According to the recent TIM (Trade Ideas Monitor) report, over the last five trading days, institutional brokers are continuing to becoming more bearish (see note below, previous post, or the youDevise website for additional information on the TIM report). For the five trading days ending June 4, the number of short ideas as a percentage of new ideas sent to investment managers increased 41.35%, compared to 35.88% just a week ago. The TIM reflects which direction brokers are expecting a stock to move over the next 1-3 weeks. The TIM Long-Short Index, measuring the total number of long ideas compared to the total number of short ideas sent to clients, decreased 35.4%, further highlighting negativity and bearishness from brokers. As for individual securities, Palm (PALM), Freeport McMoran (FCX), and Petroleo Brasileiro (PBR) were the stocks most recommended as shorts by institutional brokers.

Note: The Trade Idea Monitor (TIM) is an application for measuring "ideas from authors (mainly brokers) to recipients (mainly buy-side clients)" (see youDevise website). It is used by institutional brokers to send long and short equity and ETF trade ideas to clients. The TIM Report is based on the number of real-time equity trading ideas sent to over 4,300 equity sales people, sales traders, and analysts at over 300 institutional brokerage firms to more than 100 hedge funds, quant funds, and investment managers.

Bloomberg is reporting how Petrobras (PBR), the state-owned Brazilian oil company, has leased around 80% of the world's deep water offshore drilling oil rigs. The rigs can drill in water approaching 10,000 feet in depth. Currently, the world has a supply of 21 such rigs that are capable of such depths.

Given the need for increased supply to meet current demand (which is slightly outstripping supply), producers are moving to more deep water exploration. While placing rigs under contract can be expensive, it can also give Petrobras a strategic advantage. Not only will they have more ability to tap resources that may end up being extensive, the company is also forcing competitors to pay higher rents for available rigs, in some cases as much as $50,000 more per day. The contract rates Petrobras currently has in place range from $410,000 to $580,000 per day. Truly amazing. Who is the big winner? Possibly Transocean (RIG), the world's largest offshore driller. Petrobras is attempting to extend its leases with Transocean 3 years beyond current expiration dates.