Seeking Alpha
06-17-2008, 08:30 AM
<a href="http://seekingalpha.com/tag/wall-street-breakfast"><img src='http://seekingalpha.com/wp-content/seekingalpha/images/SACoffeeCup80.jpg' align="right" hspace="1" vspace="1" alt='' width="80" height="66" border='0' /></a>
<ul>
<li><strong><a href="http://usda.mannlib.cornell.edu/usda/current/CropProg/CropProg-06-16-2008.txt">Crop losses widen.</a></strong> The USDA released its weekly Crop Progress report: 9% of the corn is in excellent condition (vs. 10% last week), 48% good (vs. 50%), 31% fair (unchanged), 9% poor (vs. 7%), and 3% very poor (vs. 2%). Total corn in excellent-to-good condition is <strong>57%,</strong> vs. 60% last week and 70% last year. <strong>95%</strong> of corn has emerged, vs. 100% last year and a five-year average of 98%. Soybeans emerged is <strong>71%,</strong> vs. 90% last year and a five-year average of 86%. This year's crop rating is the <strong><a href="http://www.bloomberg.com/apps/news?pid=20601087&sid=awjua1SrpMN0&refer=home">lowest since 1996</a></strong>.<!--more--></li>
<li><strong><a href="http://uk.reuters.com/article/marketsNewsUS/idUKBNG23250220080616">Rotten outlook sinks Chiquita.</a></strong> Food companies were slammed today after Chiquita (CQB) predicted a significant Q3 loss on higher fuel and fertilizer costs. <a href="http://seekingalpha.com/symbol/CQB">CQB</a> -29.1%. <a href="http://seekingalpha.com/symbol/FDP">FDP</a> -13.7%. <a href="http://seekingalpha.com/symbol/PPC">PPC</a> -10.1%. <a href="http://seekingalpha.com/symbol/SFD">SFD</a> -4.35%. <a href="http://seekingalpha.com/symbol/SAFM">SAFM</a> -4.7%. <a href="http://seekingalpha.com/symbol/TSN">TSN</a> -1.1%.</li>
<li><strong><a href="http://online.wsj.com/article/SB121366576283479551.html">Food could cost 7-9% more next year.</a></strong> Economists say heavy Midwest flooding may cause U.S. food prices to climb 7-9% in 2009. "The U.S. consumer has gotten used to cheap, affordable food," food-industry analyst Fiona Boal says. "Now the goal posts are moving."</li>
<div style="width:340px; margin:20px auto; border:1px solid #C8C8C8; background-color:#F3F3F3; padding:1em; text-align:center;">After you finish reading Wall Street Breakfast<a style="display:block; margin:6px 0px; font-weight:700;" href="http://seekingalpha.com/">Seeking Alpha's Market Currents</a>will keep you current all day long.</div>
<li><strong><a href="http://www.reuters.com/article/bondsNews/idUSN1625979720080616">Junk and junkier.</a></strong> Junk bond defaults hit a 31-month high of 1.45% in May, up from 1.29% in April. U.S. junk fared worse - 1.89% up from 1.64%. 16 of 33 global corporate debt defaults this year, totalling $38.3B (up from $8.1B in all of 2007!), are from consumer-related sectors such as retail, restaurants, leisure and media.</li>
<li><strong><a href="http://www.nytimes.com/2008/06/17/washington/17trade.html">Trade-talks $14B prelude.</a></strong> Leading businesses in China and the U.S., including <a href="http://seekingalpha.com/symbol/GM">GM</a>, <a href="http://seekingalpha.com/symbol/F">F</a>, <a href="http://seekingalpha.com/symbol/ORCL">ORCL</a>, <a href="http://seekingalpha.com/symbol/IBM">IBM</a>, <a href="http://seekingalpha.com/symbol/mot">MOT</a>, <a href="http://seekingalpha.com/symbol/java">JAVA</a>, <a href="http://seekingalpha.com/symbol/txn">TXN</a> and <a href="http://seekingalpha.com/symbol/QCOM">QCOM</a>, announced $14B in new business deals on Monday -- a precursor to a likely bilateral investment treaty.</li>
