Wednesday, June 28, 2006
Tuesday, June 27, 2006
Wednesday Watch
Late-Night Headlines
Bloomberg:
- Honda Motor Co. chose Indiana as the home of its sixth North American auto-assembly plant.
- J. Crew Group(JCG), the casual clothing retailer part-owned by Texas Pacific Group, raised $376 million through an IPO today, topping its expected price range and signaling strong demand for new issues.
- Bank of China Ltd. drew $84.6 billion of bids for the nation’s biggest public offering, 52 times the stock on offer, underlining demand for new equity after the lifting of a yearlong ban on share sales.
Financial Times:
- High oil prices and the risk of volatility in commodity markets now rank ahead of fraud and the growth of hedge funds as the main concern for the stability of banks and financial regulators, citing a survey by the Center for the Study of Financial Innovation. Trading in derivatives linked to commodities has been one of the largest areas for growth for investment banks.
Xinhua news:
- Chinese government policies meant to curb excessive expansion in investment and credit must be implemented to ensure the economy maintains “stable, fast growth,” citing the head of the nation’s top planning body.
Late Buy/Sell Recommendations
- None of note
Night Trading
Asian Indices are -1.50% to -.75% on average.
S&P 500 indicated -.04%.
NASDAQ 100 indicated -.16%.
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/EPS Estimate
- (COMS)/.04
- (ARRO)/.33
- (BMET)/.45
- (CAG)/.29
- (EMMS)/-.05
- (MLHR)/.37
- (MKC)/.30
- (MU)/.10
- (PAYX)/.32
- (RHAT)/.09
Upcoming Splits
- (ANDE) 2-for-1
Economic Releases
10:30 am EST
- Bloomberg consensus estimates call for a 1,400,000 barrel crude oil drawdown. Gasoline supplies are expected to rise by 450,000 barrels. Distillate supplies are estimated to rise by 1,450,000 barrels. Finally, refinery utilization is expected to rise 0.30%.
Bloomberg:
- Honda Motor Co. chose Indiana as the home of its sixth North American auto-assembly plant.
- J. Crew Group(JCG), the casual clothing retailer part-owned by Texas Pacific Group, raised $376 million through an IPO today, topping its expected price range and signaling strong demand for new issues.
- Bank of China Ltd. drew $84.6 billion of bids for the nation’s biggest public offering, 52 times the stock on offer, underlining demand for new equity after the lifting of a yearlong ban on share sales.
Financial Times:
- High oil prices and the risk of volatility in commodity markets now rank ahead of fraud and the growth of hedge funds as the main concern for the stability of banks and financial regulators, citing a survey by the Center for the Study of Financial Innovation. Trading in derivatives linked to commodities has been one of the largest areas for growth for investment banks.
Xinhua news:
- Chinese government policies meant to curb excessive expansion in investment and credit must be implemented to ensure the economy maintains “stable, fast growth,” citing the head of the nation’s top planning body.
Late Buy/Sell Recommendations
- None of note
Night Trading
Asian Indices are -1.50% to -.75% on average.
S&P 500 indicated -.04%.
NASDAQ 100 indicated -.16%.
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/EPS Estimate
- (COMS)/.04
- (ARRO)/.33
- (BMET)/.45
- (CAG)/.29
- (EMMS)/-.05
- (MLHR)/.37
- (MKC)/.30
- (MU)/.10
- (PAYX)/.32
- (RHAT)/.09
Upcoming Splits
- (ANDE) 2-for-1
Economic Releases
10:30 am EST
- Bloomberg consensus estimates call for a 1,400,000 barrel crude oil drawdown. Gasoline supplies are expected to rise by 450,000 barrels. Distillate supplies are estimated to rise by 1,450,000 barrels. Finally, refinery utilization is expected to rise 0.30%.
BOTTOM LINE: Asian indices are lower, weighed down by commodity and technology stocks in the region. I expect US equities to open lower and to rally into the afternoon, finishing mixed. The Portfolio is 50% net long heading into the day.
***Alert***
I am unable to post the Tuesday Close due to a scheduling conflict. I will post the Wednesday Watch later this evening.
Stocks Lower into Final Hour on Rate Hike Worries
BOTTOM LINE: The Portfolio is lower into the final hour on losses in my Retail longs, Networking longs and Semi longs. I added to my (EEM), (IWM) and (QQQQ) shorts, thus leaving the Portfolio 50% net long. The tone of the market is negative as the advance/decline line is substantially lower, almost every sector is lower and volume is below average. The Johnson Redbook same-store sales index rose 3.3% year over year last week vs. a 3.2% rise the prior week. The long-term average is again of around 2.6%. I continue to see little evidence that a significant decline in consumer spending is on the horizon. I do, however, still expect to see retail sales decelerate back to average levels by next month. I expect US stocks to trade mixed into the close from current levels as short-covering and bargain hunting offset Fed worries.
Today's Headlines
Bloomberg:
- Barr Pharmaceuticals(BRL) agreed to buy Pliva d.d., eastern Europe’s biggest drugmaker, for $2.2 billion in cash, topping a bid from Iceland’s Actavis Group hf.
- The Hamas and Fatah movements, which share control of the Palestinian Authority, today agreed to back a document that implicitly recognizes Israel’s right to exist.
