Seeking Alpha
  • Friday, January 30, 2015

  • 5:14 PM
    • Vale (NYSE:VALE) -1.4% AH after revealing plans to cut dividends to the lowest level since 2007 in an attempt to shore up cash as commodities prices continue to fall.
    • Vale is proposing to its board a $2B minimum dividend payment for 2015, down from $4.2B last year.
    • Iron ore prices have been chopped by more than half since early 2014 and touched five-and-a-half-year lows today.
    | 9 Comments
  • 4:45 PM
    • Monsanto (NYSE:MON) shareholders reject a proposal urging the separation of the chairman and CEO roles, but approve a non-binding proposal requesting “proxy access” adoption.
    • Proxy access could turn typically one-sided corporate contests into something more like mainstream elections, by letting big investors list competing board candidates on official company ballots.
    • The proposal about the chairman and CEO positions said an independent chairman would benefit MON’s financial performance, while MON believes Hugh Grant’s dual role helps it best execute strategy and notes that 12 of 13 directors are independent.
    | Comment!
  • 3:45 PM
    • Australia's Newcrest Mining (OTCPK:NCMGF, OTCPK:NCMGY) surprises investors by setting a higher annual production target, saying it expects to produce 2.3M-2.5M oz. of gold in the year through June, compared with an earlier forecast for 2.2M-2.4M oz.
    • Newcrest also reports a 2.7% increase in gold output in last year's final quarter, and raises its estimate for copper output in the current fiscal year by up to 20%.
    • The main concern is about the outlook for the Lihir mine in Papua New Guinea, which the company says "continues to underperform against its potential,” as gold output at the facility was below expectations and costs rose.
    • UBS analyst Jo Battershill says "the key asset that needs to be turned around is Lihir, and we've seen no signs of that... We think they have got major problems on Lihir and they still haven't enunciated a strategy to the market."
    | Comment!
  • 3:30 PM
    | 72 Comments
  • 2:58 PM
    • The Baltic Dry Index falls another 3.8% and is now trading at its lowest levels since the 1980s, even as traded volumes of many commodities are reaching record levels.
    • The dry-bulk market has been sunk by a perfect storm as new ships ordered after the financial crisis have hit the seas just as Chinese economic growth has slowed and commodity prices have turned lower.
    • Earnings for a capesize vessel typically used to transport coal and iron ore have fallen to $6,707/day today, down ~50% Y/Y and hardly enough to cover daily operating expenses of $6K-$10K.
    • As one analyst says, some of the share prices are starting to reflect almost a state of bankruptcy: Shares of Scorpio Bulkers (NYSE:SALT), for one, have plunged 85% in the past year, and Star Bulk Carriers (NASDAQ:SBLK) has shed 67% in the same period.
    • Related tickers: FREE, EGLE, SB, DRYS, NM, SHIP, ESEA, PRGN, DCIX, GSL, NMM, DSX, DAC, KEX, ULTR, BALT, SINO.
    | 9 Comments
  • 2:51 PM
    | 20 Comments
  • 10:55 AM
    • Greece's new government says it is strongly opposed to a planned gold mine to be operated by Eldorado Gold (EGO -19.9%) that is among the biggest foreign investment projects in the country, the energy minister tells Reuters.
    • The mine in northern Greece was the flagship project of the last government's foreign investment drive and considered a test case that would reveal whether Greece could protect foreign investors despite local opposition.
    | 9 Comments
  • 7:43 AM
    • BHP Billiton (NYSE:BHP) says it plans to trim its workforce at the Olympic Dam copper and uranium mine in southern Australia in an attempt to reduce operating costs amid softer commodity prices.
    • A leading area politician reportedly says 300 workers would be cut.
    • BHP says it cannot provide a net figure for exactly how the changes would affect its total head count at the mine, which employs ~4,300 people, until later in the year; BHP has planned to increase copper output from the mine in the second half of the year.
    | Comment!
