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Two Ways To Play: Deutsche Breaks the Bank


Strengthen your portfolio in good times and bad.

Deutsche Warns of Big Loss

Weighing on stock futures this morning, Deutsche Bank (DB) is warning of a fourth quarter loss of around $6.33 billion. According to the Wall Street Journal, Germany's largest bank said the loss reflects "exceptional market conditions, which severely impacted results in the sales and trading businesses, most notably in credit trading including its proprietary trading business, equity derivatives and equities proprietary trading."

But the bank added that it has made little use of accounting rules which would allow it to revalue its own debt, and also its Tier 1 capital ratio, a measure of financial strength, is expected to be inline with its 10% target. Shares were down 8% in Germany, and the bank reports official results on February 5th.

From the Bull Pen: Bulls can look to Wal-Mart (WMT). Is the stock headed back to $55? A sell stop can be set below $51.

From the Bear Cave: Weakness in the financial sector will make it tough for the equity markets to rally. For a trade, one can consider using the ultra short S&P 500 (SDS). A sell stop can be set near $74.

Quick Check Around the World

Asian trading closed with the Hang Seng 0.27%, Nikkei 0.29%, Sensex 3.30%, Taiwan -0.24% and Shanghai 3.52%.

Glancing towards Europe, we see the CAC 1.58%, DAX -1.95%, FTSE -2.19%

As of 8:20 a.m. EST, S&P futures are trading -12 to 855.00, and Nasdaq futures are -12 to 1192.00.

A Look At Commodities

Crude oil is trading +1.07 to 38.85. Gold is +5.70 to 826.40. Silver is +0.09 to 10.770, and copper is -4.55 to 150.15.

The dollar index is +0.080 to 85.0750.

On the Radar


07:00 MBA Mortgage Applications
08:30 Import Price Index (MoM) -5.3%
08:30 Advance Retail Sales -1.2%
08:30 Retail Sales Less Autos -1.4%
10:00 Business Inventories -0.5%

Click here for the full trading radar.

Hump day! Good luck!
No positions in stocks mentioned.

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