Tuesday, June 19, 2007

Morning Market Comment

It's more of the same on the housing front. The latest housing data shows continued distress: Economic Report: Housing starts fall 2.1% to 1.47 million pace. The overall numbers were a bit better than expected, which is largely a reflection of a pickup in multi-family dwellings construction. Activity is near dead, especially relative to activity in '05 and even '06, in the realm of single family homes.

10 year treasury up a few ticks, yiled at 5.119%. This is probably the most distressing news of the morning: China Daily: China sells more US T-bonds.

Stock futures are in a bit of a funk this morning in reaction to weak earnings.

Electronics retailing giant Best Buy (BBY) posted earnings: Best Buy quarterly profit falls, and it wasn't a Don Adams, "missed it by that much..." BBY missed estimates by 11c. So much for the analyst at Jeffries who yesterday said that expectations have come down enough that there could be a positive share reaction after earnings - same for Pacific Crest which said worst case was factored in. BBY is down 4%.

Circuit City will post earnings earnings on Wednesday. Kaufman says the below consensus idea for CC could be "conservative" and that we could see a miss on the order of 16c a share in CC's earnings.

Carnival (CCL) is down about 2%. Earnings beat by a penny at 48c/shr, but lowered full year guidance to EPS of $2.85-$2.95 vs. consensus of $3.00.

A latebreaker of deal: Home Depot in $10 bln deal to sell unit--sources

Yahoo! (YHOO) was up over $2 after hours last night on word of the Semel ouster from his post as CEO. With Jerry Yang, co-founder, now in the direct driver seat some analysts are thinking that there's less of a chance of a merger. An analyst Nollenberger thinks had there been a chance of a deal with a company like Newscorp (NWS), Microsoft (MSFT), or Time Warner (TWX) Semel would have stayed on. Goldman Sachs also says near term sale of the company is not likely. Jeffries the odd man out saying Yang ceo-ship means higher chance of deal.

Is Burkle about to surprise us? Dark horse in the Dow Jones fight. Burkle said to be trying to get Yahoo! to help him bid for Dow Jones (DJ).

Over the weekend, there was speculation BHP would make a bid for Alcoa (AA). Now the speculation has shifted back to Alcan (AL) which is presently a target of AA: BHP Billiton to explore bid for Alcan.

Is Blackston the Last Hope for the Bear Stearns Subprime Fund?

LodgeNet (LNET) Guides FY Revs Above Wall Street View.

Crude down 16-cents.

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