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Friday, December 08, 2006
Thursday, December 07, 2006
Friday Watch
Late-Night Headlines
Bloomberg:
- The S&P 500 will climb to a record 1150 in 2007 as business investment and exports mitigate a slowdown in consumer spending, according to Goldman Sachs(GS) Group’s Abby Joseph Cohen. The estimate implies a 10% increase for the S&P 500 next year.
- Japan’s economy grew at less than half the pace the government estimated last quarter as consumers pared spending and growth in corporate investment cooled. The world’s second largest economy expanded at an annual .8% rate in the three months ended Sept. 30, slower than an initial estimate of 2%, the Cabinet Office said.
- Sony Corp.(SNE) sold 197,000 PlayStation 3 consoles in the US during November, missing its goal for initial shipments by half after parts shortages slowed production, market researcher NPD Group Inc. estimated. Nintendo’s Wii, which also was introduced last month, sold 476,000 units. The Microsoft Xbox 360 sold 511,000 machines.
- Drug-coated heart stents don’t pose a higher risk of death or heart attack from blood clots than bare-metal devices when used as approved by regulators, a US government advisory panel said.
- The US Senate confirmed Andrew von Eschenbach, President Bush’s nominee to head the FDA, after lawmakers blocked a vote for months because of complaints about the agency.
- Reckson Associates(RA) shareholders approved the sale of the company for $3.8 billion to SL Green Realty after a two-day lobbying effort by Reckson that included a last-minute promise of a dividend.
- Marshall Wace LLP raised $2 billion in the largest IPO of a hedge fund. The London-based firm sold shares of MW Tops Ltd., a closed-end investment company, on Euronext Amsterdam, according to an e-mailed statement.
- The “Chicago Spire,” planned as the tallest building in North America, will be entirely residential condominiums, said its developer, Shelbourne Development Ltd.
- China’s producer-price inflation unexpectedly eased in November to a six-month low as oil costs slipped.
AFP:
- Somalia’s Islamist militia rejected a UN Security Council vote authorizing an African peacekeeping force, and said it would cause further bloodshed in the Horn of Africa nation.
Late Buy/Sell Recommendations
CSFB:
- US videogame software sales grew 15% year-over-year in November, above the 1% year-over-year increase in October.
Business Week:
- Inter Parfums Inc.(IPAR) will probably benefit from an agreement to make perfumes and beauty products for Gap Inc.(GPS).
- Gannett Co.(GCI) shares may rise 26% within a year., citing Vontobel Asset Management’s Ed Walczak.
Night Trading
Asian Indices are -.75% to -.25% on average.
S&P 500 indicated -.06%.
NASDAQ 100 indicated unch.
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
Conference Calendar
Daily Stock Events
Macro Calls
Rasmussen Consumer/Investor Daily Indices
CNBC Guest Schedule
Earnings of Note
Company/EPS Estimate
- None of note
Upcoming Splits
- (CRVL) 3-for-2
- (GRC) 5-for-4
- (EMR) 2-for-1
- (EZPW) 3-for-1
- (RES) 3-for-2
Economic Releases
8:30 am EST
- The Change in Non-farm Payrolls for November is estimated at 100K versus 92K in October.
- The Change in Manufacturing Payrolls for November is estimated at -15K versus -39K in October.
- Average Hourly Earnings for November are estimated to rise .3% versus a .4% gain in October.
10:00 am EST
- The Preliminary Univ. of Mich. Consumer Confidence reading for December is estimated to fall to 92.0 versus a reading of 92.1 in November.
Bloomberg:
- The S&P 500 will climb to a record 1150 in 2007 as business investment and exports mitigate a slowdown in consumer spending, according to Goldman Sachs(GS) Group’s Abby Joseph Cohen. The estimate implies a 10% increase for the S&P 500 next year.
- Japan’s economy grew at less than half the pace the government estimated last quarter as consumers pared spending and growth in corporate investment cooled. The world’s second largest economy expanded at an annual .8% rate in the three months ended Sept. 30, slower than an initial estimate of 2%, the Cabinet Office said.
- Sony Corp.(SNE) sold 197,000 PlayStation 3 consoles in the US during November, missing its goal for initial shipments by half after parts shortages slowed production, market researcher NPD Group Inc. estimated. Nintendo’s Wii, which also was introduced last month, sold 476,000 units. The Microsoft Xbox 360 sold 511,000 machines.
- Drug-coated heart stents don’t pose a higher risk of death or heart attack from blood clots than bare-metal devices when used as approved by regulators, a US government advisory panel said.
- The US Senate confirmed Andrew von Eschenbach, President Bush’s nominee to head the FDA, after lawmakers blocked a vote for months because of complaints about the agency.
- Reckson Associates(RA) shareholders approved the sale of the company for $3.8 billion to SL Green Realty after a two-day lobbying effort by Reckson that included a last-minute promise of a dividend.
- Marshall Wace LLP raised $2 billion in the largest IPO of a hedge fund. The London-based firm sold shares of MW Tops Ltd., a closed-end investment company, on Euronext Amsterdam, according to an e-mailed statement.
- The “Chicago Spire,” planned as the tallest building in North America, will be entirely residential condominiums, said its developer, Shelbourne Development Ltd.
- China’s producer-price inflation unexpectedly eased in November to a six-month low as oil costs slipped.
AFP:
- Somalia’s Islamist militia rejected a UN Security Council vote authorizing an African peacekeeping force, and said it would cause further bloodshed in the Horn of Africa nation.
Late Buy/Sell Recommendations
CSFB:
- US videogame software sales grew 15% year-over-year in November, above the 1% year-over-year increase in October.
Business Week:
- Inter Parfums Inc.(IPAR) will probably benefit from an agreement to make perfumes and beauty products for Gap Inc.(GPS).
- Gannett Co.(GCI) shares may rise 26% within a year., citing Vontobel Asset Management’s Ed Walczak.
Night Trading
Asian Indices are -.75% to -.25% on average.
S&P 500 indicated -.06%.
NASDAQ 100 indicated unch.
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
Conference Calendar
Daily Stock Events
Macro Calls
Rasmussen Consumer/Investor Daily Indices
CNBC Guest Schedule
Earnings of Note
Company/EPS Estimate
- None of note
Upcoming Splits
- (CRVL) 3-for-2
- (GRC) 5-for-4
- (EMR) 2-for-1
- (EZPW) 3-for-1
- (RES) 3-for-2
Economic Releases
8:30 am EST
- The Change in Non-farm Payrolls for November is estimated at 100K versus 92K in October.
- The Change in Manufacturing Payrolls for November is estimated at -15K versus -39K in October.
- Average Hourly Earnings for November are estimated to rise .3% versus a .4% gain in October.
10:00 am EST
- The Preliminary Univ. of Mich. Consumer Confidence reading for December is estimated to fall to 92.0 versus a reading of 92.1 in November.
BOTTOM LINE: Asian indices are lower, weighed down by technology and commodity 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.
Stocks Slightly Lower into Final Hour on Rising Apprehension Ahead of Tomorrow's Jobs Report
BOTTOM LINE: The Portfolio is about even into the final hour as gains in my Telecom longs and Medical longs offset losses in my Computer shorts and Retail shorts. I have not traded today, thus leaving the Portfolio 100% net long. The tone of the market is slightly negative as the advance/decline line is modestly lower, sector performance is mixed and volume is slightly above average. Despite mild losses in the major averages, the underlying action remains constructive. Very few stocks are down on volume. Breadth is just modestly negative. A number of market-leading stocks continue to trade well and about a dozen sectors I follow are actually higher. The dollar is moving a bit higher vs. the euro and the 10-year yield is a bit lower over the last few hours. The NYSE Arms is an above-average 1.22. Moreover, the VIX is rising 6.7%. I expect US stocks to trade modestly higher into the close from current levels on short-covering, positive economic data and portfolio manager performance anxiety ahead of tomorrow’s jobs report.
Today's Headlines
Bloomberg:
- General Motors’(GM) decline in US sales has “bottomed out” and the company hopes to end a four-year slide in US market share next year, marketing chief Mark LaNeve said.
- MasterCard(MA) won a legal ruling awarding it the right to sponsor the next two World Cup soccer championships instead of its larger rival, Visa Intl.
- Reckson Assoc.(RA) received new bids for parts of the company today and they were rejected, said Reckson CEO Rechler.
- Democratic Representative John Dingell said that he will move to force the Bush administration to pressure pharmaceutical companies to lower prices when he takes over in January as chairman of the Energy and Commerce Committee.
- European Central Bank President Jean-Claude Trichet signaled the pace of interest-rate increases may slow after the bank lowered its inflation forecasts.
- Chevron Corp.(CVX) plans to raise capital spending by more than 20% next year to a record $19.6 billion as major projects move from the drawing board to construction. Chevron earmarked about 75% of its 2007 capital budget for exploration and production.
- Incoming US Senate Banking Committee Chairman Christopher Dodd said he’s concerned about pension-fund investments in hedge funds and plans to examine the risk for American workers.
- The US South may have wetter-than-normal weather during the next two to three months because of a strengthening weather pattern called El Nino that is heating the Pacific Ocean.
- Southern Copper(PCU), the world’s second-largest copper mining company by reserves, said it increased reserves at its two Peruvian copper mines, which account for half of its total output.
- Wheat prices will fall early next year due to increased winter plantings and good weather, according to a UN report.
- South Africa’s cabinet approved a plan to establish a biofuels industry in the country that is expected to attract $852 million in investment.
- Simon Wardell, head of energy research at Global Insight see less “upside” risk to oil prices.
Wall Street Journal:
- Avaya Inc.(AV) will be the last freestanding descendant of American Telephone & Telegraph(T) which came to be known as Ma Bell, after LSI Corp.(LSI) completes its acquisition of Agere Systems(AGR).
- Democrats have stepped up collecting donations from lobbyists while staffers are maneuvering to acquire positions before a promised clampdown on congressional ethics.
- Ford Motor(F) will debut an updated version of its small Focus car at an auto show in Detroit next month as it seeks US consumers interested in vehicles that use less gasoline.
- Motorola(MOT) has plenty of money but is struggling to make itself felt in technologies beyond cellphones.
USA Today:
- The federal government will begin screening cargo bound for the US from four overseas ports for radiation beginning early next year in an effort to stop terrorists from smuggling nuclear weapons.
NY Times:
- In 1980, 4% of Broadway theatergoers were under the age of 18, citing the League of American Theaters and Producers. Last season, 9.6% were under 18.
- An adviser to former President Jimmy Carter, Kenneth Stein, resigned because he doubted the accuracy and integrity of Carter’s new book. Stein, a professor of Middle Eastern history and political science at Emory University and former executive director of the Carter Center, wrote in a two-page letter that the book, “Palestine Peace Not Apartheid,” contains “factual errors, copied materials not cited, superficialities, glaring omissions and simply invented segments.”
Wichita Eagle:
- Raytheon Co.(RTN) may be in exclusive talks to sell its Raytheon Aircraft unit to Onex Corp. and Goldman Sachs(GS) for about $3 billion.
Kenya Broadcasting Corp.:
- Kenya will spend $1 billion upgrading and increasing electricity production by 2010. Additional electricity will be generated from wind, hydropower and geothermal stations.
- General Motors’(GM) decline in US sales has “bottomed out” and the company hopes to end a four-year slide in US market share next year, marketing chief Mark LaNeve said.
- MasterCard(MA) won a legal ruling awarding it the right to sponsor the next two World Cup soccer championships instead of its larger rival, Visa Intl.
