Rail Traffic Continues to Expand Modestly

“Rail traffic was mixed again this week, but the trend in intermodal remains modestly positive.   The AAR reported a decline of 3.1% in carloads and an increase of 4.1% in intermodal traffic.  The 10 week moving average in intermodal ticked up to 3.5%.   I track intermodal because it has tended to involve less volatility in specific commodity names and tracks the economy a bitter more closely.  While intermodal growth is nowhere near the rate of change we saw in 2010, it’s clearly still growing.  This served as an early warning indicator into the 2008 downturn and has yet to show signs of contraction.  Here’s more from the AAR:”

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Get rid of those unwanted emails….

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European markets closed down, but off the lows of the day.

World indices

IBEX closed up another 1.75% today, putting this week’s returns over 8%.

“According to some, the next Lehman-like event will be none other than a Greek exit from the Eurozone, especially if not firewalled, or in other words, disorderly. Considering how effective the Eurozone has been to date at anything orderly, it is a fair assumption that any Grexit-type event can only be disorderly. And while we appreciate that now flailing Spain has gripped the public’s attention and been exclusively in the headlines for the past week, or ever since the start of the Greek poll moratorium, we can’t help but recall that we are less than 10 days away from June 17, and the fact that for all the media disinformation, anti-bailout Syriza is likely to be the winner in the election, getting the automatic 50 extra seats that will make it likely it forms an anti-EUR government with a next step: Grexit. Pardon: a disorderly Grexit. The latest firm which see the Grexit as nothing but the coming of Lehman 2 is Citi, which in this convenient matrix predicts that such an outcome would lead to the same VIX at 80 outcome we saw in those days of September and October of 2008. Perhaps, for ole’ fat tails sake, it is not a bad idea to buy some VIX calls here just in case.

Of course, if the ITA-BUND spread hits 720 bps, there will be bigger things to worry about than what counterparty will have the cash to make good on the other side of that VIX bet.

More from Citi:”

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“(Reuters) – Intel is counting on facial-recognition technology for targeted ads and a team of veteran entertainment dealmakers to win over reluctant media partners for its new virtual television service.

But so far it’s proving a challenge to get the service off the ground, thanks to an unwillingness on the part of major media content providers to let Intel unbundle and license specific networks and shows at a discount to what cable and satellite partners pay.”

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Anadarko Petroleum Corp. (APC) investors are discounting the company’s market value by $2 billion as analysts and lawyers see few ways to minimize the effect of a $25 billion lawsuit spawned by the toxic past of its Kerr-McGee Corp. unit.

The 2006 purchase of Kerr-McGee’s oil and gas assets, a key part of former Chief Executive Officer Jim Hackett’s legacy of expanding Anadarko, has left the company battling a lawsuit that’s put a cloud over its stock. Energy investors may want to look at buying shares in companies that don’t have the sort of litigation risk that Anadarko has, said Jeffrey Campbell, an analyst for Pritchard Capital Partners in New York.

“We cannot support jumping in front of the litigation bus when peer companies offer attractive upside without unquantifiable risk,” Campbell said in a May 22 note. At its June 7 closing price of $63.20, Anadarko’s stock is underperforming peers by about $4.16 a share, implying investors were pricing in about $2 billion for a possible settlement or penalty, according to Campbell’s estimate.

The suit, which went to trial May 15 in Manhattan Bankruptcy Court, contends The Woodlands, Texas-based Anadarko’s Kerr-McGee unit was part of a two-step transaction that defrauded the Environmental Protection Agency of the money to clean 2,772 polluted sites.

After an internal reorganization started in 2001, Kerr- McGee spun off its chemicals business and old environmental liabilities as Tronox Inc. (TROX) beginning in 2005. About three months after the transaction was completed, Anadarko offered to buy Kerr-McGee’s oil and gas assets for $18 billion.

” (NYSE: NOK) is popping early Friday morning on questionable rumors it might be a takeover target of Samsung.

Shares are up about 6 percent early.

Rumors of a takeover could not be confirmed.”

Source

$KFT will leave the NYSE to the NASDAQ on June 26 to experience what the company says “will yield greater cost efficiencies, while providing visibility advantages for the company’s iconic brands.”

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Coders of applications will now be able to go to $FB to integrate their apps into $FB. Similar to what Apple, Google , and Microsoft have, but different then say an app store.

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“The Federal Housing Administration, struggling to manage a growing glut of delinquent home mortgages, plans to ramp up sales of the loans to investors, a move that could stave off foreclosure for thousands of homeowners.

The government agency, which is expected to announce the bulk sale program Friday, has more than 700,000 loans in default, amounting to more than 9% of the $1 trillion in loans it insures. Bulk loan sales are one way the FHA could reduce the backlog of potential foreclosed properties it will have to take back and resell.”

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A conference call will be held tomorrow to discuss the euro zone banking crisis. The biggest topic of discussion will be how to deal with Spain. It is expected according to sources tht Sapin will ask for more funds.

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Here’s some pretty good historical data via Raymond James and Market Montage on the odds of a deeper market decline:

“Some interesting data from Jeff Saut of Raymond James if you are a data hound like I am.”
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Thankfully, this is the case….

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$CHK will sell some assets to tackle huge debt loads.

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Gapping up 

MOH +28.3%, FRAN +17.4%, CTFO +17.3%, CNC +11.4%, CHTP +4.8%, CMTL +2.2%, DGIT +1.3%,

NEON +6.1%, YHOO +1%, TPX +0.9%, CHK +2.2%, SBRA +1.3%, CHKM +4.5%,  ZQK +0.8%

Gapping Down

RENT -8.7%, COO -5.6%, RIO -5.1%, BBL -3.9%, BHP -3.6%, MT -3%, CVU -2%, SLV -1.4%,

LEN -2.1%, FLT -5%,  CVU -2% , ATPG -14.4% ,  ELLI -5.2%, PRGS -10.1%, THO -2.8%, MCD -2.7%,

RIO -4.7%, BBL -3.9%, BHP -3.6%, MT -3%, SLV -1.4%, GOLD -1.4%, GLD -0.8%, GDX -0.8%

AEO, AVP, BONT, CSCO, CORT, JNPR, KMI, LEN, LULU, NTAP, PHM, QCOM, RVBD, SD, STI, RIG, VE,

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