24/7 Wall St. » DB

Greek Debt & Austerity Deal, Cheered With a Thud (NBG, GREK, FXE, ALU, DB, STD)

Administrator — Thu, 09 Feb 2012 14:06:09 +0000

Reports are out that parties in Greece have finally agreed to a debt and austerity deal that will allow it to get its bailout funding and to remain part of the Euro. This is great news on the surface, but the market investors are not exactly climbing all over each other to load the boat on Greek trading. Maybe the moves to watch are in the Euro currency because the ADRs are just not really moving.

National Bank of Greece (NYSE: NBG) is up 1% on its ADR trading in New York to $3.96 this morning. Keep in mind that this has already more than doubled from the $1.64 low that was seen as recently as January 10, 2012. Not a year ago.. a month ago.

And the Greek stock market ETF, the Global X FTSE Greece 20 ETF (NYSE: GREK) has not even yet traded this morning and it has extremely thin volume even during the trading day. Shares closed Wednesday at $19.16 and its post-launch range has so far been $12.70 to $19.54.

The Rydex CurrencyShares Euro Currency (NYSE: FXE) is up by 0.15% at $132.21.

As far as other “pro-Euro” trading ADRs, we are only seeing mixed action on that front as well:

Alcatel-Lucent SA (NYSE: ALU) is up 1.5% at $1.98 but that may be after a Cisco earnings report (although Cisco is indicated lower).

Deutsche Bank AG (NYSE: DB) is trading up 1.2% at $46.82 in New York.

Banco Santander, S.A. (NYSE: STD) of Spain is trading down 0.5% at $8.71 in active pre-market trading.

Great news may finally be here, but the market has been expecting a deal or has at least been trying to come up with a fair market value around the issue of “Greece, or no Greece…”

As always, until a deal is signed this may be hearsay. Future politicians may also not choose to live up to the agreements. Sad, but possible.

JON C. OGG

Filed under: 24/7 Wall St. Wire, ADR, Currency, International Markets Tagged: ALU, DB, FXE, GREK, NBG, STD

What’s Important in the Financial World (2/9/2012) A Mortgage Deal With Banks, Yahoo! to Sell Alibaba?

247wallst — Thu, 09 Feb 2012 11:38:05 +0000

As one set of government suits against America’s largest banks is settled, another is about to begin. Media reports say that federal regulators and state attorneys general have set a $25 billion deal with Ally Financial, Bank of America (NYSE: BAC), Citigroup (NYSE: C), JP Morgan (NYSE: JPM) and Wells Fargo (NYSE: WFC). These lenders have been accused of abusing the foreclosure process for their own financial advantages. States and the federal government would receive payments, along with thousands of people whose homes were foreclosed on from 2008 to 2011. Just as this home mortgage matter is settled, the government means to sue banks that misrepresented the value of mortgage backed securities that they sold to other large institutions. The Wall Street Journal reports that the banks that are part of the second investigation include Ally Financial, Bank of America, Citigroup, Deutsche Bank (NYSE: DB) and Goldman Sachs (NYSE: GS). Between mortgages and mortgage instruments, the housing collapse will cost major banks tens of billion of dollars.

Greeks in Brussels

The Greeks have departed for Brussels, where they will plead with the European Union, International Monetary Fund and European Central Bank for the money needed to cover the nation’s financial needs next month. The parties have until February 15 to reach a settlement. The Greeks say they have given in to all austerity requests but have no deal to cut some government-controlled pensions. So, after all of the negotiations, that single issue may drive Greece into default.

Luxury Car Sales

At least some rich people around the world do not think their wealth will be entirely stripped away by taxes. Daimler said it had a 39% increase in fourth-quarter profits. It said the primary driver was an upswing in sales of high-end Mercedes, particularly the car company’s M-Class SUV. Daimler is not alone. BMW posted similarly impressive earnings, as did Volkwagen’s Audi division.

