Friday Watch

Late-Night Headlines
Bloomberg:
- Federal Reserve Chairman Ben S. Bernanke said volatility in credit markets has “affected” the economy’s prospects and policy makers must decide whether the risks between growth and inflation have now shifted.
- UMC Japan rose 22%, the most in almost nine years, after the Japanese unit of Taiwan’s United Microelectronics Corp. said it expected to post a narrower full-year loss on increased output of higher-value memory chips and lower production costs.
- India’s gold production in the seven months to October rose 16.8% to 8 metric tons from 6.85 tons a year earlier.
- Crude oil was little changed near $91 a barrel in New York as Enbridge Inc. re-opened three out of four pipelines closed after an explosion cut shipments of Canadian oil to US refiners.
- The yen fell against the dollar after a rally in Asian stocks prompted investors to buy higher-yielding assets with funds borrowed in Japan.
- The US dollar is headed for its biggest weekly gain in two months against the euro.

Wall Street Journal:
- Sprint Nextel(S) rejected a $5 billion investment offer from a group led by South Korea’s SK Telecom that would have made former Chairman Tim Donahue the company’s CEO.
- The Bush administration and major financial institutions are close to agreeing on a plan that would temporarily freeze interest rates on certain troubled subprime loans, according to people familiar with the matter.
- Bernanke Hints Rate Cut Possible.
- Why Citadel Pounced On Wounded E*Trade.

MarketWatch.com:
- China aims to play a stabilization rose in global markets through its $200-billion sovereign wealth fund, the China Investment Corp., Lou Jiwei, the fund’s chairman, said Thursday.

BusinessWeek:
- Move Over, ‘Cyber Monday’ Online retailers, bracing for a record holiday season, say their business day will come in December’s second week; eBay calls it “Green Monday”
- Honda’s Home Hydrogen Fueling Station. Honda has come up with a way to get around the problem of fueling its hydrogen cars – do it at home.

CNBC.com:
- Which Home Renovations Really Pay Off?

Morningstar.com:
- The credit crisis: Chicken Little or a game of chicken? Investors are running for the hills – or at least for safer havens including cash and gold. Yet at Morningstar, our analysts are recommending an unprecedented number of financial-services stocks, even names that have been badly beaten up such as Countrywide Financial(CFC), PMI Group(PMI) and Citigroup(C).
- US revised oil demand in September was .8% below year-ago levels, at 20.385 million barrels a day and the lowest for any month since April 2006, federal data released Thursday show. Demand was revised down from an earlier estimate, which would have shown a .3% decline from a year ago.

USA Today.com:
- Rates on 30-year mortgages fall to lowest point in 2 years.
- China dropping subsidies that aided exporters.

Economic Times:
- Temasek Holdings Pte, Singapore’s state-owned investment company, may be selling shares in Chinese companies to buy stakes in US and European financial institutions. Temasek has recently held discussions with US and European financial institutions and “the pricing is reasonable,” citing people familiar with the situation. The talks prompted it to pare its holdings to raise capital for potential acquisitions, it added. Temasek manages more than $100 billion in assets.

Late Buy/Sell Recommendations
Citigroup:
- Reiterated Buy on (INTC), target $33. Dell(DELL) reported their October quarter results Thursday after the close. While much of the conference call’s focus was on Dell’s strategic initiatives, their commentary reinforces our positive view of Intel. We continue to see upside margin surprise and market share momentum.
- Reiterated Buy on (BRCD), target $10.

Morgan Stanley:
- Reiterated Overweight on (OVTI), target $28.

Night Trading
Asian Indices are +.25% to +1.75% on average.
S&P 500 futures -%.
NASDAQ 100 futures -%.

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Earnings of Note
Company/EPS Estimate
- (BIG)/.12
- (TIF)/.25
- (BE)/.02
- (LDK)/.37

Upcoming Splits
- (DE) 2-for-1

Economic Releases
8:30 am EST
- Personal Income for October is estimated to rise .4% versus a .4% gain in September.
- Personal Spending for October is estimated to rise .3% versus a .3% gain in September.
- The PCE Deflator for October is estimated to rise .2% versus a .2% gain in September.

9:45 am EST
- The Chicago Purchasing Manager report for November is estimated to rise to 50.5 from 49.7 in October.

10:00 am EST
- Construction Spending for October is estimated to fall .3% versus a .3% gain in September.

Other Potential Market Movers
- The Fed’s Poole speaking, Fed’s Kroszner speaking, Fed’s Plosser speaking, NAPM-Milwaukee, (NVO) analyst meeting and UBS Global Real Estate Conference could also impact trading today.

BOTTOM LINE: Asian indices are higher, boosted by gains in financial 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.