Markets
BX

MT Insider: Blackberry Slides While Apple Rises in Early Market Trading, US Economics Weekly Preview

According to multiple sources, Blackberry ( BBRY )'s co-founder, Mike Lazaridis, has reached out to Private Equity firms including Blackstone ( BX ) and Carlyle Group ( CG ) to explore a possible bid over the weekend.

Prior to the market close on Friday, BlackBerry ( BBRY ) shares were halted and closed down 17% at $8.72. The company issued a press release shortly after the halt announcing negative preliminary Q2 results.

Taking a step back, a quick sum of the parts analysis by MT Newswires from August 30 gave investors an idea of what Blackberry's downside could be (using a 50% write down for the company's assets).

Assuming $2 billion in patents and $2.6 billion in cash (given in the release) and $1.7 billion in receivables and inventory (including a 50% write-down), less $3.4 billion in overall liabilities (including accounts payable and accrued expenses), suggests a total value of just $2.9 billion. Dividing this by 525 million shares outstanding, BBRY is worth less than $6.00 per share.

The stock was also downgraded to Hold from Buy at Jefferies and from Sector Perform to Underperform at RBC in the pre-market

In contrast, Apple ( AAPL ) sold out of its entire stock of 5S iPhones in less than 24 hours. Furthermore, the company reported that it sold over 9M units over the weekend.

Separately, JC Penney ( JCP ) is in talks to raise additional cash in a response to shareholder pressure to take advantage of cheap financing rates (whispers that it could borrow against its own real estate).

Third Point plans to re-register its Sony (SNE) shares now held under different names, permitting the fund to file shareholder resolutions and take other steps to push for better performance.

Barron's says General Electric (GE) is poised to outperform as it scales back its financial operations and focuses on industrials. It should be able to cut costs while taking advantage of firming electricity demand.

US Economics Calendar

Monday, September 23

08:58AM Markit US PMI (preliminary), September (consensus 54.0, last 53.1)

The consensus expects a small increase in the Markit PMI in September.

Worth noting, the Markit PMI has a limited history, although is used by analysts as a metric to forecast the ISM manufacturing index. The Empire manufacturing survey was a mixed bag, while the Philly Fed index posted a strong gain to reach its highest level since March 2011.

09:20AM Atlanta Fed President Lockhart (FOMC non-voter) speaks

President Lockhart is generally considered a centrist with respect to monetary policy views. He noted in August that any reduction in the pace of asset purchases "whether it is in September, October, or December -- ought to be thought of as a cautious first step."

09:30AM New York Fed President Dudley (FOMC voter) speaks

President Dudley has not spoken on the economy for some time. He will likely mirror the dovish tone Chairman Bernanke struck at last week's post-FOMC press conference.

In July, Dudley noted that, with respect to the Chairman's guidance on ending asset purchases around mid 2014 when the unemployment rate was projected to be near 7%, "if labor market conditions and the economy's growth momentum were to be less favorable than in the FOMC's outlook--and this is what has happened in recent years--I would expect that the asset purchases would continue at a higher pace for longer."

01:30PM Dallas Fed President Fisher (FOMC non-voter) speaks

President Fisher, not a current FOMC voter but scheduled to vote in 2014, has been known for holding more hawkish monetary policy views. Fisher was a consistent dissenter against the highly accommodative stance of monetary policy when he last voted in 2011.

Tuesday, September 24

09:00AM S&P/Case-Shiller home price index, July (consensus +0.8%, last +0.9%)

S&P Case-Shiller home prices measures prices on a broader range of properties but with a more limited geographic coverage than the FHFA index.

Note that the rate of home price appreciation has slowed somewhat in recent months relative to that seen earlier in the year.

Prices have generally risen most rapidly in cities hardest hit by the housing bust, including San Francisco, Las Vegas, and Phoenix.

09:00AM FHFA house price index, July (consensus +0.8%, last +0.7%)

The consensus expects a 0.8% advance in the FHFA home price index, which measures only the prices of homes financed with conforming mortgages (loans eligible for purchase by the two major Federal agencies that buy mortgages, Fannie Mae and Freddie Mac).

According to the FHFA data, the Mountain (including NV and AZ) and Pacific (including CA) regions have rebounded most strongly. Both areas saw the largest declines in home prices during the housing bust.

10:00AM Richmond Fed manufacturing index, September (consensus +11, last +14)

The Richmond Fed manufacturing index rose strongly in August to +14. The consensus expects a small retracement in the index in September.

Continued strength in the index would be a favorable signal for the underlying trend in the manufacturing sector, as the Richmond Fed district has likely been disproportionately impacted by the defense sequester.

10:00AM Conference Board consumer confidence, September (consensus 80.0, last 81.5)

Despite the somewhat puzzling drop in the preliminary U Michigan read, Rasmussen's daily read on consumer sentiment has held up during the month and the stock market, typically a decent proxy for consumer sentiment, continues to advance.

Wednesday, September 25

08:30AM Durable goods orders, August (consensus -0.2%, last -7.3%)

Durable goods orders ex-transport, August (consensus +1.0%, last -0.6%)

Core capital goods orders, August (consensus +2.0%, last -3.3%)

Core capital goods shipments, August (consensus +1.3%, last -1.5%)

A continued drop in Boeing (BA) aircraft orders suggests that transport will subtract from the headline index.

