MARKET CURRENTS
real-time news and commentary for investors
MARKET CURRENTS
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Today - Saturday, May 26, 2012
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3:04 PM Lou Lebedin is out as head of the global prime brokerage for JPMorgan Chase (JPM), just two months after taking sole charge of the unit. He was co-chief of the business after joining JPM via its Bear Stearns purchase. Teresa Heisenrether (from the fixed-income prime brokerage) replaces him. [Financials] Comment!
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12:15 PM Housing prices in just 2 of the 20 largest U.S. metro areas have returned to 2006 levels - Dallas and Houston. Oil? Luck? Perhaps, but a Texas law requiring any homeowner refinancing a mortgage or taking out a home equity loan to have at least 20% equity in their home may have helped shield the state from at least part of the housing bust. [U.S. Economy] 16 Comments
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11:50 AM IMF head Lagarde tells The Guardian her agency has no intention of easing the terms of Greece's bailout package. Greeks need to help themselves by paying their taxes, she says, adding she has more sympathy for poor African children than Greek ones - interesting sentiments from one who was part of the regime that oversaw hundreds of billions transferred to financial institutions in the aftermath of the GFC. [Global & FX] 16 Comments
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11:25 AM Among giant U.S. IPOs of the last 10 years, Facebook (FB), which is now down 16% from its $38 offering price, has posted the worst performance, according to Bloomberg's data. Of course, many pre-IPO investors are also underwater: a SecondMarket chart shows Facebook reached current levels in Feb. '11, and largely remained above them until this week. Options trading begins on Tuesday, and could bring additional volatility. [Tech] 5 Comments
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10:15 AM Rex Nutting's column asserting "Obama's spending binge never happened" has created a buzz in some high places, and it's true that the president's spending levels are little changed from FY2009, the last Bush budget. But that was a TARP-inflated one-off, and Obama must take the blame for choosing not to reverse that elevated level of spending... or for not spending enough. [U.S. Economy] 44 Comments
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9:45 AM The pro-bailout New Democracy (23.2%) party has overtaken Syriza (22%) in a new opinion poll in Greece. Election rules give the victorious party a 50-seat bonus in Parliament, so even a tiny victory margin is significant in determining who forms the next government. Markets are pricing in disaster. What if things continue to muddle along? [Global & FX] 6 Comments
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9:25 AM Considering coming out of cash and and wading back into the markets? Look at energy, says Real Money's Daniel Dicker, particularly offshore drilling companies. Offshore profitability is almost entirely based on crude oil pricing, and Dicker is convinced that crude oil prices will find a bottom well above $100/bbl. This will make the most challenging offshore operations, using the deep and ultra deep water rigs owned and leased by companies like SeaDrill (SDRL), Transocean (RIG), Ensco (ESV) and Rowan (RDC) increasingly profitable through 2012-13. [Energy, Quick Ideas] 6 Comments
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Friday, May 25, 2012
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7:35 PM Speaking on the issue of increased financial regulation, Goldman's Jim O'Neill asks rhetorically: “Is it really that entirely desirable to have financial stability at the expense of everything else? I sort of think you want your investment bank to be a little unstable.” - pure Goldman gold. [Financials, U.S. Economy] 20 Comments
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7:08 PM Responding to a report from The Verge that Google (GOOG) had acquired H-P's (HPQ) webOS team, H-P clarifies that "some key members" of the team working on the webOS-based Enyo app development platform have left the company, but "the majority of the engineering and leadership team remains." It adds the Enyo team is looking to hire new engineers. [Tech] 4 Comments
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7:00 PM Want to buy banks? Look at some of the regionals, says Dick Bove. The big universals are dealing with a multitude of issues that impede their competitiveness, while community banks are being weighed down by regulations that are driving them out of the business. Firms in the middle tier however, are growing their key commercial and industrial lending portfolios while their competitors have had to pull back. His picks: US Bancorp (USB), PNC Financial (PNC) and Capital One (COF). [Financials, Quick Ideas] 7 Comments
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6:52 PM Buying Nokia (NOK) under $3 today is like buying Ford under $2 in '09, argues SA's Jacob Steinberg. As was the case with Ford back then, Nokia commentary is filled with talk about market share losses, cash burn, and credit rating downgrades. However, also like Ford back then, Nokia maintains a powerful brand and significant cash reserves, and is rolling out compelling new products. [Tech, Quick Ideas] 4 Comments
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6:37 PM Is Google Wallet (GOOG), off to a sputtering start, a victim of its dependence on NFC technology? Not only are NFC chips found in only a small (albeit growing) percentage of phones, the technology requires an ecosystem that doesn't exist, in part due to rival agendas. Meanwhile, PayPal (EBAY) is rolling out an app-based service that allows users to pay before walking into a store, and Starbucks has had success with a solution that scans barcodes appearing on a phone's display. Then there's Square. [Tech] 1 Comment
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6:15 PM Red flag for the U.S. economy? Lending during Q1 fell by more than $56B Q/Q, or 0.8%, a reversal from three consecutive quarters in which lending expanded. While lending to larger commercial and industrial customers continues to rise, nearly all other types of loans declined, including those to small businesses. [Financials, U.S. Economy] Comment!
