Seeking Alpha
06-26-2008, 08:51 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://online.wsj.com/article/SB121443199983104911.html?mod=hpp_us_whats_news">Bud prepares for brawl.</a></strong> Sources say Anheuser-Busch (BUD) is preparing itself to <strong><a href="http://online.wsj.com/article/SB121443199983104911.html">fight</a></strong> InBev's unsolicited $46.5B bid. Management will argue the bid undervalues the company, and will present shareholders with its strategic outlook, including selling some non-core assets such as its theme parks, and added cost savings of $500M over the next four years. InBev is likely to take its offer directly to shareholders.<!--more--></li>
<li><strong><a href="http://www.bloomberg.com/apps/news?pid=20601087&sid=acTW0F8r0Yjs&refer=home">Fed focused on inflation.</a></strong> The Fed left its target rate unchanged at 2%, as expected. It said economic activity continues to expand, but labor is weaker and financial markets remain under stress. Analysts said its statement was skewed more to inflation than to lack of growth: "Uncertainty about the inflation outlook remains high," making a rate hike by September more likely now than before. Analysts <a href="http://www.briefing.com/Investor/Public/MarketSnapshot/HeadlineHits.htm#NS20080625142559HeadlineHits">said</a> the Fed's statement is moderately bullish for the stock market: there is nothing that suggests an imminent rate hike, and no evident panic over inflation. The decision wasn't unanimous: Dallas Fed president Richard Fisher dissented for a fourth straight time, favoring a rate hike to 2.25%.</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.bloomberg.com/apps/news?pid=20601087&sid=aXXvsTcMNBKM&refer=home">Goldman says Citi crisis not over.</a></strong> Goldman says Citigroup (C) will likely take an additional $8.9B writedown in Q2. "The turnaround in business trends that we had been expecting in the second half of 2008 may not occur as quickly as we should have thought. We see multiple headwinds for Citigroup," including writedowns, the need for more capital, and dividend cuts or asset sales. These would add to Citi's $42.9B in credit-related losses so far. Goldman cut its share price target to $16, and put Citi on its Conviction Sell list.</li>
<li><strong><a href="http://online.wsj.com/article/SB121444299224205665.html">SEC sets stage for change.</a></strong> The SEC proposed numerous regulatory changes, including weaning investors' reliance on credit ratings by lifting a requirement that money-market funds hold high-rated securities, and easing limitations on U.S. retail customers trading directly with overseas brokerage houses. Chairman Christopher Cox plans to leave in Feb. 2009; the broad moves are his attempt to make his mark on the body as it moves towards globalizing U.S. securities law.</li>
<li><strong><a href="http://www.eia.doe.gov/pub/oil_gas/petroleum/data_publications/weekly_petroleum_status_report/current/txt/table12.txt">Oil inventories</a></strong> came in higher than expected: Crude +800K vs. -1.1M consensus. Gasoline -150K vs. unchanged. Distillate +2.82M vs +2M consensus. Crude futures are down 2.18% to $134. Crude futures were all over the board yesterday, but finished <font color="red">down 1.78%</font> to $134.56.</li>
<li><strong><a href="http://cgi.money.cnn.com/tools/redirect.jsp?url=http://legalpad.blogs.fortune.cnn.com/2008/06/25/supreme-court-slashes-25b-exxon-valdez-award/">Valdez award slashed.</a></strong> The U.S. Supreme Court reduced the $2.5B Valdez award against ExxonMobil (<a href="http://seekingalpha.com/symbol/XOM">XOM</a> <font color="green">+0.8%</font>) to just $507.5M, and said damages should be compensatory, not punitive.</li>
<li><strong><a href="http://www.census.gov/const/www/newressalesindex.html">May New Home Sales</a></strong> were <font color="red">down 2.5%</font> to 512K, after jumping 4.6% a month ago - in line with analyst consensus. Inventory jumped to 10.9 months supply, up from 10.7 last month. New homes sales are down 40% from a year ago. After 501K in March, and 525K in April - sales appear to be <a href="http://www.briefing.com/Investor/Public/MarketSnapshot/HeadlineHits.htm#NS20080625101025HeadlineHits">leveling</a>. Thursday's existing home sales number will be a clearer indication.</li>
