Morning Coffee with TradingMarkets

  • December 24, 2007
  • David Penn

Good Morning!

Markets to Close Early on Xmas Eve…Another Fed Debt Auction…Yield-Seeking Traders Sell Yen…Pound Falls Against Euro…Goldman CEO Wins Record Bonus…News Corp Sheds TV Stations…FedEx Hit with $319 M Tax Bill…Asian stocks up…Europe up…The dollar trending higher against the yen, pound…And the futures are trending higher in the hour before the bell.

Last week began big to the downside and ended big on the upside. With a holiday truncated week ahead, will traders look to follow-up on Friday’s early bullish action? Or will caution win out as those who are up big decide to stay that way, and those who are behind decide to call it a day and look for a better start in 2008? Plus: does the abundance of “Recession 08” talk hint at the potential for an upside surprise next year?

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TradingMarkets 5 Business Stories You Need to Know

America’s Best Big Companies – Forbes

What companies are the pride of American capitalism? Forbes compiled a list of the 400 biggest and best when it comes to not only financial growth and returns, but also corporate governance and accounting standards.

Betting on Banks? – Wall Street Journal

The subprime panic put a black mark on banking’s sinners and saints alike. This may mean opportunities ahead for those institutions that were unfairly maligned by an overly broad brushstroke.

Goldman’s Blankfein Earns $67.9 M Bonus – Bloomberg

Record profits + avoiding subprime fiasco nets Goldman Sachs CEO the highest bonus ever paid to a Wall Street CEO. Blankfein earns $26.8 million in cash, $41.1 million in restricted stock, options.

Seven Economic Warning Signs for 2008 – Marketwatch

Looking for a wall of worry to scale next year? These seven “warning signs” are as good a set of building blocks as any financial worrywort is likely to find.

Best Investment Ideas of 2008 – Forbes

So-called “recession beaters” and commodity plays…technology and international stocks are among the places investors should be looking for opportunities in 2008, says Forbes panel of market watchers.

» 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:

  • One company reporting on Monday is Analytical Surveys
    (
    ANLT |
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    News |
    PowerRating)    , which reports Q4 2007 earnings.

  • The credit ratings for Ambac Financial
    (
    ABK |
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    PowerRating)     were placed under review, for a possible downgrade, by Fitch Ratings.

  • Vermont regulators rejected FairPoint Communications’ proposed $2.7 billion buyout of Verizon Communications‘
    (
    VZ |
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    PowerRating)     land lines in northern New England, citing concerns about the company’s financial viability.

  • Marsh & McLennan
    (
    MMC |
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    PowerRating)     is looking for a new CEO after Michael Cherkasky, the current President and CEO, was forced to step down due to the company’s poor performance in 2007.

  • Walgreen
    (
    WAG |
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    PowerRating)     announced a 5.5% rise in Q1 earnings.

  • Alliant Energy
    (
    LNT |
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    PowerRating)     announced it is expecting higher earnings in 2008.

  • Ennis
    (
    EBF |
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    PowerRating)     reported a 4.3% increase in revenues and a 6.9% increase in net income.

» For a list of today’s highest PowerRating stocks, click here.

TradingMarkets 5 Top PowerRatings Stocks for Today

Company
 Symbol PowerRatings
Generex Biotechnology GNBT 9
Warner Music Group WMG 8
UST UST 8
Possis Medical POSS 8
Callidus Software CALD 8

» View More Stocks

TradingMarkets Tracking the Wizards

Dreman Likes Big Banks – Forbes

Quoting Thomas Jefferson and wagging a finger at Alan Greenspan, money manager David Dreman hints that the big banks might be the surprise opportunity for investors in 2008.

Hedge Funds Get Matchmaker – TheDealBlogs

If it works for aging baby boomers, then why not a matchmaker for hedge funds? Hedge Connection helps high net worth and institutional investors find the hedge fund of their dreams.

Carlyle Hedge Fund Down 15% YTD – FINAlternatives

The new initiative from the Carlyle Group, a hedge fund called Blue Wave, runs into some difficult waters of its own as a disapponting November adds to a negative year. With $690 million under management at the end of October, the fund was down 6% in November.

» View Portfolios of Prominent Investors

TradingMarkets Playbook

Friday’s surge again left us with fewer bargains, as stocks in the short term are more than a little overbought. As is usually the case when markets move almost vertically higher–especially off of bottoms–the best bet is often to wait to see how eager sellers are to unload shares. Again, buying weakness and selling strength remains the optimal way to trade and invest. So traders who did not get long on Friday should avoid the inevitable “missed it by that much” feelings and, instead, remain patient and wait for the market to come in a bit before striking.

That said, the bullishness of the past week looks for real. The mid-December reversal created a bullish higher low vis-a-vis the November lows, a key ingredient in helping the markets move higher over the balance of the week and year. As we have been discussing for the past few days, strength in smaller cap stocks, such as those in the Russell 2000, continue to be what is helping drive the market higher.

David Penn is Senior Editor at TradingMarkets.com.

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