Daily Archives: July 7, 2009

Morgan Stanley’s Credit Analyst Lends Weight To Equity Fears (MS, DFS, RGS, KLIC, AAI)

Money Stack ImageAn appetite for risky assets that has sent small-cap and emerging market stocks and junk bonds flying since March now is getting more scrutiny from a market heavyweight.  Greg Peters, head of credit strategy at Morgan Stanley, (NYSE: MS) is the latest to question the rallying assets of debt-laden companies. In an interview with Bloomberg, he calls the market incredibly dangerous, noting that average debt relative to earnings among high-yield offerings is at an 11-year high. And the strong rally is happening despite rising default rates. How long can any rally last when it’s being driven by the worst assets?
Read More »

Posted on: July 7, 2009 – 3:49 pm in Analyst Calls, Bonds, Secondary Offering, , , , ,

ETF/ETN Investors Have To Watch CFTC Speculation/Limitation Rules (USO, UNG, GAZ, OIL, JJC, GLD)

We are witnessing a pivotal moment in investing history.  After a decade of opening up all markets to the public and to more speculators with exchange traded products, some might soon be closed to speculators and investors alike.  If these markets are not closed off to the bulk of the public and investors and speculators, the writing on the wall is as obnoxious as street punk graffiti that access might become limited.  For better or worse, speculators are likely going to have a harder time.  This week marks a review by the Commodity Futures Trading Commission that could have a broad impact on exchange traded funds and exchange traded notes.  The exchange traded funds and exchange traded notes which track energy are the United States Oil (NYSE: USO) and the United States Natural Gas (NYSE: UNG).

iPath DJ AIG Natural Gas Total Return Sub-Index ETN (NYSE: GAZ) is one we do not cover as frequently because of its volume. It seeks the returns potentially available through an unleveraged investment in the futures contracts on physical commodities comprising the index plus the rate of interest that could be earned on cash collateral invested in specified T-Bills. The index includes the Henry Hub Natural Gas futures contract traded on the NYMEX.  iPath S&P GSCI Crude Oil Total Return Index ETN (NYSE: OIL) is another one we do not cover as much because of its volume. This ETN seeks returns that are potentially available through an unleveraged investment in the West Texas Intermediate crude oil futures contract plus the T-Bill rate of interest that could be earned on funds committed to the trading of the underlying contracts.

iPath DJ AIG Copper TR Sub-Index ETN (NYSE: JJC) is not in energy, but it invests primarily in copper contracts and instruments that hopefully mirror the price of copper.  But do you expect that if regulation goes into curbing energy prices that the same effort would not be applied to metals and other inflationary hard goods?

The SPDR Gold Shares (NYSE: GLD) actually buys and sells gold bullion.  It is so large that it holds more gold than many large nations hold in reserves.  We could cover grains and other hard and soft goods as well.  The list almost feels endless.
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Posted on: July 7, 2009 – 12:46 pm in Commodities, ETF, Index, Oil & Gas, Regulation, , , , , ,

BioHealth Business Daily (CI, AET, MYL, JAZZ, PTIE, GSK, ALNY, FOLD, HALO, AOB, STEM)

Here are some of the top stories affecting key drug and biotech stocks that are covered in-depth today at BioHealthInvestor.com:

Cigna corp. (NYSE: CI), Aetna Inc. (NYSE: AET), and other managed care companies are rising despite making health care reform concessions, as shareholders see they have a seat at the bargaining table.

Mylan Inc. (NASDAQ: MYL) has received FDA approval for a generic version of an AstraZeneca (AZN) prostate cancer drug — a rather unusual new generic.

Jazz Pharmaceuticals Inc. (Nasdaq: JAZZ) shares are up more than 25 percent after the company took steps to ease a cash crunch that had curtailed drug development.

King Pharmaceuticals (KG) and Pain Therapeutics (PTIE) said  they expect to resubmit a new drug application in mid-2010, slightly later than anticipated.

GlaxoSmithKline (NYSE: GSK) announced a positive study on its Cervarix vaccine, although it’s unclear if the company can play catch-up to Merck & Co.’s (NYSE: MRK) Gardasil.

