Monday, January 02, 2006

Tuesday Watch

Weekend Headlines
Bloomberg:
- Bill Miller, manager of the Legg Mason Value Trust, beat the S&P 500 for a record 15th straight year.
- The US dollar gained against the euro and yen in 2005, rising about 15% versus both currencies as the US economy continued outperforming Europe and Japan.
- Wal-Mart Stores(WMT) said December US same-store sales rose about 2.2%.
- Antidepressants such as Wyeth’s(WYE) Effexor and Eli Lilly’s(LLY) Prozac don’t appear to post a higher risk of suicide in the six months after they’re prescribed, a study says.
- Bank of America(BAC) became the No.1 US credit-card issuer today as it completed its $34.2 billion acquisition of MBNA Corp(KRB).
- US employers added another 200,000 jobs last month as companies remained optimistic that the new year will bring more corporate investment and solid economic growth, according to a survey of economists.
- Viacom(CBS/A), the entertainment company controlled by Sumner Redstone, completed a plan to split itself into two companies, CBS Corp.(CBS) and Viacom, its said in a statement.
- Owens Corning, the largest US insulation maker, filed a new bankruptcy reorganization plan aimed at wiping out the company’s estimated $10.2 billion in asbestos liabilities.
- HBOS Plc, Britain’s fourth-largest lender and one of the foreign-exchange market’s biggest dollar bulls in 2005, expects the US currency to extend its gain.
- Samsung and its nearest rival LG.Philips LCD began production at their newest plants ahead of schedule to meet demand for televisions.
- Overweight people are nearly twice as likely as thinner folk to develop kidney disease and the risk for the morbidly obese is 700% higher, a study says.

MarketWatch:
- Don Hays, of Hays Advisory, expects the S&P 500 to rise 30% during the next 12 months, the price of oil to fall to $42 and interest rates to remain at low levels.

NY Times:
- Crime in NYC has declined for the 17th straight year, with the number of murders at their lowest point since 1963, citing NYPD stats.
- Smaller US schools such as Allegheny College are luring bright students to their campuses offering merit scholarships to keep them from going to more sought-after institutions.
- Home prices in many areas of New Orleans are the same as or higher than they were before Hurricane Katrina struck the city in August.
- People are likely to start using their mobile phones for shopping this year.
- Suburban homeowners in cities such as NY, Chicago and San Francisco are spending more money renovating their houses than previous generations of homeowners.
- Technological convergence, whereby people can have electronic devices such as computers, televisions and telephones communicate with each other, may become a reality this year.
- Advertisements placed in movies and television programs with computer graphics allow companies to show products to customers who have learned to block commercials.

San Francisco Chronicle:
- Yahoo!(YHOO) will broadcast a reality television show on the most-visited Web site in coming months as the company expands into video offered on line.

Washington Post:
- US government contractors, such as CGI-AMS Inc. and Northrop Grumman(NOC), are moving jobs to rural Virginia instead of overseas to cut costs.
- The Bush administration will seek no new funds for rebuilding Iraq when it submits its budget request to Congress in February.

AP:
- US consumers may get more tax credits in 2006 for purchasing cars and pickup trucks that run on gasoline and electricity, for which there are already waiting lists.

Telegraph:
- Reinsurance rates are set to rise following a series of natural disasters in 2005.

AFP:
- The US has written off $280 million of debt owed by Zambia after the African country completed economic reforms recommended by the International Monetary Fund.

La Gaceta de Los Negocios:
- Germany and France have natural gas stockpiles of 75 days and 45 days respectively should a possible Russian cut off of supplies to Ukraine disrupt flows of the gas to western Europe.

Xinhua News Agency:
- China’s State Administration of Foreign Exchange approved a first group of 13 banks to be market-makers in yuan trading.

Economic Daily:
- Benq and AU Optronics(AUO) will double their sales of flat-panel televisions and television displays this year boosted by US demand, citing KY Lee, chairman of both.

Weekend Recommendations
Barron's:
- Had positive comments on (K) and (PBI).

Goldman Sachs:
- Reiterated Outperform on (ACN) and (EBAY).
- Reiterated Underperform on (TFX).

Night Trading
Asian indices are -.25% to +.50% on average.
S&P 500 indicated +.15%.
NASDAQ 100 indicated +.12%.

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
(BSG).17
(WAG).33

Upcoming Splits
(CELL) 3-for-2
(ORI) 5-for-4
(SIE) 2-for-1

Economic Releases
10:00 am EST
- Construction Spending for November is estimated to rise .7% versus a .7% increase in October.
- ISM Manufacturing for December is estimated to fall to 57.5 versus a reading of 58.1 in November.
- ISM Prices Paid for December is estimated to fall to 68.7 versus a reading of 74.0 in November.

2:00 pm EST
- Minutes of Dec. 13 FOMC Meeting.

BOTTOM LINE: Asian Indices are mostly higher, boosted by commodity producing companies in the region. I expect US stocks to open modestly higher and to fall later in the afternoon, finishing modestly lower. The Portfolio is 50% net long heading into the week.

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