MARKET UPDATE
Equities are indicated sharply lower this morning. You can blame profit taking after a near-mystery rally over the last 5 trading sessions, or for an easier fundamental explanation you can blame extremely weak Chinese manufacturing data.
S&P futures are down over 20 points, NASDAQ futures are down 25 points, and DJIA futures are down about 175 points. Weak economic data is also creating the further “demand destruction” trade for oil, as oil is down over $2.00 per barrel in early trading to under $52.00. Gold is also not seeing any love today with god trading down almost $30.00 per ounce.
One stock sector to watch for a positive bias today may be in some of the discount retailers as the National Retail Federation survey showed a surprising jump in retail spending on Black Friday and this weekend. Just keep in mind that shoppers were buying discounted items and sale/value purchases rather than across the board retail strength.
Bonds are trading higher on a flight to quality and as recessionary economic data in the E.U. and China are taking out at least some of last week’s moves into stocks.
ECONOMIC & MACRO EVENTS
These are today’s top economic data:
10:00 AM EST ISM Manufacturing (NOV)
10:00 AM EST Construction Spending (OCT)
Federal Reserve Chairman Bernanke and Dallas Federal Reserve President Fisher are speaking on the economy in Texas at 1:30 PM EST. Treasury Secretary Hank Paulson will give updates on the U.S. economy and markets in Washington D.C. at 3:00 PM EST. President-elect Obama is also set to name members of his security council today.
ANALYST UPGRADES & DOWNGRADES
Accenture (CAN) Raised to Buy at SocGen.
Alcon (ACL) Raised to Outperform at Wachovia.
BHP Billiton (BHP) reinitiated as Buy at SocGen.
Premiere Global Services (PGI) Raised to Outperform at Oppenheimer.
ASML Holding N.V. (ASML) Started as Underperform at Jefferies.
Inter Parfums, Inc. (IPAR) Cut to Neutral at HSBC.
Ituran Location and Control, Ltd. (ITRN) Cut to Neutral at JPMorgan.
STMicro (STM) Cut to Sell at SocGen; targets cut at JPMorgan and UBS as well.
BULLISH EVENTS
Yahoo! (YHOO) is trading up significantly that a new deal between Microsoft and Yahoo! may occur. The difference is that this is a search pact rather than a merger, but it is at least a pulse that has not been there in some time. Newer reports are saying that no deal is imminent and that no such deal is actually in the works right now.
QLT Inc. (QLTI) announced a modified Dutch Tender Offer for up to $50 million worth of stock in a buyback plan. This buyback follows a monster sell-off in the shares.
Morgan Stanley (MS) was noted favorably as proceeding into retail banking operations via acquisitions or partnerships soon and after layoffs in the U.K.
Icahn Enterprises, L.P. (IEP) has had a very rough year after losing three-quarters of its value. But this is Carl Icahn's public investment vehicle, and over the weekend Barron's featured Mr. Icahn as finding phenomenal values in senior corporate debt right now.
General Motors (GM) may not trade higher because of the weakness seen in stocks, but the company was said to be working over the weekend on key turnaround financial bailout plans to present to Congress in a detailed step by step plan rather than the nothing plan first being asked for.
AllianceBernstein Holding L.P. (AB) was given a very favorable weekend write-up in Barron's. The publication even said shares of the asset manager could rally some 50% in the next year.
BEARISH EVENTS
SIRIUS XM (SIRI) is now being hit by Slashdot.org reports showing far worse numbers than what was recently presented by the company. It goes so far as to note “the death of satellite radio” in the report.
Westamerica Bancorp. (WABC) was hit hard over the weekend by Barron's. The publication gave it a note as "Praiseworthy, but Pricey" and said Westamerica is way too pricey despite its many charms.
Midway Games Inc. (NYSE: MWY) may trade up or down, but Sumner Redstone sold off his majority stake in the video game company to ease his debt issues and supposedly for a tax benefit.
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