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Morning Buzz


Thanks for sharing!


As some Minyans don't have access to the Buzz, I wanted to post some of this morning's content. It's a much "quicker" format for the daily vibe and, as this morning's news is particularly important, I felt that it would be helpful to share in this forum.

9:14 am

Kodak (EK:NYSE) is predicting a faster decline in its traditional film business and an increased growth rate of 36% between '03 and '07 in its digital lines. The previous growth projection was for 26% between '02 and '06.

9:11 am

CIT Group (CIT:NYSE) filed a $15 bln mixed securities shelf

9:09 am

Vodafone Group (VOD:NYSE) will not proceed with an $11B asset swap with Verizon Communications (VZ:NYSE) . Currently Vodafone owns 45% of Verizon Wireless and Verizon owns 23% of Vodafone's Italian unit.

9:00 am

The third largest publicly traded oil company, Royal Dutch / Shell Group (RD:NYSE), plans to raise spending to $15 bln a year and will sell assets of $10-$12 bln / cut costs following an overstatement of reserves for the last six years in an effort to bolster confidence according to Bloomberg.

8:57 am

Capital One (COF:NYSE) will buy ONYX Acceptance (ONYX:NASD) for $191M in cash which is $28 per share. The deal is expected to close in Q1 '05.

8:54 am

Suntrust lowers Autozone (AZO:NYSE) from buy to neutral citing lack of top line catalysts.

8:50 am

JP Morgan downgraded Exelixis (EXEL:NASD) from overweight to neutral citing valuation

8:47 am

Cowen takes numbers lower on Teradyne (TER:NYSE) taking Q3 EPS to $0.24 (from $0.39) on rev's of $460 mln (from $526 mln prior) while for FY'05 from $1.27 to $0.68 on EPS and $2 bln to $1.69 bln on rev's.

8:46 am

Mr. Sandman....Yeeeees?

My IM's are on fire this morning as the financials paint the tape. With Morgan Stanley (MWD:NYSE) trading 5% lower and Fannie (FNM:NYSE) fessin' up--sorta--the bears have some newfound pep in their step.

I think Franklin's Rain will be a strong tell today as the "cookie cutter" takes shape. The food chain is massively inclusive and the ripples would be (will be) far reaching--if and when. Please pay close attention to this name as we piece the puzzle together.

8:46 am

US Airways has asked pilots for $1.9 bln in concessions through '09 in order to save cash needed by the company during its bankruptcy proceedings.

8:45 am

Last night Wendy's Interational (WEN:NYSE) guided Q3 EPS to $0.59-0.60 vs. $0.64 cons and to $2.25-$2.30 for the full year. Hurricanes, increased legal reserves, Q4 beef costs, and challenges at Baja Fresh Mexican Grill were cited as reasons.

As a function of the warning Piper Jaffray, CSFB and Bear Stearns all lowered numbers.

8:37 am

Bear Stearns (BSC:NYSE) reported Q3 EPS of $2.09 vs. $1.09 cons on rev's of $1.53 bln vs. $1.48 bln cons.

8:35 am

The weekly Investor's Intelligence numbers show bulls staying at 50% vs 50% prior while bears fell from 24.5% prior to 22.9%.

Those expecting a correction edged higher from 25.5% to 27.1%.

8:30 am

Take a load off Fannie...

Fannie Mae (FNM:NYSE) indicates it has been working with the SEC which is informally investigating the company's accounting.

A recent report by the OFHEO concludes that the company's accounting for derivative and hedging activities tolerated deficiencies in internal controls and did not comply with GAAP in a cookie jar reserve accounting approach that helped executives to achieve bonus compensation targets.

8:29 am

NASDAQ charts in the IBD...


8:28 am

NYSE charts in the IBD...


8:27 am

Isaac Washington...

RBC upgraded Fair Isaac (FIC:NYSE) to their top pick from underperform citing the company's announced acquisition of Braun Consulting Inc. (BRNC:NASD) for $40.3M.

The CEO for Fair Isaac said EPS would be "at least" $1.75 for 2005 on revs of $818-848M.

8:25 am

He hates these cans!

Looks like I picked the wrong day (yesterday) to "can my bids" in select financials. Mother Morgan (MWD:NYSE) is trading off a deuce on their (lack of) earnings and Fannie (FNM:NYSE) got caught with their hand in the "cookie jar."

Opportunities vs. losses? I know...but I still may need some corks for my forks...

8:18 am

Riddle me this:

General Motors (GM:NYSE) is offering six year interest-free loans on most of their cars to help chew through their outsized inventory. If GM is truly a "stealth financial", how can they make money on that trade?

8:18 am

ConAgra Foods (CAG:NYSE) reported Q1 EPS of $0.28 vs. $0.26 cons on revs of $3.5 bln vs $3.39 bln cons.

8:17 am

Morgan Stanley (MWD:NYSE) reported EPS of $0.78 vs. $0.96 cons on rev's of $5.42 bln vs. $5.81 bln cons.

8:14 am

Focus Power...

