Posted By optiondragon for myhappytrading.com
From Briefing.com
Periodicals Wrap-Up for Wednesday, November 19th
WALL STREET JOURNAL: According to people familiar with the matter, the Wall Street Journal reported that Boeing (BA) is in the process of recovering from a strike by its machinists and will delay by as much as 10 weeks the original delivery date for all 3,734 jetliners in its order backlog…The Wall Street Journal reported that the Department of Justice, in combination with a government safety warning, is probing the off-label use of a Medtronic (MDT) implant for promoting bone growth. Medtronic CEO William A. Hawkins called the probe a “perfect storm” that suppressed sales of Infuse Bone Graft…FINANCIAL TIMES: After losing 53% of its value last month, the Financial Times reported that Citigroup (C) will liquidate its Corporate Special Opportunities hedge fund…DETROIT NEWS: According to an advance copy of his remarks, the Detroit News reported that Chrysler LLC CEO Robert Nardelli will tell U.S. lawmakers that without assistance, it could run short of operating cash. He added that if pushed into bankruptcy, “we cannot be confident that we will be able to successfully emerge from bankruptcy.”…
Asian Markets Wrap-Up for Wednesday, November 19
Asian stocks continued their decline this week, led down by the financial sector and commodity companies…JAPAN: The Nikkei 225 Stock Average was down 55.19, or 0.7%, to 8,273.22, while the broader Topix index fell 8.01, or 1%, to 827.43. Mitsubishi UFJ (MTU) slid 6.4% to Y511. Mizuho Financial Group (MFG) sank 7.5% to Y212,500. Sumitomo Mitsui Financial Group tumbled 7.9% to Y314,000. Aiful slumped 10% to Y290. Takefuji Corp. dived 9.9% to Y664. Mitsubishi fell 9.2% to Y1,118. Mitsui & Co. (MITSY) dropped 6.5% to Y773. Kansai Electric Power Co. gained 3.6% to Y2,560. Central Japan Railway Co. was up 2.9% to Y865,000…CHINA: The CSI 300 advanced 113.34, or 6.2%, to 1,953.16. Tianjin FAW Xiali Automobile Co. jumped 9.9% to 3.33 yuan. China Cosco Holdings added 5.2% to 9.37 yuan. Shanghai Zhenhua Port Machinery Co. was up 2.7% to 8.33 yuan. SAIC Motor Co. gained 7% to 6.13 yuan. Dongfeng Automobile Co. advanced 7.4% to 3.05 yuan. China Petroleum (SNP) rose 10% to 8.37 yuan. PetroChina Co. (PTR) climbed 7.5% to 11.91 yuan. Sinopec Shanghai Petrochemical Co. (SHI) was up 5% to 4.42 yuan. Citic Securities gained 6.4% to 20.17 yuan. Haitong Securities Co. increased 3.8% to 13.99 yuan…AUSTRALIA: The S&P/ASX 200 Index retreated 23.60, or 0.67%, to 3,499.60. Babcock plummeted 19% to 25 Australian cents. BHP Billiton (BHP) fell 4.1% to A$23.20. OZ Minerals dropped 14% to 63 Australian cents…AROUND ASIA: In Hong Kong, the Hang Seng Index lost 100.09, or 0.8%, to 12,815.80. Henderson Land (HLDCY) slid 5.4% to HK$23.85. Sun Hung Kai Properties (SUHJY) was down 3% to HK$53.35. Cnooc (CEO) lost 2.8% to HK$5.54. Li & Fung declined 5.1% to HK$13.10. China Unicom (CHU) gained 2% to HK$9.08…In South Korea, the Kospi Index sank 1.9% and has fallen 12% over the past seven days. KB Financial Group (KB) dived 4.2% to 28,850 won. Samsung C&T Corp. was down 4.4% to 37,000 won. DC Chemical Co. slumped 14% to 184,000 won.
Nardelli says Chrysler may not emerge from possible bankruptcy-Detroit News
According to an advance copy of his remarks, Chrysler LLC CEO Robert Nardelli will tell U.S. lawmakers that without assistance, it could run short of operating cash. He added that if pushed into bankruptcy, “we cannot be confident that we will be able to successfully emerge from bankruptcy.”
Emergency talks to deal with the crisis in the shipping industry planned-FT
The Financial Times reports that emergency talks will be held today to consider possible steps to address the shipping industry crisis, a crisis that has been triggered by a collapse in dry bulk freight rates. Potential proposals may include plans to simplify payments, similar to a move implemented to settle freight futures contracts. Many believe forced sales of vessels could push values down, while bankruptcies among shipowners that are unable to service debts assumed will also worsen conditions.
U.S. equity futures are continuing to point to a lower open
U.S. equity futures continue to point to a lower open. Investors received data on consumer prices and housing with the release of the consumer price index and the housing starts report. The CPI showed a decrease of -1.0% versus an expected decrease of -0.8%. If the volatile components of food and energy are removed from the equation the report showed a decrease of -.1% versus analysts expectations of an increase of 2.4%. The housing starts came in at 791,000 versus expectations of 780,000, and building permits were 708,000 versus expectations of 774,000.
Analysts Upgrade Summary for Wednesday, November 19th
MOST NOTEWORTHY: Pacific Sunwear (PSUN), Reliant Energy (RRI) and Cogent (COGT) were today’s noteworthy upgrades: UBS upgraded Pacific Sunwear to Neutral from Sell and said liquidity is no longer a near-term concern. The firm lowered PSUN’s target to $1.50 from $3. Citigroup upgraded shares to Hold from Sell on valuation following the recent weakness and believes Pacific Sunwear has sufficient liquidity to remain a going concern. Calyon believes Reliant Energy will be successful in unwinding the Merrill Lynch Retail credit sleeve and obtaining alternative collateral. The firm upgraded shares to Buy from Add. JP Morgan said Cogent’s position in homeland security and the defense markets make it less sensitive to an economic downturn, making valuation attractive. JP Morgan upgraded shares to Overweight from Neutral and raised its target to $13 from $10.50…OTHER UPGRADES: Goldman added Research in Motion (RIMM) to its Conviction Buy List and removed Riverbed (RVBD) from the Conviction Sell List. J.M. Smucker (SJM) was raised to Buy from Underperform at Merrill Lynch.
