Market Currents

Real-time commentary on the market, with links to key sources.

Thursday, August 28 2008
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  • 5:00 PM The U.S. Chamber of Commerce's top economist says recession is possible in second half 2008, but would be relatively short and relatively mild
  • 4:30 PM Paul Kedrosky on GM's claim of 'resurgent' demand - "Here is a gentle math lesson: When a number drops to near zero -- like .... say, SUV sales -- any uptick in it creates, in relative terms, a percentage gain that tends toward infinity."
  • 4:11 PM Marvell Technology (MRVL): Q2 EPS of $0.24 beats by $0.02. Revenue of $843M vs. $837M. Shares +2.3%. [PR]
  • 4:08 PM Novell (NOVL): FQ3 EPS of $0.06 beats by $0.01. Revenue of $245M vs. $241M. Shares -0.5%. [PR]
  • 4:06 PM Dell (DELL): FQ3 EPS of $0.31 misses by $0.05. Revenue of $16.4B vs. $15.95B. Shares -7%. [PR]
  • 4:02 PM Markets close near highs. Dow +1.61% to 11,688. S&P +1.26% to 1,298. Nasdaq +1.22% to 2,412. Crude -2.17% to $115.59. Gold +0.58% to $838.80.
  • 3:52 PM Japan is readying a 10 trillion yen ($95B) stimulus plan, Nikkei says. iShares MSCI Japan Index ETF (EWJ) is up, but only by 0.5%.
  • 3:48 PM Boeing (BA +2.7%) makes its best and final offer to the union.
  • 3:41 PM One reason the Fed's itching to raise interest rates: Negative real interest. If real interest rates remain negative, "on past form it will eventually provoke an epochal shift by investors out of financial assets and into tangible assets."
  • 3:27 PM Amazon.com's (AMZN) Craig Berman puts an end to buzz about an imminent new Kindle. "Don't believe everything you read... One thing I can tell you for sure is that there will be no new version of the Kindle this year... next year at the earliest."
  • 3:15 PM Earnings previews for companies reporting after today's close: DELL, PETM
  • 3:10 PM Notable earnings after Thursday's close: DELL, MRVL, NOVL, OVTI, PETM, SIGM, WIND
  • 3:06 PM Sector ETF weakness: Natural Gas– UNG -5%. Oil– USO -2.3%. Gasoline– UGA -2.3%. Heating Oil– UHN -2.1%. Commodities– DBC -1.9%.
  • 3:05 PM Sector ETF strength: Homebuilders– XHB +4.6%. Broker/Dealers– IAI +4.1%. Commercial Banks– KBE +3.5%. Regional Banks– RKH +3.4%.
  • 3:04 PM Dow leaders: AIG +5.3%. C +4.25%. BAC +3.9%. JPM +3.8%. T +3.2%. BA +3.2%. AXP +3.1%. Laggard: KO -1.4%.
  • 3:02 PM With a hour to go, here's where we stand. Dow +1.62%. S&P +1.19%. Nasdaq +1.12%. Crude -2.12% to $115.64. Gold +0.37% to $837.10.
  • 2:49 PM GM (GM +0.9%) Vice Chairman Bob Lutz says he "can't envision GM possibly being better positioned for tomorrow than it is today, in terms of product strategy." He downplayed a GM/Toyota (TM) race, noting the Volt's superior range.
  • 2:39 PM Dell's (DELL) down 2.1% ahead of today's earnings report. Analysts expect strong PC sales, but are worried about its margins after it slashed prices on notebooks.
  • 2:25 PM Tiffany (TIF +11%) and Zale (ZLC +20%) shine after solid Q2 beats (I, II). Still, analysts at Credit Suisse wonder how long they can keep it up "given that the global macroeconomic environment is likely to weaken."
  • 2:16 PM Oil meanwhile is coming back up, now -1.95% to 115.85.
  • 2:16 PM In light trading, markets are up on good GDP and lower oil: Dow +1.39%, S&P +1.09%, Nasdaq +0.94%.
  • 2:11 PM Adjusting for inflation, gross domestic income - the income side of GDP - rose just 0.3% Y/Y. The 1.9% spread between GDI and GDP is the biggest in the post World War II era - and a signal the economy may be in bigger trouble than headlines indicate.
  • 1:59 PM The recent crude selloff was triggered by the IEA, who said it would tap strategic stockpiles if needed because of Tropical Storm Gustav. The jump in natural gas stockpiles probably didn't help.
