Two Ways To Play: Lehman Loses?
Strengthen your portfolio in good times and bad.
Bloomberg reports General Dynamics (GD) has agreed to buy Jet Aviation Management AG from U.K. buyout firm Permira Advisers LLP for $2.23 billion. The acquisition will provide General Dynamics, the maker of corporate jets as well as military combat systems, further expansion into global flight support for the corporate aviation industry.
Jet Aviation is a world leader in providing maintenance and refurbishment for planes and ground facilities at business terminals. The transaction should be completed by the end of the year and will immediately add to earnings, GD said in a statement today.
From the Bull Pen: Bulls like GD on a pullback towards the $90 mark. Sell-stops can be set below. Lockheed Martin (LMT) is also an option should the stock fall to the $110 level.
From the Bear Cave: Bears can press the downside in Boeing (BA) should the stock rally to its 50 DMA ($67.50).
Lehman Cut by JPMorgan
Bloomberg reports analysts at JPMorgan Chase (JPM) estimate that Lehman Brothers (LEH) may write off about $4 bln in credit-related assets in its fiscal 3Q results. The analysts, led by Kenneth Worthington, wrote in a report yesterday that credit conditions remain difficult and has been "exacerbated by a slowdown in execution and origination." JPM now believes Lehman will report a loss of $3.30 for the third quarter, far below its previous estimate for a profit of $0.35 per share. The analysts maintain a "neutral" rating for the stock. For more context, see Professor Bennet Sedacca's No Credit For Financials.
From the Bull Pen: Is MasterCard (MA) the better upside financial-related play? Can the stock hold its 200 DMA ($231)? Sell stops can be set below that level.
From the Bear Cave: Bears might see a downside play in the financial ETF (XLF). The stock could see more selling if the $20 support level doesn't hold. Buy-stops can be set above $21.
For more ideas in real time throughout the trading day, check out Minyanville's Buzz & Banter.
Quick Check Around the World
Asian trading closed with the Hang Seng -2.13%, Nikkei -2.28%, Sensex -0.70%, Taiwan -0.32% and Shanghai +1.06%.
A look towards Europe finds the CAC -1.88%, DAX -1.89%, FTSE -1.92%
As of 8:30 AM EST, S&P Futures are down -7.20 to 1274, and Nasdaq futures are down -12 points to 1929.
A Look At Commodities
Commodities are mostly lower. Crude oil is down -0.74 to 112.13. Gold is lower -5.10 to 794.60. Silver is off -0.165 to 12.935, and copper is higher +1.25 to 335.50.
The dollar index is higher +0.014 to 77.131.
On the Radar
PPI (m/m): 1.2% vs. 0.6% cons.
Core PPI (m/m): 0.7% vs. 0.2% cons.
PPI (y/y): 9.8% vs. 9.3% cons.
Core PPI (y/y): 3.5% vs. 3.2% cons.
Housing Starts: 965 k vs. 960 k cons.
Building Permits: 937 k vs. 970 k cons. .
Good luck today!
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