MARKET UPDATE
Stocks are indicated lower this morning, but only by a small margin. DJIA futures were down about 75 points early on and S&P Futures were down 11 points.
Bonds closed with a total flight to safety, and the 10-year T-Note closed at 3.39% and the lowest level since the extremes of mid-September. Bond spreads were starting to stabilize until Hank Paulson yanked the rug out from under the TARP mortgage securities buying, and now the 3-Month T-Bill is at a low of 0.06% like it was Japan.
Oil is down $1.50 per barrel and now under $53.00 per barrel. Gas Buddy has the national fuel price average for regular unleaded at $2.02, so don’t you feel like buying an SUV with all the incentives still attached?
ECONOMIC & MACRO EVENTS
These are today’s top economic data:
8:30 AM EST Weekly Jobless Claims
10:0 AM EST OCTOBER Leading Indicators
10:00 AM EST NOVEMBER Philly Fed
10:35 AM EST Weekly Natural gas Inventories
Dell (DELL) reports earnings after the close of trading. Other key earnings are Gap Inc. (GPS), GameStop Corp. (GME), Salesforce.com Inc. (CRM), Brocade Communications Systems Inc. (BRCD) and Barnes & Noble Inc. (BKS).
BULLISH EVENTS
Baidu.com has been spanked really hard over the last week because of a scandal in medical search in China where some results were unlicensed and those who did not pay for search were not in search. This morning we have seen some downgraded targets but Credit Suisse raised its target to $184. This is only listed as bullish because this one has been cut in half over the last two weeks.
Citigroup (NYSE: C) is indicated higher after an unusually hard pounding yesterday. Saudi Prince Alwaleed said he is increasing his stake back up to 5% and that he is in full support of management there.
Boston Scientific Corp. (BSX) was initiated in coverage as a “Buy” at UBS. This is after co-founders have had to keep selling shares left and right to meet margin calls and after the stock is close to multi-year lows.
Gymboree (GYMB) may have a small bid after yesterday’s post-earnings drop. JPMorgan has actually upgraded this stock to an “Overweight” rating from Neutral now that shares are down about 65% from their highs.
General Electric Co. (GE) is indicated slightly higher on reports that the company is in talks with several private or sovereign wealth funds over capital. This stock put in a decade low.
BEARISH EVENTS
Amgen (AMGN) is not indicated lower, but last night it and Takeda’s Millennium Pharma said that enrollment in a lung cancer trial was being suspended because of higher deaths in part of the control group over the placebo group.
Suntech Power Holdings (STP) may be under pressure again. Shares have already been hammered into oblivion, but the solar company posted $0.35 EPS vs. $0.42 estimates, and it guided next quarter and 2008 lower. It seems low gas prices and order drop-offs over credit and cost comparisons are turning the term “global warming” back to “climate change” right now.
Patterson Companies (PDCO) posted $0.40 EPS vs. $0.46 estimates and the companies lowered guidance for the coming quarter and for fiscal 2009. So much for pet-vet and dental supplies being protected in a recession.
Shoe Carnival (SCVL) is not selling enough shoes. The shoe retailer posted earnings at $0.21 EPS vs. $0.30 estimates.
Sally Beauty (SBH) is still apparently not recession proof. The retailer of affordable beauty supplies posted earnings at $0.12 EPS and $672.2 million in revenues. Estimates were $0.15 and $683.3 million. With shares down about 70% much of this might be close to getting factored in.
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