Thursday, January 25, 2007

Thursday Watch

Late-Night Headlines
- China’s economy grew 10.4% in the fourth quarter, down from 11.5% in the second quarter and 10.6% in the third quarter. “China’s growth is exceptionally high, but it’s unbalanced” said Qu Hongbin, chief China economist at HSBC Holdings Plc in Hong Kong. “The big challenge is to make growth more sustainable and avoiding a hard landing.”
- South Korea’s economy slowed more than expected in the fourth quarter as exports fell, business investment cooled and consumer spending remained weak. Asia’s third-largest economy grew .8% in 4Q, down from growth of 1.1% in 3Q.
- The US plans to offer $770 million in aid to Lebanon to help shore up the country and its pro-Western government, Secretary of State Rice said.
- “American Idol,” the most popular show in primetime television, withstood last week’s criticism over judging and returned last night with the third-largest audience for an entertainment show this season with about 32.6 million viewers.
- The US government would start raising fuel-efficiency standards for cars within 3 years and for light trucks such as sport-utility vehicles two years later, under a plan by President Bush’s administration. The proposal would reduce gasoline use 5% during the next 10 years, Transportation Secretary Mary Peters said. “The president believes we can reduce our gasoline consumption by up to 8.5 billion gallons by 2017, which amounts to a savings of about 1 million barrels of oil a day.”
- SEC officials, financial advisers and attorneys plan to review whether new eligibility thresholds for investing in hedge funds go far enough to help regulate the $1.3 trillion industry.
- Nasdaq Stock Market(NDAQ) CEO Greifeld rebuffed the London Stock Exchange’s challenge to raise his offer for the UK bourse before it expires at the end of this week.
- Jiangxi Copper Co., China’s biggest producer of the metal, said it will boost production capacity 25% this year.
- PT Aneka Tambang, Indonesia’s second-largest nickel miner, said it may incrase output of the metal by as much as 52% this year.
- Imports of crude oil by Japan, the world’s largest consumer of oil after the US and China, fell for an eighth month in December from a year earlier.
- Hedge funds are fleeing the tax haven of the Virgin Islands, hounded by IRS.

Wall Street Journal:
- Home Depot(HD) CEO Frank Blake rejected the company’s first compensation package as too rich, in contrast to predecessor Robert Nardelli who came under fire for his pay. Blake preferred equity grants related to performance measures, a salary of less than $1 million an a total package worth less than what Lowe’s Cos. CEO Robert Niblock is paid.

Commercial Times:
- Texas Pacific Group, KKR and Silver Lake Partners, are among buyout funds interested in buying Taiwanese chipmaker United Microelectronics.

- Russia and Japan plan to increase joint cooperation in the energy sector after completing the first round of talks.

Xinhua News Agency:
- Chinese geologists have discovered copper deposits that contain 26.8 million tons of the metal, citing Zhang Hongtao, deputy head of the China Geological Survey. The mines are expected to boost China’s copper mine production by 33%, easing the nation’s reliance on imports.

Late Buy/Sell Recommendations
- Upgraded (GLW) to Buy, target $29.
- The Congressional Budget office projected the US government budget deficit will drop 31% to $172 billion, or 1.3% of the economy, for the 2007 fiscal year. This is well below the August estimate of $286 billion. The 40-year average for the US budget deficit is 2.3% of GDP.

Morgan Stanley:
- Rated (AFFY) Overweight, target $47.

Night Trading
Asian Indices are -.25% to +.25% on average.
S&P 500 indicated -.03%.
NASDAQ 100 indicated +.21%.

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/EPS Estimate
- (AGR)/.22
- (AMGN)/.94
- (T)/.59
- (BAX)/.61
- (BZH)/.26
- (BEBE)/.28
- (BDX)/.92
- (BJS)/.96
- (BMY)/.16
- (ELY)/-.12
- (CAH)/.77
- (DOW)/.93
- (DJ)/.43
- (EMN)/.93
- (ELX)/.27
- (FII)/.48
- (F)/-1.00
- (BEN)/1.51
- (HAL)/.61
- (HAR)/1.20
- (HIG)/2.26
- (IMCL)/.41
- (IRF)/.54
- (KMB)/1.02
- (LEA)/-.19
- (LM)/1.13
- (LMT)/1.45
- (MEE)/1.08
- (MHP)/.59
- (MCK)/.68
- (MSFT)/.23
- (NOC)/1.26
- (NUE)/1.13
- (BTU)/.63
- (RHI)/.44
- (SHW)/.67
- (SO)/.23
- (STJ)/.39
- (SWK)/.98
- (SYK)/.55
- (SY)/.46
- (WDC)/.53
- (ZOLL)/.19

Upcoming Splits
- None of note

Economic Releases
8:30 am EST
- Initial Jobless Claims for last week are estimated to rise to 310K versus 290K the prior week.
- Continuing Claims are estimated to fall to 2480K versus 2530K prior.

10:00 am EST
- Existing Home Sales for December are estimated to fall to 6.25M versus 6.28M in November.

BOTTOM LINE: Asian indices are mixed as strength in technology shares is being offset by weakness in financial shares 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.

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