posted by Peter Greene
Transcript: Ashish Shah, CIO GSAM
13 hours ago
Friday, February 27, 2009
GE now what??
General Electric is cutting its quarterly dividend to 10 cents a share from 31 cents a share, saving $9 billion a year, CNBC reported. The move comes amid a steep slide in the company's stock price. The company's financial services operations have been hit hard by losses and delinquencies during the credit crisis and economic downturn in the past 18 months.
posted by Peter Greene
posted by Peter Greene
Morning Comment from Firm
For the last few weeks we have been talking about the critical S&P 500 support levels and how they are the dividing line between a rally and another waterfall like decline. Well here we are just two days and a very modest bounce removed from a retest of that support and we have already given back 90% of that two day bounce. This is not encouraging given that this feeble bounce came after a 15 % market thrashing over 9 days ! That said we continue to suggest investors watch the support levels on the S&P 500 near 740 as a break below that support would open up a torrent of new selling and maybe a final capitulation.
Anecdotal sentiment the last two days was off the charts bullish as everyone was calling a bottom. One thing we have learned over time and we have repeated this mantra over and over again, bear markets end when even after along-decline investors stop trying to call the low (typically out of frustration of being wrong over and over). For instance on the way down in 2001 and 2002 the bottom was probably called 50 times. However when we hit the actual lows people were super bearish. On the flip side bull cycles end when investors stop calling for the "TOP" and everyone is bullish. Jog your memory a bit and remember the 2000 top. The consensus then after a run from NASDAQ 1000 to NASDAQ 5000 was not that we were at a top but rather we were in a "NEW ERA" and that stocks and the economy would grow forever ! We say this to reinforce the point we need people screaming in the streets to be at a new low and it appears there is more disbelief than fear at the moment.
We expect there is one more shoe to drop in the finance arena. This could create the violation of the support and lead to another hard sell-off and then ultimately the low everyone will then not be calling for !!
posted by Peter Greene
Anecdotal sentiment the last two days was off the charts bullish as everyone was calling a bottom. One thing we have learned over time and we have repeated this mantra over and over again, bear markets end when even after along-decline investors stop trying to call the low (typically out of frustration of being wrong over and over). For instance on the way down in 2001 and 2002 the bottom was probably called 50 times. However when we hit the actual lows people were super bearish. On the flip side bull cycles end when investors stop calling for the "TOP" and everyone is bullish. Jog your memory a bit and remember the 2000 top. The consensus then after a run from NASDAQ 1000 to NASDAQ 5000 was not that we were at a top but rather we were in a "NEW ERA" and that stocks and the economy would grow forever ! We say this to reinforce the point we need people screaming in the streets to be at a new low and it appears there is more disbelief than fear at the moment.
We expect there is one more shoe to drop in the finance arena. This could create the violation of the support and lead to another hard sell-off and then ultimately the low everyone will then not be calling for !!
posted by Peter Greene
Wednesday, February 25, 2009
Tuesday, February 24, 2009
Bernanke Says Recession Should End This Year
Fed Chairman Ben Bernanke said the recession should end this year and 2010 "will be a year of recovery," if actions taken by the government lead to some stabilization in financial markets.
But for now, the U.S. is undergoing a "severe contraction," Mr. Bernanke said in prepared remarks to the Senate Banking Committee. He added that the contraction "appears to have continued into the first quarter of 2009."
posted by Peter Greene
But for now, the U.S. is undergoing a "severe contraction," Mr. Bernanke said in prepared remarks to the Senate Banking Committee. He added that the contraction "appears to have continued into the first quarter of 2009."
posted by Peter Greene
Monday, February 23, 2009
Here we go again
"We continue to work with the Federal Reserve Bank of New York to evaluate potential new alternatives for addressing AIG's financial challenges," AIG spokesman Joseph Norton said. "We will provide a complete update when we report financial results in the near future."
posted by Peter Greene
posted by Peter Greene
Morning comment
It is Déjà Vu all over again as today's market note is pretty much the same as Friday's. The S&P 500 remains at a very critical level of support and how it navigates this will set the directional course of trading for the next few weeks or longer. We wish there was more clarity to offer, however until we either get a break of this level or a high volume, strong participation rally (ie. good breadth rally) we are left to wait and watch.
posted by Peter Greene
posted by Peter Greene
Citi news not helping enough
The admin. is trying hard to talk out of both sides of their mouths...they support private banks, and are willing to take at least 40% of Citi to save it...
