Japan Stimulates (Again); Ford Announces Incentives
Japan announced that they will unveil another stimulus plan. Isn't this the third one for this downturn? I've lost track. They announced they would spend $120 billion in public spending last year.
- Asian Pacific Currencies vs Dollar
In the UK, the FTSE is up almost 4 percent, essentially gaining back everything it lost yesterday. Marks and Spencer had better than expected sales and consumer confidence was better than forecast, at the highest level since May 2008.
1) Ford announces incentive program; Street believes GM is next. Ford announced it would cover payments of up to $700 per month for a year on any new Ford, Lincoln or Mercury if the buyer loses his or her job.
This is similar to the successful Hyundai Assurance Program, which allows buys to way away from a loan or lease and return the vehicle in case of a job loss or other life-altering circumstances.
Traders believe GM will announce a similar incentive program shortly.
Let's face it: most traders on the Street think this latest government plan to give GM 60 days to get a more viable plan is just a ploy to buy time to set up a bankruptcy filing in a reasonable, calm, orderly fashion.
Guaranteeing the warranties was the tipping point for most; all the pieces (including help for automotive suppliers) are falling into place for an orderly bankruptcy.
2) Lennar reported a loss of $0.27, which excludes several items, less of a loss than expectations of a loss of $0.64. The good news is that the cancellation rate declined to 21 percent versus 26 percent last year.
3) We talked last week extensively about how banks will be unable to return any TARP money until well after the stress test, even though the government needs the money. On our air this morning, Rep. Barney Frank said that there was no impediment to return TARP money "as long as their basic regulator doesn't think they are too weak in capital." That is quite a hurdle.
4) Read my lips, take your money and...HSBC up 5 percent in pre-market trading as CEO Michael Geoghegan reiterated that the London-based bank will not need any government money. He told investors that they see "no time or any circumstance in which HSBC would seek capital support from any government."
5) Ingersoll-Rand down 3% pre-open after slashing its quarterly dividend 61% to $0.07 per share and announcing it would raise additional capital. The company also cut its first quarter and full-year earnings and sales guidance significantly below Street forecasts.
6) Barclays up 4% pre-open, reportedly in discussions to sell its iShares unit to CVC Capital Partners for approximately $4.3 billion. The deal would also give Barclays a 20% stake in iShares through warrants.
7) Dow component Alcoa up 6 percent on an upgrade by Deutsche Bank, which believes the aluminum producer has accumulated adequate capital and won't need to refinance its debt until the first half of next year.
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