Late-Night Headlines
Bloomberg:
- Iran has banned dozens of the country’s celebrities from state-run television and radio over their support for opponents of President Mahmoud Ahmadinejad, the opposition Web site Mowj said yesterday. Iran’s broadcaster has compiled a list of 100 well-known Iranians, including top filmmakers and actresses, who are forbidden from the state’s airwaves, Mowj said. They are banned from “having their picture shown” or “being active in programs related to the state broadcaster until further notice,” Mowj said.
- The head of the beleaguered devices unit at the U.S. Food and Drug Administration resigned after five years, calling it “in the best interest” of the agency
- Applied Materials Inc.(AMAT), the largest maker of semiconductor-production machinery, predicted fourth- quarter sales and profit that topped analysts’ estimates, signaling that the chip market may have bottomed out. Profit will be as much as 4 cents a share in the period, which ends in October, the company said today on a conference call. Analysts had projected a loss of 5 cents, according to a Bloomberg survey. “There are more indications that demand is growing,” Chief Executive Officer Mike Splinter said on the call. “It’s too soon to conclude that a broad-based recovery is at hand.” New orders rose to $1.07 billion, up 65 percent from the second quarter. That compares with a prediction of a 40 percent gain by Patrick Ho, an analyst at Stifel Nicolaus & Co. in Dallas. Applied Materials, based in Santa Clara, California, rose 41 cents, or 3.1 percent, to $13.63 in extended trading.
- The other day I received an e-mail from David Axelrod, President Barack Obama’s senior adviser. OK, so millions of other people got the same e-mail, which begins “Dear Friend” and ends “Thank you, David.” Not all of them chose to respond. Axelrod was trying to dispel rumors circulating about “health insurance reform,” to borrow the administration’s new lingo for downplaying the scary stuff -- rationing care, government bureaucrats making decisions that were once the province of doctor and patient -- and aligning itself with a public that ranks insurance companies somewhere between lawyers and lobbyists. Adopting Axelrod’s tactics, I decided to share my response with millions of others (a few thousand, if I’m lucky). So here goes:
- Lead inventories in China, the world’s biggest producer, may be double the size of stockpiles held at warehouses of the London Metal Exchange, according to Xinling Refining Co. As much as 200,000 metric tons to 300,000 tons of the metal could be stored by smelters and traders, He Yonggang, a Shanghai-based sales manager at the Chinese lead refiner, said citing traders. LME inventories were 114,175 tons on Aug. 11. The inventory levels suggest battery makers’ demand for lead in the world’s largest consumer of the metal is lagging behind the 23 times jump in imports this year. Product sales to electric-bicycle makers, the major consumer of lead in China, have dropped “significantly,” He said. “Most traders and smelters are concerned about the declining lead products sales,” He said in an interview. “A majority of lead-acid battery is used in electric bikes, and since the financial crisis, the e-bike industry has been in poor condition.”
Wall Street Journal:
- The Obama administration is reviewing a congressional request to allow consumers to use "cash for clunkers" vouchers toward future vehicle purchases as a way to cope with dwindling supplies of many popular, fuel-efficient clunker replacements.
- Probably no issue, except for healthcare, is creating more polarization in the court of public opinion than Wall Street bonuses. On one side of the debate are those who say the rewards aren’t deserved, on the other are those receiving the rewards. A report issued late Tuesday by Johnson Associates Inc. is certain to add more fuel to the debate. The recruiting firm estimates bonuses will rise as much as 50% this year for some investment bankers, but it also offers some caution for those on Wall Street who might be expecting a big check. Though fixed-income and equities professionals dealing in plain-vanilla securities and derivatives can expect a bump of 50% or more from last year’s bonus check, other Wall Street types, including professionals in private equity, hedge fund, high net worth, asset management and prime brokerage businesses can expect a decline in bonus payments of between 20% and 35%. The Obama administration on Tuesday detailed a sweeping plan to more closely oversee the giant market for derivatives by forcing many of the products to trade on regulated exchanges or electronic platforms. The proposal, which was sent to legislators on Capitol Hill for consideration, seeks to prevent a repeat of problems last year when the growing use of derivatives by many financial firms went unchecked. The proposal would essentially make it easier to see prices and make markets more transparent.
