Weekly Stock Market Letter, 20 January 2009
The Week Ahead: Financial stocks are leading the way down again as large US banks struggle to re-invent themselves in a weak economy with Citigroup splitting in two and Bank of America reporting a rare loss. Inauguration Day on Tuesday will be the main theme this week as new president Barack Obama takes office. Thursday is the only other day of significance with housing starts, jobless claims, and oil & gas inventories released.
Stocks to Watch: Barclay Capital (BCS), another weak banking sector related company has fallen sharply the last few days as analysts link the drop to the UK lifting the ban on short selling of financials. Belden (BDC) maker of coaxial cables etc. fell for the eighth day in a row after cutting their 2008 EPS forecast, but appears due for a rebound. Elizabeth Arden (RDEN) forecasted Q2 sales to fall 12.5% to 13.5% and the stock collapsed to a 7 year low.
Special Note: Having been consistently behind the recent fall-off in earnings, analysts are now forecasting a 19% drop in Q4 earnings on S&P 500 companies, but this excludes the financial firms. Similarly, despite the dramatic decline in stock prices in 2008, the tendency is to remain bullish as if stocks can only rise from here. This contrary bullish sentiment is also reflected in 12 out of 12 Baron's analysts projecting an average 15.7% gain this year while a Bloomberg survey predicts a 17% gain. Are analysts once again behind the curve?
Commentary provided by Barry Ward, Registered Principal, NobleTrading.com, Inc.
Click here to open an account.
NobleTrading Direct Access Trading
email: info@nobletrading.com
phone: 877.872.3311
web: http://www.nobletrading.com
Stocks to Watch: Barclay Capital (BCS), another weak banking sector related company has fallen sharply the last few days as analysts link the drop to the UK lifting the ban on short selling of financials. Belden (BDC) maker of coaxial cables etc. fell for the eighth day in a row after cutting their 2008 EPS forecast, but appears due for a rebound. Elizabeth Arden (RDEN) forecasted Q2 sales to fall 12.5% to 13.5% and the stock collapsed to a 7 year low.
Special Note: Having been consistently behind the recent fall-off in earnings, analysts are now forecasting a 19% drop in Q4 earnings on S&P 500 companies, but this excludes the financial firms. Similarly, despite the dramatic decline in stock prices in 2008, the tendency is to remain bullish as if stocks can only rise from here. This contrary bullish sentiment is also reflected in 12 out of 12 Baron's analysts projecting an average 15.7% gain this year while a Bloomberg survey predicts a 17% gain. Are analysts once again behind the curve?
Commentary provided by Barry Ward, Registered Principal, NobleTrading.com, Inc.
Click here to open an account.
NobleTrading Direct Access Trading
email: info@nobletrading.com
phone: 877.872.3311
web: http://www.nobletrading.com
posted by Daniel Pipitone at
4:18 AM
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