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Posted
Jun 26 2008, 01:18 AM
by
Jon Markman
Rating:
It’s easy to imagine that the 25 best-performing stocks in the S&P 500 Index this year are all oil and gas producers, and the 25 worst-performing stocks are all banks and brokers. Yet as we near the halfway mark in 2008, it turns out that there are quite a few surprises in the mix of best and worst.
For instance, the No. 1 stock in the benchmark index this year isn’t an oil producer, but a coal miner, Massey Energy. It’s up 155% so far, rising to $89 from $35 as coal prices have soared in the wake of booming demand in China and India. The No. 2 stock is actually a discount retailer, Big Lots. It’s up 100%, from $15 to $30, as investors speculate it will get a big share of tax-rebate money from low-income Americans.
Most of the rest of the next best 15 gainers
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Posted
Apr 25 2008, 01:46 AM
by
Jon Markman
Rating:
Every frat house manager knows that if you want to end a party, you take away the keg. And that’s pretty much all you need to know about why the stock market is so sluggish this year.
The banks have sharply cut back on the credit they’ve allocated to hedge funds, making less money available to purchase stocks and bonds of all stripes. Less borrowing = less buying power. It's pretty simple.
The latest evidence of this action has come from reporters at the Financial Times, who say they’ve discovered that the most leveraged funds are now borrowing no more than five times their asset base -- down from at least 10 times their base six months ago. That means a $100 million hedge fund that was buying up to $1 billion worth of stocks a year ago now can only buy less than $500 million worth. That's a big difference.
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Posted
Apr 21 2008, 01:25 AM
by
Jon Markman
Rating:
Last week’s stunning 5% advance in the stock market is likely to have one consequence that credit-starved sensitive businesses won’t like: It has eroded the likelihood of further cuts in interest rates by the Federal Reserve when its Open Market Committee meets next week.
Despite a rise in joblessness, decline in housing activity and spate of bankruptcies, the futures markets and even dovish Fed governors are now expecting the central bank to stand pat for the first time in six months.
This is something of a shocker when you consider that the odds of a cut of a half percentage point were extremely high just two weeks ago. Now traders who bet on the likelihood of cuts don’t even consider it likely that the Fed will cut by a quarter of a percentage point. If the economy really is on solid ground now, just because stocks are up, it sure will be a surprise to businesses who are seeing more dramatic sales and profit declines than they can recall in years. We’ll learn more on Tuesday and Thursday mornings when existing and new-home sales data is released, and on Thursday afternoon when continuing jobless claims for April are released, but already the news from corporate America is grim.
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Posted
Mar 25 2008, 03:58 PM
by
Charley Blaine
Rating:
Al Copeland died on Sunday. You might not know the name. In Louisiana and certainly around New Orleans, he was about as well known as anybody both for the chicken you can get at Popeyes Famous Fried Chicken, the chain he started, and for his lavish, complicated and exuberant lifestyle.
He liked getting married. But all four of his marriages ended in divorce -- often acrimoniously. He liked Christmas. His house along Lake Pontchartrain in Kenner, La., was so lit up with lights at the holidays that airline pilots would use it to line up their approaches to the airport.
He liked fast cars and fast boats. He carried on a fun feud over the decor of one of his restaurants with no less than Anne Rice, the author of "Interview with the Vampire."
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Posted
Jan 18 2008, 01:09 AM
by
Jon Markman
Rating:
If you’re wondering why the sovereign wealth fund of Singapore has invested $15 billion in faltering U.S. and European banks in the past two months, you’re not alone. Politicians in Singapore are apparently puzzled, too.
The Singapore Parliament is scheduled to open its first session of the new year at 1:30 p.m. on Jan. 21, and according to a document that I obtained today, the very first question from a parliament member to the government will focus on this issue.
The “order paper” says member Inderjit Singh will ask the minister of finance: “A) What is the rationale for the billion-dollar investments by GIC and Temasek Holdings in distressed banks like UBS and Merrill Lynch; (b) whether it was too early to make such investments especially since the full effect of the sub-prime crisis has yet to be quantified; and (c) whether he can assure the House that Singapore will not lose the money pumped into these two banks or its standing internationally.
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Posted
Oct 08 2007, 11:38 AM
by
Matt Koppenheffer
Rating:
In the ongoing fessing-up process on Wall Street, Bank of America and JPMorgan are expected to join the parade of firms disclosing write-downs on mortgage and leveraged loans. At an estimated $2 billion-plus for JPMorgan and $1 billion for Bank of America, the losses are certainly not insignificant. However, for a $230 billion company like Bank of America the losses are relatively small, particularly when we look at some of the other firms that have been reporting.
I am still stuck on the losses reported at Merrill Lynch. Well in excess of $5 billion, these losses are quite significant for a $64 billion company. As I mentioned previously, the market seemed to digest these huge losses in part because it had been preparing itself for them for a while now.
Could losses like these really come out of the blue for Merrill? Well, the market didn't seem to doubt they were on the way -- Merrill's stock price dropped 19% between the firm's second quarter earnings release and early August despite the fact that Merrill beat analysts' second quarter earnings estimates. So how was Merrill itself out of the loop here?
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