise Institute. The federal government does not appear to think the former Fed chief has any idea what he is talking about.
Several news services have reported that the Administration will announce its new plan to regulate financial markets as soon as mid-month. Read More
Unemployment May Not Turn A Corner
The ADP number for jobs lost last month was 532,000. It was better than any month since November but worse than what many analysts had expected. Economists predict the unemployment figures from the government, due tomorrow, for May will show non-farm payrolls fell by 500,000 pushing unemployment to 9.2%.
The market seems to sense relief because the economy is not pushing 600,000 people out of work each month as was the case earlier in the year. There are several reasons to believe that the pause is temporary. The government figure for the May job loss could be 550,000 if the ADP numbers are an indication. Recent news from big companies, states, and municipalities has been worse than expected. The summer may not offer any pause at all in the collapse of the job market. Read More
Media Digest 6/4/2009 Reuters, WSJ, NYTimes, FT, Bloomberg
Reuters: GM and Chrysler said closing dealers was essential to their restructuring.
Reuters: The Justice Department is probing big tech employee recruiting.
Reuters: Medical bills underlay 60% of American bankruptcies. Read More
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Today’s top tickerspy Indexes Coffee Stocks +14.8% Cement Stocks +3.8% Fitness and Dieti... +3.7% Canadian Energy T... +3.5% Platinum and Pall... +3.5% 
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- Being A Bank CEO Worked Out Pretty Well For Jim And Dick
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