10-Year Yield Hits New Low
Posted by Eddy Elfenbein on May 30th, 2012 at 10:33 am

The yield on the 10-year Treasury fell to 1.65% today which is another multi-decade low.

The 10-year TIPs yield is now down to -0.4%. In February 2011, the TIPs yield was +1.4%.

Joey Bank Bombs
Posted by Eddy Elfenbein on May 30th, 2012 at 9:51 am

Jos. A. Bank Clothiers ($JOSB) just reported horrible earnings for its first quarter. The company earned 53 cents per share which was nine cents worse than expectations. To be fair, the company had told us that this quarter looked weak but we didn’t know exactly how weak until now. Quarterly revenue rose 4.2% to $208.91 million, although comparable stores sales dropped by 1%.

The stock is getting nicked this morning but this is cause for optimism. JOSB has said that this quarter is off to a good start: “So far the second quarter has started out much better than the first quarter. For May, both our comparable store sales and Direct Marketing sales are up compared to the same period last year, continuing the positive trend established in the last five weeks of the first quarter. However, Father’s Day, the most important selling period of the quarter, is still ahead of us.”

Morning News: May 30, 2012
Posted by Eddy Elfenbein on May 30th, 2012 at 7:28 am

Euro-Area Economic Confidence Falls to 2 1/2 Year Low

Euro Bonds With Strings Are Europe’s Best Way Forward

Greek Exit From Euro Seen Exposing Deposit-Guaranty Flaws

Worries About Spain Weigh on Euro Zone

ECB Rate Cut Hopes Push Euribor To 2-Yr Lows

India’s Economy Slows, With Global Implications

Young and Global Need Not Apply in Japan

Global Carbon Market Value Hits Record $176 Billion

Challenges Mount for Chinese Makers of Electric Cars

Dragon Oil Awarded Iraqi Exploration Block

A Facebook Phone: Ambitious Leap or Fatal Mistake?

Dunkin’ Brands Looks to Emerging Markets

Allstate Leads Insurers to Best Start Since 2003 on Storm Costs

Visa Beats JPMorgan as Cards Wage War on Cash: Riskless Return

Roger Nusbaum: A Not So Lazy Portfolio

Pragmatic Capitalism: Housing Recovery: Hope and Reality

Be sure to follow me on Twitter.

Home Prices Cheapest in 10 Years
Posted by Eddy Elfenbein on May 29th, 2012 at 9:47 am

This morning’s Case-Shiller reports that U.S. home prices are the cheapest they’ve been since mid-2002.

Home prices hit new post-bubble lows in March, according to a report out Tuesday.

Average home prices were down 2.6% from 12 months earlier, according to the S&P/Case-Shiller home price index of 20 major markets. Home prices have not been this low since mid-2002.

“While there has been improvement in some regions, housing prices have not turned,” said David Blitzer, spokesman for S&P.

Although five cities – Atlanta, Chicago, Las Vegas, New York and Portland – saw average home prices hit new lows, that’s an improvement from last month’s report, in which nine cities notched new lows, Blitzer noted.

Overall, the 20-city composite is down about 35% from its peak in 2006.

Experts say affordable mortgages, combined with much lower home prices, should help to bolster the housing market.

“It’s probably the best time to buy a home in decades,” said Pat Newport, an analyst for IHS Global Insight.

“But the problem is that unless you have good credit, you are probably going to have trouble qualifying for a loan,” he added referring to overly tight lending conditions.

Chinese Banks and Greek Polls Look to Lift the Market
Posted by Eddy Elfenbein on May 29th, 2012 at 8:55 am

I hope everyone had a nice long weekend. The stock market looks to open higher today. The good news is that banks in China appear ready to boost lending. Also, the polls in Greece suggest that the conservative parties will do well.

Also, Joe Banks ($JOSB) said that it will report its first-quarter earnings on Thursday. This will be an interesting report because three months ago, the company reported inline earnings and said that business is on the weak side for Q1.

The first quarter of 2012 has started out more slowly than we had planned with declines in both comparable store sales and Direct Marketing sales for the first 8 weeks of the quarter. The declines are primarily due to weaker than expected traffic and also due to the warmer winter weather which is resulting in significantly lower sales of outerwear and cold weather merchandise. We are making marketing changes to address the sales trend. We believe that these changes will be effective and appealing to our customers; however we remain cautious about the outcome of the first quarter of 2012.