<li><strong><a href="http://www.google.com/translate?u=http%3A%2F%2Fwww.standaard.be%2FArtike l%2FDetail.aspx%3FartikelId%3DHV1T3P79%26kanaalid% 3D41&hl=en&ie=UTF8&sl=nl&tl=en">Buffett backs InBev.</a></strong> Sources say Warren Buffett, whose Berkshire Hathaway (BRK.A) owns a 5%+ stake in Anheuser-Busch (BUD), supports InBev's $65/share bid for the brewer.</li>
<li><strong><a href="http://www.bloomberg.com/apps/news?pid=20601087&sid=afDx.oZqJM4U&refer=home">Daimler launches another big buyback.</a></strong> Daimler (DAI) said it will buy back up to €6B of its shares, reducing shares outstanding by 10%. Shares were up 4.8% in Frankfurt.</li>
<li><strong><a href="http://www.marketwatch.com/News/Story/Story.aspx?guid=%7b2F8D4832-64DB-4E3B-8F27-2CE4C6BCC66C%7d&siteid=yhoof2">Alcatel gets $1B China Mobile contract.</a></strong> Alcatel-Lucent (ALU) is +4.2% in pre-market trading. Late Monday, it signed a $1B framework with China Mobile (CHL) to provide mobile equipment and services.</li>
<li><strong><a href="http://www.bloomberg.com/apps/news?pid=20601087&sid=aFruso3mxvjU&refer=home">Analysts on the move.</a></strong> Energy analysts are being lured by hedge funds from big-name Wall Street brokerages like Morgan Stanley (MS) and Citigroup (C). Morgan was forced to drop coverage of ExxonMobil (XOM), Chevron (CVX) and ConocoPhillips (COP) when its big-oil analyst left suddenly. Going from a securities firm to a hedge fund can often mean doubling one's salary, to as much as $4B. The pre-2000 sell-side model is falling apart, one hedge fund manager says. "You don't have the means by which to really underwrite a successful sell-side operation. As a result, they're no longer able to pay the salaries to attract the top talent."</li>
<li><strong><a href="http://www.nytimes.com/2008/06/17/business/worldbusiness/17venture.html">TNK-BP pressure goes up another notch.</a></strong> Russian oligarch Mikhail M. Fridman attacked BP’s (BP) management of TNK-BP, and threatened to go to court to wrest more control over their JV. BP chairman Peter Sutherland has been critical of recent Kremlin raids of its offices; there is speculation the Kremlin might try to take over TNK-BP by forcing a sale to Gazprom.</li>
<li><strong><a href="http://uk.reuters.com/article/hotStocksNews/idUKN1625373120080616">Hershey staying independent.</a></strong> Hershey Foods (<a href="http://seekingalpha.com/symbol/HSY">HSY</a> <font color="red">-6.4%</font>) says it considered strategic options, but has completely ruled out a sale of the company. There had been speculation of a sale/merger in order for Hershey to remain competitive with the Mars/Wrigley (WWY) combo.</li>
<li><strong><a href="http://www.nahb.org/generic.aspx?sectionID=134&genericContentID=529">Builder confidence at record lows.</a></strong> The NAHB Housing Market Index came in at 18, down from 19 in May. Ratings below 50 signal negativity. Builders see traffic continuing to weaken over the next six months.</li>
<li><strong><a href="http://biz.yahoo.com/bw/080616/20080616006337.html?.v=1">Intel to spinoff solar unit.</a></strong> Intel (INTC) is spinning-off an internal start-up to form SpectraWatt, which will supply photovoltaic cells to solar module makers. Goldman's (GS) Congentrix Energy is investing in a $50M round.</li>
<li><strong><a href="http://online.wsj.com/article/SB121369371301080545.html">UK prices up more than expected.</a></strong> U.K. consumer price inflation jumped 3.3% from a year ago, exceeding analyst estimates of 3.1%. While the BoE has indicated future cuts may be in store to its 5% target rate, today's number makes it likely cuts will not be fast in coming. Food prices were up 7.8% Y/Y; energy prices soared 11.2%. Core CPI was up 1.5%.</li>
