Morning Coffee with TradingMarkets

  • January 30, 2008
  • David Penn

Good Morning!

FOMC Rate Announcement 2:00 PM (ET)… Amazon Reports… McCain, Clinton Win Florida… House Passes Stimulus Package… Starbucks Reports… Kraft Profits Sour on Rising Dairy Costs… Yahoo Downgraded by Citigroup, Oppenheimer… Lazard Earnings Up 43%… Altria Group Reports… Yahoo To Layoff 1,000 Workers… Durable Goods Orders Up 5%… Merck Posts Loss, Blames Vioxx Lawsuits… Q4 GDP Expected To Show Economy Slowing… UBS Reports Record Quarterly Loss… ADP Reports Huge Private Sector Job Growth.

Asian stocks down… European stocks down… Greenbacks moving lower against the Euro, yen… And the futures are trending lower in the hour before the bell.

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TradingMarkets 5 Business Stories You Need to Know

Traders Gaze Turns Fed-ward – MarketWatch

With a rate cut baked in the cake, traders are left to ponder whether or not 50 basis points or merely 25 will be shaved from the Fed fund rate when the Federal Reserve’s Open Market Committee makes its announcement shortly after 2 p.m. eastern today. The positive close on Tuesday, including a late in the day surge higher, suggests traders believe they may get what they want from Ben Bernanke’s Fed.

Amazon.com: Yesterday’s Earnings, Tomorrow’s Outlook – Silicon Alley Insider

Traders will be paying as much attention to the outlook and forecast provided by Amazon as its earnings report, as fears of economic weakness look to disproporationately affect retailers such as Amazon.com. Most recent guidance from the company suggested to some observers that earnings margins may be reaching a peak Amazon.com has an average PowerRating in an industry that is expected to outperform the average industry going forward. This same industry–Internet Software and Services–actually has a number of stocks with better, higher PowerRatings that make them more likely than Amazon.com to be higher one year from now.

Starbucks Q1 Earnings Expected to Disappoint – CNN Money

Stock in the Seattle-based specialty eatery slide on Monday as investors prepared for what are expected to be a report of lower than expected earnings per share. The gourmet coffee company is scheduled to report earning after the market closes today. There are only a few stocks in the top-rated Specialty Eateries industry. And while Starbucks, with its average PowerRating, is one of them, there is a higher PowerRating stock in the group that is more likely than Starbucks to be higher in year’s time.

Altria Group Reports Q4 Earnings, Spin-off Update – Seeking Alpha

An attracive dividend yield and likelihood of continued growth even in the face of a possibly slowing economy keep Altria Group high on the list of stocks that investors continue to be interested in. The company reports fourth quarter earnings today at 1 p.m. Eastern, with analysts expecting softer earnings due to the spin-off of Kraft. As I wrote yesterday in a piece for PowerRatings.net, the sin stocks of the Cigarette industry all have some of the highest PowerRatings investors are likely to see in a single industry. Find out what stocks other than Altria Group are more likely than the average stock to be higher after one year.

Will Australian Dollar Reach Parity with Greenback? – Bloomberg

Continuing monetary easing by Bernanke Fed likely to bring the the U.S. and Australian dollars to equal value, predicts hedge fund manager, Craig Ferguson of Antipodean Capital Management. Reserve Bank of Australia expected to raise rates at least once in 2008 as American Fed continues to cut.

» 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
United Therapeutics UTHR 9
Stereotaxis STXS 8
Iris International IRIS 8
DynCorp International DCP 8
Concur Technologies CNQR 8

» View More Stocks

TradingMarkets Tracking the Wizards

Lessons from the Soc Gen Scandal – Smart Money

Are there lessons even average (but honest!) traders can learn from the largest trading scandal in European history? Much of what felled Societe Generale’s rogue trader, Jerome Kerviel, were many of the same flaws that cripple traders everywhere.

John W. Henry Finished Up 18%, 24% on Commodities Trades – FINalternatives

Strength in energy and grain market trading helped offset losses in currency-oriented funds. Decline in the dollar from August to December credited for many of the funds gains. John W. Henry & Company manages nearly $300 million in total assets.

25 Fastest Growing Technology Companies in America – Forbes

Which two companies in Forbes 25 have PowerRatings that will make them more likely than the average stock to be higher in a year’s time? Get those names–and four out of that 25 investors should probably avoid–at PowerRatings.net.

» View Portfolios of Prominent Investors

TradingMarkets Playbook

It’s all about the Fed today. There are a massive number of overbought stocks showing up in our TradingMarkets Stock indicators.
Traders with an inclination to bet against stocks will likely find some excellent candidates there. The only guarantee on a Fed announcement day lately is volatility, so traders should expect immediate–and potentially false–reactions to whatever rate cut decision the markets get shortly after 2:00 PM (ET) today.

There are a few things that the Fed announcement will not change. And one of them is the fact that stocks remain under pressure. Until the markets begin closing above their 200-day moving averages, traders should be discriminating with the trading opportunities they select.
If you are buying, make sure you are buying the right kind of weakness. And if you are betting against stocks, be careful to fade the right strength.

David Penn is Senior Editor at TradingMarkets.com.

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