Tuesday, October 20, 2009

NYC baby...

Back in The City for a few days, and thought I'd capture some early thoughts "on tape:"

It's not that cold.  Gimme a break folks.

Flight was delayed, as is the norm for LaGuardia.  It seems that if you miss your brief window into this airport, you'll certainly be screwed circling until another window opens up.  So, for example, a 30 minute delay on the ground in Miami (PA system was not working on the plane) means about an hour in "real terms" since you have to be exactly on time to make your LGA window...

Loved the adrenaline rush from the cab ride into Manhattan.  Couple things of note...1) Had to check the mirror a view times to see if our cabbie was awake as he sped along, 2) It was all good, he was awake, and pretty damn alert considering some of our maneuvers, 3) Never had to tell the guy to take the service road to avoid traffic/construction, i.e. he thought independently, 4) Had to look over the guy's shoulder a few times to see how fast he was going...it's actually amazing how 60mph in a beat up cab feels like 95mph in a smooth ride...

Great conversation with the cabbie as I saw him drive past 59th street (our turn)...for purposes of this interaction, think back to the great scene in Sixteen Candles when Jake is talking to Long Duc Dong ("she get married"..."married?"..."ya, married"..."married?!"..."married! jeesh..."):

Ben:  Ummm, so where are you planning to cut across?
Guy:  57th...you want 57th and 8th, right?
Ben: No, 58th and 7th...
Guy:  Oh, 57th and 8th...
Ben:  Nooo, 58th and 7th...
Guy:  Ok
Ben:  Actually, since we are on 57th now, just drop us at 57th and 7th...
Guy: Wait, you said 57th and 8th, no?

First sign we were back in the city... getting out of the cab, as a homeless guy stumbles by, the driver helps with the luggage and almost sets my bag right on top of a huge nasty & fresh pile of vomit on the curb.  Nice!

Walked to work this morning - great 15 minute stroll down 6th avenue from the NYAC to 48th and 5th.  It was not "early" (7:45am) but the city felt...empty.  Weird.  Or was it just me?  No idea...  But I loved the feel of the city, and the crispness of the air - just enough to make you eyes sting a little when the wind blows and it leaves your cheeks flush... one of the electronic temp & time signs said 46 degrees... felt warmer though...

Is the city different?  Eh... a little quieter, as I said, and some different store fronts... Magnolia Bakery has now clearly jumped the shark with a 50th and 6th location.  Brooks Brothers is now also at 50th and 6th on the south side of the street... Turned the corner onto 48th to see them filming Law & Order or some such show - that was a familiar sight from my time in NYC...

Stopped into Lenny's for breakfast/coffee - right on 48th street - and was simply amazed at the talent level of the workers there... A small asian woman - Caroline - stood at a register well in the back of the store.  The front part is all tables, so the register is a good 40 feet from the front door.  The second that someone breached the threshold of the front door, even as she was filing a prior order, Caroline would yell that new person's order - from memory - over her shoulder to the dude manning the coffee station behind her.  Sometimes the guy behind would challenge her memory, but she was spot on each time:  "Good morning sir, medium coffee, 2 creams, no sugar?  Hello ma'am, large coffee, sugar, no milk?" and so on...  The level of recall and detail was amazing.  For one woman she called back, "ice coffee, 3 equals - not sweet 'n low - equal, lotta milk."  Whhhaaat?  Unreal.  I can't even describe how "homesick" for New York this made me feel.  How does she remember this stuff?  I walked away very, very impressed, and left a nice tip.  I wonder if she's just a "Rain Man," and she'll remember my order tomorrow, or if it takes her a few days... Either way, it was such a welcome feeling to be in that "NY-deli-hustle-sharp thinking-vibe."  As I have said many times, if you spend $9.07 at a deli in Miami, and give the cashier $10.07, more often than not, they have no idea why... It's just depressing.  But for now, thanks Caroline.  You made my day thus far...it's good to be back...

Morning Note...

Abbreviated this morning, apologies… Futures are +30bps higher this morning – but are off the highs of the session - as a series of better-than-expected earnings from AAPL, TXN, BSX, UNH, COH, CAT, PFE, KO, and DD are lifting equity markets.  In fact, earnings on the aggregate have been not just better-than-expected, they have been “blow out numbers” more often than not, as companies continue to hit the ball out of the park.  However, 8:30am real estate data as tempered this morning’s strength as both housing starts and building permits were fewer than expected.  Month-over-month Producer prices were lower than expected at -0.6% vs 0.0%/e.  Year-over-year, PPI is -4.8% vs -4.3%/e.  Bank of Canada leaves rates unchanged.  Brazil last night ruled to impose a 2% tax on all foreign investment in an effort to stem the appreciation of its currency.  Fed governor’s Yellen and Prosser speak today, and Goldman Sachs is out with an emphatic report saying it is way too early to begin tightening US monetary policy.  Across the pond, France’s Sarkozy talked up a strong dollar. 

Not much general news, as earnings continue to dominate the tape.  And with every release, we’ll get a better gauge of whether “sell the news” or “buy the dips” will prevail.  For the moment, the bulls are certainly ahead.  Good summary from BTIG’s Mike O’Rourke last night:

Since the start of September, the S&P 500 has rallied approximately 10%.  During that same time, the Continuous Commodity Index, which is an equal rated commodity basket, has rallied 13%.  After an impressive run off the lows early in the year, commodities spent most of the summer consolidating as the fundamentals remained shaky.  Even today, there were reports out that the amount of oil found in 2009 will be larger than that consumed for the first time since 1988.  Our lack of enthusiasm for commodities since mid-year has been no secret, but we have punted on the timing of when our concerns will play out.  Now, as the economic data has picked up, commodities have resumed their rally.  The  bottom line is that the group is in a virtuous cycle where both bulls and bears have found middle ground.  Economy bulls are naturally expecting an uptick in commodity demand as the recovery takes hold.  Economy bears have found assets they can sleep with at night, while protecting themselves from inflation and the weak dollar. 

