Morning Coffee with TradingMarkets

  • December 6, 2007
  • David Penn

Good Morning!

Markets Bound Higher…The Subprime Fix Is In…Asian Stocks Hit One Month High…Yen Lower…Good News On Private Sector Job Growth…Orange County Owns SIVs…Bank of England Cuts Rates to 5.5%…ECB Stands Pat on Rates at 4%…Moody’s Warns on MBIA Loss of Capital…Gamestop Replaces Dow Jones in S&P 500

Forget Goldilocks economies. With stocks rallying on strong economic data AND hopes for a rate cut next week, the markets seem to be suddenly surrounded by princes on white horses. The government is here to help with a freeze on subprime mortgage rates. And recent strength in the dollar threatens to give the Federal Reserve Board room to cut rates next week. Let’s see if this “heads we win, tails you lose” attitude keeps the market higher as we move toward mid-month.

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TradingMarkets 5 Business Stories You Need to Know

AMD, Intel Gain On Semiconductor Outlook – Wall Street Journal

Forecast of higher PC demand in 2008 buoys prices for chipmakers. Anticipated demand from emerging markets leads to Intel upgrade, bets on in-the-money options.

Subprime Plan Complete – CNN Money

Plan to freeze resets of subprime loans for some borrowers cheered by Democrats, criticized by Republicans as a “break in the commitment to free markets.” More details to be revealed today.

Let’s Work! Jobs Survey Shows Strong Gains – BusinessWeek

ADP survey reveals strong job growth in private sector. Stronger than expected report highlights growth in service jobs, which offset losses in goods-producing jobs.

Ex-Amaranth Traders Down 15% In November – Bloomberg

Who said there were no second acts in American finance? Brought on board last year to run Canadian hedge fund, former traders of the notorious Amaranth Advisors lose 15% during November correction.

BlackRock Proposal Reopens Florida Pool –Miami Herald

Troubled investment pool for local governments reopened as part of plan by BlackRock. With exceptions, $14 billion fund could reopen for withdrawals as early as today.

For more stories as they happen, go to our Breaking News section.

TradingMarkets 7 Stocks You Need to Know for Today

Here are 7 stocks for traders for today from TradingMarkets.com:

For a list of today’s highest PowerRating stocks, click here.

TradingMarkets 5 Top PowerRatings Stocks for Today

Company
 Symbol PowerRatings
Blockbuster BBI 8
Research in Motion RIMM 8
Dealer Track Holdings TRAK 8
Syntax Brillian BRLC 8
Net 1 UEPS Technologies UEPS 8

View More Stocks

TradingMarkets Tracking the Wizards

Pershing Capital To Go Public? – New York Times

William Ackman says he is likely to take the $6 billion dollar hedge fund group public in the near future. Although “timing is not right now” Ackman says going public would increase capacity to make larger, longer investments and boost shareholder activism.

Larger hedge fund providing greater returns – Financial News Online

Apparently size matters when it comes to fund investing. Funds with assets under management of more than $5 billion outperformed smaller funds over the past 10 years due to larger funds’ ability to take advantage of non-traditional asset classes.

Buy Side Bill Miller: CIT Group, Texas Instruments, Bear Stearns –Gurufocus.com

After besting market returns for 15 years, recently underperforming Bill Miller of Legg Mason Value Trust makes bets on vendor financing, technology, and investment brokerage firms.

View Portfolios of Prominent Investors

TradingMarkets Playbook

Light selling on Monday and Tuesday brought out the best in the bulls on Wednesday as markets roared higher. The market is short-term overbought, which suggests that some selling is possible and perhaps even welcome to bring more bargain-hunting buyers off the sidelines and into the market. Every day the market moves sideways-to-higher puts the sellers that much more on notice, so look to see how traders and investors respond to any intraday weakness.

The number of attractive stocks is slowly increasing, with the roster of higher, “in the green,” PowerRatings stocks featuring more than a few well-known names. With accommodative noises from the Federal Reserve and news of the Federal government’s plan to bailout subprime borrowers, the mood of impending doom that characterized the market only a few weeks ago has all but dissipated, leading investors back to the market and increasing the prospect of a sustained rally between now and the December meeting of the Fed.

David Penn is Senior Editor at TradingMarkets.com..



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