Check out the “Must Read” from SeekingAlpha |

Check out the “Must Read” from SeekingAlpha

Of the top 9 must read news stories, 4 sound pretty bullish. Intel is optimistic. Wall Street bonuses are breaking out to the upside (good for New York real estate, at least on the over $5 million places). China exports, while declining, are declining at a slower rate. And for some unknown reason, Bloomberg is buying BusinessWeek. These definitely sound good and it’s no wonder the futures are solidly stronger today. I anticipate that todays shows will talk about money coming off the sidelines, managers caught off guard by the rally and needing to catch up, etc. All of those are technical and structural. In the end, from my perspective, employment hasn’t stabilized, investors are misjudging risk in emerging markets, Chinese exports are still declining at a quick clip (with the risk of social instability growing), Iran is still developing nukes, and the currencies are all over the place. Mind you, I am invested on the long side, but I’m not jumping into the market. I’m looking for the few deals that remain out there. They exist in healthcare, energy, some mining, a couple of shipping. But the market overall seems very frothy, even if I’m premature on starting to get out.

Intel says growth is back. Intel (INTC) CEO Paul Otellini sounded an optimistic note after a strong Q3 earnings report, telling analysts the firm’s strength “remains primarily consumer driven with broad-based demand across all geographies.” Speaking to concerns netbook sales are cannibalizing traditional PC and laptop sales, Otellini said sequential unit growth of notebook chip sales exceeded the growth rate of its Atom chips, “and we expect that to continue in the future.” The strong report sent futures surging after hours, and shares of Intel are up almost 5% premarket. (read Intel’s Q3 earnings call transcript)
Bank crisis, what bank crisis? Major U.S. banks and securities firms will pay workers about $140B this year, topping the $130B record set at the peak in 2007 and up from $117B in 2008. According to an in-depth study by the WSJ, workers at 23 top Wall Street firms will earn an estimated $143,400 on average (Table: Projected Compensation). The same firms’ total revenue are projected to reach $437B, smashing the record $345B set in 2007.
China export decline slows. China’s exports declined 15.2% from a year ago to $115.9B, the smallest drop in almost a year, and substantially less than consensus estimates of 21%. A recovery in exports “is one more piece of evidence that the global economy is getting stronger,” strategist Brian Jackson said, adding that recent gains in imports show “China is playing a greater role in driving recovery.” Shanghai closed up 1.2%, and yuan forwards hit a 13-month high as traders bet the jump in exports will prompt the central bank to let the yuan climb against the dollar; some say the dollar peg will break as soon as Q1 2010.
BoJ stays put, delays exit plan. Bank of Japan kept its overnight call loan rate unchanged at 0.1% (.pdf), and contrary to expectations, made no mention of whether it will end measures to supply funds to the market by buying bank-owned corporate debt, suggesting it’s still concerned that its termination could choke off an economic recovery. BoJ revised its economic assessment upward for the second straight month, saying Japan’s economy “has started to pick up,” after saying last month the economy is “showing signs of recovery.” (read BoJ’s statement)
Bloomberg buys BusinessWeek. McGraw-Hill agreed to sell 80-year-old BusinessWeek to Bloomberg for an undisclosed price. Sources say less than $5M in cash will change hands, but Bloomberg will also assume another $10M in liabilities, including severance for BusinessWeek staffers who might lose their jobs. Bloomberg executives say the firm hasn’t made any decision about job cuts or staffing, but insist it bought the magazine and web property to build them, not gut them. “Our intention is to take a venerable brand and turn it into the best global business newsweekly,” Bloomberg president Daniel Doctoroff said in an interview.

Last 5 posts by Yaron Sadan

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