See our in-depth feature this week on five fast-growing biotechs with improving analyst estimates: Alnylam Pharmaceuticals Inc. (Nasdaq: ALNY), Amicus Therapeutics Inc. (Nasdaq: FOLD), Halozyme Therapeutics Inc. (Nasdaq: HALO), American Oriental Bioengineering Inc. (NYSE: AOB), and Stemcells Inc. (Nasdaq: STEM).

-The 24/7 Wall St. Team

Posted on: July 7, 2009 – 11:03 am in Biotech, Drug companies, FDA, Medical, Trading Alert, , , , , , , , , , ,

Quantifying Triple Leverage ETF Performance vs. Target Index (FAS, FAZ, BGU, BGZ, ERX, ERY)

Burning Money PicMoney Stack ImageDirexion has issued its semi-annual report for its triple leverage ETF holders and there are some interesting revelations here.  While there are many others covered, we wanted to demonstrate some of the differences among the Direxion Daily Financial Bull 3X Shares (NYSE: FAS), Direxion Daily Financial Bear 3X Shares (NYSE: FAZ), Direxion Daily Large Cap Bull 3X Shares (NYSE: BGU), Direxion Daily Large Cap Bear 3X Shares (NYSE: BGZ), Direxion Daily Energy Bull 3X Shares (NYSE: ERX), and the Direxion Daily Energy Bear 3X Shares (NYSE: ERY).
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Posted on: July 7, 2009 – 10:04 am in ETF, Index, Mutual Funds, Stock Splits, Trading Alert, , , , , ,

Health Care Companies Play Let’s Make A Deal (CI, AET, HUM, UNH, WLP, CVH, THC, HLS)

biotech

Managed health care company stocks are rising Tuesday despite press reports that hospitals will contribute $155 billion over 10 years toward insuring the nearly 50 million Americans who do not have coverage.

The cuts would largely come from the amount the insurers receive as reimbursement from Medicare and Medicaid.

Shares of Cigna corp. (NYSE: CI), Aetna Inc. (NYSE: AET), Humana Inc (NYSE: HUM), and UnitedHealthGroup Inc (NYSE: UNH) each are up more than 4 percent in early trading, with shares of WellPoint Inc. (NYSE: WLP) and Coventry Health Care Inc. (CVH) also on the rise.

Read more at BioHealth Investor….

Posted on: July 7, 2009 – 9:21 am in Healthcare, , , , , ,

Day Traders & GM Stock: Drag Race To Zero (GMGMQ)

Burning Money PicHow many bankrupt companies have OTC and Pink Sheet stocks before they disappear for the long haul?  Enron, Lehman, Adelphia… General Motors (GMGMQ) is on this list. Some of these stay trading for some time even after the bankruptcies have closed because there is a hope that the paper would have some value in future lawsuits.  But ultimately, most die and get thrown into the Abyss.

The ‘NewCo’ GM will stay in operations and there will be a real public offering again, but for now traders and investors have to play the Pink Sheet stock of GMGMQ.  And the term “playing” is about as true as it can be in this case.

The question to ask is… WHY WOULD THEY STILL BET ON THIS????

Read More »

Posted on: July 7, 2009 – 8:45 am in Autos, Cult Stock, OTC, Trading Alert,

Hansen Medical Credibility As Weak As The Stock (HNSN, ISRG)

Burning Money PicHansen Medical Inc. (NASDAQ: HNSN) is becoming the Boulevard of Broken Dreams in the land of speculative medical instrument stocks.  We gave a volume spike alert at VSInvestor.com on this one, but this situation goes much deeper now.  The maker of The Sensei® robotic catheter systems guided second-quarter revenues lower and withdrew previous system placements guidance.  While the company cited delays in purchases by customers, it is becoming a serious question (actually, it has been a serious question for a while) as to whether or not this is a real company with a solid future or if its basis is hype around its founders and nothing more.
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Posted on: July 7, 2009 – 7:50 am in Earnings Warning, Medical, Trading Alert

The Silver Lining within Rising Jobless Numbers

By John Tamny of RealClearMarkets
 
Last Thursday’s news of yet another increase in the national rate of unemployment was predictably met with quite a few downcast headlines. The Wall Street Journal led with “Rising Job Losses Damp Hopes of Recovery”, while top Pimco investment strategist Mohamed El-Erian penned a piece for the Financial Times titled “American jobs data are worse than we think.”
 