  • 1:49 PM Deere (DE) +4.8%. It's spending $177M to expand production as farmers, bolstered by higher food prices, look to grow. The USDA said today it sees 2008 net farm income of $95.7B, up from $92.3B.
  • 1:41 PM Sony (SNE) unveils the world's thinnest LCD TV - just 9.9 mm thick. Their trick? The 'backlight' is on the side.
  • 1:28 PM Ailing Lehman (LEH) will announce layoffs of another 1,500 employees - 6% of its workforce - before it posts Q3 earnings on Sept. 15, NY Times says. That brings the total to 7,500 since last June.
  • 1:13 PM United Airlines (UAUA) will eliminate 1,550 flight attendant jobs as higher fuel prices push the company to lower capacity. United plans to cut a total of 7,000 jobs by the end of next year.
  • 1:01 PM Gustav hasn't deviated from its 'very ominous' track toward the U.S. coast of the Gulf of Mexico, and will likely 'explode' into a major hurricane before making landfall, energy analyst Jim Rouiller says.
  • 12:51 PM Oil trying to reassert itself after plunging to $114.08. Currently -2.11% to $115.70.
  • 12:49 PM "Outside of trade, the economy is considerably weaker," economist Carl Riccadonna says of today's strong GDP growth. "When you look at the spending, it looks terrible for the second half of the year."
  • 12:38 PM Amgen (AMGN) will no longer offer rebates on its anemia drug Aranesp, after critics argued that the rebates contributed to overprescription. Amgen said it will instead offer bigger discounts at the time of purchase.
  • 12:26 PM Not all poorly-received ETFs are as trivial as HealthShares' Ophthamology ETF (HHZ), Index Universe says. Five underfunded ETFs that deserve a look.
  • 12:15 PM Weekly initial claims fell 10K to 425,000. While any news is good news after recent negative suprises, the numers remain consistent with a soft labor market, and don't change expectations for another modest drop in non-farm payrolls.
  • 12:02 PM If Fannie Mae (FNM) needed new management, Doug McIntyre asks, why did CEO Daniel Mudd wait so long to make changes?
  • 11:48 AM A new survey shows worker confidence at its lowest level since 2001. 65% of respondents think this is a bad time to find a quality job, and 33% said they don't always have enough money to make ends meet.
  • 11:35 AM One weather research firm says up to 80% of the Gulf of Mexico's oil and gas production could be shut down as a precaution if Gustav enters the region as a major storm.
  • 11:23 AM "Complaints from the music industry about iTunes are nothing new," Paul Thomasch says of bellyaching Apple's (AAPL) online store is killing the music industry. It also raises the question: If not iTunes, then what?
  • 11:09 AM GlaxoSmithKline (GSK) signs a deal worth up to $820M with Valeant Pharmaceuticals (VRX) for access to the firm's experimental epilepsy treatments. Glaxo has made several deals with smaller partners to expand its pipeline of experimental medicines .
  • 11:05 AM Oil trades below $118; stocks move higher. Dow +1.13%. S&P +0.73%. Nasdaq +0.77%. Crude -0.18% to $117.95. Gold +0.64% to $839.10.
  • 10:59 AM The average U.S. 30-year fixed-mortgage rate fell to 6.60% from 6.66%, marking the second consecutive week of declines.
  • 10:48 AM Fannie Mae's (FNM) capital and reserves are better than investors think, Lehman says: The mortgage lender should be able to make it through the housing crisis without raising additional outside capital.
  • 10:48 AM Natural Gas inventories show build of 102 billion c/f to 2757 Bcf, more than the 84B consensus. NG futures -5.3% to $8.163.
  • 10:36 AM Stronger-than-expected Q2 GDP growth belies talk of a recession. Apparently, the stimulus package helped more than analysts thought, and a weaker dollar has been critical for exports. Data trends suggest similar growth for Q3.
  • 10:24 AM Contrary to recent reports, the FDIC has no current plans to ask for a Treasury loan if bank failures continue to deplete its reserves.
  • 10:15 AM The FBI arrests a man for copyright infringement after he posted songs from a not-yet-released commercial album online, possibly signalling a more aggressive stance in the battle against online music piracy.
