July, 2009
The equity market goes ‘pre-pay’
A Big Fat ‘Buy’ recommendation from Goldman Sachs’ Peter Oppenheimer.
From the strategist’s Strategy Matters note, dispatched to GS clients on Thursday:
We remain positive on the market and revise up our DJ Stoxx net income (pre-exceptionals) forecasts to a 19% fall in 2009,
UK GDP YoY fall/FAIL!
A new record.
RTRS-UK Q2 GDP -0.8% QQ, -5.6% YY (CONS -0.3% QQ, -5.2% YY), BIGGEST YY FALL SINCE SERIES BEGAN IN 1955
RTRS-UK Q2 SERVICE SECTOR OUTPUT -0.6% QQ, -3.8% YY, INDUSTRY -0.7% QQ, -12.0% YY
Related link:
Short-selling villain casting call
Because only one thing could upstage the moral terpitude of corporate-raider Gordon Gekko — the pure depravity of an evil short-selling monster of Mayfair — the sequel to Wall Street is centred around the murky world of hedge funds,
Further reading
Elsewhere on Friday,
- Escaping original sin in Hungary.
- Rail traffic shows no sign of recovery.
- A Treasury supply tsunami on its way.
- How Harvard lost $1bn.
- A new way to trade oil?
- Obama’s Morpheus red-pill blue-pill allusion FAIL.
Pink picks
Comment, news and analysis from Friday’s FT,
Philip Stephens: Europe in the slow lane
Debates about the future of Europe have an unreal quality about them these days. Eurosceptics — most noisily in Britain but also elsewhere — still live the old nightmare of a united states of Europe.
Snap news
Breaking pre-market news on Friday,
- Investec Q2 net operating income falls by 12 per cent — statement.
- CIT may sell its rail and aviation businesses, was approached by Berkshire Hathaway and Leucadia for the units — WSJ.
GM rejects Beijing Auto bid for Opel
General Motors is to press ahead with talks with Magna International and RHJ International for a stake in its Opel business, after rejecting a bid from China’s Beijing Automotive Industry Corp. GM’s announcement is the latest twist in the saga over the future of the US group’s car businesses in Europe.
Microsoft’s sales tumble
Microsoft cast doubt on hopes for a rebound in the technology sector on Thursday as it reported an unexpected slump in sales for its latest quarter. The world’s biggest software company said revenues had declined 17% amid falling demand for new PCs and servers.
Triumph for VW in Porsche battle
Porsche’s family owners on Thursday ended months of feuding over a rescue of Germany’s debt-ridden sports carmarker by agreeing a merger with Volkswagen and ousting its chief executive Wendelin Wiedeking with a huge €50m pay-off.
US stocks soar
US stocks soared on Thursday, with investors pushing the S&P to its highest level since early November and the Dow Jones breaking through the 9,000 mark. The rally, driven by a slew of positive US earnings reports and improving housing and jobs data,
Investors blast BofE on gilts sale
Angry investors blasted the Bank of England on Thursday when it sparked a sell-off in the gilts market after one of the biggest government bond offerings of the year. In an interview published 20 minutes after the £5bn bond deal was finalised,
Sinochem approaches Nufarm
Nufarm, Australia’s biggest supplier of farm chemicals, confirmed a takeover approach from China’s Sinochem, sending the shares to a more than seven-month high and valuing the company at A$2.4bn ($2bn),
RBS and Lloyds bow to Brussels
Royal Bank of Scotland and Lloyds Banking Group have submitted to the European Commission restructuring proposals that may see the banks forced to sell off branches and other assets in order to qualify for state aid.
Liberty investors set to agree Pearl deal
Pearl Group, the UK life assurer owned by financial enterpreneur Hugh Osmond, is expected to get the go-ahead for its capital restructuring on Friday from shareholders in Liberty Acquisition, the vehicle that will inject about €600m (£519m) into the company.
Amex, Capital One, see earnings plunge
American Express, the credit card issuer, reported an annual 84% drop in Q2 earnings per share on Thursday but expressed increased optimism for the rest of the year based on improved trends by delinquent credit card and loan holders.
SWFs tipped for greater financing role
Sovereign wealth funds and multinationals from the developing world will in future take the place of western banks in financing and paying for major construction projects, according to consultant Turner & Townsend.
Fortress plans buying spree
Daniel Mudd, appointed this week chief executive of Fortress Investment Group, plans to spearhead an acquisition strategy that could see the hedge fund buy other financial companies including banks, money management groups and other hedge funds.
Citi taps Fannie Mae for board
Citigroup is expected to name Diana Taylor, a former banking regulator who is a director of mortgage giant Fannie Mae and the companion of New York city’s mayor Michael Bloomberg, as a director in a revamp of its much-criticised board.
SEC sues Kuwaiti financier
Securities regulators on Thursday sued a well-connected Kuwaiti financier whose investment firm is partly owned by Citigroup, saying he reaped millions in suspicious profits after “fraudulent” takeover reports sent shares of two US companies soaring,
James Murdoch plans Star TV shake-up
James Murdoch is planning a sweeping shake-up of News Corporation’s Star Asian TV operations, his biggest move yet to stamp his mark on the most promising growth area in his father’s media empire. The move will involve job cuts in Hong Kong and the rest of Asia,
Overnight markets: Up
Asian stocks rose for the ninth consecutive trading day on Friday, giving the MSCI Asia Pacific Index its longest winning streak since 2004, as sales of existing US homes climbed and South Korea’s economy grew at the fastest pace in almost six years.
MSFT’s soft numbers
Ugly numbers out of Redmond on Thursday. Shares were slammed, falling 9 per cent in after-hours trading.
Per Bloomberg, emphasis ours:
Microsoft Corp., the world’s biggest software maker, reported a 29 percent drop in profit and sales that missed analysts’ estimates,
Latvian banks face reserve shortfall
Here’s an interesting story from Reuters on Latvian banks (our emphasis):
LONDON, July 23 (Reuters) – Banks in Latvia have fallen short of the central bank’s reserve requirements since late June, with the daily shortfall hitting as much as 234 million lats ($473.2 million),
CDS report: Credit markets surge amid equity rally
This CDS report was written by Markit’s Gavan Nolan
Credit and equity markets enjoyed another strong session today, easily offsetting yesterday’s profit taking. The Markit iTraxx Europe index tightened well below 100bp,
About that Harman International hoax…
Well, the SEC has wasted no time in getting to the bottom of it.
Via Reuters:
SEC NAMES INDIVIDUAL DEFENDANT HAZEM KHALID AL-BRAIKAN IN CASE INVOLVING PURCHASES OF HARMAN INTERNATIONAL INDUSTRIES
Bull-speed ahead
Perhaps the stars are aligned after all.
Meanwhile in London, the FTSE 100 has broken above 4,500 and is heading for a ninth consecutive session of gains:
Lex: Porsche
The dismissal of Wendelin Wiedeking may clear the way for Ferdinand Piëch to leave his family an extraordinary legacy.
Porsche SE could inject the unlisted distributor into Porsche AG, which VW would then buy.
Is this where we are now?
Looking to the skies for signs of an economic recovery? Really? From Reuters:
And if so, surely Wednesday’s solar eclipse is a bad omen?
The Buffett effect
The pre-market action in Moody’s:
The back story here is that Warren Buffett’s Berkshire Hathaway revealed on Wednesday a lowered holding of 17 per cent in the ratings agency, down from 20 per cent previously.