Late-Night Headlines
Bloomberg:
- The global recovery in stock markets will stretch into 2010 as people try to make more money than they can from cash and government bonds, according to the investment chief of Scotland’s largest money manager. “There is a wall of cash out there seeking income-earning assets,” Anne Richards, who oversees 129 billion pounds ($207 billion) at Aberdeen Asset Management Plc, said in an interview at the company’s offices in Edinburgh. “That wall of money will be supportive into next year.” American investors hold $3.5 trillion in cash, a higher proportion of the net assets of the companies in the S&P 500 Index than at the peak of the market in 2007, according to data compiled by the Investment Company Institute in Washington and Bloomberg as of Sept. 28. At the same time, interest rates worldwide are at or near record lows. The U.S. Federal Reserve cut its rate in December to between zero and 0.25 percent.
- A derivatives overhaul measure in the House may leave “regulatory gaps” and “inadvertently weaken” the Securities and Exchange Commission’s power to police fraud and manipulation of swaps transactions, an SEC official said. “Certain aspects of the discussion draft could unintentionally preserve existing regulatory gaps,” Henry T.C. Hu, director of the SEC’s new division of risk, strategy and financial innovation, said of the legislation proposed Oct. 2 by House Financial Services Committee Chairman Barney Frank. While Frank’s proposal is a “step in the right direction,” its “ambiguous” definition of risk management may leave a large number of corporations unregulated, Hu said. The draft by Frank, a Massachusetts Democrat, would ease trading and clearing requirements for derivatives dealers such as Morgan Stanley(MS) and Goldman Sachs Group Inc.(GS), compared with the administration’s proposal. “It is clearly the weakest of all the proposals I’ve seen to date,” said Christopher Whalen, managing director of Institutional Risk Analytics in
- Concerns about the federal budget deficit may thwart efforts by Senate Democrats to pass legislation this month calling for the biggest expansion of the U.S. health-care system since Medicare’s creation in 1965. The Senate Finance Committee, which had planned to approve its version of a health-care bill as early as today, scrapped a vote to give the Congressional Budget Office time to complete a cost assessment. The delay threatens to dash plans by Senate Majority Leader Harry Reid to start debate in the full Senate next week after combining the measure with one from the chamber’s health committee. “CBO has a lot of work to do,” said West Virginia Senator Jay Rockefeller, one of the finance panel’s 13 Democrats. He said the panel’s vote may be delayed for at least a week. Further clouding the timetable, a group of eight Democrats whose votes could be key to passage called on Reid, a Nevada Democrat, to delay final votes on the measure until the CBO estimates the full cost and the public has 72 hours to review it. Among the signatories were Blanche Lincoln of
- Microsoft Corp.(MSFT) CEO Steve Ballmer told Sky News that the economy has “reset to a lower level” and said he thought it will follow a “gradual growth path.”
- Verisk Analytics Inc., the supplier of actuarial data co-owned by insurers including Travelers Cos. and CNA Financial Corp., raised $1.88 billion in an initial public offering, the biggest U.S. IPO since Visa Inc. in 2008. Verisk sold about 85.3 million shares for $22 a share, according to Bloomberg data. The Jersey City, New Jersey-based company had said it would sell shares at $19 to $21 apiece.
- North Korea said dismantling the regime’s nuclear weapons is “unthinkable even in a dream,” while signaling a readiness to return to disarmament talks with the U.S., China, Russia, South Korea and Japan. The government in Pyongyang won’t give up its nuclear weapons unless the U.S. completely disarms, according to a statement by the Foreign Ministry sent in a letter to the United Nations Security Council by North Korean Ambassador Sin Son Ho.
Wall Street Journal:
- Fannie Mae and Freddie Mac are preparing to introduce a program aimed at helping independent mortgage banks acquire the short-term credit they need to make home loans, according to people familiar with the plans. The two government-backed mortgage companies, the main providers of funding for
- Attorney General Eric Holder credited counterterrorism tactics put in place in recent years for the federal arrests in Denver and New York that investigators say pre-empted a bombing plot by an alleged al Qaeda operative. Mr. Holder said Tuesday during a briefing with reporters that the arrest of Najibullah Zazi, a 24-year-old
- The other night, House Speaker Nancy Pelosi went after the commander of
CNNMoney.com:
- Beware the gold bubble. The run-up in price to more than $1,000 an ounce has investors excited. But market fundamentals point to a decline.
Politico:
- More than half of the Democrats in the House have signed on to a letter denouncing a key element of the Senate Finance Committee’s health care legislation as labor unions draw a line in the sand on paying for reform. The Democrats are attacking a plan to finance expanded health care by taxing expensive health insurance plans. The plan, sometimes cast as a tax on “Cadillac” plans, would in fact include the health care plans of many public employees and union members and has triggered a revolt from Obama’s labor supporters and their many allies on the Hill. The letter from 154 House Democrats to Speaker Nancy Pelosi urges her “to reject proposals to enact an excise tax on high-cost insurance plans that could be potentially passed on to middle-class families.”
