Thursday, January 28, 2010

Morning Note (Tyler)...

Futures +25 bps despite somewhat worse than expected jobless claims (470k vs 450k expected) and durable goods orders (.3% vs. 2.0% expected).  However economic data was roughly in-line.  Investors are probably more concentrated on yesterday’s FOMC release and the President’s State of the Union address which took a more positive tone than previously thought.  The majority of Wall Street felt that Obama would take this time to vilify our financial system, but he was more constructive in identifying our problems… “One place to start is serious financial reform. Look, I am not interested in punishing banks, I'm interested in protecting our economy.”   Obama also pledged to cut Government spending and put a jobs bill on the forefront of this legislative calendar. The House has already passed a version of a jobs bill and the Senate has to now follow suit. The House measure was a $154 billion bill passed back in December that included billions for infrastructure spending, mass transit, and jobs training. Yesterday, the President proposed tax credits for small businesses and called on the Congress to eliminate capital gains taxes on small business investment. The President also mentioned a proposal to take $30 billion in repaid TARP money to a new program to help community banks lend to small business.

The FOMC release yesterday adopted a slightly more positive tone on the economic front.  In particular, they described growth as “likely to be moderate for a time” rather than “weak for some time.”  However, they made no change in language with respect to rates being “exceptionally low for an extended period.”  Perhaps the most pertinent difference in the FOMC release was that Kansas City Fed President Hoenig dissented to keeping rates exceptionally low, and took a more hawkish stance.  The Fed also decided to wind down the MBS asset purchase program in March, as many thought they would keep it on an “as needed” basis.  The GDP reading is tomorrow morning, which may cause some volatility towards the close today.

Ford beat earnings and is trading up 2.5%. NOK beat and is up 10%. 3M beat and is up 2%. BAC-ML ups NFLX & VIV, Barclay’s ups APC & ITW, Citi ups ROK, Jefferies ups NFLX, JPM ups CME, Merriman ups NFLX, UBS ups CAT, WFC ups AHGP, APA & ARLP, BMO cuts EWBC, Citi cuts SXL, Janney cuts BKC, Jefferies cuts WCRX, JPM cuts KEX, KBW cuts TAYC, MS cuts CNK, WFC cuts CHK.

Asia and Europe are higher about 1% today in a relief rally.  USD flat.  Oil +1%.  Gold +50bps. 

Brightpoint News: 

Brightpoint PreMarket (yest close/premkt/% change/volume):

S&P 500 PreMarket (last/% change prior close/volume): 
EASTMAN KODAK           4.7500  5.70      +20.0 %
LSI CORP                       6.0000  5.48      -8.67%
QUALCOMM INC             47.2000 43.12    -8.64%
NABORS INDS LTD          23.5900 25.40    +7.67%
TERADYNE INC               10.2600 10.83    +5.56%
BALL CORP                    50.4500 53.00    +5.05%
LIFE TECHNOLOGIE         48.6900 51.06    +4.87%
SUNTRUST BANKS          24.7000 25.85    +4.66%
MOTOROLA INC             7.4000  7.08      -4.32%
CITRIX SYSTEMS           41.9800 40.21    -4.22%
CARDINAL HEALTH         31.3100 32.60    +4.12%
NICOR INC                     40.6000 39.04    -3.84%
HUNTINGTON BANC        4.8800  5.05      +3.48%
SYMANTEC CORP           18.6100 17.97    -3.44%
BAXTER INTL INC           58.9100 57.00    -3.24%
E*TRADE FINANCIA        1.6500  1.70      +3.03%
ZIONS BANCORP            18.9400 19.50    +2.96%
GENWORTH FINANCI      13.3700 13.75    +2.84%

Today’s Trivia:  Imax was 30% of theater revenue this week, what percentage of theater screens are IMAX?

Yesterday's Answer:   Alexander the Great was a student of Aristotle in 300 B.C.

Best Quotes:  The question lingering on the minds of Americans was what would the Presidents tone be.  For Investors it was how hard would he come after Wall Street and the Financial Industry?  The Financial Responsibility Fee (TARP Tax) was mentioned. “As a result, the markets are now stabilized, and we have recovered most of the money we spent on the banks.  To recover the rest, I have proposed a fee on the biggest banks. I know Wall Street isn't keen on this idea, but if these firms can afford to hand out big bonuses again, they can afford a modest fee to pay back the taxpayers who rescued them in their time of need.”    The positive in there is the President acknowledged in front of the nation that the banks have paid “most” of the money back. The negative is he still considers the Auto industry losses as the banks.” –BTIG Note

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