Yahoo! and Alibaba

Yahoo! (NASDAQ: YHOO) may finally get some tangible value from its 39% holding in large China e-commerce company Alibaba. Rumors suggest that Alibaba is close to securing bank loans of as much as $3 billion. Wall St. thinks the Alibaba stake is worth closer to $5 billion, so the firm may have to use some of its own money. Now, investors will have to wait to see what Yahoo! does with the cash. There is almost no optimism that Yahoo! has the management and prospects to use the billions to rebuild its troubled businesses. Yet, with a new CEO and newly constituted board, a turnaround is at least a long shot.

Douglas A. McIntyre

Filed under: 24/7 Wall St. Wire, Market Open Tagged: BAC, C, DB, GS, JPM, WFC, YHOO

What’s Important in the Financial World (2/2/2012) AstraZeneca Layoffs, Sony Losses

247wallst — Thu, 02 Feb 2012 11:47:21 +0000

Today is Facebook Day. It will be remembered that way as long as there are IPOs. The Facebook public offering has every aspect of what makes IPOs the focus of so much interest. No large medium in the U.S., or for the most part overseas, lacks a prominent headline about the Facebook news. Almost all of them question whether the company is worth $100 billion, or how much Mark Zuckerberg will be worth, or whether he should have voting control of Facebook. But the hard part is about to start for the social network company, the part that goes on year after year. The next big wave of media coverage will come when the shares of Facebook are listed. The press will cover the rise and fall of the shares for a few weeks or a few months. After that, Facebook will face the endless road of earnings expectations, PR announcements and quarterly calls. It will just be another fairly large American company, which is the fate of every other exciting IPO.

Sony Slashes Forecast

Sony’s (NYSE: SNE) new CEO-elect, Kazuo Hirai, will not get a honeymoon at all. The Japanese company said it expects an annual loss of $2.8 billion. Hirai said he will address Sony’s problems immediately, which he has to say. Any other reaction would be less than responsible, at least in the eyes of shareholders. Hirai sounds quite a bit like Howard Stringer, the lame duck CEO, did when he took the job. Sony, he said, has become too inward looking. Its engineering culture was isolated from the world of electronic product consumption. Stringer said he would tear the curtains away so that Sony employees could see the world of the consumers who bought its products and those of its competitor’s. The process did not work. Now Hirai can repeat it.

Deutsche Bank’s Q4 Loss

Deutsche Bank (NYSE: DB) is the largest bank in Europe, as well as one of the largest in the world. It is also the flagship financial firm of the strongest economy in Europe. Those things have not insulated it from the region’s deepening problems. Deutsche Bank announced that it lost $463 million in the final quarter of 2011. It blamed a collapse in investment banking brought on by the extreme caution of businesses in the region. These results are the swan song for Europe’s most powerful banker, Josef Ackermann. What it took him a decade to create could be gone in a short year. It may be he is lucky to be leaving when he is.

AstraZeneca Cuts 7,000

Drug maker AstraZeneca (NYSE: AZN) will lay off 7,000 people. At least the move is not part of the fallout from Europe’s problems. The reasons are more mundane. Like most major pharma firms, AstraZeneca’s major products are quickly losing their patent protection. The R&D arm of the company cannot replace them with new blockbuster treatments fast enough. Smaller and nimbler biotech firms have become the sector’s innovators. The size of these firms makes it possible for them to prosper on just one or two successes. That has prompted companies like AstraZeneca to buy these smaller companies. But the M&A process must be too slow to refill AstraZeneca’s pipeline, as the layoffs show.

Douglas A. McIntyre

Filed under: 24/7 Wall St. Wire, Market Open Tagged: AZN, DB, SNE

Top Analyst Upgrades & Downgrades (AMZN, ASH, BAC, C, CAT, DB, XOM, MWW, NEM, STX, SXC, WBSN, VRTX)

Administrator — Wed, 01 Feb 2012 13:18:09 +0000

These are some of the top analyst upgrades, downgrades, and initiations seen from Wall Street brokerage and research firms this Wednesday morning.

