Thursday Watch

Late-Night Headlines
Bloomberg:
- Michael Woolfolk, senior currency strategist at Bank of New York Mellon says the Fed is ready to cut rates at “anytime.”
- Malon Wilkus, CEO of American Capital Strategies, see opportunities in the buyout market.
- Australian business investment climbed three times as much as economists expected. Capital spending on equipment, buildings and plants rose 6.3% in the second quarter from the previous three months, the Bureau of Statistics said in Sydney. Businesses plan to spend 11.5% more in the year ending June 30, 2008, than they predicted three months ago.
- South Korean manufacturers’ confidence rose to a 17-month high, suggesting companies may ramp up production and spur growth in Asia’s third-largest economy.
- Corn fell for the fifth consecutive session on speculation that August rains will boost US production and dry weather in September will aid harvesting of record supplies.

Wall Street Journal:
- Yahoo! Inc.’s(YHOO) head of sales, Gregory Coleman, is resigning as part of a staff reorganization.

MarketWatch.com:
- Those who work at home or remotely report higher levels of satisfaction.
- Shares of US financial stocks rebounded modestly on Wednesday, after taking a pounding in the previous session, with Goldman Sachs(GS) leading gainers in the brokerage sector.

CNNMoney.com:
- Carlyle see credit storm calming. The fund, which invests in mortgage-backed securities, predicts “strong probability” for a dividend in the fourth quarter.

Reuters:
- Apple Inc.(AAPL) shares rose more than 5% on Wednesday on growing expectations that the company will announce a revamped line of iPods next week.

Financial Times:
- Google’s YouTube agreed to a deal with the British societies that collect royalties for 50,000 songwriters, composers and publishers to legitimize the use of their recorded music on the video-sharing Web site.
- Dry bulk freight costs at record high.

Late Buy/Sell Recommendations
Citigroup:
- JC Penney’s(JCP) Back-to-School season is off to a strong start, supported by a fully integrated advertising campaign, improved merchandise flow driving newness, trend-right merchandise, and a multi-channel approach. We believe the company is optimistic on Holiday 2007 based on back-to-school trends thus far.
- Reiterated Buy on (SPSN), target $15.
- Reiterated Buy on (TEX), target $94.
- Reiterated Buy on (ADBE), target $50.

Night Trading
Asian Indices are +1.0% to +1.5% on average.
S&P 500 futures -.13%.
NASDAQ 100 futures -.10%.

Morning Preview
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Today in IBD
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Earnings of Note
Company/EPS Estimate
- (BTH)/.12
- (CIEN)/.31
- (CPWM)/-.64
- (DLM)/.02
- (DELL)/.31
- (ESL)/.55
- (FRE)/.99
- (FCEL)/-.34
- (GCO/.30
- (HRB)/-.35
- (OVTI)/.19
- (SHLD)/1.13
- (TIF)/.35
- (WIND)/.04
- (ZLC)/-.08

Upcoming Splits
- (FTI) 2-for-1

Economic Releases
8:30 am EST
-Preliminary 2Q GDP is estimated to rise 4.1% versus a 3.4% prior estimate.
- Preliminary 2Q Personal Consumption is estimated to rise 1.5% versus a 1.3% prior estimate.
- Preliminary 2Q GDP Price Index is estimated to rise 2.7% versus a 2.7% prior estimate.
- Preliminary 2Q Core PCE is estimated to rise 1.4% versus a 1.4% prior estimate.
- Initial Jobless Claims for last week are estimated to fall to 320K versus 322K the prior week.
- Continuing Claims are estimated to rise to 2575K versus 2572K prior.

10:00 am EST
- The 2Q House Price Index is estimated to rise .3% versus a .4% gain in 1Q.

Other Potential Market Movers
- The weekly EIA natural gas inventory report, (NVLS) mid-quarter update and Moody’s Perspective on the State of the Credit Markets could also impact trading today.

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