Monday, January 16, 2006

Tuesday Watch

Weekend Headlines
- PetroChina Co., the nation’s largest petroleum company, increased oil and natural gas production 5.5% last year after drilling new fields to meet higher demand in Asia’s fastest-growing market.
- Shipping rates will probably fall for a second straight year as the fleet of coal and iron-ore vessels grows faster than the world’s demand for commodities.
- Stocks worldwide may rise for a fourth straight year in 2006 because shares are still cheap given the outlook for economic growth and corporate profits, strategists at Goldman Sachs Group said. US stock returns including dividends will be 13% in 2006, Goldman said.
- The US dollar is gaining against the euro on speculation industrial production and manufacturing reports will add to evidence the world’s largest economy is expanding at a healthy pace.
- Oil is rising a little over a percent in NY after rebel attacks cut output in Nigeria and Western nations stepped up pressure on Iran to abandon its nuclear program.
- Gerald Ford, the oldest living former US president, has been hospitalized with pneumonia at Eisenhower Medical Center in Rancho Mirage, California.
- “Brokeback Mountain,” the love story of two gay cowboys, won four Golden Globe awards, including best drama and best director for Ang Lee.

Wall Street Journal:
- The FDA may change its drug-labeling rules and offer drugmakers a shield from some lawsuits.
- Royal Dutch Shell Plc will begin to explore central Arkansas for natural gas deposits, a sign that multinational oil companies are increasingly interested in US domestic deposits.
- General Motors(GM) and Ford Motor(F) will recover from their current troubles, though it might be “hard, difficult and will take time,” Renault SA CEO Ghosn said.
- Russia and China are backing the US and Europe on the need for Iran to suspend its nuclear program, but stopped short of asking the matter to be taken to the UN Security Council.
- Janus Capital Group(JNS) started the Janus Adviser Long/Short Fund that uses investment strategies generally employed by hedge funds.

NY Times:
- Business travelers are paying less to fly on the nation’s airlines compared to a year ago.
- Many Shiite Muslims in the island kingdom of Bahrain want more freedom and they’re looking to Iraq as a potential model.
- Maryland’s law, passed last week, that requires large companies, including Wal-Mart Stores, to devote 8% of payroll to employee healthcare, may be hard to replicate in other states.

USA Today:
- The number of US troops wounded in Iraq fell 26% in 2005 compared with the previous year, suggesting insurgent attacks have declined in the face of stronger local security and democratic elections.

- New Jersey acting Governor Richard Codey signed a law yesterday banning smoking in bars, restaurants and most other public places in the state.

Denver Post:
- Denver’s murder rate in 2005 fell 34% to a three-year low.

Washington Post:
- Radical Islamic groups are seeking to unite all 1.2 billion Muslims by replacing national governments with caliphate, the theocratic institution that once ruled large parts of Africa, the Middle East and Europe.

Red Herring:
- Silicon Valley, home to 2.43 million, added jobs last year for the first time in half a decade, and the incomes of those working in the four-county northern California region rose for the second consecutive year, said a new study scheduled for release this week.

Financial Times:
- Cisco Systems(CSCO) plans to enter the consumer electronics industry.
- International Business Machines(IBM) has held talks to acquire a stake in Satyam Computer Services(SAY), India’s fourth-largest software services company.

- British Prime Minister Tony Blair would make a “good” secretary general of the United Nations, citing former US President Bill Clinton.

Sunday Times:
- Owners of Burger King may sell shares of the second-biggest US hamburger chain in an IPO that values the company at $2.5 billion.

Iran Daily:
- Iran will continue its nuclear program even if the Islamic Republic is referred to the UN Security Council, citing Iranian President Ahmadinejad.

- The German government expects the economy to grow 1.4% this year, less than the 1.8% that Economic Minister Glos had previously suggested.

Weekend Recommendations
- Had positive comments on (PH) and (AAPL).

Goldman Sachs:
- Reiterated Outperform on (MSFT), (STN), (LVS) and (HD).

Night Trading
Asian indices are -.50% to +.50% on average.
S&P 500 indicated +.04%.
NASDAQ 100 indicated +.09%.

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

Upcoming Splits
(CWTR) 3-for-2
(LKQX) 2-for-1
(PZZA) 2-for-1
(TALX) 3-for-2

Economic Releases
8:30 am EST
- Empire Manufacturing for January is estimates to fall to 21.0 versus a reading of 28.7 in December.

9:15 am EST
- Industrial Production for December is estimated to rise .5% versus a .7% increase in November.
- Capacity Utilization for December is estimated to rise to 80.5% versus 80.2% in November.

BOTTOM LINE: Asian Indices are mixed as commodity producing companies in the region rise and exporters fall. I expect US stocks to open modestly higher and to fall modestly into the afternoon, finishing mixed. The Portfolio is 75% net long heading into the week.

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