Before The Bell: Sweetened Deal; Housing Watch
JP Morgan beefed up its Bear offer, housing still floundering.
According to the NYT, JPMorgan Chase (JPM) was in talks over the weekend for a deal that could quintuple its offer for Bear Stearns (BSC). The negotiations are seen as an effort to appease angry Bear shareholders opposed to the deal after the stock plunged over 90% from its value in the beginning of the month. So far, JPM may be willing to pay $10 a share for BSC vs. the previous offer of $2 per share. The deal would value BSC's market cap to $1 bln, but still must first be approved by an uneasy Federal Reserve which was one of the parties that helped engineer the deal. For context, read Todd's Freaky Thursday Potpourri.
From the Bull Pen: Those bullish can play the upside in the financial ETF (XLF); sell-stops set below recent lows ($25).
From the Bear Cave: Bears believe this is short-term noise and can enter the UltraShort Financials (SKF) near $100; sell-stops can be set below $96. Note this ETF tracks twice the inverse of the daily performance of the Dow Jones U.S. Financials Index.
According to Bloomberg, economists expect sales of existing homes in the U.S. to fall to the lowest level in nine years. Forecasts for existing home sales, which will be released at 10:00 AM EST today, call for purchases to drop 0.8% to an annual rate of 4.85 mln, the fewest since the National Association of Realtors began keeping records in 1999. Meanwhile, Standard & Poors said in a statement today that it expected home prices in the U.S. to fall as much as 20% by the end of 2008 from their peak in 2006. For more, read Professor Kevin Depew's Five Things You Need To Know.
From the Bull Pen: Bulls see more upside in the Real Estate Index Fund (IYR); sell-stops can be set below the 50-DMA ($63.35).
From the Bear Cave: Those bearish can play the downside in the Homebuilders ETF (XHB) should the stock rally to its 200-DMA ($23.10). Buy-stops can be set above.
For more ideas, see Minyanville's Spotlight Stocks.
Quick Check Around the World
Asian trading closed with the Nikkei -0.02%, Sensex +1.96%, Taiwan +3.99% and Shanghai -4.49%.
European markets are closed today.
As of 8:30 AM EST, S&P futures are higher by +11.80 points to 1336 and Nasdaq Futures are up +12.75 points to 1763.
A Look At Commodities
Commodities are mixed. Gold is down -5.6 to 914.30. Crude is lower -1.11 to 100.73. Silver is higher +0.385 to 17.190, and copper is up +0.55 to 361.65.
The dollar index is higher +0.142 to 72.858.
On the Radar
10:00 Existing Home Sales: 4.85 mln cons
10:00 Existing Home Sales (m/m): -0.8% cons
Hope you have a great start to the new week! Good luck, Minyans!
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