</ul>
<h2>Earnings: Wednesday After Close</h2>
<ul>
<li><strong>Autodesk (ADSK):</strong> sees Q2 EPS of $0.50-$0.52 vs. consensus of $0.53.</li>
<li><strong>Bed Bath & Beyond (BBBY):</strong> FQ1 EPS of $0.30 <font color="green">beats</font> by $0.03. Revenue of $1.65B (+6.1%) in line. [<strong><a href="http://biz.yahoo.com/prnews/080625/nyw117.html?.v=101">PR</a></strong>]</li>
<li><strong>CKE Restaurants (CKR):</strong> Q1 EPS of $0.31 <font color="green">beats by $0.04</font>. Revenue of $466M in line.</li>
<li><strong>Herman Miller (MLHR):</strong> FQ4 EPS of $0.71 <font color="green">beats by $0.14</font>. FQ4 Revenue of $519M vs. consensus of $488.39M. Sees Q1 EPS of $0.49-$0.56, <font color="red">short of</font> consensus of $0.55, and revenue of $470-$495M vs. consensus of $491M.</li>
<li><strong>Nike (NKE):</strong> FQ4 EPS of $0.98 <font color="green">beats by $0.02</font>. Revenue of $5.09B (+16.1%) vs. $4.95B. "As we complete fiscal 2008, we are better positioned than we ever have been." [<strong><a href="http://biz.yahoo.com/bw/080625/20080625006163.html?.v=1">PR</a></strong>]</li>
<li><strong>Oracle (ORCL):</strong> FQ4 EPS of $0.47 <font color="green">beats by $0.03</font>. Revenue of $7.28B (+23.8%) vs. $6.85B consensus. New software license revenue was up <font color="green">+27%</font> - on database and middleware license revenue +23% and applications +36%. [<strong><a href="http://biz.yahoo.com/prnews/080625/aqw007.html?.v=57">PR</a></strong>]</li>
<li><strong>Red Hat (RHT):</strong> Q1 EPS of $0.18 in line. Revenue of $156.6M vs. consensus of $153M.</li>
<li><strong>Research In Motion (RIMM):</strong> FQ1 EPS of $0.84 <font color="red">misses</font> by $0.01. Revenue of $2.24B (+19.1%) vs. $2.27B consensus. Sees FQ2 EPS of $0.84-0.89 vs. $0.90. Says it shipped 5.4M BlackBerrys in Q1, and signed up 2.3M new customers vs. 2.2M guidance. [<strong><a href="http://biz.yahoo.com/iw/080625/0410627.html">PR</a></strong>]</li>
</ul>
<h2>Earnings: Thursday Before Open</h2>
<ul>
<li><strong>Lennar (LEN):</strong> Q2 EPS of -$0.76 <font color="red">misses by $0.21</font>. Revenue of $1.13B vs. consensus of $1.09B. [<strong><a href="http://money.cnn.com/news/newsfeeds/articles/prnewswire/200806260600PR_NEWS_USPR_____CLTH012.htm">PR</a></strong>]</li>
<li><strong>Oshkosh Truck (OSK)</strong>: <font color="red">Lowers</font> its Q3 EPS view to between -$1.22 and -$1.32 from $1.40-$1.50, vs. consensus of $1.47, due to a non-cash charge, and soft sales. [<strong><a href="http://www.businesswire.com/news/google/20080626005230/en">PR</a></strong>]</li>
<li><strong>Rite Aid (RAD):</strong> FQ1 EPS of -$0.20 <font color="red">misses by -$0.10</font>. Revenue of $6.61B (+49.3%) in line. SSS were up 1.5%. [<strong><a href="http://www.businesswire.com/portal/site/google/?ndmViewId=news_view&newsId=20080626005445&newsLang=en">PR</a></strong>]</li>
</ul>
<h2>Today's Markets</h2>
<ul>
<li>Asia markets: Japan <font color="red">-0.05%</font>. Hong Kong <font color="red">-0.79%</font>. Shanghai <font color="red">-0.11%</font>. Taiwan <font color="red">-0.55%</font>. India <font color="green">+1.42%</font>.</li>
<li>European bourses are sharply lower at midday: London <font color="red">-1.08%</font>. Paris <font color="red">-1.08%</font>. Frankfurt <font color="red">-1.19%</font>. Brussels <font color="red">-3.15%</font>.</li>
<li>U.S. futures: Dow <font color="red">-0.46%</font>. S&P <font color="red">-0.45%</font>. Nasdaq <font color="red">-0.61%</font>. Crude <font color="green">+0.28%</font> to $134.93. Gold <font color="green">+1.31%</font> to $893.90.</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/82808-wall-street-breakfast-must-know-news?source=feed'>Complete Story »</a>
complete article here... (http://seekingalpha.com/article/82808-wall-street-breakfast-must-know-news?source=feed)
