Moday Watch

Weekend Headlines
Bloomberg:
- Investors are preparing to snap up shares of telephone, health-care and computer companies after last week’s $2.1 trillion global stock market rout left US equities the cheapest in 16 years.
- Schroder, ABN, Wells Load Up on Stocks in Worst Rout Since 2002.
- Barclays Plc shares may rise this week after reports that ABN Amro Holding NV’s board will withdraw its support for a bid from the UK’s third-largest bank.
- Doosan Infracore Co., South Korea's largest construction-equipment maker, said it signed an agreement to buy a unit of Ingersoll-Rand Co. for $4.9 billion to expand its overseas business.
- New York state voters say Democratic Governor Eliot Spitzer should testify under oath about how much he knew of his staff’s actions to use state police in an effort to spy on a political opponent, according to a WNBC/Marist poll.
- Iraq won its first Asian Cup soccer title by beating three-time champion Saudi Arabia 1-0 in today’s final in Indonesia.
- US Treasury Secretary Henry Paulson, rejecting claims from Congress that he’s too soft on China, said negotiations rather than sanctions have led to a faster appreciation of the yuan.
- Automakers are embracing legislation in the US House that would raise fuel-economy standards, abandoning years of resistance because of concerns they might otherwise be forced to accept even tougher measures.
- Japan’s industrial production increased in June, ending the worst manufacturing slump in almost two years and easing concern that growth in the world’s second-largest economy may falter. Higher overseas demand is driving profits at Toshiba Corp. and Toyota Motor and encouraging them to make more chips and cars.

Wall Street Journal:
- Investors wondering what to do after the past week’s stock-market turbulence shouldn’t be throwing in the towel. Fast-growing big companies could be poised to move higher in coming months.
- A rice research institute in the Philippines, which helped boost Indian crop yields beginning in the 1960s, is once again trying to develop new varieties adaptable to drought.
- The turmoil in the credit markets is beginning to wound some high-profile hedge-fund managers – but it’s prompting others to swoop in an snap up some beaten-down assets.
- Some Hard-Hit Cities See Signs of a Housing Market Turnaround.

NY Times:
- A senior member of the Bancroft family, which controls Dow Jones(DJ), has changed his mind and now supports selling the company to News Corp.(NWS/A).
- Hedge-fund firm Sowood Capital, founded by a former Harvard Management manager, is down about 10% this year after bond losses stemming from subprime mortgage turmoil.
- When it comes to making asset allocation decisions in your portfolio, it is best not to be dogmatic. That is the conclusion of a new study, which found that investors are likely to do better over the long term by resisting the advice of those who take extreme positions about how much of their portfolios should be allocated among the various assets classes.
- After years of being accused by Western nations of making only token gestures to fight fake goods and months of complaints about the safety of its exports, China is taking extraordinary steps to change its image.
- Microsoft is beset with competition from all sides, unlike any it has seen in decades, and Bill Gates, who co-founded the company 32 years ago, still intends to step away next year as planned.
- Facebook, the online social network, has stolen some of MySpace’s momentum with users and the news media. Now, it is being subjected to the same accusations that it does not do enough to keep sexual predators off its site.

TheStreet.com:
- Seven Reasons to Be Bullish Now.

MarketWatch.com:
- Despite Thursday, top market timing newsletters remain bullish.

- Duo of Google and Sprint could put AT&T in a headlock.

AP:
- Google Inc. may install by September a system to prevent copyright-infringing videos from being posted on its YouTube Web site, citing company lawyer Phillip Beck.
- EBay Inc.(EBAY) may use its “buy it now” feature even though the US Supreme Court ruled its infringed upon MercExchange’s patent, citing US District Judge Jerome Friedman.

LA Times:
- Walt Disney(DIS) dropped its plan to sell wine named after the Disney-Pixar movie “Ratatouille” at Costco Wholesale Corp.(COST) stores because of complaints from California winemakers and concerns over underage drinking, citing company spokesman Gary Foster.