In times like these it’s hard to minimize the pain felt by many Americans. For those who are jobless, every day they’re out of work likely combines humiliation with fear that nothing will materialize. And for those lucky enough to be working, each day likely begins with perilous thoughts of an axe that is soon to fall. Still, as with everything in life, there are positive tradeoffs to our present economic difficulties.

For one, it has to be remembered that successful companies remain on top by virtue of destroying jobs.

Read more…

Posted on: July 7, 2009 – 7:39 am in Uncategorized

T. Boone Pickens Oil Targets For 2009 and 2010 (CLNE)

Pickens PicToday marked the one-year anniversary of the launch of The Pickens Plan.  Oil magnate T. Boone Pickens was giving a large update and gave his oil targets for 2009 and 2010 in a CNBC interview early this morning.  He is still touting natural gas as the replacement for dependence upon foreign oil as a bridge until batteries and other technologies can be perfected. In the climate bill and in Washington they have now included the smart grid and renewables, and he is looking for natural gas to replace the gasoline or diesel in the hundreds of thousands of big trucks on the roads.  While Pickens does not normally name his own play in natural gas for vehicles, the Pickens play is Clean Energy Fuels Corp. (NASDAQ: CLNE).

On wind, there is a change now that natural gas is so low and it has driven the cost effectiveness down.  Pickens is calling for $75.00 oil by the end of this year.  He is sticking with an earlier target of $80 to $85 per barrel as an average price for 2010.

With oil trading under $65 this morning, this might sound bullish for oil and energy prices.  But it is far less bullish and far less aggressive than what Pickens has been known for.

Jon C. Ogg
July 7, 2009

Posted on: July 7, 2009 – 6:44 am in Alternative Energy, Green Biz, Oil & Gas,

Top Early Bird Analyst Calls (APC, NLY, CTL, KEY, INTC, LSI, MMM, MRVL, STO, STLD)

These are the top pre-market early-bird analyst calls we have seen with about two and a half hours until the market opens this Tuesday morning:

Anadarko Petroleum (APC) Raised to Buy at BofA/Merrill Lynch.
Annaly Mortgage (NLY) STarted as Overweight at Barclays.
CenturyTel (CTL) Raised to Buy at UBS.
KeyCorp (KEY) Raised to Outperform at KBW.
Intel (INTC) Raised to Neutral at BofA/Merrill Lynch.
LSI Corp. (LSI) Raised to Buy at BofA/Merrill Lynch.
3M (MMM) Started as Buy at Jefferies.
Marvell Tech (MRVL) Raised to Buy at BofA/Merrill Lynch.
StatoilHydro (STO) Raised to Buy at BofA/Merrill Lynch.
Steel Dynamics (STLD) Raised to Buy at BofA/Merrill Lynch.

JON C. OGG

Posted on: July 7, 2009 – 6:12 am in Analyst Calls, , , , , , , , , ,

Sony (SNE) Gets Into Netbooks Late

TVSony (SNE) never got into the multimedia handheld business the way that Apple (AAPL) did with the iPod. The Japanese company’s joint venture with Ericsson that builds and markets handsets is behind Apple, RIM (RIMM), and even Palm (PALM) is the race to get out a fully-featured smartphone.

Sony was also late getting its PS3 gaming console to market, giving the Microsoft (MSFT) Xbox a lead of several months. Read More »

Posted on: July 7, 2009 – 5:13 am in Consumer Electronics, Video Games, Wireless, , , , , ,

Consumer Reports May Start To Fire Staff

magazinConsumer Reports, the non-profit advocacy magazine owned by the Consumers Union, may fire 21 editors and product reviewers if its writer’s union does not agree to sacrifice raises. According to the New York Post, other employees have already agreed to cuts.

