Minyanville's Market Recap: Markets End Lower, Investors Waiting On FOMC
Northern Rock and Former Fed Chairman Alan Greenspan rattled the markets. Investors are cautious ahead of the FOMC statement and Lehman Brothers Earnings.
The morning started off with slight turbulence coming from the East. Northern Rock, the U.K's third largest mortgage lender, continued to trouble investors. The stock continued to sell off an additional 30% one day after requiring emergency funds from the Bank of England. Hundreds of customers ignored assurances by the company's CEO, withdrawing approximately $4 bln, or about 8% of the company's total reserves. The news put heavy downward pressure on the financials today. Goldman Sachs (GS) fell -1.56%, Bear Stearns (BSC) fell -1.54%, Morgan Stanley (MS) fell -1.8%, and Lehman Brothers (LEH) fell -1.48%. Read Professor Saut's Heads I Win, Tails You Lose for his analysis on this brewing situation across the pond.
Adding to the pressure in the financials was news that the buyout of PHH Corp (PHH) by General Electric (GE) and Blackstone Group (BX) was in jeopardy due to Blackstone's inability to obtain financing. (From Bloomberg) Please read Professor Depew's daily column Five Things You Need To Know for more color on this story.
Former Fed Chairman Alan Greenspan also contributed to the anxiety. In a "60 Minutes" interview, Greenspan commented that the U.S. economy looked "pretty gloomy" and that it is unclear whether current financial market turmoil will have a deep, lasting impact on the economy. (From Thomson). Please read Toddo's Sunset Grille: The FOMC And Brokerage Earnings To Shape The Road Ahead as this week will offer us many clues of what to expect as we journey into the new year.
As for economic data, the New York Fed's Empire State Survey of manufacturing came in below expectations. The figure was reported at 14.7 vs. 18 consensus.
Below is a recap of the idea flow on today's Buzz & Banter. Please note that stocks may appear on both bullish and bearish categories due to long and short term trades by our many Minyanville professors. In addition, please click on our Buzz Bits for more in-depth summaries that occurred on the Buzz real-time.
Some bullish trade or investment ideas: MNST, STST, NVT, EMF, NYT, LEE, MNI, HOV, EMC, LVLT, PCU, GG, TIF
Some bearish trade or investment ideas: IRTB, GS, GRMN, PCU, AAPL, FTI, SPX, ABC, AIB, MSTR, VMC, SAF, VMW, RIMM
Here's a preview of what's to come for Tuesday's Trading Session. Click here for the full trading radar.
Tuesday, September 18
8:30 PPI: -0.1% cons
8:30 Core PPI: 0.1% cons
9:00 Net Foreign Purchases
2:15 FOMC Policy Statement
Before: AHII, AZO, BKRS, BBY, CBRL, KR, LEH
Mondays are the worst days... but now we can sip champagne when we're thirsty! Improve on your trading skills with Professor Tantro's article Becoming A Better Trader.
See you bright and early in the morning. Tomorrow should be a fun one. Goodnight, Minyans!
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