Monday Watch

Weekend Headlines
Bloomberg:
- U.S. retail sales jumped 22 percent to $27.8 billion during the post-Thanksgiving weekend, as shoppers flocked to stores to buy electronics, clothing and books, the National Retail Federation said.
- Retail spending on Visa credit and debit cards rose 12% on Black Friday, the first day of the holiday shopping season, led by purchases of electronic and computers. Purchases of personal entertainment devices, including Microsoft’s Xbox and Apple’s iPod, as well as computers, accounted for 19% of all retail sales volume.
- Iraqis living abroad will be permitted to take part in the country’s December elections for a new National Assembly, with voting set up in 15 other countries.
- Wal-Mart Stores said November sales at its US stores rose about 4.3%.
- Crude oil is falling in NY after forecasters predicted above-average temperatures in the US Northeast this week, leading to lower demand for fuel.

Barron’s:
- The number of US family foundations has climbed more than 60% during the past six years to about 33,000.

NY Times:
- Roche Holding AG expects to make an announcement on licenses for Tamiflu in coming weeks.
- Web logs are becoming more mainstream and less rebellious as blog advertising rises.
- The switch by large retailers to wireless cash registers from dial-up connections is inevitable.
- The US military is working to help soldiers in Iraq and Afghanistan cope with stress and grief in an effort to ward off post-traumatic stress.
- New York has approved emissions standards for cars and light trucks, based on California regulations, that the state says will add more than $1,000 in costs to each vehicle when adopted.
- Public and corporate pension plans have been investing billions of dollars in hedge funds in an effort to generate higher returns to meet demand from an increasing number of retirees.
- Canadian Prime Minister Martin’s Liberal Party government may fall in a no-confidence vote tomorrow, undercutting an international conference on greenhouse gases in Montreal.
- Verizon Communications and AT&T face large capital expenditures and higher charges for content than cable providers in the telephone companies’ bid to enter the television business.

Washington Post:
- Candidates who aspire to succeed United Nations Secretary General Kofi Annan when his term ends next year have begun seeking backing from the US and other Security Council members.

San Francisco Chronicle:
- Advanced Micro Devices has gained 5 percentage points of share to account for 10% of the market for server microprocessors in the third quarter, citing Gartner Inc.

Crain’s Chicago Business:
- Crane leases in Chicago have soared as much as 25% in the past year as construction of high-rise hotels and office towers boosted demand.

Financial Times:
- Revenue at the biggest investment banks surged after being boosted by their brokerage of hedge funds, citing research by Morgan Stanley.

Sunday Times:
- Rolls Royce Group Plc may open a factory in the US to produce its Trent 1000 aero engines.

AME Info.:
- Saudi Arabia’s Oil Minister, Ali al-Naimi, ruled out a cut in OPEC’s oil production quota when it meets in Kuwait next month.

Le Parisien:
- French President Chirac has little influence on what’s happening in France, Europe and the rest of the world, according to a majority of French people polled by research company CSA.

Weekend Recommendations
Barron's:
- Had positive comments on MEL, PCZ and KEYN.
- Had negative comments on BOT.

Goldman Sachs:
- None of note

Night Trading
Asian indices are +.25% to +1.0% on average.
S&P 500 indicated -.02%.
NASDAQ 100 indicated -.03%.

Morning Preview
US AM Market Call
NASDAQ 100 Pre-Market Indicator/Heat Map
Pre-market Commentary
Before the Bell CNBC Video(bottom right)
Global Commentary
Asian Indices
European Indices
Top 20 Business Stories
In Play
Bond Ticker
Daily Stock Events
Macro Calls
Rasmussen Consumer/Investor Daily Indices
CNBC Guest Schedule

Earnings of Note
Company/Estimate
- None of note

Upcoming Splits
BRO 2-for-1

Economic Releases
10:00 am EST
- Existing Home Sales for October are estimated to fall to 7.2 million versus 7.28 million in September.

BOTTOM LINE: Asian Indices are higher on falling energy prices and optimism for exporters in the region. I expect US stocks to open modestly higher. The Portfolio is 100% net long heading into the week.

Weekly Outlook

There are a number of important economic reports and a few significant corporate earnings reports scheduled for release this week.

Economic reports for the week include:

Mon. - Existing Home Sales
Tues. - Durable Goods Orders, Consumer Confidence, New Home Sales
Wed. - Preliminary 32Q GDP, Preliminary 3Q GDP Price Index, Preliminary 3Q Personal Consumption, Chicago Purchasing Manager, Fed’s Beige Book
Thur. - Personal Income, Personal Spending, PCE Deflator, Initial Jobless Claims, Construction Spending, ISM Manufacturing, ISM Prices Paid, Total Vehicle Sales
Fri. - Change in Non-farm Payrolls, Unemployment Rate

A few of the more noteworthy companies that release quarterly earnings this week are:

Mon. - None of note
Tues. - GameStop Corp.(GME)
Wed. - Chico’s FAS(CHS), Copart(CPRT), Jack in the Box(JBX), McData(MCDTA), Mercury Interactive(MERQE), Synopsys(SNPS), Tiffany & Co.(TIF)
Thur. - Comverse Technology(CMVT), Novell Inc.(NOVL), Omnivision Technology(OVTI)
Fri. - Del Monte(DLM), Dillard’s(DDS)

Other events that have market-moving potential this week include:

Mon. - JPMorgan Consumer & Retail Holiday Conference
Tue. - CSFB Technology Conference, JPMorgan Consumer & Retail Holiday Conference, Merrill Lynch Health Services Conference, CIBC Best Ideas Conference
Wed. - Merrill Lynch Health Services Conference, CIBC Best Ideas Conference, CSFB Tech Conference
Thur. - AG Edwards Computer Conference, CSFB Tech Conference, Merrill Lynch Med Tech Conference, Citigroup Global Paper Conference
Fri. - CSFB Tech Conference

BOTTOM LINE: I expect US stocks to finish the week mixed as worries over the housing market and profit-taking offset more optimism over US economic growth, short-covering, moderating inflation fears and a better employment report. Stocks will likely consolidate recent gains in the near-term before mounting another push higher into year-end. My trading indicators are still giving bullish signals and the Portfolio is 100% net long heading into the week.

