Wednesday Pre-Market News (12/21/11) IMF ‘Italy is Insolvent’

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:

  • Tilson’s Recommended Readings: For anyone looking to break into the hedge fund industry, here is a good resource for MUST-READS for any to-be hedge fund analyst
  • EU P/E Multiples Lowest Since 1980s: expect stocks to go higher about 10-15% given that equity risk premium priced into market is near 2009 peak and P/E valuations near their lowest levels since the 1980?s
  • Italy is Insolvent: The International Monetary Fund may be forced to classify Italy as insolvent during the first half of 2012… IMF economists described a debt-to-GDP ratio of 120 percent as “the maximum level considered sustainable for a market access country” (BBG)
  • Corporate Credit: CDX.IG, HY and LCDX tightened -5.5bp, -45bp (+$1.5) and -22bp (+$0.75) yesterday. Closing marks were 127bp, 723bp ($91.75) and 441bp ($92.75)
  • Investors Leave Stocks & Go To Bonds: Worldwide, investors have taken $34 billion out of equity funds this year and put $75 billion into bonds
  • Strong Holiday Sales: ace of holiday sales seems pretty decent as evidenced by updates from ShopperTrak (raised its sales forecast from +3% to +3.7)
  • BAC’s Mortgage Problems: is close to settling a U.S. Justice Department investigation into whether its mortgage lender unit Countrywide Financial violated fair-lending practices (Dow Jones)
  • Earnings this AM: NKE +3% great quarter, WAG -3% misses top and bottom line, TEVA +0.5% announces $3B sh buyback, ORCL -10% big miss across almost all segments, JBL -7% in-line EPS but revs and guidance light

Economic Calendar:

Einhorn’s FOF Re-positions Portfolio, Makes New Seed Investment In Year Marked By “Speculative Exuberance”

david einhorn, reading, valuewalk, internet, investment research, Greenlight Capital, hedge funds, Greenlight Masters, famous hedge fund owners, big value investors, websites, books, reading financials, investment analysis, shortselling, investment conferences, shorting, short biasIt has not just been rough year for David Einhorn's own fund. Einhorn's Greenlight Masters fund of hedge funds was down 3% net for the first half of 2020, matching the S&P 500's return for those six months. In his August letter to investors, which was reviewed by ValueWalk, the Greenlight Masters team noted that Read More

  • Wednesday: Existing Home Sales
  • Thursday: Chicago Fed Survey, GDP, Personal Consumption, Initial Jobless Claims, U. of Mich Confidence, Leading Indicators, House Price Index
  • Friday: Durable Goods Orders, Personal Income, New Home Sales

M&A Watch:

  • Weekly M&A Trends: Announced M&A volumes improved by 55.1% to $50.2 billion. 4Q11 volumes are averaging 9% below the 3Q11 average weekly volume
  • DFG getting bought by Tokio Marine in cash deal = $2.7B
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.