</ul>
<h2>Earnings: Monday After Close</h2>
<ul>
<li><strong>Adobe (ADBE):</strong> Q2 EPS of $0.50 <strong><font color="green">beats</font></strong> by $0.04. Revenue of $887M in-line. Sees Q3 EPS of $0.45-0.47 (consensus $0.45). Shares <font color="red">-1.2%</font>.</li>
<li><strong>Cemex (CX):</strong> Sees Q2 revenue of $6.4B, better than consensus of $6.18B. Shares <font color="green">+2%</font>.</li>
<li><strong>Infinera (INFN):</strong> Sees Q2 EPS of $0.01-0.02, <font color="green">better than</font> consensus of -$0.02. Sees Q2 revenue of $88-90M in-line. Sees Q3 revenue of $75-$80M, <font color="red">short of</font> consensus of $97.7M. Shares: <strong><font color="red">-25.6%</font></strong>.</li>
<li><strong>La-Z-Boy (LZB)</strong> FQ4 EPS of -$0.09 <strong><font color="red">misses</font></strong> by $0.11. Revenue of $368M (-9.8%) vs. consensus of $376M. <font color="red">-10.3%</font>.</li>
</ul>
<h2>Today's Markets</h2>
<ul>
<li>Asia closed mixed Tuesday: Nikkei <font color="red">-0.04%</font> to 14,348. Hang Seng <font color="green">+0.12%</font> to 23,058. Shanghai <font color="red">-2.76%</font> to 2,794. BSE <font color="green">+1.96%</font> to 15,697.</li>
<li>Europe is up strongly at midday: London <font color="green">+1.7%</font>. Paris <font color="green">+0.9%</font>. Frankfurt <font color="green">+1.4%</font>.</li>
<li>Futures indicate a strong open: Dow <font color="green">+0.47%</font>. S&P <font color="green">+0.53%</font>. Nasdaq <font color="green">+0.45%</font>.</li>
<li>Gold is flat at $886.50. Crude <font color="red">-0.92%</font> to $133.37.</li>
</ul>
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<ul>
<li><strong><a href="http://usda.mannlib.cornell.edu/usda/current/CropProg/CropProg-06-16-2008.txt">Crop losses widen.</a></strong> The USDA released its weekly Crop Progress report: 9% of the corn is in excellent condition (vs. 10% last week), 48% good (vs. 50%), 31% fair (unchanged), 9% poor (vs. 7%), and 3% very poor (vs. 2%). Total corn in excellent-to-good condition is <strong>57%,</strong> vs. 60% last week and 70% last year. <strong>95%</strong> of corn has emerged, vs. 100% last year and a five-year average of 98%. Soybeans emerged is <strong>71%,</strong> vs. 90% last year and a five-year average of 86%. This year's crop rating is the <strong><a href="http://www.bloomberg.com/apps/news?pid=20601087&sid=awjua1SrpMN0&refer=home">lowest since 1996</a></strong>.<!--more--></li>
<li><strong><a href="http://uk.reuters.com/article/marketsNewsUS/idUKBNG23250220080616">Rotten outlook sinks Chiquita.</a></strong> Food companies were slammed today after Chiquita (CQB) predicted a significant Q3 loss on higher fuel and fertilizer costs. <a href="http://seekingalpha.com/symbol/CQB">CQB</a> -29.1%. <a href="http://seekingalpha.com/symbol/FDP">FDP</a> -13.7%. <a href="http://seekingalpha.com/symbol/PPC">PPC</a> -10.1%. <a href="http://seekingalpha.com/symbol/SFD">SFD</a> -4.35%. <a href="http://seekingalpha.com/symbol/SAFM">SAFM</a> -4.7%. <a href="http://seekingalpha.com/symbol/TSN">TSN</a> -1.1%.</li>
<li><strong><a href="http://online.wsj.com/article/SB121366576283479551.html">Food could cost 7-9% more next year.</a></strong> Economists say heavy Midwest flooding may cause U.S. food prices to climb 7-9% in 2009. "The U.S. consumer has gotten used to cheap, affordable food," food-industry analyst Fiona Boal says. "Now the goal posts are moving."</li>
