Wednesday Watch

Late-Night Headlines
Bloomberg:
- Byron Wien, the chief investment strategist at Pequot Capital Management Inc., said the S&P 500 Index will advance to 1,200 during the first half of next year after the government’s rescue stabilizes the economy. The benchmark index for US stocks must surge 41% from yesterday’s close of 850.75 to reach that level.

- President-elect Barack Obama has selected Washington lawyer Eric Holder to be the next U.S. attorney general, Newsweek magazine reported. Holder overcame initial reluctance to accept the nomination because of the possibility that Senate confirmation hearings would revive questions about why he didn't protest plans by President Bill Clinton to pardon fugitive financier Marc Rich before Clinton left office, Newsweek said. In 2001, Holder was questioned by a House committee that investigated the pardon.

- Automakers in China are seeking government aid and lower sales taxes to help revive waning demand in the world's second-largest vehicle market. ``The situation is really severe,'' said Zeng Qinghong, general manager of Guangzhou Automobile Group Co., a partner of Toyota Motor Corp. and Honda Motor Co., in an interview at the Guangzhou auto show yesterday.

- Senator Edward Kennedy named fellow Democrat Hillary Clinton to lead a working group on insurance coverage in the effort to write health-care legislation.

Wall Street Journal:
- President-elect Barack Obama's incoming White House chief of staff challenged chief executives and other business leaders Tuesday night to join the new administration in a push for universal health care, saying incremental increases in coverage won't be acceptable. "When it gets rough out there, a lot of business leaders get out of the car and say, 'We're OK with minor reform.' I'm challenging you today, we're going to have to do big, serious things," Mr. Emanuel said, speaking to The Wall Street Journal's CEO Council, a conference convened to elicit corporate opinion on the challenges facing the new president.

- Big Three Plead for Aid. GM, Ford, Chrysler Warn of Failure; Congress Wary of Rescue.

NY Times:
- Bankers in Asia had been largely immune to the fallout from the global financial crisis. But as the economic malaise consumes country after country, those jobs are no longer viewed as safe.

CNNMoney.com:
- A collapsed hedge fund’s overlooked wind wager. Tontine Associates, the once gilt-edged hedge fund that collapsed rapidly over the past two months in the wake of the market's carnage, was renowned for its massive and highly contrarian bets in industries like home-building and steel manufacturing.

- Some 76 percent of consumers watch video on their PC, says a new international study from IBM (IBM). That’s up 27 percent from last year, according to IBM’s second-annual survey of consumers in Australia, Germany, India, Japan, the UK and the U.S.

- Gasoline prices declined to their lowest level in more than 21 months Tuesday, falling for the 62nd straight day in a national survey.

Reuters:

- Mexican retail and media tycoon Ricardo Salinas Pliego owns 28 percent of Circuit City and could buy more of the troubled U.S. electronics chain, a Salinas spokesman said on Tuesday.

- As many hedge funds suffer big losses and anxious investors yank out their money, the town synonymous with the riches of their recent glory is now hurting. In Greenwich, Connecticut, the luxury car dealers are quiet, the prices of mansions are declining and the retailers who have made a good living serving its wealthy residents are complaining about a sudden drop in business.

Financial Times:
- Citigroup (C) is liquidating its Corporate Special Opportunities hedge fund after it lost 53 per cent of its value last month, marking the ninth time in recent months that the bank has had to close or rescue a fund in its alternative investment unit. CSO, which managed almost $4.2bn at its peak, has a net asset value of about $58m and debt of about $880m, investors say. People familiar with the matter say investors in the fund are likely to receive no more than 10 cents on the dollar.

- A recent meeting of the national oil companies in Beijing predicted oil prices would fall to about $40 a barrel, Fu Chengyu, chief executive of China National Offshore Oil Corporation, told a conference in Barcelona. "The consensus at the time was that everybody realized the oil price would be even lower," Mr Fu told the Global China Business meeting. "Nobody knew where it would go but most of them said around $40."