Amazon.com Inc. (NASDAQ: AMZN) Maintained Neutral but cut target to $190 at Credit Suisse; Maintained Outperform but lowered estimates at Baird; Lowered target to $225 at Jefferies.
Applied Micro Circuits Corporation (NASDAQ: AMCC) Cut to Perform at Oppenheimer.
Ashland Inc. (NYSE: ASH) named as the Value Stock of the Day at Zack.
Bank of America Corp. (NYSE: BAC) named as Bear of the Day with under current price objective target by Zacks.
Citigroup, Inc. (NYSE: C) Raised to Outperform at Wells Fargo.
Caterpillar, Inc. (NYSE: CAT) named as Bull of the Day with way above-consensus price target at Zacks.
Deutsche Bank AG (NYSE: DB) Started as Outperform at Credit Suisse.
Exxon Mobil Corporation (NYSE: XOM) Cut to Hold at Argus.
Monster Worldwide, Inc. (NYSE: MWW) Cut to Perform at Oppenheimer.
Newmont Mining Corporation (NYSE: NEM) Cut to Hold at Stifel Nicolaus.
Seagate Technology plc (NASDAQ: STX) Raised to Buy at Stifel Nicolaus.
SunCoke Energy Inc. (NYSE: SXC) Reinstated as Outperform at Credit Suisse.
Websense Inc. (NASDAQ: WBSN) Cut to Market Perform at Wells Fargo.
Vertex Pharmaceuticals Incorporated (NASDAQ: VRTX) Reiterated Outperform and raised target at $42 at Credit Suisse.

If you enjoyed the top analyst calls, you can sign up in the box below to join our morning email list to receive news directly in your inbox each morning. We include major analyst upgrades and downgrades, IPO and M&A news, special situation developments, observations on Warren Buffett and key market gurus, as well as special exclusive feature stories.

JON C. OGG

Filed under: 24/7 Wall St. Wire, Analyst Calls Tagged: AMZN, ASH, BAC, C, CAT, DB, MWW, NEM, STX, SXC, VRTX, WBSN, XOM

Media Digest (12/16/2011) Reuters, WSJ, NYTimes, FT, Bloomberg

247wallst — Fri, 16 Dec 2011 11:27:43 +0000

Zynga posts at the high end of its IPO range and will raise $1 billion. (Reuters)

Congress reaches a tentative deal to keep the government open. (Reuters)

Bill Gross’s PIMCO Total Return Fund continues to do poorly. (Reuters)

The maker of Angry Birds may have its IPO in Hong Kong. (Reuters)

Deutsche Bank (NYSE: DB) will begin the sale of its asset management business. (Reuters)

Research In Motion (NASDAQ: RIMM) delays its QNX system until 2012, an unexpected development. (Reuters)

Apple (NASDAQ: AAPL) struggles to gain market share in China. (Reuters)

Salesforce.com (NYSE: CRM) enters the HR software industry. (Reuters)

Sony (NYSE: SNE) will launch its Vita device. (WSJ)

Battelle Memorial Institute reports that R&D spending should increase next year. (WSJ)

The International Monetary Fund’s Lagarde says all major nations must help Europe. (WSJ)

United, Delta (NYSE: DAL) and US Airways (NYSE: LCC) begin to challenge Southwest (NYSE: LUV) at the low end of the price market. (WSJ)

The CEO of the New York Times Company (NYSE: NYT) departs. (WSJ)

Investors in Sino-Forest ask the CEO to leave. (WSJ)

Facebook will release new software to make it easier for advertisers to use the social network. (WSJ)

MF Global’s Jon Corzine says he knew about fund transfers to Europe. (WSJ)

Japanese regulators again attack Citigroup (NYSE: C) over its mutual fund sales. (WSJ)

Property prices in Asia fall quickly. (WSJ)

Morgan Stanley (NYSE: MS) cuts 1,600 jobs. (WSJ)

Some retailers will have “Super Saturday” before Christmas. (NYT)

Kinder Morgan (NYSE: KMI) to bet its $21 billion buyout of El Paso Corp. (NYSE: EP) will give it a chance to enter the booming natural gas market. (NYT)

Russia may invest $20 billion in an EU bailout, with the money moving through the IMF. (NYT)

The co-CEOs of RIM will cut their salaries to $1. (FT)

