Daily Highlights: 10.7.09

• Asian stocks gain on commodity prices; Newcrest advances on record gold prices.
• ECB little reason to raise rates over next 12 months because of a muted inflation outlook: IMF.
• Fed should increase interest rates 'sooner rather than later,' Hoenig says.
• Gold hits record $1,045 on report suggesting the end of dollar-based oil trading.
• Gold jumps to record $1,038 an ounce as outlook for inflation fuels demand.
• JP Morgan says US may take until 2013 to recover jobs lost in recession.
• Nationwide, effective office rents fell 8.5% in Q3 - steepest YoY decline since 1995.
• 3M Co. will spend about $1B on acquisitions within the next 12 months: CEO.
• Allegheny Energy to sell its fiber optic network assets to NTELOS for $27M.
• Amazon.com trimmed $40 off the price of its Kindle e-reader.
• Boeing announces another delay to its 747-8 freighter, to take a $1B charge in Q3.
• Costco 4Q profit falls 6%, but Sept. sales rise
• Delphi emerges from 4-yr bankruptcy; most of the US automotive assets goes to GM.
• Emerson Electric acquires IT company Avocent Corp. for $1.2B cash.
• ExxonMobil buys Kosmos Energy's stake in oil blocks offshore Ghana; deal at $3-4B.
• Fannie, Freddie to aid mortgage banks to acquire short-term credit for lending purposes.
• GM says talks to sell its Hummer brand to China's Tengzhong are 'on track'.
• In reversal, AT&T will allow Skype, similar services on iPhone network.
• Ivanhoe Mines, Rio Tinto to develop $4B Oyu Tolgoi copper-gold project in Mongolia.
• Julius Baer to buy ING Groep NV's Swiss private bank unit for $506M.
• Marshall & Ilsley sees slide in bad loans; but posts Q3 losses wider than est.
• Pepsi Bottling Group's Q3 net rises 9.9% to $254M, helped by lower commodity costs.
• Santander's Brazilian unit seeks $8B in record IPO to fund growth.
• St. Jude Medical sees Q3 EPS at $0.57-0.58 vs. prev view of $0.61-0.63.
• Starwood Capital, TPG to buy real estate assets of Corus Bankshares Inc. for $554.4M.
• Sunoco Inc. to cut its quarterly dividend in half; idles its refinery in New Jersey.
• Tesco Plc's H1 net rises 1.3% to £1.03B; revs up 9.2% at £27.78B.
• Verisk Analytics, owned by Travelers Cos. & CNA Fincl Corp., raises $1.88B via IPO.
• YUM! Brands beats by $0.12, posts Q3 EPS of $0.70. Revs fell 2.3% to $2.78B.

Economic Calendar: Data on Crude Inventories, Consumer Credit to be released today.

Earnings Calendar: AA, AYI, COST, FDO, HELE, MON, PRXI, RT, WWW.

Recent Egan-Jones Rating Actions:
FREEPORT-MCMORAN COPPER (FCX)
NEWMONT MINING CORP (NEM)
BARRICK GOLD CORP (ABX)
RPM INTERNATIONAL INC (RPM)
HARTFORD FINANCIAL SERVICES (HIG)
MOSAIC CO/THE (MOS)
EMERSON ELECTRIC CO (EMR)
CIT GROUP INC (CIT)
DARDEN RESTAURANTS INC (DRI)
REGIONS FINANCIAL CORP (RF)
PNC FINANCIAL SERVICES GROUP INC (PNC)
ENERGY FUTURE HOLDINGS CORP (TXU)
BROCADE COMMUNICATIONS (BRCD)

Data provided by Egan-Jones Ratings and Analytics

Comments

[AR]

Regarding Bank of America (an update):  Last week, we opined the following regarding Ken Lewis' replacement. Brian Moynihan remains the board's first choice (nothing has changed, see below):

by AR   /  on Wed, 09/30/2009 - 18:52

Ken will be replaced by Brian Moynihan. That is what we are being told. Brian is known inside bank as "the fixer." Brian was also deeply involved in the all the negotiations with the government (read between the lines). Liam McGee (now CEO at Hartford) and Brian did not get along (again, read between the lines). Franchise and brand remains intact and strong, while the depth of their executive team (top 20-30 members) moves the bank forward.

WSJ Link:               http://www.google.com/imgres?imgurl=http://s.wsj.net/public/resources/images/MI-AW042_BOFA_c_G_20090407154753.jpg&imgrefurl=http://online.wsj.com/article/SB123915958168600121.html&h=369&w=553&sz=68&tbnid=3WQqDdE_yuPttM:&tbnh=89&tbnw=133&prev=/images%3Fq%3DBrian%2BMoynihan&hl=en&usg=__v_XOjDNMH2AY3xfRNmujaegsgU4=&ei=2d_DSsOXIojK8Qa3o-XfCQ&sa=X&oi=image_result&resnum=4&ct=image

[Project Mayhem]

I think if gold can close above $1033 for several days in a row that will confirm the breakout.

Perhaps the oil story was true after all... looking forward to see how this plays out over the next three weeks...

[Hephasteus]

I think the English citizens are getting really nervous and gobbling up more of the stuff.

[lettuce]

this could be true as well.... someone's getting nervous. the correlation between gold/USD isn't as tight as a lot of people think. that's definitely the underlying factor but the "momo" or "emo" factors are very high too... and then of course the "gold manipulators" (whatever the heck that means)

[blackebitda]

this advance in gold smells fishy. the manipulators are trying too hard, at least makes for a good probe to gauge market reaction. 

[lettuce]

what is your justification?

[Cognitive Dissonance]

I'm a believer in the long term ultimate value of Gold. But with most (United States) asset classes correlated to the dollar and everyone leaning on the side of further weakness in the dollar, my short term bet is a stronger dollar and thus weaker Gold, oil and stocks.

But that's just me.

[lettuce]

agree

[deadhead]

fed keeps sending out the team (i think hoenig was yesterday) doing a little jawboning for the dollar re: "careful, we could raise rates anytime, even though we have said they will stay low forever".

they're walking a tightrope on ole' bucky.  if there is one problem on selling confetti paper, they'll squeeze out the dollar shorts.