Before The Bell: Soros Predicts Dollar Death; Healthcare Earnings Plays
Billionaire George Soros says the dollar is losing its status as the world's currency. Healthcare companies report results. Futures are down again.
Bloomberg reports billionaire investor George Soros is predicting the end of the dollar's status as the world's reserve currency due to the effects of the U.S. subprime crisis.
Soros said at the World Economic Forum in Switzerland that in addition to the housing bust, the world is increasingly unwilling to accumulate dollars. According to the International Monetary Fund, the dollar reached a record low of 63.8% of global foreign exchange reserves in the third quarter. The figure has steadily declined from 65% three months ago while the euro has increased from 25.5% to 26.4% in the same period. For context, read Professor Prieur du Plessis' article Global Markets Roil In Uncertainty.
From the Bull Pen: Bulls expect a rebound in the dollar versus the world's currencies should global growth falter. A vehicle of choice may be the dollar bullish fund (UUP), sell-stops below $23.
From the Bear Cave: Those in agreement with Mr. Soros may play the dollar bearish fund (UDN); sell-stops below $27.
Earnings Plays: Healthcare
UnitedHealth (UNH) reported 4Q $0.92 EPS inline with estimates. Revenues rose 3.2% y/y to $18.71 bln vs. expectations of $18.78 bln cons. The company issued inline guidance for 1Q of $0.82-0.84 EPS and reaffirmed guidance for FY08 of $3.95-4.00 vs. $3.96 cons.
WellPoint (WLP) reported 4Q $1.51 EPS inline with estimates. Revenues increased 6.8% y/y to $15.32 bln vs. $15.26 bln cons. The company reaffirmed guidance for FY'08, seeing EPS of $6.41 vs. analyst estimates of $6.43 cons.
Johnson & Johnson (JNJ) reported 4Q $0.88 EPS vs. $0.86 cons. Revenues rose 16.6% y/y to $15.96 bln vs. $15.4 bln cons. The company issued in-line guidance for FY08; EPS in the range of $4.39-4.44.
Read Jeff Saut's How To Survive In An Artificially Maintained Market.
From the Bull Pen: Bulls choosing JNJ may set sell-stops below $64 (support which also coincides with the 200 DMA).
From the Bear Cave: Bears may choose to press the downside in UNH should the stock stay below $52; buy-stops set above. On a downside attempt in WLP, buy-stops can be placed above $77.
Click on Minyanville's Spotlight Stocks for more company-specific ideas.
Quick Check Around the World
Traders fire up their systems this morning and find Asia in positive territory and Europe in the red.
Asian trading closed with the Hang Seng +10.72%, Nikkei +2.04%, Sensex +5.17%, Taiwan -2.29% and Shanghai +3.14%.
A quick glance towards Europe finds the CAC -2.28%, DAX -2.92%, FTSE -1.67%, ATX -0.53%, Swiss Mkt. -1.57% and Stockholm -1.77%.
As of 8:45 AM EST, S&P Futures are lower by 42 points to 1265, and Nasdaq futures are off by 71 points to 1730.
A Look At Commodities
Commodities are lower. Crude oil is off by -1.65 to 87.56. Gold is down -5.50 to 884.70. Silver is down -0.108 to 16.030, and copper is down -3.5 to 318.90.
The dollar index is up +0.077 to 76.423.
On the Radar
MBA Mortgage Applications: 8.3% vs 28.4% prior
Click here for the full trading radar.
Happy Wednesday! Good luck and have a great day!
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