Sorry!! The article you are trying to read is not available now.
Thank you very much;
you're only a step away from
downloading your reports.

Before the Bell: Merrill's Losing Streak; African Oil Issues


Nigerian oil output could drop a third by 2015.

Morning Perspective: Merrill's Losing Streak

Merrill Lynch (MER) posted its third straight quarterly loss of -$2.20 per share, $0.21 worse than consensus estimates of -$1.99. According to the WSJ, the company recorded another $9 billion in writedowns on mortgage-related assets and other securities. Merrill's revenue, including the writedowns, dropped 90% to $825 million. CEO John Thain said that, despite the loss, the company remains well-capitalized with over $82 billion in its excess liquidity pool. "In addition, our global franchise is positioned strongly for the future." For context, read Minyanville Editor Andrew Jeffery's column More Merrill Writedowns.

From the Bull Pen: Although the losses look grim, bulls interpret the numbers positively for the financials and can look to the upside in Goldman Sachs (GS); sell-stops below $162.

From the Bear Cave: Bears can use the Ultrashort Financial ETF (SKF), which tracks twice the inverse of the D.J. U.S. Financials Index. Sell-stops below $100.

Another Nigerian Nightmare

According to FT, energy advisers to Nigeria President Umaru Yar'Adua warned that the country is at risk of losing a third of its oil output unless it finds ways to boost investment in joint ventures with foreign companies. Their report finds funding issues present a danger to the reform process as well as "the continued well-being of the industry as a whole." Even if funding levels are maintained at current levels, "total oil and gas production will decline by 30% from its current level by 2015." Amongst the biggest obstacles is the failure of the government to pay its share of costs. Shell recently said these issues were putting the company's joint venture with the government at risk. See Professor Adam Michael's Trends Affecting Oil Price.

From the Bull Pen: Bulls see $100 as being cheap and can use the oil ETF (USO) with sell-stops in the near-term below $90.

From the Bear Cave: Those bearish can use the Ultrashort oil and gas ETF (DUG), which tracks twice the inverse of the D.J. oil and gas index; sell-stops can be set below $30.

For more ideas, check out Minyanville's Spotlight Stocks.

Quick Check Around the World

Asian trading closed with the Hang Seng +1.59%, Nikkei +1.92%, Sensex +1.46%, Taiwan +0.27% and Shanghai -2.09%.

A quick check of European bourses has the CAC -0.26%, DAX -0.05%, FTSE -0.84%, ATX +1.00%, Swiss Mkt. -0.48% and Stockholm -0.61%.

A Look At Commodities

Commodities are mixed. Crude oil is down -0.38 to 114.55. Gold is lower -2.3 to 942.80. Silver is higher +0.050 to 18.375, and copper is up +1.45 to 400.25.

The dollar index is up +0.242 to 71.650.

On the Radar


Initial Jobless Claims: 372 k vs. 357 k prior.
Continuing Claims: 2984 k vs. 2940 k prior.

10:00 Leading Indicators: 0.1% cons.
10:00 Philadelphia Fed: -15.0 cons.

Click here for the full trading radar.

Good luck and have a great day!
< Previous
  • 1
Next >
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.

Copyright 2011 Minyanville Media, Inc. All Rights Reserved.

Featured Videos