Monday, July 26, 2010

Today's Headlines

Posted by Gary .....at 2:59 PM

Bloomberg:
  • Stock Buying Hits Bull Market Record at Mutual Funds. Mutual funds, pensions and endowments are spending more on stocks than at any time since the start of the bull market, just as individuals grow the most pessimistic in a year. Institutions pushed equities up to 68 percent of their holdings in July, the highest level in 15 months, from 63 percent in April, a Citigroup Inc. survey showed. The ratio of bullish to bearish respondents in a survey by the American Association of Individual Investors has fallen to 0.68, the lowest level since July 2009, based on a four-week average. The last time money managers and individuals were this far apart was in March 2009, before the Standard & Poor’s 500 Index began its 63 percent rally, according to data compiled by Bloomberg. The U.S. equity benchmark has posted an average return of 8.8 percent in the 12 months after individuals’ skepticism rose this high in the past 20 years, according to data compiled by Bloomberg. Profits may rise an average 34 percent in 2010 and 17 percent in 2011, the fastest two-year growth since 1995, according to forecasts tracked by Bloomberg. The AAII measure of pessimism peaked on July 8 at 57 percent, the most since March 5, 2009. Bullishness has averaged 29 percent during the past four weeks, compared with 45 percent who were bearish, according to the weekly survey. The last time optimism fell this low relative to pessimism was July 24, 2009, two weeks after the S&P 500 began a 38 percent rally, data compiled by AAII and Bloomberg show. Investors have withdrawn $22.9 billion from mutual funds that hold U.S. stocks since April 2009, while piling more than $350 billion into bond funds, according to data compiled by the Washington-based Investment Company Institute. Individuals accounted for the majority of U.S. mutual fund assets in 2009, owning 84 percent, the data show. Hedge funds that wager on both gains and losses in equities have boosted speculation shares will fall, according to Bank of America Corp. The lightly regulated private pools of capital have on average 27 percent more money in bets on rising prices than falling prices, below the historical average of 35 percent to 40 percent, based on data from the Charlotte, North Carolina- based bank. The S&P 500 trades at 14.9 times annual earnings, compared with an average of 16.5, according to data compiled by Bloomberg that dates back to 1954. The index is cheaper relative to estimated earnings for the next 12 months, with a multiple of 11.7, the data show. Mutual funds, endowments, hedge funds and pensions say they’re preparing for a rally, according to Citigroup’s questionnaire from 120 respondents among those groups. Fifty- four percent said U.S. equities may gain 10 percent to 20 percent, compared with 50 percent in the previous reading.
  • Bank Bond Risk Drops to 13-Week Low on Stress-Test Transparency. The cost of insuring against losses on bank bonds fell to the lowest level in 13 weeks as analysts said European Union stress tests provided greater-than-expected transparency about holdings of sovereign debt. The Markit iTraxx Financial Index of credit-default swaps on 25 banks and insurers dropped for a fifth day, down 15.5 basis points to 117.5, according to JPMorgan Chase & Co. at 5 p.m. in London. It’s the biggest one-day decline since May 10 and the index is now the lowest since April 26. “They provided a lot of fairly detailed information on the banks so that everyone can do their own stress tests,” said Philip Gisdakis, a Munich-based strategist at UniCredit SpA. “Having the detailed information you don’t need to rely only on the headline figures, you can do it on your own.” The Markit iTraxx Europe Index of swaps 125 companies with investment-grade ratings fell 7.25 basis points to 104.75, and the Markit iTraxx Crossover Index of 50 companies with mostly high-yield credit ratings decreased 29.5 basis points to 477, JPMorgan prices show.
  • June Sales of U.S. New Homes Climb More Than Forecast. Sales of U.S. new homes rose in June more than forecast following an unprecedented collapse the prior month, a signal the worst of the slump triggered by the end of a government tax credit is over. Purchases increased 24 percent from May to an annual pace of 330,000, figures from the Commerce Department showed today in Washington. The rate was the second-lowest in data going back to 1963 after May’s downwardly revised 267,000 pace. Sales are “bouncing along the bottom,” said Eric Green, chief market economist at TD Securities Inc. in New York, who forecast an increase to 335,000. “The future is going to be dependent on job growth. There’s no demand because confidence is weak and employment is weak.” The government had initially estimated May sales at a 300,000 rate and revised down figures for every month since March. The 37 percent plunge in May was the biggest on record. The median price decreased 0.6 percent from June 2009 to $213,400. Purchases increased in three of four regions, led by a 46 percent jump in the Northeast and a 33 [percent surge in the South, the largest area. Demand dropped 6.6 percent in the West to a record low 57,000 pace. The supply of homes at the current sales rate fell to 7.6 months’ worth from 9.6 months in May. There were 210,000 new houses on the market at the end of June, the fewest since 1968.
