Prism Morning Call 09-16-09

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CURRENT MARKET SENTIMENT Mission accomplished! What is next, sell off today or tomorrow? If the last two option expiration months are an indication, Friday is an up day to be followed by either sell off on Monday or Tuesday. Wall Street may choose to take the market higher with a better industrial production (0.6 percent ) in order to sell it off and avoiding unpredictable jobless data , thus ending up the week higher. Look at 9640 as sign of weakness in the downside.

MARKET HIGHLIGHTS 09/16/2009

ECONOMIC NUMBERS AND DATA Time (ET)

Indicator

Date

Actual

Expectation

Range

Prior

8:30 AM

Consumer Price Index

Sep 16

0.4%

0.3%

-0.1% to 0.6%

0.0%

8:30 AM

CPI Ex Food & Energy

Sep 16

0.1%

0.1%

-0.3% to 0.2%

0.1%

9:15 AM

Industrial Production

Sep 16

0.7%

-0.3% to 1.5%

0.5%

9:15 AM

Capacity Utilization

Sep 16

69.1%

68.1% to 70.0%

68.5%

10:30 AM

DOE US Crude Oil Inventories

Sep 16

800K to 1000K

-5906K

10:30 AM

Sep 16

-700K to 2000K

2068K

Sep 16

500K to 2000K

1993K

10:30 AM

DOE US Gasoline Inventories DOE US Distillate Inventory Refinery Utilization

Sep 16

-0.50%

-2.0% to 0.0%

0.05%

1:00 PM

NAHB Housing Market Index

Sep 16

19

18 to 22

18

10:30 AM

PRISM CALL CPI data came out fairly bullish. Last night the API data (oil) cam e out extremely bearish. We expect the market to take an initial leg up, maybe six handles on the futures then sell down 4 handles. We are waiting to see if there is selling pressure that comes in at that level. If so, market will return to the pivot (1050 on the spx). If it bounces from there we can see an up move till 1060 (spx), with the market pulling in and closing somewhere in the middle. Market is remaining up because of options expiration on Friday. Looking to fade the first oil move and looking for a bearish DOE number at 10:30.

TECHNICAL Indices

S2

S1

Pivot

R1

R2

INDU (DOW)

9550

9600

9659

9765

9816

SPUZ (S&P)

1040

1044

1050

1060

1065 Page |1

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DOW STOCK TO WATCH Strong MMM

Weak WMT

BAC

BAC

KO

PG

CAT

JNJ

UPGRADES / DOWNGRADES Stock Upgraded


House

Current Price

Price Adjustment

Target Price

Barclays

35.72

Overweight

$43

Argus

6.26

Buy

$20

Credit Suisse

36.16

Outperform

Oppenheimer

32.56

Outperform

Piper Jaffray

11.48

Overweight

BofA/Merrill

83.55

Buy

Goldman

29.97

Sell

Goldman

41.67

Buy

House

Current Price

Price Adjustment

Citigroup

42.64

Hold

Citigroup

18.88

Sell

Thomas Weisel

4.06

Market Weight

Citigroup

17.99

Sell

Martha Stewart Livin Omnimedia (MSO) Omniture (OMTR) Verizon (VZ)

JP Morgan

8.14

Underweight

JP Morgan

17.32

UBS

31.00

Neutral

Repsol SA (REP)

ING Group

27.03

Sell

BJ’s Wholesale Club (BJ) Continental Air (CAL) Digital River (DRIV) FPIC Insurance Group (FPIC) Take Two (TTWO) Amazon.com (AMZN) Aetna (AET) Fortune Brands (FO)

Stock Downgraded  EQT Corp (EQT) Post Properties (PPS) Sprint Nextel (S) Mirant (MIR)

$49

Target Price

$13

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COMMODITY PRICES Commodity

Price

OIL

70.73

GOLD

1019




 0.20

12.20

FOREIGN MARKETS Market

Price




FTSE

5119.67

77.54

1.54

DAX

5687.06

58.08

1.03

NIKKEI

10270.77

53.15

0.52

HANG SENG

21402.92

536.55

2.57

CHINA

2999.71



34.018

%

-1.12

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NEWS ALERT MYL Mylan Labs' Matrix Receives Tentative FDA Approval Under PEPFAR for Efavirenz, Lamivudine and Tenofovir Disoproxil Fumarate Tabl TTM Tata Motors may sell 15% in finance arm - Economic Times (12.68 ) MGM MGM Mirage discussed in Business Week (13.37 ) MGM's assets seem "richly valued," even with a generous valuation of the company's Project CityCenter CTIC Cell Therapeutics released updated 18-month follow-up clinical data for its phase III EXTEND trial of pixantrone (1.39 ) Major European markets all higher by ~1% Nikkei gains 0.5%; Hang Seng rallies for 2.6% TOT Total predicts output growth, cost cuts - Reuters.com (61.37 ) PTR PetroChina to double gas supply to Beijing by 2015 - Reuters.com (117.78 ) UK jobless rate hits highest level for 14 Years in July – WSJ Warren Buffett says no "bounce" for economy, but residential real estate has improved - CNBC.com IMF head says Asia leads economic recovery, according to paper - Reuters.com AGCO AGCO Corp issues downside rev and EPS guidance for Q3 and FY09 (32.56 ) ROK Rockwell Automation reaffirms that the company expects full-year fiscal 2009 diluted earnings per share to be $1.40 to $1.70 (consensus is $1.59), excluding any restructuring charges related to actions that the company may take in the fiscal fourth quarter (44.06 ) ECONX MBA Mortgage Applications of -8.6% vs +17% Prior U.S. Treasury to wind down financing program –WSJ WSJ reports that the U.S. Treasury Department is expected to begin winding down the Supplementary Financing Program, which provides cash for Federal Reserve initiatives, to avoid hitting the $12.1 trillion debt ceiling. The Treasury is expected to wind down the program to as little as $15 billion but government officials want to keep it in place in case it is needed in the future Wells Fargo urges US to boost mortgage market - FT.com

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NEWS ALERT AXP American Express: Outperforms peers on credit; remains overvalued on normalized EPS - FBR Capital (34.65 ) SVNT Savient Pharma confirms early 2010 target for KRYSTEXXA resubmission (15.88 ) COMDX API crude oil inventories show a build of 631K, up from previous week of -7216K Gasoline inventories showed a build of 1347K, up from previous week of 571K CGA China Green Agriculture beats by $0.05, beats on revs; issues Q1 and FY10 guidance (13.48 +1.02) ADBE Adobe Systems beats by $0.01, beats on revs; guides Q4 EPS in-line, revs in-line (35.62 +0.43) OMTR Omniture being acquired by Adobe for $21.50 in cash (17.32 +0.32) UpdateROG Rogers Corp raises Q3 guidance above consensus (27.00 -0.27) MT Arcelor Mittal sees China roar, lagging U.S, Europe - Reuters.com (41.67 )

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