Skip navigation
MOST POPULAR RELATED TAGS
  • TOPICS
  • SECTORS
  • COMPANIES
Trader Talk Video Gallery
CNBC's Bob Pisani interviews Aretha Franklin at the NYSE.
CNBC's Bob Pisani reports on the market day live from the floor of the New York Stock Exchange.
CNBC's Bob Pisani discusses the day's market activity, live from the floor of the New York Stock Exchange.
Discussing whether an auto bailout would be good or bad for the markets, with Barry James, James Advantage Funds and CNB...
Bob Pisani reports on the trading day from the NYSE
Weighing in on the day's market action, with CNBC's Bob Pisani; Jack Gage, Forbes; Jim LaCamp, RBC Wealth Management; an...
The surge in mortgage applications proves there is pent up demand in the market, with CNBC's Diana Olick, Bob Pisani, St...
Bob Pisani reports on the trading day from the NYSE
See all Trader Talk posts
Text Size
Oct.26
8:59 AM ET
Friday, 26 Oct 2007
Bullish Comments On MSFT, CFC Moving Markets

Two bellweathers in their respective industry have come out with surprisingly bullish commentary, and both have moved the markets. Microsoft's [MSFT  Loading...      ()   ] 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 [CFC  Loading...      ()   ] , 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.

Questions?  Comments? 

© 2008 CNBC, Inc. All Rights Reserved

Permalink: /id/21487464

HOME  |  NEWS  |  MARKETS  |  EARNINGS  |  INVESTING  |  VIDEO  |  CNBC TV  |  CNBC PLUS  |  CNBC MOBILE  |  CNBC HD+
About CNBC   |   Site Map   |   Privacy Policy   |   Terms of Service   |   Advertise   |   Help   |   Feedback   |   Video Reprints
  Data is a real-time snapshot   *Data is delayed at least 15 minutes

Global Business and Financial News, Stock Quotes, and Market Data and Analysis