Market Week in Review

S&P 500 1,268.25 +2.05%*



Click here for the Weekly Wrap by Briefing.com.

BOTTOM LINE: Overall, last week's market performance was positive considering recent gains and holiday-shortened trading. The advance/decline line rose, most sectors gained and volume was about average on the week. Measures of investor anxiety were mixed. The average 30-year mortgage rate declined for the first time in 13 weeks, falling to 6.28%. This is 107 basis points above all-time lows set in June 2003. Mortgage rates will likely head modestly lower over the intermediate-term. Moreover, the benchmark 10-year T-note yield fell 7 basis points on the week as inflation fears continue to diminish and optimism increased for a Fed “pause” after traders viewed the Nov. 1 Fed minutes. Small-caps and cyclicals continued to outperform on increasing optimism over the health of the US economy. The US dollar rose slightly on the week even as increasing expectations of a European Central Bank rate hike and a US Fed “pause” should have pressured the currency. As well, gold rose again on continuing international diversification out of energy and the euro and into the precious metal. In my opinion, the rise in gold is not a result of increasing inflation fears. Unleaded Gas futures continued their recent collapse and are 50% below September highs even as refinery utilization still remains below normal as a result of the hurricanes. Natural gas supplies decreased slightly this week even as a substantial amount of daily Gulf of Mexico production remains shut-in. Natural Gas has now dropped 24% from recent highs. I continue to believe global energy demand destruction and a substantial increase in supplies into 2006 will continue pushing energy prices substantially lower over the intermediate-term. The S&P 500 is closing in on my mid-year prediction of a double-digit gain. The index is currently up 6.4% for the year.

*5-day % Change

Weekly Scoreboard*

Indices
S&P 500 1,268.25 +2.05%
DJIA 10,931.62 +1.97%
NASDAQ 2,263.01 +1.92%
Russell 2000 683.58 +2.46%
DJ Wilshire 5000 12,675.34 +2.09%
S&P Equity Long/Short Index 1,081.61 +1.37%
S&P Barra Growth 606.42 +1.84%
S&P Barra Value 657.45 +2.24%
Morgan Stanley Consumer 595.64 +.46%
Morgan Stanley Cyclical 776.42 +2.46%
Morgan Stanley Technology 536.06 +2.05%
Transports 4,179.14 +2.37%
Utilities 404.01 +1.63%
S&P 500 Cum A/D Line 8,423.00 +13.61%
Bloomberg Crude Oil % Bulls 34.0 -23.84%
Put/Call .89 +25.35%
NYSE Arms .89 +32.84%
Volatility(VIX) 10.88 -3.29%
ISE Sentiment 321.00 +76.37%
AAII % Bulls N/A
US Dollar 92.04 +.17%
CRB 314.67 +.47%

Futures Spot Prices
Crude Oil 58.71 +.53%
Unleaded Gasoline 145.76 -1.58%
Natural Gas 11.62 -5.76%
Heating Oil 168.92 -2.07%
Gold 492.90 +2.95%
Base Metals 144.16 +2.09%
Copper 185.35 -1.09%
10-year US Treasury Yield 4.42% -1.56%
Average 30-year Mortgage Rate 6.28% -1.26%

Leading Sectors
Oil Service +5.07%
Steel +4.35%
Computer Hardware +4.03%

Lagging Sectors
Computer Services -.77%
Software -1.27%
Airlines -3.79%

One-Week High-Volume Gainers
One-Week High-Volume Losers

*5-Day % Change

***Alert***

The exchanges close at 1 pm EST today. I will post the Weekly Scoreboard later in the afternoon.

Today's Headlines

Bloomberg:
- High-yield, high-risk debt may reward investors in 2006 with returns of 8%, or five times higher than this year, according to John Lonski, chief economist at Moody’s Investors Services.
- The US dollar is rising against the yen after Japan’s Finance Minister Tanigaki said mild deflation “still persists” in the world’s second-biggest economy and the central bank must cooperate with the government to end a seven-year bout of falling prices.
- Taser International said the Nasdaq Stock Market may stop trading its shares because the company has failed to file a quarterly report with the SEC.
- US Treasuries are rising on speculation the Fed may signal it is nearing the end of a series of interest-rate increases on signs inflation remains contained.

Wall Street Journal:
- Tribune’s Chicago Tribune and the Los Angeles Times newspapers may reduce the number of stocks and mutual-funds they list to cut costs.
- Louisiana’s levees may have sprung leaks in countless locations during Hurricane Katrina in addition to the three main breaches, citing engineers and a study by the National Science Foundation.

Chicago Tribune:
- DECT Corp., a Japanese investment group, plans to buy Chicago’s 181 West Madison tower for about $307 million.

SparkSpread:
- Lehman Brothers Holdings hired former Goldman Sachs Group and Amerada Hess oil trader in London as part of an effort to expand into European energy trading.

Detroit Free Press:
- GM CEO Wagoner said the automaker is selling more vehicles in other countries than in the US for the first time.

Business Week:
- Krispy Kreme Doughnuts is looking to build smaller 1,500- to 2,000-square-foot stores that are closer to the size of a traditional doughnut-chain shop, citing CEO Cooper.