  • 10:06 AM Sector ETF weakness: Base Metals– DBB -0.5%, Agriculture– DBA -0.2%, Energy– XLE -0.2%
  • 10:05 AM Sector ETF strength: Silver– SLV +2.5%, Homebuilders– XHB +2.0%, Gold– GLD +1.6%, Steel– SLX +1.5%, Telecom– IYZ +1.5%
  • 10:04 AM Dow laggards: KO -0.9%
  • 10:03 AM Dow leaders: T +2.1%, AIG +2.0%, UTX +1.8%, BA +1.8%, CAT +1.7%
  • 10:00 AM Markets end the first half hour near their highs, while crude pulls back. Dow +0.83%. S&P +0.67%. Nasdaq +0.54%. Crude +0.47% to $118.71. Gold +1.15% to $843.50.
  • 9:53 AM MBIA's (MBI +19.7%) peers are heartened by the troubled insurer's $184B deal. Ambac (ABK) +12%. MGIC Investment (MTG) +6.8%.
  • 9:45 AM MBIA (MBI +19.2%) agrees to reinsure $184B in FGIC municipal bonds. FGIC's future remains uncertain, and the deal allows it to focus on other problems connected to mortgage securities. MBIA will receive a $741M premium.
  • 9:36 AM Core inflation rose at 2.1% in Q2, while headline inflation jumped to 4.2%. Corporate profits dropped by $37.8B to $1.56T - their lowest in three years. Exports were up 13.2%, while imports fell 7.6%. [PR]
  • 9:29 AM Bankruptcy filings shot up to nearly 1M/year as of June 30, and are expected to reach 1.2M by year-end. Business filings were up 41% and personal filings rose 28% vs. a year ago.
  • 9:27 AM Crude +1.62% to $120.10. Gold +1.7% to $848.
  • 9:26 AM Futures took a turn for the better on the strong GDP number, and indicate a solid open. Dow +0.61%. S&P +0.6%. Nasdaq +0.53%.
  • 9:17 AM A growing number of record companies are trying to avoid Apple's iTunes store, arguing that selling individual songs instead of albums hurts music sales. iTunes (AAPL) sells at least 90% of U.S. digital downloads.
  • 9:09 AM Q2 GDP grew at a stronger-than-expected 3.3%/year, almost double the advanced estimate of 1.9%. It grew 0.9% in Q1. Q2 growth reflects increased consumer spending and net exports, and inventories that fell less sharply than anticipated.
  • 9:01 AM Weekly Jobless Claims were 425,000, in-line with consensus, down 10K from last week's revised 435,000. Continuing claims: 3.42M. 4-week moving average falls by 6K to 446,250.
  • 8:47 AM Nikkei business newspaper claims the U.S., Europe, and Japan created a dollar rescue plan when the currency plummeted in March - but didn't use it. Investors wonder if a future dollar drop could rekindle the plan.
  • 8:40 AM The SEC proposes a tentative timeline to switch companies from Generally Accepted Accounting Principles [GAAP] to international financial reporting standards [IFRS] possibly by 2014. Many in the accounting industry welcome the move.
  • 8:39 AM Brown-Forman (BF.B): FQ1 EPS of $0.86 misses by $0.03. Revenue of $790M in-line. [PR]
  • 8:37 AM Energy Conversion Devices (ENER): FQ4 EPS of $0.24 beats by $0.08. Revenue of $82.4M vs. $77.5M. Shares +3%. [PR]
  • 8:35 AM Toronto Dominion Bank (TD): FQ3 EPS of C$1.35 misses by C$0.10. Revenue of $C4.04B in-line. [PR]
  • 8:31 AM Fred's (FRED): Q2 EPS of $0.10 in-line. Revenue of $447M (+5.3%) vs. $438M. Sees 2009 EPS of $0.72-0.76 vs. $0.71. [PR]
  • 8:28 AM Genesco (GCO): Q2 EPS of $0.18 beats by $0.14. Revenue of $353M (+7.7%) in-line. Shares +3%. [PR]
  • 8:27 AM Williams-Sonoma (WSM): Q2 EPS of $0.08 beats by $0.01. Revenue of $820M (-4.6%) vs. $833M. Sees 2009 EPS of $1.03-1.15 vs. $1.31. Shares -7.6%. [PR]
  • 8:21 AM Royal Bank Of Canada (RY): FQ3 EPS of C$0.92 beats by C$0.03. Revenue of C$6.41B vs. C$5.82B. [PR]
  • 8:15 AM Siemens (SI) +0.5%. It's in talks with SWFs about taking a stake, which would bolster Siemens against a potential takeover bid.
  • 8:10 AM Del Monte Foods Company (DLM): FQ1 EPS of -$0.04 in-line. Revenue of $726M (+15.9%) vs. $747M. Sees 2009 revenue of $3.37-3.43B vs. $3.67B. [PR]
  • 8:03 AM Coca-Cola (KO) -1%. Credit Suisse says its "broken North American model" urgently needs to be restructured due to a strengthening dollar and increased competition from Pepsi (PEP). Cuts to Neutral.
