Trader Talk

Global Stocks Up on China, France, Alcoa


Global stocks up on China, France, Alcoa. Green everywhere this morning:

1) China rallied for a second day as December exports and imports posted their weakest growth in more than 2 years; that's not good, but traders seem to be expecting more easing of bank lending restrictions. The Shanghai Index up 2.7 percent.

2) Ratings agency Fitch said it would not downgrade France's credit rating in 2012. French banks like BNP Paribas up 6 percent in Europe.

3) Alcoa: the sky didn't fall. Commodity stocks are up 3 to 6 percent, Alcoa up 2 percent because results were mostly in line with lowered expectations, including a restructuring charge.

Aluminum demand growth of 7 percent was a positive (the average increase since 2000 was about 5 percent, according to analysts), as was the comment that there would be a production deficit of aluminum in 2012.

Alcoa confirmed that about one-third of Chinese aluminum smelters are cash negative.


1) It isn't all rosy: just look at Philips Electronics , down 4 percent pre-open. They're Europe's biggest consumer electronics and lighting company, and have a big healthcare division as well. They're lowering earnings due to a weak European consumer market that has stuck them with high inventories of products they can't move. And austerity has even hospitals putting off orders for new equipment.

Their competitor, Germany's Siemens, said the same thing: slow customer investment is hurting new orders, and that the earnings headwinds have become stronger since November.

And look at Tiffany , which cut its full year forecast after the holiday sales season was on the disappointing side, not just in Europe but in the U.S. as well. After talking up full year earnings of $3.70-$3.80 in November, Tiffany lowered the numbers to $3.60-$3.65 a share.

Jewelery competitor Signet also warned, as did Jones Group .

2) Several German banks announced covered bond sales overnight, in an attempt to fund capital shortfalls. It's good news they're raising capital, but covered bond sales means they have to put up a lot of collateral to get it done.

3) Liz Claiborne (LIZ) falls 12 percent in premarket trading after cutting 2012 outlook yesterday and saying its 2011 profit would come in at the low end of its previous forecast. LIZ, which recently announced a name change, also said its CFO Andrew Warren is leaving effective May 16. LIZ posted third quarter profit loss of $214.6 million, its 16th consecutive quarter in the red.

4) WedMD Health plummets 29 percent in premarket trading after announcing the resignation of CEO Wayne T. Gattinella and the termination of buyout talks. Additionally, WBMD lowered 2012 guidance expecting revenue to fall 2 to 8 percent and said it anticipates increased competition in its consumer products market this year. Anthony Vuolo, current CFO and COO, will serve as interim CEO.

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