Sunday, November 20, 2005

Monday Watch

Weekend Headlines
Bloomberg:
- China’s economy will probably slip back into deflation by the end of this year or early 2006, ending more than 12 months of inflation that climbed as high as 2.3% in the first six months of 2005.
- The US House, casting a largely symbolic vote, overwhelmingly rejected by a vote of 403-3 a proposed resolution by Democrats calling for an immediate withdrawal of US troops from Iraq.
- Saudi Arabia, Kuwait and Qatar, three nations that together pump more than 40% of OPEC’s oil, welcomed a three month slide in crude oil prices and said they have no plans to reduce supplies.
- US 10-year Treasury notes rose for a second straight week, the first back-to-back gain in more than two months, after government reports suggested inflation is contained and the housing market may be cooling.
- Wal-Mart said November sales at its US stores are rising within its forecast.
- Saudi Basic Industries, the world’s largest chemical maker by market value, expects prices and profits to decline next year because of an excess of supply, the company’s CEO said.
- Mentor Corp., a maker of plastic surgery products, made a $2.2 billion hostile bid in stock for Medicis Pharmaceutical, the latest offer in an industry where acquisitions have risen 15% from a year earlier.
- UK house prices gained for a second month in November, reinforcing signs of a pickup in Britain’s $6 trillion property market after a yearlong slowdown, property Web site Rightmove said.
- Senator Joseph Biden said he and fellow Democrats are more likely to block the Supreme Court nomination of Samuel Alito Jr. by using a filibuster after seeing statements he made in a 1985 Reagan administration job application.
- Boeing won orders today worth a total of $13.7 billion for 112 aircraft from Emirates and China, extending gains in new business this year over Airbus SAS.

Wall Street Journal:
- Toyota Motor may set a goal next month of producing as many as 9.2 million cars in 2006, which could make it the first company in 70 years to produce more cars than GM.

NY Times:
- About 40% of New Orleans is still without power, and the city’s main utility, Entergy Corp., says some areas of the city are too devastated to predict when electricity will come back on.
- Wal-Mart Stores’ Sam’s Club warehouse stores and J. Crew Group are reaching out to higher-income shoppers this holiday season with luxury goods ranging from Italian cashmere to diamond wreath necklaces.
- Support is increasing for a nationwide telephone service that would connect callers to social services and ways to volunteer in their communities.
- Iran’s Parliament voted today to approve the outline of a bill that would prevent the United Nations from inspecting its nuclear sites should Iran’s case be referred to the UN Security Council for possible sanctions.

Washington Post:
- Lockheed Martin and three private-equity firms ended talks with Computer Sciences about a buyout of the No. 5 US computer-sciences company.

The Chronicle of Philanthropy:
- Donations to US hurricane relief efforts have surpassed the amount raised for victims and their families after the terrorist attacks on Sept. 11, 2001.

AP:
- Abu Musab al-Zarqawi, the leader of Iraq’s al-Qaeda cell, may be among those who died in a gunfight in the northern Iraqi city of Mosul and “there are efforts under way to determine if he was killed.”

Financial Times:
- Chinese copper trader Liu Qibing is being made a “scapegoat” for losses at a government agency and worked with proper approvals, citing an unidentified trader in Shanghai who knows Liu.

London-based Times:
- US companies are having their longest streak of double-digit quarterly profit rises since 1936, citing research by Merrill Lynch.

The Business:
- Microsoft, Reuters Group and Time Warner’s AOL unit will announce an Internet messaging service, overcoming restrictions that had prevented the technology from being used by financial institutions.
- Buyout firm Blackstone Group is examining a possible purchase of Knight Ridder, publisher of the Philadelphia Inquirer and Miami Herald.

Focus Magazine:
- Germany’s Federal Labor Agency expects the number of jobless people to rise next year, undercutting the estimated level of social insurance contributions by $4.4 billion, citing an internal labor office forecast.
- Plans by the incoming German government to increase taxes will cost citizens an additional $21.7 billion in 2007, citing internal finance ministry estimates.

China Daily:
- China will import less oil and oil products in 2006 than previous years, an official with the Ministry of Commerce said recently.

al-Hayat:
- Egypt discovered a new oil well south of the Sinai desert that contains 20 million barrels of oil reserves.

Le Journal du Dimanche:
- French President Jacques Chirac’s approval rating dropped another 3 percentage points in November to 35%.

Weekend Recommendations
Barron's:
- Had positive comments on EK, WY, BOW and SSCC.
- Had negative comments on AMED and GOOG.

Goldman Sachs:
- Reiterated Outperform on CSCO and GE.

Night Trading
Asian indices are unch. to +.25% on average.
S&P 500 indicated +.02%.
NASDAQ 100 indicated +.06%.

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

Earnings of Note
Company/Estimate
CPB/.56
CBRL/.53
DY/.19
PVH/.70

Upcoming Splits
NIHD 2-for-1

Economic Releases
10:00 am EST
- Leading Indicators for October are estimated to rise .8% versus a .7% decline in September.

BOTTOM LINE: Asian Indices are mixed as higher energy prices are offsetting more optimism for exporters in the region. I expect US stocks to open mixed and to rise modestly later in the afternoon. The Portfolio is 100% net long heading into the week.

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