Posted By Optiondragon for myhappytrading.com, a social network made by traders for traders.
From Briefing.com
Periodicals Wrap-Up for Friday, August 15th
WALL STREET JOURNAL: The Wall Street Journal reported that the Federal Aviation Administration is planning to fine AMR Corp’s (AMR) American Airlines $7.1M for knowingly flying airlines that did not comply with maintenance regulations and reportedly violating drug- and alcohol-testing procedures for employees…The Wall Street Journal also reported that a division of UBS AG (UBS) was accused by New Hampshire securities regulators of urging a non-profit student lender to continue issuing auction-rate securities despite the bank knowing the market was nearing a collapse…NEW YORK TIMES: Deutsche Telekom’s (DT) T-Mobile is expected to become the first company to market a cellular phone utilizing Google’s (GOOG) Android software, inside sources said. HTC will make the phone, which is expected to be launched in the U.S. before Christmas, the New York Times reported…BLOOMBERG: Merrill Lynch (MER) recorded $29B of losses from its British subsidiary’s investments in U.S. subprime mortgages and collateralized debt obligations. As a result, Merrill’s tax obligation in Britain may drop by as much as $8B, according to Bloomberg…Bloomberg also reported that top executives at Star Surgical (STAA) are betting the company’s lens implants will gain on Lasik treatments and have purchased 93,050 non-option related shares so far this year, increasing rumors of a potential takeover. Heartland’s Adam Peck says the company may be an attractive target because of recent cost cutting efforts, little competition and potential sales growth and thinks Bausch & Lomb or Johnson & Johnson (JNJ) could take a second look at Star…
Blackstone may team up with other private equity firms to buy Informa-Telegraph
Private equity firm Blackstone (BX) is holding negotiations with private equity firms Providence and Carlyle about launching a consortium to bid for Informa, which publishes Lloyd’s List.
Asian Markets Wrap-Up for Friday, August 15
Asian stocks retreated ending a third consecutive down week as most Asian markets declined. South Korea and India markets were closed for holidays…JAPAN: The Nikkei 225 Stock Average was up 62.61, or 0.5%, to 13,019.41, while the broader Topix index gained 8.38, or 0.7%, to 1,247.31. Shipper Kawasaki Kisen jumped 4.9% to Y809. Mitsui O.S.K. Lines was up 2.8% to Y1,323. Ulvac surged 13% to Y3,480. Nikon Corp. (NINOY) added 3.8% to Y3,600. Elpida Memory rose 6.3% to Y2,795. Urban Corp. tumbled 82% to Y6…CHINA: The CSI 300 Index advanced 4.10, or 0.2%, to 2,447.61. Ping An gained 1.8% to 41.83 yuan. Merchants Bank increased 1.8% to 21.99 yuan. Shanghai Pudong Development Bank Co. added 0.7% to 21.26 yuan. Panzhihua Steel surged 10% to 7.58 yuan. Maanshan Iron & Steel Co. was up 2.6% to 4.38 yuan. Zijin Mining dropped 1.5% to 5.34 yuan. Haitong Securities Co. lost 3.9% to 16.88 yuan…AUSTRALIA: The S&P/ASX 200 Index was up 0.60, or 0.01%, to 4,981.70. Woodside Petroleum (WOPEY) lost 2.5% to A$54.20. Newcrest Mining (NCMGY) slipped 2.5% to A$24.43. BHP Billiton (BHP) fell 1.9% to A$37.98. Rio Tinto Group (RTP) sank 2.4% to A$115.15…AROUND ASIA: The Hang Seng Index fell 232.13, or 1.1%, to close at 21,160.58. Cnooc (CEO) dropped 4.3% to HK$10.72. PetroChina Co. (PTR) slid 1.1% to HK$9.95. Aluminum Corp. (ACH) was down 2.9% to HK$6.60. :
Dropped calls on the iPhone causing Apple headaches-WSJ
Apple’s (AAPL) new iPhone 3G has a software problem: A number of users are experiencing dropped calls, reports the Wall Street Journal. Apple had no comment. “It’s not about whether you have problems or don’t have them,” says Ken Dulaney with Gartner Inc. “It’s how quickly you address them that matters. If Apple addresses them, people will cut them slack.”
U.S. equity futures point to a higher open
U.S. equity futures are pointing to a higher open as oil prices continue to drop. The price of crude is lower by about $1.75 to about $113. Also falling is the price of gold which is down almost $30 an ounce to about $788 an ounce. Analysts are attributing the drop in commodity prices to slowing economies around the world, but the drop in energy prices has given U.S. investors hope that lower prices means more discretionary income. That has given the equity markets a boost over the past couple of weeks and is continuing to do so this morning
Balance sheet problems raise doubts about Wells Fargo-WSJ
Wells Fargo’s (WFC) premium valuation just lost some of its luster as new disclosures reveal that earnings may not be what they appear to be, according to the Wall Street Journal’s “Heard on the Street”. For one, illiquid assets, or “level three” assets, have grown signaling lower demand and possibly with big write-downs to follow. The company isn’t talking. Also, those level three assets include CDOs which could also portend big losses. Also, short term debt jumped 60% to $86.1B. Cheap money for now but that could change.
