Bullish Comments On MSFT, CFC Moving Markets
CNBC "On-Air Stocks" Editor
Two bellweathers in their respective industry have come out with surprisingly bullish commentary, and both have moved the markets. Microsoft's commentary have propelled the perpetual tech laggard to five year highs; to move a $300 billion market cap stock by 12% pre-open is a very rare occurrence.
Countrywide , though it took a bigger loss than expected for the same reasons many financials have taken big losses (inventory valuation adjustments, losses from bad mortgage loans, and restructuring charges), sounded a very optimistic tone. Here is the paragraph that is being quoted on the Street:
"We view the third quarter of 2007 as an earnings trough, and anticipate that the Company will be profitable in the fourth quarter and in 2008," [President David] Sambol concluded. "Over the longer term, we believe that prospects for the U.S. housing and mortgage markets, as well as for Countrywide, remain very attractive."
The company claims it has made big changes, including significantly tightened its loan program and underwriting guidelines, and perhaps most importantly claims it has accelerated the integration of their mortgage banking operations into Countrywide Bank, which they claimed has strengthened their capital position.
What's this about? Cynics on the Street feel that Countrywide had nothing to lose--one trader noted to me that the stock was trading like they were going to file for bankruptcy--they didn't, and importantly they maintained a quarterly dividend of $0.15. Call it wildly optimistic, call it buying time, calling it waiting for the Fed rate cuts to take effect--the stock is up nearly 18% pre-open. Even here, much of this is short covering rather than long buying.
Now lets see if ANY financial can hold its gain.
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