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Posted
Mar 10 2008, 04:30 PM
by
Douglas McIntyre
Rating:
Money Blog: Top Stocks Blog - MSN Money
The first quarter should be another brutal right of passage for big investment banks. Citigroup is forecasting that they will have to write-down another $9 billion in Q1. According to Reuters the damage will be "primarily driven by additional leveraged loan and mortgage-related losses."
Among the hardest hit firms will be Goldman Sachs which is facing as much as a $3.2 billion write-off, Merrill Lynch, which may post $2.9 billion in write-downs, and Morgan Stanley where the figure could be as high as $1.2 billion.
If the numbers are correct, it may open the door for another round of raising funds for the brokerages. Now that most of them have called on sovereign banks overseas, it will be essential that U.S. private equity firms or Treasury help them out of the mounting mess.
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Posted
Apr 14 2008, 02:58 PM
by
Douglas McIntyre
Rating:
Money Blog: Top Stocks Blog - MSN Money
Early indications from companies like Wachovia and General Electric show that the last half of March may have been tougher on bank earnings than Wall Street expects. Bloomberg recently reported that Citigroup, JP Morgan, and Wells Fargo could all miss consensus estimates. But by how much?
A look at the spread of Q1 estimates gives some hint about how far off actual numbers could be compared with investor expectations. At Citigroup, among 15 analysts polled by First Call the average EPS estimate is a loss of $.95. But, the lowest estimate is a loss of $2.24. At JP Morgan, the average figure from fourteen analysts is $.66, but the worst case is a loss of $.11. For Wells Fargo, twenty-three analysts have an average forecast of Q1 EPS at $.57, but the low number is $.45.
The huge discrepancy among the numbers should be troubling to shareholders because recent information would argue that share prices for most banks and brokerages may still be way too high.
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Posted
Jun 02 2008, 04:32 PM
by
Andrew Horowitz
Rating:
Money Blog: Top Stocks Blog - MSN Money
What took them so long? S&P finally trimmed their outlook on Lehman
Brothers Corp and other key financials today. It has become clear that the problems facing the financial sector is far from over. Financial stocks and the markets in general were hit hard as investors were spooked after S&P announced that
they would be lowering ratings and their outlook on these companies. Is this any surprise to anyone? So now, the long term ratings on these three went from A+ to A and the short term rating went to
A-1. The concerns seem to be focussing in on residential mortgage
loans and residential construction slow downs. Timely, hey? According to the S&P release shown below, “The downgrade primarily
reflects our concern that the pace and extent of earnings improvement
could be considerably more muted than we previously assumed.” And "muted" is codeword for....?
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Posted
Jun 12 2008, 02:04 AM
by
Jon Markman
Rating:
Money Blog: Top Stocks Blog - MSN Money
As we watch the brokerage industry trip and crash this year over its mistakes in the mortgage business, it’s nice to know that it still has a sense of humor. How else to explain the decision by industry heavyweight Invesco to launch an exchange-traded fund focused on the countries in North Africa and the Middle East -- and name it the Frontier Countries Portfolio?
I really don’t consider Kuwait, the United Emirates, Lebanon, Morocco and Egypt to be the frontier of anything except, possibly, some marketing guy’s imagination. Do they really have cowboys and cactus in Beirut these days?
After a little digging, I did discover that “frontier countries” really is a new industry euphemism for a bunch of little countries with investable public stock markets but thin regulatory, reporting and transparency standards. I suppose you could make a lot of money
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Posted
Jun 13 2008, 03:29 PM
by
Andrew Horowitz
Rating:
Money Blog: Top Stocks Blog - MSN Money
There are only a few sectors that may be considered healthy in an otherwise sickly market these days. Energy is one sector that has investors smiling. While there is still a great deal of ongoing investigation being done into the potential manipulation of energy prices by speculators, shares of most companies within the oil sector have been continuing to climb as the higher level of oil prices will ultimately help their profits. Surely there will come a time when prices are high enough to push corrective legislation along with a hope for a fundamental change in America’s ideals concerning oil consumption.
Technology has also been somewhat immune from much of the horror that we have seen in many of the market sectors and this week ‘s earnings starts with a longtime industry leader, Adobe. (Listen to The Disciplined Investor Podcast #61 as we will be discussing technology with guests John C. Dvorak and Leo Laporte) Here's a look at upcoming earnings and economic factors that could drive the markets next week
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Posted
Jun 18 2008, 11:19 PM
by
Matt Koppenheffer
Rating:
Money Blog: Top Stocks Blog - MSN Money
With the exception of that crafty Goldman Sachs, I've come to expect lousy results from the investment banks. Leveraged loans along with housing related debt and structured products on the books are getting slapped around while investment banking results have been hurting due to a huge drop-off in capital raising.
Even with the expectation of a lackluster report from Morgan Stanley, though, the results were still startlingly bad. Revenue was down around 40% and net income dropped 57% -- despite $1.4 billion in pretax gains from the sale of its Spanish money management business and a secondary offering for MSCI.
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Posted
Jun 26 2008, 01:18 AM
by
Jon Markman
Rating:
Money Blog: Top Stocks Blog - MSN Money
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
Jul 16 2008, 05:35 AM
by
Douglas McIntyre
Money Blog: Top Stocks Blog - MSN Money
Newly-minted legend says that short-selling put Bear Stearns out of business and has swamped the stock prices of Lehman , Fannie Mae , and Freddie Mac. To keep evil from further invading the stock markets, short-selling should be put to sleep.
According to The Wall Street Journal, "In a dramatic emergency order, the SEC said it would immediately move to curb improper short selling in the stocks of struggling mortgage giants Fannie Mae and Freddie Mac, as well as those of 17 financial firms, including Goldman Sachs Group, Lehman Brothers Holdings, Morgan Stanley and Merrill Lynch."
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Posted
Aug 18 2008, 06:57 PM
by
Matt Koppenheffer
Rating:
Money Blog: Top Stocks Blog - MSN Money
We've seen a lot of wild things in the stock market over the past few years. Homebuilders have completely crashed and burned, banks and other financial companies are treading water at best, retail stocks have been punished, and the dollar has been in freefall. And all this while commodities from gold to wheat to oil have been skyrocketing.
But it may get just a bit wilder now that whole scenario has been flipped on its head. Financials have had fitful rallies, the dollar is showing some definite life, and oil has been sliding. While this could lead to a number of different outcomes, on The Motley Fool's CAPS service CAPS blogger RVAspeculator thinks that this turn of events is delivering a sucker punch to some hedge funds and Wall Street trading desks.
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Posted
Sep 19 2008, 08:45 AM
by
Minyanville
Rating:
Money Blog: Top Stocks Blog - MSN Money
The government stepped up the plate -- and Wall Street roared. It's fascinating that the stock market made a 500-point intra-day reversal just as everyone agreed it would get worse before it got better.
Of course, anxiety is still the order of the day, but everyone feels much better. The game plan is still on the drawing board, and there's a chance that things could get bogged down, since there are two proposals, each based on past bailouts:
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