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Morning Coffee with TradingMarkets

  • November 27, 2007
  • David Penn

Good Morning!

Futures Up, But Off Highs…Citigroup’s Dividend Spikes on More Bad Forecasts…Are Small Caps a Savior?…Sellers Strike Back…Abu Dhabi Likes Citi, Sony…”Officially a Correction”…Bullish Bets on Airlines…Fed Offers $8 bn in Loans…10-Year Yields, 3
1/2-Year Lows…

Think things have gotten out of hand? Consider this: as of yesterday, the markets experienced their sixth 3:1 negative breadth session in November. As you might imagine, this doesn’t happen very often. Since 1980, there have been two instances with five 3:1 negative breadth sessions within a twenty-day time frame. The first was October 19, 1987. The second was August 23, 1990. (Thanks to Steven Gabriel for the information)

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TradingMarkets 5 Business Stories You Need to Know

Abu Dhabi Bets on Citi – International Herald Tribune

Government makes $7.5 bn investment in Citigroup. Investment made through Middle Eastern Sovereign Fund represents a 4.9% stake in the company, bringing total of Middle Eastern investment in Citigroup to nearly 10%.

Downturn Makes Market Correction Official – Wall Street Journal

Having fallen the requisite 10% from recent highs, the Dow Jones Industrial Average and the S&P 500 are now officially “going down.”
History hints at further downside in near term.

Man the Small Caps! – Bloomberg

Weakness in the Russell 2000 is just one of the reasons why investors and traders are turning their attentions toward small cap stocks. The small cap index is set to underperform the S&P 500 for the first time since 1998.

Schumer Sets Sights on Countrywide – Reuters

New York Senator seeks probe into relationship between troubled lender and Atlanta branch of Federal Home Loan Bank. Claims mortgage company used Home Loan Bank “like an ATM.”

Fed Extends Loans to Bond Dealers –Wall Street Journal

As much as $8 bn is available to needy borrowers as the Fed attempts to keep the credit markets liquid by extending terms on loans.
Similar action also taken by European Central Bank recently.

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
Taser International TASR 10
JDA Software Group JDAS 10
Life Partners Holdings LPHI 9
Quantum QTM 8
Perdigao, S.A. PDA 8

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TradingMarkets Playbook

All Citi, All the Time…Citigroup can’t seem to stay out of the news–or out of the minds of traders and investors these days. In a perfect world, the market would attempt to sell off over the course of the day, only to have buyers step in and close the market near the highs of the session. Such a move could send the markets off to the races. Yesterday’s late selling surge had more than a little whiff of panic, and the lows that have been established over the past few days will need to hold to keep that scent of fear from becoming a full-blown aroma.

Clearly the investment by the government of Abu Dhabi in Citigroup suggests that someone is putting their money where they believe value to be. U.S. stock futures were higher on the news. But the question will be whether or not buyers will be able to fight off the selling that has become increasingly commonplace during this fall correction season. Put simply, we are watching to see when stocks stop going down on bad news, evidence that “the worst” has already been priced in to the market and that a bottom–if not the bottom–is in.

David Penn is Senior Editor at TradingMarkets.com.

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