Bloomberg:
- Natural gas and oil are falling, erasing morning gains, amid robust inventories and forecasts showing mild weather the next two weeks.
- Gold is falling $6/oz. in NY on a surge in the US dollar after stronger economic reports and positive comments from Treasury Secretary Paulson.
- US Treasuries are falling after a government report showed the economy added more jobs than expected in November.
- Shares of Citigroup(C) surged as much as 3.9% on speculation the company may shed some businesses or shuffle its executive ranks.
- MIT scientist said they engineered a new strain of yeast that can increase the speed and efficiency of ethanol production.
- Shares of Heelys Inc.(HLYS), the maker of wheeled sneakers, surged as much as 85% in its first day of trading after an IPO raised more money than planned.
- The euro will halt its seven-year climb against the yen and yearlong gain versus the US dollar in 2007, Lehman Brothers said.
- Bank of America(BAC) may be “very interested” in buying Barclays Plc in what would be the world’s biggest financial-services acquisition, analysts at Merrill Lynch(MER) said.
- Derrick Shareef, an Illinois man, was arrested and charged with plotting a terrorist attack in a shopping mall, the FBI said. He was accused of planning to place hand grenades in garbage cans at the CherryVale Shopping Mall in Rockford, about 90 miles northwest of Chicago.
Wall Street Journal:
- Some hedge-fund managers are hiring lobbyists to tell them what’s going on in the US Congress building in hopes of gathering information on which they could make a profit.
- US mutual funds’ plans to change the way in which they pay for research reports might boost returns for investors, but they threaten the trading desks of smaller brokerage firms.
NY Times:
- US wages for non-managers are climbing faster than inflation. US consumer buying power is increasing faster than it has since the last 1990s.
NY Post:
- Time Warner’s(TWX) cable subsidiary sued DirectTV Group yesterday, claiming the satellite television company engaged in false advertising about the NFL Network.
Washington Post:
- Sirius Satellite(SIRI) CEO Karmazin hinted to analysts Dec. 6 that his company could merge with competitor XM Satellite Radio(XMSR).
- The UN General Assembly’s chief budget committee approved a $4.9 million renovation of the secretary general’s Manhattan residence.
Business Week:
- McAfee Inc.(MFE), the world’s No. 2 maker of anti-spam and anti-spyware software, may be targeted for a takeover.
Jiji Press:
- The Bank of Japan probably won’t raise interest rates at a policy meeting this month.
Friday, December 08, 2006
Job Market Healthy, Consumer Confidence Falls Slightly from 15-Month Highs
- The Change in Non-farm Payrolls for November rose to 132K versus estimates of 100K and a downwardly revised 79K in October.
- The Change in Manufacturing Payrolls for November rose to -15K versus estimates of -15K and -44K in October.
- The Unemployment Rate for November was 4.5% versus estimates of 4.5% and 4.4% in October.
- Average Hourly Earnings for November rose .2% versus estimates of a .3% increase and a .4% gain in October.
- Preliminary Univ. of Mich. Consumer Confidence for December fell to 90.2 versus estimates of 92.0 and a reading of 92.1 in November.
- The Change in Manufacturing Payrolls for November rose to -15K versus estimates of -15K and -44K in October.
- The Unemployment Rate for November was 4.5% versus estimates of 4.5% and 4.4% in October.
- Average Hourly Earnings for November rose .2% versus estimates of a .3% increase and a .4% gain in October.
- Preliminary Univ. of Mich. Consumer Confidence for December fell to 90.2 versus estimates of 92.0 and a reading of 92.1 in November.
BOTTOM LINE: Employers in the US added more workers than forecast in November, showing the economy’s resilience, Bloomberg reported. These numbers bode well for Fed Chairman Ben Bernanke’s belief that the US economy will continue to expand. 7,000,000 jobs have now been created since August 2003. However, builders eliminated 29,000 jobs in November versus 24,000 the prior month. According the recent Fed Beige Book report, labor markets remained “tight” in October and November. As well, the Monster Employment Index hit a record high in November. I continue to believe the job market will remain healthy over the intermediate-term without generating substantial unit labor cost increases.
Confidence among US consumers declined in December from close to a 15-month high, Bloomberg said. The recent bounce in gas prices and continuing slowdown in housing are the main things holding back sentiment. The Current Conditions component of the index, which gauges consumer sentiment towards purchasing big-ticket items like cars, rose to 108.2 from 106. This is a big positive heading into the holidays. The Expectations Component fell to 78.6 from 83.2 in November. The Expected Inflation Component remained at 3%. I continue to believe consumer confidence will make new cycle highs over the intermediate-term as energy prices fall further, the job market remains healthy, stocks rise, housing stabilizes at relatively high levels, interest rates remain low and inflation decelerates further.
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.
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