- US regulators are moving to approve centralized clearing houses for credit derivatives in a matter of weeks as the debate about the oversight of the vast unregulated sector gathers pace. Groups competing to set up a central counterparty for credit default swaps, the most popular type of credit ­derivatives, are awaiting approval from the Federal Reserve, the Securities and Exchange Commission or the Commodity Futures Trading Commission, which are currently conducting detailed risk reviews of candidates on site.

Latin American Herald Tribune:

- General Motors(GM) to Invest $1 Billion in Brazil Operations – Money to Come from US Rescue Program.

Xinhua News:

- China's police departments should further standardize the procedure of law enforcement and build harmonious relations with the people, China's top police official said on Tuesday. State Councilor Meng Jianzhu, also Minister of Public Security, said at a tele-conference with local public security heads that the police should "be fully aware of the challenge brought by the global financial crisis and try their best to maintain social stability." "In handling mass incidents, we must be clear that the chief tasks of the public security authorities are to maintain order on the scene, ease conflicts, avoid excessive steps and prevent the situation getting out of control," he wrote.

- Beijing Capital International Airport’s combined passenger and cargo traffic fell about 5% in the first half of the month from a year earlier, citing Dong Zhiyi, president of airport operator Beijing Capital International Airport Co.

South China Morning Post:

- Hong Kong office rents may slump as much as 60% in the next two years as the global financial crisis continues to hurt the city’s economy, citing property analysts. CLSA Ltd. revised its forecast to a 60% decline in rents in the city’s Central business district in the next two years from 38% previously. UBS AG forecast a 25% drop by September next year compared with an earlier estimate of 5%, which Credit Suisse Group AG revised its forecast to a 35% decline in 2009 from 15% before. Separately, retail rents in Macau may drop around 30% in the next year on the global slowdown and falling tourist numbers, citing property agents and retailers.

China Securities Journal:

- China’s economy may grow by less than 9% in the fourth quarter of this year as overseas demand weakens, citing People’s Bank of China adviser Fan Gang. The Asian nation’s economic expansion may slip to below 8% next year before rebounding in 2010, citing Fan’s interview.

Late Buy/Sell Recommendations
- None of note

Night Trading
Asian Indices are -1.75% to +.25% on average.
S&P 500 futures -.93%.
NASDAQ 100 futures -1.17%.

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
Upgrades/Downgrades
Rasmussen Business/Economy Polling

Earnings of Note
Company/EPS Estimate
- (BJ)/.47

- (ROST)/.43

- (DBRN)/.27

- (PETM)/.26

- (GYMB)/1.03

- (INTU)/-.12

- (LDG)/.63

- (LTD)/.00

Economic Releases
8:30 am EST

- The Consumer Price Index for October is estimated to fall .8% versus unch. in September.

- The CPI Ex Food & Energy for October is estimated to rise .1% versus a .1% gain in September.

- Housing Starts for October are estimated to fall to 780K versus 817K in September.

- Building Permits for October are estimated to fall to 774K versus 805K in September.

10:35 am EST

- Bloomberg consensus estimates call for a weekly crude oil inventory build of +1,000,000 barrels versus a +22K increase the prior week. Gasoline supplies are expected unch. versus a 1,982,000 barrel increase the prior week. Distillate inventories are estimated to rise by +700,000 barrels versus a +516,000 barrel increase the prior week. Finally, Refinery Utilization is estimated unch. versus a -.69% decline the prior week.

2:00 pm EST

- Minutes of Oct. 28-29 FOMC Meeting

Upcoming Splits
- None of note

Other Potential Market Movers
- The weekly MBA mortgage applications report, (ALGT) Investor Day, (SMOD) Analyst Meeting, (CKP) Investor Day, (HAL) Analyst Meeting, (TKLC) Investor Day, (BBX) Investor Meeting, (GWW) Analyst Meeting, (ROK) Investor Meeting, Cowen Healthcare Conference, Bank of America Credit Conference, CSFB Aerospace & Defense Conference, Lazard Healthcare Conference and Morgan Stanley Retail Conference could also impact trading today.

BOTTOM LINE: Asian indices are mostly lower, weighed down by commodity and financial stocks in the region. I expect US equities to open modestly lower and to rally into the afternoon, finishing modestly higher. The Portfolio is 75% net long heading into the day.