Futures up slightly on the back of upbeat earnings from NKE and ORCL. Very slow news outside of that. No economic releases today.
MT initiated with overweight at LEHM. NKE trading up on earnings and may spin off Bauer unit. ORCL trading up on earnings.
Icahn increases stake in BEAS to 9.88%.
Oil at $81.50, off from yesterday’s $83.32 record. Ten year yields 4.69%.
Announced Deals:
Rockbay News: Fortis plans on selling $18.8B in stock to help fund ABN Amro acquisition, QI 25mm secondary priced at 10.92, ATML suspected fraud in HK operations, WSJ reports KKR and GS souring on HAR deal, HUN to settle lawsuits seeking to stop its acquisition by Apollo
Enrico Fermi’s Trivia: How many piano tuners are there in New York City?
THURSDAY, SEPTEMBER 20, 2007
Morning Note...
Futures looking lower on some profit taking after 2 strong post-Fed days.
GS reported great numbers. BSC reported well below expectations as a result of mortgage exposure.
Jobless claims came in lower (311,000) than last week’s 320,000. Also worth nothing that during recessionary periods, jobless claims typically run at 450,000 per week…
Oil above $82. Ten year yields 4.59%.
Announced Deals: Nasdaq for OMX SS (Sweden) and Borse Dubai acquires 20% of Nasdaq and 28% of LSE.
Rockbay News: Mobile Satellite Ventures (SKYT) awarded 2 patents in Canada and 2 in Australia, ABN Amro CEO hints at preference for Barclays bid since it would keep ABN Amro intact, Harbinger Capital raises stake in Terrestar to 44.7%, Fortis to launch rights issue Friday to finance ABN Amro bid, dR reports FINL may face legal action from GCO, BEST expects approval on CCU vote, MI Developments reported a 58.3% stake in Magna Entertainment (MECA) and said it would consider the acquisitions of certain real estate assets of the company
Vito’s Advanced Trivia: Best guess… How long is the Great Wall of China?
WEDNESDAY, SEPTEMBER 19, 2007
Morning Note...
Futures looking higher this morning on the back of yesterday’s unexpected Fed cuts. Many consider this a very pro-active cut, versus reactionary cuts in the past. As a result, talk of further cuts may be unwarranted.
August housing starts fell 2.6% to a 12-year low.
August CPI fell 0.1% versus expected unchanged. Core rate was up 0.2% which was in line.
Oil at $82/barrel. MSDW reports below expectations.
SIRI/XMSR downgraded at UBS. TWX and VIA.B initiated neutral at CSFB. CCE downgraded at DBAB. DJ reports BEAS not seeking sale of company. DRI trading in line premkt following earnings. WSJ reports CFC seeking to increase deposits to finance mortgage lending and plans to double its branches.
FT reports that TWX may be spinning off cable business.
Announced Deals:
Rockbay News: ATML initiated with outperform at RAJA, Kerkorian loses DaimlerChrysler appeal, NY NO exec VP steps down, ISS recommends shareholders back CCU deal, STO & NHY NO initiated outperform at BERN, AV deal expected to close by end of October.
Yesterday’s Answer: Early during WW1 the British Army made the switch from cloth caps to metal helmets because of the number of head injuries reported. From then on, all soldiers wore metal helmets. However, soon after the switch the British War Office was shocked to discover that there were more soldiers hospitalized with head injuries than ever before. Assuming the intensity of fighting was relatively constant, can you explain why? It’s simply a matter of statistics… those soldiers who were reported hospitalized with head injuries would have otherwise been dead were it not for the helmets they now wore!
TUESDAY, SEPTEMBER 18, 2007
Morning Note...
Futures looking higher this morning ahead of the FOMC meeting and on the back of better-than-expected (although lower year-over-year) earnings from LEH. August PPI down 1.4% and the energy component was off 6.6%. However, with oil up over $80 of late, the energy number is a bit dated and is not sustainable. Core PPI was in line with expectations at +0.2%.
Fed policy statement due at 2:15pm – most pundits expect a ¼ point cut and a “cautious” approach to future cuts. However, considering the lower PPI number, a surprise is certainly possible.
