Thursday (11/29/11) Pre-Market News: Funds Bullish on Housing

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:

  • Yesterday’s Market Update: “US stocks are trading definitively lower through midday Wednesday amid very little news as investors may simply be fading the recent Santa rally a bit in another light volume day. And in keeping with the risk-off sentiment brewing today, commodities are also broadly lower” (GS)
  • China to Cut Bank Reserves: China is likely to cut banks’ reserve requirement ratio in early January to bolster its economy, the state-run China Securities Journal said in a front-page editorial (Dow Jones/Reuters)
  • Morgan Stanley Layoffs: The Company plans to layoff 580 employees at three of its NYC locations starting December 15. The three locations are 1 New York Plaza, 1585 Broadway and 750 Seventh Avenue
  • New iPad in January: Apple is set to unveil its next-generation iPad – which will come in two versions – at the iWorld scheduled for January 26, 2012, according to sources at its supply chain partners
  • Paulson Decreases ACAS Stake: Due to activity on December 22, Paulson’s hedge fund has disposed a portion of its shares in American Capital, Ltd. (NYSE:ACAS). The stock price is currently $7.03 per share. Consensus has set an average price target of $10.30 per share
  • BP Charges: the WSJ says prosecutors are preparing the first criminal charges against BP employees stemming from the Deepwater catastrophe
  • Charts of the Day: some really interesting charts put out by UBS
  • Hedge Funds Bullish on Housing: Hedge funds run by Caxton Associates LP, SAC Capital Advisors LP, Avenue Capital and Blackstone Group LP have been buying housing-related investments, betting on a rebound. And formerly bearish research firm Zelman & Associates now predicts a housing pickup, as does Goldman Sachs Group Inc
  • Holiday Sales Strong: US retail sales are on track to rise ~3.8% in Nov and Dec
  • Perry Capital 3Q11 Portfolio: During 3Q11 Perry increased their exposure to the Energy (+13.0%) and Healthcare (+3.8%) while trimming exposure within Consumer D. (-4.0%) and Financials (-9.5%)
  • Sears Closing Stores: Yesterday, on December 27th, Sears Holdings announced the closing of 100-120 Kmart and Sears Full-line stores
  • Gaming & Online: “On Friday 23 December, the US Department of Justice released a legal opinion stating that the 1961 Wire Act applies only to sports, not to casino or poker. The decision differs from previous interpretations of the Wire Act, which bans betting across state borders, and has previously been pointed to as the major hurdle for Internet poker in the US. Our analyst Ed Birkin says temper any upside expectations as may hurdles to overcome” (Barclays Research)

M&A Watch:

  • Weekly M&A Trends: Completed M&A volumes doubled from last week to $49.5 billion. 4Q11 volumes are averaging 11% below the 3Q11 average. Expect precedent transactions to be comp’ing down double digits for 2011
  • J.F. Lehman & Company announced that it has acquired Doss Aviation. J.F. Lehman is a leading middle-market private equity firm focused exclusively on the defense, aerospace and maritime sectors
  • Large-cap healthcare REIT Ventas (VTR) announced a definitive agreement to acquire Cogdell Spencer (CSA) for $4.25 per share in cash, for a total consideration of $760-770mn including assumed debt and before transaction costs
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.

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