BAC upped at RBCM.  BCAP ups F, SEE.  BCAP cuts PTV.  CITI initiates JBLU, LUV with Buy. PCS, LEAP cut at GSCO.  CRL upped at GSCO.  MF positive at JPHQ.  JPHQ cuts OSG.  MSCO ups CVC.  MSCO cuts BA, DTE.  AMZN rated OP at OPCO.  BSX cut at WELA.  AAPL tgt raised at UBSS.  TJX raised guidance.  WFT cut at GSCO. 

Asia higher overnight.  Europe slightly lower.  USD flat.  Oil +16bps and broke the $80/barrel mark this morning.  Gold +70bps.  Bonds bid higher, yields are thus lower.

Brightpoint News:  WEN cut at UBSS, WEN initiated Neutral at BofA/MLCO, Ad agencies are pressing the DoJ to approve MSFT/YHOO deal to provide competition to GOOG, LMT reports $2.11/sh vs $1.83/sh expected & raises guidance, CVS trades ex-div, ACM wins $80M contract extension from US Army, T initiated Hold at Collins Stewart,

Brightpoint PreMarket (yest close/premkt/% change/volume):
T          26.00    26.30    10037598          +1.15%
C          4.54      4.59      7717132            +1.1 %
LMT      76.99    72.63    89083   -5.66%
WEN    4.61      4.51      24970   -2.17%
TSU      28.86    28.86    8203     --
KGC     23.32    23.31    4855     -.04%
ANF      37.58    37.67    700       +.24%
MO       18.35    18.42    400       +.38%
CVS     37.96    37.77    200       -.3 %
ITUB     21.59    20.72    378527  -4.03%

S&P 500 PreMarket (last/% change prior close/volume): 
MARSHALL &ILSLEY    7.1800             6.42      -10.58%            157904
LEXMARK INTL-A          22.5700             24.74    +9.61% 57190
BOSTON SCIENTIFC     10.1600             9.30      -8.46%  3901696
CATERPILLAR INC        57.8500             61.57    +6.43% 2033576
APPLE                         189.860             201.99  +6.39% 1267430
LOCKHEED MARTIN     76.9900             72.69    -5.59%  88961
BANK NY MELLON       27.2300             28.70    +5.4 %  364438
PARKER HANNIFIN       55.2600             58.00    +4.96% 49867
PRECISION CASTPT     104.7200           99.91    -4.59%  1042
INVESCO LTD               23.1200             24.10    +4.24% 169324
M&T BANK CORP         66.2700             68.80    +3.82% 8101
GAMESTOP CORP-A    28.1600             27.15    -3.59%  10860
PEABODY ENERGY     43.3700             44.91    +3.55% 37158
REGIONS FINANCIA      5.7000              5.50      -3.51%  1804096
CUMMINS INC               50.5500             52.30    +3.46% 3093
STATE ST CORP           52.2500             50.50    -3.35%  34331
SOUTHWEST AIR         9.1900              9.48      +3.16% 3000
ZIONS BANCORP          18.3300             17.76    -3.11%  11625
DEERE & CO                46.0400             47.40    +2.95% 48054
QUEST DIAGNOSTIC     56.7100             58.38    +2.94% 400
BOEING CO                  53.4500             51.95    -2.81%  50722
COGNIZANT TECH-A     40.3900             41.50    +2.75% 5450
TERADYNE INC            9.8800              10.15    +2.73% 10800
UNITEDHEALTH GRP    24.9200             25.55    +2.53% 1020601
TEXAS INSTRUMENT    23.5200             24.10    +2.47% 346295
DR HORTON INC           12.2500             12.55    +2.45% 2000
BOSTON PROPERTIE   63.8900             62.36    -2.39%  100
PFIZER INC                   17.9800             18.40    +2.34% 2627403
INTL PAPER CO            24.6800             24.11    -2.31%  2800
TENET HEALTHCARE   6.1600              6.30      +2.27% 3460
SUPERVALU INC          16.9300             16.55    -2.24%  7950
BIOGEN IDEC INC         49.3900             48.30    -2.21%  62476
SEALED AIR CORP       20.5500             21.00    +2.19% 2000

Today’s Trivia:  The name of the smallest citrus fruit comes to us from the Chinese language.  What is it?

Yesterday's Answer:  Rowing and swimming the backstroke are two sporting events in which the participants face backwards, although the high jump should probably be considered as well…

Best Quotes:  “Good Morning - "An apple a day will keep the bears away", you know that little chestnut.  They blow it out.  Anyone who owns Apple products should know that once they have you it is like crack cocaine.   I just spent 15 bucks to download Anvil, The Story of Anvil for my road trip.  It took about 4 minutes.  It's not all about Apple though.  PFE a good number.  It’s had a good run, but we expect it to continue to go.  Seen generalist pile in, and in this tape they pile on.  WU better.  5 regional banks reported this morning.  No one is getting crushed, although ZON looks dicey.  There is a bunch of Economic data today.   Probably what is holding us from already trading above 1100 in the futures.   Get in there and buy, it's not to late.”  --MLCO trader

“Macro:  S&P 500 futures up another 33 bps after AAPL crushed expectations.  We pointed out in a Bloomberg last night that technicals have caused us to get off our bullish retail call from last month.  It wouldn't surprised me to get a 5% sell-off in the next week or two.”  --BCAP trader