- “I believe that by the end of my first term in office that we will have a universal health-care system instituted in this country. That is a commitment that I’ve made, and it is a commitment I want to be held accountable for.” The words belong to Barack Obama, and he spoke them in April 2007—the last time he visited Portsmouth, N.H., for a town-hall meeting on health care. The Associated Press reported the crowd that day “was almost single-mindedly focused on a single-payer system.” Candidate Obama asked if they would agree to much higher taxes for such a system. And he emphasized that he would remain open to changes even after he released his plan. Today, a very different Mr. Obama returns to Portsmouth for another town hall on health care. Gone is the demand that supporters acknowledge the implications of their plans (e.g., higher taxes). Gone too is the openness to good ideas from others. In their place is a my-way-or-the-highway president who impugns the character and motives of dissenters.
- Economists are nearly unanimous that Ben Bernanke should be reappointed to another term as Federal Reserve chairman, and they said there is a 71% chance that President Barack Obama will ask him to stay on, according to a survey. Meanwhile, the majority of the economists The Wall Street Journal surveyed during the past few days said the recession that began in December 2007 is now over. Battling the downturn defined most of Mr. Bernanke's term, which began in early 2006 and expires in January, and economists say his handling of the crisis has earned him four more years as Fed chief.
- The U.S. government is investigating whether several U.S. companies took part in a cross-border scheme to siphon oil products from Mexico's state oil company and smuggle them across the border. The probe is part of a broader two-year joint U.S.-Mexican investigation into a network of Mexican oil smugglers supported by the Gulf drug cartel, one of Mexico's most powerful and brutal criminal organizations. Oil theft has been common on both sides of the border for decades. But the breadth of the smuggling operation, extending from Petroleos Mexicanos, Mexico's state oil company, to U.S. companies, is a troubling sign of the growing reach of cross-border organized crime, as well as the efforts by Mexican drug cartels to diversify their business.
- Slack demand for electricity across the U.S. is leading to some of the sharpest reductions in power prices in recent years, offering a break for consumers and businesses who just a year ago were getting crunched by massive electricity bills. On Friday, the nation's largest wholesale power market serving parts of 13 states east of the Rockies is expected to report that electricity demand fell 4.4% in the first half of the year. That helped to push down spot, or daily market prices, by 40% during the first half of this year.
MarketWatch.com: With U.S. interest-rate hikes over the next year an increasing possibility, the U.S. dollar is expected to reverse to more normal behavior for a currency, such as rising on positive economic news that might eventually lift rates and the dollar's yield compared to other currencies. That pattern hasn't described the dollar's behavior for most of this year. "Over the past many months, traders could be excused if they have come to believe it's carved in stone that good news is dollar negative [...] and bad news is dollar positive," said Brian Dolan, chief currency strategist, at Forex.com.
NY Times:
- China formally arrested four employees of the British-Australian mining giant Rio Tinto, including an Australian citizen, late Tuesday, and charged them with commercial bribery and trade secrets infringement in a case that has rocked the global steel industry.
- After surpassing the United States as the world’s largest producer of household garbage, China has embarked on a vast program to build incinerators as landfills run out of space. But these incinerators have become a growing source of toxic emissions, from dioxin to mercury, that can damage the body’s nervous system. And these pollutants, particularly long-lasting substances like dioxin and mercury, are dangerous not only in China, a growing body of atmospheric research based on satellite observations suggests. They float on air currents across the Pacific to American shores.
- The Kuwaiti authorities said Tuesday that they had arrested six jihadists who were planning to attack the main United States military base in the country and other sites. The six men, all Kuwaitis, gave “full confessions” about their plans to attack Camp Arifjan, a sprawling American logistics and supply base in the desert south of Kuwait City, along with Kuwaiti security agencies and other targets, according to a statement released by Kuwait’s Interior Ministry. The men were a “terrorist network” under the influence of Al Qaeda, the statement said.
IBD:
- That's the formula that has helped Buffalo Wild Wings (BWLD) cruise through the consumer-led recession, which sunk many tonier restaurants.
Business Week: From the start, few believed Bernard Madoff's claim that he acted alone in creating and managing his $65 billion Ponzi scheme. On Aug. 11, in a Manhattan courtroom, that claim was revealed to be just another of Madoff's lies. Madoff's former chief financial officer, Frank DiPascali, pleaded guilty to 10 criminal charges relating to his involvement in the scam and agreed to cooperate with prosecutors. "I was loyal to him. I ended up being loyal to a terrible, terrible fault," he said in U.S. District Court. DiPascali's guilty plea is a big victory for prosecutors. As CFO, DiPascali was the face of Madoff's asset management business. When investors had questions, they spoke with DiPascali and it was he who usually explained Madoff's investment strategies to investors. In court, DiPascali said he helped Madoff prepare false documents for investors, accountants, and regulators, shifted money between accounts in New York and London, and otherwise helped make a fictitious business look real. "This guy knows where the bodies are buried," says Robert Lamb, a professor at New York University's Stern School of Business.
