early tour 9.2.11
Good Morning European Markets off 1.6 % -2.7% (DAX -2.7%, Greece -3.7%) ... Nikkei Closed -1.2 %/ (HSI -1.8%, China -1.1%)
EUR 1.4256 (-0.02%) JPY 76.80 (+0.17%) CHF .7804 (+1.93%) Silver +1.89% Copper -0.93% Corn +1.15% 10yr 2.13%
Futures: Dow -83, Nasdaq -19, S&P -10 DXY 74.47 (-0.07%) Crude $88.19 (-74c) Gold $1855.20 (+$26.10)
S&P futures turned negative around 10pm last night and currently near the lows of the morning 1190.60 (-0.89%). European headline risk (Greece) & NYT article saying U.S. government to sue banks for misrepresenting quality of mortgage securities to blame for the weakness this morning (see below). Labor report @ 8:30am.
August Labor Report @ 8:30am (Payroll Estimates: NFP +68k, PP +95k) Italy's largest union 1-day strike today, German election in Merkel's home state on Sunday
Greek FinMin Evangelos Venizelos says economy to shrink about 5% this year (more than forecast)
Greek daily Kerdos reports discussions between government & the Troika broke down (Greece denies)
Citigroup analyst Stefan Nedialkov says Greek banks may need to take further Cl6B in impairments
U.S. government to sue banks for misrepresenting the quality of mortgage securities created (NYT<http://www.nytimes.com/2011/09/02/business/us-is-set-to-sue-dozen-big-banks- over-mortgages.html?_r=1&hp>)
Fed asks BofA to reveal its "contingency plan for dealing with the worsening environment"
(WSJ<http://professional.wsj.com/article/SB10001424053111903895904576542991664860896.html?
mod=WSJ_business_whatsNews&mg=reno-secaucus-wsj>)
NYU economist Noriel Roubini now sees 60% chance of a recession for 2012 (Eurozone to get worse)
Harvard economist Martin Feldstein says euro is "failure" as no permanent crisis solution in sight
London Stock Exchange is said to join in bidding for a majority stake in swaps clearinghouse LCH
Finisar eps beats estimates & guides above street (trading +8.7%) (JDSU/OCLR up in sympathy)
Quicksilver Q3 profit +26% on strong U.S. demand & currency exchange rates (beats estimates)
Esterline (aerospace) Q3 profit -5.4% & warns of upcoming gap in key source of business (trading -8.9%)
H&R Block 01 loss widens on charges from proposed sale of RSM McGladrey & lower revs (trading -5.0%)
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Starz Entertainment ends contract renewal negotiations with Netflix (expires 2/28) (NFLX trading -8.7%)
Coinstar's Redbox enters into amended pact with Sony (expects one-time diluted eps benefit 5c-7c in Q3)
Cracker Barrel 9.3% holder Biglari sends letter ("now is the hour to place real owners in the boardroom")
Valero to buy a refinery from Murphy Oil Corp. for $325 million + the value of its hydrocarbon inventories
Expedia CFO Michael Adler will leave company after 6 years (will stay on until TripAdvisor spin complete)
Euro-area July producer prices rise 6.1% y/y in July led by higher energy costs (inline with estimates)
Iceland agrees to pay $11.4B from estate of failed Landsbanki Islands hf to end U.K.-Netherlands dispute
Astrazeneca shares trading lower as Crestor benefit over Lipitor not statistically significant (trading -2.8%)
Esprit closed -10.1% after yesterday's warning that profit will drop on unspecified store-restructuring costs
Japan capital spending unexpectedly declined last quarter (fanning concerns about economic recovery)
Noda picks Jun Azumi (formerly the DPJ's Diet affairs chief) to succeed him as Japan's finance minister
Chian cuts RRR to Xinjiang banks (will set RRR for Xianjiang banks 2%-6% lower than other banks)
Paladin CEO says they have had "serious inquiries from a range of parties" seeking project stakes
India manufacturing expands at slowest pace in 29 months in August after rate rises (PMI = 52.6)
Australia Prime Minister Julia Gillard says she is "not going anywhere" (election to be held in 2013)
Leading European Sectors: Food & Beverage -0.30%, Real Estate -0.94%, Travel & Leisure -1.16% Lagging European Sectors: Autos/Parts -3.46%, Banks -2.77%, Insurance -2.56%
LEA appoints interim CFO fda acceptance RNOW boosts buyback - VVUS - LRCX increases buyback - CGEN sales agreement - ISIL credit agreement LIZ Mexx JV agreement - BTU lowers outlook for N. Goonyella - MOS patent approval
Notable Options Activity Yesterday:
XLF ($13.08 +2.2%)—Prior to the Federal Reserve Board announcing an enforcement action against GS, a trader bought 40,000 Jan 10 puts for $0.32 tied to buying 560,000 shares for $13.25. The trade is indicative of someone who is expecting elevated volatility through January.
