"The world belongs to the energetic." - Ralph Waldo Emerson
Morning News of Note:
- REITS: Pop! The Other Real-Estate Bubble THE NATIONWIDE INFATUATION with property has spilled over into the stock market, where shares of real-estate investment trusts have soared, despite spotty operating results and higher interest rates. The run-up in REIT shares, which have doubled since early 2003, has raised concern on Wall Street that a bubble could be forming in the $300 billion sector. "Our view is that valuations are in uncharted territory, and the group is very susceptible to a correction," says Jonathan Litt, the REIT analyst at Smith Barney. What's the downside? Litt says that shares of real-estate investment trusts could fall more than 10%. This year, the major REIT indexes are up about 10% (including dividends) after 30%-plus returns in both 2003 and 2004. (Full Story) BARRONS
- TWX: AOL making wireless move America Online will announce today that it's accelerating its move into cell phone services through the acquisition of a software company, Wildseed, which will be part of a new unit called the AOL Wireless Group. "We believe that wireless is one of the biggest places for AOL to play in," says AOL Wireless General Manager Craig Eisler. The deal with privately held Wildseed "enables us to offer new products like instant messaging for phones, and great photo and music experiences for phones." (Full Story) USA Today
- BIDU: Baidu.com Sees IPO Pop, But Some Fear a Burst Bubble The initial public offering of shares in Chinese Web search engine Baidu.com Inc. seemed to have it all: exposure to China's booming consumer sector, a pure play on a hot industry, and a chance to own what is commonly referred to as the Chinese Google. The result was the best U.S. stock debut in more than five years, according to Thomson Financial. Baidu's American depositary shares closed at $122.54 on Friday, rising 354% on the Nasdaq Stock Market from its offering price, the biggest first-day gain since telecom-equipment provider Finisar Corp. jumped 357% in November 1999 -- during the final chaotic months of the Internet stock-market boom. (Full Story) WSJ
- C: Citigroup-C planning aggressive bank acquisitions-FT: C is planning an aggressive acquisition comapaign in growth markets including Asia, Latin America and eastern Europe after the regulatory ban preventing the company from making large acquisitions is lifted, according to CEO Chuck Prince. "I would expect a lot more transactions like [South Korean bank] KorAm where we step up from 2 or 3 per cent market share to something like 10 per cent market share," he said
- CSCO NOK: Nokia shares gain on report of Cisco interest -- Reuters (15.94 ) Nokia shares opened more than 2 percent higher on the Helsinki bourse on Monday following a newspaper report that Cisco Systems (CSCO) is considering making a bid for the top mobile handset maker. The Business newspaper reported on Sunday, without revealing its sources, that Cisco is eyeing NOK in a bid to gain its wireless infrastructure technology. Both Cisco and Nokia declined to comment on the London newspaper report.
Market Comments: The market opens higher this am, and BIDU is off to the races again. Don't chase this one. There is also a rumor that CSCO wants to buy NOK, but I don't believe it.
Friday was a pretty big distribution day, the first one in a while. I think the consolidation phase has started, and doubt the market will make any new highs in the near-term. I have trimmed my overall market exposure and will look to play the trading ranges for the time being.
long C, TWX