MARKET UPDATE
This morning we are seeing stocks globally trade higher off of their lows after an emergency Fed Funds rate Cut by 0.50% to 1.50%. The problem is that the European markets are still down sharply. The ECB finally joined in on the show and other central banks which cut rates are United Kingdom, Bank of Canada, China, and Switzerland. Japan did not cut rates but said they support the move. There has actually been a sell-off though after the major pop and DJIA futures came back down to only up 0.25% from being up more than 2% initially.
Bonds would normally be cheering for the rate cuts, but there is still the attitude that this could translate to a feeling of "The rates are advertised lower in the window, but we still can't get a loan."
ECONOMIC & MACRO EVENTS
These are today’s top economic data:
- MBA mortgage application survey at 7:00 AM EST;
- Housing Starts at 8:15 AM EST;
- Pending Home Sales at 10:00 AM EST;
- API & DOE Weekly Oil Inventories at 10:35 AM EST
Philadelphia Federal Reserve's Plosser speaks on setting realistic expectations for the Fed's policies in New York at 7:45 EST. Treasury undersecretary McCormick holds pre-G7 finance ministers, central bankers meeting press briefing in Washington at 3:00 PM EST.
ANALYST UPGRADES & DOWNGRADES
AMAG Pharmaceuticals (AMAG) Started as Overweight at JPMorgan
Bank of America (BAC) Raised to Market Perform at KBW
BMC Software Raised to Neutral at JPMorgan
Cadence Design Systems (CDNS) Raised to Overweight at JPMorgan
Inter Parfums (IPAR) Raised to Buy at Piper Jaffray
Jefferies (JEF) Raised to Market Perform at KBW
McDermott International (MDR) Started as Buy at American Tech Research
Myriad Genetics (MYGN) Started as Outperform at Oppenheimer
NuVasive (NUVA) Started as Overweight as JPMorgan
AuthenTec (AUTH) Cut To Neutral at JPMorgan
DuPont (DD) Cut to Hold at BB&T Capital
Ford (F) Cut to Sell at Citigroup
General Motors (GM) Cut to Sell at Citigroup
Host Hotels (HST) Cut To Market Perform at KBW
RealNetworks (RNWK) Cut to Sell at Piper Jaffray
Red Lions Hotels (RLH) Cut to Neutral at Baird
BULLISH EVENTS
Wal-Mart Stores is trading up after posting same store sales of +2.4% versus estimates of +2.5%. Despite being a tad light, there is relief that this is still growth and close enough to estimates.
YRC Worldwide (YRCW) is seeing shares jump this morning after the company issued a statement saying that its financial position was solid. That wasn’t any reassurance of great earnings growth, but it wasn’t the sound of a ploy of someone about to drown.
Wachovia may be in some hope of a bidding war of some sort despite talks that Wells Fargo and Citi may call a truce and share in the takeover. There are reports that Citi is seeking partners to make a larger bid for the ailing bank.
Acergy (ACGY) beat earnings by a wide margin with a report of $0.58 EPS vs. $0.42 estimates. But revenues were a tad light even though they made positive comments from the engineering and construction company for oil and gas.
Symantec is flat or down slightly this morning on two pieces of news. First off the shares were raised to Overweight from Neutral by JPMorgan. Second off, the data protection software giant is acquiring private MessageLabs for $695 million in cash.
Costco showed some very impressive numbers considering the economy right now. The company posted $0.97 EPS vs. $0.93 estimates and also posted September same store sales at +7% with a total sales gain of 10%. Shares are indicated up 2%.
BEARISH EVENTS
Alcoa shares traded lower after reporting earnings of $0.33 EPS vs. $0.54 estimates. More importantly, the company announced hard times to continue and cost cutting measures look like a company in total retreat.
Helen of Troy Limited missed earnings at $0.34 EPS vs. $0.36 estimates. The company says that retail remains challenging and customers are seeing slower sales.
General Motors is trading up on the global rate cut scenario, but Citigroup made a big call by downgrading shares to a Sell rating. Their timing is atrocious as it is already on 52-week lows, so who knows where this one settles by the open.