  • 7:46 AM Shares of China Mobile (CHL) fall 6.3% in Hong Kong after after JPMorgan and DBS Vickers cut CHL to Underweight from Overweight and Hold from Buy citing contracting margins and increasing competition.
  • 7:38 AM Vimpelcom (VIP) gets the go-ahead to sell Apple's (AAPL) iPhone 3G in Russia.
  • 7:27 AM A high percentage of Yahoo (YHOO) employees vest on lucrative restricted stock units this month, which could cue another mass exodus of both execs and rank and file employees, opines Michael Arrington.
  • 7:27 AM U.S. index futures are largely unchanged, with light overnight volume. Dow -0.03%. S&P -0.04%. Nasdaq -0.14%. Crude +1.18% to $119.55. Gold +0.94% to $841.80.
  • 7:27 AM In Europe at midday: London -0.3%. Paris -0.5%. Frankfurt -0.6%.
  • 7:26 AM Asia markets closed mixed. Nikkei +0.1% to 12,768. Hang Seng -2.3% to 20,972. Shanghai +0.3% to 2,350. BSE -1.7% to 14,048.
  • 7:22 AM China Telecom (CHA): China's biggest land-line carrier said H1 net income fell 4% to 11.6B yuan ($1.7B), short of the 12B analysts expected. [AP]
  • 7:16 AM Zale (ZLC): FQ4 EPS of $0.48 beats by $0.09. Revenue of $456M (+6.1%) vs. $449M. [PR]
  • 7:14 AM Tiffany (TIF): Q2 EPS of $0.63 beats by $0.08. Revenue of $732M (+10.5%) vs. $721M. [PR]
  • 6:55 AM Euro-region retail sales fell for the third straight month. "Inflation is squeezing disposable incomes and the outlook for consumer spending and for retailers is gloomy," economist Ken Wattret says.
  • 6:41 AM German unemployment falls to a 16-year low. The jobless rate of 7.6%, while far worse than in the U.S., is the lowest since 1992.
  • 6:35 AM Hong Kong's exports grew 11.1% in July vs. last year after slipping 0.6% in June. Economists expected a 5.5% gain. "The weakness in the U.S. economy is expected to continue to drag down Hong Kong's export performance," the government said. (ETF: EWH)
  • 6:30 AM Cnooc (CEO) climbs 2.9% on strong earnings, while PetroChina (PTR) falls 0.7% after its steep decline in profits.
  • 6:26 AM Diageo (DEO): H2 profits fell 8.1% to £546M ($1B). Sales rose 9.9% to £3.8B. Full-year profit climbed 2.1% to £1.52B, just short of £1.56B consensus. DEO sees 2009 operating profit growth of 7-9%, vs. this year's 9%. Shares -0.9% in London. [Bloomberg]
  • 6:18 AM Sears (SHLD): Q2 EPS of $0.21 misses by $0.12. Revenue of $11.76B (-4.1%) in-line. [PR]
  • 6:04 AM Toyota (TM) slashes its 2009 sales growth outlook to 2.1% from 5.6% - or 9.7M vehicles from 10.4M. Forecasts were lowered across the board for North America and Europe, but raised for some emerging markets.
  • 6:00 AM Earnings previews for companies reporting early this morning: SHLD, TIF, ZLC
  • 5:55 AM UK home prices fell 10.5% in August, the biggest annual drop in 18 years. The 1.9% drop from July was the 10th straight monthly decline. Including inflation, residential real estate could lose 1/5 of its value in 2008.
  • 2:58 AM Asian markets are mixed: Nikkei +0.1%. Hang Seng -1.7%. Shanghai +0.2%. BSE -0.3%.
  • 12:10 AM Notable earnings after Thursday's close: DELL, MRVL, NOVL, OVTI, PETM, SIGM, WIND
  • 12:09 AM Asian markets midday are mixed: Nikkei -0.15%, Hang Seng -1.22%, Shanghai +0.51%.
  • 12:05 AM Notable earnings before Thursday's open: DLM, ENER, SHLD, TIF, VIP, WSM
  • 12:00 AM Thursday's economic calendar:
    8:30 Corporate Profits
    8:30 GDP (preliminary)
    8:30 Jobless Claims
    10:35 EIA Natural Gas Report
    11:00 Kansas City Fed Mfg Survey
    4:30 PM Money Supply
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