Two Ways To Play: FedEx, Texas Instruments a Silver Lining
Strengthen your portfolio in good times and bad.
Helping stock futures this morning is news from FedEx (FDX). According to Bloomberg the world's largest air-cargo carrier said 1Q profit would exceed its prior forecasts due in part to "lower-than-expected fuel costs" and "stringent cost management."
The company said earnings for the most recent quarter would come in at $1.23 a share, better than its previous outlook of 80 cents to $1. It also reaffirmed full-year profit forecasts of $4.75 to $5.25 a share. But CFO Alan Graf said that although the decline in fuel prices could be beneficial, "the slowing economic growth trend in the U.S. is now extending to other areas of the global economy." Shares rose 4% in overseas trading.
From the Bull Pen: The international growth theme is over, and bulls may simply be going with domestic exposure. General Mills (GIS) may be an option on a pullback to $65.
From the Bear Cave: Is the FDX news really surprising to Wall Street? Bears can fade this rally into the $90 level with buy stops above that point.
Texas Instruments Shares Rise
Texas Instruments (TXN) reaffirmed its sales forecast last night and shares jumped as much as 7.4% in after-hours trading. According to Bloomberg, the second largest U.S. semiconductor maker said 3Q revenues would come in between $3.33 and $3.47 billion which was inline with street expectations of $3.47 billion.
Analysts believe it's a positive sign given the lowered outlook from number one cell phone maker Nokia (NOK). TXN now expects profit to be in the range of 42 to 46 cents, inline with consensus estimates of 44 cents.
From the Bull Pen: Bulls can consider Broadcom (BRCM). Will the stock find support at $20? Sell stops can be set below that level on an upside try.
From the Bear Cave: Notice how TXN dropped from the beautiful head & shoulders pattern from August to September. Previous support is now resistance. Bears can fade (read: sell) the stock into $24. Buy stops above that level.
For more ideas in real time throughout the trading day, check out Minyanville's Buzz & Banter.
Quick Check Around the World
Asian trading closed with the Hang Seng -2.40%, Nikkei -0.44%, Sensex -1.60%, Taiwan +0.52% and Shanghai +0.23%.
A quick check of Europe finds the CAC +0.06%, DAX -0.26%, FTSE -0.79%
As of 8:30 AM EST, S&P futures are lower by 1 point to 1225, and Nasdaq futures are up 7.5 points to 1736.
A Look At Commodities
Commodities are mostly lower. Crude oil is +0.92 to 104.18. Gold -13 to 775.10, Silver -0.355 to 11.285, and copper -1.50 to 308.00.
The dollar index is higher +0.287 to 79.534.
On the Radar
MBA mortgage applications: 9.5% vs. 7.5% prior.
Click here for the full trading radar.
Happy Hump Day! Good luck!
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