• Treasury Secretary Geithner released today a report calling on the Obama Administration to wind down holdings in Fannie Mae and Freddie Mac, hoping to bring private capital back to the mortgage market. The report notes that a major goal is to ensure government support to make sure GSEs such as Fannie and Freddy can pay debt and meet obligations. The administration endorsed an existing law that forces the GSEs to shed loans in their almost USD 1.5tln portfolios by a rate of 10% or more per year as a way to reduce the governments exposure to failing mortgages.
• US Trade Balance (USD) (Dec) M/M -40.6bln vs. Exp. -40.5bln (Prev. -38.3bln)
Earnings :
Kraft Foods - Q4 EPS USD 0.46 vs. Exp. USD 0.46, Q4 revenue USD 13.80bln vs. Exp. USD 13.44bln. Co. sees organic revenue net growth at least 5%. (RTRS)
Other news:
Microsoft/Nokia - The two cos. have teamed up in a Hail Mary attempt to take on Apple and Google in the burgeoning smartphone market. Nokia has been losing market share to the iPhone and Android platforms at a staggering clip; embracing Microsoft’s software is seen by analysts as a desperate attempt to regain some their presence in the marketplace. (RTRS)
Cisco Systems - Senior VP and GM of consumer products John Kaplan to leave co. (WSJ)
Earnings:
Other news:
Visa – Co. announces plans to pay USD 190mln for privately held PlayScan Inc., a payments company that processes transactions in online games, digital media and social networks. The deal, which is expected to close during Q1, is seen as a move to compete with e-commerce firms like eBay’s PayPal. (The San Francisco Chronicle)
Eli Lilly - Co. announces senior leadership changes, with Sue Mahony to head Lilly Oncology, replacing John Johnson, who resigned last month. Also, Steve Fry has been promoted to top Human Resources and Diversity position. (RTRS)
Walgreens - Co. to launch first national ad campaign for co. branded health and wellness products. Co. has hired Publicis Group to expand beyond its regular newspaper circulars and in-store signs. (NYTimes)
DuPont - Co. must raise Danisco bid from USD 5.8bln, sources say. (RTRS)
Earnings :
Expedia Inc. - Q4 adjusted EPS USD 0.32 vs. Exp. USD 0.36, Q4 revenue USD 808.4mln vs. Exp. USD 801.7mln. (Sources)
Other news:
Amazon.com - Co. will close a Dallas-area fulfilment center and cancel a planned expansion after co. failed to reach an agreement with the state over taxes. The expansion would have added 1000 jobs. For workers losing jobs at the existing center, co. has offered them positions in other locations if they are willing to move. (WSJ)
eBay - Co. says its PayPal unit could become its biggest business. In a recently laid out plan, co. predicts PayPal revenues could increase 40% over the next two years, rising to around USD 13bln to 15bln in 2013 versus USD 9.2bln in 2010. (WSJ)
Yahoo ! - Co. unveiled plans to launch a digital newsstand for tablet devices, called ‘Livestand,’ to distribute content to users in exchange for a cut of advertising and subscription revenue. (The San Francisco Chronicle)
eBay - Co. price target raised to USD 38 from USD 35 at UBS, buy rating maintained.
Ameriprise Financial - Co. upgraded to buy from neutral at Goldman Sachs.
Fluor Corp. - Co. upgraded to buy from hold at Citigroup.
Interpublic Group - Co. upgraded to buy from hold at Deutsche Bank, price target raised to USD 15 from USD 11.
Goodyear Tire - Co. price target raised to USD 16 from USD 14 at Goldman, rating held at neutral.
Teradata - Co. price target raised to USD 55 from USD 47 at Oppenheimer, rating held at outperform.
Downgrades :
Cisco - Co. downgraded to neutral from overweight at JP Morgan, price target lowered to USD 19.00 from USD 24.50.
Expedia - Co. downgraded to neutral from buy at Bank of America, price target set at USD 26.
Sprint - Co. downgraded to neutral from buy at Goldman Sachs, price target lowered to USD 5 from USD 6.
Dean Foods - Co. downgraded to market perform from outperform at Wells Fargo, price range held at USD 10 – 11.
Blue Nile - Co. downgraded to hold from buy at Citigroup, price target held at USD 56.
Facebook - Co. is considering allowing a tender offer to its employee shares up to USD 1bln - with a USD 60bln valuation of the co. - in a fresh attempt to generate liquidity and delay what is seen as an eventual IPO. (AllThingsDigital)
General Motors - Co. has announced that most of its 26,000 white-collar workers will get performance bonuses of 4% – 16% of their base salaries this year, giving further evidence of the co.’s turnaround since getting government aid two years ago. (AP)
US National Wireless Technology - US President Barack Obama’s broadband plan to invest USD 5bln to expand wireless technology to rural parts of America could face difficulty passing through Congress. Although the plan has been supported by technology and wireless companies, Republicans on the House Energy and Commerce committee have voiced concerns about the proposal. (The Hill/theflyonthewall.com)
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