Reports » US

US stock market opening report (November 19, 2009, Thursday)

Contributed by Paddy Power Trader

By Paddy Power Trader

Fed’s Plosser said that central banks should not respond to wild swings in food and energy prices with monetary policy unless expectations of inflation become unhinged. Plosser further said that US has turned a corner on the economy and is in a recovery, adding that as economy strengthens, will have to look very hard at reversing course on rates. Plosser said that he doesn’t see any reason to be concerned about prices relevant to asset bubbles. (RTRS) Also, Fed’s Fisher said that falling USD is not necessarily inflationary. (RTRS)

In other news, For the first time in the credit crisis, the government may have run into a problem that is too tough to bail out: commercial real estate. Smaller banks weren’t stress-tested in the same way as larger banks, and thus are less likely to have raised enough equity to deal with commercial real estate. (Heard on the Street, WSJ)

Analyst Meredith Whitney said today that banks are grossly overvalued and that the Fed is unlikely to extend the purchase of mortgage securities. Whitney also noted that credit card losses are continuing on pace. (BBG)

Wall Street

Boeing – Co. may lose a USD 7.5bln jet fighter sale to Brazil unless the US Senate lifts a four-month delay in confirming President Barack Obama’s nominee for ambassador to Latin America’s biggest country, a former top US diplomat to the region said. (BBG)

Kraft – Hershey and Ferrero have followed co. and entered the bidding for Cadbury. But it won’t be easy for the newcomers, according to the WSJ’s “Heard on the Street”, as financing, issues of control, and what to do with Cadbury’s gum business all require hard decisions. Unless Nestle or Unilever joint the running, Kraft may still emerge victorious. (WSJ)

General Electric – According to their CFO, Vivendi could exit from U.S. media group NBC Universal as it has no intention to be part of the future joint venture being discussed by Comcast and co. Vivendi’s CFO also said that selling its 20% stake in NBC Universal would give Vivendi “additional financial headroom” after it gained control of Brazil’s telecoms operator GVT last week. (Briefing.com)

S&P 500

US Financials – Meredith Whitney says Banks are still ‘grossly overvalued.’ She also expects USD 2.7trln in credit lines cut and sees credit card losses ‘continuing on pace.’ In other news, Fed’s Plosser said falling prices of US commercial real estate is a threat to small, medium-sized banks. (BBG/RTRS)

JPMorgan – Co. and Cazenove agree deal where joint venture JPMorgan Cazenove will become a wholly owned part of co. Cazenove shareholders to receive GBP 5.35 per share and transaction values Cazenove at GBP 1bln, implied value of joint venture of GBP 2bln. (FT)

Goldman Sachs – Meredith Whitney says co. lost a tremendous amount of talent who left to set up hedge funds. (BB)

Citigroup – Fitch upgraded co.’s individual rating to ‘D/E,’ rating watch to positive. In separate news, co. has held informal talks with several big-name buyout shops about buying co.’s auto-loan business, whose outlook is improving as the car business recovers. Sources tell The Post that Blackstone and other private-equity leaders have kicked the tires on the unit known as CitiFinancial Auto, which maintains a portfolio of roughly USD 16bln in car loans. A source warned that while private equity has expressed interest, an actual deal could be weeks or months away, if at all. In other news, co. has agreed to sell the St. Regis Monarch Beach resort in California for about USD 245mln. (RTRS/NY Post/LA Times)

Utility Companies – Pimco’s Gross says utilities earnings should mimic US growth and advises buying utilities in outlook. (BBG)

Time Warner – Co.’s AOL unit to start voluntary layoffs on December 4 and will fire employees if voluntary layoffs fall short. Co. is to cut 1/3 of jobs which equates to about 2300 jobs. In other news, AOL, set to spin itself off from co. in less than a month’s time, has reportedly hired Morgan Stanley and Allen & Co to manage the sale of ICQ, its instant-messaging unit. Interest has been coming from “two major non-U.S. companies,” according to sources, and AOL may seek up to USD 300mln for the asset. A deal will likely occur after AOL becomes an independent company. Also, rumours indicate AOL may also be looking to sell MapQuest, its online map service. Possible purchasers for the unit may include other mapping giants, including Microsoft. AOL paid USD 1.1bln in stock for MapQuest in 1999. (BBG/ All Thing Digital)

Schlumberger – Co. and Technip announced the signing of a global cooperation agreement to jointly develop subsea integrity and surveillance solutions for flexible pipes used in deep offshore oil and gas production. The new agreement extends the collaboration between the companies that began in 1998. (theflyonthewall.com)

Marathon Oil – Co. sees 2010 exploration and production capex at USD 3.5bln. (RTRS)

Colgate-Palmolive – Co. sees 4-7% growth in sales volumes in 2010 a sees a little bit more consumer confidence globally. Co.’s CEO also says no more price increases in 2010. In other news, UBS notes Given co.’s USD 8bln market cap advantage over Reckitt, they believe that the likeliest outcome (if a deal were to occur) would be a Merger of equals scenario where co. was the purchaser. (RTRS/Briefing.com)

Companies paying dividend: KB Home (USD 0.0625)

NASDAQ

Earnings

Sears Holdings – Q3 loss per share ex-items USD 0.81 vs. Exp. loss per share USD 1.09, Q3 revenue USD 10.19bln vs. Exp. USD 9.91bln. (BBG)

Ross Stores – Q3 EPS USD 0.84 vs. Exp. USD 0.84, Q3 revenue USD 1.74bln vs. Exp. USD 1.74bln. Co. reaffirms forecast. (BBG)

Other News

Apple – Co. is reportedly planning to postpone the launch of its much rumoured tablet PC from the original March launch to the second half of 2010, according to sources. The delay is thought to be due to co.’s decision to add a 9.7-inch OLED display to the device. (Digi Times/pocket-lint.com)

Research in Motion – Co.’s execs said there is great potential in building and designing applications for the BlackBerry platform. In particular, they are interested in apps that blend data from several sources, such as an advanced calendar that would notify a user of traffic congestion or other problems that would affect their ability to make it to a meeting on time. (RTRS)

Comcast– According to their CFO, Vivendi could exit from U.S. media group NBC Universal as it has no intention to be part of the future joint venture being discussed by co. and GE. Vivendi’s CFO also said that selling its 20% stake in NBC Universal would give Vivendi “additional financial headroom” after it gained control of Brazil’s telecoms operator GVT last week. (Briefing.com)