Fed Funds Price In 60% Chance Of 50 BP Ease
Edited by Thomas Granahan
Of DOW JONES NEWSWIRES
(Call Us: 201 938-5299; All Times Eastern)
MARKET TALK can be found using code N/DJMT
10:58 (Dow Jones) February Fed Funds futures, which were recently trading at
93.920, are pricing in about a 60% chance of a 50 BP Fed rate cut in Jan.,
trader says. A rise to 94.00 would price in a 100% chance of a 50-point cut,
but a rally to that level is unlikely, at least in next few sessions. (DMR)
10:57 (Dow Jones) Avici Systems (AVCI) has landed a product supply agreement
with AT&T (T) - generally a good thing, suggesting a solid contribution to
revenues. But we're talking about a weak telecom sector, so UBS Warburg has
greeted the news in a very muted way. The firm reduced its price target for
Avici shares to $70 from $200. Shares were recently up $4.75, or 24%, to
$24.38. (KJT)
10:47 (Dow Jones) It might still be too soon to snoop around the house for
your hidden Christmas presents. Many people apparently haven't even hit the
stores yet. With Christmas on a Monday this year, Visa says this weekend
could be a record-breaker for buying. The credit card company says it
expects record transaction volume on Dec. 23 and Dec. 24, with the company
handling 4,100 transactions a second. (RJH)
10:37 (Dow Jones) Mark your calendars! Jan. 4 is the date to watch if you
are following the California power crisis. The state's utility commission
has signaled it could raise rates at its next meeting. Investors were
bidding up shares of both PG&E Corp. (PCG), which recently gained 6.5%, and
Edison International (EIX), which added 2.1%, on the news. Shares of the two
companies, which own the state's largest utilties, both hit 52-week lows
Thursday. (CCC)
10:34 (Dow Jones) George W. Bush has tapped a number of corporate boardrooms
for Cabinet posts, so perhaps Donald Rice might fit the bill for Defense
Secretary. The New York Times says Rice's name has been mentioned as a dark
horse for the post. Rice, a former Secretary of the Air Force, is president
and CEO of closely held biotech UroGenesys and is chairman of biotech Scios
(SCIO). He's served on the boards of Amgen (AMGN), Wells Fargo (WFC), Vulcan
Materials (VMC) and Unocal (UCL). (RJH)
10:23 (Dow Jones) Though March bonds and 10-years remain near contract
highs, there are some signs the market is "tiring," broker says. A test of
shorts is warranted at current level of 105-04 in bonds and at 105-00 in
10-years. (DMR)
10:18 (Dow Jones) The Nasdaq Composite is backing off a little after a test
of long-term resistance at 2463.71, so don't be surprised by a dip to
support at 2432.83, the Dec. 20 high. The index isn't going anywhere on the
upside unless it moves above 2696.61. (SC)
10:07 (Dow Jones) Pushing the cause of barbequed meat is a good thing.
Lehman Brothers analyst Mitchell Speiser shaved his above-consensus earnings
estimate on Darden Restaurans (DRI) to $1.59 from $1.62 to reflect bad
weather in the current fiscal 3Q and increased spending to open more Smokey
Bones restaurants. Speiser, who kept his buy rating and $32 a share price
target, said the Smokey Bones barbeque sport bar brand adds a catalyst to
the Darden portfolio. (DDO)
9:56 (Dow Jones) Volume so thin in T-bond and 10-year futures that a 100-lot
trade moved the market two ticks, traders say. No major players of note.