Goldman raises the Asian utilities sector from cautious to neutral

8:10 am

Casualties of War!

Interstate Bakeries (IBC:NYSE), which makes Hostess Twinkies, Dolly Madison and Drakes-- citing "the convergence of a number of recently identified interrelated circumstances" in its delay of 10-K--filed for Chapter 11 last night.

It is unclear at this time whether Minyanville's weight debate played a role in the decision.

8:05 am

Breakfast Sniffs:

  • The metals are in slip-back mode as the dollar tacks on 50 early bips.
  • The German DAX can't seem to mount the 4k hump (which is also the '04 downtrend line).
  • 214 lbs.
  • Meanwhile, at the Roach Motel...
  • Intern Michael (aka "Killer") was in the office when I arrived this morning. A sure sign of sushi-lamentation!

8:00 am

FedEx Corp.(FDX:NYSE) reported Q1 EPS of $1.08 vs. $1.08 cons on revenues of $6.98B vs. $6.81B cons.

The company guided Q2 EPS to $1.10-$1.20 vs. $1.15 cons and took full year EPS to $4.40-4.60 vs. $4.61 cons.

7:56 am

Morgan punts the European semiconductor sector from attractive to in line and takes STMicroelectronics (STM:NYSE) from equal weight to underweight.

7:36 am

In case you missed it...

Jabil Circuit (JBL:NYSE) reported Q4 EPS of $0.27 vs $0.26 cons on rev's of $1.6 bln vs. $1.63 bln cons.

The company also guided '05 EPS to $1.20-$1.24 vs. $1.24 cons on revs of $7.2- $7.4 bln vs. $7.19 bln cons.

Paychex (PAYX:NASD) reported Q1 EPS of $0.23 vs. $0.23 cons on revs of $344.98 mln vs $342.41 mln cons, and guided in-line for '05. (PCLN:NASD) reiterated its Q3 guidance and announced the acquistion of Active Hotels, a leading European internet hotel reservation service.

The company raised Q4 guidance to $0.14-0.18 vs $0.14 cons on revs of $420-430 mln to reflect the acquisition.

TIBCO (TIBX:NASD) reported Q3 EPS of $0.07 vs $0.05 cons on revs of $105.9 mln vs $101.59 mln cons. The company also approved a plan to buyback up to $50 mln in stock.

7:28 am

Suntrust downgraded Walgreen Co (WAG:NYSE) to neutral from buy as a function of the sluggish industry growth rate for pharmacies, valuation, and difficult comps in the coming quarters. Note that WAG will report earnings on 9/27.

7:23 am

According to the Wall Street Journal, short interest on the NYSE rose by 1% from 7.67 bln to 7.75 bln for the month ending Sept 15. The short ratio rose to 6.7 from 5.5 in Aug.

7:21 am

JP Morgan upped RF Micro Devices (RFMD:NASD) from underweight to overweight.

7:16 am

The MBA mortgage application index for 9/17 came in at 1.8% vs. -2% prior.

7:16 am

Morgan Stanley lowered Tellabs (TLAB:NASD) from equal weight to underweight saying they expect earnings to be below cons and citing risk associated with the Advanced Fibre Communications (AFCI:NASD) acquisition.

7:15 am

Last night the ABC/Money Magazine consumer confidence index for the week ending 9/19 came in at -9 vs -7 prior.

7:14 am

Plexus Corp (PLXS:NASD) guided Q4 revs to $270-280M and EPS to $0.09-0.11. This is the lower end of previous guidance. First Call consensus is at $0.09.

Company also announced plans to close a Washington facility as part of a $10-13M restructuring.

7:13 am

In an effort to settle an accounting scandal with the government, the NY Post reports that Computer Associates (CA:NYSE) will pay a fine of $225 mln.

7:04 am

Household spending in France climbed for a second month in three during August gaining +0.5% according to Bloomberg.

Meanwhile consumer confidence in Italy rose for a fourth month from 101.8 to 102.8.

Both governments have sought to bolster the consumer via pressure on retailers to control prices along with tax cuts as they struggle with the issue of unemployment (9.8% / 8.8% unemployment rates respectively)

6:54 am

A Zogby poll has the race between John Kerry and President Bush in a virtual dead heat based on 20 battleground states according to Bloomberg.

6:45 am

Deutsche Banc cuts Cisco (CSCO:NASD) from buy to hold citing business uncertainty and macro concerns.

6:37 am

Good morning. Traders wake up this Wednesday to find foreign markets mixed. A look at European markets finds the FTSE +0.31%, CAC +0.01% while the DAX slinks -0.23% lower.

Asia also finished the session lower as the the Nikkei, fresh off a move below its 200 dma, slipped -0.55% while the Hang Seng edged -0.24% lower. The dollar index (DXY) is gaining back 30 bps of yesterday's drubbing and sitting just below the 200 dma (88.47). For their part, stateside futes are below fair value.

A number of events on the trading radar today most notably earnings from BSC, FDX, MWD, and BBBY.


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