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Before The Bell: Gilead Shines; Companies Brace For Recession

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Gilead Sciences shines in the fourth quarter, but other companies are bracing themselves for a recession.

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Morning Perspective: Gilead Shines

Gilead Sciences (GILD) reported 4Q earnings of $0.41 EPS above analyst estimates of $0.40. Revenues rose 21.7% for the year to $1.09 bln, inline with consensus estimates. While sales of only two out of its six main drugs beat expectations, the company's quarterly performance still led to an upgrade this morning by research firm Friedman Billing from Market Perform to Outperform. The firm also raised its price target on the company from $43 to $54, according to Briefing.com. Professor Guy Adami first mentioned this story this week in his column Gilead Shines Into Earnings.


From the Bull Pen: Bulls pleased with Gilead's numbers may place near-term sell stops below $42 and below $40 for those with a riskier profile.


From the Bear Cave: In the biotech sector bears can attempt a downside play in Genentech (DNA), buy-stops above $70.



Companies Brace For Recession


WSJ reports U.S. companies are taking a more cautious approach as recession concerns mount. Financial companies such as Citigroup (C) and Bank of America (BAC) have already announced layoffs, and other companies like retailer Chico's FAS (CHS) and Delta Air Lines (DAL) have put hiring freezes in place. Economists say U.S. companies are responding more quickly this time around by reducing inventory or cutting payrolls as the lessons out of the 2001 recession are still fresh in the minds of management. For more, check out Minyanville's Recession Package.


From the Bull Pen: In a recessionary environment, bulls expect pharmaceuticals to outperform. Professor Guy Adami mentioned yesterday a possible play in Pfizer (PFE); sell-stops below recent lows $21.56.


From the Bear Cave: Bears expect Caterpillar (CAT) to underperform in a slowing economy. Downside entry at $70 should the stock rally to that level; buy-stops set above.


For more ideas, see Minyanville's Spotlight Stocks.


Quick Check Around the World

As traders fire up this Thursday pup, foreign markets are, for the most part, glowing green.

Asian trading closed with the Hang Seng -2.29%, Nikkei +2.06%, Sensex -2.12%, Taiwan +1.47% and Shanghai +0.31%.

A glance across the pond finds the CAC +4.11%, DAX +5.80%, FTSE +3.88%, ATX +3.10%, Swiss Mkt. +4.25% and Stockholm +3.33


A Look At Commodities

Commodities are mixed this morning. Crude is up +1.00 to 87.99. Gold is higher by +16.50 to 899.50. Silver is lower by -0.128 to 15.902, and copper is off by -12.55 to 306.35.

The dollar index is down -0.305 to 76.101.

As of 9:00 AM EST, S&P futures are higher +6.30 to 1347, and Nasdaq futures are up as well +5.0 to 1812.

On the Radar

Initial Claims 301K vs 320K consensus, prior revised to 302K from 301K

10:00 Existing Home Sales: 4.95 mln cons


Click here for the full trading radar.

Good luck, Minyans! Have a great day!


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No positions in stocks mentioned.

The information on this website solely reflects the analysis of or opinion about the performance of securities and financial markets by the writers whose articles appear on the site. The views expressed by the writers are not necessarily the views of Minyanville Media, Inc. or members of its management. Nothing contained on the website is intended to constitute a recommendation or advice addressed to an individual investor or category of investors to purchase, sell or hold any security, or to take any action with respect to the prospective movement of the securities markets or to solicit the purchase or sale of any security. Any investment decisions must be made by the reader either individually or in consultation with his or her investment professional. Minyanville writers and staff may trade or hold positions in securities that are discussed in articles appearing on the website. Writers of articles are required to disclose whether they have a position in any stock or fund discussed in an article, but are not permitted to disclose the size or direction of the position. Nothing on this website is intended to solicit business of any kind for a writer's business or fund. Minyanville management and staff as well as contributing writers will not respond to emails or other communications requesting investment advice.

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