Wall Street Breakfast: Must-Know News 20 comments
-
Font Size:
-
Print
- TweetThis
- Wells Fargo to repay TARP. Wells Fargo (WFC) shares were buffeted by speculation yesterday amid rumors of a secondary offering, but the bank said it plans to repay its $25B in TARP funds by the end of the year without raising additional equity. According to CEO John Stumpf, "we are now earning capital so quickly, organically, we don't want to dilute our existing shareholders." Stumpf said the money would be repaid 'shortly' but declined to provide a date. Shares +0.6% premarket (7:00 ET).
- Regulators may delay Oracle-Sun deal. Less than two days before a key deadline, the European Commission is reportedly weighing whether to delay Oracle's (ORCL) planned $7.4B takeover of Sun Microsystems (JAVA) over concerns about Oracle's access to Sun's MySQL database. A delay in regulatory approval would put Oracle months behind schedule and give competitors like Hewlett-Packard (HPQ) and IBM (IBM) more time to lure away hardware customers. U.S. antitrust authorities approved the deal last week.
- BP's 'giant' oil find. BP (BP) announced this morning a 'giant' oil discovery in a very deep well drilled in U.S. waters in the Gulf of Mexico, but said an appraisal is necessary to determine the exact size and commerciality of the find. BP is already the largest individual producer in the area. Shares +3.6% premarket (7:00 ET).
- RHJ sweetens Opel bid. As General Motors continues to stall over its Opel decision, RHJ International (RHJIF.PK) has raised its bid for the unit. The company is now willing to offer GM €300M ($431M) in cash for a 50.1% stake, €25M more than its initial bid. RHJ also said it would ask for only €3.2B in state aid, down from €3.8B, and would repay the loans in 2013, a year earlier than previously planned.
- MBA: Time for a Fannie/Freddie overhaul. The Mortgage Bankers Association, a major industry trade group, is calling on lawmakers to break Fannie Mae (FNM) and Freddie Mac (FRE) into several smaller, privately held companies that would issue mortgage securities with an explicit government guarantee. The new companies would have to pay fees into a federal insurance fund which would kick in only in the event of catastrophic losses. Fannie and Freddie both fell more than 17% in trading yesterday, following an earlier analyst report that the firms have 'no fundamental value remaining,' and are continuing to trade down premarket. FNM -5%, FRE -4.2% (7:00 ET).
- Last clunkers boost for auto sales. August U.S. motor vehicle sales reached their highest pace in twelve months thanks to a large boost from the cash-for-clunkers program. Firms sold 1.3M cars and light trucks in August, pushing the annualized selling pace to 14.09M vehicles vs. July's 11.24M. However, analysts are expecting a September slowdown following the end of the clunkers program. Here's the breakdown:
-Ford (F): +17% to 176,323 vs. consensus of +39%, excluding 5,826 units at Volvo, a second straight increase. Model standouts: Fusion sales: +131.6%; Focus +55.9%; Flex +106.5%.
-Chrysler: -15% to 93,222 units. Chrysler brand vehicles -23% to 18,619; Jeep -6% to 22,041; Dodge down to 52,562 units.
-General Motors: -20.2% to 246,479 vehicles. Pontiac +23.3% to 29,921 units; Chevrolet -9.2% to 168.130. Cadillac -55% to 6,931. Buick -51.7% to 8,612.
-Honda (HMC): +14.2% to 161,439 vehicles, vs. consensus of +3.2%, its second-best month ever. Honda Fit +194.1% to 13,593; Civic +49.6% to 43,294; CR-V +58.3% to 30,284.
-Toyota (TM): +10.5% to 225,088 vehicles, vs. consensus of +8.9%. Toyota brand +15.2% to 202,196; Lexus -18.8% to 22,892. Toyota passenger cars +32.4% to record 142,529 units. Toyota light trucks -12.1%. Hybrids +28.6%.
-Nissan (NSANY): -2.9% to 105,312 vehicles. Nissan brand vehicles +0.2% to 97,580; Infiniti -30.2% to 7,732.
-Daimler (DAI): -10.5% to 18,734 units. Mercedes-Benz -7.5% to 17,112; Smart car sales -33% to 1,622.
-Volkswagen (VLKAY.PK): +11.4% to 24,823, its best sales month since December 2005. Jetta +14.8%.
-Kia: +60.4% to 40,198 vehicles. Sportage more than doubles, to 7,558 units.
-Hyundai: +47% to 60,467 vehicles, its monthly record, and its eighth straight month of Y/Y gains. Elantra +116% to 21,673 units.
-Porsche: +9% to 1,526 units. Porsche 911 +92% to 673; Cayenne -34% to 509. - Buying private banking growth. Credit Suisse (CS) and Julius Baer Holding both said they would consider acquisitions to grow their private banking businesses. Credit Suisse declined to comment on whether it planned to bid for ING Group's (ING) private banking units in Asia and Switzerland.