However, strong ISM new orders numbers suggest a solid print on ex-transport orders. Core capital goods shipments, which have lagged growth in orders over the past twelve months, should bounce back following weakness in July.

10:00AM New home sales, August (consensus +6.6%, last -13.4%)

July's very large drop in new home sales was concerning in light of the substantial rise in mortgage rates in recent months and generally more mixed housing data.

12:00PM Flow of Funds, Q2

The Fed's Flow of Funds report includes data on balance sheets of the household, corporate, and government sectors.

The report will likely show an increase in household net worth relative to disposable income, in light of continued increases in home prices and modest gains in the stock market during Q2.

Also of interest will be the extent to which homeowners have continued to rebuild equity. Homeowners' equity as a share of the total value of household real estate has risen substantially from its 2009 low.

Thursday, September 26

08:30AM Initial jobless claims, week ended September 21 (consensus 325k, last 309k)

Continuing jobless claims, week ended September 14 (consensus 2,820k, last 2,787k)

Jobless claims have been distorted downward in recent weeks due to claims processing delays in California. The delays were caused by a computer system changeover.

A Labor Department spokesperson noted that claims may continue to be distorted for several weeks, while California's Employment Development Department stated that as of September 18 there remained a significant backlog of unprocessed claims.

As a result of recent distortions, the signal from jobless claims on the underlying strength of the labor market is significantly clouded.

08:30AM GDP (third estimate), Q2 (consensus +2.6%, last +2.5%)

Expect the composition of this week's more modest potential revision to be broadly spread across components, including a possible upward revision to Q2 services consumption in light of the quarterly services survey.

10:00AM Pending home sales, August (consensus -1.0%, last -1.3%)

Pending home sales,which measure contract signings rather than closings, are expected to decline modestly in August, likely due in part to higher mortgage interest rates. Over the past year, pending home sales have increased 6.7%.

10:10AM Fed Governor Stein speaks

Governor Stein generated significant discussion on the potential costs of QE when he spoke in February on potential overheating in credit markets. He will speak on "yield-oriented investors and the monetary transmission mechanism."

11:00AM Kansas City Fed manufacturing index, September (consensus +8, last +8)

12:15PM Minneapolis Fed President Kocherlakota (FOMC non-voter) speaks

President Kocherlakota has advocated reducing both the unemployment rate threshold (from 6.5% to 5.5%) and the inflation threshold (from 2.5% to 2.25%) in the FOMC's outcome-based forward guidance on the path of the federal funds rate.

09:15PM Kansas City Fed President George (FOMC voter) speaks

President George has dissented from each FOMC decision so far this year, citing concerns that the high level of monetary stimulus will create financial imbalances and could eventually lead to an un - anchoring of inflation expectations.

Friday, September 27

05:45AM Chicago Fed President Evans (FOMC voter) speaks

President Evans, originator of the "Evans rule" which closely parallels the outcome-based forward guidance on the federal funds rate that the Committee ultimately adopted, stated earlier this month that "to start the wind-down [of asset purchases], it will be best to have confidence that the incoming data show that economic growth gained traction during the third quarter of this year and that the transitory factors that we think have held down inflation really do turn out to be transitory."

08:30AM Personal income, August (consensus +0.4%, last +0.1%)

Personal spending, August (consensus +0.3%, last +0.1%)

PCE price index (mom), August (consensus +0.1%, last +0.1%)

Core PCE price index (mom), August (consensus +0.1%, last +0.1%)

Personal income likely advanced in August, based on the solid 0.6% increase in aggregate weekly payrolls already reported for the month. However, last month government wages & salaries fell 0.5%, likely due in part to defense furloughs.

Consumer spending probably posted a moderate gain as well, as core retail sales rose 0.2% and unit auto sales rose 1.8%. Energy prices probably made a relatively neutral contribution to the headline PCE price index in August, as was the case in the CPI report.

09:55AM University of Michigan consumer sentiment (final), September (consensus 78.0, last 76.8)

University of Michigan consumer sentiment unexpectedly declined in the September preliminary survey.

In light of continued gains in the stock market and a generally positive read from the Rasmussen daily sentiment index, expect a higher estimate for consumer sentiment in the final September read.

10:15AM Chicago Fed President Evans (FOMC voter) speaks

02:00PM New York Fed President Dudley (FOMC voter) speaks

DJIA 15396.0 -7.0 -0.05

SPX 1701.5 -1.0 -0.06

IXIC 3217.5 +1.0 +0.03

BA 117.06 +0.43 +0.37

BBRY 8.33 -0.40 -4.53

BX 24.22 -0.03 -0.12

CSL 69.66 0.00 0.00

AAPL 483.81 +16.40 +3.51

SNE 21.36 -0.27 -1.25

GE 24.20 +0.19 +0.79

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

Copyright (C) 2016 MTNewswires.com. All rights reserved. Unauthorized reproduction is strictly prohibited.


The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

In This Story

BX CG JCP AAPL

Other Topics

Commodities

Latest Markets Videos