The Zacks Analyst Blog Highlights: Kinder Morgan, El Paso, Statoil, Brigham Exploration and BHP Billiton

Oct 18, 2011, 09:30 ET from Zacks Investment Research, Inc.

CHICAGO, Oct. 18, 2011 /PRNewswire/ -- announces the list of stocks featured in the Analyst Blog. Every day the Zacks Equity Research analysts discuss the latest news and events impacting stocks and the financial markets. Stocks recently featured in the blog include Kinder Morgan (NYSE: KMI), El Paso (NYSE: EP), Statoil (NYSE: STO), Brigham Exploration (Nasdaq: BEXP) and BHP Billiton (NYSE: BHP).


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Here are highlights from Monday's Analyst Blog:

Critical Week for the Market

We are entering a critical phase for the market, and the next few days will determine its directional thrust. We have a busy economic schedule on the domestic front and the earnings season gets into high gear this week. Developments in Europe will also remain in the spotlight as Euro-zone leaders scramble to finalize details of their comprehensive plan before the self-imposed October 23 deadline.

Stocks have erased the losses of August and September and now stand at levels just before the S&P rating downgrade in early August. The events of this week will determine which way the market moves from here.

On the domestic economic docket, we will get fresh reports on inflation, manufacturing and housing. With respect to CPI and PPI fronts we will likely get strong headline gains, but increases on the 'core' front will likely be moderate and non-threatening. The fleeting nature of the pricing pressures, however, is unlikely to bring uniformity and consensus to the FOMC.

On the manufacturing front, we will get the regional Fed surveys (the Empire State & Philly Fed surveys) and the Industrial Production reports. The regional surveys have lately been poor predictors of the national ISM, though we should get continued momentum on the manufacturing front. Housing is unlikely to provide any market-moving readings, though we may get a modest gain on the starts front.

This is a big week for Europe as well as it brings us closer to the October 23 deadline for the release of the comprehensive plan to tackle the crisis besetting the common currency union. The plan will need to provide for bank recapitalizations, beefing up the IMF/EU-backed rescue fund, and a decision about what to do with Greece. The plan will likely be announced in the October 23 Euro-zone summit meeting in Brussels and endorsed by the G-20 summit in Cannes, France in early November.

A deal along these lines would have the potential to provide a reassuring framework for resolution of the multiple issues plaguing the union. But an inability to work out some of the critical details by the deadline date could spook the markets. For example, a timeline for bank recapitalizations and the extent of 'hair cuts' on Greek debt may prove to be difficult to resolve.

In corporate news, we have a couple of major M&A deals in the energy space. Kinder Morgan (NYSE: KMI) is acquiring El Paso (NYSE: EP) for $38 billion in stock and cash to form the largest natural gas pipeline company in the U.S. In another deal, Norway's Statoil (NYSE: STO) is increasing its presence in the onshore U.S. region by acquiring Brigham Exploration (Nasdaq: BEXP) for $4.7 billion.

This deal is in line with the recent trend of major international oil companies acquiring or getting into partnership with U.S. based exploration and production companies. The recent purchase of Petrohawk Energy by BHP Billiton (NYSE: BHP) was along the same lines.

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