GM downgraded at GSCO. ETFC downgraded at GSCO. AXP agreed to sell its American Express Bank to Standard Chartered for approximately $1.1B. The company expects the deal to be completed in Q108 and expects break-even impact to earnings from the deal. EXC reaffirmed guidance for FY07 and sees FY07 EPS at the upper end of the $4.15-$4.30 range (Reuters consensus was $4.29) and expects "robust growth" over the next five years. Breeden Capital (8%) and SAC (5%) report stakes in ZLC.
Announced Deals: Standard Chartered for AXP Bank ($1.1B)
Rockbay News: Debt sale road show begins for FDC financing lenders, FDC confirms Sept 25th as closing date, dR reports KKR may seek to divest some of FDC’s payment processing platforms, NY Post reports UBS is looking to escape funding GCO’s bid for FINL, Dutch minister clears RBS bid for ABN Amro, 3045 TT seeking strategic investor from US or Europe, Statoil/NHY NO merger effective October 1, 12 potential WEN bidders have signed confidentiality agreements,
Vito’s Advanced Trivia: Early during WW1 the British Army made the switch from cloth caps to metal helmets because of the number of head injuries reported. From then on, all soldiers wore metal helmets. However, soon after the switch the British War Office was shocked to discover that there were more soldiers hospitalized with head injuries than ever before. Assuming the intensity of fighting was relatively constant, can you explain why?
Yesterday’s Answer: A French wooden peasant shoe is a “sabot.” Thus, when French peasants in the 19th Century trampled crops to show their displeasure with the way they were being treated, they were performing “sabotage.”
MONDAY, SEPTEMBER 17, 2007
Morning Note...
Futures slightly lower as focus falls on tomorrow’s Fed meeting. Most pundits agree we’ll see a ¼ point cut, but the debate continues as to what the Fed’s tone will be. Some argue that sluggish economic growth, and corrections in the credit and housing markets, are exactly what the Fed wants and will indicate that further cuts are by no means certain.
Oil down to $78.50 as tropical storms abate. Ten year note yields 4.49%.
TIN upgraded at UBS. DB downgraded at CITI. MAR upgraded at MSDW. F upgraded at BEST. APA added to conviction list at GSCO.
BOBJ hires GSCO and is looking for a buyer. SNE to focus on consumer electronics, and may look to sell chip production to Toshiba or IBM.
Barron’s positive on MO breakup. MSFT appeal rejected by EU.
Announced Deals: ITT for EDO ($56/share), T-Mobile (Deutsche Telekom AG) merger with SunCom Wireless Holdgings (TPC) for $2.4B in cash and debt
Rockbay News: RTP extends expiry date for AL acquisition to Oct 23, Av announces that two proxy advisory firms recommend voting for acquisition by Silver Lake and TPG, Karsch Capital pressures CAO to explore strategic alternatives, FDC announces nearly $150mm in charges to implement cost-cutting strategies, ABN Amro to spin off ABN Amro Capital private equity arm, Plexus Holdings signs pack with NHY NO, ABN Amro projects earnings of EU2.3/share, ABN Amro CEO says Barclay’s bid likely to fail, MLCO initiates CP711 with Buy, BEST initiates DAI with Buy, IFX upgraded to overweight at LEHM, RTP Chairman does not expect issues with Australian regulators on AL takeover,
Vito’s Trivia: During the 19th Century, French peasants sometimes went into the fields and trampled on all the tobacco plants to show their discontent or disdain for the way they were being treated and abused. They would trample the crops with their wooden peasant shoes. Out of this behavior a new word was born. It has entered not only the French vocabulary, but the English vocabulary as well and it's a very common word. A word you could hear nearly every day… what is it? (hint: if you know the word for “wooden shoe” in French, you’ll get it…)
FRIDAY, SEPTEMBER 14, 2007
Morning Note...
Futures down this morning on the NRK LN bailout (re-raising credit concerns in the US) and general European weakness. August retail sales also rose slightly less than expected (+0.3% vs +0.5% expected). But the July gain was revised to +0.5% from 0.3%. While consumer spending looks sluggish, it’s not yet indicating recession. Thus far, all indications are consistent with the projected 2% GDP growth for Q2.
AXP downgraded at MLCO. UBS, CSFB, & DBAB downgraded at Soc Gen. WY upgraded at BofA.
