Fed Watch: Is It A 25 or 50 Point Cut?
How aggressive will the Fed be? They are expected to cuttt 25 basis points and many are expecting a 50 basis point cut in the discount rate. Some are also expecting new innovations to encourage banks to use the discount window.
1) Washington Mutual down 10 percent as it cuts its dividend and is selling $2.5 billion in preferred stock. Downgraded at Citi. The big worry here is that the company appears to be seeing deterioration in its prime book of business.
Meanwhile, Keefe Bruyette & Woods downgraded a large number of regional banks.
2) Texas Instruments up 4 percent pre-open after guiding higher in its fourth quarter revenue.
3) GE holds it annual analyst conference.
4) Merck reiterates guidance.
5) H&R Block down 7 percent as they delay their quarterly report because of a change in auditor. Still, they expect to report a loss for the quarter of $1.55, which includes a loss of $1.13 a share from discontinued operations. Excluding this, the loss of $0.42 is still worse than analyst consensus loss of $0.35. Remember, they are essentially exiting the mortgage business.
Hewlett-Packard just out with guidance for fiscal 2009; seems like guidance roughly in line with expectations.
While some banks and brokers are cutting dividends, other industries are increasing theirs:
1) AT&T up 3 percent as it boosts its dividend by 12.7 percent, the largest dividend increase in its history. They also announced a new $15.2 billion buyback, about 7 percent of the market capitalization. That will push the company's dividend yield over 4.0 percent.
2) Boeing approved a 14 percent dividend increase.
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