Tuesday Watch

Late-Night Headlines
Bloomberg:
- Billionaire investors Nelson Peltz said he might pay as much as $41 a share for hamburger chain Wendy’s Intl.(WEN).
- Japan’s households increased spending for a sixth month in June and the jobless rate fell, suggesting consumer spending will help extend the economy’s longest postwar expansion.
- The yen fell for a second day against the euro as a rebound in US stocks gave investors confidence to buy higher-yielding assets funded by loans in Japan.
- Nicolas Sarkozy is rolling out the welcome mat for thousands of rich French people who fled one of Europe’s most onerous tax regimes. Few may heed his call.
- The US aims to reach agreements with China on food and drug safety by December as a US delegation started the first of a series of talks with the Chinese government in Beijing.
- Confidence among South Korean manufacturers for August increased for the first time in four months, suggesting companies may ramp up production and spur growth in Asia’s third-largest economy.
- MySpace.com co-founder Brad Greenspan made a new proposal to invest $600 million in cash and stock in three joint ventures with Dow Jones(DJ) and said he has received interest from five “credible” investor groups.
- Northrop Grumman Corp.(NOC) won satellite system-modification work from the US Air Force valued at as much as $2.34 billion.
- Smoking one marijuana joint has the same detrimental effects as smoking as many as five cigarettes, a study said.

Wall Street Journal:
- Marathon Asset Management LLC is starting a new fund that will buy mortgage-related assets in an effort to capitalize on problems in the sub-prime lending market. Marathon, a $9 billion hedge-fund focuses on debt markets, will start taking orders from investors for the Marathon Distressed Sub-Prime Fund in August, citing a letter sent to clients by Marathon President Bruce Richards.
- With deal-related financing markets in disarray, private-equity buyouts are being delayed around the world, giving corporate buyers an advantage over the cash-rich private-equity firms for the first time in years.
- News Corp.(NWS/A) and Dow Jones(DJ) edged closer to a final agreement on the sale of the publisher to the media giant late yesterday, as Dow Jones negotiated on an unusual deal for the company to cover advisory fees for its majority owners, the Bancrofts, in exchange for some holdout family members supporting the deal.

MarketWatch.com:
- Commentary: Why gold didn't profit more from the stock market's difficulties.

Late Buy/Sell Recommendations
Citigroup:
- Upgraded (CE) to Buy, target $45.
- Reiterated Buy on (CBG), target $47.
- Downgraded (RSH) to Sell, target $20.
- Reiterated Buy on (WMB), target raised to $40.
- Reiterated Buy on (HUM), target $88.
- Reiterated Buy on (AXP), target $78. We believe the recent weakness in AXP’s shares, which appears driven by broader market concerns about credit is significantly overdone. We believe the macro economic environment should continue to support AXP’s above average growth and returns. Citi’s economists/strategists are sanguine about the broader economy and view the high-end consumer as a source of relative strength. We see AXP’s premium brand, products, and customers as key drivers of its premium pricing relative to its network competitors over the foreseeable future. AXP’s pricing power is supported by its rewards programs and network partnerships. We think the market’s recent valuation of AXP’s shares(15 times our 2008 EPS estimate) significantly overestimates the company’s exposure to broader market credit issues and significantly underestimates the benefits of its positioning, strategy and processing-heavy mix of business.
- Added (WB), (EMN) and (JWN) to Recommended List; Removed (JCP).

Morgan Stanley:
- Reiterated Buy on (VZ), target raised to $45.

Night Trading
Asian Indices are unch. to +1.25% on average.
S&P 500 futures +.02%.
NASDAQ 100 futures -.11%.

Morning Preview
US AM Market Call
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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
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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/EPS Estimate
- (AG)/.52
- (AEP)/.57
- (ADP)/.36
- (AVP)/.45
- (BEAV)/.38
- (BWLD)/.22
- (CBS)/.51
- (CEPH)/1.01
- (CMG)/.45
- (COH)/.41
- (CVH)/.95
- (DBD)/.37
- (DWA)/.33
- (FSLR)/.03
- (GM)/1.10
- (GMR)/.40
- (HLT)/.33
- (IACI)/.33
- (IMCL)/.31
- (LIZ)/.24
- (MRO)/2.14
- (MAS)/.47
- (MET)/1.33
- (NCR)/.58
- (NMX)/.58
- (PPC)/.62
- (RUTH)/.24
- (SAF)/1.54
- (SGR)/-.01
- (JOE)/.16
- (UA)/.03
- (VLO)/3.75

Upcoming Splits
- (SJR) 2-for-1

Economic Releases
8:30 am EST
- Personal Income for June is estimated to rise .5% versus a .4% gain in May.
- Personal Spending for June is estimated to rise .1% versus a .5% gain in May.
- The PCE Core for June is estimated to rise .2% versus a .1% rise in May.
- The 2Q Employment Cost Index is estimated to rise .9% versus a .8% gain in 1Q.

9:45 am EST
- The Chicago Purchasing Manager Index for July is estimated to fall to 58.4 versus 60.2 in June.

10:00 am EST
- Consumer Confidence for July is estimated to rise to 105.0 versus 103.9 in June.
- Construction Spending for June is estimated to rise .2% versus a .9% gain in May.

Other Potential Market Movers
- The Keefe Bruyette & Woods Community Bank Conference, S&P/CS Home Price Composite, weekly retail sales reports and (LSI) Analyst Day could also impact trading today.

BOTTOM LINE: Asian indices are higher, boosted by technology and mining stocks 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.