Trader Talk

Today's Boldest Call


The Fed has said banks must tap the equity market before anyone gets approval to return TARP money so...banks are again out raising money.

JP Morgan has priced $5 billion in common stock: 142 million shares at $35.25. They received $25 billion from the TARP.

American Express has priced a $500 million deal: 19.8 million shares at $25.25 a share, and they too hope to repay the TARP this month. They received $3.4 billion.

Morgan Stanley announced a $2.2 billion common equity offering and has said they hope to make the TARP repayment (they got $10 billion) before the end of June.

SunTrust said it plans to sell $1.4 billion in common stock and announced other capital-raising initiatives.


1) The dollar is weak again today, and there is lots of talk of new leadership in stocks...financials notably underperformed yesterday, while commodities outperformed.

2) GM, after trading at the NYSE since December 1916, has left the trading now trades under the pink sheets under the symbol GMGMQ.

GM has found a buyer for its Hummer unit, but we don't know who it is...more important is May vehicle sales that are out today, which are estimated in the range of 9.4 million units, well below the 10 million that GM's bankruptcy proceeding is assuming they will be seeing.

More importantly, GM is assuming the reorganized company will have 18 percent of U.S. vehicle sales, slightly less than the roughly 20 percent share they currently have. That is after they spinoff Hummer, Saab, Pontiac and Saturn, which are 3.8 percent of total vehicle sales.

This is optimistic and will require a lot of work: most analysts believe they will settle closer to 16 percent of total sales.

Another bold analyst call: this morning UBS lowered its price target on GM from $ $0. Thanks.

3) Walgreen's May same-store sales inched up 1 percent. Despite the rise, its comp. store sales missed estimates of 2.2 percent as pharmacy sales lagged due to a greater number of lower-priced generic drugs available.

4) Pepsi Bottling Groupraises both its Q2 and full-year earnings guidance for the second time in two months. The company cites "improving fundamentals" in North America and successful pricing initiatives for fueling the strength in the current quarter.

Keep in mind that Pepsi Bottling Group has turned down a takeover offer from PepsiCo,deeming that the current bid undervalues the bottler and its future earnings growth potential.

5) Cardinal Healthboosts its quarterly dividend 25% to 17.5 cents per share. 




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