- New Nokia phones with Facebook link. Nokia (NOK) launched two new phone models today and announced a location-based service deal with Facebook. The X6 and X3 phones will ship next quarter and are priced at €450 ($641) and €115, and a smaller version of the N97 smartphone was unveiled as well. Nokia will also allow users to directly update their Facebook locations and status messages through their Nokia Ovi accounts.
- Freedom falls to bankruptcy. As expected, Freedom Communications, which owns over 30 daily newspapers and 8 TV stations, formally declared bankruptcy. The Tuesday filing was part of a prepackaged plan approved by a majority of the company's lenders.
- MBA apps fall. Mortgage applications fell 2.2% from last week, MBA reported. The average interest rate on 30-year fixed-rate mortgages fell to 5.15% from 5.24%.
- Retail sales decline. Chain store sales fell 0.6% in August from a month before, Redbook reported, in-line with consensus. Sales were down 4.3% Y/Y. According to ICSC, weekly sales were down 0.7% Y/Y and fell 0.5% from the previous week.
- Manufacturing improves. The ISM Manufacturing Index reached 52.9 in August, better than the consensus of 50.5 and an improvement over July's 48.9. The move above 50 marks the first expansion since January 2008, as well as the seventh consecutive monthly increase.
- Construction spending dips down (.pdf). Construction Spending fell 0.2% in July to $958B/year, slightly worse than the consensus of 0%, and 10.5% below the year-ago estimate. For the first seven months, spending was $543.8B, 11.4% below the same period in 2008.
- Home sales tick up. Pending Home Sales rose 3.2% in July to 97.6, the sixth straight monthly gain and better than the +1.5% consensus. The National Association of Realtors noted the recovery is broad-based with housing affordability at record highs.
- Consumer confidence holds steady. ABC's Consumer Confidence Poll came in at -45, matching last week and marking its fourth straight week without a retreat. However, it's still only nine points above its January record low. Only 8% think the economy's not in bad shape, while just 27% think it's a good time to buy things, and 48% rate their personal finances positively.
Earnings: Wednesday Before Open
Earnings: Tuesday After Close
- ADC Telecommunications (ADCT): FQ3 EPS of $0.17 beats by $0.03. Revenue of $283M (-26%). (PR)
- Pike Electric (PIKE): FQ4 EPS of $0.07 in-line. Revenue of $128.5M (-7%) vs. $129.5M. (PR)
- Take-Two Interactive Software (TTWO): FQ3 EPS of -$0.66 beats by $0.02. Revenue of $139M (-68%) vs. $125M. (PR)
- VeriFone (PAY): FQ3 EPS of $0.26 beats by $0.08. Revenue of $211M (-18%) vs. $202M. Sees Q4 EPS of $0.23-0.25 vs. $0.19 and revenue of $208M-215M vs. $203M. Sees full-year EPS of $0.83-0.85 vs. $0.70 and revenue of $835M-842M vs. $821M. (PR)
Today's Markets
Mild-to-moderate losses across the board.
- In Asia, Nikkei -2.4% to 10,280. Hang Seng -1.8% to 19,522. Shanghai +1.2% to 2,715. BSE -0.5% to 15,467.
- In Europe at midday, London -0.15%. Paris -0.6%. Frankfurt -0.4%.
- Futures: Dow -0.1%. S&P -0.1%. Nasdaq -0.25%. Crude +1% to $68.76. Gold flat.
Wednesday's Economic Calendar
- 7:00 MBA Mortgage Applications
7:30 Challenger Job-Cut Report
8:15 ADP Jobs Report
8:30 Productivity and Costs
10:00 Factory Orders
10:30 EIA Petroleum Status
11:30 Fed's Lockhart speaks on lessons of the financial crisis
2:00 PM FOMC minutes - Notable earnings before Wednesday's open: JOYG
- Notable earnings after Wednesday's close: HOV, PSS, SAI
Seeking Alpha editor Eli Hoffmann contributed to this post.
Get Wall Street Breakfast by email -- it's free and takes only seconds to sign up.
After you finish reading Wall Street BreakfastSeeking Alpha's Market Currentswill keep you current all day long.
Related Articles
|
-
The Seeking Alpha 100
See allThe top 100 stock
market authors
selected for publication
Seeking Alpha 100 » -
Fastest Climbers
Authors with the largestSee all
increase in followers
in the last 7 days
Fastest Climbers » -
Top Commenters
Top commenters,See all
as ranked by their peers
Top Commenters » -
Top Instabloggers
The 100 most active
Instabloggers.-
1
David Fry
-
2
TraderMark
-
3
Don Dion
-
4
Cliff Wachtel
-
5
Mike Havrilla
Top Instabloggers » -
1
-
Top StockTalkers
TopSee all
StockTalkers.
Top StockTalkers »
This article has 20 comments:
What did anyone expect? Especially after the moon shot they have had recently. .
The MBA wants to break them up and make more little fannies and freddies. Are you Kidding me?!!!!!
I say shoot them and put them out of their misery. Then shoot whoever came up with the idea of making more of these Barney bastards.
The most apt analogy is that Wells Fargo is Lucy van Pelt with the mortgage football and they think we are Charlie Brown. "I won't pull the football away this time, Charlie Brown, really I won't."
