Fed: Big Week, But Will There Be A "Big" Enough Cut?

This is the week for the Fed; traders are hoping for a 50 bp cut, but some fear only a 25 bp cut. The good news is that mortgage rates have come down, and the yield curve has steepened considerably.

Another LBO marriage comes unhinged. Alliance Data down 40 percent pre-open after Blackstone appears to have nixed the deal, claiming that they will not satisfy the requirements to close the deal required by the Office of the Comptroller of Currency--and as a result they do not expect the OCC to grant regulatory approval.

The CEO of Landry's is offering to buy all the shares of the company at $23.50, a 41 percent premium.

On earnings:

1) McDonalds keeps expanding their menu, selling higher-end coffee, and beating estimates. 73 cents, 2 cents better than expected. U.S. comp store sales up 3.3 percent, but the growth is international: 11.4 percent in Asia/pacific, Middle East and Africa. Down 4 percent pre-open.

2) Black and Decker down 7 percent pre-open; earnings for the fourth quarter were OK, but guidance for the first quarter and full year is well below expectations. CEO Nolan Archibald said he does not expect a housing recovery in 2008.

3) Stanley Workscame in just a bit below expectations; guidance for the full year 2008 as reaffirmed, though those estimates are toward the lower range of analyst estimates.

4) Corning up 4 percent pre-open, they beat and guided higher for the quarter on strong demand for LCD screens.

5) Oil services giant Halliburton beat; international growth was strong.

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