Market remains lower, but well above support at 104-10 for bonds and 104-5
for 10-years. (DMR)
9:46 (Dow Jones) International Business Machines Corp.'s (IBM) stock has
been on a wild ride in recent days. Earlier this week Big Blue saw its stock
reach a new 52-week low after Merrill Lynch downgraded its rating on the
company. Things got even uglier Thursday, when concerns over IT spending and
fears that the $90 billion giant would pre-announce sent its stock to yet
another new low. But Friday the stock is up 5% after Salomon Smith Barney
analyst John Jones issued a bullish research note defending IBM. (DLF)
9:34 (Dow Jones) March S&Ps and Nasdaq start firmer, finding support from a
firmer overnight trade. Hopes are the market can post gains two days in a
row. Short covering likely a feature as traders even up positions before the
Christmas holiday. Equity futures observe normal trading hours, while
financial futures close early. (DMC)
9:27 (Dow Jones) Analyzing periods of monetary easing over the past 28
years, Goldman Sachs analysts say, "If the Fed succeeds in averting a
downturn, as we expect, then the history points on balance to an improvement
in stock prices over the next year. However, if it does not, then the
history tells a much bleaker story." (JC)
9:21 (Dow Jones) Mutual fund investors became increasingly cautious during
November, investing $52B of the $60B of total net inflows into money market
funds, according to fund tracker Lipper Inc. (TL)
9:11 (Dow Jones) One last look this year at the biotech group from Arnhold's
John Roque. He still believes the sector is loaded with trouble and that the
indexes (the Nasdaq Biotech and AMEX Biotech) don't tell the real story. The
AMEX index (602) has downside to 400, while the Nasdaq index (1024) has
downside to 900. He says sell both on rallies. His list of stocks with
substantial downside risk: ABGX, ALXN, CELG, CEGE, CORR, CVTX, HGSI, INHL,
MEDX, MLNM, VRTX. (TG)
8:56 (Dow Jones) Longer-dated Treasurys retreat a little as equities futures
show a stronger open for U.S. stocks and some curve trades within Tsys curve
switch from longer to shorter maturities. 30-year down 14/32 on session at
111 25/32, yield up 3 bp to 5.44%. (JNP)
8:44 (Dow Jones) Citing rare national sale to combat weak trends, Lehman
cuts 4Q, 2000, and 2001 views on Home Depot (HD). Brokerage firm says just
second time HD has done this, the last time being about seven years ago.
Says event like this "is a clear indication that business continues to be
soft." (TG)
8:42 (Dow Jones) Besides the leading role played by transport equipment,
other components of durable goods - industrial machinery (+1.1%), electrical
machinery (+4.5%) - were up, with only primary metals among major groups
doen (-2.1%). After the big (-6.5%) decline in durable orders in Oct., it is
like the manufacturing sector took one step forward after three steps back.
(JM)
8:40 (Dow Jones) No reaction from currency markets to spending/income and
durable goods data. Data point to a slowdown but not a serious one. EUR/USD
at $0.9239 while USD/JPY is at Y112.30. (CSE)
8:38 (Dow Jones) Some Treasurys traders can't resist taking profits after
November durable goods orders were up more than expected. But it's just that
- profit taking - because these numbers do not change the economic
landscape, especially with October revised further downward. Personal income
numbers were also a wash for bonds. (SV)
8:36 (Dow Jones) The firm Nov. durable goods and income/spending data offer
some relief after a series of very weak economic reports. The data suggest
that while spending and investment have clearly softened, the bottom hasn't
fallen out of the economy. Numbers consistent with slowdown, not recession.
(BB)
8:33 (Dow Jones) Nov. personal income and spending right on consensus.
Income up 0.4%, spending 0.3%. October figures revised up slightly. Data
suggest a little more firmness in spending, but pace still moderating from
earlier levels. (BB)
8:30 (Dow Jones) Stocks will take their cue Friday morning partly from the
release of durable goods orders and personal income and spending for
November. Prior to these releases, stocks are looking higher. Ford (F) will
miss its 4Q views, but tech names may rebound from a mild selloff Thursday.
A big deal in the defense group has the spotlight on that sector. Bond
market closes early for holidays, and equity session likely to slow as day
progresses. (TG)
(END) DOW JONES NEWS 12-22-00
10:59 AM
*** end of story *** |
