Before The Bell: Financials For The Future; Cisco Taking Over
Financials face a bleak future. Cisco has plans to take over the world. Futures are slightly lower.
WSJ reports the major investment banks such as Citigroup (C), Bank of America (BAC), and J.P. Morgan Chase (JPM) are likely to return to a simpler and less-profitable business model. Due to the subprime crisis and credit crunch, gone are the easy days where loans were sold off to investors while arranging financing through structured investment vehicles. With banks forced to hold onto more of the loans they make and the crippled securitization business, analysts expect an overall negative impact from a resulting earnings slowdown with some forecasts calling for just a 5.5% increase over 2006 levels. For context, read Professor Kevin Depew's Five Things You Need To Know.
From the Bull Pen: Bulls looking for financial exposure may see a play in Goldman Sachs (GS) and MasterCard (MA); sell-stops for both stocks may be set below $200. JPM may be an option; sell-stops below $43.
From the Bear Cave: Bears may play the downside in BAC, buy-stops above $45 (50 DMA).
Cisco Taking Over The World
FT reports that Cisco (CSCO) is preparing to launch a business group in Bangalore, India in a plan to wire new buildings and eventually entire cities with state-of-the-art technology. The world's largest maker of data networking equipment is hoping that governments and developers will skip older telecom systems and install the more advanced internet protocol, or IP, networks. Cisco said the project, which is expected to be worth over $10 bln over 10 years, is at an early stage and is part of a broader plan to expand into other developing countries. For more tech ideas, read Professor Sean Udall's 15 Technology Stock Ideas For A January Effect Trade.
From the Bull Pen: Bulls may attempt the upside in Cisco, near-term sell-stops below $27. A tertiary play may include Oracle (ORCL), though this may require patience waiting for the gap from 21.40 to 22 to be filled.
From the Bear Cave: Bears looking for a downside play in tech may find one in Sigma Designs (SIGM); buy-stops may be placed above $59 (50-DMA).
For more ideas, click on Minyanville's Stocks To Watch.
Quick Check Around the World
With Christmas in the rear-view and New Years only days away, we come in to find European markets closed and Asian markets mostly in the green.
Asian trading closed with the Nikkei +0.65%, Sensex +1.70%, Taiwan -0.13% and Shanghai +0.62%.
A Look At Commodities
Crude oil is higher this morning +0.61 to 94.74. Gold is up +2.90 to 815.70. Silver is up +0.01 to 14.53 and copper is higher +5.35 to 314.70.
The dollar index is down -0.38 to 77.22.
As of 8:40 AM ET, S&P futures are lower by -1.5 points and Nasdaq futures are unchanged.
On the Radar
We continue this light week with no economic events scheduled.
Click here for the full trading radar.
Good luck and have a great day!
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