Today’s trading was extremely cautious in anticipation of the February’s monthly jobs report due to be released tomorrow at 8:30 am.
This report is released once a month on the first Friday of each month. Many times the market reacts drastically to this report. Reaction to the report is usually short lived. For the most part by the next day, no one seems to care about the results. It is a great opportunity to sell stock if the report is positive. However if the report is disappointing, it is a good opportunity to purchase stock. At the end of the day, reversing the trade can turn out to be a good short term trade.
Today the CEO of CITIGROUP (C ) Vikram Pandit testified in front of the TARP panel. During his testimony he made very interesting points. It seems that “C” is on the road to a full recovery.
The bank has changed their methods of operations and will return to profitability within a short time. The big cloud hanging over “C” is the government. As of today, US Treasury Department has a huge investment in CITIGROUP. The US Treasury has 25 Billion dollars invested and owns about 27% of “C” stock.
The Treasury Department has plans to sell a large chunk of the stock at the end of March, after the lockup is over. The belief is that at one point “C” will repay their obligations to the Government. At that point, “C” will trade as a public company, free of US Government controls.
Currently the stock is trading around $3.40 a share. I believe that after the Treasury Department will sell their shares at the end of March, the stock will rise dramatically. I think that the stock can finish the year at over $5.00 a share. A 50% return on your money from today‘s closing price.