Morning Coffee with TradingMarkets

  • January 29, 2008
  • David Penn

Good Morning!

FOMC Meeting Begins… Pepsi, EMC Report Today… President Bush Gives Final State of the Union Address, Calls for Extending Tax Cuts, Passing Economic Stimulus Bill As Is… Would Further Rate Cuts Invite New Bubbles?… Cardindal Health Reports Positive Quarter… Wal-Mart Lowers Prices… Countrywide Misses… Durable Goods Orders Rise in December.

Asian stocks up… European stocks up… Greenbacks moving higher against the Euro, yen… And the futures are trending higher in the hour before the bell.

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TradingMarkets 5 Business Stories You Need to Know

Traders Bid Futures Higher As Fed Meets – The Wall Street Journal

Market index futures are rising strongly in the hour before the bell as traders try to position themselves for the FOMC meeting announcement this week. Strong durable goods data before the bell helped bump markets higher in trading before the open.

Cardinal Health Posts Net Income Loss – The Wall Street Journal

Cardinal Health saw its Q2 net income decline by 56%, due largely to sales of its pharmaceuticals services division. Legal problems with this division also led the company to cut its earnings forecast for the fiscal year. Cardinal Health is one of a number of stocks that are statistically more likely than the average stock to be higher one year from now based on its high PowerRating. Find out what other stocks in this company’s impressive industry group are also likely to do better than the average stock after one year.

EMC Posts 35% Q4 Earnings Gains – Houston Chronicle

EMC reported strong fourth quarter earnings growth of 35%, handily beating Wall Street estimates. The data storage company saw revenue and earnings growth across all segments of its business, including software licensing, professional services, and systems maintenance. EMC is stock that is likely to perform as well as the average stock over the next year. There are a few stocks in its industry group, however, that may be better opportunities for investors.

Raw Materials Costs Hamper Pepsico – CNN Money

Commodity cost pressures made it difficult for Pepsico to meet analyst expectations for the quarter. The company still posted most revenue growth, with the weak dollar contributing significantly. Pepsico reiterated its guidance for fiscal year 2008. Among the stocks that are more likely than the average stock to be higher in a year’s time are high PowerRating stocks like Pepsico. Believe it or not, but based on our PowerRatings, there are three other stocks in Pepsico’s industry group that are just as likely to outperform the average stock as Pepsico is.

Fed Funds Could Drop Below Inflation – Bloomberg

Will more Fed rate cuts pave the way for a future asset bubble? As cries for rate relief grow louder and the date of the announcement from the Federal Reserve’s Open Market Committee draws near, more and more critics wonder what sort of asset bubble might be inflated by another round of monetary easing.

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
Radiation Therapy Services RTSX 9
Regeneron Pharmaceuticals REGN 8
IKON Office Solutions IKN 8
Apple AAPL 8
Alexion Pharmaceuticals ALXN 8

View More Stocks

TradingMarkets Tracking the Wizards

Bill Gross’s January Outlook – PIMCO.com

Temporary fixes and short-term economic stimulus plans will not do what the economy most needs right now, according to legendary bond fund manager, Bill Gross of Pimco in his latest monthly outlook.

CEO Out at Lampert’s Sears – New York Times

Hedge fund manager Eddie Lampert steps away from day-to-day operations at Sears and removes the troubled retailer’s CEO at the same time, leading critics to question Lampert’s strategy for turning the company around.

Venture Capital: Best of the Best – New York Times

John Doerr’s Kleiner Perkins Caufield & Byers, which was involved in the early investment in tech giant, Google, takes top spot as the best deal maker in technology among venture capital firms. Forbes’ “Midas List”,an annual ranking of the best venture capital firms in technology, moves Michael Mortiz’s Sequoia Capital from first to second place.

View Portfolios of Prominent Investors

TradingMarkets Playbook

Sideways movement at this point is a positive. While traders would undoubtedly prefer the market to rocket straight up from its current lows, the fact of the matter is that more base-building–as the technicians call it–will make for a more lasting bottom than a V-shaped rally higher.

It is critical that the lows hold. The market has seen some strength in recent days, but because all the major averages remain below their 200-day moving averages, the same caution we have advised since the fall correction began in October remains applicable. Again, be wary of any strength in stocks–or markets for that matter–that are still trading below their 200-day moving average, at least when it comes to short-term trading. For those looking to trade to the upside, the edge remains with the strong stocks still above their 200-day.

David Penn is Senior Editor at TradingMarkets.com.

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