Futures are trading up on hopes that the stimulus package from India, talk of a greater stimulus package from China, and President-elect Obama's talk to launch the biggest public infrastructure works project since Eisenhower will be game changers in the global slowdown.
Commodity stocks like US Steel , Freeport-McMoran ,Alcoa and others are trading up 7 to 10 percent on the general rise in markets as well as a strong commodity market this morning.
Financials are also trading up 4 to 7 percent.
But we have several reminders that companies are still in the process of adjusting their expectations for 2009:
1) 3M, which is holding an analyst meeting today, reduced it's 2008 earnings guidance by about 8 percent, and more importantly said 2009 earnings would be $4.50-$4.95, well below analyst estimates of $5.31. It's not just volume declines; differing exchange rates are also expected to have a negative impact.
2) Illinois Tool Works, holding its annual meeting in New York, lowered their fourth quarter earnings forecast, from $0.44-$0.52 from $0.74-$0.82, reflecting "significant further weakening in North American and international end markets." Down 5 percent pre-open.
3) Dow Chemical is laying off about 5,000 full-time employees, about 11 percent of its workforce. However, the closing of several plants will also idle about 6,000 contract workers.
4) How strange are things? MetLife is also holding an investor meeting; they announced fourth quarter earnings would be far from analyst expectations for 2008 ($0.20 vs. expectations of a gain of $0.74) as well as 2009 ($3.60-$4.00 vs. expectations of $4.48).
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Still, the stock is trading up 6 percent pre-open. The only good news is that the shortfall was due to a "decline in variable investment income and the poor equity markets"; their core insurance business continued to perform well.
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