Before The Bell: Video Games Rock The House; Schlumberger's Quarter
Video game consoles and sales were strong in 2007. Schlumberger's reports increased profits but were below expectations. Stock futures are up.
Morning Perspective: We Would Like To Play
Reuters reports U.S. video game hardware sales and software hit $4.82 bln in December, an increase of 28% from a year earlier. For all of 2007, sales reached nearly $18 bln. Nintendo (NTDOY) led the gaming console makers selling 1.35 mln Wii units, according to market research firm NPD. Microsoft (MSFT) sold 126 mln Xbox 360 machines, and Sony (SNE) trailed the others with 798,000 PS3 units sold. The top games were Microsoft's Halo 3, which sold 4.8 mln copies since September, and Activision's (ATVI) Call of Duty, accounting for 1.47 mln units in just the month of December. Read Professor Jeff Macke's Retailers On Thin Ice.
From the Bull Pen: Professor Macke remains a long-term bull in Activision. In the near-term, sell-stops may be placed below $26 and $24 for those with a higher risk profile.
From the Bear Cave: Bears do not expect outperformance in Nintendo with the gaming console market expected to cool. Buy-stops on downside attempts may be set above $60 should the stock break that level.
SLB's Earnings Play
Schlumberger (SLB) reported earnings for the fourth quarter of $1.11 per share. The figure was $0.02 less than what analysts had expected. Revenues rose 16.8% year-over-year to $6.25 bln vs. $6.14 bln consensus. The world's largest oilfield-services provider also said it plans to increase capital spending on oilfield services by 13% this year to $2.9 bln, according to Bloomberg. For more context, read Professor Adam Michael's Trends Affecting Oil Price.
From the Bull Pen: Although SLB and others have been struggling, the oil ETF (USO) is back at the $70 support level. Bulls may choose to turn away from the energy companies and focus on the commodity itself. Sell-stops may be set below.
From the Bear Cave: An energy-related downside play may lie in refiner Tesoro (TSO). Professor Ryan Krueger said crude is just too expensive for these companies. Buy-stops may be set above $38 or $40 depending on one's risk profile.
Click on Minyanville's Spotlight Stocks for more company-specific ideas.
Quick Check Around the World
The latest five day stretch winds to a close as foreign markets are skewed to the upside.
Asian trading closed with the Hang Seng +0.35%, Nikkei +0.56%, Sensex -3.49%, Taiwan +1.02% and Shanghai +0.56%.
Glancing towards Europe, we find the CAC +0.51%, DAX +0.03%, FTSE +1.39%, ATX -0.04%, Swiss Mkt. +0.72% and Stockholm +0.57%.
A Look At Commodities
Crude is up this morning +0.70 to 90.82. Gold is higher +0.30 to 881.00. Silver is up +0.123 to 15.930, and copper is lower by -3.05 to 314.00.
As of 8:30 AM EST, S&P and Nasdaq futures are higher by 19.10 and 23 points respectively, to 1358 and 1879.
On the Radar
10:00 Leading Indicators: -0.1% cons
10:00 Michigan Sentiment- Prel: 74.5 cons
Happy Expiration Friday! Good luck!
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