Thursday, February 22, 2007

Friday Watch

Late-Night Headlines
- The yen headed for the biggest weekly drop in more than two years against the euro after the Bank of Japan suggested it won’t accelerate the pace of interest-rate increases this year.
- H&R Block(HRB) posted a fiscal third-quarter after setting aside an additional $111 million to cover losses on sub-prime loans made by its Option One mortgage business. The stock surged 4.4% after-hours.
- Osaka-based Sanyo Electric Co., bailed out last year by Goldman Sachs(GS) and two Japanese banks, said regulators are investigating whether it failed to fully disclose losses. The shares plunged 29% in Tokyo trading.
- South Korean President Roh Moo Hyun said he will leave the ruling Uri Party this month to help members settle conflicts before December’s presidential election.
- Gold sold by mining companies in forward contracts in 2006 fell the most in two years, Mitsui & Co. said in its annual global survey of 118 producers. Sales dropped 13.4 million ounces, or 25%, to 40.2 million ounces, led by a reduction in hedges by Barrick Gold Corp.(ABX) “Barrick continues to set the pace in de-hedging,” said Edel Tully, head of precious metals research at Mitsui. “While de-hedging in 2007 is not expected to be of a similar magnitude, little appetite exists for new hedging.”
- Exxon Mobil(XOM) will take a 10% stake in Qatar’s Barzan gas field.
- Tractor Supply(TSCO), a retail farm-supply chain with 676 stores in 37 states, said it plans to buy back as much as $200 million of common stock over a three-year period.
- New government rules limiting emissions of carbon-dioxide aren’t likely to hurt Canadian oil-sands projects, according to Suncor Energy(SU), the world’s second-largest producer of oil from the tar-like deposits.
- Billionaire investor Carl Icahn says a preference for “out-of-favor” companies led him to buy shares of Lear Corp.(LEA) and WCI Communities(WCI), burning so-called short sellers who bet the stocks would fall.
- The Bank of Japan will gradually raise interest rates as the economy expands, Governor Toshihiko Fukui said, two days after his policy board increased the key lending rate to .5% to prevent investment bubbles.
- Billionaire Warren Buffett said Berkshire Hathaway will keep its stake in PetroChina Co., rejecting appeals to sell because of China’s investments in Sudan, accused by the US of human rights abuses.
- Rio Tinto Group(RTP) will invest $2 billion in Indonesia for its first nickel-mining project in the country.

Wall Street Journal:
- DaimlerChrysler AG’s(DCX) Chrysler unit plans to spend as much as $6 billion a year to develop new products.

- Billionaire real estate mogul Sam Zell, who just sold Equity Office Properties, the nation's largest office landlord, to Blackstone for $39 billion, said the office property market is still going strong and the broader housing market is also in good shape. "The overall market is much better than the press portrays it as." Zell said.

- The UK government will say Feb. 26 it plans to deploy over 1,000 extra troops and equipment to Afghanistan.

Late Buy/Sell Recommendations
Business Week:
- UnitedHealth Group(UNH) was popular with analysts before Warren Buffett’s Berkshire Hathway(BRK/A) bought 1 million shares of the largest US medical insurer earlier this month. Sarat Sethi of investment firm Douglas C. Lande & Assoc. said the company should trade at $70.
- Epix Pharmaceuticals(EPIX) shares may more than double in a year, citing George Fulop of Needham & Co.

Night Trading
Asian Indices are -.50% to +.25% on average.
S&P 500 indicated -.05%.
NASDAQ 100 indicated -.03%.

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
- (CCO)/.16
- (DPZ)/.49
- (LOW)/.37
- (GAS)/.97
- (CCU)/.40
- (CTV)/.37
- (DDS)/1.08

Upcoming Splits
- None of note

Economic Releases
- None of note

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