- Reckson Assoc.(RA) received new bids for parts of the company today and they were rejected, said Reckson CEO Rechler.
- Democratic Representative John Dingell said that he will move to force the Bush administration to pressure pharmaceutical companies to lower prices when he takes over in January as chairman of the Energy and Commerce Committee.
- European Central Bank President Jean-Claude Trichet signaled the pace of interest-rate increases may slow after the bank lowered its inflation forecasts.
- Chevron Corp.(CVX) plans to raise capital spending by more than 20% next year to a record $19.6 billion as major projects move from the drawing board to construction. Chevron earmarked about 75% of its 2007 capital budget for exploration and production.
- Incoming US Senate Banking Committee Chairman Christopher Dodd said he’s concerned about pension-fund investments in hedge funds and plans to examine the risk for American workers.
- The US South may have wetter-than-normal weather during the next two to three months because of a strengthening weather pattern called El Nino that is heating the Pacific Ocean.
- Southern Copper(PCU), the world’s second-largest copper mining company by reserves, said it increased reserves at its two Peruvian copper mines, which account for half of its total output.
- Wheat prices will fall early next year due to increased winter plantings and good weather, according to a UN report.
- South Africa’s cabinet approved a plan to establish a biofuels industry in the country that is expected to attract $852 million in investment.
- Simon Wardell, head of energy research at Global Insight see less “upside” risk to oil prices.
Wall Street Journal:
- Avaya Inc.(AV) will be the last freestanding descendant of American Telephone & Telegraph(T) which came to be known as Ma Bell, after LSI Corp.(LSI) completes its acquisition of Agere Systems(AGR).
- Democrats have stepped up collecting donations from lobbyists while staffers are maneuvering to acquire positions before a promised clampdown on congressional ethics.
- Ford Motor(F) will debut an updated version of its small Focus car at an auto show in Detroit next month as it seeks US consumers interested in vehicles that use less gasoline.
- Motorola(MOT) has plenty of money but is struggling to make itself felt in technologies beyond cellphones.
USA Today:
- The federal government will begin screening cargo bound for the US from four overseas ports for radiation beginning early next year in an effort to stop terrorists from smuggling nuclear weapons.
NY Times:
- In 1980, 4% of Broadway theatergoers were under the age of 18, citing the League of American Theaters and Producers. Last season, 9.6% were under 18.
- An adviser to former President Jimmy Carter, Kenneth Stein, resigned because he doubted the accuracy and integrity of Carter’s new book. Stein, a professor of Middle Eastern history and political science at Emory University and former executive director of the Carter Center, wrote in a two-page letter that the book, “Palestine Peace Not Apartheid,” contains “factual errors, copied materials not cited, superficialities, glaring omissions and simply invented segments.”
Wichita Eagle:
- Raytheon Co.(RTN) may be in exclusive talks to sell its Raytheon Aircraft unit to Onex Corp. and Goldman Sachs(GS) for about $3 billion.
Kenya Broadcasting Corp.:
- Kenya will spend $1 billion upgrading and increasing electricity production by 2010. Additional electricity will be generated from wind, hydropower and geothermal stations.
Jobless Claims Fall Substantially From Prior Week, Monster Employment Index Hits Record
- Initial Jobless Claims last week fell to 324K versus estimates of 325K and 358K the prior week.
- Continuing Claims rose to 2524K versus estimates of 2460K and 2467K prior.
- Continuing Claims rose to 2524K versus estimates of 2460K and 2467K prior.
BOTTOM LINE: Fewer US workers filed first-time applications for jobless benefits last week, retreating from a 13-month high that was inflated by holiday adjustments, Bloomberg reported. The four-week moving-average rose to 328,750 from 325,250 the prior week. The unemployment rate among those eligible to receive benefits, which tracks the US unemployment rate, held steady at 1.9%. Moreover, the Monster Employment Index hit a record high in November, according to data released this morning. I continue to believe the job market will remain healthy over the intermediate-term without generating substantial unit labor cost increases.
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