Friday, March 16, 2007

Morning Market Comment

There is subprime nirvana, at least for Accredited (LEND) and Fremont (FMT)...

Accredited Home Lenders is selling $2.7 Billion of Loans. The loans are being sold at what is being called a discount, but being sold and the stock is surging.

Fremont General (FMT) is also surging. Real estate lender Corus says it now owns 2.5 mln shares of FMT at a cost basis of $12.73. They still have a ways to go to get that investment above water, but at this rate - you never know. FMT has been the subject of merger speculation in recent days and has again delayed filing its 10k.

The subprime mirth combined with core consumer prices up .2% and in line with expectations has taken stock futures off the lows of the morning. In the backdrop, however, Yen stength - up about 60 points. A strong Yen has recently been a stumbling block for the Wall Street bulls. OEX put open interest has been pared down considerably this week, so expiration itself isn't likely to be much of an issue for the market.

Most economists surveyed by the Wall Street Journal still think the economy will avoid a recession Most won't predict it until it happens IMO.

A few analysts comments of note...

  • Matrix downgraded Prepaid (PPD) from Strong Buy to Buy after it recent runup

  • Merrill upgraded Schering Plough (SGP) to Buy from Neutral.

  • Time Warner initiated with a Buy at UBS, target $25.

  • Goldman Sachs has removed McDonald's (MCD) from its Conviction Buy List, but added Starbucks (SBUX) to the list.

  • Goldman has added Federated Investors (FII) to its Conviction Buy List; and removed AllianceBernstein (AB) from the Americas Conviction Buy List.

  • KBW has upgraded Downey Financial (DSL) to Outperform and Countrywide (CFC) to Market Perform

  • CBOT Holdings (BOT) downgraded to Hold at DBAB, target at $195, expects new CME bid not to be above $195 following hositle offer from ICE

I'm long gold futures again. I like that gold has held at key trendline support among many other reasons detailed in this blog. Also interesting to note that even with a 51 point rise in the Yen today, gold is galloping higher.

And, because of overseas demand (read, China), does it appear copper has put in a bottom again?

No comments: