General News:
– Sales of existing homes fell in May to the lowest level in four years while the median home price dropped for a record 10th consecutive month.
– According to the Financial Times, there is weakening capital expenditures in the US and Euro Zone. The ratio in the US is expected to fall from 51% to 45%. (**Note: Capital Expenditures is the acquiring of fixed assets).
– Iran has invited the UN Atomic Agency inspectors to Tehran in an attempt to resolve the conflict. The general strike in Nigeria has also ended. This has pushed oil prices lower.
– Not just Bear Stearns is being affected by the mortgage industry. Cheyne Capital lost 67.7 million euro on a mortgage related holding.
– A bill in the Senate is being passed around that would give generic drug makers the right to sell copies of medications developed by biotech companies. This could be negative for biotechs. Watch PBE, the biotech ETF, for direction.
Asia/Europe:
Asia:
– There is monetary tightening in China, which resulted in a 3.7% fall in Chinese shares.
– People’s Bank of China, Zhou, said that the PBOC is thinking of a rate hike and that upside inflationary pressures remain high.
– Supply in the Chinese market is increasing as evidenced by the amount that Chinese listed companies have raised. According to statistics, the Chinese companies raised 13.8 billion yuan in May, up 102% year over year.
– China reported that it will keep the bulk of its foreign reserves in dollars.
– Japanese stocks declined as investors shifted funds out of shares that may be hurt by the trend of increasing interest rates such as property shares.
– Australia, the world’s biggest wool exporter and third-largest shipper of wheat, raised its forecast for farm-export earnings by $764 million because of a higher price forecast for grain, dairy and beef.
– ICICI Bank Ltd., India’s largest bank, said it will increase its assets by almost 30% as economic growth caused demand for loans.
Europe:
– German Consumer Confidence rose to a six month high in the latest report; up a point to 8.4, better than the expected 7.8 reading.
– Hungary’s central bank unexpectedly cut its benchmark interest rate for the first time since 2005 after inflation slowed.
– The French government sold a 5% stake in France Telecom SA for about $3.57 billion, the bottom of the price range sought by the state, which resulted in a share price loss of 3.5%.
– The Munich-based, Ifo Economic Institute, raised its forecast for German growth as consumer spending and corporate investment are expanding.
Corporate News:
– Ford (F) hired KPMG to help sell off the Jaguar and Land Rover brands.
– Tyson Foods Inc. (TSN) is building a plant specifically designed to turn fat into fuel.
– US Xpress Enterprises’ (XPRSA) management is making a $20 per share buyout bid.
– Yahoo’s (YHOO) sales chief has quit his position as he is moving to MSO.
– Walgreen Co. (WAG) reported a 20% rise in third-quarter profit, citing an increase in prescription sales as part of the rise.
Favorable Comments:
– Applied Bio (ABI) upgraded at Robert W. Baird
– Barrett Business (BBSI) upgraded at JMP Securities.
– Bristol-Myers (BMY) upgraded at Bear Stearns.
– Chevron (CVX) and Interpublic (IPG) upgraded at Banc of America.
– First Comm Banc (FCBP) and Meadowbrook Insurance (MIG) upgraded at Friedman Billings.
– Infineon (IFX) upgraded at Matrix.
– LivePerson (LPSN) upgraded at Roth.
– Marchex (MCHX) upgraded at Piper Jaffray.
– National City (NCC) upgraded at AG Edwards.
– Omnicom (OMC) upgraded at Deutsche Securities.
– Pearson Plc (PSO) upgraded at Stifel.
– Perot Systems (PER) upgraded at KeyBanc/McDonald.
– Pier 1 Imports (PIR) upgraded at UBS.
– Sirius Satellite (SIRI) upgraded at Morgan Joseph.
– Smith Micro Software (SMSI) upgraded at Jeffries.
– True Religion (TRLG) upgraded at CIBC.
Negative Comments:
– Amgen (AMGN) downgraded at Lehman Brothers.
– China Grentech (GRRF) downgraded at WR Hambrecht.
– Cinemark (CNK) downgraded at Soleil.
– Jackson Hewitt (JTX) downgraded at CIBC.
– Magna Entertainment (MECA) downgraded at Brean Murray.
– Shore Bancshares (SHBI) downgraded at BB&T.
– Town Sports (CLUB) downgraded at Credit Suisse.