Market Has Modestly Positive Developments

U.S. futures are modestly positive as we attempt to snap a 6-week losing streak.

There are some modestly positive developments: there's talk of smaller bank capital requirements than expected, with banks selling for near book value or at a discount to book (as Barron's noted this week).

Indeed, valuations in general are a lot more reasonable. With the S&P 500 at 1270, and current earnings estimates for the year at $95, leaves us with a 13.3 times forward earnings estimate.

A trader messaged me this morning with an interesting factoid: no President has since Franklin Roosevelt has been elected when the unemployment rate was over 7 percent. I haven't been able to independently confirm this, but with an unemployment rate north of 9 percent, nuggets like this is undoubtedly deeply worrisome to the Obama administration.

That's why I've gotten a few modestly bullish comments this morning. If President Obama can make the economy better, he will do it. Expect more creative and accomodative ideas to be forthcoming, particularly on job creation. This morning's editorial in the WSJ from General Electric* CEO Jeff Immelt (chairman of the President's Jobs and Competitiveness Council) and AmEx CEO Ken Chenault was only the opening salvo.


1) Wendy's/Arby's announced it will sell an 81.5 percent controlling stake in its Arby's chain to Roark Capital Group for $130 million in cash, assumption of $190 million in debt, and $80 million in income tax benefits.

Wendy's/Arby's will maintain an 18.5 percent ownership stake in the struggling fast food brand. Arby's bought Wendy's for $2.4 billion in 2008. The combined company has a market cap of $1.9 billion today. Arby's has been battling declining comps, far underperforming sales at the company's Wendy's fast food locations.

2) Ford has been ordered to pay nearly $2 billion to dealers as a result of a class action lawsuit accusing the automaker of overcharging dealers on sales of commercial trucks. The Wall Street Journal reports that a Cleveland judge upheld the verdict made by a jury back in February. Ford still continues to plan to appeal the ruling.

3) Timberland soars 43 percent after VF Corp agreed to acquire the footwear/outdoor apparel retailer for $2 billion in cash. Timberland shareholders will receive $43/share, while VF, which already owns North Face, will broaden its line of outdoor apparel. VF Shares are jumping 11 percent on the news.

* General Electric maintains minority ownership in NBCUniversal, CNBC's parent company.

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