Weekly Trading Newsletter, March 17, 2008

Monday, March 17, 2008

Weekly Trading Newsletter, March 17

The Week Ahead: The collapse of Bear Stearns and its ultimate rescue by the Fed and J.P. Morgan has financial markets fearful others may follow and may be more widespread than is actually known. The Fed also lowered the discount rate this past weekend between lending institutions by a 1/4 percent in an emergency move. The FOMC meeting on Tuesday is likely to produce a .75 to 1.00 reduction in the fed funds rate as well. Other reports to watch are Tuesday's PPI and housing starts. Friday the markets are closed.

Stocks to Watch: Ann Taylor Stores (ANN) showed a 4th quarter loss versus a profit a year ago and is very cautious about next quarter as same store sales fell 3.7%. Newcastle Investment (NCT) was downgraded after a dividend cut from .72 to .25 a share. S&P placed Western Refining (WNR) on notice for a possible rating downgrade. SkillSoft (SKIL) reported earnings of 31 vs .08 in the 4th Q and sees .32 to .35 in the 1st Q. Finally the largest IPO ever of VISA is anticipated to go public on Thursday.

Special Note: The buyout of Bear Stearns for the equivalent of $2 a share from a $30 close on Friday by J.P. Morgan financed in part by the Fed is not exactly giving confidence for stocks around the world. The Fed has truly become "lender of last resort" in an attempt to keep financial markets stable. The question on many investors minds will be how to value other banks similar to Bear Stearns and the related impact this will have on market indexes? The 3.3 year cycle appears to be building towards a climactic low.

Commentary provided by Barry Ward, Registered Principal, NobleTrading.com, Inc.

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