Before The Bell: Gross Says Recession; RIMM Shines
Bond Guru Bill Gross says U.S. is already in a recession. RIMM beats expectations. Futures are up.
Morning Perspective: Gross Says IT has begun
FT reports bond guru Bill Gross, founder of the world's largest fixed-income manager Pimco, said the U.S. economy began a recession in December. Mr. Gross, whose company has $750 bln of assets under management, said the recession would last four to five months but could be prolonged should Congress and the administration fail to take "unperceived and unforecasted measures in terms of fiscal stimulation." Earlier this month, Gross called for the Fed to bring down interest rates to 3% and has been critical of the recent attempts (Super SIV plan and freezing mortgage teaser rates) calling them a "temporary fix." For more context, check out our Economy page.
From the Bull Pen: Bulls may look to the health care ETF (IYH) in a slowing economy. Professor Cody Tafel said last month "pullbacks in the IYH to the $70-72 range should provide excellent risk/reward buying opportunities." Sell-stops may be placed below $70.
From the Bear Cave: Bears may find a short in the bearded financial/mfg conglomerate General Electric (GE); buy-stops above $38.
Research In Motion (RIMM) reported 3Q results of $0.65 EPS vs. expectations of $0.62. Revenues rose 21.9% to $1.67 bln vs. $1.65 bln cons. The company issued upside guidance for 4Q with EPS in the range of $0.66-o.70 vs. expectations of $0.65. The company sees 4Q net subscribers to be approximately 1.82 mln. Further the company stated in its conference call that emerging markets were showing a strong interest in RIMM's products particularly in Brazil, Russia, and Asia/Pacific as well as strong adoption and brand recognition in Europe. Todd mentioned RIMM in yesterday's Random Thoughts.
From the Bull Pen: Professor Bennet Sedacca said yesterday that tech is in a world of its own while mentioning the Powershares QQQ ETF (QQQQ). Bulls may play the upside; sell-stops below $49.
From the Bear Cave: Bears may see an opportunity to play the downside in RIMM amid all the enthusiasm. With the stock trading up in the pre-market, near-term buy-stops may be set above $124.
Click on Minyanville's Stocks To Watch for more company-specific ideas.
Quick Check Around the World
Asian trading closed with the Hang Seng +2.26%, Nikkei +1.50%, Sensex +0.37%, Taiwan +1.07% and Shanghai +1.15%.
A quick check across the pond finds the CAC +1.43%, DAX +1.52%, FTSE +0.93%, ATX +1.16%, Swiss Mkt. +0.63% and Stockholm +1.34%.
A Look At Commodities
Crude oil is down this morning -0.18 to 90.89. Gold is up +4.60to 803.80. Silver is higher +0.12 to 14.19, and copper is up +5.15 to 301.00.
As of 8:30 AM ET, S&P futures are up +16.3 points and Nasdaq futures are higher by +24.8 points.
On the Radar
Personal Income: +0.4$ vs. +0.5% cons.
Personal Spending: +1.1% vs. +0.7% cons.
Core PCE Deflator y/y 2.2% vs +2.0% consensus
Core PCE Deflator m/m: +0.2% vs. +0.2% cons.
PCE Deflator y/y +3.6% vs +3.4% consensus
PCE Deflator m/m +0.2% vs +0.2% consensus
10:00 Michigan Sentiment –Rev: 74.3
Click here for the full trading radar.
TGI Friday! Good luck, Minyans!
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