  • FedEx(FDX) Boosts Profit Forecast as Shipment Demand Rises. FedEx Corp. boosted its profit forecast for the quarter and full year, exceeding analysts’ estimates, on rising demand for international express shipments. The shares climbed in New York trading. Earnings for the quarter ending in August will be in a range of $1.05 to $1.25 a share, an increase from the previous outlook of 85 cents to $1.05, the Memphis, Tennessee-based company said today in a statement. Analysts projected $1 a share, the average of 17 estimates in a Bloomberg survey. FedEx said volume for international priority packages, which are among its most profitable offerings, will jump more than 20 percent this quarter, adding to signs of a strengthening global economy.
  • Biggs Buys Stocks Three Weeks After Cutting Holdings: Tom Keene. Barton Biggs, the hedge fund manager who sold half his equity holdings at the start of July, said today that signs the U.S. economy will avoid a recession spurred him to build the stakes back up. Biggs, whose Traxis Partners LLC gained 38 percent in 2009 when he bought shares as the Standard & Poor’s 500 Index fell to a 12-year low, said bets that stocks will advance make up 75 percent of his fund, up from about 35 percent three weeks ago.
  • Copper Prices Rise to 10-Week High on Improving Demand Outlook. Copper climbed to a 10-week high as shrinking inventories, a rally in equity markets and rising U.S. home sales signaled improving demand. Stockpiles monitored by the London Metal Exchange have slumped 7.7 percent in July, heading for the biggest monthly decline since June 2009. Copper for September delivery gained 4.9 cents, or 1.5 percent, to $3.234 a pound at 11:39 a.m. on the Comex in New York.
  • Corn, Soybeans, Wheat Drop as Favorable Weather Aids U.S. Crops. Corn fell to the lowest price in more than three weeks, while soybeans and wheat declined, on speculation that rain is reviving U.S. crops that were threatened by dry weather earlier this month. Weekend rain significantly increased soil moisture in previously dry areas of the Midwest and South, said Drew Lerner, the president of World Weather Inc. in Overland Park, Kansas. Forecasts call for showers and no sustained heat over the next two weeks, which will be good for crops, Lerner said in a report. “Weather conditions are improving,” said Greg Grow, the director of agribusiness for Archer Financial Services Inc. in Chicago. “Farmers are going to be active sellers because they are more confident in raising a big crop.” Corn futures for December delivery fell 6 cents, or 1.6 percent, to $3.785 a bushel at 10 a.m. on the Chicago Board of Trade, after touching $3.78, the lowest level for a most-active contract since July 1.
  • CFA Pass Rate for Level 1 and 2 Exams Falls From Year Earlier. A lower percentage of hopefuls for the Chartered Financial Analyst designation passed the first and second level of their three-part exam in June compared with a year earlier, as a record number of people tried to get an edge in Wall Street hiring. Forty-two percent of applicants passed the exam’s first test, CFA Institute spokeswoman Kathy King said today, down from 46 percent on the June 2009 exam. Thirty-nine percent of applicants passed the second, compared with 41 percent a year earlier. A record 139,900 candidates enrolled to take CFA exams in June, aiming to capitalize as Wall Street begins to recover from the worst shakeout in decades.
  • Utility Companies 'Exhausted' After Climate Defeat.
  • Stock Short Sales at 2-Year Low, Data Explorer Says. Investors are exiting bearish bets on global equities, pushing bullish wagers on stocks to a two- year high versus short sales, according to Data Explorers. The firm’s long-short ratio has risen to 9.5, having surged from 5.75 in September 2008 when Lehman Brothers Holdings Inc.’s collapse intensified the financial crisis, the London- and New York-based securities-research company said. The reading is the highest of the data that goes as far back as July 2008.
  • Genzyme(GENZ) Said to Rebuff Sanofi-Aventis Buyout Approach. Genzyme Corp., the world’s largest maker of drugs for rare genetic diseases, rebuffed Sanofi- Aventis SA’s takeover approach last week, two people with knowledge of the matter said today. Genzyme can command at least $22 billion, or $80 a share, on the potential for revenue to surge after the company resolves manufacturing defects depressing sales of existing products and introduces new medicines, investors and analysts said today. That is a 48 percent premium over Genzyme’s closing price on July 22, the day before reports of Sanofi’s interest.

