Morning Perspective: Surge In Steel?

The WSJ reports a failed commitment by mining giant BHP Billiton (BHP) to ship coal used for steel production may temporarily boost steel prices. BHP and its partner Mitsubishi Corp. (MTU) declared force majeure on coal shipments, likely due to recent weather conditions in the region. Steel prices have already been moving higher in recent weeks as steelmakers around the world attempt to recoup their increased energy, raw material, and shipping costs. Professor Guy Adami mentioned this story in November in his column Is It Time For Steel?


From the Bull Pen: Professor Adami said U.S. Steel (X) is a stock he had been watching for some time. Bulls may play the upside, sell-stops in the near term below $104.


From the Bear Cave: The risks to these stocks are high due to increased concern of a global slowdown. Bears may find a downside play in AK Steel (AKS); buy-stops above the downtrend from the October high ($44).


Microsoft, Tech Titan

Microsoft (MSFT) reported earnings last night, blowing away analyst estimates. 2Q profits came in at $0.50 per share vs. $0.46 cons. Revenues grew 30.5% on an annual basis to $16.37 bln; analysts had projected revenues to come in at $15.95 bln. Shares of the company surged in after-hours trading when the company gave an upbeat outlook. Guidance for 3Q profits was in the range of $0.43-0.45 per share. Analysts are expecting 3Q EPS of $0.44. Professor Sean Udall mentioned this story yesterday in 18 Reasons Microsoft Won’t Be Apple.


From the Bull Pen: “Longer term, I don’t think it’s a stretch to give MSFT a $40 handle,” says Professor Udall. Near-term sell-stops may be set below $32.


From the Bear Cave: Bears see a downside play in Microsoft competitor Red Hat (RHT). Entry may be at $20 with buy-stops above.



For more ideas, see Minyanville’s Spotlight Stocks.


Quick Check Around the World

As the weekend appears on the horizon, traders get set for one more day and find foreign markets green across the board.

Asian trading closed with the Hang Seng +6.73%, Nikkei +4.10%, Sensex +6.62%, Taiwan +2.96% and Shanghai +0.93%.

A quick look across the pond finds the CAC +1.14%, DAX +1.89%, FTSE +1.03%, ATX +1.80%, Swiss Mkt. +1.23% and Stockholm +1.07%


A Look At Commodities

Commodities are strong this morning. Crude oil is higher +1.22 to 90.63. Gold is up +14.60 to 920.40. Silver is up +0.371 to 16.273, and copper is up +4.05 to 320.55.

The dollar index is up +0.174 to 75.867.

As of 8:30 AM EST, S&P futures are higher +9.60 to 1361, and Nasdaq futures are up as well, +25 to 1862.


On the Radar

We have a light radar today with no economic events scheduled.

Happy Friday! Good luck!


GET THESE INSIGHTS AND MORE IN REAL-TIME.  CALL 212-991-9357 FOR A 14-DAY FREE TRIAL TO THE BUZZ & BANTER OR CLICK BELOW.