Is their a plan??
S&P Futures up small; over night they rallied big. Now it seems nobody knows how to read their new "stress test" rules...
posted by Peter Greene
Is their a plan??
S&P Futures up small; over night they rallied big. Now it seems nobody knows how to read their new "stress test" rules...
posted by Peter Greene
Sunday, February 22, 2009
BAC & C Nationalize fears
Great article on http://www.foxbusiness.com/story/markets/industries/finance/citi-bofa-shares-tumble-nationalization-fears/ for a recap of the fears.
With 100+ billion gone to these banks, do the companies just get taken over now? The stock price and Sen. Dodd think so
posted by Peter Greene
With 100+ billion gone to these banks, do the companies just get taken over now? The stock price and Sen. Dodd think so
posted by Peter Greene
Friday, February 20, 2009
Saab Moves to Separate Itself From G.M.
Saab, the Swedish automaker owned by General Motors, filed for bankruptcy protection Friday and asked the Swedish government for help in making it an independent car company again.
Maybe they will finally make good cars again!!
posted by Peter Greene
Maybe they will finally make good cars again!!
posted by Peter Greene
Wednesday, February 18, 2009
Oh NO!!!
Sen. Graham says bank nationalization an option
Nationalization is an option for dealing with troubled U.S. banks if they fail the U.S. Treasury's "stress test," Sen. Lindsey Graham said on Wednesday.
posted by Peter Greene
Nationalization is an option for dealing with troubled U.S. banks if they fail the U.S. Treasury's "stress test," Sen. Lindsey Graham said on Wednesday.
posted by Peter Greene
Housing starts fall
Home construction fell a seventh straight month during January and a sign of future building tumbled as high inventories and the recession sent builders into further retreat. Housing starts decreased 16.8% to a seasonally adjusted 466,000 annual rate compared to the prior month, the Commerce Department said Wednesday, much worse than Wall Street expected. Year over year, housing starts were 56.2% below the pace of construction in January 2008.
These data are "bad", but do we really want housing starts to rise with housing inventories still close to record levles relative to sales? No, we don't. So while this means the economy will be very weak in the near term, cutting down excess housing inventories is a critical component of getting home prices to stabilize (which is at the heart of the financial crisis, and won't occur until inventory/sales ratios for housing get back to to 7-8 months of supply from 13 now).
posted by Peter Greene
These data are "bad", but do we really want housing starts to rise with housing inventories still close to record levles relative to sales? No, we don't. So while this means the economy will be very weak in the near term, cutting down excess housing inventories is a critical component of getting home prices to stabilize (which is at the heart of the financial crisis, and won't occur until inventory/sales ratios for housing get back to to 7-8 months of supply from 13 now).
posted by Peter Greene
Thursday, February 12, 2009
Another One Bites the Dust
Sen. Judd Gregg has withdrawn his nomination to be Obama's commerce secretary. In a statement released by his office, the Republican New Hampshire senator cited "irresolvable conflicts" on issues including the economic stimulus package.
posted by Peter Greene
posted by Peter Greene
Wednesday, February 11, 2009
Tuesday, February 10, 2009
Tuesday's market
The Dow Jones Industrial Average plunged 385 points after Geithner's remarks on the bank bailout plan didn't provide the level of detail that some traders had been hoping to hear. Financial stocks led the broad-based selloff, as an exchange-traded fund that tracks the S&P 500's financial sector dropped more than 10%. Bank of America declined 19%. Treasury prices surged as investors flooded back into the relative safe haven of government dent despite an impending surge in the supply of government paper as the U.S. ramps up borrowing to fund the bailout and stimulus package
posted by Peter Greene
posted by Peter Greene
More trouble at GM
General Motors will cut 10,000 jobs, or 14% of its salaried work force, this year as the auto maker struggles to cope with a steep drop in world-wide vehicle sales. The job cuts are part of the plan the company submitted to Congress in December to secure bailout funding from the federal government. Also, most salaried employees will see a 3% to 7% pay cut, while executives will get a 10% reduction
posted by Peter Greene
posted by Peter Greene
Friday’s market shrugged off the negative payroll numbers and moved to an impressive rally. Then Monday was a lack lustier day, these type of days are important as we did not give the rally right back as we had in the recent rallies.The real bright areas recently have been technology & Bio-tech
A sell off here on Tuesday is expected, unless the 11am announcement is better than expected
posted by Peter Greene
A sell off here on Tuesday is expected, unless the 11am announcement is better than expected
posted by Peter Greene
Friday, February 6, 2009
Morning Note
Good morning :
As seen below the intra-day of the SPZ, it stayed in that same range (chart in the PDF ) of 825-850...will the Payroll numbers finally break us out of this zone?