Buffalo Wild Wings thrives where others fail-IBD
Double digit sales growth for 12 straight quarters defines Buffalo Wild Wings (BWLD), especially as tough economic times have depressed sales at a number of restaurant chains nationwide. What are they doing right? “”I think it’s really the experience that sets us apart,” says CEO Sally Smith. “We’ve been very focused on meeting the guests’ needs and desires. It’s not about turning tables, it’s about guests staying as long as they want.” With 526 restaurants in 38 states second quarter company-owned same store sales increased 8.3%, and 4.5% at franchised units. Earnings jumped 41% to 31 cents per share, as sales were up 29% to $97.9M. Lynne Collier with KeyBanc Capital Markets looks to the $12 price point. “I think their price value is very attractive. It has good quality food in good quantity for the price”, she says. The ad budget was increased 50% in the second quarter, with more to come. Analysts expect 2008 earnings to climb 28% to $1.41 a share, and then be up 22% in 2009, and another 28% in 2010.
Google’s GPhone: Powerful but not elegant-Silicon Alley Insider
Early insider reviews of Google’s (GOOG) new Android phone say that it’s powerful but nothing like Apple’s (AAPL) iPhone. Reportedly it’s bulky and big, and hardly a design marvel.
AT&T reportedly getting iPhone 3G stock about August 21-Boy Genius Report
Availability is said to be based on existing direct fulfillment orders being filled.
China Yahoo to enter gaming market-Pacific Epoch
China Yahoo (YHOO) is expected to enter the gaming market and has had talks with a Chinese gaming firm.
SunPower-SPWR volatility low; shares rally on PCG electricity deal
SPWR is recently up $8.13 to $86.70 in pre-open trading. PCG announced it will purchase electricity from a facility built by SPWR. SPWR over all option implied volatility of 54 is below its 26-week average of 64 according to Track Data, suggesting decreasing price movement.
Alexion Pharm-ALXN volatility Flat; shares near record high
ALXN, an developer of anti-inflammatory therapeutics primarily for hematological and cardiovascular discords, autoimmune diseases and cancer, is recently up 71c to $95.11 in pre-open trading. Cowen has an Outperform rating on ALXN. ALXN over all option implied volatility of 46 is near its 26-week average according to Track Data, suggesting non-directional price movement.
First Solar-FSLR: Buy shares, a deal may come soon@SBSH
Citigroup said SPWR’s deal with PCG was from last year and FSLR was not in the market. The analyst said they would buy FSLR on the news and not SPWR (do to low margins) as checks suggest FSLR will have a large-scale announcement soon.
Lehman Brothers-LEH: Target estimates lowered, see $3.6B in write-downs@FPKI
Fox-Pitt lowered Lehman’s target to $50 from $62 and its FY08 EPS estimate to $3.99 from $4.50 as they expect the broker to have write-downs of $3.6B.
J.C. Penney-JCP reports Q2 EPS 52c vs. consensus of 50c
Reports Q2 revenue $4.28B vs. consensus of $4.28B. The Company reported that comparable store inventory levels at the end of the second quarter were below last year, and it remains on track for total inventory to be below 2007 levels by the end of the Back-to-School season.
J.C. Penney-JCP sees Q3 EPS 70c-75c vs. cosnensus of 75c
Sees Q3 sales down in the low single digits, sees Q3 SSS down in the mid single digits.
J.C. Penney-JCP reports Q2 SSS down 4.3%
SunPower-SPWR signs substantial agreement with PCG@TWPT
tThomas Weisel said PCG has entered into two large scale contracts for a total of 800MW with SPWR and OptiSolar, SPWR will install 250MW. The firm views the win as a positive for SPWR and for the large scale systems market. The firm notes that this is not a negative for FSLR and would recommend buying shares on any weakness.
Urban Outfitters-URBN: Believe company has strong momentum@FBRC
After Urban Outfitters reported higher than expected EPS, Friedman Billings believes the company has a top management team and has shown that it can perform well during the economic slowdown. The firm reiterated their Outperform rating.
Urban Outfitters-URBN: Stock highlighted as Top Growth-Oriented Pick@FBRC
FBRC advises investors to take advantage of the stock pullback in the low $30s to buy shares, as well as cutting back as it accelerates to the high $30 range. The firm believes the company will be outperforming their peers. FBRC increased their FY08/FY09 with a $39 target price. Valuation is extremely rich and the firm reiterates their Outperform rating.
Ricks Cabaret-RICK: Believe company will take more market share@MERI
After Ricks reported lower than expected EPS for its Q3, Merriman believes the miss was caused by start-up costs, and they think the company’s core club trends are still solid. Merriman maintained their Buy rating. :
Sanderson Farms-SAFM initiated with a Buy, target $58@BBNT
Soros Fund raises stake in Lehman-LEH to 9.47M shares from 10k shares.
