Late-Night Headlines
Bloomberg:
- Gold's price will average 9.7% less in the second quarter of 2010 than the current spot rate, as the dollar rebounds and boosts volatility of the precious metal, according to Standard Chartered Plc. "We see volatility potentially increasing further when the dollar rebounds in the first half and the large speculative position suffers from some liquidation," Hong Kong-based commodity strategist David Barclay said. "This will weigh on gold prices and, due to the extent of investor positioning, volatility should remain a feature of the spot market.
- A U.S. judge limited operations of an Invenergy LLC wind energy project in West Virginia to protect an endangered species of bat. U.S. District Judge Roger Titus in Baltimore ruled that turbines at the Beech Ridge Energy project in Greenbrier, West Virginia. can only operate from Nov. 16 to March 31 while the Indiana bat hibernates. Operations at other times would harm the bat, in violation of the Endangered Species Act, he said.
- AU Optronics Corp.(AUO), the world’s third-largest maker of liquid-crystal displays, is considering making its first acquisition since 2006 as consolidation accelerates in the industry, Chairman K.Y. Lee said. “Either we grow organically inside, or we have a chance to acquire outside capacity,” Lee, 57, said in an interview at AU Optronics’s headquarters in Hsinchu, Taiwan, yesterday. “It’s time many companies should consolidate to reduce competition.”
- Five Americans arrested in Pakistan are suspected of being the same men who left behind a “farewell” video message in the U.S. calling for young Muslims to defend Islam against aggression. At least two Pakistani-Americans, detained in the city of Sargodha, are being investigated for possible links to Jaish-e- Muhammad, a banned militant group, Pakistan’s Dawn newspaper reported today, citing officials it did not name. Five men from Virginia, aged between 19 and 25, vanished last month without informing their families of their whereabouts, Nihad Awad, national executive director of the Council on American-Islamic Relations, said at a news conference yesterday in Washington. One of them left behind an 11-minute video that “misused” verses from the Koran in a way that showed a “profound misunderstanding,” he said.
Wall Street Journal:
- President Barack Obama's latest plan to spur job growth among small businesses is drawing lukewarm praise from entrepreneurs and advocates. Under the president's latest plan, small businesses would receive an extension of various tax incentives, which were authorized in the American Recovery and Reinvestment Act, or ARRA. The plan also extends the suspension of fees and the promise of larger guarantees for Small Business Administration loans. Currently, the SBA provides a sweetened 90% guarantee on certain loans, up from 75% or 85%. The reaction to the plan was mixed among small-business owners and industry advocates. Although the president's proposals are intended to create job growth and help troubled businesses, small-company CEOs and advocates say they are frustrated by Congress's pace. "Small businesses need help this month and they needed help last month," says George Cloutier, chief executive of American Management Services, a small-business consulting firm in Orlando, Fla. "But nothing has passed," he says. "If they can rush health care, they can get something passed to help small businesses."
- Pfizer Inc.'s(PFE) takeover of Wyeth Corp.(WYE), and Merck & Co.'s(MRK) acquisition of Schering-Plough Corp., are just two of at least nine transactions under investigation by the Securities and Exchange Commission for possible insider-trading violations, people familiar with the matter said Wednesday. The Wall Street Journal reported last week that the SEC recently sent about three dozen subpoenas to hedge funds and brokerages, looking at whether deal advisers and traders illegally shared confidential information, according to people with knowledge of the inquiries. On Wednesday, new details about the specific deals under investigation emerged.
- Apple Inc.(AAPL), the company that restructured the music industry around its iTunes service, is exploring an overhaul of the way it sells and stores music that is aimed at extending its influence to the Web, according to people briefed on the company's strategy. The key vehicle for the move is music-streaming service Lala Media Inc., which Apple acquired in a deal last week for $85 million, according to people familiar with the matter. Where Apple's iTunes requires users to download music onto a specific computer, Lala lets users buy and listen to music through a Web browser, meaning its customers can access their purchases from anywhere, as long as they are connected to the Internet. Apple is considering adopting that same model for the songs sold on iTunes, a change that would give consumers more ways to access and manage their iTunes purchases -- and wouldn't require them to download Apple's software or their purchases. That new business model would extend Apple's grip on the music business, giving it the ability to sell music through search engines and other Web sites and broaden its reach beyond people who come to its virtual store.
- In his private meetings with Democrats, President Obama's health-care argument has come down to an appeal to make "history" (see above). He'd be more candid if he said that if they vote for the current bills many of them soon will be history. That's the warning from the unlikely quarter of Tuesday's special state senate election in Kentucky that became a referendum on the Democratic agenda in Washington, especially health care. Voters in the 14th District elected Republican Jimmy Higdon over Democrat Jodie Haydon by 12 points. That's significant in a district that leans Democratic by more than 2 to 1, and where Democrats and their allies spent more than $1 million, perhaps twice what the GOP did. While the Democrat campaigned on local issues and jobs, Mr. Higdon focused relentlessly on the national controversy surrounding health care.
CNBC.com:
- Citigroup(C) plans to pay back some of the $45 billion in TARP money it received last year by raising as much as $20 billion through a stock offering, CNBC has learned. An announcement could come as early as Thursday.
