Europe Banks in Huge Rate Cuts; U.S. Earnings Glum

Sweden, Bank of England, and now the ECB have all cut interest rates, the ECB by a record 75 basis points to 2.5 percent.

On the U.S. front, there is mostly negative news. Let's see how much of this negative news has been priced into the market.

1) November same store sales (bear in mind that almost every retailer had DOUBLE-DIGIT declines)

a) Walmart up 3 percent pre-open on sales up 3.4 percent, way above the 2.1 percent expected.

b) Below estimates: Macy's

c) Above estimates: JC Penney , Nordstrom , Saks , Gap , American Eagle (lower guidance than analysts), Aeropostale (lower guidance than analysts)

2) This morning, more talk of lowered earnings estimates and job cuts:

a) Dupont down 7 percent pre-open, other commodity stocks are weak as Dupont reduces its earnings estimates on "sharply lower sales volumes." What's the issue? They sell big into the automotive and construction business, that's the issue. If you want numbers: expecting a fourth quarter loss of $0.23-$0.30 vs. expectations of a gain of $0.23. Full year 2009 now expected to be $2.25 to $2.75 versus analyst expectation of $2.80. They will cut 2,500 jobs.

b) AT&T laying off 4 percent of the company's workforce

c) Credit Suisse said it would cut more than 10 percent of its workforce

d) Merck down 4 percent as it reaffirms 2008 earnings of $3.28-$3.32 (estimates $3.29); and has provided initial 2009 guidance of $3.15-$3.30 vs. analyst estimates of $3.52.

e) Philips down 6 percent, saying its lighting and consumer business was being hurt by the global slowdown, they also will not meet their targets.

f) Adobe reduced its revenue guidance on weak demand for its new software suite.

Questions? Comments?