When the volatile components of food and energy were taken out of the equation, prices increased 0.3% versus an expected 0.2%. The report had little effect on the futures and they remain slightly lower.
JNJ: Solid results, but see challenges ahead@LEER
After Johnson & Johnson reported higher than expected Q2 EPS, Leerink Swann believes that tight cost controls are increasing the company’s margins. However, the firm believes that the company will be challenged over the next year by the patent expirations of Risperdal and Topamax, as well as a new player in the U.S. DES market. The firm reiterated their Market Perform rating.
SINA: Concerns of a post-Olympic slowdown are overdone@SUSQ
Susquehanna said concerns that the Chinese economy will have a post-Olympic slowdown are overdone and that the Internet sector should continue to have secular growth that overrides macro issues. Shares of SINA are Positive rated.
SPWR: Expect a solid Qtr, concerns overdone@COWN
Cowen expects SPWR to report a solid quarter and to maintain/increase 2008/09 targets. The firm believes concerns regarding Spanish and U.S. market exposure are overdone. Shares are Outperform rated.
NTRS reports Q2 EPS $1.35 ex items vs. consensus of $1.05
Reports Q2 revenue $1.09B vs. consensus of $1.01B. The provision for credit losses was $10.0 million in the current quarter and net charge-offs totaled $4.7 million.
INTC: Solid quarter, but margins were lower than expected@JMPS
After Intel reported results that JMP Securities views as solid, the firm notes that the company’s gross margins were lower than they expected. JMP Securities maintained their Market Perform rating, as they believe the company’s valuation is fair.
First Solar-FSLR announces 2 California solar projects
First Solar, Inc. announced that Southern California Edison has selected First Solar to engineer and supply the PV power plant system for a 2 megawatt project to be installed on the roof of a commercial building in Fontana, CA. This is the first installation in SCE’s plan to install 250 megawatts of solar generating capacity on large commercial rooftops throughout Southern California over the next five years. SCE began installation of this initial project on July 14, 2008, and expects to connect the PV power plant to the grid in September 2008. In March, SCE, with California Governor, Arnold Schwarzenegger, announced the five-year solar PV installation project, which is the largest rooftop solar program ever proposed by a U.S. utility.
RIG: Would continue to buy more shares of the company@OPCO
After Transocean was awarded $3B of contracts from Petrobras (PZE), Oppenheimer states that Transocean is still one of their top picks, due to what they see as its attractive valuation, strong deepwater profile, and strong free cash flow.
RIMM downgraded to Underperform from Hold@NEED
See fair value at $87.
Dry Bulk Shipping: Expect sentiment to stay negative through summer@BOFA
Banc of America expects sentiment surrounding the group to remain negative in the near-term but believes valuations are attractive and thinks vessel demand and freight rates should be strong by the end of the summer. The firm’s favorite ideas are Navios Maritime (NM), Genco (GNK) and TBS International (TBSI).
LEH: View a potential management buyout as unlikely@BERN
Bernstein said the costs of a potential management buyout of LEH would be too high as it would result in extremely high leverage ratio and a likely credit rating downgrade. The firm believes LEH will look to raise more capital instead. Shares are Market Perform rated.
V estimates raised on operating leverage potential@PIPR
Piper raised their estimates for Visa as they believe the company has more operating leverage potential than its guidance suggests. The firm maintains a Neutral rating on the stock due to valuation.
Chicago Bridge & Iron-CBI volatility Elevated into lower guidance & charge
CBI, was trading at $31.39 in after market trading last night, below its close of $36.39. CBI lowered guidance for 2008 and will take a Q2 pretax charge of $317 million on cost over runs associated with two LNG projects in the UK. Goldman Sachs say’s “Lowering rating to Neutral on nagging execution risk.” CBI August option implied volatility of 66 is above its 26-week average of 53 according to Track Data, suggesting larger price movement.
Cleveland Cliffs-CLF & Alpha Natural-ANR host a conference call at 9am on 7/16
Conference call to discuss CLF acquiring all outstanding shares of ANR for about $10B in cash and stock
Alpha Natural-ANR volatility Elevated into CLF $10 billion buyout
CLF will acquire all outstanding shares of ANR in a cash and stock transaction valued at $10 billion. ANR stockholders will receive 0.95 CLF common shares and $22.23 in cash. Based on CLF closing price on July 15, ANR shares would receive $128.12 per share. ANR August option implied volatility of 86 is above its 26-week average of 64 according to Track Data, suggesting larger price movement.
Cleveland Cliffs-CLF and Alpha Natural-ANR announce merger agreement
Cleveland-Cliffs Inc and Alpha Natural Resources, Inc. announced that each company’s Board of Directors has approved a definitive merger agreement under which Cleveland-Cliffs will acquire all outstanding shares of Alpha in a cash and stock transaction valued at approximately $10 billion. Under the terms of the agreement, for each share of Alpha common stock, Alpha stockholders would receive 0.95 Cleveland-Cliffs common shares and $22.23 in cash. Based on Cleveland-Cliffs’ closing stock price on July 15, 2008, Alpha stockholders would receive $128.12 per share, which represents a premium of 35% to Alpha’s closing stock price on July 15, 2008.
S&P 500-SPX: Pivot Points
The following are the pivot points for the S&P 500 (SPX). Pivot High: 1224.585, Pivot Low: 1191.325. These were calculated using the DeMark method.
