Friday Morning, June 8th
Site News:
Hidden Treasure News - NNRF:
Russia's new nuclear holding company to start operations July 1 -
Russia's new nuclear holding company Atomenegroprom will start operations July 1. Atomenergoprom will combine all of Russia's commercial nuclear companies into a government-owned public stock company, effective July 1, according to Liudmila Zalimskaya, deputy director general of Techsnabexport.
Techsnabexport, or Tenex, is one of the companies to be combined into the new Russian commercial nuclear company, along with TVEL, Atomstroyexport and Rosenergoatam.
Tenex supplies uranium and enrichment services; TVEL makes nuclear fuel; ASE exports nuclear plants; and REA is Russia's nuclear utility.
Dow Stock News:
The WSJ writes that Johnson & Johnson (JNJ) management tried to convince skeptical investors that its consumer and drug businesses are in for a period of rapid growth.
MCD McDonald's Deutsche Securities Upgraded from Hold to Buy $45 to $61;
Breakouts the Ice Man may consider trading:
ELY - 19
MFLO - 23.20
Regular Trades the Ice Man may consider:
NURO - 10.55
KNSY - 23.70
SWIM - 12.05
MNKD - 11.25
Depressed stocks the Ice Man may buy or short to the gap:
QCOM - 40.15 Gap
Dollar Man Ideas:
CVCP - 1.66
MTPM - 1.45
Cramer's Comments:
Bullish: XTO, NYX, MNST;
Break Man Video Summary:
Break out buy watch list for short term gains June 8 includes: NURO, CSX, ELY, LBIX, CVCP.
Several candidates for break out or pullback plays for at least short term gains by buying the break out on good volume and selling at least some on the first day. http://stocktiger.com
Swing Man Market Recap:
June 8th 2007
Yesterday was a complete bloodbath for the market; nothing was immune. The major indexes lost between 1.5% to 2% on average, and volume was also strong.
As I stated previously, the market is fixated on interest rates, and today the 10 year yield rallied to almost 5.1%. The market wants a rate cut, but now the possibily of the FED lowering short term rates is no longer in the cards, and in fact there is a chance that the FED might have to raise rates sometime later this year.
However one major concern is that the Chief European equities strategist for Morgan Stanley issued what is called a Full House Sell Signal. Since 1980, his three leading indicators – bond yields, Institute for Supply Management new orders, and valuation and risk – have offered only 5 sell signals. They were in April 1981, September 1987, February 1990, May 1992, and April 2002. In each case the market was down 15% within 6 months.
Here is a chart of the 10 year yield (symbol TNX), as you can see, the 10 year yield has experienced a huge rally since it broke out on May 18 from a symmetrical triangle pattern. Of course, this big move in rates should not come as a surprise to any of you as I began to discuss this scenario back in late April and early May when I first became aware of the triangle. The next logical target is the July 2006 high of 5.25%. This may also put more pressure on an already weak housing market.
10 year Yield Chart
http://tinyurl.com/2mb3vd
SDP rallied strongly yesterday as a result as a result of rising long term interest rates. SDP was suggested last week as a swing trade and I hope some of you caught this one. SDP is the double inverse ETF to the Utility Sector.
SDP Chart:
http://tinyurl.com/2na2mn
The 20 day moving average has been lost for both the Dow and S&P 500, which had been acting as strong support since March. The next major support levels are the 50 day MA and the February highs. The Dow and the rest of the maret also finally appears to have completed a major top via a completion of a 5 wave uptrend pattern.
The next major swing trade opportunities will be on the short side, howver we need to see an oversold bounce occur on light volume before we will get aggressive shorting the indexes. Shorting after 3 down days in a row is dangerous from a risk/reward point of view.
Dow Chart:
http://preview.tinyurl.com/32243k
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CNBC Fast Money Review:
1. Word on the Street
The Markets Get Crushed
Bolling: Sold some short on NASDAQ when GOOG turned positive.
Najarian: Lots of put activity in Russell. Expects selling to last a while.
Volitility back in markets.
Macke: Sell equities rather than hedge volitility.
Buy or Bail: Utilities?
Bolling: Get out of XLU.
Buy or Bail: Telecom?
Macke: Give it a little space.
Bolling: Likes T because of iPhone.
Buy of Bail: Homebuilders?
Bolling: Commercial REITs not hurt as bad as homebuilders.
Trade Update: Housing's Heavy Toll
Adami: Out of TOL. If rates go higher avoid homebuilders.
Weak Retail Fuels Selloff
Macke: WAit on retail until later in Summer. Likes JWN as long term story.