All expectations are a move to at least a 16 year high in the unemployment rate; according to our Barry Ritholtz “Would anybody be shocked if the non-farm payroll number even was in the high 600k level?” His range is 600k-700k, but better or worse is irrelevant. (also published on his blog, The Big Picture).
For us we are looking to see if the news is the catalyst to finally break out of the range-bound trade.
posted by Peter Greene
As seen below the intra-day of the SPZ, it stayed in that same range (chart in the PDF ) of 825-850...will the Payroll numbers finally break us out of this zone?
All expectations are a move to at least a 16 year high in the unemployment rate; according to our Barry Ritholtz “Would anybody be shocked if the non-farm payroll number even was in the high 600k level?” His range is 600k-700k, but better or worse is irrelevant. (also published on his blog, The Big Picture).
For us we are looking to see if the news is the catalyst to finally break out of the range-bound trade.
posted by Peter Greene
Feb. 6, 2009
U.S. employment plunged in January, a government report showed, bringing total job losses since the recession started in December 2007 to 3.6 million. Nonfarm payrolls, which are calculated by a survey of establishments, tumbled 598,000 in January, more than expected and the most since December 1974. The unemployment rate, which is calculated using a survey of households, jumped 0.4 percentage point to 7.6%, the highest since September 1992.
posted by Peter Greene
U.S. employment plunged in January, a government report showed, bringing total job losses since the recession started in December 2007 to 3.6 million. Nonfarm payrolls, which are calculated by a survey of establishments, tumbled 598,000 in January, more than expected and the most since December 1974. The unemployment rate, which is calculated using a survey of households, jumped 0.4 percentage point to 7.6%, the highest since September 1992.
posted by Peter Greene
Thursday, February 5, 2009
Banks
UBS out with a call on Obama's stimulus package (to be unveiled Monday with a bad bank provision, it seems) .....UBS believes Obama's financial plan to be announced next week could drive short-term rallies in Fifth Third Bancorp (FITB), Huntington Bancshares (HBAN), and Regions Financial (RF).. UBS thinks shares of the banks could potentially double on the news
posted by Peter Greene
posted by Peter Greene
More of the Same
The markets continued in the range bound levels we have been talking about (hope we are not boring you). The S&P 500 rallied until it was slightly above our range high of 850; then fell to a low above our low of the range 825 (actual high 851.85, low 829.18). We see more of the same until there is a catalyst to break one way or another...this may be the Friday Payroll numbers
Some of our trading ideas continue to be: long RIMM (up in a down market again); short WMT (3 cents off a 52 week low yesterday) but WMT may get a bump if the sales data is higher-just watch for too much discounting, UPS (the “intraday levels from yesterday worked like a champ, wish they all worked that well), FDX (down 1.58). A couple other names mentioned this week; WYNN (sell signal on 2/2/09 and we suggested if it broke the levels to short it...down 2.59 yesterday); DRYS & FSYS also mentioned new sell, but to watch for a break first and they have not broken yet.
Non-Farm Payroll numbers on Friday morning (from Barry Ritholtz)
We are likely to see another ugly NFP report on Friday. The early data points ain’t pretty:
Layoffs: Challenger job layoffs surged to 242k in January — the highest level for a month since 2002. The monthly rise was +75k and year over year, the increase in layoffs was 165k.
ADP Report: 522k jobs lost in January, consistent with consensus expectations. ( Barry also mentioned that the ADP report has been unreliable) .
I am looking for another 500k plus job loss (potentially as high as 700k) and unemployment ticking up to 7.8%
posted by Peter Greene
Some of our trading ideas continue to be: long RIMM (up in a down market again); short WMT (3 cents off a 52 week low yesterday) but WMT may get a bump if the sales data is higher-just watch for too much discounting, UPS (the “intraday levels from yesterday worked like a champ, wish they all worked that well), FDX (down 1.58). A couple other names mentioned this week; WYNN (sell signal on 2/2/09 and we suggested if it broke the levels to short it...down 2.59 yesterday); DRYS & FSYS also mentioned new sell, but to watch for a break first and they have not broken yet.
