Monday, February 20, 2006

Tuesday Watch

Weekend Headlines
- The United Arab Emirates reassured US senators that Dubai’s takeover of the US port assets of Peninsula & Oriental Steam Navigation Co. is not a threat to national security.
- NBC Universal, the no. 3 US network, may be forced to give advertisers free or discounted air time to make up for low viewership after its Olympic coverage twice failed to gain top ratings this week.
- Abu Dhabi’s Mubadala Development Co. will partner with Dubai Aluminum Co. Ltd. to build the world’s largest aluminum plan for $6 billion.
- Pakistani cleric Mohammed Yousaf Qureshi offered a $1 million bounty to 1,000 people for killing the Denmark cartoonist who drew caricatures of the prophet Mohammad.
- Harvard University President Lawrence Summers may be on the way out, as the governing board considers calls for his resignation.
- The virus that causes bird flu hasn’t become more easily transmissible to humans as the disease spreads in birds across Europe, the World Health Organization said.
- President Bush said the US needs to reduce crude oil imports and diversify its energy consumption so the world’s largest economy isn’t “held hostage” by oil-rich countries that may not be allies.
- Oil rose the most in 4 weeks in NY as Nigerian rebels threatened more attacks after cutting output from Africa’s largest producer by about 20%.

Wall Street Journal:
- McDonald’s(MCD) more expensive items such as the $4.50 California Cobb salad have been helping the company’s earnings by increasing customers’ average bill.
- McDonald’s(MCD) had at least three lawsuits filed against it after it disclosed last week its French fires contain wheat and milk ingredients that may cause problems for people sensitive to these substances.
- Coca-Cola(KO) is headed for a legal battle with 54 of its bottlers over a new distribution system at Wal-Mart(WMT).
- Fidelity Investments and a hedge fund group last week offered to buy any shares in USG’s(USG) proposed $1.8 billion stock offering not purchased by current shareholders, underbidding Warren Buffett’s Berkshire Hathaway.

- Retail investor assets rose 18% to $678 billion last year in separately managed accounts, customized investment vehicles that permit direct ownership of a bundle of securities.

- Here is a list of America’s most shareholder-friendly companies for 2006.

NY Times:
- Temporary diabetes among pregnant women, known as gestational diabetes, has increased almost 50% in the past decade in New York.
- The newfound wealth coming to the African nation of Chad from a $2.4 billion oil pipeline, backed by the World Bank to fight poverty, is being diverted by the government in part to the army.
- American Indians are becoming increasingly involved in trafficking high-potency marijuana, Ecstasy, cocaine and methamphetamine on US reservations, citing court records, federal and local prosecutors and tribal members.
- Day-trading, the fad that contributed to the bubble in the 1990s, is becoming popular in Japan, embraced by students, and housewives.
- US suburban homeowners doubled their expenditure on garage organizing products to $800 million last year compared with 2000.

LA Times:
- The FDIC’s boost in insurance coverage may help make bank accounts an attractive choice for retirement funds.

- Nigerian protests over caricatures of the prophet Mohammad erupted into violence that killed 15 people and resulted in at least 15 Christian churches being burned.
- Louisiana Governor Kathleen Blanco laid out a $7.5 billion plan to fund rebuilding, moving or buying out residents whose homes were destroyed or remain damaged by hurricanes Katrina or Rita.

Seattle Times:
- Microsoft’s executive in charge of its MSN online division is taking a leave of absence and may or may not return to the company.

Financial Times:
- Sony Corp.(SNE) may have to delay the introduction of its new PlayStation 3 video game console by six to 12 months, citing Merrill Lynch analysts.
- The European Union will introduce anti-dumping tax duties of around 20% on shoe imports from China and Vietnam.
- US companies have so far borrowed $98.5 billion with investment grade bonds this year to fund an increase in mergers and acquisitions.
- National Grid Plc, manager of the UK power grid, may buy KeySpan Corp.(KSE), the biggest natural-gas seller in the US north east.

Sunday Telegraph:
- The UK should introduce Sharia law in some parts of the country, according to 40% of British Muslims surveyed.

- Microsoft(MSFT) has developed a Skype-style free Internet voice service that challenges operators such as Vodafone Group Plc(VOD), citing CEO Ballmer.

Xinhua News Agency:
- Coca-Cola’s(KO) sales in China expanded 22% last year as the company focused on non-carbonated drinks.

China Daily:
- China’s sales conducted over the Internet rose 58% last year to $69 billion.

Times of India:
- An official in the northern Indian state of Uttar Pradesh offered $11.4 million to anyone who beheads the Denmark cartoonist who drew caricatures of the prophet Muhammad.

El Moudjahid:
- OPEC may leave its quotas for crude-oil production unchanged because prices are high, citing Algeria’s oil minister.

Middle East Economic Digest:
- Saudi Arabia will invite international companies to bid for a contract in the second quarter to build production facilities to pump 100,000 barrels a day of oil from the Nuayyim oilfield.

Weekend Recommendations
- Had positive comments on (TOL), (ALSK) and (TXRH).

Goldman Sachs:
- Reiterated Outperform on (K) and (EBAY).
- Reiterated Underperform on (SIRI) and (MCCC).

Night Trading
Asian indices are -.25% to +.75% on average.
S&P 500 indicated -.08%.
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

Upcoming Splits
(AET) 2-for-1
(BRCM) 3-for-2
(FCFS) 2-for-1
(IMGC) 3-for-2
(ITT) 2-for-1

Economic Releases
10:00 am EST
- Leading Indicators for January are estimated to rise .6% versus a .1% increase in December.

2:00 pm EST
- Minutes of Jan. 31 FOMC Meeting

BOTTOM LINE: Asian Indices are mostly higher, boosted by gains in financial shares in the region. I expect US stocks to open modestly lower and to rise later in the afternoon, finishing modestly higher. The Portfolio is 100% net long heading into the week.

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