Tuesday, February 13, 2007

Wednesday Watch

Late-Night Headlines
- The deterioration of the subprime mortgage market will have limited impact on Lehman Brothers(LEH), Bear Stearns(BSC), Citigroup(C) and JPMorgan Chase(JPM), according to Merrill Lynch(MER). “We just don’t think the losses in these will really create any systemic risk at all,” said Scott Simon, head of mortgage- and asset-backed securities investments at Pacific Investment Management.
- JPMorgan Securities Japan, the most bearish among Japan’s primary bond dealers in December, trimmed its forecast for declines as the chance of a central bank interest-rate increase next week faded.
- Moqtada al-Sadr, the anti-US Shiite Muslim cleric, has fled Iraq for Iran. Bush administration officials said there were fractures within al-Sadr’s militia and that he feared for his life.
- Nine US-built vehicles made by General Motors(GM), Ford Motor(F) and DaimlerChrysler AG(DCX) topped US government crash safety tests this year.
- Applied Materials(AMAT), the world’s largest maker of semiconductor equipment, said first-quarter profit more than doubled after it delivered more machines to memory-chip companies. The shares surged 4.6% after-hours.
- Shares of Sony Corp.(SNE) rose after the company said it will scale back spending on semiconductors to help the chip business turn profitable next fiscal year.
- Ilaria Capua, a virologist, and other health experts say the alarmist headlines on bird flu killing some turkeys in the UK last week was just a lot of gobble. “Many more people have been struck by lighting” than killed by the deadly H5N1 strain of avian influenza, say Capua, whose laboratory in Padua, Italy, handles some flu screening for the Paris-based World Organization for Animal Health. “The public should be well informed but not prepared for the worst.”
- Hindustan Copper Ltd., the biggest state-owned producer of the metal in India, may spend as much as $300 million extending a mine underground to take advantage elevated copper prices.
- Oil refiners including Chevron Corp.(CVX) and Marathon Oil Corp.(MRO) share a common vision with DaimlerChrysler AG(DCX), one of increasing US demand for diesel as drivers opt for more fuel-efficient vehicles.
- Consumer inflation in China slowed to 2.2% in January versus estimates of a 2.6% rise and a 2.8% gain in December.

Wall Street Journal:
- Jones Lang LaSalle Inc.(JLL) is closing its residential agency business in Shanghai after 12 years of operations because of intense competition in China, citing Managing Director Anthony Couse.

Financial Times:
- China regulations introduced in September on takeovers of domestic firms by overseas investors may hinder venture capital investment, citing accountant Ernst & Young.

Korea Economic Daily:
- Matsushita Electric Industrial may buy new or existing shares in LG.Philips LCD to seek an alliance in production of liquid-crystal displays.

Late Buy/Sell Recommendations
- Reiterated Buy on (BBY), target $63. BBY is likely seeing better than expected sales of Vista-based PC’s since their introduction on January 31st. Due to the overwhelming demand for the Nintendo Wii, BBY is struggling to keep them in stock.

Night Trading
Asian Indices are +.50% to +1.25% on average.
S&P 500 indicated +.01%.
NASDAQ 100 indicated +.06%.

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
- (AGP)/.34
- (APPB)/.23
- (BIDU)/.35
- (CMG)/.27
- (KO)/.50
- (DE)/.81
- (ESLR)/-.08
- (GRMN)/.58
- (GENZ)/.75
- (GES)/.90
- (JNY)/.46
- (MAS)/.37
- (MDCO)/.09
- (MGM)/.48
- (NTAP)/.28
- (NTRI)/.51
- (ODP)/.52
- (OSI)/.29
- (PFCB)/.26
- (PGN)/.53
- (RIG)/1.18

Upcoming Splits
- None of note

Economic Releases
8:30 am EST
- Advance Retail Sales for January are estimated to rise .3% versus a .9% gain in December.
- Retail Sales Less Autos for January are estimated to rise .4% versus a 1.0% gain in December.

10:00 am EST
- Business Inventories for December are estimated to remain unch. versus a .4% gain in November.

10:30 am EST
- Bloomberg consensus estimates call for a crude oil build of 1,000,000 barrels versus a -449,000 barrel drawdown the prior week. Gasoline supplies are expected to rise by 2,000,000 barrels versus a 2,600,000 barrel increase the prior week. Distillate Inventories are expected fall by -4,000,000 barrels versus a -3,632,000 barrel decline the prior week. Refinery Utilization is estimated to rise .25% versus a .28% increase the prior week.

BOTTOM LINE: Asian indices are 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 75% net long heading into the day.

No comments: