Five Things We're Watching: March 31, 2011
Stocks target highs with jobs on the horizon, Irish banks quake in their boots, GNC faces the market—and what's happening in Omaha? Here's what we're watching ...
The Berkshire Bombshell: Late Wednesday afternoon came a letter from Warren Buffettannouncing the resignation of longtime Berkshire Hathaway lieutenant David Sokol. The departure of Mr. Sokol was a surprise on face value, surely changing the arithmetic of Berkshire's succession plan. The (now former) NetJets chief was seen as a leading candidate. However, the letter also made explicit mention of Mr. Sokol's trading activity in Lubrizol and ownership of the company's shares shortly before Berkshire announced a proposed takeover of the chemicals manufacturer. While Buffett emphasized he doesn't believe anything unlawful occurred, the disclosure stunned investors. We'll be following any further developments and Mr. Sokol is, as of this moment, scheduled to appear on Squawk Box on Thursday, at 7:40am ET.
Jobs & the Market: With one day left of trading in the first quarter, the Dow sits just 41 points away from its year-to-date high—a remarkable turn considering the headline events across the globe. So what comes next? Well, the first order of business is the employment outlook. Wednesday's strong ADP data sets the stage for the Thursday morning weekly jobless claims number, all of which points to Friday's monthly Labor Department jobs report.
The NYSE Gets its Vitamins: After the bell Thursday, GNC will likely price in the range of $15 to $17 per share, hoping to raise north of $300 million. The vitamin/supplement company did $1.82 billion in sales last year, and is hoping that this IPO, the third they've tried in the last seven years, is the charm. They were previously owned by Apollo (who, in a fun twist, also IPOed this week) and are now owned by an affiliate of the Ontario Teachers Pension Plan. A great deal of optimism surrounds the offering, including from CNBC's Jim Cramer, who compared them with Vitamin Shoppe, a competitor whose shares more than doubled upon entering the public market.
Who's at the Window?: When's the last time you picked up a DVD? Well, that's what we'll be doing at 10:00am ET Thursday, as the Federal Reserve will release tons and tons of data about U.S. and international banks' use of the Fed's discount window facility during the financial crisis (data all in the format of a handy-dandy DVD). Who accessed the discount window, how much lending occured, and what kind of collateral was in play? At issue going forward: are the banks really better (answer: probably not in Ireland) ... and will the expected disclosures color future use of the discount window?
Irish Banks Under Stress: The Central Bank of Ireland will publish results of its stress testson the stability of Irish banks in the wake of the financial crisis, which hit its banking sector particularly hard. The likes of Allied Irish Bank, Bank of Ireland, and Irish Life & Permanent have been slammed in recent months, and Thursday's results might come as further bad news. Reports suggest that the tests could reveal further losses among the banks, potentially leading to another round of bailouts.