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Before The Bell: Cautious Chambo; India Slowdown


Chambo comments spook investors. India is cooling with inflation brewing.

Morning Perspective: Cautious Chambo

Cisco (CSCO) reported results for the second quarter last night. Earning per share came in at $0.38, which was inline with analyst estimates. Revenues increased 17% year-over-year to $9.83 bln vs. $9.79 bln consensus. Yet, shares plunged as much as 9% in after-hours trading after CEO John Chambers said in a conference call that consumers in the U.S. and Europe were cautious in spending, and that the slump may last for months. Professor Mike Shedlock cautioned Minyans on the tech sector last month in Tipping Point For Tech.

From the Bull Pen: Professor Fil Zucchi mentioned a bullish play in the tech sector using Infinera (INFN); sell-stops may be placed below $11.

From the Bear Cave: Bears can follow the downtrend from the November highs in CSCO; buy-stops can be set above $24.

India Slowdown

Bloomberg reports India's economy is expected to cool for the first time since 2005. Economists predict Asia's third largest economy will increase 8.7% next year, the slowest rate in three years. India's central bank has raised interest rate nine times since late 2004 and ordered increases in bank reserves five times since 2006. But some expect inflation, currently at a five-month high of nearly 4%, to increase due to capital inflows increasing the country's money supply. Professor Fil Zucchi mentioned India's inflation story recently in Settling Into The Bear Camp.

From the Bull Pen: Bulls may see a long-sided technical play in the Indian motor company, Tata Motors (TTM); sell-stops below $18 (200 DMA).

From the Bear Cave: Professor Fil Zucchi mentioned a dangerous brew for the Indian market and was leaning toward longer term short exposure on the country via the India Fund (IFN); bears can play the downside with buy-stops above $50.

For more ideas, see Minyanville's Spotlight Stocks.

Quick Check Around the World

Critters fire up this Thursday pup amid the BOE cutting rates and foreign markets trading mostly lower.

Asian trading closed with the Sensex -3.38% and Nikkei +0.82, with most markets closed for the Chinese New Year.

A quick check of Europe finds the CAC -1.28%, DAX -1.15%, FTSE -1.49%, ATX -1.55%, Swiss Mkt. -1.38% and Stockholm -1.91%.

A Look At Commodities

Commodities are mixed this morning. Crude is lower -0.35 to 86.79. Gold is higher +3.40 to 904.10. Silver is up +0.085 to 16.635, and copper is higher +1.25 to 332.00.

The dollar index is up +0.265 to 76.412.

As of 8:45 AM EST, S&P futures are down -12.7 points to 1317, and Nasdaq futures are lower by -30 points to 1718.

On the Radar


Initial Jobless Claims: 356 k. Prior revised to 378 k from 375 k.
Continuing Claims: 2785 k vs. 2715 k cons.

10:00 Pending Home Sales: -1.0% cons

Click here for Minyanville's full trading radar.

Good luck today, Minyans!

No positions in stocks mentioned.

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