According to Mortgage Daily, Wells Fargo is the biggest holder of residential mortgages in the country, and likely the largest holder of subprime, alt-A, option ARM and all the rest of the dreck still sitting like time bombs in their portfolio. Yet they figure they can paint a happy face on this pit bull to keep their stock elevated long enough for the insiders to sell at the 30:1 ratio of sells to buys most recently reported.
Sadly, there are those who will actually fall for it -- and end up flat on thier backs.
The public didn't like the auto bailout .. And guess what, they bought Fords! Look what is happening to Whole Foods .. A Buy-Cutt. I'll take Joe 6 pack over the "Elitest Leftest Professors." Joe 6 pack has what the Professors lack .. COMMON SENSE!!!
I highly recommend we should have "cash for washing machines" or something like that.
Mr. Pham Thanh Truyen
Vietnam
I'm also hearing/reading anecdotal reports of "buyer's remorse" as purchasers realize they've signed up for a new round of car payments....the last thing an overleveraged consumer needs..
When our dollar is on parity with the peso that gold will go a long way.
On Sep 02 09:45 AM robert.b.ferguson wrote:
> How about no more cash for anything else? Here is a green idea: Save
> the forests; stop printing money. Redistributing wealth is not healthy
> for this economy or any other one for that matter. Quit spending
> my grandchildrens money!
C4C was NOT for the car companies or the environment, it was another gift to the bankers who cut smaller checks to dealers.
Anyone else feel that when the government money train grinds to a halt there is not going to be anything left? Nothing. Wasteland.
Then what?
On Sep 02 09:17 AM Old Trader wrote:
> Despite the nice bump in sales, resulting from C4C, many analysts
> are saying the same thing that I, as well as many others here, have
> said; that is, look for sales to drop back into the toilet, now that
> the program is over because all of the sales that were pulled forward.
> Even a high level GM exec cautioned about that recently.
>
> I'm also hearing/reading anecdotal reports of "buyer's remorse" as
> purchasers realize they've signed up for a new round of car payments....the
> last thing an overleveraged consumer needs..
Our grandchildren won't exist if we starve to death (or worse) before they arrive.
On Sep 02 09:45 AM robert.b.ferguson wrote:
> How about no more cash for anything else? Here is a green idea: Save
> the forests; stop printing money. Redistributing wealth is not healthy
> for this economy or any other one for that matter. Quit spending
> my grandchildrens money!
Without C4C 3.0, what is Ford going to do next month, or the month after?
They continue to slash and burn their American suppliers (former best customers) and they are now going through and slashing their own employees and then turning them over to temp firms.
Amazing business plan the car companies have, fire your best customers by eliminating American suppliers, cut your own employees down to temps that can't afford your products, then proceed. Lather, rinse, repeat.
I give Ford less than a year before they are in DC begging to be saved.
GM & Chrysler may make it a couple years, but I doubt it.
All three followed Walmart's lead and fired American supplier, with Walmart it was a great plan as those that lost their jobs were forced to shop in Walmart.
Unless the Big 3 start producing (and self-financing) $5000 cars, it won't work out so well for them.
The main reason that GM/Chrysler failed in C4C is NOT because they did not have enough small cars, it IS because the millions of former dealer & supplier employees KNOW who forced their employers into bankruptcy. They will NEVER buy another POS from those companies again. As if they could ever afford to again.
On Sep 02 09:58 AM bbowen7 wrote:
> A victory for John Galt and the guys over at Ford. Keep up the good
> American private enterprise work.
On Sep 02 09:04 AM robert.b.ferguson wrote:
> Wells Fargo (seekingalpha.com/symbo...) is making money hand
> over fist. So fast they can't keep up counting it all. Miraculously
> they made all of their toxic waste vanish too. Fannie and Freddie
> will be just fine Barney and Chris won't let anything happen to them.
> How else will they be able to use your money for their piggy bank?
> Consumer confidence remained steady. There isn't any and probably
> won't be for some time to come. Is a corps in stable condition?
On Sep 02 09:17 AM Old Trader wrote:
> I'm also hearing/reading anecdotal reports of "buyer's remorse" as
> purchasers realize they've signed up for a new round of car >payments....the last thing an overleveraged consumer needs..
The big 3 is now the little one.
Sorry all I should have said "cane" the idiot or idiots who came up with this idea.
I have had my coffee now and blood is no longer coming out of my eyes thinking about how much MORE DAMN MONEY a bunch of these creations would cost us.
These 2 alone are killing us. We cant possibly afford any more of them.
As a nation we are broke. What comes after broke!!!?
On Sep 02 07:53 AM doubleguns wrote:
> Fannie and freddie hit hard yesterday and still sinking in pre market.
>
>
> What did anyone expect? Especially after the moon shot they have
> had recently. .
>
> The MBA wants to break them up and make more little fannies and freddies.
> Are you Kidding me?!!!!!
>
> I say shoot them and put them out of their misery. Then shoot whoever
> came up with the idea of making more of these Barney bastards.