  • Thursday, January 29, 2015

  • 12:41 PM
    • Unable to sustain a move over $1,300 per ounce after last week's QE launch by the ECB, gold is selling off hard today, -2.5% to $1,253.
    • The longs sound stretched, with State Street's Dave Mazza noting gold ETPs had their best inflows in a year last week, futures volume was 52% higher than the average volume over the previous 100 days, and net-long positions in futures contracts increased 27% over the previous week.
    • "Gross longs are now at their highest since November 2012," says Mazza.
    • Gold remains higher by just over 4% YTD.
    • Silver is down 7% on the session to $16.80, platinum by 3.5% and palladium by 3.2%.
    • ETFs: GLD, SLV, AGQ, IAU, USLV, SIVR, PALL, PPLT, SGOL, ZSL, UGL, DGP, GLL, UGLD, DZZ, SLVO, GLDI, DSLV, OUNZ, DGL, DBS, GLTR, PTM, DGZ, DGLD, AGOL, DBP, WITE, PGM, TBAR, USV, UBG, JJP, GLDE, BAR, GYEN, GEUR, BARS, RGRP, GGBP, BLNG
    | 14 Comments
  • 11:09 AM
    | 7 Comments
  • 9:35 AM
    • Mechel (MTL +15.8%) surges at the open following a report that Russia's industry minister said the coal and steel producer will be included in a list of companies to receive state support as part of anti-crisis measures.
    • The government is drawing up a list of core companies which will receive state guarantees for their loans.
    | Comment!
  • 8:34 AM
    • Potash (NYSE:POT+1.1% premarket after reporting better than expected Q4 results and raising its dividend by nearly 9% in a sign of confidence in future cash flow and demand for its fertilizer products.
    • POT says Q4 potash sales volumes totaled a record 2.5M metric tons, bringing the FY 2-14 total to 9.3M; nitrogen volumes were relatively flat, while phosphate sales volumes fell due to certain production challenges.
    • POT says increased sales volumes, lower costs and slightly higher realized prices raised its Q4 potash gross margin to $445M, 95% above the $228M during the year-ago period; Q4's average realized potash price was $284/ton.
    • Issues in-line guidance for FY 2015, seeing EPS of $1.90-$2.20 vs. $2.12 analyst consensus estimate; issues in-line guidance for Q1, seeing EPS of $0.45-$0.55 vs. $0.51 consensus.
    • Guides for 2015 potash sales volumes of 9.2M-9.7M tons and a full-year potash gross margin of $1.5B-$1.8B.
    | Comment!
  • 8:17 AM
    • Dow Chemical (NYSE:DOW) +4.5% premarket after Q4 earnings easily beat Wall Street expectations and the company offers a strong outlook for 2015.
    • Q4 revenue was flat at $14.38B, as volume gains in emerging areas were offset by 14% price declines in Western Europe, including currency headwinds.
    • DQ4 saw expanded volume in most segments, led by a 9% increase in agriculture sciences, while performance materials rose 7% and performance plastics added 3%.
    • "We believe lower oil prices are a relative positive for Dow and a boost for the global economy," CEO Andrew Liveris says, rebutting critics who have said Dow's competitive edge may be fading amid falling oil prices (on CNBC).
    | 1 Comment
  • Wednesday, January 28, 2015

  • 2:57 PM
    • “Despite the large declines in commodity prices, we see risks as still skewed to the downside over the near-term,” says Goldman Sachs.
    • Of course, much of the price decline has to do with oil, and Goldman doesn't expect a whole lot more damage as prices have gotten low enough for investors to begin buying excess supplies and putting them in storage. While this may put a floor under the price, says Goldman, it also means prices are likely to stay lower for longer.
    • Meanwhile, there's China, and slowing growth there means copper (NYSEARCA:JJC) prices have further to fall. Some metals to consider going long? Palladium (NYSEARCA:PALL), nickel (JJN, NINI), and zinc.
