Thursday, October 22, 2009

Thursday Morning

US stocks are pretty flat a half hour into trading. Jobless claims were slightly worse than expected, at 531k versus the 515k consensus. Earnings are generally coming in ahead of estimates, but after big gains it's taking pretty impressive out performance to drive shares higher. 3M, McDonald's, Travelers and AT&T are the standout gainers in the DJIA, thanks to better than expected earnings. Caterpillar (CAT) is off 2.5% -->> investors displeased with the choice for CEO?


JCrew (JCG) increased earnings guidance significantly for the upcoming 3rd and 4th quarters. While sales are better than anticipated, gross margins will be much higher than in the previous year. JCG is taking 3rd quarter EPS from 31cents to about 57cents, and shares are reacting well, +11%.

China claims its economy grew at 8.9% in the 3rd quarter, but stocks are down today as people worry that the government will pull back the reigns on the giant stimulus propping up multiple asset classes.
The dollar headed higher and Asian stocks dropped on concern that the acceleration in China’s growth will spur policy makers to consider withdrawing record fiscal and monetary stimulus in coming quarters. Qin Xiao, chairman ofChina Merchants Bank Co., this week said it’s “urgent” for the central bank to tighten policy to avert asset-price bubbles.

NYTimes discussing the environment facing SPACs (Special Purpose Acquisition Companies), or what they call "poor man's private equity."
The reason why SPACs are back in the news is that they are on a literal death march. A typical SPAC must complete its acquisition within 18 months to 2 years, and so the last remaining survivors of the 2007 crop are fighting to stay alive

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