Trader Talk

Trading And Thriving In This Topsy-Turvy World


Housing starts and permits were well below expectations, but in the topsy-turvy world today many traders believe that the lower the starts and permits the better, since it means less inventory that needs to be worked off.

The stimulus package is getting more real.

The House Appropriations Committee made a big down-payment on the stimulus package, approving $358 billion in spending, much of it on infrastructure, but also for more police and even for expanding high-speed Internet services. The panel approved an amendment requiring U.S.-made steel be used in construction projects. The House Ways and Means Committee will meet today to consider the tax part of the stimulus bill.

While there is poor commentary from Nokia and Potash , and we have had generally poor commentary from financials, we have had good reports from Apple and IBM .

1) Nokia's down 10 percent pre-open, results were below expectations and gave a poor outlook, saying the global mobile market would decline by 10 percent compared to 2008.

2) Potash reported better than expected earnings but guidance of $0.70-$1.00 for the first quarter is well below expectations of $1.94. They are expecting a much stronger second half because they expect farmers who are delaying purchases to wait for lower prices to order then, so their full year guidance of $10-$12 for 2009 is only a bit below Street expectations of $12.21.

3) Burlington Northern reported earnings a tad above expectations but noted volumes have fallen off.

4) Taiwan Semiconductor , one of the world's biggest chip foundry said overall semiconductor sales could decline 30 percent in 2009 and they could post their first quarterly loss since 1990.

5) In financials, Keycorp and Fifth Third continued the usual trend of boosting provisions for credit losses.

5) United Health came in in-line with expectations, and affirmed full year guidance.

6) Toll Brothers is now offering a 3.99% 30 year fixed rate mortgage for loans of $417,000 or less for those who put down a minimum of 20% and have a FICO score of 720 or higher.

That's important, because average 30-year mortgage rates jumped 0.35 percentage points last week to 5.24 percent. So a $300,000 mortgage at the current rate of 5.25 percent: the monthly payment is $1,657. At 3.99 percent, that $300,000 mortgage is $1,431, a differential of $226, a yearly savings of $2,712. That is significant. Look for more creative ideas like this got get home buying going.

7) Jamie Dimon joined Ken Lewis in buying stock in his company. JP Morgan announced after the close that CEO Jamie Dimon says he bought 500,000 shares of JP Morgan last Friday at 22.93--close to where the stock closed yesterday at $22.63.

    • Microsoft Profit Misses, To Cut Up to 5,000 Jobs



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