Tuesday, December 2, 2008

The Kirk Report

The Kirk Report

Earnings & Automakers

Posted: 02 Dec 2008 08:30 AM CST

Good morning. Following the fourth-sharpest point decline in the Dow ever, premarket futures are showing a positive bias.

Frankly, it's been difficult to understand why the premarket futures are in rally mode other than for the big loss yesterday. Along with expectations for another bad quarter at Goldman Sachs, earnings news for the most part continue to disappoint. Companies like Beazer Homes (BZH), Sears Holding (SHLD), to General Electric (GE) all either reported a larger-than-expected loss and/or reduced forward expectations.

Premarket gainers: GOLD, JASO, CRMT, QGEN, MRX, FNM, F, GM, C, MS, BAC, FRE, AXP, SHLD, GE, RBS, MT, SNDA, BECN, FWLT, ABK, GFI, JRCC, HL, PQ, DTV, ROS, & WLT.

Premarket losers: TSRA, XNPT, SWKS, PALM, TMA, POT, CF, MOS, SOLF, LRCX, ZOLT, HEV, GS, GPN, FAF, CRM, & LDK.

For today, Hank The Tank is due to speak on U.S. and China relations and Philly Fed President Charles Plosser will offer his economic outlook. In addition, the top focus will be back on the automakers again as they head back to Congress hoping to win $25 billion in federal aid. The automakers will also report sales for November and you can bet they probably won't be very good.

As for the market, hope remains alive that the odds are still with the bulls. A couple of positives to be found from yesterday rout is that volume was relatively low and that stocks making new lows did not expand in a major way. Along with positive seasonality factors this month, I'm also hearing chatter that we'll see both larger than expected interest rate cuts later this week overseas and that the jobs report will be better than expected. Clearly, for us to get back in rally mode again, both of these things must pan out or another retest of last month's lows will be seen. Overall, until we have clarity on both, expect some choppy trading over the next couple of days.

Go make it a great day!

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