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  • Wall Street Breakfast: Must-Know News [View article]
    March factory orders were down more than expected -.9% vs an expected -.5%. Adding to this negative news, the Feb. factory orders were revised downward from +1.8% to +0.7%. The April ISM Manufacturing PMI came in at 40.1 vs. and expected 38.3. This is probably good news, but it is still contraction. Overall you would have to say this news was negative for the markets.
    May 01 10:30 am |Rating: +2 0 |Link to Comment
  • Wall Street Breakfast: Must-Know News [View article]
    For those following Financials (Marketwatch): Mitsubishi UFJ cut its full year outlook. It now projects a loss of -$2.6B in 2009. As late as Feb. 6, it had forecast a gain of +$0.5B.


    "These decreases were mainly due to an increase in net losses on equity securities caused by further decline in market share prices, and a recording of valuation allowance against deferred tax assets as a result of re-assessing collectability of its deferred tax assets," MUFG said in the Friday statement.
    The revision, the third time the bank has cut its outlook for fiscal 2008, was released after the close of Tokyo stock trading Friday. Markets in Japan will remain shuttered for an extended holiday break and reopen Thursday. "

    This is another instance of banks tending to sour recently. Ken Lewis has made very clear negative comments about the likely souring of the credit card business throughout this year. At some point one has to believe all of these negatives will start to negatively effect banks stock prices.

    Certainly the capital many banks are supposed to be required by the government to raise should lead to further dilutory effects on the banking stocks. This should tend to push prices of those stocks downward. The souring of the credit card business is just yet another reason for this. The banks have been resistant to downward movement as the overall markets have climbed. Now the overall markets are overbought. A downturn seems imminent. Are financials going to lead the way down again???

    A number seem to have definite downside potential. For example AXP's credit ratings were lowered substantially today by S&P. Its counterparty credit rating was cut by two notches to BBB+, while its preferred stock rating was cut to junk territory with a three-notch drop to BB.
    May 01 10:17 am |Rating: +1 0 |Link to Comment
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