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6:10 PM Is the “cult of the equity” dead? Institutional investors have slashed their equity holdings over the past decade. Stocks have not been this far out of favor in over a half a century. “Ultimately what is going on is that fundamental tenets of capitalist society are being questioned,” says Allianz's Andreas Utermann. This is stunning in light of overwhelming evidence that, in the long run, equities outperform. From 1900 to 2010, they beat inflation by 6.3% a year in the U.S., compared with only 1.8% for bonds. [U.S. Economy, Global & FX] 16 Comments
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6:01 PM Quest Software (QSFT -0.1%) shares dived in the final minutes of trading to $25.15 after Reuters reported Dell (DELL) is expected to reach a deal to buy the company, perhaps as soon as this weekend, but at a price of $23-$26/share. Before the story broke, Quest traded as high as $26.73 on a Bloomberg report that mentioned Dell's interest, but didn't name a price. Reuters adds Dell's post-earnings crash led a prior deal to fall apart. [Tech, On the Move, M&A] Comment!
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6:00 PM On the hour: S&P -0.56%. 10-yr +0.33%. Euro -0.12% vs. dollar. Crude +0.09% to $90.75. Gold +0.95% to $1572.25. Comment!
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5:55 PM Now that he owns 7.6% of Chesapeake (CHK), what can Carl Icahn accomplish? Having Icahn around can at least stiffen the spines of the other shareholders, and he's seeking the removal of four board members. But his best results typically come when the company he targets ends up selling itself - and CHK, with its complicated capital structure, wouldn't be an easy sell. [Energy] 2 Comments
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5:52 PM Though Apple (AAPL) continues to heavily promote Siri - it just hired John Malkovich to do some ads - the voice assistant service, which is powered by Nuance's (NUAN) voice recognition technology, remains a lightning rod for criticism. Disgruntled user Jon Friedman calls Siri a "gimmick for self-indulgent people with a tremendous amount of time on their hands." "Steve would have lost his mind over Siri," a former Apple employee recently told Adam Lashinsky. [Tech] 6 Comments
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5:48 PM May has been a truly awful month for stocks. How awful? The Dow has enjoyed only four up days so far this month, the first month with so few positive trading days since September 1903. Recent history doesn't offer much hope for near-term relief, as the S&P has shed more than 2% during the four trading days after Memorial Day in each of the last two years. [Quick Ideas] Comment!
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5:41 PM Morningstar's Theo Francis takes a look at the 14-A filed by Dell (DELL) for its July 13 stockholder meeting, and finds some interesting details. Among them: Michael Dell's compensation package for the year rose over 3x to $16.1M, in spite of his company's less-than-stellar performance; $2.7M was spent on security for Dell and his family; and services chief Stephen Schukenbrock received $1.9M in relocation benefits in order to move 200 miles. [Tech] 2 Comments
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