Submitted By OptionDragon
The Strokes – Take it or leave it
From Briefing.com
WLP’s earnings disappointment last night is affecting the whole industry as they all gap down this morning. WLP, a health benefits company, lowered its full-year financial outlook. Goldman Sachs lowered its rating on WLP to Neutral from Buy. Goldman say’s “WLP’s problems reflect company-specific underwriting error, but also reflect industry-wide pricing pressures that are now combined with upward pressure on underlying cost trends.”
Those affected include AET, CI, CVH, UNH, HNT, HUM and WCG.
Look for continued weakness as the problems are fundamental within the sector.
TXN lowered guidance last night and got some downgrades this morning as Nokia or ERIC has cut back orders. Nokia is one of their largest customers. Watch for sympathy plays on ERIC and NOK on this news. Watch for weakness in the semis or SOXX componenets. JPM defending QCOM this morning with an upgrade. JP Morgan believes TXN’s guidance reflects more a return to a normal seasonal order pattern than a downtick in either the overall 3G market or to Nokia specific demand. They do not believe the 3G market is weak in Q1 and reiterate an Overweight on QCOM shares.
LEH- JP Morgan expects the challenging credit environment to drive further write-downs of fixed income inventory, primarily in Alt-A. They estimate additional write-downs of $750M in LEH’s $15B Alt-A portfolio and lowered their Q1 estimate to 74c.
PXD upgraded to Outperform by RAJA.
DO reiteration Outperform, given the rising cash flows, FBRC anticipates the company’s special dividend to increase by $0.25 by quarter this year, and expects this amount to modestly increase to $0.30 per quarter in 2009 with the shares yielding either 10% more in a year or nearing the firm’s $166 target price.
Research in Motion’s (RIMM) Indian market may be threatened after the government announced plans to investigate whether RIM’s BlackBerry device poses a security risk and could be used for purposes related to terrorism. The government is exploring whether the device’s security features could help terrorists evade authorities. BlackBerry service may be shut down in the country by the end of the month if a resolution is not met.
ISRG: Data from SGO conf bodes well for da Vinci@COWN
Cowen said data presented at the Society of Gynecologic Oncologists meeting showed superiority and outcomes of da Vinci-based hysterectomy vs. traditional open surgery and/or laparoscopy. Shares are Outperform rated.
Crude oil is pushing for $110 and US equities are pointing higher as the Fed has stepped in once again to add liquidity to the system. Futures are up 201 right now and it looks strong.
The Federal Open Market Committee (FOMC) has authorized increases in its existing temporary reciprocal currency arrangements (swap lines) with the European Central Bank (ECB) and the Swiss National Bank (SNB). These arrangements will now provide dollars in amounts of up to $30B and $6B to the ECB and the SNB, respectively, representing increases of $10B and $2B. The FOMC extended the term of these swap lines through September 30, 2008.
The Federal Reserve also announces expansion of its securities lending program.
Under this new Term Securities Lending Facility (TSLF), the Federal Reserve will lend up to $200B of Treasury securities to primary dealers secured for a term of 28 days (rather than overnight, as in the existing program) by a pledge of other securities, including federal agency debt, federal agency residential-mortgage-backed securities (MBS), and non-agency AAA/Aaa-rated private-label residential MBS. The TSLF is intended to promote liquidity in the financing markets for Treasury and other collateral and thus to foster the functioning of financial markets more generally.
This market is responding strongly to this move by the Fed so look for this strength to continue. This was a coordinated by banks across the world and is exactly what the market wanted and needed. Global ingenuity to the problem as well as everyone pitching in to help will help this problem greatly.
The 4 horsemen (GOOG, AMZN, AAPL, RIMM), and other leaders such as BIDU, FSLR, ISRG, POT, MOS
are going to be a focus today.
Art Cashin is saying this is big and the “helicopter is up”, massive short covering is what we are seeing as of now, Fed is making a massive move to get to where it couldn’t reach before with just the cuts.
The recent market low testing is good but he wants to see high volume, he wants to see 1315 to go down and see it broken. He says that this move by the Fed brings them out of the old ways of solving this problem and into the 21st century with new solutions.
Just as Art I will be letting the technicals speak for themselves and will be watching for a fade or weakness after midday and will be watching the upper resistance and pivot points above. I want to see high volume across all indices in order to be comfortable to hold some positions. With high oil prices, energy could be one of the sectors that outperform for the year so I’ll be sifting through the best setups there. CME could see a good bounce following yesterday’s dismal performance.
Focus on your game plan and trade what’s in front of you. Focus on the NOW and drop into the zone by keeping centered and in concentration. Feel the rhythm and move with the waves.
Good luck and great trading!
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