conversion cost $6,500 US, top speed 85 mph
Thursday, June 26, 2008
Pre Market Trader Talk
1) it's another beat-up-the-brokers day, let's take the estimates down (see below);
2) With the Fed out of the way, it is now all about second half earnings and guidance. Several important companies have been notably downbeat on their outlooks today:
--RIMM,[RIMM 127.23 
-15.11 (-10.62%) 
] one of the last darlings of momentum traders, down nearly 10 percent after their second quarter guidance is below analyst consensus;
--Oracle [ORCL 21.70 -0.85 (-3.77%) ]issued a conservative forecast that has got tech buffs worried that tech sales may be weaker than bulls expected,
--to illustrate how downbeat the Street is, Nike[NKE 60.74 -5.23 (-7.93%) ] is trading down, though they reiterated 2009 revenue growth targets "in the high single digit" percentages;
3) initial jobless claims continue to creep up.
Back to brokers:
What is this, beat up on Merrill Lynch[MER 33.87 -1.59 (-4.48%) ] day? Yesterday I noted that the biggest fear on the Street was the lack of catalysts for owning stocks this summer, post-Fed announcement, particularly for financials. That fear is being born out by financial analysts today.
Start with Goldman Sachs cutting estimates on all the brokers. Your first reaction should be, "So? Everybody has!" And you would be right, but now we are entering a new period of one-upmanship (you can thank Meredith Whitney for this), where brokers are trying to get out ahead of the companies (and the rest of the Street) by taking numbers WAY DOWN.
Back to Goldman: remember they raised their view of brokers after the Bear Stearns debacle? Well, today they reduced their view (to Neutral from Attractive), "as we see limited near term catalysts."
They added Citi [C 18.00 -0.85 (-4.51%) ]to the Conviction Sell List, because they see additional write-downs ($9 b for Q2), higher consumer provisions as a result of rapidly deteriorating consumer credit trends, and the potential for additional capital raises, dividend cuts, or asset sales. Anything else? Oh, they moved estimates to a loss of $0.75 from $0.25.
They cut estimates for Merrill too, estimating $4.2 b of Q2 write-downs, and lowered quarterly estimate to a loss of $2.00 from $0.25.
On top of that, Bernstein slashes estimates for Merrill to well below consensus as well: to a loss of $0.93 per share, down from a gain of $0.82 per share.
Nyah-nyah: Wachovia downgrades Goldman! Oh, they make apologies: it's the top name in the space, etc. etc. But the bottom line is "we see both banking and prime brokerage slowing as we enter slower months."
Get it? Fear of the summer, lack of catalysts. Bulls are now arguing that the Street is cutting second half numbers so much that there will be a rally when the numbers do not come in as bad as expected--but that, if it happens, is months away, and we have the summer to get through.
Finally, Goldman cut estimates on General Motors[GM 11.63 -1.18 (-9.21%) ]--gee thanks for that!
Looks Like Down Beat Day For Market - Trader Talk with Bob Pisani - CNBC.com
Opening View: Anheuser-Busch Reportedly Planning to Reject InBev Offer
U.S. stock futures are lower ahead of the opening bell, indicative of a potentially negative start to the regular session. Overseas trading is rather dismal this morning, as steelmakers continue to decline in Asia, while the aerospace sector was hit with a slew of downgrades in Europe. In focus this morning is Goldman Sachs, starting the day off with a heavy hand for issuing downgrades; Nike (NKE) reporting stronger-than-expected earnings; and merger-and-acquisition news from Anheuser-Busch (BUD) and potential suitor InBev.
Goldman Sachs was busy this morning, cutting its rating on U.S. brokers to "neutral" from "attractive." The firm attributed the downgrade to a lack of possible catalysts to move the group significantly higher over the next few months. The analyst also placed Citigroup ( C: 
sentiment, chart, options) on its conviction sell list; downgraded General Motors (GM: sentiment, chart, options) to "sell" from "neutral," cutting its price target to $11 from $19; and slashed his rating on Lear Corp. (LEA: sentiment, chart, options) to "sell" from "neutral," reducing its price target to $18 from $29.
On the earnings front, Nike (NKE: sentiment, chart, options) reported fourth-quarter profit of $490.5 million, or 98 cents per share, up from $438 million, or 86 cents per share, a year prior. Analysts, on average, expected the athletic apparel company to post earnings of 96 cents per share. Revenue for the quarter grew 16% to $5.1 billion, helped in part by sales in Asia. Net income for the fiscal year jumped 26% to $1.9 billion, while 2008 earnings docked at $3.74 per share.
In merger-and-acquisition news, Anheuser-Busch (BUD: sentiment, chart, options) reportedly plans to reject Belgian brewer InBev's $46.35-billion unsolicited bid, claiming the offer undervalues the company. As early as this week, BUD is expected to formally reject the bid and offer its own restructuring plan, The Wall Street Journal reported. However, the report claims that InBev is allegedly prepared to take its offer directly to BUD shareholders.
Opening View: Anheuser-Busch Reportedly Planning to Reject InBev Offer
NYSE Arca Morning Update
Stocks trading on NYSE Arca at a price more than 15% away from the previous trade day's consolidated close price. (As of 08:30:00 ET)
Stock | Wednesday's Close | Current Price | Pct Chng | Current NYSE Arca Vol |
|---|---|---|---|---|
GCH | $20.45 | $14.00 | ( 32%) | 1,000 |
PHTN | $11.59 | $15.20 | 31% | 57,201 |
IIF | $32.56 | $24.04 | ( 26%) | 2,300 |
GRO | $6.67 | $5.11 | ( 23%) | 9,200 |
10 Most Active stocks on NYSE Arca as of 08:30:00 ET
| Based on Dollar Volume: | Based on Share Volume: | ||||||||||||||||||||||||||||||||||||||||||||
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NYSE Arca Morning Update
GCH: Greater China Fund, No Idea why this stock is gapping
PHTN:
- Orbotech buying Photon Dynamics for $290 millionAP(Thu 8:21am)
- Orbotech to buy Photon Dynamics for $250 mlnat MarketWatch(Thu 7:58am)
- Orbotech Reaches Agreement to Acquire Photon DynamicsBusiness Wire(Thu 7:32am)
- THIS IS A CASH DEAL. LOOK FOR FLAT LINE CHART AFTER OPEN.
GRO:
- Q4 2007 Agria Corporation Earnings Release - Time Not SuppliedCCBN(Thu 7:07am)
- Agria Reports 4Q07, FY07 and 1Q08 Financial ResultsMarketwire(Thu 6:00am)
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Pre-Market Trading Most Active Stocks - NASDAQ Premarket
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Pre-Market Most Active Stocks - NASDAQ Premarket
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