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Five Things You Need to Know for Thursday


What you need to know (and what it means).


Five things you need to know to stay ahead of the pack on Wall Street.

1. Whiskey in the Jar, Google on the Shelf

Yesterday after the close, Google (GOOG) announced a shelf registration of up to 5.3 million shares of stock, according to a regulatory filing.

  • What is a shelf registration?
  • Under a shelf registration, a company may sell securities in one or more offerings with the size, price and terms to be determined at the time of the sale.
  • Why would Google file a shelf registration?
  • The "official" explanation is that the company wants to offset the impact of its inclusion into the S&P 500.
  • The company has also noted that "the offering will be used to fund "general corporate purposes," which might include acquisitions."
  • Meanwhile, the company has an estimated cash pile of $6 billion already.
  • Another way to look at it is the company is selling stock into demand created by the S&P 500 inclusion, meanwhile diluting the float by as much as 2.7% if all 5.3 million shares are issued.
  • Index funds tracking the S&P 500 will need to buy $7.3 billion in Google stock, according to an estimate from Citigroup.

2. Oh, Come Back Nikkei, Come Back!

With apologies to Prince, the Nikkei has indeed come back, now trading at a five-year high.

  • Japan's Nikkei index closed above 17,000 on Thursday, its highest level for more than five-and-a-half years.
  • Shares in technology and high value companies have been pushing the Nikkei up, and the index has risen by 3.4% over the past five trading days alone.
  • Forecasts last month for GDP growth of 3.6% for 2006 mean Japan could potentially be the fastest growing of the G7 nations over the next two years.
  • Meanwhile, the Bank of Japan (BOJ) has ended its policy of quantitative easing, with the emphasis now more on an inflation target of up to 2%.

3. Peruvian Metal Mash

One of the best parts about the Minyanville network is the "eyes" scattered about the globe. Courtesy of savvy Minyan Adam, our eyes are turned toward the upcoming elections in Peru.

  • Uh, OK. elections in Peru. So what.
  • Ollanta Humala, the frontrunner in Peru's presidential elections, has vowed to alter contracts with foreign investors that are currently ex-exempt from paying royalties, a move that would affect global miners such as Newmont, BHP Billiton, Phelps Dodge, Falconbridge and Barrick.
  • In an interview with the Financial Times, Mr Humala also pledged to introduce "21st-century nationalization" and said he would refuse to sign the trade deal Peru has agreed with Washington.
  • Mr Humala, a radical nationalist, regularly attacks foreign investors in his campaign speeches.
  • Meanwhile, as Minyan Adam noted from NEM's recent 10k, "For the years 2005, 2004 and 2003, 39%, 34% and 34%, respectively, of revenues came from Peru."
  • 16.8 Million of NEM's 93.2 Million gold reserves are from Peru.
  • Meanwhile, as Prof. Succo noted on the Buzz & Banter this morning, the PHLX Gold & Silver Index (XAU), is underperforming gold.
  • Prof. Depew noted on Feb. 10 that his PnF indicators are also favoring the metal over the stocks.

4. For Iran, the Choices Are Narrowing

Iran has been given 30 days to return to the negotiating table or face isolation, foreign ministers from six major powers have warned.

  • A statement by the UN Security Council has urged Iran to halt its nuclear enrichment program.
  • Iran has rejected the call, and insists its nuclear activities are peaceful.
  • The Berlin talks included the five veto-wielding permanent members of the Security Council - the US, China, France, Russia and the UK - as well as Germany.
  • Iranian Foreign Minister Manouchehr Mottaki said Tehran was still open to talks on the issue with the IAEA, but that there was "mistrust" over negotiations with European nations.

5. Jet Lag

Researchers in Australia launched a test flight Thursday of a supersonic jet designed to fly 10 times faster than conventional airplanes.

  • The test flight was conducted by researchers at the University of Queensland under commission from the Japan Aerospace Exploration Agency.
  • The so-called Supersonic Combustion Ramjet - or scramjet - engine was designed to travel at speeds of up to 5,000 mph, or 10 times the speed of conventional aircraft, the University of Queensland said in a statement.
  • The U.S. has already carried out a flight test with a scramjet engine, while the European Union, Japan, China, Russia and India are in different stages of testing their technologies.
  • Some observers say scramjet technologies could revolutionize air travel.


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