Minyanville's Before The Bell: Chinese Chicken, BAC, EBAY, Futures Lower
Chinese banks are hoping to make moves in the U.S. BAC's earnings have opened investors' eyes. Futures are lower.
Morning Perspective: Chinese Chicken
The Industrial & Commercial Bank of China and China Merchants Bank Co. have applied this year to start operations in the The Chinese government is pressing to let the two banks open branches in
Also, China's Citic Bank Corp denies it is in talks with Bear Stearns (BSC) in seeking a stake for the investment bank. The statement is contrary to comments made by China Banking Regulatory Commission Vice Chairman Jiang Dingzhi earlier this week that Citic had made a bid. (From WSJ) For more context, read Professor Depew's Five Things You Need To Know from last Tuesday.
The Bull Pen: With Chinese stocks receiving so much attention, investors should be aware of the risks of entering into "crowded" trades. However, investors seeking a diversified play might want to consider Morgan Stanley's China A Share Fund (CAF) with sell-stops at $62.80 (recent support) or the 50-day ($60).
The Earnings Play
Bank of America (BAC) reported earnings of $0.82 per share, $0.24 worse than analyst estimates. Revenues fell 11.8% year-over-year to $16.3 billion versus $18.01 billion consensus. Todd noted other banks were in precarious positions in yesterday's Random Thoughts.
eBay (EBAY) beat analyst estimates by $0.08 for the third quarter with earnings coming in at $0.41. Revenues rose 30.4% for the year to $1.89 billon versus analyst estimates of $1.83 billion. Read Professor Tatro's Another Way To Play An Earnings Report for his methods on how he approaches earning's season.
The Bull Pen: BAC is offered lower in the premarket by -3%. The company increased provision expenses to $865 million due to increasing small business credit costs (meaning they are further bracing themselves for any downturns in our economy). Aggressive bulls that think the worst may be over could enter with sell-stops at the 52-week low ($46.52). They would, of course, know that this play could take some time.
eBay issued upside guidance for the fourth quarter with earnings coming in the range of $0.39-0.41 versus estimates of $0.38. CEO Meg Whitman stated that many business lines including eBay International, Paypal, StubHub, classifieds and adverstising business all performed above the company's expectations. Ebay bulls may set sell-stops at recent support levels ($38.10) or the 50-day ($36.82). Tertiary plays include Amazon (AMZN), Yahoo! (YHOO) and Google (GOOG).
Have a look at Minyanville's Stocks To Watch for more company-specific ideas.
A Quick Check Around the World
Asian markets were mixed. The Hang Seng rose +0.57%, Nikkei +0.89%, and Taiwan +0.78%. India's Sensex continued another day of declines -3.83%, and
Europe is lower with the CAC -1.085, DAX -0.86%, and the FTSE -1.18%. As of 8:40 AM EST, S&P Futures are down 8.50 points, and Nasdaq futures are down by 12.8 points.
A Look At Commodities
Gold is higher by +1.30 to 763.60. Crude is off by -0.03 to 87.37. Copper is lower by -0.35 to 359.25, and Silver is up +0.07 to 13.82.
On the Radar
Here is what to expect for today's session.
8:30 Initial Claims: 308 k prior
8:30 Leading Indicators: 0.4% cons
Some notable companies reporting today:
Before: BAC, FCSX, LLY, PFE
After: GOOG, COF, SNDK
Click here for the full Minyanville Trading Radar.
Good luck and have a great day!
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