MOST NOTEWORTHY: Comcast, Time Warner Cable, YRC Worldwide and Syniverse were today's noteworthy upgrades:
Soleil upgraded shares of Comcast (NASDAQ: CMCSA) and Time Warner Cable (NYSE: TWC) to Buy from Hold on improving fundamentals, as they believe the economic stimulus package should drive consumer demand in 2H08.
Stephens upgraded shares of YRC Worldwide (NASDAQ: YRCW) to Overweight from Underweight as they believe management is making meaningful changes.
Syniverse (NYSE: SVR) was raised to Overweight from Neutral at JP Morgan. The firm upgraded shares based on accelerating organic growth from consumer wireless data usage.
OTHER UPGRADES:
Deutsche Bank upgraded NYSE Euronext (NYSE: NYX) to Buy from Hold.
Confidence in the global economy improved for the the first time in five months in April 2008, a Bloomberg News survey of news / analytics subscribers to Bloomberg on five continents indicated Wednesday.
The Bloomberg Professional Global Confidence Index, which surveys 5,905 Bloomberg subscribers, rose to 14.5 in April 2008 from 13.1 in March 2008. The measure increased to 18.5 from 17.6 in the U.S. and to 11 from 7.5 in Asia. It declined in Western Europe. A reading below 50 indicates negative sentiment.
Economist Peter Dawson, who was not a part of the survey, told BloggingStocks Wednesday the April 2008 uptick is welcome news, but investors/traders should not become prematurely optimistic.
"Overall sentiment remains cautious and downbeat," Dawson said. "We are close to a recession in the U.S., with little signs of life in the housing sector or from the consumer to inspire confidence that recovery is just ahead, so you've got to place the higher April data in the proper context."
MOST NOTEWORTHY: The Brokers and Asset Managers sector, Pacific Sunwear and Metabasis Therapeutics were today's noteworthy upgrades:
Goldman upgraded the Brokers and Asset Management sector to Attractive from Neutral as they believe an inflection point has been reached for stocks with minimal credit exposure, or where exposure is marked to market. Goldman expects the problem to shift to regional banks and specialty finance from brokers. As such, Goldman upgraded American Express (NYSE: AXP), Metlife (NYSE: MET), Bank of New York Mellon (NYSE: BK), Franklin Resources (NYSE: BEN), Janus Capital (NYSE: JNS) and NYSE Euronext (NYSE: NYX) to Buy from Neutral.
Wachovia upgraded Pacific Sunwear (NASDAQ: PSUN) to Outperform from Market Perform based on valuation, merchandising improvements, operating efficiencies, favorable product mix, and reductions in underperforming categories.
Rodman & Renshaw raised Metabasis (NASDAQ: MBRX) to Outperform from Market Perform on valuation given the potential for MB07803.
OTHER UPGRADES:
HSBC raised Novartis (NYSE: NVS) to Neutral from Underweight.
UBS (NYSE: UBS) was upgraded at Morgan Stanley to Equal Weight from Underweight.
As investors await today's start of earnings season, they should remember that Wall Street's equity analysts blew it in the fourth quarter, overestimating profit by 33.5 percentage points, the biggest miss ever, according to Bloomberg News.
"Merrill Lynch & Co.(NYSE: MER), Bank of America Corp. (NYSE: BAC) and the rest of the securities industry aren't losing credibility because of anything sinister," the story says. "The problem is they didn't get their math right after credit markets froze nine months ago."
I am not terribly optimistic that analysts have improved much in the first quarter. Earnings estimates are probably still way too high. Many, many companies are going to miss their earnings estimates. This will erode Wall Street's credibility even further.
Richard Weiss of City National Bank told Bloomberg that first quarter results will be a "big wake-up" call for some analysts. Some may lose their six- and seven-figure jobs because of it.
The lesson here is for investors to do their own homework. Anyone who doesn't have the time or motivation to do it should either hire an adviser or buy index funds.
These days, you can't take Wall Street's word for anything.
MOST NOTEWORTHY: Cisco Systems, NYSE Euronext, Nasdaq and Cognicase were today's noteworthy initiations:
Friedman Billings believes Cisco Systems (NASDAQ: CSCO) is well-positioned to take advantage of "Business 2.0" applications and to gain share in a slower economic environment. The firm initiated shares with an Outperform rating and $31 target.
NYSE Euronext (NYSE: NYX) and Nasdaq (NASDAQ: NDAQ) were assumed with a Neutral rating and $72 target and $44 target, respectively, at UBS. The firm cited increasing competition and moderating volumes.
Deutsche Bank believes Cognicase (COGI) is one of the few carriers offering high-capacity commercial Internet access to enterprise customers at a discount to nearly all of its competitors. Shares were initiated with a Buy rating and $23 target.