Rasmussen:
- The findings in the latest edition of the Generic Congressional Ballot remain fairly steady, as Republican candidates continue to hold a modest lead over Democrats for the seventh straight week. The latest Rasmussen Reports national telephone survey shows that 42% would vote for their district’s Republican congressional candidate while 38% would opt for his or her Democratic opponent.
- Republican candidate Robert F. McDonnell has opened a nine-point lead over Democrat R. Creigh Deeds in the race for governor in Virginia. The latest Rasmussen Reports telephone survey of Virginia voters finds McDonnell leading Deeds 47% to 38%. Three percent (3%) prefer some other candidate, and 12% are undecided. These figures reflect an improvement for McDonnell. A month ago, the GOP hopeful led by just three percentage points.
The Washington
- A group usually seen as one of Barack Obama's allies in the health care debate - AARP - says the president went too far Tuesday when he said the seniors lobby had endorsed the legislation pending in Congress. AARP is sensitive to the issue because polls show that Medicare beneficiaries are worried their health care program will be cut to subsidize coverage for the uninsured. At the town hall in Portsmouth, N.H., Obama said, "We have the AARP onboard because they know this is a good deal for our seniors." He added, "AARP would not be endorsing a bill if it was undermining Medicare." But Tom Nelson, AARP's chief operating officer, said, "Indications that we have endorsed any of the major health care reform bills currently under consideration in Congress are inaccurate."
Reuters:
- ABC News reported on Tuesday that its U.S. consumer confidence index rose in the latest week, as many Americans became less worried about their personal finances. The Consumer Comfort Index rose to -47 in the week to Aug. 9 from -49 the prior week, although the index remains in deeply negative territory.
- Bearish bets in U.S. stocks dropped sharply at the end of July for the first time since mid-May, the exchanges said on Tuesday, suggesting short investors have been forced to abandon their bets in the wake of the recent hefty rally.
Financial Times:
- The International Swaps and Derivatives Association on Tuesday unveiled a new website designed to provide key information about the credit derivatives market for investors and dealers.
Late Buy/Sell Recommendations
- None of Note
Night Trading
Asia Ex-Japan Inv Grade CDS Index unch.
Morning Preview
US AM Market Call NASDAQ 100 Pre-Market Indicator/Heat Map Indications Pre-market Stock Quote/Chart Asian Financial News
European Financial News WSJ Intl Markets Performance Commodity Futures Top 25 Stories Top 20 Business Stories Today in IBD In Play Bond Ticker Economic Preview/Calendar Earnings Calendar
Conference Calendar
Who’s Speaking? Upgrades/Downgrades Rasmussen Business/Economy Polling
Earnings of Note
Company/EPS Estimate
- (LIZ)/-.39
- (M)/.17
- (SLE)/.24
- (HRS)/.83
- (CACI)/.92
- (BYI)/.56
- (AAP)/.83
- (ETH)/-.25
Economic Releases
8:30 am EST
- The Trade Deficit for June is estimated to widen to -$28.7B versus -$26.0B in May.
10:30 am EST
- Bloomberg consensus estimates call for a weekly crude oil inventory build of +1,000,000 barrels versus a +1,670,000 barrel gain the prior week. Gasoline supplies are expected to fall by -1,200,000 barrels versus a -218,000 barrel decline the prior week. Distillate inventories are estimated to rise by +200,000 barrels versus a -1,136,000 barrel decline the prior week. Finally, Refinery Utilization is expected to fall by -.10% versus a -.03% decline the prior week.
2:00 pm EST
- The Monthly Budget Deficit for July is estimated to widen to -$180.0B versus -$102.8B in June.
2:15 pm EST
- The FOMC is expected to leave the benchmark fed funds rate unchanged at .25%.
Upcoming Splits
Other Potential Market Movers
BOTTOM LINE: Asian indices are mostly lower, weighed down by automaker and commodity shares in the region. I expect US
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