<ul>
<li><strong><a href="http://online.wsj.com/article/SB121443199983104911.html?mod=hpp_us_whats_news">Bud prepares for brawl.</a></strong> Sources say Anheuser-Busch (BUD) is preparing itself to <strong><a href="http://online.wsj.com/article/SB121443199983104911.html">fight</a></strong> InBev's unsolicited $46.5B bid. Management will argue the bid undervalues the company, and will present shareholders with its strategic outlook, including selling some non-core assets such as its theme parks, and added cost savings of $500M over the next four years. InBev is likely to take its offer directly to shareholders.<!--more--></li>
<li><strong><a href="http://www.bloomberg.com/apps/news?pid=20601087&sid=acTW0F8r0Yjs&refer=home">Fed focused on inflation.</a></strong> The Fed left its target rate unchanged at 2%, as expected. It said economic activity continues to expand, but labor is weaker and financial markets remain under stress. Analysts said its statement was skewed more to inflation than to lack of growth: "Uncertainty about the inflation outlook remains high," making a rate hike by September more likely now than before. Analysts <a href="http://www.briefing.com/Investor/Public/MarketSnapshot/HeadlineHits.htm#NS20080625142559HeadlineHits">said</a> the Fed's statement is moderately bullish for the stock market: there is nothing that suggests an imminent rate hike, and no evident panic over inflation. The decision wasn't unanimous: Dallas Fed president Richard Fisher dissented for a fourth straight time, favoring a rate hike to 2.25%.</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.bloomberg.com/apps/news?pid=20601087&sid=aXXvsTcMNBKM&refer=home">Goldman says Citi crisis not over.</a></strong> Goldman says Citigroup (C) will likely take an additional $8.9B writedown in Q2. "The turnaround in business trends that we had been expecting in the second half of 2008 may not occur as quickly as we should have thought. We see multiple headwinds for Citigroup," including writedowns, the need for more capital, and dividend cuts or asset sales. These would add to Citi's $42.9B in credit-related losses so far. Goldman cut its share price target to $16, and put Citi on its Conviction Sell list.</li>
<li><strong><a href="http://online.wsj.com/article/SB121444299224205665.html">SEC sets stage for change.</a></strong> The SEC proposed numerous regulatory changes, including weaning investors' reliance on credit ratings by lifting a requirement that money-market funds hold high-rated securities, and easing limitations on U.S. retail customers trading directly with overseas brokerage houses. Chairman Christopher Cox plans to leave in Feb. 2009; the broad moves are his attempt to make his mark on the body as it moves towards globalizing U.S. securities law.</li>
<li><strong><a href="http://www.eia.doe.gov/pub/oil_gas/petroleum/data_publications/weekly_petroleum_status_report/current/txt/table12.txt">Oil inventories</a></strong> came in higher than expected: Crude +800K vs. -1.1M consensus. Gasoline -150K vs. unchanged. Distillate +2.82M vs +2M consensus. Crude futures are down 2.18% to $134. Crude futures were all over the board yesterday, but finished <font color="red">down 1.78%</font> to $134.56.</li>
<li><strong><a href="http://cgi.money.cnn.com/tools/redirect.jsp?url=http://legalpad.blogs.fortune.cnn.com/2008/06/25/supreme-court-slashes-25b-exxon-valdez-award/">Valdez award slashed.</a></strong> The U.S. Supreme Court reduced the $2.5B Valdez award against ExxonMobil (<a href="http://seekingalpha.com/symbol/XOM">XOM</a> <font color="green">+0.8%</font>) to just $507.5M, and said damages should be compensatory, not punitive.</li>
<li><strong><a href="http://www.census.gov/const/www/newressalesindex.html">May New Home Sales</a></strong> were <font color="red">down 2.5%</font> to 512K, after jumping 4.6% a month ago - in line with analyst consensus. Inventory jumped to 10.9 months supply, up from 10.7 last month. New homes sales are down 40% from a year ago. After 501K in March, and 525K in April - sales appear to be <a href="http://www.briefing.com/Investor/Public/MarketSnapshot/HeadlineHits.htm#NS20080625101025HeadlineHits">leveling</a>. Thursday's existing home sales number will be a clearer indication.</li>