Fitch cuts the ratings of Bank of America (NYSE: BAC), Goldman Sachs (NYSE: GS) and Barclays (NYSE: BCS). (Bloomberg)

PSA Peugeot Citroen , Fiat SpA and General Motors (NYSE: GM) lead a drop in European car sales. (Bloomberg)

Douglas A. McIntyre

Filed under: Press Digest Tagged: AAPL, BAC, BCS, C, CRM, DAL, DB, EP, GM, GS, KMI, LCC, LUV, MS, RIMM, SNE, UAL

French Bank Downgrades Shows Lack of Support for EU Bailout

247wallst — Fri, 09 Dec 2011 11:40:43 +0000

Moody’s downgraded its long-term rating of Societe Generale to A1. Its ratings of Credit Agricole and BNP Paribas dropped to Aa3. If Moody’s had confidence in a solution to the eurozone debt crisis, it probably would not have taken this action. The three banks have a great deal of the region’s sovereign paper on their balance sheets.

Even though Moody’s could have anticipated that leaders in the region would create one or more facilities to help the financial weakest sovereigns, the agency must have forecast that the capital in those facilities would be inadequate. French banks supposedly have larger investments in regional paper than their counterparts in most other nations. There even has been concern that the French government will need to bail out its largest banks with billions of dollars in support.

Comments on Societe Generale from Moody’s are adequate to cover concerns about the other two banks:

As stated in our recent report “Rising Severity of Euro Area Sovereign Crisis Threatens Credit Standing of All EU Sovereigns”, since the initiation of our review in June 2011, the severity of the crisis facing the euro area has increased. As one of the largest banks in the euro area, SocGen’s creditworthiness is necessarily affected by the fragile operating environment for European banks.

Credit rating agencies still have warnings on large amounts of important paper in the region, and the downgrade of French banks indicates what other downgrades may happen. The agencies have said they will watch other large banks, including the powerful Deutsche Bank (NYSE: DB). The agencies also warned of downgrades of every nation in the region, which would include France and Germany, which currently carry AAA rating on their sovereign debt.

It is ironic that the downgrades should come on the day that European nations set a map for relieving the stress on the debt of the weakest nations. Moody’s did not wait for that action. It sees the problems as too severe.

Douglas A. McIntyre

Filed under: Research Tagged: DB

Euro Banks on the Rise for Merkel/Sarkozy (STD, BBVA, IRE, CS, UBS, DB, NBG, BCS, RBS)

Administrator — Mon, 05 Dec 2011 12:45:31 +0000

Sarkozy and Merkel have gone from killers of the markets to saviors of the market, and oddly enough there is no full resolution yet to the Euro Zone debt crisis other than he hope that the two will reach an agreement of sorts on higher oversight of local government budgets. The move has European bank ADRs on the rise all over again.

Spain is a particular winner. Banco Santander, S.A. (NYSE: STD) is up almost 5% at $7.94; and Banco Bilbao Vizcaya Argentaria, S.A. (NYSE: BBVA) has not traded but shares are indicated up around $8.90 in New York after a $8.53 close on Friday.

The Bank of Ireland (NYSE: IRE) is up almost 4% at $5.02.

The Swiss banks are on the rise as Credit Suisse Group (NYSE: CS) is up 2.6% at $25.25 and UBS AG (NYSE: UBS) is up 1.6% at $12.44.

Deutsche Bank AG (NYSE: DB) is up 1.2% at $40.48.

National Bank of Greece SA (NYSE: NBG) has not yet traded.

The British Banks are higher as well and they are technically not a part of the Euro Zone other than doing business in Europe. Barclays PLC (NYSE: BCS) is up 4.1% at $12.35; The Royal Bank of Scotland Group plc (NYSE: RBS) is up 5.9% at $7.15.

JON C. OGG

Filed under: ADR, Banking, International Markets Tagged: BBVA, BCS, CS, DB, IRE, NBG, RBS, STD, UBS

European ADRs Surging on Global Central Bank Action (ALU, MT, BHP, STD, IRE, CS, UBS, DB, FTE, PHG, ERIC, NOK, NBG, SI, TI)

Administrator — Wed, 30 Nov 2011 14:03:50 +0000

The action out of China’s virtual easing by lowering reserve requirements was already a boost to global markets, but the coordinated central bank efforts of the U.S., Canada, Europe, Switzerland, and the U.K. to preserve global liquidity is creating a boom for stocks today at the expense of the U.S. dollar.

