Morning Coffee with TradingMarkets
 |
Good Morning! |
Drug Stocks Surge…Gold Hits Another Record High…Bear Stearns, Starbucks, Krispy Kreme, Sallie Mae All Shed CEOs…Countrywide Plunges Amid Bankruptcy Rumors…Pending Home Sales Hits KB Homes…Nasdaq Down Eight In a Row, Dow Off Five of Eight…McCain, Clinton Win New Hampshire…Alan Schwartz in at Bear…Goldman Predicts Recession…Asian stocks up, European stocks down…The dollar moving higher against the yen, lower against the pound…Futures are trending higher in the hour before the bell.
You know you have an unhealthy market when old news is able to launch a sell-off–as was the case Tuesday afternoon. As this disconnect grows, it will become all the more apparent how the selling is increasingly driven by abstract, rather than specific fears–at least until something fresher than Iranian gunboats, the perpetually-maligned consumer or problems in the subprime market comes around. Economic news will be relatively light. And Alcoa’s earnings report will be among the more key announcments later today.
» Take the TradingMarkets Path to Professional Trading – Level 1 course and immediately improve your trading. It’s free! Start here.
|
TradingMarkets 5 Business Stories You Need to Know |
Amgen’s Improved Outlook – CNN Money
Amgen CEO praises cost-cutting initiatives as helping push forecast for 2007 profits higher than previously thought. Restructuring cost savings on track for 2008 after significant staff cutbacks. Research and development as a share of sales are expected to be lower in 2007 than 2006. Our PowerRatings show Biotechnology to be among the best industries for investors right now. Find out if there are even better bets than Amgen in the group.
Soft Housing Sales Hit KB Homes – Forbes
Among the casualties of the weak Pending Homes Sales report were K.B.
Homes. The company reported quarterly losses of 31%, $9.99 per share, stunning analysts. Both number and price of new homes delivered were lower in 2007 than 2006. KB Homes’ low PowerRating–along with other stocks in its industry group–suggests that the stock is still one for investors to avoid.
Countrywide Battles Bankruptcy Rumors – Bloomberg
Countrywide suffers worst drop since the Crash of 1987 as the company spends an afternoon fighting off bankruptcy rumors. Company responds with reports of better than expected number of home loans in December. A low PowerRating stock itself, Countrywide is at the bottom of an industry with precious few better options for investors.
Supervalu Drops on Lowered Forecast – Bloomberg
The second-largest supermarket chain in the United States falls the most in five years on lower profit, sales forecasts. Inability to push through price increases due to rising cost of cereal and milk-based goods partly blamed for setback. The Grocery Stores industry has a relatively high PowerRating. Find out what other stocks in the group are expected to do as well, or better, than Supervalu one year from now.
AT&T CEO Warns of “Soft” Consumer Demand – Reuters
Remarks about “soft consumer demand” helped precipitate a broad-based stock market sell-off on Tuesday. AT&T CEO Randall Stevenson says slow economic growth limiting company’s businesses in both home phones and the Internet. Company says increasing number of customers unable to pay telephone, high-speed Internet bills. An average PowerRating stock in an average PowerRating industry, AT&T has rivals in the group that may stand a better chance than it does of being higher in a year’s time.
» 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:
-
Apollo Group
(
APOL |
Quote |
Chart |
News |
PowerRating) beat earnings expectations, announcing $0.83 EPS over an expected $0.73 EPS. -
InterVoice
(
INTV |
Quote |
Chart |
News |
PowerRating) also beat analyst expectations, reporting $0.10 EPS over a consensus of $0.06 EPS. -
Oxford Industries
(
OXM |
Quote |
Chart |
News |
PowerRating) exceeded traders’ outlook today, reporting $0.71 EPS over a consensus of $0.64 EPS. -
Emmis Communications
(
EMMS |
Quote |
Chart |
News |
PowerRating) reported a third quarter loss of $0.22 per share in an announcement before the bell on Wednesday. -
Helen of Troy
(
HELE |
Quote |
Chart |
News |
PowerRating) beat earnings estimates with EPS of $0.81, although the company also reported net sales that fell short of expectations. - Alcoa
(
AA |
Quote |
Chart |
News |
PowerRating) kicks off the big-cap earnings season for 2008 on Wednesday afternoon, with analysts expecting $0.33 EPS. - Ruby Tuesday
(
RT |
Quote |
Chart |
News |
PowerRating) also reports earnings on Wednesday afternoon and is expecting -$0.20 EPS.
» For a list of today’s highest PowerRating stocks, click here.
|
TradingMarkets 5 Top PowerRatings Stocks for Today |
|
Company
|
Symbol | PowerRatings |
| MEMC Electronic Materials | WFR | 10 |
| Savient Pharmaceuticals | SVNT | 9 |
| Quanex | NX | 9 |
| Zixlt | ZIXI | 8 |
| Waddell & Reed Financial | WDR | 8 |
| » View More Stocks |
|
TradingMarkets Tracking the Wizards |
Emerging Markets, Energy Hedge Funds Top in 2007 – FINalternatives
According to early estimates of hedge fund subindexes by HedgeFund.net, emerging markets hedge funds returned 20.83% in 2007, with energy-based hedge funds bringing in 17.53% due in large part to a strong 3.81% bump in December. Asian-oriented hedge funds came in third with returns of 15.86%.
More Hedge Funds = More Shareholder Activism – New York Times
“Activist campaigns” rose dramatically in 2007 as the growing number of hedge funds has resulted in more and more investors demanding accountability from corporate managements. Report by FactSet SharkWatch says more proxy fights last year than at any time since 2001.
Buying a Better Brokerage Stock – TheStreet.com
Cramer says even with the change at the top, Bear Stearns has more work to do. He recommends both Merrill and Goldman for those who absolutely must own a brokerage stock. But if we look beyond Wall Street, there are at least five stocks with exposure to the brokerage business that are more likely than any of those three to be higher one year from now.
» View Portfolios of Prominent Investors
|
TradingMarkets Playbook |
It’s a heck of a coincidence that our TradingMarkets Professional Trading Course would be on “Lesson Four: Trading Large Pullbacks” this month. Markets such as these are the markets that make and break traders. If you find that you are struggling to stay (or get) on track, then now would be a good time to register and check out our Trading Course. It’s free. Visit TradingMarkets.com for details.
Signing up is quick and easy.
With this sort of selling as earnings season begins, it seems clear that the market is trying to discount what it expects will be miserable earnings to start the year. Remember, the market is a discounting mechanism. So the selling we see (and feel) now has more to do with the news the market expects to hear later–with later in this case probably being a combination of weak earnings and a Fed the market still sees as playing for the “other team” (i.e., inflation hawkery).
For investors, there are still stocks–high PowerRating blue chips–that investors can look toward, drug and medical names, as well as stocks with higher, but secure dividends. For traders, the gameplan remains the same–even if there are more opportunities lately to sell strength than buy weakness.
David Penn is Senior Editor at TradingMarkets.com.
Click here to sign up for the Morning Coffee with TradingMarkets newsletter.