Bullishness Backs Off

London back after two days off, China up fractionally after a 5-day drop.

Finally, bullishness backs off: Investors Intelligence notes that financial newsletter writers who are bullish dropped to 55.6 percent versus 58.8 the week before; but that was the highest level of bullishness since October 2007.


1) Rare earth proxy Molycorp up 3 percent pre-open after falling 6.5 percent yesterday. While much was made of the Chinese government's announced cut in rare earth exports for the first half of 2011, Piper Jaffray and others noted that the 11 percent cut was not as great as expected. "...the quota came in above our expectations and if annualized it would represent a comparable level to 2010 following several years of sharp y/y declines. We were expecting an export quota reduction of 20% or more," Piper Jaffray noted.

Momentum traders take note: significant share unlock coming on January 25: 28.125 million shares of MCP come unlocked (out of 81.25 million outstanding) at that time. This is from the July 29th IPO, where 28.125 million shares were sold at $14 (!) with a six-month lockup period. The stock closed yesterday at $46.18.

2) BJ's Wholesale up 5.9 percent pre-open, biggest gainer at the NYSE, as the New York Post reports private equity firm Leonard Green and Partners may launch a hostile bid for BJ's Wholesale if an auction for the company doesn't come in the next few weeks. Green owns 9.5 percent of BJ. They acquired Jo-Ann Stores Eat at Joe's Ltd last week.

3) Blackstone joined the bidding for for Australian property developer Centro Properties Group, according to the WSJ. While Centro owns malls in Australia and New Zealand, it also owns about 600 properties in the U.S., largely strip malls and neighborhood shopping centers. This is being closely followed as an indication of whether there has been a bottom in the U.S. commercial real estate market.

: Simon Property Group More signs that retail real estate has bottomed came to an agreement with banks on a $4.6 billion loan to help finance its bid for Capital Shopping Centres, which would be a merger of shopping mall giants. The U.S. mall operator has until January 12 to make a formal offer for the U.K's largest mall operator, and still needs to sway Capital Shopping Centers' board with an attractive-enough offer. Simon Property's earlier offer was rejected by Capital Shopping Centers' board, which deemed that it "very substantially undervalues the company."

released a bullish research note on Fairchild Semiconductor 4) FBR Capital . The firm was optimistic for improvements in Fairchild's margins and believes that its 2011 earnings could come in between $1.50-$1.60 - above the Street's current consensus of $1.36. FBR also raises Fairchild's price target by $2 to $22 on expectations of a buyback or dividend announcement, and the outside possibility that the chip company may be sought in an acquisition.

5) Shares of Rio Tinto are down fractionally after severe floods in Australia have affected some of its coal mining operations. As a result, the miner has declared force majeure on certain delivery contracts, which permits the company to miss deliveries without paying penalties due to extraordinary events beyond its control.

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