Non-Farm Payroll numbers on Friday morning (from Barry Ritholtz)
We are likely to see another ugly NFP report on Friday. The early data points ain’t pretty:
Layoffs: Challenger job layoffs surged to 242k in January — the highest level for a month since 2002. The monthly rise was +75k and year over year, the increase in layoffs was 165k.
ADP Report: 522k jobs lost in January, consistent with consensus expectations. ( Barry also mentioned that the ADP report has been unreliable) .
I am looking for another 500k plus job loss (potentially as high as 700k) and unemployment ticking up to 7.8%
posted by Peter Greene
Wednesday, February 4, 2009
More problems for Personel in DC???
The White House's nominee for director of the CIA, Leon Panetta, has earned more than $700,000 in speaking and consulting fees since the beginning of 2008, with some of the payments coming from troubled banks and an investment firm that owns companies that do business with federal national security agencies. Panetta is set to appear before the Senate Intelligence Committee on Thursday about his nomination
from WSJ
posted by Peter Greene
from WSJ
posted by Peter Greene
An actual up day yesterday
The move on UPS and the others in that sector were impressive yesterday. As you know we have been bearish on this group for a few weeks and overall the ideas have panned out. Although HUBG & FWRD continue to hold in much better than FDX and UPS.
We are still bearish on the names (although from a trading point of view we would suggest shorting into strength - around 45.80ish on UPS with a tight stop) until a move outside the downtrend. (Expect the research houses to upgrade; always worth a nice bounce too...
The markets ended a three day slide with the pending home sales news; the feeling out on the street that some of the banks toxic assets will be guaranteed by the Obama spending plan may help to move financials up again just like last Wednesday. Although we expect a move higher in the market, the volume has not followed yet (we will need to remember to cover all shorts when this happens as the mass buying will, for a time, take all names higher).
We are still bearish on the names (although from a trading point of view we would suggest shorting into strength - around 45.80ish on UPS with a tight stop) until a move outside the downtrend. (Expect the research houses to upgrade; always worth a nice bounce too...
The markets ended a three day slide with the pending home sales news; the feeling out on the street that some of the banks toxic assets will be guaranteed by the Obama spending plan may help to move financials up again just like last Wednesday. Although we expect a move higher in the market, the volume has not followed yet (we will need to remember to cover all shorts when this happens as the mass buying will, for a time, take all names higher).
click on chart to view larger
posted by Peter Greene
Senate lacks votes on huge spending bill
POLITICS: [WASHINGTON POST] - 4-Feb-09 7:48 AM
Majority leaders concede they lack the votes to pass the stimulus bill as currently written, will try to trim $900B plan to gain GOP support. ...
posted by Peter Greene
Majority leaders concede they lack the votes to pass the stimulus bill as currently written, will try to trim $900B plan to gain GOP support. ...
posted by Peter Greene
Tuesday, February 3, 2009
Stock move higher on home sales news
The averages are moderately higher after the pending home sales report came in better than expected. It showed that U.S. home sales were stronger in the South and the Midwest. CNBC reported that the high end housing market has been ravaged by the stock sell off, showing that homes valued at $750,000 or more plunged by 47% in the year ending in November. But homes valued at $400,000 or less fell just 3% during that same time period. The housing sector is strong today with the housing ETF up more than 6.5%.
posted by Peter Greene
posted by Peter Greene
YO-YO markets
Yesterday's intraday swings are almost enough to drive even the most serious trader crazy. The trading levels we have been looking at (as you should know from Kevin Lane's pieces last week) are in the SPZ 825 to 850. The one day move last wed turned out to be the "head fake" we thought it was, also as yesterday’s market open to the down side may have been too. (See chart on page 3). The SPZ came down and flirted above MAJOR support at 805/808, all the black boxes, etc started buying ahead of that level. Guess what? We closed at 825.
This is a frustrating time for many investors and many of our newer institutional accounts too. They all want the answer to which way, up or do??? Answer is BOTH. Our more active accounts are enjoying the swings with shorter term ideas (some intra-day).
posted by Peter Greene
This is a frustrating time for many investors and many of our newer institutional accounts too. They all want the answer to which way, up or do??? Answer is BOTH. Our more active accounts are enjoying the swings with shorter term ideas (some intra-day).
posted by Peter Greene
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