- Intel Corp.(INTC) agreed to sell a unit that builds chips for devices such as the BlackBerry to Marvell Technology Group.(MRVL) for $600 million as the company slashes costs and seeks to regain market share in its bigger businesses.
- Copper is falling 4% on mounting concern that the world’s central banks will continue to boost interest rates to combat inflation, slowing the economy and demand for metals.
- Henry Paulson, President Bush’s nominee for US Treasury Secretary, said “low” tax rates and fixing the Social Security and Medicare programs are key to a stronger economy.
Wall Street Journal:
- General Electric’s(GE) NBC Universal today plans to announce it will offer YouTube Inc. promotional video clips for some of its shows including “The Office” and “Saturday Night Live.”
- The US House of Representatives this week will probably cancel a 25-year restriction on oil and gas exploration along portions of the US coast.
- Google(GOOG) will introduce a test version of its GBuy online-payment service as early as this week to challenge EBay’s(EBAY) PayPal online-payment service.
- Time Warner’s(TWX) Warner Bros. will distribute movies and television shows over the Internet under an agreement to use Guba’s search engine and video-sharing network.
- US investors have been playing it safe, opting for multi-cap or all-cap mutual funds rather than large-cap or small-cap funds.
- Sony’s(SNE) personal music player is still struggling to compete with Apple Computer’s(AAPL) iPod, citing Sony president Ryoji Chubachi.
- A Coca-Cola bottler and MasterCard Intl. plan to site 1,000 vending machines in the Philadelphia area which will be able to accept credit and debit cards.
Washington Post:
- President Bush asked US Homeland Security Secretary Michael Chertoff to overhaul the nation’s Emergency Alert System because of weaknesses revealed after the Sept. 11, 2001, terrorist attacks and Hurricane Katrina in 2005.
Miami Herald:
- “Full-house” generators have become an important feature for high-priced South Florida homes after six major hurricanes in two years.
NY Times:
- Univision Communications(UVN) may accept a bid worth about $36.25 a share, or $11 billion, from a group led by billionaire Haim Saban.
USA Today:
- Real estate in more than 30 major metro areas, including Washington, Atlantic City, New York, Las Vegas, Phoenix, Sacramento and San Diego, more than doubled since 2000. Home prices will rise another 5% this year, according to the paper.
Handelsblatt:
- Kohlberg Kravis Roberts raised $15.5 billion for the biggest ever private equity fund.
Xinhua News:
- China’s government may fine media organizations as much as $12,501 for unauthorized reporting of emergencies under a draft law legislators started debating yesterday.
- Barr Pharmaceuticals(BRL) agreed to buy Pliva d.d., eastern Europe’s biggest drugmaker, for $2.2 billion in cash, topping a bid from Iceland’s Actavis Group hf.
- The Hamas and Fatah movements, which share control of the Palestinian Authority, today agreed to back a document that implicitly recognizes Israel’s right to exist.
- Intel Corp.(INTC) agreed to sell a unit that builds chips for devices such as the BlackBerry to Marvell Technology Group.(MRVL) for $600 million as the company slashes costs and seeks to regain market share in its bigger businesses.
- Copper is falling 4% on mounting concern that the world’s central banks will continue to boost interest rates to combat inflation, slowing the economy and demand for metals.
- Henry Paulson, President Bush’s nominee for US Treasury Secretary, said “low” tax rates and fixing the Social Security and Medicare programs are key to a stronger economy.
Wall Street Journal:
- General Electric’s(GE) NBC Universal today plans to announce it will offer YouTube Inc. promotional video clips for some of its shows including “The Office” and “Saturday Night Live.”
- The US House of Representatives this week will probably cancel a 25-year restriction on oil and gas exploration along portions of the US coast.
- Google(GOOG) will introduce a test version of its GBuy online-payment service as early as this week to challenge EBay’s(EBAY) PayPal online-payment service.
- Time Warner’s(TWX) Warner Bros. will distribute movies and television shows over the Internet under an agreement to use Guba’s search engine and video-sharing network.
- US investors have been playing it safe, opting for multi-cap or all-cap mutual funds rather than large-cap or small-cap funds.
- Sony’s(SNE) personal music player is still struggling to compete with Apple Computer’s(AAPL) iPod, citing Sony president Ryoji Chubachi.
- A Coca-Cola bottler and MasterCard Intl. plan to site 1,000 vending machines in the Philadelphia area which will be able to accept credit and debit cards.
Washington Post:
- President Bush asked US Homeland Security Secretary Michael Chertoff to overhaul the nation’s Emergency Alert System because of weaknesses revealed after the Sept. 11, 2001, terrorist attacks and Hurricane Katrina in 2005.
Miami Herald:
- “Full-house” generators have become an important feature for high-priced South Florida homes after six major hurricanes in two years.
NY Times:
- Univision Communications(UVN) may accept a bid worth about $36.25 a share, or $11 billion, from a group led by billionaire Haim Saban.
USA Today:
- Real estate in more than 30 major metro areas, including Washington, Atlantic City, New York, Las Vegas, Phoenix, Sacramento and San Diego, more than doubled since 2000. Home prices will rise another 5% this year, according to the paper.
Handelsblatt:
- Kohlberg Kravis Roberts raised $15.5 billion for the biggest ever private equity fund.
Xinhua News:
- China’s government may fine media organizations as much as $12,501 for unauthorized reporting of emergencies under a draft law legislators started debating yesterday.
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