Tuesday, March 06, 2007

Wednesday Watch

Late-Night Headlines
Bloomberg:
- The US and North Korea are on the “right track” for normalizing relations, Assistant Secretary of State Christopher Hill said after completing eight hours of talks with North Korean Vice Foreign Minister Kim Kye Gwan.
- Australia’s central bank today kept its benchmark interest rate unchanged at a six-year high amid signs inflation and the global economy are slowing.
- Rio Tinto Group(ETP), the world’s second-largest miner by market value, signaled to analysts it was in “no rush” to acquire assets, Credit Suisse Group analysts said.
- Australia’s economy grew 1% from the third quarter, when it expanded .3%. Estimates were for a .5% gain.
- The perceived risk of owning low-rated sub-prime mortgage bonds decreased for a fourth straight day. An index of credit-default swaps on 20 securities rated BBB- and created in the second half of 2006 rose about 3% to 71.14 yesterday, according to Markit Group Ltd. The index hit a low of 62.25 five days ago.

Late Buy/Sell Recommendations
Citgroup:
- Reiterated Buy on (EBAY), target $39.
- A number of homebuilders presented at out industrial manufacturing conference. Overall, the builders did in fact indicate that cancellation rates have dropped in recent months, which is an encouraging sign. Hovnanian(HOV), Beazer(BZH) and MDC Holdings(MDC) indicated that they have started to see signs of stabilization in their home prices net of all incentives. Intriguingly, Beazer also indicated that it was attempting to implement modest price increases in several locations and was finding that doing so helped to create a sense of urgency on the part of home buyers. Finally, Meritage Homes(MTH) expects cancellation rates to drop “dramatically” in 1Q07, based on data from the first two months of the year.

Night Trading
Asian Indices are +1.0% to +1.50% on average.
S&P 500 indicated -.10%.
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
- (AEOS)/.66
- (BJ)/.66
- (FLML)/-.38
- (FL)/.68
- (GCO)/1.31
- (HDL)/.64
- (MATK)/.12
- (MW)/.77
- (MIK)/1.10
- (SKS)/.22
- (TLB)/.00
- (TIVO)/-.36

Upcoming Splits
- None of note

Economic Releases
8:15 am EST
- ADP Employment Change for December is estimated at 100,000 versus 126K in January.

10:30 am EST
- Bloomberg consensus estimates call for a weekly crude oil build of 1,800,000 barrels versus a 1,421,000 barrel build the prior week. Gasoline supplies are expected to fall by -1,500,000 barrels versus a -1,940,000 barrel decline the prior week. Distillate inventories are estimated to fall by -2,750,000 barrels versus a -3,787,000 barrel drawdown the prior week. Finally, Refinery Utilization is expected to fall by -.30% versus a .76% increase the prior week.

2:00 pm EST
- The Fed’s Beige Book

3:00 pm EST
- Consumer Credit for January is estimated at $7.0 billion versus $6.0 billion in December.

BOTTOM LINE: Asian indices are higher, boosted by technology and metal shares in the region. I expect US equities to open modestly lower and to rally into the afternoon, finishing modestly higher. The Portfolio is 100% net long heading into the day.

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