Morning Coffee with TradingMarkets

  • February 8, 2008
  • David Penn

Good Morning!

Gold Continues Rally as Platinum Hits Record… Pending Homes Sales Plunge… Weyerhaeuser Beats Estimates… Jobless Claims Lower… Delta, Northwest Air Consider Merger… Recession A 50-50 Bet, Say Economists… MBIA Raises $1 Billion in Stock Sale… Treasuries Rally on Rate Cut Expectations… Google May Get Approval from EU Over Doubleclick Bid… Stock Hedge Funds Slip in January, Beat Market Indicies… Delphi’s Scott Black Sees Second Half Bounce for Stock Market…

Asian stocks down… European stocks down… Greenbacks moving lower against the Euro, British Pound… And the futures are trending lower in the hour before the bell.

Take the TradingMarkets Path to Professional Trading – Level 1 course and immediately improve your trading. It’s free! Start here.

TradingMarkets 5 Business Stories You Need to Know

Fed Nervous Over Inflation – Wall Street Journal

Will the Fed’s growing concerns over inflation limit the rate-cutting crusade the central bank has embarked upon over the past several months? Expectations that economic growth will resume in the second half of 2008 has some members of the Federal Reserve cautious about the magnitude of any rate cut in the spring.

Stimulus Bill Heads to White House – Bloomberg

Congress passed a $152 billion economic stimulus package, which includes tax rebates that will go to more than 100 million households. Incentives for businesses to spend money on new equipment and changes in the size of mortgage loans that Fannie Mae and Freddie Mac can buy were also part of the stimulus package that President Bush is expected to sign into law.

U.S. Dollar Gains Big on Euro – Bloomberg

ECB president Jean-Claude Trichet signaled a willingness to lower rates yesterday to defend Eurozone growth prospects. The new bias in favor of looser monetary policy in Europe is one of the factors that has led to the dollar’s strong gains against the Euro this week, the largest such gains in more than a year and a half.

Weyerhaeuser Profits Dip – Reuters

The housing slowdown continues to affect construction supply companies such as Weyerhaeuser, which saw its profits decline due in large part to losses in the company’s wood products business. The company did beat Wall Street estimates with its adjusted earnings.

Yahoo: Between Google and Microsoft – New York Times

Will Yahoo CEO and co-founder Jerry Yang, who years ago pledged that Yahoo would remain independent, be able to withstand the growing pressure from Yahoo shareholders, who are warming to the idea of an acquisition by software giant, Microsoft?

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:

  • Brightpoint
    (
    CELL |
    Quote |
    Chart |
    News |
    PowerRating)     beat earnings estimates on Thursday, reporting $0.31 EPS over a consensus of $0.26 EPS.

  • McAfee
    (
    MFE |
    Quote |
    Chart |
    News |
    PowerRating)     also beat earnings on Thursday, with $0.46 EPS over expectations of $0.45 EPS.

  • Alcatel-Lucent -ALUI}ALU] reported quarterly earnings of $-0.03 EPS Friday before the market opened.

  • Coventry Health Care
    (
    CVH |
    Quote |
    Chart |
    News |
    PowerRating)     announces results on Friday morning; look for $1.18 EPS.

  • Weyerhaeuser
    (
    WY |
    Quote |
    Chart |
    News |
    PowerRating)     reported earnings of $0.42 EPS before the bell this morning, beating analyst estimates.

  • Analysts are watching for Fannie Mae
    (
    FNM |
    Quote |
    Chart |
    News |
    PowerRating)     to report -$1.29 EPS on Friday before the bell.

  • When Lubrizol
    (
    LZ |
    Quote |
    Chart |
    News |
    PowerRating)     reports earnings on Friday morning, look for $0.71 EPS.

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

TradingMarkets 5 Top PowerRatings Stocks for Today

Company
 Symbol PowerRatings
Bankrate RATE 9
First Solar FSLR 9
Terra Industries TRA 8
Syniverse SVR 8
Somanetics SMTS 8

» View More Stocks

TradingMarkets Tracking the Wizards

Trading as Addiction – New York Times

Scientists have concluded that the human brain is stimulated by the risks of high-stakes trading in the same way that it responds to other strong stimuli, such as sex. According to researchers, the greater the risk, the greater the brain’s craving for the experience. A new field of study called “neurofinance” looks at the relationship between psychology, neuroscience and economics.

Hedge Funds Off to Rough Start – Bloomberg

Stock-picking hedge funds struggled in January 2008, with funds losing an average of more than 4% for the month. The losses represent the biggest decline in a month in more than seven years according to a report from Hedge Fund Research Inc. Hedge funds across the board, however, outperformed the major indexes in January, losing on average less than 2% compared to a loss of more than 6% for the S&P 500.

Legal Problems Grow for Bear Stearns Over Failed Funds – FINalternatives

The collapse of two hedge funds managed by Bear Stearns may lead to a federal indictment. Two credit-based hedge funds went bankrupt in 2007 due to massive losses in subprime mortgage related debt. The withdrawal of $2 million from the funds by former hedge fund manager, Ralph Cioffi is also under investigation by the SEC.

View Portfolios of Prominent Investors

TradingMarkets Playbook

Three consecutive days of selling have returned the market toa mildly oversold condition, which may limit selling on the final trading day of the week. That said, since this correction began in the fall of last year, traders have been reluctant to hold long positions over the weekend. So pressure to sell may outweigh the fact that the markets have already been in sell mode for the past few days. Since early November, the S&P 500 has closed lower on Friday eight out of 13 times.

Bloomberg reported this morning that nearly 85% of stocks were below their 200-day moving average as of yesterday’s close, reflecting the prevailing bearish mood that still surrounds stocks. Our TradingMarkets Stock Indicators are still showing more weak stocks up 10% or more in the past five days than strong stocks down 10% or more in the past five days, which suggests that there may still be weakness for traders to sell.

David Penn is Senior Editor at TradingMarkets.com.

Click here to sign up for the Morning Coffee with TradingMarkets newsletter.