- Despite the embarrassing rejection of his effort to lure the 2016 Olympic Games to his hometown of Chicago, President Barack Obama will keep the first-ever White House Olympic Office, POLITICO has learned. The White House stressed that the office, officially called the White House Office of Olympic, Paralympic and Youth Sport, is permanent and has purposes other than helping
- The Securities and Exchange Commission has opened a probe into whether the largest hospital company in the world, Hospital Corporation of America, violated securities law by manipulating its books and records, according to documents and people familiar with the investigation. The investigation has been focusing, at least in part, on HCA's
The Business Insider:
- Chart of the Day: Google(GOOG) Set To Dominate Mobile Advertising.
- U.S. consumers got good news Tuesday: Winter heating bills will drop an average of 8% nationwide from last year given cheaper fuel prices and expectations for milder weather. The Energy Information Administration, the forecasting arm of the Energy Department, said the average household will save $84 on heating bills this winter and pay $960 for the season, which runs through March.
Reuters:
- Bank of America Corp's (BAC) board has narrowed the list of company candidates to replace retiring chief executive Kenneth Lewis to the bank's chief risk officer and its consumer and small-business banking chief, The Wall Street Journal reported on its website on Tuesday.
- A U.S. Federal Reserve official said on Tuesday that while the U.S. economy is clearly rebounding, it is too soon to begin to withdraw the Federal Reserve's massive support. "I see nothing that conflicts with the widely held opinion that we are in recovery," Kansas City Fed President Thomas Hoenig said in remarks prepared for delivery to an economic conference. "I would not support a tight monetary policy in the current environment," Hoenig said.
- Citigroup (C) is working on a sale of its controversial commodities unit Phibro in a move that could raise hundreds of millions of dollars, the FT reported on Wednesday citing people close to the situation.
Nikkei English News:
- Samsung Electronics Co. aims to sell more than 10 million LED-backlit LCD televisions next year, five times the expected sales for 2009.
Australian Financial Review:
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Economic Times:
- NEW DELHI: Several private equity (PE) firms are reviewing whether to continue operations in India even as the domestic economy is showing clear signs of recovery. Around half a dozen PE firms are said to be in the process of shutting shop including Candover, a UK-based buyout specialist, which has recently closed shop in
This is attributed to the slowdown in PE transactions with the average number of deals in a month more than halved compared to last year as investors have turned cautious in putting in fresh money.
Late Buy/Sell Recommendations
Citigroup:
- Reiterated Buy on (IRM), target $35.
Piper Jaffray:
- Raised (BARE) to Overweight, target $14.
- Raised (EL) to Overweight, target $55.
Night Trading
Asian Indices are +.50% to +1.75% on average.
Asia Ex-Japan Inv Grade CDS Index 110.0 unch.
S&P 500 futures +.02%.
NASDAQ 100 futures unch.
Morning Preview
BNO Breaking Global News of Note
Yahoo Most Popular Biz Stories
MarketWatch Pre-market Commentary
US AM Market Call
NASDAQ 100 Pre-Market Indicator/Heat Map
Pre-market Stock Quote/Chart
WSJ Intl Markets Performance
Commodity Futures
IBD New America
Economic Preview/Calendar
Earnings Calendar
Who’s Speaking?
Upgrades/Downgrades
Politico Headlines
Rasmussen Reports Polling
Earnings of Note
Company/EPS Estimate
- (FDO)/.41
- (WWW)/.56
- (MON)/.00
- (AA)/-.09
- (RT)/.09
- (AYI)/.57
- (COST)/.76
Economic Releases
10:30 am EST
- Bloomberg consensus estimates call for a weekly crude oil inventory build of +2,000,000 barrels versus a +2,796,000 barrel gain the prior week. Gasoline supplies are estimated to rise by +1,000,000 barrels versus a -1,657,000 barrel decline the prior week. Distillate inventories are expected to fall by -400,000 barrels versus a +323,000 barre gain the prior week Finally, Refinery Utilization is expected to fall by -.33% versus a -1.01% decline the prior week.
3:00 pm EST
- Consumer Credit for August is estimated at -$10.0B versus -$21.6B in July.
Upcoming Splits
- None of note
Other Potential Market Movers
- The Treasury’s 10-year Note Auction, weekly MBA mortgage applications report, (AIR) investor day, (SFE) investor day, (ADBE) analyst meeting, (CADX) analyst day, and retail same-store-sales after close, could also impact trading today.
BOTTOM LINE: Asian indices are mostly higher, boosted by technology and commodity shares 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.
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