Tuesday, December 26, 2006

Tuesday Watch

Weekend Headlines
Bloomberg:
- US retail sales rose 23% on the weekend before Christmas as consumers swarmed stores for last-minute gift shopping. Dec. 23 was probably the second biggest shopping day of the year, with sales of about $8.72 billion, research firm ShopperTrak RCT said.
- US retail sales may rise 5% this holiday season, above the 4.6% average rated during the last 10 years, boosted by consumer who put off buying gifts and took advantage of this year’s extra shopping day before Christmas.
- The United Nations Security Council voted 15-0 to impose sanctions on Iran for its nuclear program for the first time, including a ban on acquisition of materials and technology that might be used to build an atomic bomb.
- The US dollar may strengthen on speculation reports this week will show the US housing market is stabilizing.
- Toyota Motor(TM) raised its production last month as demand for its small cars rose in North America.
- Sharp Corp., Japan’s largest maker of liquid-crystal displays and mobile phones, will double production of large-sized LCD screens in January, two months ahead of schedule, to meet demand for flat-panel televisions.
- US Treasuries fell for a third week, pushing yields on 10-year notes to the highest in more than a month, as reports showed strength in consumer confidence and housing construction.
- CBS Corp.(CBS) ignored warning signs that singer Janet Jackson might expose her breast during the 2004 Super Bowl half-time show, the FCC told an appeals court. The FCC, responding to a CBS appeal of its $550,000 regulatory fine, said the tv broadcaster should pay the penalty for airing indecent material at a time when children might be watching. “CBS was itself at fault because the network consciously and deliberately chose not to take reasonable precautions to prevent the broadcast of indecent material,” the FCC said.
- The yen fell after government reports on inflation and spending suggested the Bank of Japan will keep interest rates on hold at a policy meeting next month.
- Ethiopian forces attacked positions within 100 miles from Mogadishu, hours after Prime Minister Zenawi said he is being forced into war with Somalia, where Islamic militants have taken power.
- Crude oil is rising only .30 after Iran said it will defy United Nations sanctions and pursue nuclear research.
- Copper may fall by $1,000 a metric ton in the first quarter next year on concern slower economic growth in the US and falling imports by China may damp demand for the metal, according to the Great Wall Futures Co.

Wall Street Journal:
- Liberty Media(LINTA) may seek to acquire a phone company to make newly bought DirectTV more competitive with cable companies’ high-speed Internet and phone packages.

NY Times:
- Amtrak, the US passenger railroad, may see its number of riders increase by 50% within 10 years, but it needs billions of dollars in federal and state investment in other railroads.
- The US government awarded $388 million to Mississippi, Louisiana, Texas and Alabama to develop better, more comfortable temporary housing for those people displaced by natural disasters.
- A new documentary is urging rappers and music executives to consider the effect that the often negative messages on violence, sexism and homophobia in hip-hop songs has on young fans. The film, “Hip Hop: Beyond Beats and Rhymes,” was made by Byron Hurt, a former Northeastern University football player who counseled male athletes on the treatment of woman, and will be aired on PBS in February.
- The prices of pelts, including beaver, mink and muskrat, have as much as tripled as annual sales of fur garments rise.
- US hospital employees who work for companies that do at least $5 million in Medicaid business annually will have to learn to detect fraud and report it to the government.

Washington Post:
- The bald eagle will be removed from the endangered species list by February, with the support of mainstream environmental groups. The eagle population, under protection from the Endangered Species Act, has rebounded 15-fold to more than 7,000 nesting pairs since dropping to 417 nesting pairs in 1963, citing the US Fish and Wildlife Service.
- The FDA will probably recommend this week that stores be allowed to sell products from cloned animals.

San Diego-Union Tribune:
- The number of cruise passengers departing from San Diego has almost tripled since 2000 as cruise prices drop and more customers seek vacations to destinations such as Mexico and Hawaii.

Seattle Times:
- Marijuana valued at $1.03 billion is grown annually in Washington, making it the state’s second largest cash crop next to apples.

San Jose Mercury News:
- The number of jobs in California’s Silicon Valley grew by the most in more than five years as technology firms hired workers while the housing –construction declines were less than in other parts of the state.

AP:
- Ford Motor(F) plans to invest $1 billion in six automotive plants in southeastern Michigan, including the Dearborn Truck and Wayne Assembly, in exchange for $151 million in tax incentives..
- The FBI failed to fully investigate whether Oklahoma City bombers Timothy McVeigh and Terry Nichols had help from foreign sources, citing a yet-to-be released report from the House International Relations Committee.

LA Times:
- Walt Disney(DIS), which sold more than 300 Disney Stores in North America to Children’s Place Retail Stores in 2004, will earn a profit from a licensing agreement as the stores’ sales rise.
- The US Environmental Protection Agency last week approved amendments adopted by California three years ago that allows carmakers to produce vehicles powered by hydrogen fuel cells.
Financial Times:
- Chapman Capital LLC, a Los Angeles-based hedge fund, is seeking a private investigator to monitor the private lives of company executives, citing a job advertisement on a NY web site.

Sunday Times:
- Tesco Plc, Britain’s biggest retailer, will sell electronics from Apple Computer(AAPL) such as the iPod music player. Tesco will initially target 12 stores for its so-called “Apple Zones,” displaying products like the Apple Mac computer.

El Pais:
- Google(GOOG) CEO Schmidt said that a project to sell advertising for US newspapers will work.

Shanghai Securities News:
- China National Petroleum is aiming for a 23% increase in natural gas output in 2007.

Weekend Recommendations
Barron's:
- Made positive comments on (TXT), (SSP), (ITT) and (BTU).

Night Trading
Asian indices are -.25% to +1.0% on average.
S&P 500 indicated n/a.
NASDAQ 100 indicated n/a.

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
Conference Calendar
Daily Stock Events
Macro Calls
Rasmussen Consumer/Investor Daily Indices
CNBC Guest Schedule

Earnings of Note
Company/Estimate
- None of note

Upcoming Splits
- None of note

Economic Releases
- None of note

BOTTOM LINE: Asian Indices are mostly higher, boosted by automaker and technology shares in the region. I expect US stocks to open mixed and to rally into the afternoon, finishing modestly higher. The Portfolio is 75% net long heading into the week.

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