Minyanville's Before The Bell: More On The Superconduit, The Earnings Game, Futures Point Higher
The tech sector may see a lift this morning...
Morning Perspective: The SuperConduit
More details of the Superconduit are emerging. In a story reported earlier this week, Citigroup (C), JPMorgan Chase (JPM), and Bank of America (BAC) were in talks with the Treasury Department in setting up a Superconduit called the master-liquidity enhancement conduit. The three banks are targeting commitments of at least $80 billion to create this fund which would issue short-term notes to investors and use the proceeds to buy securities from structured investment vehicles (SIVs).
Wachovia (WB) announced yesterday it planned to participate in the fund with Fidelity Investments and Federated Investors (FII) showing their support. Northern Trust (NTRS) stated it has no interest in participating since it has no exposure to the kind of investment vehicles that hold the mortgage securities in question. (From WSJ). Professor Depew first touched on the irrelevance of subprime, however, in his Special Edition Five Things You Need To Know.
From The Bull Pen: Citigroup is sitting directly on it's 2007 low at $44.70 and, while it's tested this level four times (and each test absorbs a layer of demand), aggressive bulls can use $44.50 as a sell-stop on longs.
From The Bear Cave: We've highlighted BKX 111.50 as the most important (and reliable) resistance for the backs. Active traders may roll down their stops to 105.50 (the most recent break) for tighter and defined risk.
The Earnings Game
The tech sector may see a lift this morning as a number of tech giants reported positive results last night for the third quarter. Intel (INTC) reported earnings of $0.31 per share versus $0.30 consensus. Revenues came in at $10.1 billion versus estimates of $9.61 billion.
Yahoo! (YHOO) reported $0.11 EPS versus $$0.08 consensus. Revenues rose 14.5% to $1.28 billion versus estimates of $1.37 billion.
IBM (IBM) reported $1.68 EPS in-line with estimates. Revenues did rise 6.6$ for the year to $24.12 billion also in-line with estimates.
In late August, Professor Sean Udall mentioned other ideas in the tech sector for the next 6-12 months. Read his article 21 Bullish Predictions For Tech. Also read how Professor Quint Tatro likes to approach earnings season in Another Way To Play An Earnings Report.
From The Bull Pen: YHOO is bid higher in the premarket currently at $29.15. Bulls interested in getting involved can set a sell-stop below $28.75 (the recent highs) or $27.70 (the 200-day moving average).
INTC is bid higher in the premarket as well. The 50-day ($25.15) could be used as a sell-stop for chip bulls. Traders seeking a more diversified play could look at the iShares Dow Jones U.S. technology ETF (IYW). A reasonable sell-stop could be placed at $63.15 coinciding with the high on July 19th.
From The Bear Cave: IBM is offered lower in the premarket. Those attempting to ride the dark-side could use the all-time high as a buy-stop ($121.46) or yesterday's closing price ($119.60) for tighter, defined risk.
A Quick Check Around the World
Asian markets closed mostly lower. The Nikkei lost -1.07%, Taiwan's TAIEX lost -0.32%, and Shanghai lost -0.92%. India's Sensex plunged as much at -9.2% before Finance Minister P. Chidambaram appealed for calm in the markets. We mentioned yesterday of the effect of the P-notes. The Sensex did recover to finish -1.76%. Hong Kong's Hang Seng was the only winner out of this group adding +1.19%.
Markets in Europe are higher. The CAC is up +0.76%, the FTSE is up +0.91%, but the DAX is lower by -0.10%. As of 8:30 AM EST, S&P futures are higher by +10.5 points, and Nasdaq futures are higher by +20.25 points.
A Look At Commodities
Crude oil is lower this morning by -0.31 to 87.30. Gold is up by +1.60 to 763.60. Silver is up +0.03 to 13.69 and copper is weaker this morning down -5.05 to 359.10.
On The Radar
Investors have plenty of data to digest this morning. Below is a list of events for today.
8:30 CPI: 0.2% cons
8:30 Core CPI: 0.2% cons
8:30 Housing starts: 1285 k
8:30 Building Permits: 1300 k
10:30 Crude Inventories: -1674 k prior
2:00 Fed's Beige Book
Here are some notable companies reporting today:
BMO: MO, BLK, KO, JPM
AMC: ETFC, EBAY, WM
Click here for the full Minyanville Trading Radar.
Good luck and have a great day!
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