Morning Coffee with TradingMarkets

  • December 18, 2007
  • David Penn

Good Morning!

Best Buy Beats…Goldman Beats…Deutsche Bank AG Recommends Adobe…Futures Higher Before the Bell…Japan Likely to Keep Rates at 0.5%…Credit Fears Stymie Australian Rate Hike…Ingersoll Rand Buys Trane…Asian Stocks Rebound…European Stocks Up…And the Dollar Is Steady Against Major Currencies.

We warned Monday before the bell that last Friday’s close was likely seen as a sell signal for many technicians. And on Monday, sell they did. The near-vertical rally from late November to early December made it more likely that the correction would be sharp rather than sideways, as we would have preferred. Bullish action in the futures suggests that the conviction of the sellers is likely to be tested early and often on Tuesday.

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TradingMarkets 5 Business Stories You Need to Know

Stock Futures Up: Goldman, Apple, Adobe Moving Higher –Bloomberg

Expectations of record earnings for Goldman encourage European investors to bid shares of the company higher. Analyst recommendations lift technology shares such as Apple and Adobe.

Hong Kong, South Korea Post Gains – CBS Marketwatch

After days of declines, markets in Asia rebounded as buyers moved to scoop up stocks on sale. Japan’s Nikkei 225 trimmed losses, but lagged neighbors on mainland.

The Goldman Man Can – Wall Street Journal

Will the wisest guys (and gals) on Wall Street continue to meet ever higher expectations? The investment banking and securities firm reports this morning, and options buyers are betting “yes.”

Inflation Fears Embolden Stock Sellers – Wall Street Journal

A stock market still preoccupied with the Federal Reserve’s willingness to reduce rates becomes hyper-sensitive to inflation. Decliners led advancers yesterday by more than 5 to 1 on NYSE.

Insider Trading at Bear? –BusinessWeek

Federal investigators are trying to find out if some were able to escape some of Bear Stearns troubled hedge funds while others were trapped inside.

» 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
Stanley SXE 10
STEC STEC 9
Olympic Steel ZEUS 8
VIVUS VVUS 8
Terra Nitrogen TNH 8

» View More Stocks

TradingMarkets Tracking the Wizards

Charlie Munger’s Investing Principles Checklist – GuruFocus.com

Joe Koster’s summary of the investment–and lifestyle–guidelines of Warren Buffett’s right hand man, Charlie Munger. From Munger’s book, Poor Charlie’s Almanack.

Goldman Plotting Record-Breaking Hedge Fund – Bloomberg

Former prop traders now with Goldman Sachs said to be planning $10 billion equity hedge fund. Equity trading group seen as incubator of hedge funds, having created at least six multi-billion dollar funds in recent years.

SAC Capital’s Grossman To Go Solo –New York Times

Star trader Matt Grossman, who helped run the CR Intrinsic fund with Steven A. Cohen, to leave after one year. Grossman expected to start his own investment business.

» View Portfolios of Prominent Investors

TradingMarkets Playbook

Yesterday provided the sell-off we were looking for. Now, in the hour before the market opens, the index futures are pointing to a strong open led by optimism from European stock analysts and strong earnings from Best Buy and Adobe–to say nothing of high expectations for Goldman Sachs, which reports this morning.

The combination of strong futures and oversold conditions means that a rally of some sort is possible. Given this, a sustained move higher for the next few days would be no surprise.

David Penn is Senior Editor at TradingMarkets.com.

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