- The Dow Down, But Not Out
- Bad News Hits Traders Hard
- Traders Already Eyeing Earnings
- In The Holiday Mood
- A Broad Advance
- Stocks & Ben Both Hold Their Own
- Traders On Bernanke's Hearings: "Nothing Good Will Come From This"
- Why The Fed Did Not Cause Stocks To Sink
- Durable Goods Causes The Big Pop!
- "Lowered Expectations" - The New "Green Shoots?"
|
CNBC'S MOST SHARED
- 'We're in the Middle of a Crash': Black Swan
- The Rising Mountain of Debt May Be the Next Crisis
- Latvian Banker Taking Souls as Collateral
- SEC May Reinstate Rules for Short-Selling Stocks
- Alaska Governor Sarah Palin Will Resign
- Cuddle Parties Heat Up
- The Worst Expected 2010 State Budget Gaps
- Malaysia PM Speaks to CNBC
- Best Cities For New Grads
- Charting Gold & Crude Oil
- Fireworks At Pharma's Market
- Value of Warren Buffett's Annual Gift to Gates Foundation Falls Along With Berkshire's Stock
- Michael Jackson: The Music And The Money
- Five Stock Picks for This Market
- Realities of the New Obama Refis
- Weak Dollar Means Gold at $1,040: Strategist
- Court Ruling Could Mean Trouble for TiVo
- Lance, Please Back Out Of Tour
- TeleMedicine Gets An Apple App Store Facelift
- Schwarzenegger Signals Key Budget Concession
- Palin's Resignation May Hurt Her Future
- North Korea Fires 7 Missiles Off East Coast
- The Rising Mountain of Debt May Be the Next Crisis
- Drug Bust Nets Heroin Stuffed in Build-A-Bear Toys
- For Banks, Wads of Cash and Loads of Trouble
- SEC May Reinstate Rules for Short-Selling Stocks
- Vatican Runs Deficit Amid Economic Crisis
- Earnings Season: A Likely Game-Changer
RSS FEED

Bank of America [BAC
Loading...
()
] says their fourth quarter results will be "disappointing" and there are more write-downs coming due to exposure to collateralized debt obligations (CDOs). They will likely not be buying back stock until 2009. Down 2 percent pre-open.
Wachovia Bank [WB
Loading...
()
] will put aside about $1 billion to cover mortgage-related losses; down 2 percent pre-open.
The failure of the Fed to cut more than 25 basis points was one factor that caused Guy Moszkowski at Merrill Lynch to downgrade Bank of America. He also downgrades JP Morgan and Wachovia. He notes that Merrill is expecting a "consumer recession" in 2008, and that a firm like JPM will be hard-pressed to avoid the pain entirely.
If that's not enough of dumping on the banks, how about this one: Morgan Stanley named Citigroup [C
Loading...
()
] as their top short idea for 2008. Their reasoning: "earnings are deteriorating, we expect new management to deliver a dividend cut, not a breakup, and we expect further hybrid issuance, diluting current shareholders."
Elsewhere:
1) More holiday cheer: Office Depot [ODP
Loading...
()
] sees "continued erosion of sales and earnings" and that weakness it had seen in the third quarter in Florida and California appears to be spreading to other parts of the country.
2) Morgan Stanley downgrades the entire airline sector, talking about higher fuel costs and a weak economy. US Air, Northwest, Delta, and AMR downgraded, but Continental and Southwest are upgraded.
3) MMM [MMM
Loading...
()
] is making more positive comments. They see 2008 estimates at $5.44-$5.47, analyst estimate is $5.43 . That's about 10 percent EPS growth. U.S. will be slow but will continue to grow, the second half of the year will be stronger than the first, and softer but stable worldwide economic growth in 2008.
4) While traders were clearly disappointed with yesterday's tepid Fed announcement, others were noting that the sky has not fallen.
George Friedman at Stratfor notes that, in theory, oil prices at $100 and the bursting of the subprime mortgage market should have created global havoc--but it hasn't. He notes that the overall stock market has not plummeted. Nor has the bond market collapsed and driven interest rates up; just the opposite has happened.
As for a devastating chain reaction from housing, where is it? Global markets continue to hold up. One major factor, Friedman notes, is Asian money flowing into U.S. market, which have helped keep interest rates low: "We would argue that the money is coming from the dollar bloc and its huge free cash flow from China, and at the moment, the Arabian Peninsula in particular. This influx usually happens anonymously through ordinary market actions, though occasionally it becomes apparent through large, single transactions that are quite open."
He argues that this foreign inflow of cash has been a major factor helping the U.S. markets.
Questions? Comments?







