Monday Watch

Weekend Headlines
Bloomberg:
- Just when many investors are acknowledging the sudden swoon of US stocks as a sign of a market top, some of Europe’s biggest money managers are anticipating a profit rebound for American companies and slowing earnings growth at home.
- Mobile-phone shipments worldwide this year will probably increase 20%, more than previously though estimated, because of higher Nokia Oyj sales and demand in China and India, JPMorgan Chase(JPM) said.
- Axel Weber, a member of the European Central Bank’s governing council, said the bank may have to raise interest rates further to quell inflation as the euro-region’s economy maintains its expansion.
- US Treasury Secretary Henry Paulson said the World Bank should focus on lending to poor countries and trim funds for China, India and other middle-income nations that are luring private capital.
- Federal Reserve Governor Frederic Mishkin said inflation measures that exclude food and energy costs are a “better guide” to underlying changes in prices.
- Johnson & Johnson(JNJ) and Boston Scientific(BSX) reported new safety data today for drug-coated stents that may help revive sales depressed by prior reports linking the devices to a higher risk of heart attacks.
- Russian Finance Minister Alexei Kudrin suggested the price of gold may decline because of a potential increase in production after the Natalka field was confirmed as the world’s third-largest deposit of the precious metal.
- Turkey’s military probably won’t attack Kurdish rebels in northern Iraq in the immediate future, US Defense Secretary Robert Gates said, after meeting his Turkish counterpart.

NY Times:
- The Gloomsayers Should Look Up.
- As Apple(AAPL) Gains PC Market Share, Jobs Talks of a Decade of Upgrades.
- Lottomatica SpA’s Gtech Holdings(GTK) and Scientific Games Corp.(SGMS), the two dominant suppliers of equipment and products to US state lotteries, plan to expand into other countries.
- Fight Against Coal Plants Is Creating Diverse Partnerships.

MarketWatch.com:
- US venture deals fewer in number, bigger in size.
- The end of Microsoft as we know it? Commentary: A holding company in the mold of KKR, Berkshire Hathaway.

Washington Post:
- One year ago, a 32-year-old trader at a giant hedge fund named Amaranth held huge sway over the price the country paid for natural gas. Trading on unregulated commodity exchanges, he made risky best that led to the fund’s collapse – and, according to a congressional investigation, higher gas bills for homeowners.

CNNMoney.com:
- Apple’s(AAPL) Earnings Preview: Firing On All Cylinders.

MSNBC.com:
- Commercial real estate market outlook upbeat.

MIT Review:
- The Blow-Up. This summer, as a meltdown in subprime credit market spilled over into other markets, all eyes were on the mathematically trained financial engineers known as “quants.” Who are these guys?

LA Times:
- Some firms replace offshoring with onshoring. Small US towns can match India in cost, Northrop Grumman(NOC) plans up to 50 sites for tech support, Dell opens a center in Idaho.

USA Today:
- Sporting goods makers who once treated technology as a threat are boosting revenue with online social-networking tools, mapping programs and wireless gadgets.

Seattle Times:
- Clean technologies propel venture capital funding. Shrugging off credit-related economic woes, venture capitalists be heavily on new companies in the third quarter, driven by opportunities in clean technologies, software and biotechnology.

AP:
- Iran named Deputy Foreign Minister Saeed Jalili as it nuclear envoy following the resignation of Ali Larijani, a move that may support President Mahmoud Ahmadinejad’s hard line stance on talks with Western governments.
- US teachers were fired or disciplined for sexual abuse in more than 2,500 cases during a five-year period.
- Half of likely US voters said they would never vote for Senator Hillary Clinton for president, a new survey by Zogby International shows. The latest Zogby survey showed 50% of those polled said they would never vote for her, compared with 46% of likely voters who said the same thing in a Zogby survey in March. Among Democratic women, 17% said they would not vote for Clinton.

Sydney Morning Herald:
- Russia, the world’s second-biggest oil exporter after Saudi Arabia, has forecast crude oil may drop to $60/bbl. within 10 years. “Oil is significantly overpriced,” Russia’s Finance Minister, Alexei Kudrin, said in Washington on Friday. Crude oil prices have “overshot their fundamentals and are likely to come down sharply,” Eric Chaney and Richard Berner, analysts at Morgan Stanley, wrote in a report on Friday.

Gulfnews.com:
- Saudi Arabia is not considering or revaluing its currency or moving away from its dollar peg, Finance Minister Ebrahim Al Assaf said yesterday.

Al-Arabiya:
- Saudi Arabia, the world’s largest oil exporter, will pump more crude oil if there was an emergency disruption to supplies, citing a government official.

Weekend Recommendations
Barron's:
- Made positive comments on (MMC), (VAR), (SHLD) and (MNST).

Citigroup:
- Reiterated Buy on (ADBE), target raised to $56.

Night Trading
Asian indices are -3.25% to -1.75% on average.
S&P 500 futures -.83%.
NASDAQ 100 futures -.88%

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
- (CHKP)/.37
- (HAL)/.65
- (HAS)/.71
- (MRK)/.70
- (SGP)/.30
- (AXP)/.85
- (AAPL)/.84
- (KMB)/1.06
- (RCL)/1.78
- (TXN)/.50

Upcoming Splits
- (ARD) 2-for-1
- (CSNT) 2-for-1

Economic Data
- None of note

Other Potential Market Movers
- The Fed’s Kroszner speaking, (WSO) analyst meeting and (NCI) investor day could also impact trading today.

BOTTOM LINE: Asian indices are sharply lower, weighed down by commodity and financial 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.