Morning Coffee with TradingMarkets
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Good Morning! |
Markets Freak Over Citigroup Quarter… Forest Labs, Intel See Profit Surges… December Retail Worse Than November… Romney Wins Michigan Primary… Recession Talk Gives Way to Bear Market Talk… Dollar Hits 2+ Year Low vs Yen… Oracle Buys BEA Systems… JP Morgan Misses… Intel Still Reeling from Soft Forecast… Asian stocks down… European stocks down… Dollar moving lower against the yen… And the futures are trending lower in the hour before the bell.
Sellers stormed back on Turnaround Tuesday, eager to take profits on the mere 175 points the Dow handed out on Monday.
The narrative of the day was that a “worst-ever” quarter from Citigroup and a weaker-than-expected retail sales report–which we warned about in yesterday’s Morning Coffee–but it is increasingly hard to believe that bad news from two of the most credit-sensitive sectors of the economy could continue to surprise. Today’s economic news includes the Consumer Price Index as well as Industrial Production number and Treasury International Capital flows. It will be worth watching to see how investors fold this news into what has become the World’s Most Anticipated Recession ever.
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TradingMarkets 5 Business Stories You Need to Know |
Forest Labs Profit Up More than 20% – Reuters
The drugmaker raised its fiscal year earnings forecast as it reported a profit increase of 21% for the recently ended quarter. Sales of Forest Labs’ drugs for depression and Alzheimer’s disease credited for earnings bump. Based on its PowerRating, Forest Labs is an average stock in an average industry. And not only are there several higher rated stocks in the industry group, but three of those stocks have a better than Forest Labs of being higher one year from now.
Citigroup Writes of $18 Bn, Cuts Dividend, Jobs – New York Times
“Worst loss ever” hits Citigroup as the company declares writedowns of more than $18 billion, a decision to cut its dividend by 40%, and job cuts to the tune of 20,000 workers. Analysts have begun to question the wisdom of the “financial supermarket” business model that Citigroup has embraced since the late 1990s. Citigroup’s PowerRating marks the company as an average one in an industry with few better alternatives right now.
Intel Profit Tops 50% – Bloomberg
Earnings surged higher in the last quarter, but modest guidance for the current year and expectations of even more from Q4 provide anxious investors with an opportunity to sell the stock. As with Citigroup, Intel is an average stock in an industry with a very high PowerRating. There are at least four other higher PowerRating stocks in Intel’s industry group that are more likely than Intel to be higher in a year’s time.
Retail Sales from December Disappoint – Christian Science Monitor
Analysts say the retail sector just finished its worst year since 2002, with December retail sales confirming the negativity of the year that was. Use our Long-Term PowerRatings to help discriminate between the stocks that are making the news, and the stocks that are truly likely to be higher one year from now.
Apple Unveils New Notebook, Movie Rentals – Marketwatch
Macworld is the stage for the world’s first sighting of Apple’s new “ultrathin” notebook computer, the MacBook Air. A new movie rental service that will work through the company’s iTunes service was also announced. As mentioned in yesterday’s Morning Coffee, Apple has an average PowerRating in an industry that investors would do better to avoid.
» 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:
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Intel
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PowerRating) missed earnings estimates on Tuesday, reporting $0.38 EPS versus an estimated $0.40 EPS. -
JP Morgan Chase
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PowerRating) missed analyst estimates in its earnings report Wednesday morning before the open, announcing lower fourth quarter earnings by 34%. -
Knight Trading
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PowerRating) announces quarterly results before the bell on Wednesday; look for $0.26 EPS. -
Analysts are watching for Logitech
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PowerRating) to report $0.63 EPS on Wednesday afternoon. -
Progressive
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PowerRating) should report $0.33 EPS on Wednesday morning before the market opens. - Northern Trust
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PowerRating) reports earnings on Wednesday morning, with traders watching for $0.93 EPS. - Increases in delinquent payments from borrowers led Wells Fargo
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PowerRating) to report fourth quarter earnings that were down 38%, beating analyst expectations by a penny.
» 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 |
| Delta Petroleum | DPTR | 10 |
| Mastercard | MA | 9 |
| IMAX | IMAX | 9 |
| Sigma Designs | SIGM | 8 |
| Ternium S.A. | TX | 8 |
| » View More Stocks |
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TradingMarkets Tracking the Wizards |
Soros Hires Former BlackRock Co-Founder – Reuters
Legednary hedge fund manager George Soros hired Keith Anderson as his fourth chief investment officer in eight years. Anderson helped found the investment management group BlackRock decades ago, where he was head of fixed income trading.
Liongate Funds Up 24%, 17% in 2007 – FINalternatives
Multi-Strategy and Select Funds two of Liongates more successful hedge funds of funds from last year. The Multi-Strategy Fund invests in between 30 and 40 different hedge fund managers, while the Select Fund invests in 20 to 30 managers. Best performing strategy was “sector specialist” which alone contributed nearly 0.5%.
Greenspan Joins Paulson & Company – New York Times
Among the best performing hedge fund companies of 2007, Paulson & Company announced that the former Federal Reserve chairman, Alan Greenspan, will be joining the fund as an advisor. Although Greenspan has other advisory deals with Deutsche Bank and Pimco, Paulson & Company is the only hedge fund that the former Fed chairman advises.
» View Portfolios of Prominent Investors
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TradingMarkets Playbook |
Over-reaction or not, the markets are taking every opportunity to sell off bad news. I cannot emphasize enough that if you are trading stocks in this environment and you have not yet read Larry Connors’
“Five Mistakes to Avoid with a Market Trading Below its 200-day Moving Average”, then stop, do not pass go and browse directly to TradingMarkets.com and make sure none of these five mistakes are holding you and your trading performance back.
Our research into stock behavior tells us that the largest pullbacks–such as the kind that many stocks are experiencing as the broader markets continue to correct–are nevertheless the most rewarding pullbacks for traders to trade. Unfortunately, they can also be the most difficult pullbacks to trade from a psychological perspective. To this end, we provide specific tools for traders to make sure that they are able to enter stocks when they are at their cheapest as well as when they are most likely to make strong moves once the pullback has run its course. Learn about these tools by taking our TradingMarkets Path to Professional Trading course, where the current lesson, Lesson 4, just happens to be all about trading large pullbacks.
David Penn is Senior Editor at TradingMarkets.com.
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