Morning Coffee with TradingMarkets

  • January 3, 2008
  • David Penn

Good Morning!

Oil Climbs Above $100…Gold Soars to New Record…Chinese IPOs to Top 2007 Levels…Gold Hit All-Time High…Fed Minutes Reveal Easing Bias…U.S. Manufacturing Contracts, Construction Spending Up…Monsanto Beats Estimates…Jobs Survey: 40K Additional Jobs in December…Asian stocks lower…European stocks rebounding from lows…The dollar trending lower against the yen, higher against the pound…The futures are moving higher in the hour before the bell…

The first day of trading in 2008 felt a lot like the last few days of trading in 2007, as investors moved a little closer to the panic stage of selling. The ADP Jobs report shows job gains of 40,000 for December, which was better than expected, though the futures bumped down slightly. Intiial jobless claims to follow. Auto sales are also likely to gain attention this morning with investors looking to see the effect of sales on stocks like Toyota and Honda as well as Ford and General Motors.

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TradingMarkets 5 Business Stories You Need to Know

Price of Oil Reaches Century Mark – FX Street

All it took was a single transaction, but crude oil finally reached the $100 per barrel mark in trading yesterday. Moves in oil market said to reflect continuing dollar weakness as well as consensus that the Federal Reverse will cut rates again in early 2008.

Fed Minutes Show More Cuts Likely – Wall Street Journal

Minutes of December FOMC meeting reveals concerns that consumer spending could be adversely effected by problems in credit, housing markets. Vote was 9-1 to lower rates by 25 basis points, with one Fed governor preferring a 50 basis point cut.

U.S. Manufacturing Slows in December – Wall Street Journal

A surprising drop in manufacturing in December revives fears that a slowing econony will be that much more vulnerable to recession in 2008.

State Streeet CEO Resigns Amid Massive Losses – Bloomberg

William Hunt to step down as the world’s largest money manager for institutions reports setting aside $279 million for legal expenses related to subprime mortgage losses. At least three lawsuits have been filed against State Street for “breach of fiduciary responsibility”.

A Mean Season for Automakers – Marketwatch

Even mighty Toyota was not immune to the pullback in auto sales as analysts expect disappointing year-end results, including some double digit losses, from the world’s top automobile manufacturers.

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
Sapient SAPE 9
TradeStation Group TRAD 8
TiVo TIVO 8
Netflix NFLX 8
Herman Miller MLHR 8

View More Stocks

TradingMarkets Tracking the Wizards

Hedge Funds Beat Market in 2007 – Financial Times

You might not believe it given the news emphasis on hedge funds that underperformed or outright blew up as a result of the problems in the credit markets, but hedge funds as a group again outperformed the S&P 500 and FTSE 100. Broad-based hedge fund index, HFRI Composite, finished the year up 9.7%.

Robert Wilson Gives it All Away – Portfolio.com

Legedary short-seller discusses his plans to donate as much as 70% of his wealth before he dies–and comments on the state of philanthropy on Wall Street.

Bear Stearns to Launch 130/30 Fund – HedgeFund.Net

Bears Stearns announced plans to offer a hedge fund-like mutual fund to investors. The fund will be invested at least 80% in U.S. stocks according to prospectus filed with the Securities and Exchange Commission. “130/30” funds invest 130% long-only and 30% short against the stocks in the porfolio.

View Portfolios of Prominent Investors

TradingMarkets Playbook

The markets are as oversold now as they were in mid-December when the Dow rallied some 500 points toward the Christmas holiday. This suggests that the risks are shifting against those who are betting against stocks right now. The number of stocks appearing in our high PowerRatings listing points to growing opportunities for buying weakness, any of which could respond to the extremely oversold conditions with a sharp move higher.

That said, the Dow Industrials, S&P 500 and Nasdaq Composite are all now officially trading below their 200-day moving averages. This does not necessarily mean that traders should limit themselves to the short side, the markets moved below the 200-day moving average in the first half of December only to bound higher. But it does mean that traders should make sure that they are betting the right way on the right kind of stocks–strong stocks experiencing temporary weakness and weak stocks experiencing temporary strength.

David Penn is Senior Editor at TradingMarkets.com.

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