</ul>
<h2>Earnings: Wednesday After Close</h2>
<ul>
<li><strong>Autodesk (ADSK):</strong> sees Q2 EPS of $0.50-$0.52 vs. consensus of $0.53.</li>
<li><strong>Bed Bath & Beyond (BBBY):</strong> FQ1 EPS of $0.30 <font color="green">beats</font> by $0.03. Revenue of $1.65B (+6.1%) in line. [<strong><a href="http://biz.yahoo.com/prnews/080625/nyw117.html?.v=101">PR</a></strong>]</li>
<li><strong>CKE Restaurants (CKR):</strong> Q1 EPS of $0.31 <font color="green">beats by $0.04</font>. Revenue of $466M in line.</li>
<li><strong>Herman Miller (MLHR):</strong> FQ4 EPS of $0.71 <font color="green">beats by $0.14</font>. FQ4 Revenue of $519M vs. consensus of $488.39M. Sees Q1 EPS of $0.49-$0.56, <font color="red">short of</font> consensus of $0.55, and revenue of $470-$495M vs. consensus of $491M.</li>
<li><strong>Nike (NKE):</strong> FQ4 EPS of $0.98 <font color="green">beats by $0.02</font>. Revenue of $5.09B (+16.1%) vs. $4.95B. "As we complete fiscal 2008, we are better positioned than we ever have been." [<strong><a href="http://biz.yahoo.com/bw/080625/20080625006163.html?.v=1">PR</a></strong>]</li>
<li><strong>Oracle (ORCL):</strong> FQ4 EPS of $0.47 <font color="green">beats by $0.03</font>. Revenue of $7.28B (+23.8%) vs. $6.85B consensus. New software license revenue was up <font color="green">+27%</font> - on database and middleware license revenue +23% and applications +36%. [<strong><a href="http://biz.yahoo.com/prnews/080625/aqw007.html?.v=57">PR</a></strong>]</li>
<li><strong>Red Hat (RHT):</strong> Q1 EPS of $0.18 in line. Revenue of $156.6M vs. consensus of $153M.</li>
<li><strong>Research In Motion (RIMM):</strong> FQ1 EPS of $0.84 <font color="red">misses</font> by $0.01. Revenue of $2.24B (+19.1%) vs. $2.27B consensus. Sees FQ2 EPS of $0.84-0.89 vs. $0.90. Says it shipped 5.4M BlackBerrys in Q1, and signed up 2.3M new customers vs. 2.2M guidance. [<strong><a href="http://biz.yahoo.com/iw/080625/0410627.html">PR</a></strong>]</li>
</ul>
<h2>Earnings: Thursday Before Open</h2>
<ul>
<li><strong>Lennar (LEN):</strong> Q2 EPS of -$0.76 <font color="red">misses by $0.21</font>. Revenue of $1.13B vs. consensus of $1.09B. [<strong><a href="http://money.cnn.com/news/newsfeeds/articles/prnewswire/200806260600PR_NEWS_USPR_____CLTH012.htm">PR</a></strong>]</li>
<li><strong>Oshkosh Truck (OSK)</strong>: <font color="red">Lowers</font> its Q3 EPS view to between -$1.22 and -$1.32 from $1.40-$1.50, vs. consensus of $1.47, due to a non-cash charge, and soft sales. [<strong><a href="http://www.businesswire.com/news/google/20080626005230/en">PR</a></strong>]</li>
<li><strong>Rite Aid (RAD):</strong> FQ1 EPS of -$0.20 <font color="red">misses by -$0.10</font>. Revenue of $6.61B (+49.3%) in line. SSS were up 1.5%. [<strong><a href="http://www.businesswire.com/portal/site/google/?ndmViewId=news_view&newsId=20080626005445&newsLang=en">PR</a></strong>]</li>
</ul>
<h2>Today's Markets</h2>
<ul>
<li>Asia markets: Japan <font color="red">-0.05%</font>. Hong Kong <font color="red">-0.79%</font>. Shanghai <font color="red">-0.11%</font>. Taiwan <font color="red">-0.55%</font>. India <font color="green">+1.42%</font>.</li>
<li>European bourses are sharply lower at midday: London <font color="red">-1.08%</font>. Paris <font color="red">-1.08%</font>. Frankfurt <font color="red">-1.19%</font>. Brussels <font color="red">-3.15%</font>.</li>
<li>U.S. futures: Dow <font color="red">-0.46%</font>. S&P <font color="red">-0.45%</font>. Nasdaq <font color="red">-0.61%</font>. Crude <font color="green">+0.28%</font> to $134.93. Gold <font color="green">+1.31%</font> to $893.90.</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/82808-wall-street-breakfast-must-know-news?source=feed'>Complete Story »</a>
complete article here... (http://seekingalpha.com/article/82808-wall-street-breakfast-must-know-news?source=feed)