LIZ reaches agreement with Li & Fung USA on sale of four brands under strategic review. ALK $100mm shares buyback. HRH acquires insurance agency from BAC. Amalgamated Gadget reports 17.6% stake in ITWO and urges company to pursue strategic alternatives, including sale.
Fed watch continues as nearly everyone expects a ¼% cut on September 18th. We’ll probably trade in a pretty narrow range until then.
Announced Deals:
Rockbay News: CBRY LN rejects bid for beverage division due to unfavorable financing, SUG declares quarterly dividend, CP711 forecasts 15% growth, Barclays shareholders approve bid for ABN Amro, Ess Dee Aluminum (India) interested in AL’s packaging unit, continued articles/commentary on KKR’s delay of debt sale until next week – probably post-Fed.
Vito’s Trivia: Which US state (of the contiguous 48) borders only one other state?
Yesterday’s Answer: Assess, Banana, Dresser, Grammar, Potato, Revive, Uneven, & Voodoo have the following in common – take the first letter of each word and move it to the end. It then spells, backwards, the original word.
THURSDAY, SEPTEMBER 13, 2007
Morning Note...
Futures up this morning as new claims for unemployment rose slightly from the week before but remain at historically low levels. Again, there is hope last week’s job data stemmed from caution in hiring rather than recessionary forces.
Alcatel-Lucent down 10% on lowered guidance. STM downgraded at LEHM. MRK upgraded at BofA. MCD raises dividend by 50%. MSFT raises dividend by 10%. TGT hires GSCO to review credit card biz. FT reports that LUKOY plans to spend $9B in Europe. FHN and WM announced layoffs in their mortgage areas. NUE warns.
Oil hits all time high of $80 and is now trading just below at $79.60ish.
10-year note yields 4.42%.
Fed meets Tuesday. In a bit of a holding pattern until then, barring any sudden news regarding debt-financing for the major deals out there…
Announced Deals:
Rockbay News: Gazprom OAO denies interest in VK FP, EU extends review of Fortis-portion of RBS bid for ABN Amro by 10 days – deadline for RBS/Santander portion remains Sept 19th, CSFB neutral-to-positive on RTR LN, TOG CN initiated at outperform by CIBC, NHY NO announces capital reduction, TXU financing talks to begin early next week, FT Germany reports IFX can not afford new acquisitions with its most recent QI shares, IFX upgraded to overweight at LEHM, KKR may delay sale of FDC loans until next week as talks with bankers continue, CSFB reports WMB pipeline IPO is on track for year end,
Vito’s Advanced Trivia: What unique trait do these words have in common: Assess, Banana, Dresser, Grammar, Potato, Revive, Uneven, Voodoo?
Yesterday’s Answer: The landscaper says, “I planted 5 rows of 4 trees each.” Bob says, “Ah, so 20 trees.” “No,” says the landscaper, “it was 10 trees total.” How is this possible? Draw a star on a piece of paper… now count the points of the star along with the intersection of each line you drew. There will be “5 rows” of “4 trees each” but you will only have 10 trees total. Thus the landscaper planted the trees in the shape of a star.
WEDNESDAY, SEPTEMBER 12, 2007
Morning Note...
Futures down slightly this morning and giving back some of yesterday’s gains. Yesterday’s strength came in part from blow-out same-store-sales from McD’s, which perhaps indicated consumer spending is still healthy.
Japan’s PM Abe resigned and the NKY closed down 0.5%.
Very little corporate news today. Ericsson gave strong guidance for Q3. Texas Instruments lowered guidance. INTC raised guidance.
Oil at record levels as it trades at $78.16. Oil inventory at 10:30am.
10-year note yields 4.34%.
Announced Deals:
Rockbay News: MLCO neutral on IFX reducing QI stake, DBAB largest Link REIT shareholder – at 22% from 6% - replacing TCI, AA to sell stake in Chalco for $2.1B, DAI GY expects double digit gain in productivity for 2007, NHY NO merger with Statoil expected to complete October 1, DBAB cuts CBRY LN price target on uncertain margins,
Vito’s Advanced Trivia: The landscaper says, “I planted 5 rows of 4 trees each.” Bob says, “Ah, so 20 trees.” “No,” says the landscaper, “it was 10 trees total.” How is this possible?
TUESDAY, SEPTEMBER 11, 2007
Morning Note...
