Bloomberg:
- Norfolk Southern is buying new locomotives and Audi AG is investing in new models, part of a worldwide corporate spending spree that may take over the US consumer’s role in driving global growth next year.
- US health officials are preparing new hospital infection control guidelines to slow the growing spread of bacteria that has become resistant to antibiotics.
- FPL Group agreed to buy Constellation Energy Group for about $11 billion, doubling its number of nuclear power plants and expanding in deregulated electricity markets.
- DaimlerChrysler’s Chrysler will operate its North American factories at full capacity for the first time since 19999 as 10 new models help to increase US market share, the unit’s chief said.
- Shares of Pfizer rose as much as 12%, the most in more than 20 years, after a US court ruling blocked generic competition until 2011 for Lipitor, the world’s best-selling prescription drug.
Wall Street Journal:
- PepsiCo has started growing potatoes in China as part of a risky gambit to dominate the global market for snacks and other packaged foods.
- THQ Inc., the publisher of video games such as “SpongeBob SquarePants,” plans to announce today an agreement with Massive Inc. to deliver advertisements over the Internet to its games.
- The US is boosting training of dogs that can sniff explosives as part of a broader program to boost security on the nation’s transportation systems.
- AG Edwards has started a subsidiary that will sell investment services for third parties, such as mutual funds and insurance companies.
- SEC Chairman Cox has left intact new mutual fund governance rules, hedge fund registration requirements and other changes introduced by his predecessor.
- Southwest Air CEO Kelly said the carrier has six US cities, including Charlotte, North Carolina, that are “high on the list” for possible expansions to its route network.
Barron’s:
- Microsoft may be developing a digital media player to challenge Apple’s iPod.
NY Times:
- Some US minors create pornographic Web sites, displaying themselves through Web cameras, as they seek to earn money.
- US companies are helping filmmakers distribute movies to consumers through Internet downloads or direct DVD sales.
Lloyd’s List:
- A 12% overcapacity of liquefied natural gas tankers during the next two years may spur freight rates to fall and shop operators to cut costs by trimming crews and maintenance.
AFP:
- The Shiite Muslim-led United Iraqi Alliance won 58% of the vote in the province of Baghdad in the Dec. 15 parliamentary elections.
Monday, December 19, 2005
Sunday, December 18, 2005
Monday Watch
Weekend Headlines
Bloomberg:
- Wal-Mart Stores said December same-store sales at its US stores are rising within its forecast.
- Vice President Dick Cheney made a surprise visit to Iraq, landing at Baghdad International Airport last night for meetings with local officials and hailing the “tremendous results” of last week’s elections there.
- Afghanistan will inaugurate its first parliament since 1969 at a ceremony today, following elections for the assembly held in September.
- Goldman Sachs, the world’s leading adviser on corporate mergers, reclaimed the top spot in a record year for takeovers in Asia outside Japan after arranging the biggest transactions in China.
Wall Street Journal:
- The US Patent and Trademark Office plans to accelerate its reexamination of five patents held by NTP that could be used to ban Research in Motion’s Blackberry device and e-mail service in the US.
- Vonage Holdings plans to raise another $250 million in a private sale of convertible debt, bringing the total raised by the Internet-based telephone carrier to $658 million.
NY Times:
- Chinese authorities have beaten, bribed and threatened residents of the southern village of Dongzhou to try to prevent them from disclosing details about a clash with security services on Dec. 6.
- The city of New Orleans will soon begin demolishing thousands of the homes most severely damaged by the flooding following Hurricane Katrina in the next several weeks.
- New Jersey awarded $5 million in grants for stem-cell research, becoming the first state to use public funds for that purpose.
- US Airways Group’s merger with America West Holdings may prompt further consolidation in the airline industry.
- eBay’s PayPal has grown to service more than 86.6 million accounts in 55 countries and it expects to process $25 billion in money transfers this year.
NY Post:
- Sirius Satellite Radio on average has spent more than $150 for each of the 1.06 million subscribers it’s gained as of Jan. 1.
San Francisco Chronicle:
- Google receives 150,000 resumes a month and uses perks including free food and annual ski trips to lure new hires.
San Jose Mercury News:
- Random security screening of passengers will return at airports Dec.22, two years after they were dropped.
Philadelphia Inquirer:
- United Parcel Service’s discount shipping offered on the Internet is undercutting the profit its UPS Store franchisees make on in-store fees.
LA Times:
- More victims of Hurricane Katrina came from middle-class neighborhoods than was previously thought, citing data from the state of Louisiana.
