Friday, February 23, 2007
Thursday, February 22, 2007
Friday Watch
Late-Night Headlines
Bloomberg:
- The yen headed for the biggest weekly drop in more than two years against the euro after the Bank of Japan suggested it won’t accelerate the pace of interest-rate increases this year.
- H&R Block(HRB) posted a fiscal third-quarter after setting aside an additional $111 million to cover losses on sub-prime loans made by its Option One mortgage business. The stock surged 4.4% after-hours.
- Osaka-based Sanyo Electric Co., bailed out last year by Goldman Sachs(GS) and two Japanese banks, said regulators are investigating whether it failed to fully disclose losses. The shares plunged 29% in Tokyo trading.
- South Korean President Roh Moo Hyun said he will leave the ruling Uri Party this month to help members settle conflicts before December’s presidential election.
- Gold sold by mining companies in forward contracts in 2006 fell the most in two years, Mitsui & Co. said in its annual global survey of 118 producers. Sales dropped 13.4 million ounces, or 25%, to 40.2 million ounces, led by a reduction in hedges by Barrick Gold Corp.(ABX) “Barrick continues to set the pace in de-hedging,” said Edel Tully, head of precious metals research at Mitsui. “While de-hedging in 2007 is not expected to be of a similar magnitude, little appetite exists for new hedging.”
- Exxon Mobil(XOM) will take a 10% stake in Qatar’s Barzan gas field.
- Tractor Supply(TSCO), a retail farm-supply chain with 676 stores in 37 states, said it plans to buy back as much as $200 million of common stock over a three-year period.
- New government rules limiting emissions of carbon-dioxide aren’t likely to hurt Canadian oil-sands projects, according to Suncor Energy(SU), the world’s second-largest producer of oil from the tar-like deposits.
- Billionaire investor Carl Icahn says a preference for “out-of-favor” companies led him to buy shares of Lear Corp.(LEA) and WCI Communities(WCI), burning so-called short sellers who bet the stocks would fall.
- The Bank of Japan will gradually raise interest rates as the economy expands, Governor Toshihiko Fukui said, two days after his policy board increased the key lending rate to .5% to prevent investment bubbles.
- Billionaire Warren Buffett said Berkshire Hathaway will keep its stake in PetroChina Co., rejecting appeals to sell because of China’s investments in Sudan, accused by the US of human rights abuses.
- Rio Tinto Group(RTP) will invest $2 billion in Indonesia for its first nickel-mining project in the country.
Wall Street Journal:
- DaimlerChrysler AG’s(DCX) Chrysler unit plans to spend as much as $6 billion a year to develop new products.
CNBC:
- Billionaire real estate mogul Sam Zell, who just sold Equity Office Properties, the nation's largest office landlord, to Blackstone for $39 billion, said the office property market is still going strong and the broader housing market is also in good shape. "The overall market is much better than the press portrays it as." Zell said.
Guardian:
- The UK government will say Feb. 26 it plans to deploy over 1,000 extra troops and equipment to Afghanistan.
Late Buy/Sell Recommendations
Business Week:
- UnitedHealth Group(UNH) was popular with analysts before Warren Buffett’s Berkshire Hathway(BRK/A) bought 1 million shares of the largest US medical insurer earlier this month. Sarat Sethi of investment firm Douglas C. Lande & Assoc. said the company should trade at $70.
- Epix Pharmaceuticals(EPIX) shares may more than double in a year, citing George Fulop of Needham & Co.
Night Trading
Asian Indices are -.50% to +.25% on average.
S&P 500 indicated -.05%.
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
Conference Calendar
Daily Stock Events
Macro Calls
Rasmussen Consumer/Investor Daily Indices
CNBC Guest Schedule
Earnings of Note
Company/EPS Estimate
- (CCO)/.16
- (DPZ)/.49
- (LOW)/.37
- (GAS)/.97
- (CCU)/.40
- (CTV)/.37
- (DDS)/1.08
Upcoming Splits
- None of note
Economic Releases
- None of note
Bloomberg:
- The yen headed for the biggest weekly drop in more than two years against the euro after the Bank of Japan suggested it won’t accelerate the pace of interest-rate increases this year.