Alcatel-Lucent (NYSE: ALU) is up only 1.25% at $1.60 and shares are flat in local trading in Paris. Arcelor Mittal (NYSE: MT) is up 10% at $18.26 and BHP Billiton Ltd. (NYSE: BHP) is up 6.5% at $74.21.

Banco Santander, S.A. (NYSE: STD) is up 5.6% at $7.56 and the stock is up 4% in local trading in Madrid. The Bank of Ireland (NYSE: IRE) is now up 8.6% at $4.92 and shares are up 7% in local trading in Dublin. National Bank of Greece SA (NYSE: NBG) is up 4.9% at $2.55 in New York but shares are up almost 3% in local trading in Athens.

Credit Suisse Group (NYSE: CS) is up 7% at $24.03 and UBS AG (NYSE: UBS) is up 6.1% at $12.18. Deutsche Bank AG (NYSE: DB) is up 7.9% at $38.36 and shares are up 6.6% in local trading in Frankfurt.

France Telecom (NYSE: FTE) is up 4.3% at $17.01 and shares are up 3.4% in local trading in Paris. Koninklijke Philips Electronics NV (NYSE: PHG) is up 4.6% at $20.00 in New York trading. LM Ericsson Telephone Co. (NASDAQ: ERIC) is up 5.5% at $10.37; Nokia Corporation (NYSE: NOK) is up 4.2% at $5.73. Funny, Nokia’s problems are not really tied to “liquidity” issues or other uncertainties. Siemens AG (NYSE: SI) is up 5.9% at $101.54 in New York and shares are up 4.1% in local trading in Frankfurt.

Telecom Italia SpA (NYSE: TI) is up 5.6% at $11.32 in New York and shares are up 4% in local trading in Milan.

JON C. OGG

Filed under: ADR, International Markets, Pre-Market Activity, Trading Alert Tagged: ALU, BHP, CS, DB, ERIC, FTE, IRE, MT, NBG, NOK, PHG, SI, STD, TI, UBS

European ADRs Dragging Down U.S. Trading (ALU, MT, BHP, STD, IRE, CS, UBS, DB, FTE, PHG, ERIC, NOK, NBG, SI, TI)

Administrator — Tue, 15 Nov 2011 12:44:11 +0000

The Eurozone growth rate of 0.2% in the third quarter may have met expectations but this is just one more example that growth is so low already that getting out of the debt hole is going to be no easy task. As a result, we have another day of Euro-led selling and almost every major European name that has a New York ADR tied to its is trading lower.

Alcatel-Lucent (NYSE: ALU) is down another 2.5% at $1.92 and shares are down 2.6% in local trading in Paris.

Arcelor Mittal (NYSE: MT) is down 3.3% at $18.36 and BHP Billiton Ltd. (NYSE: BHP) is down 1.5% at $74.85.

Banco Santander, S.A. (NYSE: STD) is down almost 2% at $7.47 and the stock is down 2% in local trading in Madrid.

The Bank of Ireland (NYSE: IRE) is down 2.1% at $4.70 and shares are down 2.3% in local trading in Dublin.

Credit Suisse Group (NYSE: CS) is down 3.6% at $23.32 and UBS AG (NYSE: UBS) is down over 2.5% at $11.60.

Deutsche Bank AG (NYSE: DB) is down 2.2% at $37.68 and shares are down 2.6% in Frankfurt.

France Telecom (NYSE: FTE) has not traded in New York but shares are indicated under $17.00 after a $17.10 close on Monday; shares are down 1% in Paris.

Koninklijke Philips Electronics NV (NYSE: PHG) is down 3.1% at $18.86 in New York trading.

LM Ericsson Telephone Co. (NASDAQ: ERIC) is down 1.8% at $9.99; Nokia Corporation (NYSE: NOK) is indicated down almost 2% at $6.42.