Trade Update: Saks Sweet Music
Adami: SKS is a tourist destination, helps SKS tremendously.
Sublime Subprime?
Najarian: NFI is takeover candidate based on volume of options traded.
Ameritrade Takeover Speculation
Adami: Likes AMTD.
2. The Top 3
When Will the Selling Stop?
Bolling: S&P will drop to 1470-1490, NASDAQ won't go lower than 1880. Buying
opportunity at those levels.
Najarian: Explosive volume in back months.
Selloff Shopping List
Macke: Likes MSFT over 30, WMT.
Adami: Likes JNJ, PFE.
Bolling: Likes DVY, PID.
Najarian: Loves GS, MS if pullback $2.
Select Tech
Bolling: Recommends AAPL, T, IBM.
Macke: Likes GOOG.
Adami: Likes NVDA possible takeover by INTC.
Najarian: Recommends protective puts on AAPL, GOOG, BIDU. Huge options volume in AMD.
3. Face 2 Face
Allison from CA - BSC?
Adami: Buy BSC if it gets down to $135 or after earnings.
Erica from IL - VNO, BXP?
Najarian: Buy HST instead.
4. Fast Money World
China's Secret Hedge Fund
Bolling: China bought Blackstone for it's relationships. China wants to buy
assets. Also likes ACH as a play.
________________
Breaking News:
AXA (AXA) and BNP Paribas said Friday they have reached an agreement for the establishment of a partnership on the Ukrainian property & casualty insurance market. AXA will acquire from BNP Paribas' subsidiary UkrSibbank a 50% stake in its insurance subsidiary: Ukrainian Insurance Alliance or UIA. AXA will take the management control of the joint company, which will benefit from an exclusive bancassurance distribution agreement with UkrSibbank for an initial period of 10 years. - MarketWatch
Reuters reports that PC companies including Sony (SNE) and Lenovo are building smaller and smaller laptops in the hope of tapping a new market.
Reuters writes that Qualcomm (QCOM) lost a ruling with the US International Trade Commision that will prevent certain cell phones from being imported into the US.
The Wall Street Journal writes that the push for a restructuring of Vodafone (VOD) shows that investors do not need to own a large portion of a company to pressure management.
The New York Times writes that private equity interests bought Bioment (BMET) for $11.4 billion.
FT writes that Toyota (TM) will accelerate its manufacturing of hybrids as the models meet with great succes..
Barron's writes that Netflix (NFLX) moved higher on rumors of a buy-out by Amazon (AMZN).
M&A Activity:
Investment Technology Group Inc. (ITG) entered a definitive agreement to buy RedSky Financial LLC, a privately held Chicago-based broker-dealer. Terms of the deal weren't disclosed. The New York-based provider of automated equity trading services said RedSky specializes in electronic multi-asset class trading with an emphasis on exchange-traded equity derivative products. In addition, Investment Technology Group said it had May U.S. trading volume of 4.2 billion shares, compared with 3.4 billion shares in May of 2006. Average daily volume in May 2007 was 191 million shares, compared with 156 million shares a year earlier. - MarketWatch
IPO Central:
Limelight Networks (LMLT) priced 16 million shares at $15, above its $10-$12 range, for its stock market debut on Friday. The tech firm raised $240 million by offering 16 million shares with underwriter Goldman Sachs. - MarketWatch
IPOs on Schedule for the week of 6/11/2007:
Aegerion Pharmaceuticals (AEGR). The Company Develops small-molecule therapeutics to treat cardiovascular and metabolic disease. The company is selling 5M shares at the initial range between $12-$14. The company announced Revenues for the last 12 months of $0M and Net Income of $(-6)M. The Lead Managers are Lehman Brothers and CIBC. Aegerion Pharmaceuticals (AEGR) is headquartered in Bridgewater, NJ and their website is www.aegerion.com.
Economic Data:
8:30 Trade Imbalance
Stock Split Announcement:
Corrections Corporation of America (CXW) announced that its board of directors approved a 2 for 1 stock split.
