Before the Bell: Bernstein Bulls; Desperate for Vytorin
Merck and Schering Plough are trying to prove that they were Wrong!
According to Bloomberg, analysts at Sanford C. Bernstein raised their forecasts for crude oil and natural gas saying that commodities are in a "secular upward trend." The analysts say crude oil will average $92.30 a barrel in 2008 up 27% from last year's forecast due to "rising marginal cost" and declining reserves per well. The firm also raised their natural gas price targets by 7% to $8.30 per million cubic feet for 2008 as well as the stock price targets for companies like XTO Energy (XTO), Andarko Petroleum (APC), and Patterson-UTI (PTEN). For another perspective, read Professor Sally Limantour's Commodity Bull Market Alive and Well.
From the Bull Pen: Bulls can play the upside in the Natural gas fund (UNG); sell-stops can be set below $45.
From the Bear Cave: Bears that believe the commodity bubble has burst can play the downside in the oil ETF (USO); buy-stops can be set above $87.80.
Desperate for Vytorin
According to Bloomberg Merck (MRK) and Schering-Plough (SGP) will have a tough time convincing doctors that their jointly marketed cholesterol drug Vytorin failed to halt the progression of artery disease. Shares of both companies plunged in January after a preliminary finding of a study, called Enhance, showed that the drug failed to outperform older drugs giving doctors little reason to use it. Almost $50 billion in market cap was slashed from SGP and MRK. Now the companies are attempting to retain the $2.8 billion in annual sales of Vytorin by discrediting the research both companies funded and helped design. A final report will be presented this Sunday but analysts remain skeptical that any results will influence practice. Read Biotech specialist Professor David Miller's column The Problem with Drug Trials.
From the Bull Pen: Bulls can look elsewhere such as the healthcare ETF (IYH); sell-stops in the near term can be set below recent lows ($61.80).
From the Bear Cave: Those bearish can play the downside in MRK. Buy-stops can be set above the 50 DMA ($46.25).
Fore more ideas, see Minyanville's Spotlight Stocks.
Quick Check Around the World
The Friday ticks get fired up as Critters find foreign markets skewed to the upside.
Asian trading closed higher with the Hang Seng +2.74%, Nikkei +1.71%, Sensex +2.22%, Taiwan +0.20% and Shanghai +4.94%.
Looking over at Europe, we see the CAC -0.37%, DAX +0.2%, FTSE +0.04%
As of 8:30 AM EST, S&P futures +6.90 points to 1336, and Nasdaq futures are higher +10.0 points to 1802.
A Look At Commodities
Commodities are lower. Crude is down -1.07 to 106.50. Gold is lower -5.10 to 943.70. Silver is lower -0.245 to 18.305, and copper is higher +2.90 to 393.25.
The dollar index is lower -0.107 to 71.62.
On the Radar
Personal Income: 0.5% vs. 0.3% cons.
Personal Spending: 0.1% vs. 0.1% cons.
PCE Deflator (y/y):3.4% vs. 3.5% cons.
PCE Core (m/m): 0.1%vs. 0.1% cons.
PCE Core (y/y): 2.0% vs. 2.1% cons.
10:00 U of Michigan Confidence: 70.0 cons.
Let's end this week on a great note. Good luck, Minyans!
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