Morning Coffee with TradingMarkets

  • February 11, 2008
  • David Penn

Good Morning!

Yahoo to Reject Microsoft Bid… Motorola, Nortel in Joint Venture Talks… Hasbro Reports 24% Earnings Surge… ECB, Australian CB In No Hurry to Cut Rates… Retail Sales Due Today… Ford May Cut 9,000 Factory Jobs… Bear Sees $175 Bn in Writedowns Industry-Wide… Taser International Up Big in Pre-Market…

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

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TradingMarkets 5 Business Stories You Need to Know

Yahoo Says Microsoft Offer Too Low – Wall Street Journal

The ball is back in Microsoft’s court as Yahoo rejects the software giant’s near-$45 billion offer as not fully reflecting Yahoo’s value.
The move by Yahoo has led observers to wonder whether or not Microsoft will make a hostile takeover attempt of the second leading Internet company. We wrote extensively about Yahoo and Microsoft in our PowerRatings Weekly Outlook for the weekend, analyzing the PowerRatings of both companies and the prospects for the companies’ stocks going forward.

Motorola, Nortel Pitch Joint Venture – Chicago Sun Times

While cell phone makers meet at the Mobile World Congress in Barcelona, Spain, news broke that Motorola and Nortel will be looking to combine their wireless infrastructure and equipment making businesses. From a PowerRatings perspective, neither Motorola nor Nortel offer the best opportunities for investors right now, although both stocks come from an industry, Communication Equipment, that should outperform the average industry in the near term.

About Those ECB Rate Cuts – Bloomberg

Traders initially reacting to suspicions that the ECB would shift to a rate lower posture have decided that a lower rate might be longer in coming than was previously suspected. The Euro rallied against the yen in response.

Toy Maker Tops Estimates – CNN Money

Toy maker Hasbro enjoyed earnings growth of 24% for the fourth quarter based on sales of board games, Transformers. The company managed to avoid the lead paint scandals that damaged many of Hasbro’s competitors in 2007. Based on its PowerRating, Hasbro is an average opportunity in an industry that is expected to perform about as well as the average industry going forward. There is one stock in the Toys & Games industry, however, that may be more likely than Hasbro to be higher in a year’s time. Find that name at PowerRatings.net.

Australian Central Banks Ponders Higher Rates – Bloomberg

Concerns about “uncomfortably high” inflation may lead the Australian central bank to raise interest rates at a time when most of the world’s major central banks are looking to ease monetary policy. Cash rates in Australia could an 11-year high if the central bank goes through with suggested rate hikes.

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
Bankrate RATE 9
ICICI Bank IBN 9
TempleInland TIN 8
TurboChef Technologies OVEN 8
Nasdaq NDAW 8

View More Stocks

TradingMarkets Tracking the Wizards

Did Societe Generale Trader Have Help? – New York Times

Investigators pouring through 2,000 pages of instant messaging texts from Jerome Kerviel suggest that the rogue trader may have been trying to hide the involvement of a friend who was helping Kerviel remain undetected.

Grantham and the Credit Crisis – Seeking Alpha

Excerpts from a Barron’s interview with Jeremy Grantham. The chairman of GMO, a global investment management firm based out of Boston, Grantham sees tough going in the near-term, but a a world of bargains come 2010.

Hedge Fund Strategies Shift in 2008 – New York Times

Long positions in 10-year Treasuries and euro-dollar holdings
(EUR/USD) both growing fewer as traders unwind profitable trades from the last several months. These shifts along with fewer short equity bets have led some to suspect that hedge funds may be making room for buying stocks over the course of the year.

View Portfolios of Prominent Investors

TradingMarkets Playbook

As we noted in the PowerRatings Weekly Outlook, the exchange-traded tracking funds for the S&P 500, Dow Jones Industrials and Nasdaq 100 all have attractive Long Term PowerRatings of 8 or 9. This alone suggests that the broader markets are becoming a more attractive environment for investing, which should help support short-term trading to the upside. The futures are pointing to a positive open and the markets are slightly oversold on a short-term basis.

At the same time, the number of low Short-Term PowerRatings stocks still outnumbers the higher Short-Term PowerRatings stocks. Barring a significant event, this may be a recipe for sideways trading, and a clue for traders to pick their shots carefully.

David Penn is Senior Editor at TradingMarkets.com.

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