Before The Bell: Gilead Shines; Companies Brace For Recession
Gilead Sciences shines in the fourth quarter, but other companies are bracing themselves for a recession.
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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