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Before The Bell: Dollar Plunges on Fed Funds; DNA's Quarter


Traders are pressing their bets the Fed will lower rates the most in over two decades. DNA beats but drugs sales are lower than expected. Stock futures are lower.

Morning Perspective: Dollar Plunges on Fed Funds

Bloomberg reports the dollar declined for the fourth consecutive day to its lowest levels in two months as traders press their bets the Fed will lower the Fed Funds rate by 75 basis points. Such a move would mark the greatest reduction since 1984, during the Reagan Administration. Fed funds futures on the CBOT show a 100% chance the Fed will cut the target by 50 basis points to 3.75%, and a 50% chance of a 75 basis point reduction. For more, read Professor Prieur du Plessis' article Worry in the Wake of a Wild Week.

From the Bull Pen: Gold specialist Professor Lance Lewis mentioned a potential trifecta in the gold complex regarding the economic events scheduled this week. Gold bulls may play the gold ETF (GLD); sell-stops below $85.

From the Bear Cave: Bears can continue to press the downside using the bearish dollar fund (UDN); sell-stops below $27.50.

DNA's Quarter

Yesterday, Genentech (DNA) reported fourth quarter results of $0.69 EPS, $0.02 better than expectations of $0.67. Revenues increased 9.4% on an annual basis to $2.97 bln inline with expectations. However, sales of its main drugs, Avastin and Rituxan, fell short of expectations. The company issued guidance of $3.30-3.45 EPS for FY'08, which was inline with expectations. For other ideas, check out Professor David Miller's Biotech Roundup. Also, be sure to check out his Six Rules For Biotech Investing.

From the Bull Pen: Professor Miller positively mentioned DNA last week. Bulls may use this morning's weakness as an opportunity for entry. Sell-stops may be placed below $65.

From the Bear Cave: Professor Miller mentioned the poor fundamental story in Amgen (AMGN). Buy-stops can be placed above $51.

Click on Minyanville's Spotlight Stocks for more company-specific ideas.

Quick Check Around the World

Asian trading closed with the Hang Seng -2.38%, Nikkei -0.98%, Sensex -2.30%, Taiwan +3.13% and Shanghai -0.98%.

A quick glance towards Europe finds the CAC -0.59%, DAX -0.42%, FTSE 1.01%, ATX -0.69%, Swiss Mkt. -1.28% and Stockholm -1.49%.

A Look At Commodities

Crude oil is down -0.51 to $93.71. Gold is edging higher +0.60 to 904.10. Silver is +0.052 to 16.325, and copper is +3.35 to 331.70.

As of 8:00 AM EST, S&P and Nasdaq futures are lower by -10.6 and -14.5 respectively to 1410 and 1940.

On the Radar


8:30 Retail Sales: 0.1% cons
8:30 Retail Sales ex-auto: 0.1% cons
8:30 PPI: 0.2% cons
8:30 Core PPI: 0.1% cons
8:30 NY Empire State Index: 11.5 cons
10:00 Business Inventories: 0.4% cons

Click here for the full trading radar.

Good luck, Minyans!

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No positions in stocks mentioned.

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