CNNMoney.com:
- Is sourcing in China worth it? Businesses weigh the costs and benefits, in the wake of product recalls and bans.

Boston Globe:
- ‘Aesthetic medicine’ firms hope vanity has its price.
- Boston’s Brigham and Women’s Hospital plans to let a group of surgeons provide partial face transplants to patients with disfigured features.

NY Post:
- Tom Cruise’s United Artists movie studio and Merrill Lynch(MER) may complete a $500 million film-financing agreement by mid-August.

San Jose Mercury News:
- More than half of all babies born in California were delivered by Latina mothers in 2004 and the state could have an Hispanic majority by 2050, citing demographers and its own research.

Seattle Times:
- Microsoft Corp.(MSFT) co-founder Paul Allen is funding more documentary films, including one on climate change, adding to 20 movies financed by his production company.

Reuters:
- The technology company Google Inc.(GOOG) is the biggest gainer in Interbrand’s annual ranking of the top 100 Global Brands.(video)
- US average retail gasoline prices fell 17 cents per gallon over the past two weeks as Midwest refiners recovered from recent “difficulties” and produced more gas, an industry analyst said.

Financial Times:
- China’s steelmakers received more than $52 billion of government subsidies over the past decade, enabling them to sell products cheaper than international rivals, citing a report commissioned by the American Iron and Steel Institute.
- Carlos Ghosn, Nissan Motor’s CEO, said he will continue to seek an alliance with one of the three US domestic automakers.

Daily Telegraph:
- China and the other emerging giants have started to use their colossal reserves to buy Western companies.

The Times:
- Goldman Sachs(GS) is planning to launch a $10 billion hedge fund, which for the first time will be run by its own proprietary traders.

Spiegel:
- Deutsche Bank AG, Germany’s largest bank, will stop its business in Iran.

IMF Survey Magazine:
- Global Growth Seen at 5.2% in 2007.

Weekend Recommendations
Barron's:
- Made positive comments on (CME), (DD), (INAP), (HD), (GRMN) and (IBKR).
- Made negative comments on (REDF) and (AMZN).

Citigroup:
- Reiterated Buy on (MSFT), target $36.
- Upgraded (VECO) to Buy, target $25.

Night Trading
Asian indices are -1.0% to -.25% on average.
S&P 500 futures +.08%.
NASDAQ 100 futures unch.

Morning Preview
US AM Market Call
NASDAQ 100 Pre-Market Indicator/Heat Map
Pre-market Commentary
Pre-market Stock Quote/Chart
Before the Bell CNBC Video(bottom right)
Global Commentary
WSJ Intl Markets Performance
Commodity Movers
Top 25 Stories
Top 20 Business Stories
Today in IBD
In Play
Bond Ticker
Economic Preview/Calendar
Daily Stock Events
Macro Calls
Upgrades/Downgrades
Rasmussen Business/Economy Polling
CNBC Guest Schedule

Earnings of Note
Company/Estimate
- (ACV)/.24
- (APC)/.77
- (ANDW)/.17
- (ADM)/.58
- (CBG)/.42
- (CNA)/1.09
- (FPL)/.80
- (HUM)/1.28
- (JAH)/.57
- (LTR)/.98
- (MNST)/.34
- (OSIP)/.27
- (PBI)/.70
- (PPS)/.04
- (RSH)/.25
- (SUNW)/.05
- (TSN)/.24
- (VZ)/.59
- (VMC)/1.46

Upcoming Splits
- (SJR) 2-for-1

Economic Releases
- None of note

Today’s Other Potential Market Movers
- None of note

BOTTOM LINE: Asian indices are lower, weighed down by automaker and technology shares in the region. I expect US stocks to open modestly lower and to rally into the afternoon, finishing modestly higher. The Portfolio is 75% net long heading into the week.