Two Ways To Play: Citi Smells Global Rate Cut
Strengthen your portfolio in good times and bad.
Bloomberg reports Citigroup analysts say that there is a "decent chance" that European central banks will enact emergency rate cuts as early as this week.
The analysts wrote "If financial-market conditions do not improve soon, then early easing also will be on the agenda." The report said banks including the European Central Bank, Bank of England, Swiss National Bank, Sweden's Riksbank, and Denmark's central bank could all follow the Federal Reserve's lead in lowering its benchmark rate.
From the Bull Pen: Professor Lance Lewis has talked about this potential on the Buzz. AngloGold Ashanti (AU) is an option for an upside play with sell stops below $21. Also consider the silver ETF (SLV) with sell stops below $12.
From the Bear Cave: A global cut will likely be a catalyst for a relief rally. But the outlook remains grim. A rally in J.C. Penney (JCP) to $40 could likely be the right shoulder of a bearish H&S pattern.
Pfizer Cutting Down
The Wall Street Journal reports Pfizer (PFE) is abandoning its efforts to develop drugs for heart disease, a field that includes its own cholesterol drug Lipitor which helped make it a dominant player in the 90's. Also being cut are its businesses of treating obesity and bone health. The move is part of Pfizer's plan to restructure into business units responsible for their own profits and losses. CEO Jeffrey Kindler said the company is decentralizing in an effort to boost pipeline prospects and efficiency. For another biotech idea, see Professor David Miller's column on Repros Therapeutics.
From the Bull Pen: Professor Miller positively mentioned Repros Therapeutics (RPRX). Bulls can consider the upside with sell stops near $6.40.
From the Bear Cave: Bears can consider a downside play in PFE if the stock can complete a bearish double top pattern at $20.
For more ideas in real time throughout the trading day, check out Minyanville's Buzz & Banter.
Quick Check Around the World
Asian trading closed with the Hang Seng +0.76%, Nikkei -4.12%, Sensex +2.08%, Taiwan -3.55%. China remained closed due to a holiday.
A quick check of Europe, we find the CAC -0.02%, DAX -0.89%, FTSE +0.21%,
As of 8:20 a.m. EST, S&P Futures are trading +25 points to 1143 and Nasdaq futures are up +23 points to 1535.
A Look At Commodities
Commodities are mostly higher. Crude oil is +2.79 to 99.15. Gold is +8.50 to 896.70. Silver is -0.005 to 13.020, and copper is -1.90 to 289.85.
The dollar index is +0.730 to 78.201.
On the Radar
9:00 S&P CaseShiller Home Price Index: 167.7 prior.
9:00 S&P/CS Composite – 20 (y/y): -16.0% cons.
9:45 Chicago Purchasing Manager: 54.0 cons.
10:00 Consumer Confidence: 55.0 cons.
10:00 NAPM-Milwaukee: 54.0 cons.
5:00 ABC Consumer Confidence
Click here for the full trading radar.
Turnaround Tuesday again? Good luck!
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