Stockman: Apr 8, 2008

Tuesday, April 8, 2008

GOLD VS DOLLAR

this is an excellent video detailing the price of gold vs the dollar. video goes into detail on the importance of a gold standard.

Pre Market Trading Indications

Following yesterday's afternoon sell-off, futures indicate a modestly lower open for the mkt as the technology sector is under pressure this morning. Yesterday after the close, Advanced Micro (AMD) announced it expects Q1 revs to be ~$1.50 bln vs. the $1.62 bln First Call consensus, citing lower than expected sales across all business segments. Then overnight, Novellus (NVLS) issued mixed Q1 guidance, expecting EPS of $0.15-0.17 vs. the $0.23 FC consensus, with revs of $315-325 mln vs. the $318.48 mln FC consensus. But the in line rev guidance was also at the low end of the previous guidance range. Shares of NVLS are indicated 5% lower pre-mkt. Finally, Dutch digital navigation device maker TomTom lowered its 2008 rev outlook after cutting prices for its personal navigation devices during Q1. Shares of peer Garmin (GRMN) are indicated 5% lower pre-mkt following the TomTom news and a downgrade of its own shares to Hold from Buy at Soleil. Dow futures are currently -44; Nasdaq futures are currently -11.0; S&P futures are currently -5.2.

Gapping down in reaction to weak earnings/guidance: CBBO -7.4%, SCUR -7.1%, NVLS -4.6%, LDK -2.5% (also announces proposed offering of us$300 million senior convertible notes), AMD -2.2%, AUO -2.1%, AA -1.9%, MNTG -1.4%...

Select financial names showing weakness: BCS -3.8%, LYG -3.4%, CIT -3.3%, STD -1.8%, HBC -1.1%, DB -1.0%...

Other news: GRO -46.1% (announces resignation of COO and retracts prior guidance), FMD -31.8% (makes statement on TERI's petition for reorganization under Chapter 11; says is analyzing the implications of this filing), REXX -8.1% (files S-1 relating to 8 mln share offering by co selling 4 mln shares of common stock and the selling stockholders are selling 4 mln shares of common stock), MWE -5.6% (announces public offering of 5 mln common units at $32.44/unit), ASML -5.6% (down in sympathy with AMD), WM -5.3% (finalizing capital injection plan and downgraded to Underperform at Keefe Bruyette), SIRF -5.0% (discloses CFO resignation), ENDP -3.0% (announced that it has notified the FDA of the withdrawal of the sNDA without prejudice for FROVA), DEPO -2.0% (settles patent litigation against IVAX and as stated that it intends to return the rights to Chronogesic licensed from DURECT), RTP -1.7% and BHP -1.5% (Rio Tinto can go it alone, CEO says - Globe and Mail)...

Analyst downgrades: IFX -6.5% (downgraded to Neutral at Credit Suisse), GRMN -5.1% (downgraded to Hold at Soleil), MI -4.2% (downgraded to Sell at tier 1 firm), JBL -4.0% (Hearing downgraded to Neutral from Buy at tier 1 firm), FLS -3.9% (downgraded to Neutral at Baird), AZN -2.9% (downgraded to Neutral at tier 1 firm), NITE -2.4% (hearing downgraded to Neutral at tier 1 firm), CNK -2.2% (downgraded to Neutral at JPMorgan), WFC -1.8% (hearing downgraded to Neutral at tier 1 firm), WIBC -1.4% (initiated with Sell at Stern Agee), AAPL -1.2% (downgraded to Underperform at Morgan Keegan).

Gapping up in reaction to strong earnings/guidance: NTRI +16.5%, NUAN +3.1%, VRSN +2.0% (also Brian Robins named acting CEO), CHTT +1.8%, CHINA +1.4%...