Financial Times:
- Music downloads are beginning to offset the decline in compact disc sales, citing unidentified record company executives.
- Lehman Brothers Holdings, Goldman Sachs Group and Bear Stearns will increase staff levels in 2006 after all three investment backs reported record profits.
AP:
- Most Americans favor leaving troops in Iraq until the country is stabilized, citing a Dec. 13-15 AP-Ipsos poll.
Nihon Keizai:
- Japan’s government expects the world’s second-largest economy to grow 1.9% in real terms next fiscal year.
Commercial Times:
- Acer Inc. forecasts its notebook computer sales will expand 50% in 2006 from this year, citing Chairman JT Wang.
Sunday Times:
- The value of acquisitions made by buyout firms this year will increase 12% to $41 billion, the most since 2000.
Iranian Republic News Agency:
- China and Iran may complete an agreement in January on the purchase of liquefied natural gas and investment in an Iranian oilfield, citing Iran’s deputy oil minister.
Weekend Recommendations
Barron's:
- Had positive comments on BA, NAPS, TRB, TIF, FDX, OSG, UTX, GE, ITT and AIG.
Goldman Sachs:
- Reiterated Outperform on PFE.
Night Trading
Asian indices are +.50% to +1.0% on average.
S&P 500 indicated +.20%.
NASDAQ 100 indicated +.12%.
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
CC/.04
Upcoming Splits
HYSL 3-for-2
Economic Releases
1:00 pm EST
- The NAHB Housing Market Index for December is estimates to rise to 61 versus a reading of 60 in November.
Bloomberg:
- Wal-Mart Stores said December same-store sales at its US stores are rising within its forecast.
- Vice President Dick Cheney made a surprise visit to Iraq, landing at Baghdad International Airport last night for meetings with local officials and hailing the “tremendous results” of last week’s elections there.
- Afghanistan will inaugurate its first parliament since 1969 at a ceremony today, following elections for the assembly held in September.
- Goldman Sachs, the world’s leading adviser on corporate mergers, reclaimed the top spot in a record year for takeovers in Asia outside Japan after arranging the biggest transactions in China.
Wall Street Journal:
- The US Patent and Trademark Office plans to accelerate its reexamination of five patents held by NTP that could be used to ban Research in Motion’s Blackberry device and e-mail service in the US.
- Vonage Holdings plans to raise another $250 million in a private sale of convertible debt, bringing the total raised by the Internet-based telephone carrier to $658 million.
NY Times:
- Chinese authorities have beaten, bribed and threatened residents of the southern village of Dongzhou to try to prevent them from disclosing details about a clash with security services on Dec. 6.
- The city of New Orleans will soon begin demolishing thousands of the homes most severely damaged by the flooding following Hurricane Katrina in the next several weeks.
- New Jersey awarded $5 million in grants for stem-cell research, becoming the first state to use public funds for that purpose.
- US Airways Group’s merger with America West Holdings may prompt further consolidation in the airline industry.
- eBay’s PayPal has grown to service more than 86.6 million accounts in 55 countries and it expects to process $25 billion in money transfers this year.
NY Post:
- Sirius Satellite Radio on average has spent more than $150 for each of the 1.06 million subscribers it’s gained as of Jan. 1.
San Francisco Chronicle:
- Google receives 150,000 resumes a month and uses perks including free food and annual ski trips to lure new hires.
San Jose Mercury News:
- Random security screening of passengers will return at airports Dec.22, two years after they were dropped.
Philadelphia Inquirer:
- United Parcel Service’s discount shipping offered on the Internet is undercutting the profit its UPS Store franchisees make on in-store fees.
LA Times:
- More victims of Hurricane Katrina came from middle-class neighborhoods than was previously thought, citing data from the state of Louisiana.
Financial Times:
- Music downloads are beginning to offset the decline in compact disc sales, citing unidentified record company executives.
- Lehman Brothers Holdings, Goldman Sachs Group and Bear Stearns will increase staff levels in 2006 after all three investment backs reported record profits.
AP:
- Most Americans favor leaving troops in Iraq until the country is stabilized, citing a Dec. 13-15 AP-Ipsos poll.
Nihon Keizai:
- Japan’s government expects the world’s second-largest economy to grow 1.9% in real terms next fiscal year.
Commercial Times:
- Acer Inc. forecasts its notebook computer sales will expand 50% in 2006 from this year, citing Chairman JT Wang.
Sunday Times:
- The value of acquisitions made by buyout firms this year will increase 12% to $41 billion, the most since 2000.
