Trader Talk

What's Got Traders Worried

Despite continuing worries about markets in Dubai and Greece (down another 6 percent and 2 percent respectively today) the dollar is weaker this morning, and that is helping stocks and commodities. The Japanese revised their GDP dramatically lower, which some argue will keep rates low for the foreseeable future, thus helping the short dollar trade.


1) Men's Wearhouse down 16 percent pre-open, said they would have a loss in the fourth quarter of between $0.15 and $0.19 cents, much worse than the gain of roughly $0.01 expected by analysts. They did report Q3 earnings better than expected.

2) Texas Instruments said fourth quarter net would be above analyst expectations, but the stock is trading down pre-open. No surprise, given the stock is just off a 52-week high and it would have needed more aggressive guidance to move it forward.

3) Don't remind us: Time Warner spins off its AOL unit today, nine years after the merger that came to symbolize media mergers that don't work. Time Warner shareholders of record on Nov. 27 will receive one AOL share for every 11 shares of Time Warner common stock they hold. Trading begins tomorrow at the NYSE under the symbol AOL (the when-issueds are already trading).

4) Car rental company Dollar Thrifty Automotive said the fourth quarter will show improvement, as demand slowly returns and used car prices are modestly higher. Talk about a rally: DTG was, at one point in March, below $1; it closed yesterday at $21.69.

5) U.S. home prices appear to be stabilizing, according to real estate website Zillow. Rates of negative equity , where home owners had mortgages under water, declined from 23 percent in the second quarter to 21 percent in the third quarter. Forty-Eight of the 154 markets tracked by Zillow, or nearly one in three, showed gains in home values during 2009.

Separately, the near-record low interest rates (4.88 percent for a 30-year fixed rate mortgage) is helping refinancings, which were up 11 percent last week, according to the Mortgage Bankers Association. Applications to purchase a home rose 4 percent to the highest level in nearly 2 months.



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