When Moody's Investor Service downgraded big banks Tuesday, it cited the potential affects of financial reform. The financial institutions had been expecting the downgrade, says Orenbuch, so it should have "minimal impact" on their outlook. He thinks Moody's lowered its outlook now, so that banks would have time to adjust and rebuild their balance sheets. It's possible there could be a slight impact on regional banks, but Orenbuch says it's not likely.
Ahead of Visa's earnings report, Orenbuch guessed it would forecast earnings potential to be around 20% for 2011 and 2012.
What's the Trade?
Steven C. Cortes, founder of Veracruz, recommends selling Visa and Bank of America and buying American Express . In the short-term, Orenbuch says that move makes sense because AXP is less affected by the Durbin amendment. But because American Express charges consumers the most, Orenbuch worries the Durbin amendment could cut the price that merchants pay for plastic and that would hurt its stock.
Orenbuch adds that American Express doesn't offer the range of products that Visa and Bank of America does, like debit cards.
Brian Kelly of Kanundrum Capital would watch Visa's earnings for a read on consumer confidence, but would be leery of getting into this stock.
UNUSUAL ACTIVITY: CHICO'S
In midday trading Wednesday, Jon Najarian of optionMONSTER.com spotted some unusual activity in Chico's stock with a lot of call buying. He says the stock has been "hammered" in the past few months, so maybe people are now betting it will outperform. If it does, he thinks that will be good news for those long in the stock, but he's not one of them.
TAKE YOUR POSITION: XOM REPORTS THURSDAY
Set to report earnings ahead of the opening bell Thursday, Exxon Mobil has significantly underperformed the market and is trading down sharply.
In good times, Exxon traded at up to $80 a share, notes Joe Terranova of Vitrus Investment Partners, but the share price is now at $65 to $70. He wonders what's ahead for this Irving, Texas-based company and says the company must post a strong beat to garner investors' interest.
CALL TO THE FLOOR: OIL OUTLOOK
Following the Gulf oil spill and with more policy makers putting emphasis sources of alternative energy, why would a natural gas company get into crude oil? For several reasons, says CEO Tom Ward of SandRidge Energy , an Oklahoma City-based natural gas giant.