FED Meeting Tuesday
US techs rise on expectations for 'triple threat' coordinated US, UK and ECB rate cuts this week. Economsits: 100% chance of 1/4 point cut, 60 % chance of 1/2.
My best guess? Too close to call, but if I must, I’d go 1/4 Nov 6, and another 1/4 in December. Half point cut would the last of year . . . A quarter point cut would be a return to Greenspan’s earlier gradualism (1/4 now, 1/4 again in December).
Pre-meeting, it’s wise to “Sell the Green, Buy the Red”
Stocks to watch
-CSCO earnings tonite 11/5; Will impact JNPR, EXTR, SCMR and other networkers. Key will be John Chambers comments in conference call;
-EMC Barrons very positive mention – look for a pop.
-QCOM earnings tomorrow nite (be flat before then -- stock's in the middle of a range and could break either way)
-NTAP JP Morgan H&Q is 'banging the table' Monday on Network Appliances telling clients overnight that the stock "remains our top pick because we believe shares are still attractively priced, we expect a strong earnings call next week." Analyst William Lewis raises his price target on the stock to $20.
-SMH “Too Risky” for some clients to own KLAC, AMAT, MU, INTC or XLNX? Consider owning them all (via Merrill Lynch) Semiconductor Holders (SMH) – the diverse set of holdings is a sector bet; Less risk of any one stock blowing up.
TA round up
AOL is forming a triangle -- downside risk? Consider hedging or lightening positions.
HD broke its downtrend; Seen as big beneficiary of Treasury decision ot cancel 30 yr bond, which drove mortgage rates way down. Potential upside to 46-48 over 90 days.
Technimentals (Kevin Lane) Favorite Pick: Gilette (G) 30 3/4 up to 33
Add to the AEP short position up to 45
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FURTHER READING
Microsoft Settlement Problems? States point to flaws in U.S. pact
By CBS.MarketWatch.com
WASHINGTON (CBS.MW) -- State antitrust authorities reportedly have listed a dozen changes they want to make in the proposed agreement between Microsoft and the Bush administration.
Officials with several of the 18 states plan to tell a court-appointed mediator that they don't expect to sign on to the federally approved plan that was submitted Friday to U.S. District Judge Colleen Kollar-Kotelly, The Wall Street Journal reported Monday.
It wasn't clear on Sunday night whether all 18 of the states that have joined the federal suit against Microsoft (MSFT: news, chart, profile) would be united in opting out of the deal reached by U.S. antitrust chief Charles James, the report said.
No free lunch: BrokerageAmerica's free trade offer has downsides
By Jamie Heller, CBS.MarketWatch.com
NEW YORK (CBS.MW) -- Everyone loves to get something for free. Unless it costs them in the end.
BrokerageAmerica, the latest firm to enter the free-trading business, doesn't charge commissions on market orders and gives its customers rebates on all stock trades. But the price customers pay in foregone services could whittle that commission savings fast. And as for execution quality, the firm's "cut-out-the-middle-man" message suggests an edge when in fact its set up is pretty par
BrokerageAmerica, the company running those commercials where two guys in rubbers suits bearing commission figures attack a man in a rubber suit with a zero on his chest, is both a broker and a "market maker." Market makers execute trades, mostly on the Nasdaq, and make money on the difference between the bid - offer to buy -- and the ask - the offer to sell, known as the spread.
While most brokers rely on commissions, margin interest, and payment for order flow for revenue, BrokerageAmerica depends almost entirely on the spread as its main revenue source. The commission-less trading and rebates are an incentive to attract orders on which it makes money. At the same time, it keeps its costs low by offering little in the way of services.
--Barry Ritholtz
November 5, 2001
If you would like a free subscription to my bi-weekly market comments, please send an email to
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Copyright © 2001 Barry L. Ritholtz, All Rights Reserved worldwide. May not be copied, stored or redistributed without prior, written permission.
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