UBSPaine Webber (CSCO ,INTU ,GM ,AXL ,TLB ,GADZ )
Economics: Fed cuts fed funds rate 25bps to 3.5% as expected: As expected, the Fed cut the funds rate by 25 bps and retained the formal 'risks weighted toward weakness' stance. The statement was slightly more upbeat than the one they issued last time, particularly on household spending, but it was fairly terse again. The statement keeps the door wide open to more easing at the October 2 meeting if necessary, but it is also consistent with the Fed going on hold if the numbers start to show improvement. In other words, the data between now and October 2 will be key. Wireless Equipment: More Signs of Consolidation in Mobile Handset Industry: We view the announcement that NEC and Matsushita have agreed to cooperate in the development of 3G handsets as consistent with our thesis that the mobile phone industry will face significant consolidation in the face of increasing complexity associated with next generation data products and slowing growth in the traditional voice segment of the market. Semi Capital Equipment, SPE, SEMI Reports B:B of 0.67x On Rising Orders; We Remain Cautious: Total equipment B:B was 0.67x, above June`s revised 0.56x. We believe Street was looking for a number in the high 0.5x range, on declining orders. Total Equipment orders were up 5% sequentially, and 6% on a rolling quarterly basis. Automobiles, August Vehicle Sales Could be Soft; Expecting 16.1m unit SAAR: Indications in August point to a y-o-y decline in vehicle sales of 7.0%, adding further credence to the cycle downswing in progress. We estimate SAAR of 16.1m units, down from 16.3m in July, and the weakest rate this year. Weekly API Report: Substantial Crude and Product Draw Supportive Near-Term: Last night`s data showed the largest weekly crude and main product draw since December 1999. Crude inventories fell 5.4 mn bbls as imports fell by 0.5 mnb/d. Influential PADD 2 inventories continued to fall to 60 mn bbls, the lowest level since March 2001 and seasonally the lowest level since 1993
CSCO: reit buy - 12 month target $24 |
