Trader Talk

Pisani: Traders Plan on Steady Rates

Stock futures Tuesday were a couple points higher ahead of the Fed meeting. An informal survey of stock traders indicate that no one is expecting a dramatic change in wording or rates. Most feel that unemployment will stay in the 9 percent range, that inflation will remain in the 1 to (at most) 2 percent range in 2010, and that none of this warrants rate increases before late in the year.

February housing starts of 575,000 about in line with consensus, permits at 612,000 about in line as well.

January starts revised to 611,00 for January, well above the inital read of 591,000. That is good news: starts have been stuck in the roughly mid-500,000 range for a long time; anything that takes them decisively over 600,000 would be signs of life in housing. This is the first time starts were over 600,000 since November of 2008.


1) Quadruple witching coming Friday, so expect some break from the low volume. This is the quarterly expiration of stock and index futures, and stock and index options. Several stocks have had interesting breakouts on higher volume recently — including CNBC's parent company, General Electric.

(See: GE CFO Sees Profit, Dividend Rising in 2011.)

Good and bad news in the retail world.

2) Retailer Limited Brands rises 4 percent after announcing a $1/share special dividend and a $200 million stock buyback program.

3) Shoe retailer DSW missed Q4 earnings estimates ($0.30 vs. $0.32 consensus) as a 10 percent rise in costs dampened a 13 percent rise in same-store sales.

Looking ahead, the shoe retailer sees comps rising low single digits this year, with earnings of $1.35-$1.45, inline with current Street estimates.

4) Watch maker Movado said it would incur a larger than expected loss in the fourth quarter (loss of $0.28 vs. $0.25 consensus). Many of the company's retailers are no longer in business, and heavy discounting is occurring in the remaining retailers. A move to cheaper watches, like rival Fossil, is also hurting.

Royal Dutch Shell is up 1 percent after indicating it will increase its production by 11 percent by 2012 from last year's levels — a little more than it had expected.

At the same time, in the oil giant seeks to sell $1 billion to $3 billion in assets each year over the next few years to trim its refining capacity by 15 percent. The company also intends to reduce costs by cutting 2,000 jobs by the end of 2011 — doubled the number it had originally planned.

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