How Will Rest Of TARP Be Used?
The joke on the Street this morning is that Starbucks wants to be part of the TARP—that Peolosi and company thinks everyone needs a $5 latte in this economy.
We should find out what the rest of the TARP will be used for this morning, when Treasury Secretary Paulson speaks. Assumption is he will finally give a clearer outline of what the remainder of the money will be used for.
GM is up 10 percent this morning because everyone believes that they will get some kind of aid, but from the looks of things the insurance industry may beat them to the punch. Genworth has gone from $25 in May to $1.24 yesterday. It's up almost 10 percent this morning for the same reason.
The Bank of England indicated that because inflation may drop below 2 percent in 2009, they could cut rates again; the pound is weaker.
- Pershing's Ackman Says GM Should Reorganize
- Stock Recovery Will Come Last: Pimco's El-Erian
1) Best Buy down 12 percent pre-open, lowering fiscal 2009 guidance, to $2.30-$2.90 from $3.25-$3.40. This is not only lower, it is a much wider range to reflect the uncertainty. Comp store sales declined 7.6 percent in October. Comp store sales for the four months remaining in fiscal 2009 (November-February) are expected to decline 5 to 15 percent. Again, this is a very wide range.
The commentary reads like an excerpt from the Book of Revelations: "Since mid-September, rapid, seismic changes in consumer behavior have created the most difficult climate we've ever seen," CEO Brad Anderson said. They are working to adjust inventory levels (read: they're not buying as many TVs, camcorders, etc.)
2) Macys trading up 5 percent pre-open, surprised everyone by beating on earnings for the third quarter ending in October; however if sales trends continue into the fourth quarter earnings will be at the low end of guidance. That is not as bad as some feared.
3) Commodity stocks again weak today.
New from CNBC.com:
Questions? Comments? email@example.com