Analysts Downgrade Summary for Wednesday, November 19th
MOST NOTEWORTHY: Ace Ltd (ACE), HSBC Holdings (HBC) and Century Aluminum (CENX) were today’s noteworthy downgrades: Citigroup believes Ace Ltd’s Net Amount at Risk increase over the past nine months will limit near-term upside. The firm cut shares to Hold from Buy and lowered their target to $54 from $68. WestLB downgraded shares of HSBC Holdings to Sell from Reduce to reflect the deteriorating global economic outlook and the bank’s lower than average Tier 1 Capital ratio. JP Morgan downgraded Century Aluminum to Neutral from Overweight citing lower aluminum prices and high costs…OTHER DOWNGRADES: Goldman removed Cisco (CSCO) from the Conviction Buy List. Sunoco (SUN) was downgraded to Sell from Hold at Deutsche Bank. Arbitron (ARB) was lowered to Neutral from Overweight at JP Morgan.
Analysts Initiation Summary for Wednesday, November 19th
MOST NOTEWORTHY: Resmed (RMD), St. Jude Medical (STJ) and Tibco (TIBX) were today’s noteworthy initiations: Jefferies initiated Resmed with a Buy rating and $41 target and expects the company’s “strong” sales growth to continue. The firm feels Resmed is an attractive acquisition candidate. Jefferies believes St. Jude Medical’s growth expectations are ambitious and finds the stock fairly valued at current levels. Shares were initiated with a Hold rating and $34 target. Banc of America assumed coverage of Tibco with a Neutral rating and $6 target. The firm sees risk to the company’s Q4 results but believes it has a solid recurring revenue model…OTHER INITIATIONS: Ticketmaster (TKTM) was started at Thomas Weisel with a Market Weight rating and $9.25 target. Chemical Financial (CHFC) was initiated with a Market Perform rating and $25 target at Keefe Bruyette. Usec (USU) was reinitiated with a Neutral rating at Goldman.
Jim Cramer’s “Mad Money”
Tuesday’s 6pm pre-empted show aired later at 11 pm. — Cramer thinks a Yahoo! (YHOO) deal with Microsoft (MSFT) could actually happen now that Jerry Yang is not at the helm. Cramer removes Jerry Yang from his CEO “Wall of Shame” and adds Citigroup’s (C) Vikram Pandit in the slot due to his underperformance and destroying value at Citigroup. Shares of Citigroup went from $33.23 when he took the CEO position in December of 2007, and it now trades at $8.36, down 74.8%. Cramer says Pandit is in way over his head. He says, Pandit tells everyone that Citigroup is well capitalized, but the WSJ and others know it is highly leveraged, and investors remain worried about capital. Under Pandit, Citigroup slashed its dividend twice. Cramer says, “let’s hope Pandit pulls a Yang and quits.” When asked by a caller if Cramer would buy YHOO shares now that Yang has stepped down, he said he doesn’t believe in buying a company with declining fundamentals, even when they may be a buyout coming. Cramer talked about his “green plays” again and highlighted and infrastructure play, Quanta Services (PWR). Cramer said this a great play on wind power, and an Obama administration play. The shares have been annihilated in the last few weeks, despite reporting an upside surprise. Cramer said Quanta is a perfect example of a good company that was killed by hedge fund redemptions. He says Quanta’s stock is broken, but the company isn’t and it should prosper with Obama in the White House. Then, Cramer said that Exxon (XOM) has shown that oil has bottomed. Next, Cramer talked with Shaw Group’s (SGR) CEO Jim Bernhard. Cramer says Shaw is an infrastructure “green play”. Shaw is down 57% since Cramer last talked about the stock on April 16, 2007. Cramer says Shaw has 30 projects for 48 nuclear units and 1800 MW added to the U.S. Grid. Bernhard talked about Shaw’s order backlog for nuclear plants for next year: 6 units in the U.S. are booked, 4 in China, and India, Brazil, U.K. and So. Africa projects are all well underway. Bernhard said its non-nuclear business’ are doing well. Trading at $2 above cash value, Bernhard essentially said the shares are cheap. MAD MAIL: FWLT continues to like the stock as it is trading at/near cash value. LIGHTNING ROUND: CMI owned by hedge funds, great company but not the time to buy; PEG Cramer likes it, but prefers DUK with greater growth prospects; PHG a 6% yield, beneficiary of a strong dollar, its a Buy; BAC Cramer is puzzled, a he didn’t want to see the investment in China, one of his “fortress banks” and he is not backing away just yet; CREE too risky, likes HPQ instead; ISRG wrong stock for this environment, its a bull market stock, it doesn’t work here as not recession resistant; SYY problematic on the short-term, challenged business in this economy, great company but stock can’t move due to the poor restaurant environment.
Fast Money position recap- Macke Owns (DIS), (WMT), (MSFT), (UUP); Macke Is Short (YHOO), (TM); Najarian Owns (IYR) Put Spread; Najarian Owns (TSO) Call Spread; Seymour Owns (AAPL), (BAC), (F), (TSO); Finerman’s Firm Owns (MSFT), (VLO); Finerman’s Firm Is Short (IYR), (IJR), (MDY), (SPY), (IWM), (RTH), (USO)