<div style="width:340px; margin:20px auto; border:1px solid #C8C8C8; background-color:#F3F3F3; padding:1em; text-align:center;">After you finish reading Wall Street Breakfast<a style="display:block; margin:6px 0px; font-weight:700;" href="http://seekingalpha.com/">Seeking Alpha's Market Currents</a>will keep you current all day long.</div>
<li><strong><a href="http://www.reuters.com/article/bondsNews/idUSN1625979720080616">Junk and junkier.</a></strong> Junk bond defaults hit a 31-month high of 1.45% in May, up from 1.29% in April. U.S. junk fared worse - 1.89% up from 1.64%. 16 of 33 global corporate debt defaults this year, totalling $38.3B (up from $8.1B in all of 2007!), are from consumer-related sectors such as retail, restaurants, leisure and media.</li>
<li><strong><a href="http://www.nytimes.com/2008/06/17/washington/17trade.html">Trade-talks $14B prelude.</a></strong> Leading businesses in China and the U.S., including <a href="http://seekingalpha.com/symbol/GM">GM</a>, <a href="http://seekingalpha.com/symbol/F">F</a>, <a href="http://seekingalpha.com/symbol/ORCL">ORCL</a>, <a href="http://seekingalpha.com/symbol/IBM">IBM</a>, <a href="http://seekingalpha.com/symbol/mot">MOT</a>, <a href="http://seekingalpha.com/symbol/java">JAVA</a>, <a href="http://seekingalpha.com/symbol/txn">TXN</a> and <a href="http://seekingalpha.com/symbol/QCOM">QCOM</a>, announced $14B in new business deals on Monday -- a precursor to a likely bilateral investment treaty.</li>
<li><strong><a href="http://www.google.com/translate?u=http%3A%2F%2Fwww.standaard.be%2FArtike l%2FDetail.aspx%3FartikelId%3DHV1T3P79%26kanaalid% 3D41&hl=en&ie=UTF8&sl=nl&tl=en">Buffett backs InBev.</a></strong> Sources say Warren Buffett, whose Berkshire Hathaway (BRK.A) owns a 5%+ stake in Anheuser-Busch (BUD), supports InBev's $65/share bid for the brewer.</li>
<li><strong><a href="http://www.bloomberg.com/apps/news?pid=20601087&sid=afDx.oZqJM4U&refer=home">Daimler launches another big buyback.</a></strong> Daimler (DAI) said it will buy back up to €6B of its shares, reducing shares outstanding by 10%. Shares were up 4.8% in Frankfurt.</li>
<li><strong><a href="http://www.marketwatch.com/News/Story/Story.aspx?guid=%7b2F8D4832-64DB-4E3B-8F27-2CE4C6BCC66C%7d&siteid=yhoof2">Alcatel gets $1B China Mobile contract.</a></strong> Alcatel-Lucent (ALU) is +4.2% in pre-market trading. Late Monday, it signed a $1B framework with China Mobile (CHL) to provide mobile equipment and services.</li>
<li><strong><a href="http://www.bloomberg.com/apps/news?pid=20601087&sid=aFruso3mxvjU&refer=home">Analysts on the move.</a></strong> Energy analysts are being lured by hedge funds from big-name Wall Street brokerages like Morgan Stanley (MS) and Citigroup (C). Morgan was forced to drop coverage of ExxonMobil (XOM), Chevron (CVX) and ConocoPhillips (COP) when its big-oil analyst left suddenly. Going from a securities firm to a hedge fund can often mean doubling one's salary, to as much as $4B. The pre-2000 sell-side model is falling apart, one hedge fund manager says. "You don't have the means by which to really underwrite a successful sell-side operation. As a result, they're no longer able to pay the salaries to attract the top talent."</li>
<li><strong><a href="http://www.nytimes.com/2008/06/17/business/worldbusiness/17venture.html">TNK-BP pressure goes up another notch.</a></strong> Russian oligarch Mikhail M. Fridman attacked BP’s (BP) management of TNK-BP, and threatened to go to court to wrest more control over their JV. BP chairman Peter Sutherland has been critical of recent Kremlin raids of its offices; there is speculation the Kremlin might try to take over TNK-BP by forcing a sale to Gazprom.</li>
