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Morning Coffee with TradingMarkets

  • December 3, 2007
  • David Penn

Good Morning!

Futures Start December Softly…Vivendi Boosts Activision Stake…Bonds Still Bullish…Paulson to Tout Borrower Bailout…Zander Out at Motorola, Brown In…Citi + JP Morgan?…Freddie Sells All $6 Billion…Nasdaq’s China Syndrome…Europe’s Record Low Employment

What a week! Some late afternoon selling on Friday could do nothing to dampen the strength of the rally in stocks that finished November. With the Dow having its best week in many months, sentiment remains mixed–even as the global economy looks to finish the year strongly, with double digit earnings growth, for example in the BRIC nations of Brazil, Russia, India and China. Vivendi’s move to create the world’s largest gamemaker shows that companies are still willing to take on risk in an effort to gain market share.

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TradingMarkets 5 Business Stories You Need to Know

Markets Enjoy Biggest Weekly Gain Since March – Barron’s

Traders, technicians debate whether strong end of November is the beginning of a sustained move to the upside. Will a retest of the lows or a race to test the October highs come next?

Brown Takes Over at Motorola – EE Times

President and COO Gregory Brown replaces four-year CEO Ed Zander, whose tenure at Motorola included the company’s slide into third place behind Nokia and Samsung in mobile handset market.

BRIC’s Double Digit Earnings Growth – Bloomberg

Initial public offerings in the BRIC nations of Brazil, Russia, India and China continue to attract investors. Of the record amounts of capital raised in IPOs this year, more than 50% came from the BRIC quartet, as well as from other emerging market economies.

Vikram Pandit To Head Citi? – The Hindu

Pandit, who took over Citigroup’s investment banking operations in October is widely believed to be a top contender to run the world’s largest bank. Rubin will step down as soon as board makes its final decision on permanent leadership.

Vivendi Buys Control of Activision for $9.8 Bln – CBS Marketwatch

Vivendi deal creates the world’s largest software gaming company, with popular titles such as Guitar Hero and World of Warcraft part of the prize. Electronics Arts slips to number two spot.

» 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
Hythiam HYTM 8
Cybersource CYBS 8
Delek DK 8
UltraShort Real Estate ProShares SRS 8
UltraShort Financial ProShares SKF 8

» View More Stocks

TradingMarkets Tracking the Wizards

Buffett on “Durable Competitive Advantage” – CNBC

World’s most famous investor discusses his signature concept of the “business moat” in feature interview with CNBC, “A Day with Warren Buffett.”

Rogers, Soros Back Herman Miller – GuruFocus

Continuing to seek out “great companies at bargain prices,” Ariel Capital Management’s John Rogers joins billionaire speculator in support of high-quality interior furnishings maker.

Ackman Boosts Target Stake – BloggingStocks

Pershing Square Capital Management head calls retailer “best in the world” as he increases stake in world’s second largest retailer to 9.6%.

TradingMarkets Playbook

After one of the strongest weeks in months, it is clear that the buyers have the momentum going into December. Having rallied four days in a row since the market made its closing low on Monday, December 26, we continue to be watchful for profit-taking as well as sideways movement.

Selling late on Friday helped relieve the market of some of its overbought condition, and it would be expected that some of this selling might spill into trading in the first week of December. That said, many money managers who are facing an underperforming–or even losing–year may feel pressure to “shoot the works” in December. This “I’m already dead” attitude may create more than usual volatility in the final month of the year as money managers go for broke in an effort to boost their returns and keep their investors happy.

If this is the case, then look for those stocks that have been working to continue to work. Money managers will want to show their investors that, at a minimum, they are in the right stocks. This piling in could represent opportunity, though investors will need to be wary of chasing some of these names. The fact that we continue to show fewer top opportunity stocks, stocks with trading PowerRatings of 9 and 10 hints at the sort of caution we should have in the near-term, while we wait for pullbacks to create a new set of bargains.

David Penn is Senior Editor at TradingMarkets.com.

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