GLD (177.87 +.08%)-Similar to what we had seen during the debt ceiling debate where investors bought way out of the money call spreads in GLD, a customer bought 5,000 of the GLD Sep 200 - 220 call spreads for $0.15. Shares would need to rise 13% over the next two weeks for this
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trade to be profitable.
VIX (31.80 +.57%)— A customer bought 19,000 Dec 20 puts, which are 34% out of the money, for $0.30
LIZ (5.06 -3.1%) since aug 22 (stock was -4.00) we have seen notable upside call buyers in sep and oct and a rally in the stock -25% today however opening cust bought 9000 oct 4 puts paying .30 and still looked bid on the close
AXP (49.50 -.4%) early in the session we saw an opening buyer of 6000 sep 52.5 calls paying up to .30
Secondaries (announced/priced): UDR 20 million ATM offering IPO's: ILFC Holdings (ILFC) files $100M through Citi, JPM & MS
Key Research: CRT initiates BA/GR/PCP (buys), Baird upgrades ZQK, Opco upgrades LQDT, CS upgrades TD Key Research: Roth initiates MGN (buy), Bankhaus downgrades BMW.GR (sell), Barclays upgrades OR.FP Key Research: Citi downgrades HEIA.NA, HSBC downgrades CA.FP, Macquarie upgrades FME.GR Key Research: MS resumes LSE.LN (ew), Collins Stewart upgrades AZ (buy), DB downgrades SQM
Reporting Pre-Open: CPB
Economic Data: August Employment Report @ 8:30am
Conferences: No major conferences.
Analyst/Investor Days: N/A
Non-Deal Roadshows: N/A
Shareholder Meetings: MED, TIXC
Equity/Mixed Shelfs: TSRX ($100M), LIME ($50M)
Other Newspaper Articles & Stories
Barron's positive: Penn Virginia (PVR)
Barron'shttp://online.barrons.com/article/weekday_trader.html
WSJ positive: Deutsche Telekom (DTE GR)
WSJ<http://professional.wsj.com/article/SB10001424053111904583204576544780949169742.html?
mg-reno-secaucus-wsj>
Stung, Chinese Firms Now Look to Go Private
WSJ<http://professional.wsj.com/article/SB10001424053111904009304576531012898300754.html?
mod=ITP_moneyandinvesting_0&mg=reno-secaucus-wsj>
Britain's lenders face a wait for new rules.
WSJ<http://professional.wsj.com/article/SB10001424053111903895904576544591893890636.html?
mod=rss_europe_w whats_news&mg-reno-secaucus-wsj>
BNY Mellon's New CEO Is Old Hand
WSJ<http://professional.wsj.com/article/SB10001424053111903895904576544992946954136.html?
mg-reno-secaucus-wsj>
Fresh Scrutiny of BofA
WSJ<http://professional.wsj.com/article/SB10001424053111903895904576542991664860896.html?
mod=ITP_moneyandinvesting_0&mg=reno-secaucus-wsj>
H-P's Customers Backing Off
WSJ<http://professional.wsj.com/article/SB10001424053111903895904576544822297017068.html?
mod=ITP_marketplace_0&mg-reno-secaucus-wsj>
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| If AT&T Prevails at Trial, It Faces Battle With FCC WSJ<http://professional.wsj.com/article/SB10001424053111903895904576544911382577794.html? mod=ITP_marketplace_1&mg=reno-secaucus-wsj> |
|---|
| Samsung Presses Ahead on Android WSJ<http://professional.wsj.com/article/SB10001424053111904716604576543402188323480.html? mod ITP marketplace_0&mg-reno-secaucus-wsj> |
| China Benefits as U.S. Solar Industry Withers WSJ<http://www.nytimes.com/2011/09/02/business/global/us-solar-company-bankruptcies-a-boon- for-china.html?ref=todayspaper> |
| Banks Push Greek Bailout Plan NYT<http://www.nytimes.com/2011/09/02/business/global/european-banks-are-hard-selling-greek- bailout-plan.html?_r=2&ref=business&pagewanted=all> |
| U.S. Is Set to Sue a Dozen Big Banks Over Mortgages NYT<http://www.nytimes.com/2011/09/02/business/us-is-set-to-sue-dozen-big-banks-over- mortgages.html?_r=1&ref=business> |
| In Japan, a Tenuous Vow to Cut NYT<http://www.nytimes.com/2011/09/02/business/global/japan-seeks-answers-to-debt-load- without-angering-voters.html?ref=todayspaper> |
| Eric and Irene NYT Op-Ed Paul Krugmanhttp://www.nytimes.com/2011/09/02/opinion/krugman-eric-and-irene.html |
| American Apparel in Talks to Raise $160M Bloomberg<http://www.bloomberg.com/news/2011-09-01/american-apparel-said-to-be-in-talks-to- raise-160-million.html> |
