Sunday, July 30, 2006

Monday Watch

Weekend Headlines
Bloomberg:
- Israel suspended air strikes in southern Lebanon for 48 ours while it investigates the bombing yesterday of the Lebanese town of Qana that killed at least 54 people.
- The House voted to boost the minimum wage in Republican-backed legislation that also cuts $310 billion in taxes.
- One person was killed and five were wounded by gunfire at the Jewish Federation Building in downtown Seattle. The suspect told building staff members before he began shooting that he was “a Muslim American” who was “angry at Israel.”
- US 10-year Treasuries rose for a fifth straight week, pushing yields below 5%, as reports showing the US economy slowed fueled speculation the Fed will stop raising interest rates next month.
- Wal-Mart Stores(WMT) said July same-store sales in the US rose about 2.4% versus estimates of a 1-3% gain.
- The NY Times endorsed Ned Lamont over three-term US Senator Joe Lieberman in Connecticut’s Aug. 8 Democratic primary, criticizing the incumbent for a “warped version of bipartisanship,” including support of President Bush on national security issues.
- Nanotech is luring bankers and venture capitalists with promise of a $1 trillion market.
- SanDisk(SNDK), the world’s largest maker of memory cards for portable electronics, agreed to buy M-Systems Flash(FLSH) for about $1.3 billion in stock to add storage products for mobile phones.
- Crude oil traded near a one-week low in NY on signs of slowing global growth and as Israel called a temporary halt to air strikes in Lebanon.

Barron’s:
- China’s expanding economy ay stumble amid concerns about an aging population, lax environmental protections and increasing corruption.

NY Times:
- Apple Computer(AAPL) won some intellectual property protections from French judges, who declared unconstitutional a law to force companies to make online music playable on any device.
- A federal grand jury is investigating the leak of classified information about US intelligence programs and subpoenaed a former National Security Agency employee.
- Netgear Inc.(NTGR) and three other manufacturers will begin shipping wireless fidelity, or Wi-Fi, phones in September that are compatible with Skype Technologies SA’s Internet calling service.
- The two major US political parties, Democrats and Republicans, are now more divided over the Iraq War than their members ever were during the Vietnam War, citing pollsters. 75% of Republicans in the latest NY Times/CBS poll supported the war in Iraq, while only 24% of Democrats did.
- Larry Sonsini and his law firm, Wilson Sopnsini Goodrich & Rosati, represented “just under 50%” of the Silicon Valley companies implicated in the probe of backdating stock options.

Time Magazine:
- Senator John McCain’s son has joined the Marine Corps and could be sent to Iraq.

Washington Post:
- The Bush administration is waging a fight against bioterrorism by authorizing realistic tests of some of the pathogens and tactics that might be used in an attack.
- US Senate Majority Leader Frist needs to line up 60 votes to overcome Democrats’ threats of a filibuster over reducing the death tax.

The Economist:
- High-tech entrepreneurs recently unveiled a sporty electric car.

Crain’s Chicago Business:
- US automobile insurers such as Allstate Corp.(ALL) and State Farm Insurance Cos. have seen accident claims drop for four straight years, helping them achieve record profits. Insurance companies are baffled by the decline. The advance several possible reasons: Cars are safer, the baby-boom generation has reached the safest driving age, 45-64, or drivers aren’t filing claims for “fender-benders.”

LA Times Times:
- Viacom’s Paramount Pictures unit told Washington lawmakers this spring that director Oliver Stone’s film on the 9/11 terrorist attacks, “World Trade Center,” doesn’t promote conspiracy theories.

Financial Express:
- Property prices in India may drop 10% over an unspecified period as demand slows, citing officials from three property developers.

Spiegel:
- BASF CEO Hambrecht said the economic outlook for the remainder of the year is “very positive” and business in its markets around the world is “good.” The head of the world’s biggest chemical maker said he’s “fairly certain” the price of oil will decline as investments in the industry start to pay off.

Neue Zuercher Zeitung:
- The situation in Iraq is “not as bad as it’s portrayed,” and the number of car bombings has declined since last year, citing Iraqi President Jalal Talabani. The number of car bombs in Baghdad has gone down from an average of 14/day last year to 2-4/day this year.

The Globe and Mail:
- Grupo Mexico SA may bid for Phelps Dodge(PD), complicating Phelps Dodge’s bid for Inco Ltd.(N).

Kydo News:
- The United States told Japan that North Korea’s long-range Taepodong-2 missile, test-fired on July 5, disintegrated within 1.5 Km of the launch pad, flying far less than Japan had estimated.

AFP:
- The head of Iran’s Revolutionary Guards urged his troops to prepare “to get even” with Israel and the US.

China Securities Journal:
- Short selling and margin trading on the Shanghai Stock Exchange may reach up to $1.5 billion when a trial program starts on Aug. 1.

Weekend Recommendations
Barron's:
- Had positive comments on (EP), (DNR), (RRC), (TTEK) and (COH).

Night Trading
Asian indices are unch. to +1.0% on average.
S&P 500 indicated -.09%
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
- (AG)/.55
- (AVP)/.35
- (CELL)/.16
- (CMG)/.25
- (CMVT)/.19
- (EXC)/.80
- (FRE)/1.17
- (HUM)/.35
- (ISSX)/.22
- (IRBT)/-.20
- (JNPR)/.19
- (MET)/1.14
- (TSN)/-.03
- (VMC)/1.28
- (WFMI)/.34

Upcoming Splits
- None of note

Economic Releases
10:00 am EST
- Chicago Purchasing Manager for July is estimated to fall to 56.0 versus a reading of 56.5 in June.

BOTTOM LINE: Asian Indices are higher, boosted by technology shares in the region. I expect US stocks to open mixed and to rally into the afternoon, finishing modestly higher. The Portfolio is 100% net long heading into the week.

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