Monday, January 31, 2005

Monday Watch

Weekend News
Arab airlines grew the fastest last year of any regional grouping by number of passengers carried, boosting profits, Arabian Business magazine reported. New York my become the first state to offer a so-called work-readiness credential to students who voluntarily take a test on skills needed to perform entry-level jobs, the NY Times reported. Kaiser Permanente, a California-based hmo, will no longer sell Pfizer's Bextra in its pharmacies after some tests found the arthritis and pain drug may increase the risk of heart attacks and strokes, the NY Times reported. Advisers to President Bush have recommended he propose personal Social Security accounts that let individuals invest initially in three to five diversified funds under a system similar to the Thrift Savings Plan for federal workers, the Boston Globe reported. SBC Communication's possible bid for AT&T will make Verizon Communications, BellSouth and Qwest Communications consider whether to purchase MCI Inc., the NY Times reported. A few days before a Parliament debate to loosen limits on the 35-hour work week, 77% of the French people say they would prefer to leave their working time unchanged, Le Journal du Dimanche reported. Comcast and Time Warner have completed a joint off for the bankrupt Adelphia Communications and may be the only bidder for the whole company by the Jan. 31 deadline, the LA Times reported. Bill Gross, CIO for PIMCO, expects the yield on 10-Year T-notes may rise to 4.75% or 5.0% within 12 months, Barron's reported. Some Trump Hotels and Casino Resorts shareholders and a bank that once offered to buy a controlling stake in it have filed motions blocking the company's plan to exit bankruptcy, the Star-Ledger reported. Public health officials say AIDS infections in newborn babies may be almost eradicated in the US because of more effective drugs, public education and testing, the NY Times reported. The Qatari government is trying to sell unprofitable Al Jazeera after Bush administration officials have complained about biased and false reporting on the Arab language television station, the NY Times reported. International Speedway will sell Nazareth Speedway, once the home track for now-retired race drivers Mario and Michael Andretti, the Morning Call of Allentown, Pennsylvania reported. The British Broadcasting Corp. said it mistakenly reported that US forces and their allies killed more civilians than insurgents fighting in Iraq, Bloomberg reported. Halliburton and Baker Hughes won a government contract to drill for gas in Bahrain, a Persian Gulf archipelago, in an effort to meet demand from its power plants and aluminum industry, Middle East Economic Digest said. Iran, holder of the world's second-largest oil reserves, will increase oil production from its Mansouri field by a third to 150,000 barrels a day as it seeks to increase total production, Petroenergy Information Network said. Boeing CEO Stonecipher is backing plans to build an advanced version of the company's 747 airliner, raising the possibility of the plane's launch in the next few months, the Business reported. Afghan President Karzai was urged by two human rights organizations yesterday to prosecute war criminals after decades of human rights abuses in the nation, the NY Times said. Beating back President Bush's plan to let workers invest a small part of their Social Security taxes in private accounts is the Democratic Party's most important priority this year, the NY Times reported. Russia has as many spies in the US as the former Soviet Union had during the Cold War, and the National Security Council has instructed intelligence agencies to follow the threat closely, Time magazine reported. A US tax amnesty, offset by tax breaks in the American Jobs Creation Act, may reap about $100 billion of foreign exchange earnings for the US, the Financial Times said. Saudi Arabia's OPEC minister said crude oil at $50 a barrel has done nothing to slow economic growth, signaling the group will do little to stop a year long really in prices, Bloomberg said. China's vice premier and deputy central bank chief said they want to maintain a "stable" exchange rate, rebuffing calls from the US and Europe to let the Chinese currency strengthen, Bloomberg said. Libya auctioned off rights to explore for oil in its first such sale for 40 years, with US oil companies, led by Occidental Petroleum, winning the bulk of the bidding, Bloomberg reported. Dubai said it bought a $1 billion stake in DaimlerChrysler AG, making the Persian Gulf emirate the third-largest shareholder in the world's biggest maker of luxury cars, Bloomberg said. Israeli Prime Minister Sharon and Palestinian Authority President Abbas will hold a summit meeting next week to push forward the Middle East peace process after a 19-month lull, Bloomberg said. As many as 8 million Iraqis, or about 60% of eligible voters, voted for a National Assembly, defying insurgents to hold the country's first democratic election since 1953, Bloomberg reported. President Bush called the elections in Iraq a "resounding success" that proves the commitment of Iraqis to democracy and freedom, Bloomberg said. National Semiconductor forecast its China sales will rise by more than 20% this year on expanding demand for electronic and telecommunications products, Bloomberg reported. Crude oil futures are falling, heading for their biggest two-day drop in a month, after Iraq's first free election in 50 years reduced concern that the country's oil supply would be disrupted and OPEN said it may raise output in the second quarter, Bloomberg reported.

Weekend Recommendations
-Bulls and Bears: Had guests that were positive on UDI, AH, PJC, PG, INTU and mixed on ATK, DAL.
-Forbes on Fox: Had guests that were positive on HAL, WWW, TK, MHX and mixed on LLL, PTEN.
-Cashin' In: Had guests that were positive on DUK, MCD and mixed on ISL, BHP.
-Barron's: Had positive comments on SHPGY, FWHLF, TIIPF, AIZ, LEAP, IGI, JPM, FITB, FNF, PFE, LYO, ALL, EP, OMM and CRY. Had negative comments on HOV, TOL, LEN and CTX.
-Goldman Sachs: Reiterated Outperform on MDT, SII, INTC, SPG, ALK, UTX, NFX, BLS and DNA. Reiterated Underperform on PCZ and MU.

Night Trading
Asian Indices are higher, +.50%. to +1.25% on average.
S&P 500 indicated +.43%.
NASDAQ 100 indicated +.76%.

Morning Preview
US AM Market Call
NASDAQ 100 Pre-Market Indicator/Heat Map
Pre-market Commentary
Before the Bell Video(bottom right)
Asian Indices
European Indices
Top 20 Business Stories
In Play
Bond Ticker
Analyst Actions
Macro Calls
CNBC Guest Schedule

Earnings of Note

None of note.

Economic Data
-Personal Income for December is estimated to rise 3.3% versus a .3% increase in November.
-Personal Spending for December is estimated to rise .9% versus a .2% increase in November.
-PCE Deflator(YoY) for December is estimated to rise 2.4% versus a 2.6% increase in November.
-New Home Sales for December are estimated at 1200K versus 1125K in November.
-Chicago Purchasing Manager for January is estimated to fall to 59.0 versus 61.9 in December.

BOTTOM LINE: I expect US stocks to open higher in the morning on optimism over the Iraqi elections, increasing potential for meaningful US reforms, lower energy prices, short-covering and bargain hunting. The Portfolio is 100% net long heading into the week.

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