Traders expect 0.5% cut Wednesday. Fed fund futures traders give 100% probability of a rate cut on Wednesday by the FOMC. 86% favor a 0.5% cut, up from 70% on Friday and 0% a week ago.
Repos rise. More than 1% of U.S. households were hit with some stage of repossession proceedings last year, giving new insight into just how far-reaching the subprime mortgage crisis may become.
Recession chances less than 20%. An economic model based on the unemployment rate and jobless claims predicts the chances of a U.S. recession are just 1/6, much lower than the forecasts of most economists.
More rogue traders to come. The UK Financial Services Authority warns that tighter economic conditions could be diverting companies' attention away from proper risk management, which increase the risks of more rogue trader scandals a-la Societe Generale.
Quality over quantity. Pimco's Bill Gross says in his Feb. 2008 outlook that "bubble creating, inflation inducing damage to the U.S. dollar" would be the likely result of a trek back to 1% interest rates. "To rejuvenate the U.S. economy a well constructed, more than temporary fiscal/monetary stimulus plan is required," he says.
iPod touch sales cannibalize iPhone. One analyst says Apple (NASDAQ:AAPL) forfeited as many as 1.5M iPhone sales over the holidays in order to entrench the iPod touch as a "mainstream Wi-Fi mobile platform," and not just a touchscreen iPod. iPod touch sales cannibalized iPhone sales, which would have hit 4M during the last quarter. He predicts Apple will release a $399 3G-capable iPhone in the summer, will drop the current model to $299, and cut iPod touch prices to $199 and $299.
Firefox: full steam ahead. Firefox gained market share against Microsoft's (NASDAQ:MSFT) Internet Explorer in 2007, and is within a few percentage points of taking the lead in Finland, Poland and Hungary. Firefox has a record high 28% global market share, vs. IE's 66.1%. Opera has 3.3% and Safari has 2%.
BofA: Incompetent but great. Punk Ziegel analyst Richard Bove said Bank of America's (NYSE:BAC) 95% Q4 earnings drop reflect incompetent risk management, but added that based on a number of metrics, there is no better bank in the country.
Motorola dumping cell phones? Motorola (MOT) may exit the handset business in order to concentrate on becoming an enterprise and government company, a Nomura analyst said. Rumors of a Chinese buyout have gained traction, but they may not have the knowledge necessary to right the company.
Virtual bandwidth scores Infinera a win. Infinera (NASDAQ:INFN) will announce today a contract from data center specialist Equinix (NASDAQ:EQIX), which thinks INFN's 'bandwidth virtualization' will help it save expenses and attract new customers.
Nvidia considers VIA. Nvidia (NASDAQ:NVDA) may be looking to buy or invest in VIA Technologies, which recently launched a 64-bit Isaiah-based processor that significantly decreases power consumption while boosting performance.
New chipset for Nvidia. Nvidia (NVDA) will launch the next generation nForce 790i chipset in Q2. The nForce 790i is high-end product, and will support DDR3 memory, the pricing of which is expected to start dropping in Q3.
DRAM outlook murky. After taking on extra stock in Q4, PC OEMs are now overstocked with DRAM, making a recent price climb for the memory unlikely to continue.
Citigroup to stay whole. Sources say Citigroup (NYSE:C) CEO Vikram Pandit will resist calls from shareholders to break up the company. Pandit prefers a 'leaner' Citigroup, and is likely to cut as many as 24,000 jobs in 2008.
Quicksilver to dump Rossignol. Quicksilver (NYSE:ZQK) paid $320M for ski apparel and equipment co. Rossignol in 2005, but now expects to sell the business within nine months. ZQK says integration is taking longer than expected, and that it needs "immediate results."
Statins may have limited use. Statins, including Pfizer's (NYSE:PFE) Lipitor, AstraZeneca's (NYSE:AZN) Crestor, and Bristol-Myers's (NYSE:BMY) Pravachol, don't seem to prolong the lives of all people with high cholesterol. Men with heart disease do benefit from the drugs, but women with or without heart disease and otherwise healthy men have shown no life-expectancy increase.
Cold outlook for Chinese power providers. Heavy snow and sleet have forced 7% of Chinese power plants to shut down, and companies are struggling to secure enough coal to keep plants operating. Companies potentially affected include Huaneng Power (NYSE:HNP).
Rumors: Dendreon (NASDAQ:DNDN) moved higher this morning on renewed partnership speculation. Shares of JP Morgan (NYSE:JPM) were down on rumors of a large derivatives loss. First Marblehead (NYSE:FMD) was up on renewed takeover speculation.