Late-Night Headlines
Bloomberg:
- Republican Senator Saxby Chambliss won a second term and blocked Democrats from gaining a 60-seat Senate majority by defeating challenger Jim Martin in a runoff election in Georgia. Chambliss received 57.4 percent of the vote to 42.6 percent for Martin with 99 percent of the precincts reporting. Chambliss’ victory makes it more difficult for Democrats to stave off Republican filibusters, an attempt to block legislation through endless debate. It takes 60 votes to stop the procedure, meaning Democrats, set to control at least 58 seats when the Senate convenes in January, will need to enlist Republicans to stymie filibusters. Preventing a 60-seat majority gives Republicans “a shot at shutting Democrats down, or at least getting a seat at the table,” on important legislation, said Jennifer Duffy, a congressional analyst at the nonpartisan Cook Political Report in Washington.
- U.S. House Speaker Nancy Pelosi said she believes either Congress or the Bush administration will step in to aid domestic automakers because bankruptcy is “not an option.”
- Hedge Funds Lower Fees, Lengthen Lockups on New Bond Funds. Artradis Fund Management Pte, RAB Capital Plc’s Northwest unit and Cannizaro (Hong Kong) Ltd. are cutting fees and locking up investors’ money for longer in new hedge funds that will buy bonds after prices fell in Asia.
- The Markit iTraxx Australia index quoted 25 basis points lower at 355 as of 11:27 am in Sydney The Markit iTraxx Japan index fell 5 basis points to 355 in Tokyo
- Research In Motion Ltd.(RIMM), maker of the BlackBerry phone, reported third-quarter sales and profit that missed its forecasts, blaming the economic slump and a strengthening U.S. dollar.
- Incitec Pivot Ltd., Australia’s largest fertilizer maker, and Wesfarmers Ltd. may face falling sales and rising inventories as farmers delay purchases on expectation domestic prices will drop in line with a global slide. “Demand is very slow; stock that was purchased before the crash is still sitting in sheds,” Peter McEwen, chief executive officer of Summit Fertilizers, a unit of Japan’s Sumitomo Corp. said from Kwinana, Western Australia.
- China, India Looking More ‘Third World’ Again. Economists such as Jim Walker of Asianomics Ltd. in Hong Kong are right that ``China is now at the heart of the global slowdown.'' If Walker's prediction that China will grow 4 percent or less next year -- with a 30 percent chance of a contraction -- is even close to being right, the nation is in huge trouble. The world's most-populous country needs to grow closer to 10 percent to generate the jobs needed to contain social unrest.
- Mongolia, sitting on what Rio Tinto Group has said is the world’s largest undeveloped copper-gold resource, is considering faster approval for investments after commodity prices plunged, President Nambaryn Enkhbayar said.
- NATO foreign ministers agreed to resume limited ties with Russia and ruled out further expansion of the alliance in the near term, handing an early diplomatic challenge to President-elect Barack Obama. Western European countries led by Germany maintained a veto on fast-track membership for Georgia and Ukraine and successfully pushed for an end to the U.S.-inspired policy of “no business as usual” with the Kremlin that was proclaimed after Russia’s war with Georgia in August.
Wall Street Journal:
- Big Three Seek $34 Billion Aid. GM, Chrysler Warn of Collapse This Month as Lawmakers Explore Bankruptcy.
- Electricité de France SA will offer to buy as much as $6.5 billion of assets from Constellation Energy Group Inc.(CEG), the U.S. utility that spurned an earlier offer from the French energy giant and instead agreed to be bought by Warren Buffett's MidAmerican Energy Holdings Co., people familiar with the matter say.
- AIG May ‘Dismantle’ Firm to Repay Government Loan
- Goldman Sachs Group Inc.'s(GS) Whitehall family of real-estate funds is struggling with weak performance and potentially big losses on some investments made at the top of the real-estate market. Whitehall is best known for deals such as buying Rockefeller Center in 1996, but has slashed the value of the equity in one of its funds in half and likely will struggle to make a profit on deals such as its purchase of the Stratosphere, a Las Vegas casino, in 2008 and a string of hotel deals in the past two years.
- Another week, another hedge-fund restructuring. This time it's Ramius Capital Group, the New York firm overseen by Peter Cohen, the former chairman of the old Shearson Lehman Brothers. Ramius manages $10 billion in assets, but like many hedge-fund firms it's getting smaller.