OTHER INITIATIONS:
China Housing (OTCBB: CHLN) was initiated at Merriman with a Buy rating.
Goldman started Juniper (NASDAQ: JNPR) with a Market Perform rating and $27 target.
Suntrust initiated hhgregg (NYSE: HGG) with a Buy rating and $16 target.
The Dow Jones industrial average soared almost 400 points today as a plethora of good news soothed the frayed nerves of investors. This is the best start for stocks in the second quarter since 1938, according to Bloomberg.
For once, the economic data wasn't all that bad either. Data from the Institute of Supply Management showed manufacturing activity slowed in March at a slower rate than February and the government also reported better-than-expected construction data for February.
Over the last quarter $100 billion has left equity funds. The FT says that data from Emerging Portfolio Fund Research shows that "investors pulled $70bn from US, Japan and Western Europe funds during the quarter." Some of that money went into funds which invest in emerging markets and a great deal of it went into safe money market funds.
The data means that many mutual fund companies will post bad first quarter figures, but the news is much more serious than that. Such a large amount leaving these funds means that stocks are being sold to provide the capital for redemptions. The process sets up a bad cycle. Stocks are sold to provide money to go into other assets. The sale of stocks continues to push equity indexes down. This leads to more withdrawals.
The only positive aspect to the news is that there is now hundreds of billions of dollars in money market funds, most of it very liquid. If the markets do begin to recover due to better news on earnings or a perceived end to problems in the financial sector, there is a great deal of "dry powder" to be put back in the market. That could further accelerate a market recovery.
But, if withdrawals from equity funds continues, that could be a long way off.
Douglas A. McIntyre is an editor at 247wallst.com.
Some Wall Street analysts believe that most write-offs for subprime mortgages, LBO loans, and other credit paper are behind the big banks and brokerages. Goldman Sachs (NYSE:GS) analysts think otherwise.
According toBloomberg: "Wall Street banks, brokerages and hedge funds may report $460 billion in credit losses from the collapse of the subprime mortgage market, or almost four times the amount already disclosed."
If the analysis is true, it will cause two huge problems in the financial markets. The first is that banks and brokerages will probably have to raise more money. This capital may be hard to come by. Sovereign funds and private equity firms appear to have lost their appetites for investing in US financial companies while their stocks keep dropping. That leaves the Fed to provide more capital, which will have to come from someplace. That someplace is the tax base especially individual taxpayers.
The other byproduct of more losses is that banks will cut lending to customers even further instead of risking capital on consumer credit, auto loans, mortgages, and small business loans.
In other words, borrowing a dollar for a cup of coffee may be out of the question.
Douglas A. McIntyre is an editor at 247wallst.com.
The Bear Stearns (NYSE: BSC) deal happened fast, almost overnight. Some analysts think buyer JP Morgan (NYSE: JPM) got a great deal because the Fed is backing almost $30 billion of Bear Stearns asset values. Within days of an announcement of the buyout, the big bank had 39.5% of BSC shares, a lien on its headquarters, and a very firm deal at $10 a share.
According toThe Wall Street Journal: "Indeed, it's possible a Delaware court could find these features coercive, and depriving shareholders of a true vote." It is true that Bear's shareholders did not have much time to consider the idea. The Fed and JP Morgan would argue that there was not time. The brokerage was about to go under.
As is true with most visible deals that involve shareholder rights and employment, Congress may decide that it wants to look at the transaction, as if it did not have better things to do.
The perverse argument here is that shareholder rights trump the company's survival. It leads to a conclusion that the holders of Bear Stearns stock should have been able to accept or reject the JP Morgan bid, even if it caused Bear Stearns to go under. In essence, shareholders have the right to lose all of their money, if they wish.
Douglas A. McIntyre is an editor at 247wallst.com.
It has happened before. The cuts were especially deep after the market crash in 1987. New York City now believes that Wall St. will cut 20,000 jobs over the next two years. The number seems too small.
Accoding toReuters: "The city's Independent Budget Office, in its report, estimated that Wall Street's profits for 2007 will sink by more than 80 percent to the lowest level since 1994." Financial firms account for almost 35% of all income in NYC.
While this would seem to be a local problem, that is not entirely true. Companies that sell luxury items from Tiffany (NYSE:TIF) to BMW will take some hit from falling employment among workers at big banks and brokerages.
Just as important, all of these people pay a hefty federal income tax. As unemployment grows the government will see receipts from the IRS fall. The more of the rich who move off the payrolls, the more difficult it will be to cut the Federal deficit and fund agencies like the Fed.
Douglas A. McIntyre is an editor at 247wallst.com.
The New York Times reports that the New York economy is more dependent on Wall Street than ever. For every Wall Street employee, there are three jobs created to "support" that person. These support jobs are related to the multimillion dollar real estate Wall Street sleeps in and the lunches and dinners they get delivered to their desks.