| Bidders setting their sights on Saxon NY Post<http://www.nypost.com/p/news/business/bidders_setting_their_sights_on_nZw8AX6jgRm4VSyXrI BSPL> |
| Benihana board proposes dual-class elimination NY Post<http://www.nypost.com/p/news/business/it_class_warfare_BqIf0vaEFOE0aMVoTcWCkM? CMP=OTC- rss&FEEDNAME=> |
| Netflix offered $300 million-plus, but Starz wanted higher consumer prices LA Times<http://latimesblogs.latimes.com/entertainmentnewsbuzz/2011/09/netflix-offered-300- million-plus-but-starz-wanted-higher-prices.html? utm_source=feedburner&utm_medium=feed&utm_campaign=Feed%3A+newsandbuzz+%28News+%26+Buzz%29> |
| Amazon's offer in California sales tax fight gets tepid response LA Times<http://www.latimes.com/business/la-fi-amazon-brown-20110902, 0, 6054554.story> |
| The Washington Post Is Closing Almost All of Its Local Bureaus Atlantic Wire<http://www.theatlanticwire.com/business/2011/09/washington-post-closing-lots- bureaus/42013/> |
| TransCanada aims to cut gas shipping costs Globe and Mail<http://www.theglobeandmail.com/globe-investor/transcanada-aims-to-cut-gas-shipping- costs/article2150818/> |
| Shaw shuns cellular, bets on WiFi Globe and Mail<http://www.theglobeandmail.com/globe-investor/shaw-shuns-cellular-bets-on- wifi/article2149909/> |
| Enbridge's push to the Pacific wins support from China Globe and Mail<http://www.theglobeandmail.com/globe-investor/enbridges-push-to-the-pacific-wins- support-from-china/article2150950/> |
Pension fears threaten to derail sale of Comet
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Independent<http://www.independent.co.uk/news/business/news/pension-fears-threaten-to-derail-
sale-of-comet-2347794.html>
Rumor: Tullow Oil is tipped to strike it rich Daily
Mail<http://www.thisismoney.co.uk/money/markets/article-2032782/MARKET-REPORT-Tullow-Oil-
tipped-strike-rich.html?ito=feeds-newsxml>
Banks 'still expect taxpayer to pay for their failure' (Paul Fisher)
Telegraph<http://www.telegraph.co.uk/finance/newsbysector/banksandfinance/8736081/Banks-
still-expect-taxpayer-to-pay-for-their-failure.html>
Central bank flight to Federal Reserve safety tops Lehman crisis
Telegraph<http://www.telegraph.co.uk/finance/financial crisis/8736204/Central-bank-flight-to-
Federal-Reserve-safety-tops-Lehman-crisis.html>
LSE in £900m bid talks with LCH.Clearnet
Telegraph<http://www.telegraph.co.uk/finance/newsbysector/banksandfinance/8736646/LSE-in-
900m-bid-talks-with-LCH.Clearnet.html>
Who gets Starz's digital rights now? Probably no one
GigaOm<http://gigaom.com/video/starz-streaming-rights/?
utm_source=feedburner&utm_medium=feed&utm_campaign=Feed: 200mMalik%20%28 GigaOM: %20Tech%29>
Intel reportedly plans to back off MeeGo OS
DigiTimeshttp://www.digitimes.com/news/a20110901PD217.html
Key Events Next Week
Monday: North American markets closed (Labor Day)
Tuesday: Congress back from recess, ISM Non-Manufacturing Index, Citigroup Technology Conference (NYC), Eurozone GDP, FinMins (Germany, Netherlands, Finland) meet to discuss Greece, RBA Cash Target, Earnings (PBY)
Wednesday: Republican presidential debate, Fed's Beige Book, MBA Mortgage Applications, Jefferies Global Shipping Conference (NYC), Goldman Sachs Retailing Conference (NYC), Bank of Canada Rate, UK Industrial Production, Rulings of German Constitutional Court relative to first Greek bailout expected, Earnings (TLB, VIP, CASY, MIND, MTRX, SWHC)
Thursday: BOE & ECB Interest rate decision, Trade Balance, Consumer Credit, President Obama to present his jobs program to joint session of Congress, Bofa Canada Mining Conference (Toronto), Japan GDP, China CPI & PPI, Earnings (SFD)
Friday: Wholesale Inventories, G7 finance ministers meeting, UBS Best of Americas Conference (London), Deadline for Greece to reach agreement with private sector creditors on proposed debt write-down, Earnings (KR, LULU)
Ike Groff 680 Washington Blvd |Stamford, CT 06901
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