Futures up this morning on the back of overseas strength following positive commentary by Fed Governor Mishkin at last night’s 8pm speech. Interesting that futures are discounting China’s near 5% drop overnight on inflation fears (6.5%) and the Central Bank’s need to raise rates to stem inflation.
Bernanke speaks in Berlin at 11am ET. July trade deficit came in at $59.2B and was in-line with expectations.
GSCO ups beverage sector to attractive from neutral. TMA mortgage co. upgraded at UBS. MAR & HOT upgraded at TWPT. AA sees $10mm Hurricane Dean impact, mostly in Q3. NY Post reports that CFC working with GSCO on a multi-billion dollar bailout plan. Icahn raises TIN stake.
Retail sales and industrial production numbers Friday.
Announced Deals:
Rockbay News: DJ quotes industry analysts who believe M&A will continue in the mining sector but are doubtful about mega-deals such as BHP/RIO for RTP, dR reports ADS FDIC decision due in October, AA estimates lowered at JPM to reflect aluminum pricing, RBC neutral on UFS day 1 presentation, MDT/KYPH announce early termination of waiting period by both the FTC and the DoJ, WEN target lowered at UBS to reflect “lower likely sale price,” DAI GY to up dividend and R&D spending, Toyota Prez denies interest in DAI or any other possible acquisition, TFX acquires NHY NO subsidiary
Vito’s Advanced Trivia: In honor of September 11th… Most of the WTC steel (180,000 tons) was sold as scrap. Where was it sent? (For a very interesting and thought-provoking 9/11 quiz, go here: http://www.funtrivia.com/
MONDAY, SEPTEMBER 10, 2007
Morning Note...
Futures up slightly following Friday’s down 250pts on the back of the August payroll numbers.
Several Fed speakers are on tap today – mkts may react to any commentary out of the norm. Atlanta Fed prez at 8:40am, SF Fed Prez at 11am, Dallas Prez at 1pm, and Fed Govenor Mishkin at 7:30pm tonight.
Oil just below $76. 10 year note yields 4.37%.
TMA mortgage upgraded at JEFF. CFC to reduce workforce by 20%.
BHI, HAL, SLB, WFT initiated buy at UBS.
WY to “balance supply with demand through closures and restricted operating postures at its Wood Product facilities.”
Announced Deals: BX for China National BlueStar Corp (Chemicals) for $600mm.
Rockbay News: 3045 TT August sales up 15%, continued speculation CBRY LN will opt for demerger of US bev biz, dR reports HUN deal to close no earlier than Q1 2008, Fortis denied rumors the RBS-led bidding consortium for ABN Amro is facing trouble, IFX CEO aims to be industry consolidator rather than takeover target, FINL hires Moelis Advisors, Enskilda positive on NHY NO balance sheet restructuring, RTP to sell Kintyre uranium project in Western Australia, CITI slightly raises BHP estimates, KKR agrees to covenant on bank debt for FDC deal – agree to “maintain a certain level of earnings before interest payments, depreciation, tax, and amortization in relation to the senior debt.”
Vito’s Advanced Trivia: What is JELL-0 made of? Or, asked another way, what is gelatin?
FRIDAY, SEPTEMBER 7, 2007
Morning Note...
Futures down this morning on the back of a negative jobs report. August payrolls fell 4,000 and a 75k-110k gain had been expected.
Recession talk stemming from this data misses the mark. It’s likely that companies were simply more cautious with hiring given the credit crunch and market turmoil we experienced over the past few weeks. Or perhaps we are truly experiencing some level of slower payroll growth and thus lower economic growth. Yet the data does not seem to support any “doomsday” recession theorists.
Regardless, the silver lining is that the likelihood of the Fed cutting rates Sept 18th has now increased.
BZH down 7% on 10Q delay. BSC downgraded at BofA. NOK trading higher overseas on “large buyback” speculation.
Announced Deals:
Rockbay News: Aussie paper reports the BHP/RIO for RTP speculation has no merit, Dutch finance minister makes pro-RBS comments indicating he would not favor the Barclay’s bid more in order to keep ABN headquartered in the Netherlands, MLCO positive on NHY NO, shareholder vote on TXU today, DAI GY August sales rose 8.7%, KKR and bankers met last night on FDC, CITI positive but calls on APL to execute, CIBC cautious on FINL
Vito’s Advanced Trivia: What are the Canary Islands named for?
