Friday Watch

Late-Night Headlines
Bloomberg:
- Countrywide Financial(CFC), the nation’s biggest residential lender, led shares of mortgage companies and homebuilders higher as the US government announced a freeze on some subprime rates.
- Subprime rate freeze is good for mortgage bonds, Moody’s says.
- The yen headed for a second weekly decline against the US dollar and the euro as concerns eased that credit-market losses will spread, encouraging purchases of higher-yielding assets funded in Japan.
- Japan’s third-quarter expansion was slower than the government initially reported, and growth may lose more steam because of a slump in domestic housing construction and waning US demand. The world’s second-largest economy grew an annualized 1.5% in the third quarter. The US economy grew 4.9% during the same three month period.
- JetBlue Airways(JBLU) will begin offering free in-flight e-mail and instant-message services next week through a partnership with Yahoo!(YHOO) and Research In Motion(RIMM).

Wall Street Journal:
- AT&T(T) expects a revenue increase of at least 20% next year in the Asian-Pacific region, citing expansion by clients in countries such as China and India.
- News Corp.(NWS/A) Duo Set To Lead Dow Jones As Zannino Resigns.

MarketWatch.com:
- MarketWatch CEO of the Year 2007: McDonald’s(MCD) Jim Skinner.
- Another bear growls at China. Hutchinson sees big debt, and big problems, ahead for Beijing. Is a China crash coming? The top-performing China letter continues cautious.
- Google(GOOG) is forging ahead on a second spectrum-related initiative, by filing its own testing results for so-called “white spaces” wireless technology with the Federal Communications Commission.
- Will ‘Golden Compass’ controversy hurt the box office? New Line film is subject of protest from Catholic group for atheist themes.

BusinessWeek.com:
- After months of betting on an increase in oil prices, some speculators now see a new downward trend.

CNNMoney.com:
- Lilly projects seven new blockbusters for 2008.

CNBC.com:
- 10 Top Investing Blunders.

washingtonpost.com:
- Highlights of Mortgage Plan.
- Details on the House Energy Bill.

Barron’s:
- Carlos Slim May Trade CompUSA for Circuit City.

USA Today.com:
- Airport face-lifts smooth out wrinkles for fliers.

Reuters:
- Short interest on the NYSE rose 3.31% in late November, the exchange said on Thursday, suggesting an increase in bearish sentiment in the stock market. Moreover, short interest rose 87.2% in shares of Freddie Mac(FRE), 83.9% in shares of Nordstrom(JWN), 82.2% in shares of Discover Financial Services(DFS) and over 100% in shares of Fannie Mae(FNM).

DigiTimes:
- The dynamic random access memory market may improve next year as the increase in global output slows, citing Powerchip Semiconductor Corp. Chairman Frank Huang. Inventories in the distribution network “aren’t high,” Huang said. Powerchip is Taiwan’s biggest maker of DRAMs.

Late Buy/Sell Recommendations
Citigroup:
- RIMM continues to be our top pick in North America handsets. Our analysis shows only 14% of the subscriber base is in financial services. According to the Wall Street Journal JetBlue Airways will begin a trial Tues Dec. 11^th to provide free in-flight email and messaging via a WiFi connection on a specially equipped A320. JetBlue said it may install the service across its entire fleet if passenger response is positive. The in-flight WiFi service will be available to WiFi laptops and WiFi-enabled BlackBerries. We view this as an incremental positive for RIMM. Maintain Buy, target $140.
- Reiterated Buy on (HON), target $68.

Night Trading
Asian Indices are +.50% to +.1.25% on average.
S&P 500 futures -.22%.
NASDAQ 100 futures -.20%.

Morning Preview
US AM Market Call
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Pre-market Commentary
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Before the Bell CNBC Video(bottom right)
Global Commentary
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Today in IBD
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Earnings of Note
Company/EPS Estimate
- (HITK)/-.05
- (KWD)/.13

Upcoming Splits
- (FLIR) 2-for-1
- (GRC) 5-for-4
- (ROL) 3-for-2

Economic Releases
8:30 am EST
- The Change in Non-farm Payrolls for November is estimated at 80K versus 166K in October.
- The Unemployment Rate for November is estimated at 4.8% versus 4.7% in October.
- Average Hourly Earnings for November are estimated to rise .3% versus a .2% gain in October.

10:00 am EST
- Preliminary Univ. of Mich. Consumer Confidence for December is estimated at 75.0 versus 76.1 in November.

3:00 pm EST
- Consumer Credit for October is estimated to rise to $5.0 billion versus $3.7 billion in September.

Other Potential Market Movers
- The Lehman Brothers Technology Conference, (SON) analysts’ meeting, (HSC) analysts conference, (RRGB) analyst meeting and (NVO) analyst meeting could also impact trading today.

BOTTOM LINE: Asian indices are higher, boosted by automaker and financial 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.