Wall Street Journal:
  • Report Finds Labor Laws Restraining Europe. European businesses are struggling to compete with their U.S. rivals who are far more agile at maximizing profit from their investment in people according to new research that warns firms in the EU are being hampered by strict labor laws. The findings, from a report on the efficiency of employees by PricewaterhouseCoopers, shows that Western European companies are failing to compete with their global rivals and lack the key skills to operate in the new global business environment.
  • Madoff Investors Brace for Lawsuits. Trustee Pursues Account Holders Who Withdrew More Than They Deposited; 'I Will Be Penniless'. The court-appointed trustee recovering money for Bernard L. Madoff's victims is preparing a wave of new lawsuits seeking to wrest funds away from investors who also were duped by the Ponzi scheme. In an interview, Irving Picard said he could wind up suing about half the estimated 2,000 individual investors he has called "net winners" from their dealings with Mr. Madoff. Such investors withdrew more from Mr. Madoff's firm than the amount of principal they invested.
Bloomberg Businessweek:
  • Iron Ore Price Jumps Most in 7 Months as China Buyers Return. The spot price of iron ore delivered to China, the biggest buyer of the steelmaking ingredient, jumped the most in almost seven months as buyers from the Asian nation returned to the market. The cost of 62 percent iron ore delivered to the port of Tianjin rose 5 percent to $133.40 a metric ton, the biggest one- day gain since Dec. 30, according to The Steel Index. The price hasn’t posted a decline for nine consecutive days after posting 16 straight days of losses through July 13. The spot price has risen 13 percent since July 15 after dropping to a 2010 low on July 13. It’s unclear whether the gains can be attributed to fundamental buying or are driven by traders, ING’s Hatch said.
CNBC:
Business Insider:
Forbes:
  • Brace Yourselves, New Macs Are On The Way. Apple(AAPL) could be updating its iMac and Mac Pro computers soon, if depleted stock at some of its retail stores are any indication. MacRumors has been tracking in-store pre-order availability for Apple's desktop Macs, and the fact that many are unavailable at several Apple Stores suggest that new, updated models could be announced soon.
OCRegister:
  • Mark Landsbaum: Is It Time to End Climate Alarmism? Five allegedly independent investigations claim to have cleared U.S. and British climate scientists of chicanery in their global warming research. It's more likely the investigations will be among the final nails in the coffin for the global warming alarmist movement. That's a position shared not only among respected skeptics in the scientific community, but increasingly in the mainstream press and even by some global warming believers. Sure, government funding for climate change research probably will continue for a while. And propagandists will continue to crank out new studies claiming we're cooking the planet to death. They will hold more international confabs and issue more dire proclamations, but to less and less avail. Most likely, this was the tipping point. Global warming zealots have lost. It's only a matter of time until they realize it and move on to a new contrived catastrophe, where doubtless they'll be warmly received by a compliant press and amply rewarded with more tax-subsidized grants. It seems there are insatiable appetites and never-ending tax dollars for the proper causes.
NYDailyNews.com:
  • Governor Paterson Says Planning for Layoffs to Start Immediately. Gov Paterson had some grim news for state workers - and their union leaders - this morning. It’s time to start planning for layoffs. “I think the planning for layoffs is going to have to begin immediately,” Paterson told reporters after throwing out the first pitch at an Albany t-ball game. Paterson was uncertain how many layoffs would be needed or when they would start. But he was certain about who’s to blame - union leaders for refusing to negotiate concessions such as lag pay or furloughs.
Rasmussen Reports:
  • 58% Favor Repeal of Health Care Bill. Most voters continue to favor repeal of the national health care bill, but nearly half see repeal as unlikely. A plurality believes repeal would be good for the economy. The latest Rasmussen Reports national telephone survey finds that 58% of voters favor repeal, including 48% who Strongly Favor it. Thirty-seven percent (37%) are opposed to repeal, with 28% who are Strongly Opposed. Forty-four percent (44%) believe repeal of the health care bill would be good for the economy. Twenty-eight percent (28%) say repeal would hurt the economy.
Politico:
  • House Leaders Squeeze Rangel. Increasingly impatient House Democratic leaders are prodding Rep. Charlie Rangel (D-N.Y.) to make a deal with the ethics committee before charges against him are unveiled Thursday, top Democratic officials told POLITICO. Fellow Democrats told POLITICO that they believe he’s dragging his feet in a futile effort at total vindication. Democrats worry that his stubbornness could add to their losses in November by helping Republicans, who have vowed to build a “culture of corruption” narrative using ads, mailings and talking points.
Reuters:
  • Onyx Pharma(ONXX) Calls Myeloma Data 'Impressive'. Nearly a quarter of patients with multiple myeloma who had stopped being helped by current medicines responded to Onyx Pharmaceuticals Inc's experimental cancer treatment carfilzomib, according to data from a clinical trial. Onyx (ONXX), whose shares jumped 18 percent, said it planned to use the study results, released on Monday, as the basis for seeking U.S. approval with the Food and Drug Administration before the end of the year.
The Independent:

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