    • ETFs: DJP, GSG, RJI, GSC, GSP, DJCI, CMD, UCD
    | Comment!
  • 2:46 PM
    • Cliffs Natural Resources' (CLF -2.1%) move to restructure its Canadian Bloom Lake operations faces an uncertain outcome, according to RBC analyst Fraser Phillips.
    • CLF had indicated that closure costs associated with the Bloom Lake shutdown would total $650M-$700M, but Phillips says "the outcome of the restructuring proceedings is uncertain and it remains unclear what amount of closure costs could ultimately be avoided, if any."
    • Sam Dubinsky at Wells Fargo concurs, adding that CLF shares are expensive at 9x estimated 2015 EBITDA in light of long-term risk from a contract renewal with ArcelorMittal and additional 2015 earnings risk from the recent downturn in steel prices.
    | 6 Comments
  • 2:12 PM
    • Glencore (OTCPK:GLCNF, OTCPK:GLNCY) says it may shut some of its South African coal operations amid slumping commodity prices.
    • Glencore's Optimum Coal Mines unit says the closures would reduce its overall production of thermal coal by at least 5M metric tons/year and more than 1,000 employees could lose their jobs.
    • The company says it will not close its underground coal mining operations and could reopen its opencast mines if conditions improve.
    | Comment!
  • 12:17 PM
    • U.S. Steel (X +13.5%) soars the day after its Q4 earnings crushed expectations and reporting a strong quarter and year despite extreme headwinds, providing confidence that it can handle whatever 2015 brings.
    • Although the company warned that low oil prices and the strong U.S. dollar could negatively impact its business in 2015, it said the potential for higher consumer spending could help lift demand.
    • Credit Suisse calls it “another impressive quarter within the context of a challenging operating environment” but maintains a Market Perform rating and $31 price target on the stock.
    • UBS keeps its rating at Neutral but cuts its price target to $25 from $32, saying X's competitive position worsens as imports ramp up, oil capex falls and iron ore prices weaken while conceding that guidance provides some validation that the Carnegie project is delivering more sustainable operating profit than in the past (Briefing.com).
    • Cowen maintains an Outperform rating and $40 target.
    | 3 Comments
  • 10:41 AM
    • The EIA reported oil inventories rising 8.9M barrels last week vs. 10.1M the week earlier, and expectations for a 4.6M gain.
    • Last night, the API reported a 12.7M barrel gain in inventories.
    • Gasoline (NYSEARCA:UGA) stocks fell 2.6M barrels vs. a small gain the previous week, and forecasts for another small gain.
    • Distillates (NYSEARCA:UHN) fell 3.9M barrels vs. a 3.3M barrel decline last week and estimates for 1.7M barrels this week.
    • WTI crude is bouncing on the EIA report, maybe as it's not as bearish as the API print. As low as $44.66 ahead of the 10:30 release, it's now at $45.28, down 2.1% on the session. USO -1.6%
    • Previously: EIA Petroleum Inventories (Jan. 28)
    • ETFs: USO, OIL, UCO, SCO, BNO, DTO, DBO, UWTI, USL, DWTI, DNO, SZO, OLO, TWTI, OLEM
    | 14 Comments
  • 7:49 AM
    • Anglo American (OTCPK:AAUKF, OTCPK:AAUKY) warns that it expects to take a charge when it reports FY 2014 results next month.
    • Anglo does not provide details of the scale of the financial impact, which it blames on falling coal and iron ore prices, but the warning echoes recent announcements by other large mining companies.
    • Analysts see Anglo taking charges of anywhere from $1B to $5B, relating specifically to its costly Brazilian iron ore project Minas Rio and its Australian coal operations.
    • Anglo says it beat its Q4 production targets, with production of iron ore up 14% to more than 48M metric tons at its Kumba subsidiary, with Minas Rio adding a further 688K metric tons.
    | Comment!
  • Tuesday, January 27, 2015

  • 4:42 PM
    | 13 Comments
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