Minyanville's Before The Bell: Citi Shake-Up, GE Report Card, Futures Down
Citigroup shakes up management. GE reports in line. Futures Point lower.
Citigroup (C) said its co-chairman and co-CEO Thomas Maheras along with top fixed-income executive Randy Barker will be leaving the firm after almost $6 billions of losses and write-downs. Citigroup named Vikram Pandit, a former Morgan Stanley executive, to oversee trading, investment banking and alternative investments. Pandit joined the firm earlier this year after he sold his hedge fund to the bank for $800 million. (From Bloomberg) Toddo wondered about the cause for Citi's divergence yesterday away from the other financials. See the buzz in yesterday's Buzz Bits. Also read Minyan Peter's A Look Into Citigroup's Writedowns.
The Bull Pen: Citigroup's shares have had a -5.35% return year-to-date and the shake-up could spark investor enthusiasm. While the shares curiously rallied yesterday in front of this news, trader may look to use the trend-line from the August lows ($46.80) as a near-term sell-stop on buy-side tries.
The Bear Cave: As with any perceived mismanagement, the buck stops with the CEO. As Charles Prince remains in the corner office, investors appetite for change may not be satiated. Further, Deutsche Bank downgraded the stock from "Buy" to "Sell" on the heels of this news. With the bank index hovering under resistance (BKX 111.50), traders may opt to lean against this stock with a buy-stop above $50 (where Citigroup broke down from a head & shoulders pattern).
A GE Report Card
General Electric (GE) reported third quarter earnings of $0.50 earnings per share in-line with consensus estimates. Revenues rose 12.3% year-over-year to $42.53 billion versus $42.44 billion consensus. The company issued in-line guidance for the fourth quarter seeing earnings per share in the range of $0.67-0.69 versus $0.68 consensus. Read Professor Quint Tatro's article from September, Global Rotation: Seeing The Big Picture In GE, Intel (INTC), Banks…
The Bull Pen: GE broke out to '07 highs above $41 and has been basing sideways since. Those looking to play this name from the long side can set a sell-stop below that level.
The Bear Cave: GE is a bellwether stock that some consider a gauge on the global economy. As the global economy is expected to slow, so will GE's sources of revenue. The ursine among us can use a trade above the recent highs ($42) as tight and define risk.
Have a look at Minyanville's Stocks To Watch for more company-specific ideas.
A Quick Check Around the World
Asian markets finished lower. Japan's Nikkei fell -0.73%, Hong Kong's Hang Seng fell -1.01%, and China's Shanghai Composite fell -0.17%.
Markets in Europe are also trading lower. As of 7:15 AM EST, S&P futures are down -2.90 points and Nasdaq futures are lower by -4.5 points.
A Look At Commodities
Crude is down -0.31 to 82.77 and gold is weaker, down, -4.30 to 752.40. Other metals are weaker as well: Silver down -0.095 to 13.89, and copper down -2.90 to 364.00.
On The Radar
Below is a list of events for today's trading session. Investors will have plenty to digest. Click here to see Minyanville's full Trading Radar.
8:30 Retail Sales: 0.2% cons
8:30 PPI: 0.4% cons
8:30 Core PPI: 0.2% cons
10:00 Business Inventories: 0.3%
10:00 Michigan Sentiment-Prel: 84.0 cons
TGI Friday! Join us for Happy Hour if you can after the bell. Good luck and have a great day!
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