- Texas Pacific Group and Hellman & Friedman LLC agreed to buy Intergraph Corp.(INGR) for $1.3 billion because of increasing demand for mapping software for homeland security, and oil and gas exploration.
- Chevron Corp.(CVX) is poised to overtake ExxonMobil(XOM) as one of the world’s top five liquefied natural gas producers within a decade when it overcomes environmental objections to a $10.4 billion project in Australia.
- Microsoft Corp.(MSFT) paid out performance bonuses totaling almost $1 billion in stock to 900 of its top employees.
- US Treasury Secretary Henry Paulson, in office seven weeks, is about to ease into the first task of his tenure: persuading China to increase the value of its currency.
- Goldman Sachs Group(GS) cut its forecasts for South Korea’s economic growth this year and next as cooling domestic demand curbs Asia’s third-largest economy.
- Sales of Eli Lilly’s(LLY) Cymbalta antidepressant climbed 92% in the second quarter and CEO Sidney Taurel expects “much more” growth as the drug is sold in more countries and approved to treat a wider range of illnesses.
- Bristol-Myers(BMY) and Sanofi-Aventis SA won a bid to stop generic-drug maker Apotex Inc. from selling its copies of the Plavix heart pill, the world’s second-biggest selling medicine.
- Asahi Tec Corp., a Japanese auto-parts maker controlled by Ripplewood Holdings LLC, may buy US component maker Metaldyne Corp. to help it expand in the world’s biggest auto market.
- Analog Devices(ADI) announced it has collaborated with Legend Silicon Corp., a leading supplier of silicon solutions for broadband wireless broadcasting, to accelerate the development of mobile TV receivers for China with the industry’s first digital TV standard-compliant receiver solution.
- Shares of Aluminum Corp. of China(ACH) fell as much as 4% after the world’s second-biggest alumina producer said it will cut the price of the raw material used to make aluminum for the second time in a month.
- Natural Gas is falling another 3.5% to cycle lows as speculators trim bets on production disruptions.
Wall Street Journal:
- Las Vegas Sands(LVS) plans to spend as much as $15 billion to build an island resort in southern China.
- Electronic Arts(ERTS) said buyers spent $100 million on the video game “Madden NFL 2007” in its first week on the market, an opening-week sales record for the title.
- Technology companies worldwide may see more merger activity as market conditions make the prospect of leveraged buyouts more appealing.
- China will form industry negotiation groups to secure lower prices for commodities. China will establish the groups to make sure it has a bigger say in price talks for oil, copper and aluminum, citing Wei Jianguo, a vice minister at the Ministry of Commerce.
- Goldman Sachs Group(GS) will seek to raise $1 billion from its employees to partly finance a $10 billion private equity fund.
Late Buy/Sell Recommendations
- Investors should reduce bets on how much the yen will gain against the dollar and euro this year on evidence Japan’s economic growth is slowing.
- Reiterated Buy on (SBUX), target $40.
- After an unusually busy August, we anticipate events in September will provide additional fuel for the rally in semiconductor stocks. Factoring in the benefit of falling oil prices, the potential for a cessation of interest rate hikes, and solid back-to-school results thus far, we reiterate our stance that the SOXX is poised to reach 480-520.
- Shares of AMR Corp.(AMR), parent of American Airlines, could rise 68% in the next 12 months, citing Daniel McKenzie of CSFB.
Asian Indices are -.25% to +.25% on average.
S&P 500 indicated unch.
NASDAQ 100 indicated +.09%.
US AM Market Call
NASDAQ 100 Pre-Market Indicator/Heat Map
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Earnings of Note
- (CD) 1-for-10
- (CHAP) 2-for-1
8:30 am EST
- The Change in Non-farm Payrolls for August is estimated at 125K versus 113K in July.
- The Change in Manufacturing Payrolls for August is estimated at 0K versus -15K in July.
- The Unemployment Rate for August is estimated to fall to 4.7% versus 4.8% in July.
- Average Hourly Earnings for August are estimated to rise .3% versus a .4% gain in July.
9:45 am EST
- The Final Univ. of Mich. Consumer Confidence reading for August is estimated to rise to 79.2 versus a prior estimate of 78.7.
10:00 am EST
- Construction Spending for July is estimated to fall .1% versus a .3% increase in June.
- ISM Manufacturing for August is estimated to fall to 54.5 versus a reading of 54.7 in July.
- Pending Home Sales for July are estimated to fall 1.5% versus a .4% gain in June.
- Total Vehicle Sales for August are estimated to fall to 16.5M versus 17.2M in July.
- Domestic Vehicle Sales for August are estimated to fall to 12.8M versus 13.2M in July.
BOTTOM LINE: Asian indices are mixed, as gains in technology stocks are being offset by losses in consumer stocks in the region. I expect US equities to open mixed and to rally into the afternoon, finishing modestly higher. The Portfolio is 100% net long heading into the day.