- US Market Recap
- S&P 500 surged from a 12-year low after positive comments made by Citigroup CEO, Congressman Barney Frank and Fed Chairman Ben Bernanke:
- DOW up 379 points (+5.8%) to 6,926 (-21.1% YTD)
- S&P 500 up 43 points (+6.4%) to 720 (-20.3% YTD) – 735/780; 690
- NASDAQ up 90 points (+7.1%) to 1,358 (-13.9% YTD)
- All 10 sectors of S&P 500 posted gains of above 2%:
- Out-performers:
- Financials (+15.6%): JPMorgan Chase (+22.6%), Wells Fargo (+18.5%), Bank of
- Industrials (+8.5%): General Electric (+19.7%), United Technologies (+8.6%), UPS (+7.6%), 3M (+8.1%), Honeywell (+9.5%), Caterpillar (+10.8%)
- Info. Technology (+7.4%): Microsoft (+9.7%), Intel (+10.9%), Cisco Systems (+8.3%), Oracle (+9.5%), IBM (+4.5%), Apple (+6.7%), Google (+5.9%)
- Consumer Discretionary (+7.3%): Time Warner (+12.8%), Comcast – A (+8.8%), Home Depot (+6.5%), Disney (+6.5%), Amazon (+8.6%)
- Materials (+6.9%): Monsanto (+6.5%), Dow Chemical (+11.0%), Nucor (+15.8%)
- Policies:
- House Financial Services Committee Chairman Barney Frank and Senate Banking Committee Chairman Christopher Dodd support the reinstatement of the “up-tick rule” proposed by the SEC; the SEC eliminated the almost 70-year old provision after a study in 2007 determined it was no longer relevant in markets dominated by fast-paced electronic trading.
- During an address to the Council on Foreign Relations, Federal Reserve Chairman Ben Bernanke commented that the stress test for the 19 largest banks in the
- US Congress gave final approval to a USD410b spending bill that includes an overall 8% budget increase for some federal agencies.
- Others:
- Citigroup CEO Vikram Pandit said his bank is having the best quarter since 2007, when it last posted a profit; Citigroup shares rose +38% and helped spur gains for finance company stocks.
- Pandit’s upbeat remarks follow similar comments from Bank of America CEO, Ken Lewis, who said last month that Jan results were “encouraging”; Morgan Stanley CFO had also said last month that the firm had a “good start” in Jan; separately Goldman Sachs Group is showing strong trading profits in 2009.
- Sandler O’Neill & Partners analyst, Jeffery Harte, wrote in a research note “while we expected the firm to be profitable excluding provisions and markdowns on troubled assets, we did not anticipate a bottom-line profit. Our estimates remain unchanged, but for the first time in a long time our outlook may have an upward bias.”
- Economic data for the rest of the week:
- Jan wholesale inventory at -0.7%, vs. est. of -1.0%.
- 11 Mar (Wed): MBA weekly (Mar 7) mortgage application
- 12 Mar (Thu): Feb advance retail sales, weekly initial/continuing claims
- 13 Mar (Fri):
2) European Update
- Finmeccanica reported in line 2008 numbers and gave a conservative outlook for 2009.
- Commerzbank has begun to asses non-strategic assets acquired through its purchase of Dresdner Bank and may sell some of them.
- Hypo Real Estate needs another EUR 10bn by late April.
- AP Moeller Maersk is in talks with shipyards about delaying new container vessels.
- JC Decaux, the largest seller of outdoor advertising, said 2008 net fell 51%, hit by a slump in demand.
- M6 reports better FY 2008 number but gives no guidance for 2009. The dividend is cut by 15% to 85c.
- German Unions support establishing a foundation to take 25% in Schaeffler Group. (Continental)
- ABB sees consolidation in the global wind industry, says to remain strong supplier to the market.
- UBS adjusts 2008 results to include costs for tax settlement and valuation adjustments to a total loss of CHF 20.9bn.
- Schneider gave good feedback during a Road show in
- Daimler expects no division to be loss-making in 2009. Model pipeline and cost-cutting plan will provide major support.
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