Other news: RGEN +22.7% (announces settlement with Bristol-Myers Squibb in Orencia lawsuit), AGEN +22.3% (announces that the Russian Ministry of Public Health has issued a registration certificate for the use of Oncophage in the treatment of kidney cancer patients at intermediate risk for disease recurrence), VRNM +4.9% (announces commencement of start-up phase at its demonstration-scale cellulosic ethanol plant), ANSV +4.1% (announces that a pivotal Phase 3 clinical trial evaluating Adlea is underway), ATAC +3.5% (will replace MESA in the S&P SmallCap 600 after the close on 4/9), ISIS +3.0% (Bristol-Myers Squibb selects ISIS drug targeting PCSK9 as development candidate for prevention and treatment of cardiovascular disease), TIN +3.0% (Cramer makes positive comments on MadMoney), PXD +2.8% (raises long-term production growth target to 14+% and increases net resource potential by 1.1 bln barrels oil equivalent), FMX +2.2% (Cramer makes positive comments on MadMoney), INSU +1.9% (completes review of strategic options; determines to execute business plan and hire new CEO), ELN +1.9% (still checking), CRXL +1.8% (announces a non-exclusive STAR research license agreement with Celltrion for the production of recombinant proteins), ITG +1.5% (says March 2008 US trading volume was 4.6 billion shares), UN +1.1% (still checking)...

Analyst upgrades: FNM +2.8% (upgraded to Overweight at Lehman), PSUN +2.7% (upgraded to Outperform at Wachovia), FRE +2.6% (upgraded to Overweight at Lehman), IVAC +2.1% (upgraded to Buy at Brean Murray), NYX +1.6% (upgraded to Buy at tier 1 firm), AXP +1.6% (upgraded to Buy at tier 1 firm), NVS +1.3% (upgraded to Neutral at HSBC).

Pre Market - Trader Talk with Bob Pisani - CNBC.com

Futures are down slightly, but have been stable throughout the morning, despite rather downbeat commentary from Alcoa [AA 37.44 --- UNCH (0%) ] and AMD [AMD 6.34 --- UNCH (0%) ]. Metals a bit weaker (the IMF sold 12 percent of its gold stake, so gold is down 1 percent), dollar fairly stable, Europe down about 1 percent on average.

Alcoa reported adjusted profits of $0.44, several cents below expectations. Several analysts noted that the result was disappointing given the strong aluminum price seen in the quarter; the main problems seemed to be 1) higher than expected costs, 2) lower-than-expected realized price for aluminium, and 3) production a bit below expectations. Many analysts have lowered 2008 estimates.

Chip maker AMD down about 4 percent pre-open; they said that revenues for the first quarter (ending in March) would be below expectations because sales were down across all business segments. They are expecting first quarter revenue to be about $1.5 billion, compared to consensus of $1.61 billion. They're planning to lay off 10 percent of the workforce by the end of the third quarter. Earnings will be reported April 17.

The question is, is this a company-specific problem or is there some kind of problem with the whole industry slowing down? Not entirely clear, but several analysts noted that AMD has had considerable delays in a number of products, supporting the idea that it is company specific.

Elsewhere:

Goldman upgrades brokers and asset managers like American Express

American Express Co

AXP

46.55 UNCH 0%

NYSE

Quote | Chart | News | Profile

[AXP 46.55 --- UNCH (0%)

] and Franklin Resources[BEN 101.5 --- UNCH (0%) ] .

Lehman upgraded Fannie Mae

Federal National Mortgage Association (Fannie Mae)

FNM

29.85 UNCH 0%

NYSE

Quote | Chart | News | Profile

[FNM 29.85 --- UNCH (0%) ] and Freddie Mac[ Loading... (%) ], noting that capital requirements are coming down for them, enabling them to play an even bigger role in the housing markets. They are indeed gaining market share. Of course, no one wants to talk about the considerable additional credit risk they are taking on.

AMD's Problems: Industry Wide Or Speciifc To Them? - Trader Talk with Bob Pisani - CNBC.com