Wednesday, January 31, 2007

Thursday Watch

Late-Night Headlines
- President Bush, making the first presidential visit to the NYSE during trading hours in more than two decades, said a four-year rally in stocks may continue if taxes don’t rise.
- The Iraqi government invited Syria, Iran and other neighboring states to come to Iraq in March to talk about ways to improve the country’s security, Iraq’s ambassador in Washington said.
- Nikko Cordial Corp. shares plunged as much as 17%, the biggest drop since the October 1987 stock market crash, after an inquiry implicated former executives in an accounting fraud that may cost Japan’s third-largest brokerage its stock market listing.
- The University of California and the University of Illinois will split a $500 million grant from BP Plc(BP), Europe’s second-largest oil company, to fund research into development of clean-burning biofuels.
- The yuan rose to its highest since China ended its fixed exchange rate in 2005 on speculation the central bank will seek to reward US Treasury Secretary Henry Paulson for heading off sanctions to force currency gains.
- The Senate moved toward approval of the first increase in the US minimum wage in a decade, voting 88-8 to complete work on the bill after eight days of debate. The measure includes $8.3 billion in tax breaks over 10 years for small businesses that lawmakers paid for in part by including a cap on deferred-compensation for top executives.

Financial Times:
- Sony Corp.(SNE) will announce deals with software providers and internet service providers in March to boost sales of its handheld PlayStation Portable games device, the company’s CFO said.

- Dow Jones(DJ) plans to offer the Wall Street Journal’s Web site in several languages and would consider buying the Financial Times if Pearson Plc put it up for sale, citing executive VP Gordon Crovitz.

Financial News:
- China needs a bullish stock market to absorb planned share sales by large state-owned enterprises on the mainland exchanges in 2007.

Wen Wei Po:
- China should consider imposing a windfall tax on property developers to curb over-investment in the housing market.

China Securities Journal:
- China may implement “big changes” to its foreign-exchange policy this year amid the balance of payments imbalance and excess cash in the banking system.

Late Buy/Sell Recommendations
- Reiterated Buy on (EL), raised target to $55.

- We continue to believe Google(GOOG) represents the best investment in the internet space. With shares trading at 28x '08 EPS, and EPS growing in excess of 35% over the next 3-5 years, we see considerable upside in buying GOOG at these levels.

Night Trading
Asian Indices are +.50% to +.75% on average.
S&P 500 indicated unch.
NASDAQ 100 indicated +.11%.

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
- (ADVS)/.06
- (ATK)/1.32
- (AMZN)/.21
- (BUD)/.25
- (APA)/1.60
- (ADM)/.60
- (AVID).57
- (BSX)/.11
- (CA)/.21
- (CELG)/.18
- (CERN)/.41
- (CLX)/.50
- (CMCSA)/.24
- (CVS)/.43
- (DLB)/.21
- (ERTS)/.57
- (XOM)/1.51
- (ILMN)/.30
- (IP)/.35
- (ISRG)/.51
- (MRO)/2.25
- (MNST)/.33
- (MYL)/.36
- (RTN)/.65
- (RGLD)/.19
- (TSG)/.44
- (STA)/1.42
- (UA)/.25
- (VLO)/1.37
- (YRCW)/1.00

Upcoming Splits
- None of note

Economic Releases
8:30 am EST
- Personal Income for December is estimated to rise .5% versus a .3% gain in November.
- Personal Spending for December is estimated to rise .7% versus a .5% increase in November.
- The PCE Core for December is estimated to rise .2% versus unch. in November.
- Initial Jobless Claims for last week are estimated to fall to 315K versus 325K the prior week.
- Continuing Claims are estimated to fall to 2469K versus 2484K prior.

10:00 am EST
- Pending Home Sales for December are estimated to rise .9% versus a -.5% decline in November.
- ISM Manufacturing for January is estimated to rise to 51.7 versus a reading of 51.4 in December.
- ISM Prices Paid for January is estimated to fall to 47.0 versus a reading of 47.5 in December.

- Total Vehicle Sales for January are estimated to fall to 16.7M versus 16.8M in December.
- Domestic Vehicle Sales for January are estimated at 12.7M versus 12.7M in December.

BOTTOM LINE: Asian indices are higher, boosted by technology and automaker 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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