Professional Documents
Culture Documents
Monday, June 8, 15
Index
Up/Down
Last
DJ Industrials
-82.78
0.46%
17,766
S&P 500
-13.53
0.65%
2,079
Nasdaq
-46.83
0.92%
5,021
Russell 2000
-7.34
0.58%
1,253
Commodities
Energy prices dropped; Oil futures finished lower, weighed by a drop in Chinese oil imports and
last weeks decision by the Organization of the Petroleum Exporting Countries to keep its
production ceiling unchanged. WTI crude fell about 1.7% to settle at $58.14 a barrel, while Brent
dropped 1% to $62.69 a barrel. Natural gas prices outperformed, the lone gainer in the energy
complex, rising nearly 4% to $2.70 mln Btu despite bearish inventory data late last week
Gold prices ended the session higher by $5.50, or 0.5% to settle at $1,173.60 an ounce, helped
today by the weaker dollar (DXY fell more than 1%), but follows a weekly decline of nearly 2% last
week 3rd straight weekly decline (snapped 3 day losing streak)
Currencies
The dollar was weaker; falling initially on reports by Bloomberg that President Obama had said at
the G-7 summit that the "strong dollar posed a problem". However, Obama later said on TV that
he does not comment on daily currency fluctuations. In the end, it was broad weakness for the
greenback regardless, falling from 2002 highs against the yen (back under 125 level, while the
euro jumped back above 1.1250 (was as low as 1.1077 on Friday).
Bond Market
Bonds bounce back; after last weeks bond selling pressure saw yields surge to best levels since
the fall of last year, markets started the week slightly better, pushing yields lower. Fridays
pullback was fueled by a strong official jobs (while higher inflation readings/expectations in
Europe also fueled bond yields). The yield on the 10-yr fell 3 bps to under 2.37% after surging
more than 30 bps last week, its largest weekly gain in nearly two years. On the calendar this
week, a few key inflation readings (PPI and retail sales)
Macro
Up/Down
Last
WTI Crude
-0.99
58.14
Brent
-0.62
62.69
Gold
5.50
1,173.60
EUR/USD
0.0159
1.1273
JPY/USD
-1.00
124.63
10-Year Note
-0.02
2.381%
Energy
Movers on news; oil drillers were little changed (though RIG underperforms), while majors (XOM,
CVX, HES) underperformed in the energy complex; PQ jumped after being upgraded at Raymond
James after sold assets for $280M; after hitting 6-month highs early last week, oil prices have slid
on the dollar rebound/no surprises at OPEC last week
Utilities trying to bounce back after an awful performance last week following a surge in Bond
yields, making dividend paying/defensive stocks less attractive to equity investors (Utilities as a
whole little changed on the day)
MLPs have been sliding over the last few weeks, with the Alerian MLP Index (AMZ) moving to its
lowest levels since late March (under 420), as oil prices have slipped and companies have been
raising cash (via secondary); coal MLPs (ARLP) down with the overall sector; PAA near 52-week
lows after California oil spill news last week hit shares
Alternative Energy/Solar/Coal; WLT leads coal names lower after Bloomberg reported it is
negotiating a debt restructuring with senior lenders that may put the unprofitable coal producer
into bankruptcy as soon as this month; BLDP will supply Nantong Zehe New Energy Technology
and Guangdong Synergy Hydrogen Power Technology with fuel cell solutions in $10M deal; BTU
announced job cuts
Financials
Large Cap banks; DB a top story after changing its leadership (again), appointing John Cryan as its
new CEO, replacing Anshu Jain just two weeks after Jain was given more power to reorganize the
bank; outside of DB, group was mostly lower, paring some gains after last weeks rate/yield spike
induced gains (especially brokers/regional banks), but group remains strong
Lending sector; ONDK mentioned cautiously in Barrons saying shares may be too pricey and
too risky; LC upgraded to Overweight at Pacific Crest with a $23 price target as the firm's
checks with advertising executives indicate stable trends despite irrational pricing concerns;
Compass Point cut tgts on both LC (to $14 from $16) and ONDK (to $12 from $14) saying prices
dont reflect high likelihood of added regulatory scrutiny
Exchanges; ITG said May average daily volume in the U.S. was 182M shares, up from 144M YoY;
CBOE upgraded to Hold at Evercore
Brokers & Asset Managers; IVZ upgraded to Buy at UBS saying the current valuation provides
investors a compelling opportunity; Goldman Sachs initiates sector: Buy rated: APAM ($53 tgt),
JNS ($22 tgt), BLK ($421 tgt), AMG ($258 tgt)Sell rated: CRC, BEN; SF picks up Barclays'
Americas wealth management unit
Healthcare
Large Cap Pharma; SHPG is considering an $18.32B takeover of Actelion Ltd (ATLN.VX) Europe's
biggest biotech firm, Britain's Sunday Times newspaper reported, citing unnamed sources. An
informal approach by Shire was rebuffed several weeks ago http://goo.gl/8VERj6; ABBV
reinstated as its Top Pick in Global Pharma, added the stock to its Franchise Pick List at Jefferies
Biotech; sector as a whole little changed; in M&A news, POZN said it would acquire Tribute
Pharmaceuticals Canada Inc. for about $144M, in a deal that would shift its domicile to Ireland
and cut its tax bill (new merged co name now Aralez). As part of the transaction, a group of
investors including healthcare investment firm Deerfield Management and Canadian biotech
company QLTI will invest up to $350M in growth capital for Aralez http://goo.gl/ds5dAq
In other movers; BRLI rises despite earnings miss (agreed to acquire OPK for $1.47B last week);
FCSC and XON announce positive in vitro Pre-Clinical data for FCX-007 for RDEB; HUM said in a
regulatory filing it would not comment on speculation that it was considering a sale of the
company and will observe a "quiet period" until earnings (7/29); PTBI licensed an AAV gene
therapy for treatment of juvenile Batten disease from UNeMed;
Want a free trial to The Hammerstone Report 4x Daily ? Sign-up for a trial today at
www.thehammerstonereport.com
Please be sure to check out The Hammerstone Institutional Feed for News and Analysis for the
Informed Trader at www.hammerstoneinstitutional.com
***DISCLAIMER/LIMITATION OF LIABILITY: Hammerstone Inc. (the Report) provides information and data and does NOT provide any individual investment advice or money management
assistance and does NOT attempt to influence the sale or purchase of securities. The Report is intended for informational purposes only and does not claim to be actionable for investment
decisions. The information contained in the Report has been obtained from sources deemed to be reliable but is not represented to be complete, and it should not be relied upon as such. The
Report does not purport to be a complete analysis of any security, issuer, or industry and is not an offer or a solicitation of an offer t o buy or sell any securities. The Report is prepared for
general information purposes only and does not consider the specific investment objectives, financial situation, and particular needs of any individual subscriber, person, or entity