- H&R Block(HRB) posted a fiscal third-quarter after setting aside an additional $111 million to cover losses on sub-prime loans made by its Option One mortgage business. The stock surged 4.4% after-hours.
- Osaka-based Sanyo Electric Co., bailed out last year by Goldman Sachs(GS) and two Japanese banks, said regulators are investigating whether it failed to fully disclose losses. The shares plunged 29% in Tokyo trading.
- South Korean President Roh Moo Hyun said he will leave the ruling Uri Party this month to help members settle conflicts before December’s presidential election.
- Gold sold by mining companies in forward contracts in 2006 fell the most in two years, Mitsui & Co. said in its annual global survey of 118 producers. Sales dropped 13.4 million ounces, or 25%, to 40.2 million ounces, led by a reduction in hedges by Barrick Gold Corp.(ABX) “Barrick continues to set the pace in de-hedging,” said Edel Tully, head of precious metals research at Mitsui. “While de-hedging in 2007 is not expected to be of a similar magnitude, little appetite exists for new hedging.”
- Exxon Mobil(XOM) will take a 10% stake in Qatar’s Barzan gas field.
- Tractor Supply(TSCO), a retail farm-supply chain with 676 stores in 37 states, said it plans to buy back as much as $200 million of common stock over a three-year period.
- New government rules limiting emissions of carbon-dioxide aren’t likely to hurt Canadian oil-sands projects, according to Suncor Energy(SU), the world’s second-largest producer of oil from the tar-like deposits.
- Billionaire investor Carl Icahn says a preference for “out-of-favor” companies led him to buy shares of Lear Corp.(LEA) and WCI Communities(WCI), burning so-called short sellers who bet the stocks would fall.
- The Bank of Japan will gradually raise interest rates as the economy expands, Governor Toshihiko Fukui said, two days after his policy board increased the key lending rate to .5% to prevent investment bubbles.
- Billionaire Warren Buffett said Berkshire Hathaway will keep its stake in PetroChina Co., rejecting appeals to sell because of China’s investments in Sudan, accused by the US of human rights abuses.
- Rio Tinto Group(RTP) will invest $2 billion in Indonesia for its first nickel-mining project in the country.
Wall Street Journal:
- DaimlerChrysler AG’s(DCX) Chrysler unit plans to spend as much as $6 billion a year to develop new products.
CNBC:
- Billionaire real estate mogul Sam Zell, who just sold Equity Office Properties, the nation's largest office landlord, to Blackstone for $39 billion, said the office property market is still going strong and the broader housing market is also in good shape. "The overall market is much better than the press portrays it as." Zell said.
Guardian:
- The UK government will say Feb. 26 it plans to deploy over 1,000 extra troops and equipment to Afghanistan.
Late Buy/Sell Recommendations
Business Week:
- UnitedHealth Group(UNH) was popular with analysts before Warren Buffett’s Berkshire Hathway(BRK/A) bought 1 million shares of the largest US medical insurer earlier this month. Sarat Sethi of investment firm Douglas C. Lande & Assoc. said the company should trade at $70.
- Epix Pharmaceuticals(EPIX) shares may more than double in a year, citing George Fulop of Needham & Co.
Night Trading
Asian Indices are -.50% to +.25% on average.
S&P 500 indicated -.05%.
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
Conference Calendar
Daily Stock Events
Macro Calls
Rasmussen Consumer/Investor Daily Indices
CNBC Guest Schedule
Earnings of Note
Company/EPS Estimate
- (CCO)/.16
- (DPZ)/.49
- (LOW)/.37
- (GAS)/.97
- (CCU)/.40
- (CTV)/.37
- (DDS)/1.08
Upcoming Splits
- None of note
Economic Releases
- None of note
BOTTOM LINE: Asian indices are slightly higher, boosted by technology and commodity shares in the region. I expect US equities to open mixed 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 Iran Worries and Profit-taking
BOTTOM LINE: The Portfolio is slightly lower into the final hour on losses in my Medical longs and Energy-related 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, most sectors are declining and volume is about average. Many pundits and analysts have said that Sam Zell is "the smartest guy in the room" and that he was selling Equity Office Properties Trust (EOP) at the top of the market. He is likely "the smartest guy in the room." However, he said recently that he didn't sell at the top and that office rents will continue to rise. Moreover, Zell told Bloomberg that "What I can tell you is that the office market at least for the next 24 months looks extremely strong and extremely good." The S&P REIT Index, which has soared 36% over the last year, is only 2% off all-time highs despite much hand-wringing. I believe CNBC's "Closing Bell" has Zell as a guest later this afternoon. Maybe Zell did sell at the top, but he doesn't seem to see it that way. I expect US stocks to trade modestly higher into the close from current levels on short-covering and more optimism in the technology sector.