<li><strong><a href="http://uk.reuters.com/article/hotStocksNews/idUKN1625373120080616">Hershey staying independent.</a></strong> Hershey Foods (<a href="http://seekingalpha.com/symbol/HSY">HSY</a> <font color="red">-6.4%</font>) says it considered strategic options, but has completely ruled out a sale of the company. There had been speculation of a sale/merger in order for Hershey to remain competitive with the Mars/Wrigley (WWY) combo.</li>
<li><strong><a href="http://www.nahb.org/generic.aspx?sectionID=134&genericContentID=529">Builder confidence at record lows.</a></strong> The NAHB Housing Market Index came in at 18, down from 19 in May. Ratings below 50 signal negativity. Builders see traffic continuing to weaken over the next six months.</li>
<li><strong><a href="http://biz.yahoo.com/bw/080616/20080616006337.html?.v=1">Intel to spinoff solar unit.</a></strong> Intel (INTC) is spinning-off an internal start-up to form SpectraWatt, which will supply photovoltaic cells to solar module makers. Goldman's (GS) Congentrix Energy is investing in a $50M round.</li>
<li><strong><a href="http://online.wsj.com/article/SB121369371301080545.html">UK prices up more than expected.</a></strong> U.K. consumer price inflation jumped 3.3% from a year ago, exceeding analyst estimates of 3.1%. While the BoE has indicated future cuts may be in store to its 5% target rate, today's number makes it likely cuts will not be fast in coming. Food prices were up 7.8% Y/Y; energy prices soared 11.2%. Core CPI was up 1.5%.</li>
</ul>
<h2>Earnings: Monday After Close</h2>
<ul>
<li><strong>Adobe (ADBE):</strong> Q2 EPS of $0.50 <strong><font color="green">beats</font></strong> by $0.04. Revenue of $887M in-line. Sees Q3 EPS of $0.45-0.47 (consensus $0.45). Shares <font color="red">-1.2%</font>.</li>
<li><strong>Cemex (CX):</strong> Sees Q2 revenue of $6.4B, better than consensus of $6.18B. Shares <font color="green">+2%</font>.</li>
<li><strong>Infinera (INFN):</strong> Sees Q2 EPS of $0.01-0.02, <font color="green">better than</font> consensus of -$0.02. Sees Q2 revenue of $88-90M in-line. Sees Q3 revenue of $75-$80M, <font color="red">short of</font> consensus of $97.7M. Shares: <strong><font color="red">-25.6%</font></strong>.</li>
<li><strong>La-Z-Boy (LZB)</strong> FQ4 EPS of -$0.09 <strong><font color="red">misses</font></strong> by $0.11. Revenue of $368M (-9.8%) vs. consensus of $376M. <font color="red">-10.3%</font>.</li>
</ul>
<h2>Today's Markets</h2>
<ul>
<li>Asia closed mixed Tuesday: Nikkei <font color="red">-0.04%</font> to 14,348. Hang Seng <font color="green">+0.12%</font> to 23,058. Shanghai <font color="red">-2.76%</font> to 2,794. BSE <font color="green">+1.96%</font> to 15,697.</li>
<li>Europe is up strongly at midday: London <font color="green">+1.7%</font>. Paris <font color="green">+0.9%</font>. Frankfurt <font color="green">+1.4%</font>.</li>
<li>Futures indicate a strong open: Dow <font color="green">+0.47%</font>. S&P <font color="green">+0.53%</font>. Nasdaq <font color="green">+0.45%</font>.</li>
<li>Gold is flat at $886.50. Crude <font color="red">-0.92%</font> to $133.37.</li>
</ul>
<br/><strong><a href="http://seekingalpha.com/page/email-preferences/?source=newsbriefbody">Get Wall Street Breakfast by email</a></strong> -- it's free and takes only seconds to sign up.<br/><a href='http://seekingalpha.com/article/81635-wall-street-breakfast-must-know-news?source=feed'>Complete Story »</a>
complete article here... (http://seekingalpha.com/article/81635-wall-street-breakfast-must-know-news?source=feed)