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Before The Bell: Financials For The Future; Cisco Taking Over

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Financials face a bleak future. Cisco has plans to take over the world. Futures are slightly lower.

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Morning Perspective: Financials For The Future

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!
No positions in stocks mentioned.

The information on this website solely reflects the analysis of or opinion about the performance of securities and financial markets by the writers whose articles appear on the site. The views expressed by the writers are not necessarily the views of Minyanville Media, Inc. or members of its management. Nothing contained on the website is intended to constitute a recommendation or advice addressed to an individual investor or category of investors to purchase, sell or hold any security, or to take any action with respect to the prospective movement of the securities markets or to solicit the purchase or sale of any security. Any investment decisions must be made by the reader either individually or in consultation with his or her investment professional. Minyanville writers and staff may trade or hold positions in securities that are discussed in articles appearing on the website. Writers of articles are required to disclose whether they have a position in any stock or fund discussed in an article, but are not permitted to disclose the size or direction of the position. Nothing on this website is intended to solicit business of any kind for a writer's business or fund. Minyanville management and staff as well as contributing writers will not respond to emails or other communications requesting investment advice.

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