Upgrades and Downgrades by Sector:
Biotech
DNA Genentech Deutsche Securities Upgraded from Hold to Buy
Business Services
FIS Fidelity National Information Services AG Edwards Downgraded from Buy to Hold
Computer Hardware
STST Argon ST CIBC Wrld Mkts Cut Price Target Sector Outperform $31 to $30
Computer Services
AKAM Akamai Tech WR Hambrecht Upgraded from Hold to Buy
SVVS SAVVIS Comm Stanford Research Initiated at Buy $58
Computer Software
FIRE Sourcefire RBC Capital Mkts Initiated at Outperform $18
SMSI Smith Micro Software Morgan Joseph Initiated at Buy $20
Finance Companies
FNM Fannie Mae UBS Price Target Raised Buy $73 to $78
Foods
DF Dean Foods Stifel Nicolaus Downgraded from Buy to Hold
Gold and Silver Mining
EGO Eldorado Gold Credit Suisse Initiated at Outperform
Healthcare
BSTE Biosite Piper Jaffray Upgraded from Underperform to Market Perform
FRX Forest Labs Matrix Research Upgraded from Buy to Strong Buy
RIGL Rigel Pharms Jefferies & Co Initiated at Buy $16
Industrial Equipment
ASTI Ascent Solar Merriman Curhan Ford Initiated at Buy
Insurance
PFG Principal Fincl Keefe Bruyette Upgraded from Underperform to Mkt Perform
FAF First American Lehman Brothers Downgraded from Overweight to Equal-weight
Mining - Minerals
ACI Arch Coal Banc of America Sec Price Target Raised Buy $41 to $46
BTU Peabody Energy Banc of America Sec Price Target Raised Buy $53 to $60
CNX CONSOL Energy Banc of America Sec Price Target Raised Neutral $39 to $48
MEE Massey Energy Banc of America Sec Price Target Raised Neutral $26 to $28
Oil and Gas
GRP Grant Prideco Stifel Nicolaus Price Target Raised Buy $60 to $64
PQ PetroQuest Energy Friedman Billings Price Target Raised Outperform $14 to $16
END Endeavour Intl JP Morgan Downgraded from Overweight to Underweight
Pharmaceutical
VRUS Pharmasset Stifel Nicolaus Initiated at Buy $13
Real Estate
CBG CB Richard Ellis Wachovia Initiated at Outperform
JLL Jones Lang LaSalle Wachovia Initiated at Outperform
Regional Banks
TCB TCF Financial RBC Capital Mkts Price Target Raised Outperform $29 to $30
REITs
NHP Nationwide Health Stifel Nicolaus Downgraded from Buy to Hold
VTR Ventas Stifel Nicolaus Downgraded from Buy to Hold
SNH Senior Housing Stifel Nicolaus Cut Price Target Buy $27 to $24
Restaurants
CEC CEC Entertainment Matrix Research Upgraded from Sell to Hold
PNRA Panera Bread Deutsche Securities Downgraded from Buy to Hold $73 to $54
CAKE Cheesecake Factory Friedman Billings Cut Price Target Outperform $35 to $34
CPKI California Pizza Friedman Billings Cut Price Target Outperform $42 to $41
Retail Trade
JWN Nordstrom Bear Stearns Upgraded from Peer Perform to Outperform
SPTN Spartan Stores Friedman Billings Upgraded from Mkt Perform to Outperform $26 to $32
FL Foot Locker Banc of America Sec Downgraded from Buy to Neutral $23
LOW Lowe's Matrix Research Downgraded from Strong Buy to Buy
SSI Stage Stores Morgan Joseph Cut Price Target Buy $26 to $24.50
NKE Nike Banc of America Sec Downgraded from Buy to Neutral $57.50
Semiconductors
BRCM Broadcom JMP Securities Upgraded from Mkt Underperform to Mkt Outperform $21 to $35
NSM National Semi UBS Upgraded from Neutral to Buy
NSM National Semi Am Tech/JSA Research Price Target Raised Buy $28 to $32
NSM National Semi Credit Suisse Price Target Raised Neutral $26 to $29
DRS DRS Tech Credit Suisse Initiated at Outperform $62
BKHM Bookham Tech Cowen & Co Downgraded from Outperform to Neutral
FCSE FOCUS Enhancements Roth Capital Downgraded from Buy to Hold $1.75 to $1.50
Telecom Equipment
OPXT Opnext Merriman Curhan Ford Initiated at Buy
Telecommunications
CBB Cincinnati Bell Banc of America Sec Upgraded from Sell to Neutral $4 to $6
Q Qwest Banc of America Sec Upgraded from Neutral to Buy $8.50 to $12
NT Nortel Credit Suisse Initiated at Underperform $19
ADTN ADTRAN Cowen & Co Downgraded from Outperform to Neutral
TLAB Tellabs Cowen & Co Downgraded from Outperform to Neutral
Transportation UTIW UTI Worldwide Credit Suisse Price Target Raised Neutral $28 to $29
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