Iranian Republic News Agency:
- China and Iran may complete an agreement in January on the purchase of liquefied natural gas and investment in an Iranian oilfield, citing Iran’s deputy oil minister.
Weekend Recommendations
Barron's:
- Had positive comments on BA, NAPS, TRB, TIF, FDX, OSG, UTX, GE, ITT and AIG.
Goldman Sachs:
- Reiterated Outperform on PFE.
Night Trading
Asian indices are +.50% to +1.0% on average.
S&P 500 indicated +.20%.
NASDAQ 100 indicated +.12%.
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
CC/.04
Upcoming Splits
HYSL 3-for-2
Economic Releases
1:00 pm EST
- The NAHB Housing Market Index for December is estimates to rise to 61 versus a reading of 60 in November.
BOTTOM LINE: Asian Indices are higher, led by technology shares in the region after oil fell the most in three months last Fri. I expect US stocks to open modestly higher and build on gains throughout the day. The Portfolio is 75% net long heading into the week.
Weekly Outlook
There are a number of important economic reports and some significant corporate earnings reports scheduled for release this week.
Economic reports for the week include:
Mon. - NAHB Housing Market Index
Tues. - Producer Price Index, Housing Starts
Wed. - Final 3Q GDP, Final 3Q Personal Consumption
Thur. - Personal Income, Personal Spending, PCE Deflator, Initial Jobless Claims, Leading Indicators
Fri. - Durable Goods Orders, Univ. of Mich. Consumer Confidence, New Home Sales
A few of the more noteworthy companies that release quarterly earnings this week are:
Mon. - Circuit City Stores(CC)
Tues. - BISYS Group(BSG), Factset Research(FDS), Flowserve(FLS), Jabil Circuit(JBL), Morgan Stanley(MWD), Nike(NKE), Palm Inc.(PALM)
Wed. - Commercial Metals(CMC), Carmax(KMX), Biomet(BMET), Bed Bath & Beyond(BBBY), Family Dollar(FDO), FedEx(FDX), Micron Technology(MU), Paychex(PAYX), Red Hat(RHAT)
Thur. - AG Edwards(AGE), American Greetings(AM), Cintas Corp.(CTAS), ConAgra Foods(CAG), General Mills(GIS), Solectron(SLR)
Fri. - 99 Cents Only(NDN)
Other events that have market-moving potential this week include:
Mon. - None of note
Tue. - Semi Book-to-Bill
Wed. - None of note
Thur. - None of note
Fri. - None of note
Economic reports for the week include:
Mon. - NAHB Housing Market Index
Tues. - Producer Price Index, Housing Starts
Wed. - Final 3Q GDP, Final 3Q Personal Consumption
Thur. - Personal Income, Personal Spending, PCE Deflator, Initial Jobless Claims, Leading Indicators
Fri. - Durable Goods Orders, Univ. of Mich. Consumer Confidence, New Home Sales
A few of the more noteworthy companies that release quarterly earnings this week are:
Mon. - Circuit City Stores(CC)
Tues. - BISYS Group(BSG), Factset Research(FDS), Flowserve(FLS), Jabil Circuit(JBL), Morgan Stanley(MWD), Nike(NKE), Palm Inc.(PALM)
Wed. - Commercial Metals(CMC), Carmax(KMX), Biomet(BMET), Bed Bath & Beyond(BBBY), Family Dollar(FDO), FedEx(FDX), Micron Technology(MU), Paychex(PAYX), Red Hat(RHAT)
Thur. - AG Edwards(AGE), American Greetings(AM), Cintas Corp.(CTAS), ConAgra Foods(CAG), General Mills(GIS), Solectron(SLR)
Fri. - 99 Cents Only(NDN)
Other events that have market-moving potential this week include:
Mon. - None of note
Tue. - Semi Book-to-Bill
Wed. - None of note
Thur. - None of note
Fri. - None of note
BOTTOM LINE: I expect US stocks to finish the week higher on more positive economic/earnings data, declining energy prices, short-covering, seasonal strength, moderating inflation fears and increasing inflows. My trading indicators are still giving bullish signals and the Portfolio is 75% net long heading into the week.
Saturday, December 17, 2005
Chart of Interest
BOTTOM LINE: The Consumer Price Index fell at the greatest rate in over 50 years during November. This decline illustrates the extreme effect commodity prices have recently had on various measures of inflation. I continue to believe that the US has experienced a mild bout of cyclical inflation within a secular disinflationary environment. I expect the longer-term trend of disinflation to reassert itself in 2006.
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