UPB June 29th Market Commentary - SINA SPY BIDU
Europe plans single financial supervisor
SYDNEY (MarketWatch) -- A late Thursday night meeting of European leaders came up with a plan for a single financial supervisory mechanism for the region to help stabilize markets. European Commission President Herman van Rompuy said that the mechanism will involve the European Central Bank and that there will be the possibility of direct recapitalization for European banks. Financial assistance will be provided by the European Financial Stability Facility until the European Stability Mechanism becomes available, he said at a press conference early Friday. Europe is trying to do what's necessary in order to break the negative cycle for the region, he said.
European leaders agree on long-term union
BRUSSELS (AP) – European leaders have agreed to use the continent's permanent bailout fund to recapitalize struggling banks, and agreed to the idea of a tighter union in the long term.
The bank decision at overnight meetings in Brussels on Friday was aimed at helping Spain, which sought a €100 billion rescue to help its troubled banks and is facing rising borrowing costs.
EU President Herman Van Rompuy called it a "breakthrough that banks can be recapitalized directly."
He said leaders of the 17-nation eurozone also agreed to a joint banking supervisory body.
He said the leaders of the full 27-member European Union agreed to a general long-term plan for a tighter budgetary and political union.
Euro zone leaders agreed Friday to a series of long-debated measures they hope will calm market pressure on Spain and Italy , including pledging to eventually allow direct recapitalization of euro-zone banks and opening access to the region's rescue funds to countries not in bailout programs.
After a summit meeting that dragged into the early morning hours Friday, the leaders also agreed that the region's permanent bailout fund, the European Stability Mechanism, will not have senior creditor status when it takes over the loans granted to Spain for its ailing banks. A senior European official said Spain will eventually be able to take the loans off its sovereign debt balance sheet.
European Council President Herman Van Rompuy said euro-zone banks will be able to directly access the region's permanent bailout mechanism once a single bank supervisor is established. He said the European Commission will soon make a proposal on this plan.
The decisions were immediately welcomed by Italian Prime Minister Mario Monti , who, along with Spanish prime minister Mariano Rajoy , drove a hard bargain during the talks to secure immediate steps to help ease soaring borrowing costs in their countries.
Mr. Monti said the steps taken were very positive for the euro zone and should help to stabilize the region's economy.
Jean-Claude Juncker , head of the Eurogroup of finance ministers, told reporters that "considering the difficulty of the moment and of the discussions, we have managed to send markets a message that - I hope - will convince them."
Meanwhile, German Chancellor Angela Merkel said euro-zone leaders took good short-term decisions and that further work would be needed on long-term solutions.
UPB June 29th Option Recap - SPY SINA BIDU MA NKE
FACEBOOK Analysts Think The Stock Is Going To Go Higher... Imagine That.
Today, over a month since the Facebook IPO debacle, analysts were able to tell the world whether or not they liked FB shares. Lead underwriter Morgan Stanley was liking shares at $38 the day of the IPO, where do you think they liked them at today? For those who weren't watching FB trade the first day, or were busy funding an account in hopes of backing up the truck on the biggest front loaded dump IPO we've ever seen, you would not have noticed the floor that was put in at $38. The powers that be were not going to leave home that day with egg on their face by letting FB close a tick below $38... and it didn't. So much for a free market. The day after the IPO and over the next few weeks the stock fell quicker than a drunk whose Friends secretly tied his shoes together, and proceeded to laugh furiously as he collapsed numerous times before ultimately figuring out what was causing him to fall.
And like that drunk FB was able to shake off the embarrassment of the IPO and these days finds its stock heading higher.
If Morgan Stanley was protecting that $38 figure and was so confident that FB was worth $38, what possibly could their Analyst price target be for FB? Ok, I'll save all your pent up excitement..... its $38!! Amazing! These guys at Morgan Stanley are simply brilliant. It gets better... the average Analyst estimate is $37.95. Astounding! Below are some popular analysts and their price targets for FB. Notice how all the prices are for FB trading higher. It's like every weatherman calling for the next 365 days to be sunny. Who needs college, a degree, and type of knowledge? Just buy buy buy.
Lets see what transpires over the next 12 months.
According to the average analyst estimate compiled by Bloomberg, Facebook shares “will increase to $37.95 over the next year, 5 cents less than the initial price set when shares began trading in May.”
JPMorgan, another lead Facebook underwriter, initiated coverage with an “overweight” rating and a $45 12-month price target.
“As the underlying social fabric of the Web, Facebook is a unique platform asset with strong network effects, a deep competitive moat, and unparalleled social context,” JPMorgan analysts wrote. “We believe the next phase of the Internet will be driven by data and powered by ubiquitous online access, and Facebook is well positioned here through its large and engaged user base, virtual ownership of the social graph, and unwavering focus on the user experience.”
Here’s a selection of other newly-released analyst reports on Facebook, via The Wall Street Journal. Facebook stock traded early Wednesday at $32.05, down 3% from the previous day’s close, and 13.5% below the IPO opening price.
- Goldman Sachs, also a lead underwriter, initiated coverage with a “buy” rating and a $42 12-month price target.
- RBC Capital Markets launched its coverage with an “outperform” rating and a $40 price target.
- Bank of America Merrill Lynch came in with a “neutral” rating, and $38 price target.
- Citigroup was also “neutral,” with a $35 price target.
- Barclays started its coverage with an “equal weight” rating and a $35 price target.
June 22nd Option Market Recap - SPY, VIX, MA, FB, BBBY, FCX