- Paulson Debates Second Infusion. U.S. Treasury Secretary Henry Paulson is debating whether to ask Congress for the second installment of the $700 billion bailout package, concerned about competing demands for the funds and a potentially hostile reaction from lawmakers.
MarketWatch.com: Will December break Dow’s losing streak? Odds of stocks losing in the month are low.
NY Times: Lehman Bankers Resurface in Barclays Deal Team
CNNMoney.com: iPhone grabs 30% of US smartphone market. Apple’s(AAPL) iPhone is the star in a series of charts published Tuesday by Needham & Co. analyst Charles Wolf.
ABC News:
- The Mumbai Police Bomb Squad confirmed today that terrorists planted a total of five bombs in the city during Wednesday's attacks, and that at least two of the bombs used sophisticated timers unlike anything India had seen until this year.
IBD:
- Integral Systems(ISYS): Defense Suppliers Banks On Being Low-Cost Maker Of Satellite Gear.
Reuters:
- Europe's greenhouse gas market has shown that investments by rich countries into clean-energy projects in poor nations are not always the best way to cut emissions blamed for global warming, the investigative arm of the U.S. Congress reported on Tuesday.
- Financial assets have become so cheap because of the credit crisis that now is a good time to scoop up bargains, the head of one of the world's biggest hedge funds, Avenue Capital, said on Wednesday. "Now is a phenomenal time to buy, assuming you think we're not in a depression," Marc Lasry, chairman and CEO of the company, said at the 2008 Clinton Global Initiative meeting in Hong Kong. "We're looking at valuations we think are extremely low. Unless the unthinkable happens, you'll be fine," he said, referring to the investment environment. Lasry said the fund is holding around $7 billion in cash. Of that capital, Avenue is investing 10 percent a month, he said.
Financial Times: Robert Gates, the US defence secretary who will remain as Pentagon chief in the Obama administration, on Tuesday said he was "less concerned" about President-elect Barack Obama's 16-month timetable to remove combat troops from Iraq. During the presidential campaign, Mr Obama pledged to remove combat troops from Iraq within 16 months of taking office, a position that Mr Gates and Admiral Mike Mullen, chairman of the joint chiefs, had publicly opposed. Mr Gates on Tuesday appeared to soften his opposition, saying he was comfortable with the 16-month timetable because Mr Obama wanted a "responsible drawdown". In doing so, however, he hinted that the incoming president might be more flexible on the timing of the withdrawals.
South China Morning Post:
- Macau casino revenues snapped a two-month losing streak last month, rising a modest 2.6 per cent from a year ago to 7.55 billion patacas, according to unofficial data.
China Daily:
- The sharp fall in initial public offerings and other businesses has forced many accounting firms in China, including the big four international giants, to start cutting jobs for the first time in many years.
Late Buy/Sell Recommendations
Citigroup:
- Reiterated Buy on (SKS), target $7.
Deutsche Bank:
- Investors should buy technology stocks because they will probably rebound the most when the economy recovers, according to Owen Fitzpatrick, head of equities at Deutsche Bank Private Wealth Management. The industry “doesn’t have to deal with the credit issue,” Fitzpatrick said. “Tech name in general are pretty safe.” Microsoft(MSFT), Apple Inc.(AAPL) and Google Inc.(GOOG) are among seven of 15 companies representing the largest proportion of the S&P 500 Info Tech Index that had had no long-term debt as of Sept. 30, shielding them from turmoil in credit markets.
Night Trading
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 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
- (AVAV)/.28
- (ARO)/.62
- (JAS)/.33
- (CPRT)/.43
- (SNPS)/.38
Economic Releases
8:15 am EST
- The ADP Employment Change for November is estimated at -205K versus -157K in October.
8:30 am EST
- Final 3Q Non-farm Productivity is estimated to rise .9% versus a prior estimate of a 1.1% gain.
- Final 3Q Unit Labor Costs are estimated to rise 3.6% versus a prior estimate of a 3.6% increase.
10:00 am EST
- ISM Non-Manufacturing for November is estimated to fall to 42.0 versus 44.4 in October.
10:35 am EST
- Weekly EIA energy inventory data.
2:00 pm EST
- Fed’s Beige Book
Upcoming Splits
Other Potential Market Movers
BOTTOM LINE: Asian indices are mostly higher, boosted by financial and airline stocks in the region. I expect US equities to open modestly lower and to rally into the afternoon, finishing modestly higher. The Portfolio is 100% net long heading into the day.
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