- Pre-Market Indications

Thursday, May 29, 2008

Trader Talk: Morgan Stanley Says Business Travel Suffering - Trader Talk with Bob Pisani -

Dollar stronger again; bond rout continues. Stock futures dropped a bit as GDP revision came in in-line, up 0.9 percent from 0.6 previously.

Morgan Stanley out with a long note on business travel this morning, not surprisingly with the title, "Business Travel Fundamentals Worsening." A summary:

1) room rate renegotiations, which first surfaced with financial business travelers, is now spreading to other sectors;

2) group cancellation rates are increasing.

3) rising airfares, already impacting leisure travel, will impact corporate travel this year.

They cut their ratings on Marriott

Marriott International Inc

34.14 UNCH 0%

[MAR 34.14 --- UNCH (0%) ] , and reduce the price target to $40 from $47. Marriott closed at $34.14. They go further: "...we do not recommend putting new money into lodging with the exception of stocks with unique catalysts."


1) We have been getting retail earnings reports for the past week, with mixed results.

a) Men's Wearhouse

Men's Wearhouse Inc

23.62 UNCH 0%

[MW 23.62 --- UNCH (0%) ] reported earnings a bit below expectations, and guidance for the quarter and full year appears a bit below expectations as well. Down 6 percent pre-open.

b) Big Lots

Big Lots Inc

28.53 UNCH 0%

[BIG 28.53 --- UNCH (0%) ] and Costco [COST 73.24 --- UNCH (0%) ] beat expectations; Big Lots up 8 percent pre-open as they raise their full year guidance slightly. Costco reported good comp store sales growth--U.S. up 6 percent, international up 16 percent.

2) NYSE IPO: Safe Bulkers (SB), a marine drybulk shipping company, priced 10 million shares at $19, below the expected range of $20 to $22 a share.

3) German chip maker Infineon

Infineon Technologies AG

9.96 UNCH 0%

[IFX 9.96 --- UNCH (0%) ] down about 12 percent pre-open, after they lowered their outlook for their communications unit.

Bob Pisani's Trader Talk: Morgan Stanley Says Business Travel Suffering - Trader Talk with Bob Pisani -

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