Very interesting development here….mental note. Soros was super bearish about the market and economy, this could be the first sign that his view is changing, albeit possibly slowly.
National Oilwell Varco-NOV upgraded to Buy from Add@LYON
Calyon upgraded NOV on valuation. Target to $96 from $108.
SunPower-SPWR upgraded to Buy from Neutral@MLCO
DNA downgraded to Hold from Buy@SBSH
Citigroup would not chase shares at these levels, but does expect Roche to increased their $89 offer. Target to $108 from $91.
Red Robin Gourmet-RRGB: Believe stock has compelling long-term risk/reward@JEFF
After Red Robin reduced its 2008 EPS guidance, Jefferies believes the stock’s “dirt cheap” valuation already accounts for this announcement. The firm maintained their Buy rating.
Priceline.com-PCLN upgraded to Buy from Hold@SBSH
Citigroup upgraded PCLN based on valuation. Target $130.
Nice premarket pop here.
Bill & Melinda Gates raises stake in American International-AIG to 2.5M shares
Bill & Melinda Gates previously reported holding 1M shares of American International.
Bill & Melinda Gates Foundation reports a 1M share stake in Crocs-CROX
Nasdaq Composite-$COMP: Pivot Points
The following are the pivot points for the Nasdaq Composite ($COMP). Pivot High: 2480.780, Pivot Low: 2434.040. These were calculated using the DeMark method. It is generally believed to be bullish when price breaks out above the pivot high or bearish when price breaks down below the pivot low.
Dow Jones Industrials Index-DJX: Pivot Points
The following are the pivot points for the Dow Jones Industrials Index (DJX). Pivot High: 11800.800, Pivot Low: 11533.410. These were calculated using the DeMark method. It is generally believed to be bullish when price breaks out above the pivot high or bearish when price breaks down below the pivot low.
S&P 500-SPX: Pivot Points
The following are the pivot points for the S&P 500 (SPX). Pivot High: 1307.215, Pivot Low: 1285.005. These were calculated using the DeMark method. It is generally believed to be bullish when price breaks out above the pivot high or bearish when price breaks down below the pivot low.
(Important note on how to use this upgrade/downgrade list with analyst comments and news….you must parse out the factual data (Factual data is the most important) from the opinionated data and always take all analyst comments with a grain of salt. Do not follow blindly with their recommendations. Remember that technicals are the most powerful force in short term direction for stock prices due to the law of supply and demand.)
Fast Money Position recap- First Moves: Guy likes DE long, Karen likes NOK, Pete likes JNPR. Macke Owns (COST), (DIS), (MSFT), (WMT), (UUP); Adami Owns (C), (GS), (INTC), (BTU), (AGU), (MSFT), (NUE); Najarian Owns (AAPL), (NOK), (TSO), (XTO); Najarian Owns (WPI) Calls, (ONXX) Calls, (MRVL) Calls, (CSCO) Calls; Najarian Owns (BGG) Puts; Finerman Owns (GS); Finerman’s Firm And Finerman Own (C) Leaps; Finerman’s Firm Owns (JCP), (MSFT), (NOK), (SUN), (TSO), (VLO), (MO); Finerman’s Firm Is Short (IYR), (IWM), (SPY), (IJR), (XLF), (BBT), (COF); Finerman’s Firm Owns (ANF) Call Spreads; Finerman’s Firm Is Short British Pound.
Looks like the market is getting another boost this morning from the drop in oil prices and dollar stabilization. Here we are at 1290 again. Bears are looking for reasons why the market should go lower and finance stocks to plunge lower like they have some sort of knowledge the market doesn’t know about. Cherry picking the data in which your bias resides continues to work for both sides. Where are the regional banks trading at? Where are the big center money banks trading at? Is the market wrong? Why is Soros buying 10 million shares of LEH here? Has age overtaken his common sense? LOL Yeah right. We have a closet full of “dead bodies”, and the bears think there will be more. Clearly they aren’t going against the grain and the market loves to do the opposite of what the majority think. If Greenspan is right and a recovery for housing sits in the first 6 months of 2009, the market should start pricing in a recovery in the next couple months since the market looks 6 months ahead.
Greenspan called the “recession” in january of 2007 and the market reacted violently and in the end Greenspan was right. He foresaw a big economic pullback when Ben’s Fed was still raising rates. Ben’s Fed was waaaay behind the curve and when they were raising they should have been cutting as I suspect Greenspan would have done. Option expiration today and I expect the Optiondragon LIB will tell me where the market will go.
Optiondragon Leading Indicator Basket Formula: LIB= UUP (dollar) + USO (oil price inverse related) + XLF + IWM + (AAPL+GOOG+RIMM).
Patterns in Nature : Think Fractally, patterns emerge in nature as they do in the market both are represnted by formulas.
Striated sandstone lines the slopes of Coyote Buttes in Vermillion Cliffs National Monument, Arizona