Yesterday’s Answer: The world’s tallest mountain is Mauna Kea, Hawaii, the bulk of which is underwater.
THURSDAY, SEPTEMBER 6, 2007
Morning Note...
Futures slightly lower this morning as short-term volatility continues. The S&P was up 15 points Tuesday and gave back 17 points Wednesday. Obviously there is still fear of a recession stemming from credit market issues, but recent data suggests only a moderate slowdown. While WalMart posted a 3.1% same store sales gain, Costco reported a lower-than-expected 2% gain only. ANF and AEO posted good numbers, as did SKS and JWN. Limited and Dillard’s were weak. August auto sales – as previously reported – were also better than expected. Initial jobless claims came in better than expected. Thus it appears from the cursory evidence that Q3 real GDP will be somewhere in line with the 2.5% forecast rate.
ECB left benchmark interest rate unchanged at 4%.
August employment data due tomorrow. Oil trading above $76/barrel. 10-year note yields 4.48%.
Announced Deals:
Rockbay News: Tata Tea may join PE consortium as bid partner for CBRY LN, WSJ article defends KKR’s stance to refuse to amend deal terms to assist banks, FINL same-store-sales +1.3%, IFX upped to Buy at Dresdner, ABN Amro CEO defends deal (vs. stand alone) as in best interest of shareholders, CEN urges shareholders to reelect board and not vote in Pershing Square nominees, LEHM ups RTR LN, MLCO reits Buy on NRG, dR reports on doubts surrounding RTP/AL deal, NHY NO to double investment and expand production to meet increased demand, ASTSF announces Aug revs of $44mm, CAO announces “strategic review” of itself
Vito’s Advanced Trivia: Name the world’s tallest mountain.
WEDNESDAY, SEPTEMBER 5, 2007
Morning Note...
Futures look down this morning in a reversal of yesterday’s action. Not much news out there to justify the move… the Japanese mkt was down 1.6% overnight so that may be a contributing factor. Mortgage apps were up 0.4% last week. Auto sales were stronger than expected as reported yesterday. Oil holds $75/barrel. 10-year note yields 4.52%.
Announced Deals:
Rockbay News: RBC upgrades UFS on valuation, ISS recommends CEN shareholders vote for deal yet reject full slate of Pershing Square board nomimees, FT reports RBS unlikely to lower or escape bid for ABN Amro, TA started at outperform at MOKE, FT reports RIO and BHP may be working on break-up bid for RTP, TheDeal reports investment banks offering debt at discount, MLCO raises AA to buy on recent pullback, WMB target raised to $43 at MSDW, CSFB raises IFX to outperform, UBS raises estimates for DAI GY, CVS Chairman sells $45mm in stock,
Vito’s Advanced Trivia: Which country boasts the largest tiger population?
TUESDAY, SEPTEMBER 4, 2007
Morning Note...
Futures looking slightly lower this morning after last Friday’s end-of-month strength.
Light news…no earnings, no major deals announced, and the only economic report of note is the August ISM index at 10am.
Important events on the horizon include the FDC financing and the Fed’s Sept 18th meeting. While many have called for a rate cut at this next meeting, others contend the overall economy remains on track and that a cut is unwarranted. Expect that debate to take center stage as Sept 18th nears.
MLCO cut numbers on many large-cap banks (BAC, WFC, PNC).
Oil trading just under $74/barrel. 10-year note yields 4.51%.
Announced Deals: ASX for ASTSF ($784mm or $14.78/share)
Rockbay News: UK Times article speculates RBS could invoke MAC clause for ABN Amro if conditions worsen, DJ reports EU to rule on Thomson/Reuters deal Oct 8th, ASX to pay $14.78/share for remaining shares of ASTSF that it does not own, HCR shareholder meeting Oct 17th, KKR to cut price on $16B loans to finance FDC deal, TYC upgraded at DBAB, HOT names new CEO, UK Times reports banks involved in underwriting TXU deal have offered to pay the $1B breakup fee to convince KKR and TPG to back out, ATML in agreement with MeshNetics to bundle technology,
Vito’s Advanced Trivia: How many states are there in America?
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