Morning Coffee with TradingMarkets

  • December 12, 2007
  • David Penn

Good Morning!

Fed Cuts 25 Basis Points, Dow Dives Nearly 300…Citi Picks Pandit…AT&T Boosts Dividend…GE Likes Profit Outlook, Moody’s Likes MBIA ‘s Capital Raising Plan…Lehman’s Fuld Rewarded for Loss Limiting…Bank of America Warns of Write-offs…Asia Ends Off Lows…Europe Gaps Down and Bounces…Futures are trending strongly upward an hour before the bell.

How’s that sell-off for gratitude? There’s an interesting theory developing that the market had simply been trying to see how far it could “bully” Bernanke toward deeper and deeper rate cuts. And while the geeky kid didn’t exactly shove back, at least he didn’t turn tail and run. With the potential for further cuts in late January, don’t be surprised if Tuesday’s sell-off turns into a vote in favor of Bernanke’s rate cut restraint here in December.

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TradingMarkets 5 Business Stories You Need to Know

Fed Sees Growth Potential Rather than Recession – Bloomberg

In lowering the Fed funds rate 25 basis points, the FOMC signaled their conviction that the economy would continue to grow in spite of current mortgage debt-related headwinds.

Further Steps for the Fed? – CBS Marketwatch

Fed watchers speculate on other measures the Federal Reserve may take to loosen credit for consumers, businesses. More action on discount rate among actions considered.

Pandit to Run Citigroup – Bloomberg

Citigroup shares help boost stock index futures as news of Pandit as CEO heartened investors in Europe. Pandit promises a “front-to-back”
review of the company’s expenses and productivity.

Sovereign Wealth Funds Continue to Surge – CBS Marketwatch

Formerly used as virtual “savings accounts” for recycled petrodollars, sovereign wealth funds are increasingly being directed by their managers toward more risk and higher returns.

PIMCO Likes Corporate Debt, Emerging Market Currencies –Reuters

Brazilian, Mexican and South African debt expected to continue to outperform in 2008. Company has shifted away from European bonds to focus more on opportunities in Asia.

» 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
TEL Offshore Trust TELOZ 9
Sohu.com SOHU 9
Questcor Pharmaceuticals QSC 8
Priceline.com PCLN 8
Interactive Intelligence ININ 8

» View More Stocks

TradingMarkets Tracking the Wizards

Buffett: Jobs Key to Avoiding Recession – Reuters

World’s most famous investor says recession risks will grow with jobless rate. Holiday sales, consumer spending are indicators to watch in December.

Bear Stearns Top Equity Research, Managers Say – Alpha Magazine

Hedge fund managers vote Bear Stearns “top sell-side research shop” beating out Lehman Brothers. Poll based on Institutional Investors’ All-American Research Team survey.

Richest Investors Shifting Toward Hedge Funds –Institutional Investor

Richest Investors Shifting Toward Hedge Funds — Institutional Investor Survey by Institute of Private Investors suggests that fully 1/3 of richest investors allocating money to hedge funds. Percentages are up from last year, reflecting growing confidence in the asset class.

» View Portfolios of Prominent Investors

TradingMarkets Playbook

The markets were overbought yesterday in anticipation of deeper rate cuts and more action on the part of the Federal Reserve’s Open Market Committee. When those longed-for deep cuts were met with a milder 25 basis point cut, the healthy pullback we had been anticipating for the past few days finally arrived.

Again, we see yesterday’s 294-point pullback in the Dow as healthy. This view is supported by the strength in the market index futures, which are trending strongly higher a little over an hour before the bell on Wednesday. We are starting to see an uptick in the number of higher, PowerRatings stocks for traders–another indication that the market’s overbought condition is being worked off. Any follow-through to the upside from this strength will be a positive in the short-term.

David Penn is Senior Editor at TradingMarkets.com.

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