Wednesday, August 15, 2007

Thursday Watch

Late-Night Headlines
Bloomberg:
- Goldman Sachs Group(GS) blamed its $3 billion in hedge-fund losses this month on too many quantitative managers making the same trades and said it needed to develop new investing strategies.
-
China’s spending on factories, equipment and property rose 26.6% in the first seven months of 2007 from a year earlier, maintaining pressure for an interest-rate increase to cool the economy.
- Hong Kong’s stocks are falling 3.6%, pushing the Hang Seng Index to its steepest two-day loss in six years.
- Crude oil is falling $.48/bbl. in NY as forecasters altered the likely track of a storm approaching the Gulf of Mexico.
- Venezuelan President Hugo Chavez will unveil a plan today to rewrite the constitution to allow him to seek indefinite re-election and to deepen the transformation of the country’s political structure.
- HFA Holdings Ltd, an Australian hedge fund manager than manages more than $3 billion, said its funds have benefited from the turmoil in the US subprime mortgage market.

NY Times:
- US-Made Toys Benefit From China’s Troubles.
- China Plans Greater Scrutiny of Food Exports.

CNBC:

- Warren Buffett, chairman of Berkshire Hathaway(BRK/A), said some stocks could be cheaper and worth buying as US markets are dragged down by bad bets on subprime mortgages.

Financial Times:
- A unit of Kohlberg Kravis Roberts, the powerful US private equity group, became the latest victim of the mortgage crisis on Wednesday, casting a cloud over its plans to raise $1.25 billion in an IPO.
- Asian stocks slumped on Thursday, pushing Japan’s Nikkei to 8-month lows, while the yen held firm, as appetite for risky assets waned amid persistent fears about a global credit crisis.

Reuters:
- Investigators from major US stock exchanges and the SEC have formed an elite unit to investigate suspicious trades and tackle insider trading.

Late Buy/Sell Recommendations
Citigroup:
- Reiterated Buy on (DE), target $149.
- Upgraded (SOV) to Buy, target $22.

CSFB:
- Raised (INTC) to Buy, target $35.

Night Trading

Asian Indices are -5.5% to -2.25% on average.
S&P 500 futures -.91%.
NASDAQ 100 futures -.87%

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/EPS Estimate
- (ADSK)/.43
- (BEAS)/.13
- (RDEN)/.19
- (EL)/.50
- (FLO)/.24
- (GBE)/.12
- (HPQ)/.66
- (JCP)/.78
- (KSS)/.82
- (JWN)/.69
- (RRGB)/.43
- (RGLD)/.19

Upcoming Splits
- (SHEN) 3-for-1

Economic Releases
8:30 am EST

- Housing Starts for July are estimated to fall to 1400K versus 1467K in June.
- Building Permits for July are estimated to fall to 1400K versus 1413K in June.
- Initial Jobless Claims for last week are estimated to fall to 315K versus 316K prior.
- Continuing Claims are estimated to fall to 2550K versus 2559K prior.

12:00 pm EST
- The Philly Fed for August is estimated to fall to 8.6 versus 9.2 in July.

Other Potential Market Movers
- The weekly EIA natural gas inventory report, (IVGN) Investor Day, (GNW) meeting with investors and CSFB Communications Conference could also impact trading today.

BOTTOM LINE: Asian indices are sharply lower, weighed down by financial and commodity stocks in the region. I expect US equities to open lower and to rally into the afternoon, finishing modestly lower. The Portfolio is 50% net long heading into the day.

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