Two Ways To Play: World Banks Get Out Their Scissors
Strengthen your portfolio in good times and bad.
World Banks Join Hands
Bloomberg reports that, in a global coordinated action, the Federal Reserve, European Central Bank, Bank of Canada and Sweden's Riskbank all cut their benchmark rates to counter the financial crisis. All institutions cut rates by halt a percentage point.
Switzerland also took part and, separately, China's central bank lowered its 1-year lending rate by 0.27%. In a statement, the FOMC said economic activity has slowed and the intensification of the financial turmoil is likely to put additional restraints on spending.
From the Bull Pen: GoldCorp (GG) sitting above $25 remains healthy. Bulls can consider this play with sell stops below that level.
From the Bear Cave: We should see a broad-based rally today and it could last for some time. But the picture remains bleak. Coach (COH) at $25 resistance may be a downside option, if and when.
According to the Wall Street Journal, steelmakers around the world are gathering in Washington to determine how far to cut output before prices fall below theibreak-even point. Hot-rolled steel has plunged from $1000 a metric ton to $780 recently, nearing the break-even price of approximately $650.
At issue is whether there will be too much steel capacity due to a deep recession, which is what South Korea's Posco (PKX), the world's fourth-largest steelmaker, believes. But Lakshimi Mittal, CEO of ArcelorMittal (MT), said he thinks supply will be in line with demand and that long-term prospects for the industry remain strong with a projected 5% annual growth rate.
From the Bull Pen: Professor Smita Sadana mentioned on the Buzz yesterday to be on the lookout for a bounce in ArcelorMittal. With the stock trading above the $36 level in the pre-market, bulls attempting the upside can set a tight sell stop below that mark.
From the Bear Cave: Those bearish PKX can fade (read: sell) the gap if it can approach $80.
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Quick Check Around the World
Asian trading closed with the Hang Seng -8.17%, Nikkei -9.38%, Sensex -2.48%, Taiwan -5.76% and Shanghai -3.04%.
Glancing towards Europe, we see the CAC +0.29%, DAX -0.70%, FTSE +0.79%
As of 8:20 a.m. EST, S&P Futures are trading +15 to 1022, and Nasdaq futures are +12 to 1348.
A Look At Commodities
Commodities are mixed. Crude oil is -0.62 to 89.44, gold is +29 to 911.60. Silver is +0.390 to 11.780, and copper is +0.55 to 255.00.
The dollar index is down -0.532 to 80.437.
On the Radar
10:35 Crude Inventories (10/4)
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