PRE-MARKET UPDATE
Stocks are likely to focus at least some on the regulatory framework
and the "central banks' exit strategies" for the stimulus here and
abroad. DJIA futures are stable and up 0.2% and S&P futures are up
0.2%. Europe is also trading marginally higher as the UK's FTSE is up
0.3%, Germany's DAX is up 0.1%, and France's CAC is up 0.2%. Asian
stocks were lower again with Japan's NIKKEI 225 was down by 2.4% and
Hong Kong's Hang Seng was down by -0.8%.
Bonds are firm ahead of today's G8 meeting more than our own economic
data. The 10-Year Treasury yield at 3.435% and the 30-Year yield is
4.285% in early indications.
Commodities are soft again on global economic re-softening trends and
somewhat on the CFTC looking in on regulating baskets of commodities
pools and ETF and other instruments by size. NYMEX WTI Crude is down
about another $0.70 per barrel and at $62.23 in early trading. Gold is
down about 0.25% at $920.65 in early trading indications.
ECONOMIC & MACRO EVENTS
These are today’s top economic data:
10:30 AM EST DOE Weekly Crude Oil Inventories
11:00 AM EST Mortgage Applications
3:00 PM EST Consumer Credit (May)
Today, Chicago Federal Reserve President Evans speaks on
"Nontraditional Monetary Policy and the Economic Outlook" in South
Bend. Indiana.
Today's Earnings: Alcoa (AA), Family Dollar (FDO), Pepsi Bottling (PBG), and WD-40 (WDFC).
ANALYST UPGRADES & DOWNGRADES
Upgrades
Air Products (APD) Raised to Buy at KeyBanc.
First Solar (FSLR) Raised to Buy at ThinkEquity.
Freeport-McMoRan (FCX) Raised to Buy at Citigroup.
Photronics (PLAB) Raised to Buy at UBS.
Qualcomm (QCOM) Started as Outperform at Morgan Keegan.
SAP (SAP) Raised to Buy at Jefferies.
Southern Copper (PCU) Raised to Hold at Citigroup.
STMicro (STM) Raised to Buy at BofA/Merrill.
Downgrades
Chattem (CHTT) Cut to Hold at Jefferies.
Citrix Systems (CTXS) Cut to Perform at Oppenheimer.
Starwood Hotels (HOT) Cut to Underperform at Baird.
BULLISH EVENTS
Ruby Tuesday, Inc. (RT) is showing why it has recovered
so much from lows. The restaurant chain posted earnings at $0.28 EPS
vs. $0.19 estimates. It also gave in-line guidance for the year at
$0.50 to $0.65 EPS.
Motorola (MOT) announced that it has entered into a
pact with Communications Test Design to divested its proven
Fiber-to-the-Node product family to CTDI. The effective date was July
2, 2009. Unfortunately, no terms were disclosed.
Websense, Inc. (WBSN) reaffirmed earnings forecasts but gave weak revenue numbers. The data
security and filtering company forecast $0.30 to $0.32 EPS and $83.9 to
$84.2 million in revenues vs. $0.30 and $84.57 million. Unfortunately,
this also includes $4.6 million in revenue from SurfControl that would
have been recognized during this period had SurfControl remained an
independent operating company and that makes for unclear estimates.
Shares look down about 5%.
Amylin Pharma (AMLN) announced that its new drug
application for Exenatide (once weekly) was accepted for review by the
FDA along with Eli Lilly and Company (LLY) and Alkermes (ALKS). Shares
are indicated up about 3% on last look.
Amgen (Nasdaq: AMGN) has announced that a pivotal,
Phase 3, head-to-head trial evaluating denosumab versus Zometa in the
treatment of bone metastases in 2,049 patients with advanced breast
cancer met its primary and secondary endpoints and demonstrated
superior efficacy compared to Zometa. Amgen also settled a price
fixing case in Illinois for $7.2 million. Shares are indicated up
almost 10% on last look.
BEARISH EVENTS
Arena Pharma (ARNA) announced its intent to offer shares
of its common stock in a public offering. Shares already took a 2% cut
yesterday, but this has shares down 10%.
Alcoa Inc. (AA) traded up yesterday on a down market.
It seems the traders were deciding the 10%+ haircut was enough, and
today's action may determine the "bias trends" for pre-earnings trading
in many of the metals and commodity names.
NRG Energy (NRG) is turning down Exelon's latest
increased buyout offer. The company still believes that the $8 billion
valuation undervalues the business as a whole.
Microsoft (MSFT) may face some additional operating
system competition from the likes of Google. Google is reportedly
working on an operating system for lower priced PCs in an attempt to
wrestle away some of that business from the software giant.
Pepsi Bottling Group (PBG) beat its earnings
expectations, but there were some items in the numbers. Earnings were
$0.78 EPS vs $0.73 estimates, but a tax item may have helped some. It
sees 2009 at high end of its forecast of $2.30 to $2.40 EPS vs $2.37
estimates, and that includes a $0.13 per share negative impact from
translational foreign currency headwinds. Revenues fell 7% to $3.27
billion and under the $3.4+ billion estimate.
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