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Thursday, March 19, 2009

Tsys Surge After Fed Moves To Buy Gov Bonds

2:26 (Dow Jones) Treasurys surge across the board after the Fed moves to buy
government debt. The Fed says it will buy up to $300B in Treasurys over the
next six months. Ten-year note up 3 points to 100 26/32 to yield 2.65% while
the 30-year bond is up 5 4/32 to 99 22/32 to yield 3.53%. DJIA back around
session highs, up 111.

2:24 (Dow Jones) Euro soars to eight-week high of $1.3351 after the FOMC
decision, rising more than two cents from its levels just prior, $1.3110. In
NY, EUR/USD was at 1.3302 from 1.3009 late Tuesday.

2:22 (Dow Jones) The FOMC economic outlook is largely the same, but it is
seriously pushing up its campaign to aid credit markets. It is upping it
mortgage market interventions massively, and adding to it the purchase of
Treasury securities. If the balance sheet size was something that was keeping
you up at night, you haven't seen nothing yet! Treasurys yields plummeting;
10-year yeild down to 2.66%. DJIA up 61.

2:20 (Dow Jones) In an effort to continue propping credit markets the Fed has
announced it will buy Treasurys and Agencies.

2:19 (Dow Jones) The FOMC says they will buy Treasurys, against expectations.
This is a big surprise and will have a large impact on the bond market. DJIA
shoots higher, now up 25.

2:13 (Dow Jones) The phenomenal growth of Facebook has so far likely helped
Google (GOOG) gain market share, RBC Capital Markets says. But firm warns that
could change if Facebook's rapid growth trajectory continues and it finds a
business model that sucks ad dollars away from other online media. "We think
Facebook as the 'starting point' for more and more users on the Internet could
create some multiple compression for Google over time, if the momentum
continues," firm says. GOOG down 1% to $332.12.

2:09 (Dow Jones) Investors should buy into any weakness that Hot Topic (HOTT)
may experience now that Wal-Mart (WMT) plans at week's end to roll out its own
merchandise related to the teen vampire movie "Twilight," which HOTT has been
selling for sometime, FBR said. That's because HOTT's March and April comps
will still benefit from "Twilight" sales, even if WMT does take some business
away. HOTT up 0.4% to $9.51.

2:02 (Dow Jones) The outcome of the FOMC meeting lies dead ahead and there's
really only one source of drama. While no one expects the Fed to annouce the
purchase of longer-term Treasurys, the last two statements have discussed the
ongoing study of the issue. Whether the Fed repeats that or not could offer
clues about whether in fact this will happen at some point. Another mention
keeps the idea alive, while an ommission may mean it's off the table.
Otherwise, look for the Fed to be downbeat on growth, worried inflation is too
soft and keeping interest rates pinned effectively at zero.

1:52 (Dow Jones) Nasdaq Comp and S&P 500 have turned higher, and the DJIA is
down but a fraction, as the FOMC statement nears and Congress grills AIG's
Liddy. Financials again lead rising sectors; energy, consumer staples lead
decliners. Frankly, we'll get interested in Congressional hearings when members
of Congress are sitting in the low seats, answering the questions instead of
asking them. Freddie Mac discloses apparently mandated bonuses it has to pay
its executives. Does anybody understand a bonus is supposed to be a reward for
a job well done? Apparently not. DJIA down 29, S&P 500 up 2, Nasdaq Comp up 13.

1:41 (Dow Jones) Canada has received lavish global praise for its sound
financial system, yet amid all the back-patting is the rather uncomfortable
fact that its economic indicators are now deteriorating nearly as quickly as
their US counterparts, Doug Porter, deputy chief economist at BMO Capital
Markets, says. Contributing to the decline are three particular vulnerabilities
for Canada: a heavy reliance on auto production, a heavy reliance on
commodities and the fact that the recent construction boom is starting to
correct, he says. "These three factors help explain why there will be precious
little separation between the Canadian and US economies either during this
year's deep downturn or next year's shallow recovery," Porter says.

1:33 (Dow Jones) ProLogis (PLD) up sharply, possibly on a report from The
REIT Newshound saying Stockbridge Capital Partners and Teacher Retirement
System of Texas are positioning to buy a "sizable" portfolio of US assets from
ProLogis. A ProLogis representative wasn't immediately available to comment on
the report, which cited unnamed sources. The Newshound quoted the company's
director of investor relations as declining to comment, but noted PLD has said
it was marketing assets that could generate $500M-$600M in proceeds. PLD up
9.8% to $7.03.

1:25 (Dow Jones) Sanford Bernstein cuts price target for Edison International
(EIX) to $36 from $39, based on EIX's 2009 EPS forecast filed late Monday of
$2.90-$3.20; Bernstein sees 2009 EPS at $3.11. They note EIX's projected 13%
rate-base growth at utility Southern California Edison is lower than expected;
see 2010 EPS at $3.69, 2011 at $4.14; and predicts EIX's $20.4B capex plans for
2009-2013 will likely come in 4% lower due to transmission project permitting
delays. EIX down 2.8% at $27.51.

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