Minyanville's Before The Bell: Halloween Edition! Alcatel and Debt Markets Spooky!
Alcatel reports a creepy crawler performance. The debt markets frighten Cerberus. But equity futures point up!
Alcatel-Lucent SA (ALU) reported 3Q loss of -0.02 euro per share vs. analyst estimates of -0.01 euro loss per share. Revenues rose 30.4% year-over-year to 4.35 bln euro vs. 4.43 consensus. The world's largest maker of telecom equipment stated it would cut another 4,000 jobs along with the resignation of CFO Jean-Pascal Beaufret. CEO Patricia Russo cited the collapse of the housing market as reasons for slowing sales of fixed-line network equipment. Yesterday Todd asked about the tech sector in Answers I Really Wanna Know.
The Bull Pen: Those who think the negative sentiment is finally overdone with respect to Telecom may look to ALU with sell-stops below recent support at $9.00. Tertiary plays include Verizon (VZ), near-term sell-stops below $43.50 (50-DMA) and Broadcom (BRCM), sell-stops below $32.
The Bear Cave: Those believing the long-term downtrend in ALU will resume may look at 9.90 (50-day) as a prudent entry point. Buy-stops may be placed with trades above.
Debt-market Spooks Cerberus
Cerberus Capital Management officially announced it's withdrawing the $6.2 bln offer for Affiliated Computer Services (ACS) it made last March. Cerberus cited "continuation of poor conditions in the debt markets" as a reason for its withdrawal, in addition to dissatisfaction with how ACS management handled the $62 per share approach. Read Minyan Peter's The Ripple Effect of Collateralized Debt and Bank Earnings Post Mortem for more context into the financial sector.
From The Bull Pen: Cerberus and ACS aside, those who are bullish financials may look for a play in bellwether Goldman Sachs (GS), but note the stock is extended above sell-stops and the FOMC policy statement will be released at 2:15 EST. One idea is to look for an entry point on weakness to the $230 area, with sell stops below $215.
From The Bear Cave: Traders looking to play the downside on the financials may see a play in Lehman Brothers (LEH) with buy-stops above recent support ($65 area).
Quick Check Around the World
Asian trading closed with the Hang Seng -0.90%, Nikkei +0.52%, Sensex +0.28%, Taiwan -0.48%, and Shanghai +0.98%.
Over in Europe, markets are higher with the CAC +0.52%, DAX +0.17%, and FTSE +0.44%. As of 8:30 AM EST, S&P futures are up 6.00 points and Nasdaq futures are higher by 7.25 points.
A Look At Commodities
Crude is slightly higher +0.06 to 90.45. Gold is lower by -0.80 to 787, silver is down -0.008 to 14.32, and copper is off by -0.006 to 3.47. The dollar index (DXY) is down -0.03 to 76.74.
On the Radar
The calm before the storm is over. Traders will have plenty to digest today. Below is a list of economic events for today's session.
8:30 GDP-adv: 2.1% cons
8:30 Chain Deflator – Adv: 2.1%
8:30 Employment Cost Index: 0.9% cons
9:45 Chicago PMI: 53.0 cons
10:00 Construction Spending: -0.3%
10:30 Crude Inventories: -5288k prev.
2:15 FOMC Policy Statement
Click here for Minyanville's full Trading Radar.
Happy Halloween, Minyans! Good luck today!
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