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Tonight’s Agenda

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Tonight’s Agenda

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  1. THERE ARE NO WARRANTIES, EXPRESSED OR IMPLIED, AS TO ACCURACY, COMPLETENESS, OR RESULTS OBTAINED FROM ANY INFORMATION DISCUSSED DURING HAWKTRADE MEETINGS.  Past performance does not guarantee future results. Investment returns and principal value will fluctuate, so that investors' shares, when sold, may be worth more or less than their original cost. Investing in any financial instruments does not guarantee that an investor will make money, avoid losing capital, or indicate that the investment is risk-free. There are no absolute guarantees in investing. HAWKTRADE and its members do not bear any responsibility for losses or gains made by members trading on their personal accounts based on analysis from HAWKTRADE meetings.

  2. Tonight’s Agenda • Japan Nuclear Crisis • Fed approves of bank dividends • Economic Data • Market Technicals • Market speculation

  3. Nuclear Radiation Crisis in Japan

  4. Nuclear Crisis in Japan has the Market on Edge • Earthquake & Tsunami • Est. 8,000 people dead & 12,000 missing • Est. $100-$200 billion in damage/repair • One time incident (aside from after-shocks) • Nuclear Power Plants Damaged • 6 reactors/spent fuel-rod pools, some leaking radiation • Reactors 150 miles north of Tokyo • Situation still Unresolved….

  5. Nuclear Situation • Potential for catastrophe, could be as worse as Chernobyl if situation not contained • Engineers, firefighters, and military working around the clock to prevent disaster • Fuel rods must be kept from over heating • Military using choppers to dump water on reactors in order to keep cool • Firefighters using water cannons on ground • Engineers trying to restore power to water pumps (very critical)

  6. Airtime: Fri. March. 18 2011 | 1:15 PM ET Nuclear Alert Level Raised

  7. Lasting Effects? • Japan is the 3rd largest economy in the world • Nuclear situation could weaken economy long-term if not resolved • Japanese Economy: • Export economy, major world supplier of technology & autos

  8. Airtime: Fri. Mar. 18 2011 | 12:08 PM ET The Market’s Next Move

  9. Word on the Street • Investors cautious ahead of the weekend • Taking positions off, holding cash • Watching what’s going on in Japan & Middle East • Many think the Japan situation will improve • Some think Japan will have long term economic problems

  10. Rebuilding Japan Stocks • PKX (steel) • MTL (steel & coking coal) • XSRAF(copper, thermal coal, coking coal) • BHP (iron ore, copper, coking coal) • BTU (thermal coal) • VALE (iron ore) • OGZPY (nat gas) • CVX (nat gas & oil)

  11. Last week’s economic data

  12. 1 week chart of S&P 500 • Japan & Middle East Dictate the Market

  13. Fed Approves Bank Dividends & Share Buy-backs • Signals U.S. banking sector is healthy & stronger • All 19 of the largest banks tested passed • Banking system is profitable now • 30% payout ratio limits

  14. RBC's Outlook on Banks Airtime: Fri. Mar. 18 2011 | 1:36 PM ET RBC’s Cassidy on Bank Dividend Increases

  15. RBC’s Cassidy’s Outlook on Banks • Dramatic increase in dividends in next 3 years for banks • Dividends will increase as earnings increase (higher ratio) • A lot of M&A in banking sector in next 3-5 years • Both borrowers & lenders will have more confidence, take more risk

  16. Notable Bank Dividend Hikes

  17. Phrase of the week: “Even a banker can make money with an upper sloping yield curve”

  18. Market Technicals

  19. Airtime: Thurs. Mar. 17 2011 | 4:27 PMET Is the Bull Market Broken?

  20. Video Summary • Beginning of a major correction? • Or just a normal healthy correction? (5%-7%) • Market Technician: • 3 weeks down, 7% correction since Feb high of 1,343 in S&P 500 • Corrections are healthy, keeps the bull market going • Says the financial sector will lead the way

  21. Where’s the Market Headed? • 1 year chart of S&P 500

  22. What’s the Trade? • Financials? • JPM, BAC, C, WFC, USB, PNC, BK, STT, BBT • Triple leveraged (3X) ETF’s? • Bulls: FAS, EDC, TNA, ERX, DRN • Bears: FAZ, EDZ, TZA, ERY, DRV

  23. P/E ratios & Forward Looking Earnings • P/E ratios is the price of the stock divided by annualized earnings • Market often looks at projected future earnings of a company • Normal P/E ratios range from 10x-20x earnings • 15x often considered fair value • Some sectors trade at different earnings multiples, like casino stocks (very high) • Stocks like AAPL, HAL, BHP, MTL, & BAC have upward trends in their projected future earnings, BUY!!!

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