New York Times:
- The House Democratic effort to overhaul regulation of the nation’s financial system ran into new internal resistance Wednesday, demonstrating the difficult balancing act the party faces in trying to shape rules to prevent a repeat of last year’s financial crisis. As the House took up a sweeping measure that would put new controls on businesses and financial institutions, a bloc of business-oriented Democrats threatened to withhold support because of their concerns about its impact on financial institutions.
IBD:
Gallup:
- For the first time in Gallup's annual Honesty and Ethics of Professions poll, a majority of Americans -- 55% -- say the honesty and ethical standards of "members of Congress" are low or very low -- slightly worse than "senators," whose ethics are rated low by 49%. By contrast, 83% of Americans say nurses have either very high or high ethical standards, positioning them at the top of Gallup's 2009 ranking of various professions. The percentage of Americans now believing that members of Congress have low ethics is up from 46% in 2008 and 45% in 2007, and has more than doubled since the start of the decade -- rising from 21% in November 2000 to 55% today. The deterioration in Congress' ethics rating over the past year has occurred about equally among all three party groups. The percentage rating members' honesty and ethical standards as low or very low rose by 8 points among Republicans and independents, and by 10 points among Democrats. In addition to nurses, pharmacists, medical doctors, police, and engineers are all well regarded for their honesty and ethics by more than 6 in 10 Americans. Additionally, dentists, college teachers, and members of the clergy earn high marks from at least half of Americans. Aside from members of Congress, the only other occupational group that the majority of Americans see as having low or very low honesty and ethical standards is car salespeople. At least 40% of Americans perceive several other professions as having low integrity, including senators, stockbrokers, HMO managers, insurance salespeople, and lawyers.
Politico:
- In a bold but risky year-end strategy, Democrats are preparing to raise the federal debt ceiling by as much as $1.8 trillion before New Year’s rather than have to face the issue again prior to the 2010 elections. “We’ve incurred this debt. We have to pay our bills,” House Majority Leader Steny Hoyer told POLITICO Wednesday. And the Maryland Democrat confirmed that the anticipated increase could be as high as $1.8 trillion — nearly twice what had been assumed in last spring’s budget resolution for the 2010 fiscal year. The leadership is betting that it’s better for the party to take its lumps now rather than risk further votes over the coming year. But the enormity of the number could create its own dynamic, much as another debt ceiling fight in 1985 gave rise to the Gramm-Rudman deficit reduction act mandating across-the-board spending cuts nearly 25 years ago. Already in the Senate, there is growing pressure in both parties for the creation of a novel bipartisan task force empowered to force expedited votes in the next Congress on deficit reduction steps now shunned by lawmakers.
Rasmussen:
Financial Times:
Telegraph:
International Business Times:
- Why Apple(AAPL) succeeds, and always will. Simply put: Apple doesn't play by the rules. It reinvents them. Apple applies what I call "David Thinking" to its broader business, product development and marketing. Apple is David to Microsoft Goliath -- and other ones, too. Goliath plays by one set of rules. David chooses to change the rule
South China Morning Post:
- While the climate-change conference in Copenhagen struggles to secure agreement to reduce global warming by cutting greenhouse gasses, China's emissions are set to more than double according to forecasts by the International Energy Agency (IEA) and the US Department of Energy. The nation's emissions will rise to 13 billion tons in 2030 from 6 billion in 2006.
Economic Times:
- American Tower Corp.(AMT), the second-largest US operator of mobile-phone towers, will buy a controlling stake in the telecom infrastructure unit of Essar Group for $400 million, citing a senior executive. The deal may be announced in early January.
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China Securities Journal:
- China's banking regulator asked the nation's lenders to re-examine existing property, corporate and personal loans to make sure borrowings weren't diverted into stocks or other risky investments.
Late Buy/Sell Recommendations
Citigroup:
- Reiterated Buy on (GLW), target $20.50.
- Reiterated Buy on (FORM), added to Top Picks Live list, target $30.
Needham:
- Rated (NWS) Buy, target $18.
- Rated (VIA/B) Buy, target $37.
- Rated (CBS) Buy, target $17.
Janney Montgomery:
- Rated (IR) Buy, target $43.
Night Trading
Asian Indices are -1.25% to +.25% on average.
Asia Ex-Japan Inv Grade CDS Index 105.0 +.50 basis point.
S&P 500 futures -.09%.
NASDAQ 100 futures -.17%.
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
- (COST)/.59
- (SFD)/-.39
- (CIEN)/-.07
- (UNFI)/.36
- (JW/A)/.81
- (DG)/.25
- (NSM)/.16
Economic Releases
8:30 am EST
- The Trade Deficit for October is estimated to widen to -$36.8 billion versus -$36.5 billion in September.
- Initial Jobless Claims for last week are estimated to fall to 455K versus 457K the prior week.
- Continuing Claims are estimated to fall to 5450K versus 5465K prior.
10:30 am EST
- The Monthly Budget deficit for November is estimated to widen to -$131.6B versus -$125.2B in October.
Upcoming Splits
- None of note
Other Potential Market Movers
- The Fed's Duke speaking, Geithner's testimony before Congress on TARP, (UTX) analyst meeting, BofA Industrials Conference, BoE rate decision, weekly natural gas inventories, Treasury's 30-Year Auction, (PRU) investor day, (LLY) investment meeting and the (EP) analyst meeting could also impact trading today.
BOTTOM LINE: Asian indices are mostly lower, weighed down by automaker and real estate shares 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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