National Bank of Greece SA (NYSE: NBG) is down 5.5% at $0.52 in New York but shares are down 8.5% in local trading in Athens.

Siemens AG (NYSE: SI) is down 1.2% in New York and shares are down 1.7% in local trading in Frankfurt.

Telecom Italia SpA (NYSE: TI) is down almost 3% at $11.55 in New York and shares are down almost 3.1% in local trading in Milan.

JON C. OGG

Filed under: ADR, International Markets, Pre-Market Activity, Trading Alert Tagged: ALU, BHP, CS, DB, ERIC, FTE, IRE, MT, NBG, NOK, PHG, SI, STD, TI, UBS

European ADRs Follow Italy Much Lower, Wrecking U.S. Market Gains (E, LUX, TI, ALU, MT, BHP, STD, IRE, CS, UBS, DB, FTE, PHG, ERIC, NOK, NBG, SI, EWI)

Administrator — Wed, 09 Nov 2011 12:32:30 +0000

Well, it used to be Greece taking us down daily, but now it is the much larger concern of Italy. The markets were supposed to be cheering that Silvio Berlusconi was going to step down but then suddenly the fears of who would or could replace him and the uncertainty have set in. Now Italy’s ten-year yield is not just above 5% and 6%, but above 7%. Unlike Greece just being a flea on a dog, Italy is even larger than a dog’s tail and it is frankly too big to just get a bailout.

Eni SpA (NYSE: E) is down over 4% around $42.30 and shares are down 3% in Milan. Luxottica Group SpA (NYSE: LUX) has not traded and we do not yet have Ney Work indications, but shares were down 3.1% in Milan. Telecom Italia SpA (NYSE: TI) is indicated down around 7% in New York at $11.30 but shares are down 4.5% in local trading in Milan.

Elsewhere in Europe….

Alcatel-Lucent (NYSE: ALU) is down around $1.98 (ouch, 52-week low) after a $2.16 close in New York, and shares are down almost 4% in local trading in Paris.

Arcelor Mittal (NYSE: MT) is down over 8% at $19.03 and BHP Billiton Ltd. (NYSE: BHP) is down 4.5% at $76.47 in New York trading in the early pre-markets.

Banco Santander, S.A. (NYSE: STD) is down 7% at $7.50 in active early New York trading but the stock is down more than 3% in local trading in Madrid.

The Bank of Ireland (NYSE: IRE) is down 1.4% at $5.17 in New York and shares are down 2.2% in local trading in Dublin.

Credit Suisse Group (NYSE: CS) is down 7.1% at $24.77 and UBS AG (NYSE: UBS) is down 6.1% at $11.97 in early New York pre-market trading.

Deutsche Bank AG (NYSE: DB) is down over 9% at $36.80 in New York and shares are down about 5% in Frankfurt.

France Telecom (NYSE: FTE) has not traded in New York yet but its shares are down 2% in local trading in Paris.

Koninklijke Philips Electronics NV (NYSE: PHG) is indicated down around $19.65 after a $20.86 close in New York for a loss of close to 6%.

LM Ericsson Telephone Co. (NASDAQ: ERIC) is indicated down 5% around $10.15; Nokia Corporation (NYSE: NOK) is down 4.7% at $6.50.

National Bank of Greece SA (NYSE: NBG) is indicated flat to down a couple cents after a $0.59 close in New York but shares are down 4.1% in local trading in Athens.

Siemens AG (NYSE: SI) is down 4.5% at $98.56 in New York trading and shares are down 1.6% in local trading in Frankfurt.

iShares MSCI Italy Index (NYSE: EWI) is trading down 5.2% at $12.87.

Another rough day is being brought on by the woes of the nanny and endless welfare nations in Europe. S&P futures are down over 2% with well over two hours until the market opens.

JON C. OGG

Filed under: ADR, Economy, International Markets, Pre-Market Activity, Trading Alert Tagged: ALU, BHP, CS, DB, E, ERIC, EWI, FTE, IRE, LUX, MT, NBG, NOK, PHG, SI, STD, TI, UBS