Market news

Every morning the Street of Walls team puts out an update on market levels, today’s top stories, and active M&A deals.

Today’s Top Stories:

  • FREE HF 13F Report: Next week the StreetofWalls team will be releasing the 4Q 2011 Hedge Fund Intelligence Report, free sign-up
  • FHA Bailout: The FHA could exhaust its reserves over the coming year according to an estimate published Mon
  • Profit Margins All Time High: S&P 500 profit margins have now risen to an all time high.  As the chart below illustrates, S&P 500 profit margins have risen sharply to new all-time highs over the past several quarters
  • Hedge Funds and EU Banks: the FT reports on how leading hedge funds have seen large profits from the eurozone bank rally and many think the gains can continue (FT)
  • Macquarie Cut 10% IB in Asia: More investment banking resumes on the market as Macquarie cut about 10 percent of its investment banking workforce in Asia last week (BBG)
  • Romney Is Losing Ground: “Mitt Romney was beating President Obama among independent voters, 53% to 41%. Now those numbers are upside down: Obama tops Romney among them, 51% to 42%”
  • Apple iPad: WSJ reports that iPad3 will use VZ and T’s 4G networks. It is not known if S and T-Mobile (which currently don’t sell the iPad) will sell the new product or not
  • Lowes Reducing Headcount: LOW offers corporate buyouts to staff in an attempt to reduce headcount
  • Citi Downgrades BAC: “Downgrading BAC reflecting our view that at current levels the risk/reward tradeoff is relatively balanced in the near term.  Longer term, BAC still offers attractive value as the company addresses its legacy issues, which should drive down the perceived risk in the stock (reflected via its 3 yr beta of 1.6, the highest in the space) and its cost of equity” (Citi)
  • Soros Decreases IOC Stake: George Soros’ hedge fund disclosed that it decreased its stake in the total outstanding common shares of InterOil Corp. (NYSE:IOC) to 3.82%

Economic Calendar:

  • 7:30 am: NFIB Small Business Optimism, Jan., est. 95.0 (prior 93.8)
  • 7:45am/8:55am: ICSC/Redbook weekly retail sales
  • 8:30am: Import price index, Jan.; Y/y est. up 7.2% (prior gain 8.5%), M/m est. up 0.3% (prior drop 0.1%)
  • 8:30am: Advance retail sales, Jan., est. up 0.8% (prior up 0.1%)
  • 8:45am: Fed’s Plosser speaks on economy in Newark, Del.
  • 10am: Geithner testifies before Senate Finance Committee
  • 10am: Business Inventories, Dec., est up 0.4% (prior up 0.3%)
  • 11am: Fed to purchase $4.25-$5b notes
  • 11:30am: U.S. to sell $20b 64-day cash management bills
  • 1pm: U.S. to sell $40b 4-week bills
  • 4:30pm: API weekly inventories
  • 5:40pm: Fed’s Lockhart speaks on economic outlook in Sarasota, Fla.

M&A Watch:

  • Weekly M&A Trends: This week saw some big jumps in Debt underwriting and M&A activity. Announced investment banking M&A increased +22% from the prior week to $34bn, M&A volumes are still very low for the start of the year
  • DOJ clears GOOG’s purchase of MMI
Disclosure: I do not have a position in any stocks mentioned in this article, do not have a plan to initiate a position within the next 72 hours.
Disclaimer:  The information, opinions, material, and any other content provided in this article is for informational purposes only and is not to be used or considered an offer or solicitation to buy or sell securities, investment products, financial instruments, or to participate in any particular investment strategy. The information, opinions, material, and any other content provided in this article does not constitute as a recommendation or as advice to buy or sell securities, investment products,  financial instruments, or to participate in any particular investment strategy.