The magazine does not take advertising because it wants to appear independent when it reviews products and services. It is time for the magazine to reverse that policy, if it wants to continue to provide full services to its readers. Taking advertising does not mean catering to advertisers. Read More »

Posted on: July 7, 2009 – 4:57 am in Old Media, ,

China Economy Defies Gravity

chinaIt does not make any sense that China’s GDP is growing, unless the government is buying that growth with its stimulus package. If that is true, it is remarkable how well China’s program is working while similar efforts in America appear to be getting nowhere.

An important economic leader in China says he expects second quarter GDP to be up 7.5%. That would be on top of 6.1% growth in the first quarter. According to the AP, the head of China’s central bank research operation wrote, “We forecast second quarter GDP growth will surpass 7 percent or even 7.5 percent.” Read More »

Posted on: July 7, 2009 – 4:42 am in China, Economy

World’s Oldest Bible To Go Digital

nokOne of the wonderful things about technology is that it can make the old new again. Parts of the oldest Christian Bible, probably written in the fourth century, will be available online. According to PC World, readers will even be able to see the texture of the parchment. Read More »

Posted on: July 7, 2009 – 4:24 am in Old Media

Palm (PALM) Picks European Vendors For Pre

palmAnalysts in the United States are already saying that sales of the Palm (PALM) Pre by exclusive distributor Sprint (S) are starting to slow. Fortunately for Palm shareholders, the handset company has already found vendors to sell the handset in Europe.

According to Reuters, Telefonica’s O2 will market the product in German, Ireland, and the UK. Movistar will sell it in Spain. The news agency writes that the product will be out by Christmas. Read More »

Posted on: July 7, 2009 – 4:10 am in International Markets, Telecom, Wireless, , ,

World Banks Warns The Worst May Not Be Over

uncle samWorld Bank president, Robert Zoellick, was born in Naperville, Illinois. He was educated at Harvard Law School and worked at Goldman Sachs and the State Department but still has the directness of a Midwesterner. He recently wrote to the G8 members who are meeting in Italy, a place about as philosophically distant from the Midwest as anywhere could be, that “…2009 remains a dangerous year. Recent gains could be reversed easily, and the pace of recovery in 2010 is far from certain.” The reason that he may not have delivered the message in person is even though he had the courage to write this missive, he may have chosen not to put himself in harm’s way. Read More »

Posted on: July 7, 2009 – 3:57 am in Economy

Toyota Keeps Its Edge By Pushing Through Troubles

fordMedia in Japan recently reported that Toyota (TM) will begin to produce its new plug-in hybrid in 2012. Toyota will be using lithium-ion batteries which it can produce efficiently in a joint venture with Panasonic. American car companies probably don’t have the balance sheet capacity to support mass production of complex new technology. Toyota’s superior product development and access to capital will give the firm a substantial lead in the plug-in market, a head start that the Japanese car company’s competitors have seen before. Read More »

Posted on: July 7, 2009 – 3:46 am in Autos,

Media Digest 7/7/2009 Reuters, WSJ, NYTimes, FT, Bloomberg

newspaperReuters:   Japanes Topix index is expect to rise to 1,000.

Reuters:   The US may need a second stimulus package.

Reuters:   Hospitals have agreed to contribute $155 billion over ten years to help with the healthcare package.

Reuters:   Treasury is ready to push Wall St. on starting a consumer protection agency.

Reuters:   Lear filed for bankruptcy. Read More »

Posted on: July 7, 2009 – 2:55 am in Autos, Banking, Earnings, Healthcare, Luxury, Mergers and Buy Outs, Pharmaceuticals, Press Digest, Wireless, , , , , , , ,

Asia Markets And Europe Open 7/7/2009

chinaMarkets in Asia were mixed.

The Nikkei was off .3% to 9,648. Toyota (TM) declined.

The Hang Seng was down .1% to 17,959. China Unicom (CHU) rose on rumors that it would sell the Apple (AAPL) iPhone.

The Shanghai Composite was off 1.1% to 3,065.

At the open in Europe, the FTSE was up .3% to 4,209. BHP Billiton (BHP) advanced. The Dax rose .3% to 4,663. The CAC 40 rose .1% to 3,086.

Data from Reuters and MarketWatch.

Douglas A. McIntyre

Posted on: July 7, 2009 – 2:21 am in International Markets, , , ,