Morning Coffee with TradingMarkets
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Good Morning! |
Dow Soars 300+…Fed Hints at December Rate Cut…A Hot Q3 After All?…Is Citi In the Market for a Merger?…Royalties Killed the (Internet) Radio Star…Blackstone’s Schwarzman: Private Equity is “A Force for Good”…Bear Stearns to Cut Workforce By 4%…Will Buffett Buy Northern Rock?
The follow-through we talked about yesterday arrived in spades–to the tune of a 330+ rally in the Dow Jones Industrials. Fed Vice Chair Donald Kuhn suggested yesterday that credit problems were likely to be more intractable than he has suspected, leading traders to believe that the Fed was more prepared to lower rates in December than previously thought. GDP growth in Q3 is expected to be revised dramatically higher and rumors swirl about a possible merger involving Citigroup.
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TradingMarkets 5 Business Stories You Need to Know |
More Upside for the Markets – Reuters
Dow leaps more than 300 points as markets follow-through to the upside. Hints of a rate cut in December from the Fed helped fuel the rally that began on Tuesday.
Commerce: Third Quarter GDP “Blistering” – Wall Street Journal
In the midst of all the bad news from financial companies, the Commerce Department is prepared to revise GDP growth in the third quarter upward to an annualized 4.9%.
Merger Rumors Surround Citi – Wall Street Journal
Breaking Views Reports of bankers sounding out Citigroup for possible merger with Bank of America add to speculation that a partnership is the best way forward for Citigroup and its shareholders.
Fed’s Number Two Tilts Toward Lower Rates –
BusinessWeek
“Flexible and pragmatic” monetary policy is recommended by Fed Vice Chair Kuhn, who warns against using monetary policy to “punish” bad financial behavior.
E*Trade Gets Capital Infusion – FoxBusiness
Citadel Investment Group plows $2.5 billion into troubled online brokerage. Agreement includes purchase of notes, stock, ABS portfolio and changes at the top in management.
For more stories as they happen, go to our Breaking News section.
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TradingMarkets 7 Stocks You Need to Know for Today |
Here are 7 stocks for traders for today from TradingMarkets.com:
- Sigma Designs
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PowerRating) beat earnings on Wednesday afternoon, reporting $0.79 EPS versus expectations of $0.55 EPS. - Aeropostale
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PowerRating) beat earnings expectations on Wednesday, with $0.48 EPS over $0.47 EPS. - Genesco
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PowerRating) this morning reported declining profits for the third quarter on a modest increase in sales. - Beazer Homes
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PowerRating) reports earnings on Thursday morning, with analysts looking for -$3.20 EPS. - Shares of Sears Holding
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PowerRating) were sharply lower overnight as the company reported earnings that were well short of estimates. - E*Trade
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PowerRating) will receive a significant infusion of capital from both Citadel Investment Group and BlackRock. - This morning, HJ Heinz
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PowerRating) reported an increase in second quarter profits of nearly 19%, exceeding Wall Street estimates.
For a list of today’s highest PowerRating stocks, click here.
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TradingMarkets 5 Top PowerRatings Stocks for Today |
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Company
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Symbol | PowerRatings |
| Senomyx | SNMX | 8 |
| Hythiam | HYTM | 8 |
| Core Laboratories | CLB | 8 |
| Delek U.S. Holdings | DK | 8 |
| Oceaneering International | OII | 8 |
| View More Stocks |
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TradingMarkets Tracking the Wizards |
Lahde’s Readies Short Credit Fund – FINalternatives
New hedge fund coming online next week follows 1000%, 80% year-to-date gains in Lahde Capital’s flagship and number two fund, respectively.
CGM Focus Fund Up 60% Year to Date – Bloomberg
Kenneth Heebner bets big, wins big against Countrywide Financial and Sears Holding. Fund is top performer in “flexible portfolio” class of hedge funds.
Bill Ackman’s Charity Short – New York Times
Head of Pershing Square Capital pledges his end of a short sale of bond insurers to charity. Says failure of insurer MBIA will put him $500 million in the black.
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TradingMarkets Playbook |
Yesterday we discussed the importance of follow-though. And the follow-through we have seen in the markets has led us to the biggest 2-day gain since November 2002.
Today’s theme is about holding. We would expect to see some profit-taking here. The markets are short-term overbought. But it is important for the market to hold on to the majority of the gains of the past two very bullish sessions.
If the market is able to move sideways over the next few days, sideways to slightly down, then we would expect to see a next leg higher.
David Penn is Senior Editor at TradingMarkets.com.
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