So let me get to the point before going into detail. This is the plan as I described to my Mom and my wife at the dinner table last night: âOK. So the government agreed to lend out $500 billion right now- and potentially $500 billion more- in which they will help to form a consortium between the Treasury/Federal Reserve and the private sector.â My wife said âAnd?â I said âand what? Thatâs the plan.â My Mom said, âWhatâs the plan?â I said âExactly.â My Mom and wife in unison said âI donât understand.â I noted, âNeither does anybody else.â I could go on with this Abbott and Costello routine, but really, I hope I start this piece out by emphasizing the opaqueness and lack of detail given to arguably the most complex financial crisis in the history of the world. The renamed âFinancial Stability Planâ will attempt to utilize $100 billion that the Federal government would take in expanding a $200 billion facility aimed to help consumer and small business lending into a $1 trillion program which will also backstop a variety of mortgage-related assets. Treasury Secretary Geithner note that the public-private investment fund will be initiated- with government seed money â in an attempt to leverage (read:backstop) private monies so that toxic/illiquid assets can be gotten rid of from the failing banking system. The goal of this would be to resume lending. But, there is no clarity or resolution to the plan nor are there any specific details as to how this will all be done. How will the government price the assets? Thatâs the key question- one addressed here in the âgood bank versus bad bankâ blog post written a couple of weeks ago in this space. And there was absolutely no answer yesterday. Furthermore, in addition to the lack of a good bank/bad bank schematic, there was next to no detail offered on the housing issue- namely who will get what. President Obama has correctly expressed the urgency of coming up with a solid plan, but the key word there is âgood.â Right now, the best analogy is that we are all in a car going at 60 miles per hour towards a financial brick wallâ¦and all that happened yesterday was that the accelerator was stepped upon. In the interim, the Senate quietly approved an $838 billion economic-stimulus program yesterday which will include money to help states pay for health care, education, and highways as well as provide tax breaks for buyers of cars and homes. Money is also set aside for a modern day new Deal type program- funding for rebuilding highways and bridges, repairing water/sewer systems, adding more time for benefits for the unemployed, and an increase in funds for Medicaid. Keeping all politics out of this, the stock market largely had the stimulus factored in, but the complexity and lack of detail to the bank bailout plan crushed whatever optimism was left. It is not for me to say whether anybody truly has a handle on the situation in DC, but I do know that the market abhors uncertainty- and that is all that was discernible yesterday. For day traders, at a minimum, look for a rapid pick-up in uncertainty and volatility for some time to come with the focus on the banks in the immediate-term and eventually on the automobile industry as the week progresses particularly into next week as the status update nears for the auto manufacturers. Overnight, prices in Asia were down around 1% on average in relatively quiet trade with Tokyo closed. European markets are down fractionally as they took their cue from Wall Street intra-day yesterday thus the follow through wasnât titanic this morning. Oil is up slightly with the dollar continuing to strengthen. With RIMM warning which is going against a small bounce in bank stocks, look for a quieter day than yesterday, but a choppier one as well with banks ultimately leading the way as has been so often the case recently. Reiterating- Please understand that if the ideas do not get to the hoped for set-ups cited below, more often than not, one should not blindly trade the symbol next to said idea. If the whole story is not there - If something is good, assume either a short thru unchanged or an A-B-A2 based on direction of the market unless specifiedIf something is bad, assume either a buy thru unchanged or an A-B-A2 (preferably to the downside in a downside market and the upside in an upside market) based on direction of the market unless specified- Good- The following stocks have good news and/or a strong technical pattern CSC- beat on quarter; forecast better than expected earnings for the year, but a miss on revenues FIS- good earnings BGC- decent earnings CERN- good earnings and outlook MVSN- decent earnings NSR- decent earnings SVR- good earnings SLB, RIG- mentioned on âMad Moneyâ last night; SLB was mentioned positively with RIG less so. DF- beat earnings and raised guidance MMC- beat earnings Bad-The following stocks have bad news and/or a weak technical pattern AMAT- in-line earnings, but negative statements about the look seeped out during conference call NVDA- poor earnings MANH- warned on its outlook PFG- closed somewhat weak; Tues 11.50 low is a target HIG- closed near a low; looking to short thru 12.90 Tues low MDC- closed near a low LNC- closed near a low BAC, STI, KEY, RF, USB, PNC, ZION, SUSQ, ASBC, SIVB- among the banks closing near their lows GXP- warned on its outlook INSU- closed near a trend low BPFH- closed at a new trend low PTV- closed near a new trend low FBP- closed at a new trend low RIMM- lowered guidance in the 2nd sentence of the 3rd paragraph of a press release; those tend to be bad performers intra-day when it is that subtle SE- implementing a massive share offering at 14.35 Earnings: WED FEB 11 BEFORE AGU AYE CCE DF DVA GENZ IR JNY MAC MICC MMC MT NVE PFCB RAI SIAL TOL WED FEB 11 AFTER ACL ATVI BMR BWLD CMG CYMI DFG GIL GXP HIW INSP LPS LVS MAS NTAP O OFC PPS PVA RE RNR SQNM STR TCO TEX WSH Good luck today. Erik R. Kolodny
I wonder if anyone could de-mystify this for me. This morning I check the news before open and CBG posted better than expected results (by +$0.10). Shares leap. Then I see this: "CB Richard Ellis Group, Inc. Earnings Conference Call (Q4 2008)". What does that mean? I thought the earnings have been announced? Right after that news the shares reverse and procede to plummet a whole dollar (and counting). WTF?
Companies release their earnings report before they do their conference call. the conference call is where management explains how well they operated and answer analysts' questions.