The RealMoney contributors are in the business of trading and investing all day on the basis of ongoing news flow. Below, we offer the top five ideas that RealMoney contributors posted today and how they played those ideas.TheStreet.com brings you the news all day, and with RealMoney's "Columnist Conversation," you can see how the pros are playing it on a real-time basis. Here are the top five ideas played today:
1. FOMC ExpectationsTony Crescenzi
1/28/2009 2:06 PM EST Here is what is expected of (or hoped for from) the Fed:
- Obviously, a continued commitment to ZIRP (zero-interest-rate policy).
- An exclamation point on the recent foray into the purchase of agency and agency mortgage-backed securities, a strategy that has helped lower mortgage rates.
- While few expect the Fed to say that it will begin purchasing long-term Treasury securities, some expect as much, so if the Fed does not repeat its Dec. 16 statement that it is "evaluating the potential benefits" of doing such, Treasuries might weaken. I stress that few expect the Fed to say it will purchase Treasuries, and most would prefer that the Fed focus on other fixed-income products, but an omission of the Dec. 16 idea might weaken Treasuries.
- The Fed might tell us when it will begin its Term Asset-Backed Securities Loan Facility (TALF), the facility meant to jump-start lending for credit cards, auto loans and leases and small-business loans. The TALF could begin next week.
- Perhaps the Fed will discuss how it plans to help the Treasury cordon off bad assets.
2. They Just Don't Get ItRobert Marcin
1/28/2009 12:02 PM EST We must get the banks lending, they say. We must get housing prices up. We must get the consumer restarted they say. They just don't get it. The biggest financial crisis in history was caused by the banks over-lending to consumers who over-consumed. And now the talking heads say we need to prod banks to force debt down the throats of over-levered households. They just don't get it. At least infrastructure spending represents an investment in future productivity and quality of life. I can get on board regarding the infra spend. But to borrow trillions to pay for our current over-consumption as well as stimulate over-consumption is simply wrong. The feds and talking heads don't get it. Is it any surprise that those clueless contributors to the mess are promoting the wrong solutions?
3. I Prefer the Best Values, Not the Best CompaniesTom Au
1/28/2009 9:28 AM EST Steve Birenberg made a gutsy self-criticism today by admitting that he has sometimes made the mistake of owning the best companies that nevertheless had problems not anticipated by the markets.
4. Morning TradeBob Byrne
1/28/2009 9:24 AM EST Bull market back on ... maybe. I have no clue whether we hold this gap and rocket higher or not, but Kass has clearly seen a nice chunk of his 5%-10% happen fast. I am of the opinion that when we shoot up like this, if you added exposure below (or are sitting on bad positions you wished you had never bought) ... take some off. It is an FOMC day, so things may get stirred up a bit toward the announcement. If this "bad bank" proposal keeps the bulls excited and the bears petrified, we could break free of our initial resistance at 862 and make a run for the 872.50/873 area. I would expect heavy selling at this area, especially if we get there in a near vertical manner. A break of 872.50/873 and it's on to 882 ... which is my extreme high for the day.
5. Zimmer Options Heat Up Ahead of EarningsJon Najarian
1/28/2009 8:08 AM EST Surgical implant company Zimmer Holdings ( ZMH) is seeing significant options activity ahead of its earnings report before the opening bell Thursday. Some 5,100 of the February 40 calls are trading, with more than 86% on the offer, according to OptionMonster's tracking systems, which to us says accumulation. ZMH stock, however, fell 5.6% in after-hours trading late yesterday to $39.66 after closing the regular session up on the day at $42.01. At the same time, Stryker ( SYK), a competitor of Zimmer in orthopedic implants, rose 4.75% in after-hours trading following a positive earnings report. SYK options continued to be bullish leading up to the release, and the company expects sales to increase 6% to 9% in 2009. For free trial to Real Money, where you can get updated trading and investment ideas throughout the course of the day, please click on the tile below.