Minyanville's Before The Bell: Financials Warn, Financials Surge!
Deutsche Bank and Credit Suisse warn. The transparency sends shares higher.
Topping the Headlines
Deutsche Bank (DB) announced 3Q profit rose 13% while admitting $3.1 bln in write-downs. Expect the markets to treat the transparency favorably as with similar examples of UBS (UBS) and Citigroup (C) earlier in the week.
Credit Suisse (CS) is also trading higher in the premarket with its disclosure. Although the company stated that the mortgage credit market would be "problematic" for the next 18 months, the company did state it had a strong liquidity position and saw advantageous opportunities in the marketplace. Keep an eye on the BKX and XBD levels as well as the big five: BSC, GS, LEH, MER, and MS. Please read Minyan Peter's article, A Look Inside Citigroup's Writedowns, as he gives more context on the disclosures.
Speaking of the opportunities, analysts estimate banks are raising approximately $170 bln to acquire LBO debt. Due to such a large size, analysts expect LBO dept to trade right back to levels prior to this summer's credit crunch. (From FT) Read Professor Depew's Five Things You Need To Know from yesterday as he gives some context in what credit managers face.
A Check Around The World
Hong Kong's Hang Seng was hit hard last night falling -2.6%. Oil producers were the biggest laggards due in part to falling prices in commodities. India's Sensex jumped 3% to an all-time high. Taiwan and the Nikkei gained almost a percent each, and Shanghai was closed.
A Look In Commodities
Following yesterday's sell-off, gold is higher by +0.7% to 736.60. Crude is up almost 1% to $80.61 per barrel, and copper prices are stronger today up +0.61% to $373.35. Look for improvement today on some of the commodities-based equity plays such as Freeport McMoRan (FCX) and Southern Copper (PCU) for copper, and Barrick Gold (ABX) and Goldcorp (GG) for gold. As many continue to be bullish on gold, it may be wise to review through Professor Bloudek's What Does Gold's Strength Mean For Markets?
What to Expect Today
Investors get a gauge of the health of the economy at 10:00 Am EST with the release of the ISM services index. Consensus estimates call for the figure to come in at 55.0. A reading above 50 indicates growth. This gauge covers industries including finance, insurance, real estate, communications, and utilities so be sure to keep some of those names on the radar. Besides some popular ETF's (IYR for real estate, and KIE for insurance, IYG for financial services), keep an eye on other notable such as Nokia (NOK), Countrywide (CFC), and even Cheesecake Factory (CAKE) and Amazon (AMZN). For more insight into economic sentiment, read Toddo's Five Themes For The Fourth Quarter.
Also on the radar, the weekly crude inventories report is due at 10:30 AM EST. Watch for movement in Exxon Mobil (XOM), Suncor (SU), as well as the ETF's USO and OIH.
Click here for the full weekly trading radar.
For more trading ideas, check out our News & Views page in addition to Minyanville's Stocks To Watch. Check out Hoofy's & Boo's new video also when you get a chance. Good luck today, Minyans!
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