The shares dropped from $54.48 before the report to as low as $45.12 last week. Wall Street has trimmed its earnings estimate from 73 cents per share to 62 cents per share.

Morning News: May 29, 2012
Posted by Eddy Elfenbein on May 29th, 2012 at 7:23 am

Bankia Tapping Depositors for Bonds Leaves Spain on Bailout Hook

Greek Euro Exit Aftershocks Risk Reaching China

Hedge Funds Take Bets Against Core Euro Zone Bonds

Yen-Yuan Direct Trading To Start June 1

Taiwan Finance Minister Quits

World To Gain From Gas Glut If Regulation Right

Crude Oil Slightly Higher: Iran, Greece Remain In Focus

$8.5 Billion Deal for Calling Service Presents a Puzzle

Marubeni of Japan to Buy Gavilon for $3.6 Billion

RIM Writedown Risked With $1 Billion Inventory

JPMorgan Dips Into Cookie Jar To Offset “London Whale” Losses

Repsol Seen Cutting Dividend to Defend Rating After YPF

Azul’s Neeleman Says Trip Acquisition Equals 4 Years of Growth

7-Eleven Finds a Niche by Adapting to Indonesian Ways

Phil Pearlman: On Sendak’s Obituary in The Economist

Howard Lindzon: Facebook was just a PARTIAL Scam, Venture Capital is ALIVE, and Equities are NOT Dead!

Be sure to follow me on Twitter.

Morning News: May 28, 2012
Posted by Eddy Elfenbein on May 28th, 2012 at 7:32 am

Spain Regional Rescue Risks Tipping Point on Yields

Spain May Recapitalize Bankia with Government Debt

Greek Pro-Bailout Parties Gain Amid Euro Collapse Concern

European Firms Plan for Greek Unrest and Euro Exit

In Italy, Technology Is Leading to a TV Transformation

IMF Urges Ukraine To Up Gas Prices

Bank of Japan Gets Cold Feet After Valentine Surprise

Report Warns on Africa Jobs Growth

Lukoil Q1 Net Jumps 8% on Higher Crude Price

JPMorgan Injects $394 Million in China Unit on Faster Growth

U.S. Hedge Funds Find Ways to Trade Euro Misery

How Facebook is Like Prison

For Tech Start-Ups, New York Has Increasing Allure

Jeff Miller: Weighing the Week Ahead: Bring on the (Economic) Evidence!

Epicurean Dealmaker: Out of Office Autoreply: Where Are You, Dammit?!

Be sure to follow me on Twitter.

Thanks Vets
Posted by Eddy Elfenbein on May 27th, 2012 at 11:48 am

Four Up Days in September
Posted by Eddy Elfenbein on May 25th, 2012 at 5:49 pm

Here’s a factoid that caught my attention:

The Dow has seen only four “up” days this month, which is tied for the least number of positive days in a month during the index’s history, according to WSJ Market Data Group.

The only other month with this few positive trading days was September 1903.

Of course the month isn’t over just yet.

Analyst Thinks Hudson City Could Go For $8.25
Posted by Eddy Elfenbein on May 25th, 2012 at 4:58 pm

Matthew Kelley, an analyst at Sterne Agee, thinks Hudson City Bancorp ($HCBK) could go for $8.25 in a buyout, but only if the bank makes some big changes.

Kelly said that “earnings power at HCBK will continue to suffer in a sustained low interest rate environment, in our view,” and that the company was “expected to announce changes to its business plan (add mortgage banking),” and that a third restructuring of borrowings was “not out of the question.”

The analyst said that mortgage loan prepayments were continuing to pressure Hudson City’s margins, and that because Fannie Mae (FNMA) and Freddie Mac (FMCC) have raised their dollar limits on the “conforming” mortgage loans that they will buy, “the pool of jumbo mortgages which has wider spreads (without government guarantees),” and has been a traditional focus for the company, “is smaller.”

Going forward, options for Hudson City “include a push into a less capital-intensive mortgage banking,” focusing on quickly selling newly originated conforming mortgages to generate gains-on-sale,” according to Kelley, who added that the company “may also be considering a move into non-residential lending (multi-family and commercial real estate),” with which Sterne Agee “would be more concerned,” because of “the lack of infrastructure, history and expertise in these areas.”