And New York is more dependent on Wall Street than ever. The Times reports that In New York and surrounding counties, for example, financial workers accounted for 29% of all money earned and only 11% of jobs in 2006. That is up significantly from 1990, when the finance industry accounted for 19% of wages and 12% of jobs.
The troubles in the financial markets have led to 20,000 layoffs -- a reduction of over 10% from the nearly 200,000 Wall Street employees before the bust began. Most of The Bear Stearns Companies (NYSE: BSC) 14,000 jobs are expected to go. And The Goldman Sachs Group (NYSE: GS) -- which has already cut 5% of its jobs -- was rumored by the New York Post to be cutting 20% of its employees.
Why should you care? When Wall Street sneezes, America gets pneumonia.
Today the market is closed for Good Friday. Maybe the market can use the day off.
The market is bipolar. Rising from stratospheric highs to crushing lows at the flick of a switch. Mind you, sometimes it takes a big event to turn the market on and off and sometimes it doesn't take much of anything. That's what makes the market so maddening to follow.
Bloomberg News argues that the market's reaction indicates that Federal Reserve Chairman Ben Bernanke's strategy of aggressive interest rate cuts is working since commodity prices had a huge sell-of this week.
"The Standard & Poor's 500 Index posted its first weekly gain in a month, and the dollar leapt from its lowest level since 1973 after the Fed stepped in March 16 to rescue Bear Stearns Cos. (NYSE: BSC), the fifth-largest U.S. securities firm, and expanded its role as lender of last resort to embrace the biggest dealers in Treasury notes," the news service reported. "The Reuters/Jefferies CRB Index of 19 commodities tumbled 8.3 percent this week, the most since at least 1956, after touching a record on Feb. 29."
But any rejoicing may be premature. Consumer confidence remains shaky amid continued worries about the real estate market. Applications for unemployment benefits soared to their highest level in nearly two months, according to theAssociated Press. In short, there is plenty to worry about.
The trick for investors is not to panic and do anything rash. Markets aren't volatile forever and do eventually sort themselves out. Getting to that point may cause quite a lot of pain in the meantime.
I'm glad all these "blue chip stocks" are blowing up. No, I don't enjoy seeing investors suffer, but as I've written about here, here and here, investors need to learn not trust any company or anybody in this business. Investors don't even have to remain invested all the time! Contrary to the advice of fee-earnings-professionals, the majority of whom continually fail to match the S&P 500's returns, you don't have to manage your money like a $500 million mutual fund. Diversification is for widows and orphans!
While it'll probably take me a few years to truly get through to all of you, if you've been invested for any length of time in any company listed below-considering what you've been through-you're probably more likely to believe me:
The glow is coming off yesterday's huge Fed rate cut. Just as I expected, the market gave back much of yesterday's huge gains.
Investors sent the Dow Jones industrial average down 293 points, or 2.36%, to 12,099.66, while the Nasdaq Composite Index fell 58.30, or 2.57%, to 2,209.66 and the S&P 500 tumbled 32.32, or 2.43%, to 1298.42. Market watchers, who were jubilant yesterday, were downright depressed today.
"This whole market is driven by fear right now,'' James Gaul, a portfolio manager at Boston Advisors LLC told Bloomberg News. "Investors are thinking more and more this will be a long and drawn out recession, and that pulls down commodity prices and energy prices.''
"Clearly there is fear. I would say the needle is pointing more toward fear than greed right now," said George Shipp, chief investment officer at Scott & Stringfellow, in an interview with the Associated Press.
O.K, we get the picture. People are scared. Fear rules the day.
That's the case for now, but the funny thing is this fear will not last. The slightest good news will send the market skyward yet again.
You can get whiplash watching this market rise and fall.
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As investors await today's start of earnings season, they should remember that Wall Street's equity analysts blew it in the fourth quarter, overestimating profit by 33.5 percentage points, the biggest miss ever, according to 
The Dow Jones industrial average soared almost 400 points today as a plethora of 
Over the last quarter $100 billion has left equity funds. The FT 
Some Wall Street analysts believe that most write-offs for subprime mortgages, LBO loans, and other credit paper are behind the big banks and brokerages. 
The 
Today the market is closed for Good Friday. Maybe the market can use the day off.
I'm glad all these "blue chip stocks" are blowing up. No, I don't enjoy seeing investors suffer, but as I've written about 
The glow is coming off yesterday's huge Fed rate cut. Just as I expected, the market gave back much of yesterday's huge gains.
Just how high will U.S. gasoline prices rise?
Nordstrom and Kohl's post smaller-than-expected Q1 profit declines
Oil hits record $127.43 on supply concerns, raised Goldman forecast
