Morning Coffee with TradingMarkets

  • January 15, 2008
  • David Penn

Good Morning!

Big Blue Pre-Announces Earnings Beat… Japan Down, Taiwan Up…India’s $2,500 Car… Apple’s New Wares Expected to Debut Today at MacWorld… Merrill Lynch Gets $6.6 bn Korean, Kuwaiti, Japanese Cash Infusion… Citigroup Writes Down $18 bn, Cuts Dividend 40%… Forest Labs Raises 08 Guidance… Toyota Lower… Retail Sales Weaker Than Expected… Asian stocks mixed… European stocks lower… The dollar lower against the yen, pound… And the futures are trending lower in the hour before the bell.

IBM’s surprise announcement buoyed stocks yesterday as the markets opened up and stayed up throughout the session. The futures are pointing to a softer open today, which is to be expected after yesterday’s strong rally. Economic news is limited to retail store sales, the Producers Price Index and Business Inventory numbers today. But the big news this morning in the pre-market is Citigroup, which is reporting that losses in mortgage investments will cause the company to write down more than $18 billion and slash its dividend by 40%.

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TradingMarkets 5 Business Stories You Need to Know

IBM’s Fourth Quarter Trumps Estimates – Associated Press

A typically good fourth quarter for IBM turns into a great one as Big Blue leaks news that they will beat quarterly and full year earnings estimates. Full disclosure: we own IBM as part of our Live Blue Chip Portfolio, a real account with real money that is up more than 9% since inception on August 1. IBM is just one of a number of high PowerRatings stocks in high PowerRatings industries that investors should focus on when looking for stocks that stand a great chance of outperforming the average stock in year’s time.

SAP Sales Up 10% – Forbes

Preliminary announcement says fourth quarter of 2007 was company’s sixteen consecutive quarter of double digit growth. SAP shares the Application Software industry with Microsoft, Intuit and CA (Computer Associates ). Our PowerRatings will tell you what stock in the group is even more likely to be higher one year from now.

Sears Warns on Q4, Full Year – Washington Post

With falling sales due to competition and the credit crunch, Sears announced that its earnings were likely to disappoint for both the recently-ended quarter and 2007. You might not know it from Sears, but Department Stores actually have a pretty high PowerRating, which means the group is more likely than other industry groups to be higher one year later. Is there a better bet in the group for investors than Sears?

Tech Eyes Turn to Apple, Jobs at Macworld – San Jose Mercury News

Will it be a new, ultra-slim notebook, streaming movies over the Internet or something else entirely when Apple CEO Steve Jobs takes the stage at MacWorld today? Questions abound as to whether Apple will unveil a completely new gadget or merely enhancements to current products and services. But for all the excitement over Apple, our PowerRatings suggest that the stock and the Personal Computers industry group it comes from, are nothing to write home about.

Samsung Beats Estimates, LCD Sales Strong – Bloomberg

“Glass half full” attitude toward fourth quarter earnings follows Samsung Electronic’s tripling of profits on sales of liquid-crystal display screens. Samsung is the largest manufacturer of flat screens used in both televisions and as monitors for personal computers.

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
Electronic Clearing House ECHO 10
Mastercard MA 9
Capstone Turbine CPST 9
TriQuint Semiconductor TQNT 8
Tiffany & Company TIF 8

View More Stocks

TradingMarkets Tracking the Wizards

Barron’s Soapbox Picks Tech Stocks for 2008 – Barron’s

Cowan & Company’s Technology , Media and Telecom team take the floor to make their case for the tech stocks that are likely to surprise investors in 2008. We have a list like that at PowerRatings.net, and our list has six stocks that are more than 79% likely to be higher one year from now.

Magellan Fund to Reopen After More Than a Decade – Bloomberg

Performance of Fidelity Investments’ Harry Lange and his investment in technology and stocks beyond the United States helped him beat more than 80% of his mutual fund peers. Lange took over the fund in 2005 after nine years of alleged S&P 500 mimicking by previous fund management.

Lazard’s Wasserstein Strikes Back – Portfolio.com

Bruce Wasserstein, CEO of the legendary independent investment bank Lazard, reflects on life as a Wall Street survivor.

View Portfolios of Prominent Investors

TradingMarkets Playbook

As we said a few days ago, follow-through is key. Sentiment continues to favor the bulls, as recession talk continues unabated. The next big sell-off should provide a signficant tell as to whether or not those who believe stock prices are going higher have managed to wrestle control of the market from those who fear that stock prices can only go lower from current levels. With the markets both short-term overbought and poised to open lower on Tuesday, we might get an early chance to see how well stocks hold up to the inevitable, initial selling pressure.

It is still worth remembering that the S&P 500, Dow Industrials and Nasdaq are all trading below their 200-day moving average which means Larry Connors’ “Five Mistakes to Avoid in a Market Trading Below its 200-day Moving Average” published at TradingMarkets.com last fall should remain our template for trading in the near-term.

David Penn is Senior Editor at TradingMarkets.com.

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