Today's Headlines
Bloomberg:
- Hedge-fund investors are best protected by market discipline rather than added regulation, the US Treasury Dept. said in releasing guidelines for the industry form the President’s Working Group on Financial Markets.
- Google Inc.(GOOG), seeking to challenge Microsoft Corp.’s(MSFT) dominance in business software, will today start selling e-mail, calendar and personalized home pages to businesses over the Web.
- Iran expanded its capacity to enrich uranium, defying a UN Security Council demand to halt its atomic work and prompting the US to consider seeking further international sanctions against the Islamic Republic.
- Crude oil is rising above $61/bbl. as a government report showed gasoline supplies fell as refineries shut units and Iran defied another UN mandate.
- Oil prices will be less than anticipated this year because a warm winter in the Northern Hemisphere and the absence of supply disruptions caused fuel stockpiles to gain, according to National Australia Bank Ltd.
- Prince Harry, third in line to the British throne, will serve alongside his military regiment in Iraq later this year, the UK Ministry of Defense said.
Wall Street Journal:
- BHP Billiton Ltd.(BHP), Rio Tinto Plc(RTP) and other world mining companies are boosting their investment and planning to open more mines, even though some commodity prices have dropped and their spending is likely to bring down prices in the future. The companies together have plans to spend tens of billions of dollars expanding production of iron ore, coal, nickel and other materials. The projects may show that mining executives are setting aside concerns that the industry may over-expand in good times and find a glut of metal in a slowdown.
- Costs incurred by North American corporations in order to comply with the 2003 Sarbanes-Oxley financial and accounting disclosure law are leveling off, as costs to meet environmental guidelines are increasing, citing a study to be published today by AMR, a Boston-based research firm.
- US crude-oil imports from Africa exceeded purchases from the Middle East in 2006 for the first time in 21 years.
NY Times:
- Executives at DaimlerChrysler AG(DCX) would prefer to sell the Chrysler unit as a whole, instead of breaking off assets.
- The campaigns of Democratic Senators Hillary Clinton and Barack Obama engaged in a series of sharply worded exchanges, changing the tone of the presidential race. Hollywood producer David Geffen’s remarks yesterday in a commentary in the Times prompted the exchange. Geffen wrote that the Clintons lie “with such ease, it’s troubling” and the NY senator’s politics are “going to be very unpleasant, unattractive and ineffective.”
- Advocates for medical marijuana sued the Dept. of Health and Human Services and the FDA over the agencies’ claims that smoking the drug isn’t medically beneficial.
Washington Post:
- China is undertaking a nationwide effort to keep teenagers from becoming addicted to the Internet.
National Post:
- Magna Intl.(MGA), Canada’s largest auto-parts maker, may make a bid for DaimlerChrysler AG’s(DCX) Chrysler unit, citing British researcher SupplierBusiness.
Arab News:
- Saudi Arabia reported a capital outflow of $800 billion, citing a member of the Riyadh Chamber of Commerce and Industry. The money is leaving the kingdom as a result of corruption, citing Majed Garoub, chairman of the lawyers committee at the Riyadh Chamber of Commerce and Industry.
- Hedge-fund investors are best protected by market discipline rather than added regulation, the US Treasury Dept. said in releasing guidelines for the industry form the President’s Working Group on Financial Markets.
- Google Inc.(GOOG), seeking to challenge Microsoft Corp.’s(MSFT) dominance in business software, will today start selling e-mail, calendar and personalized home pages to businesses over the Web.
- Iran expanded its capacity to enrich uranium, defying a UN Security Council demand to halt its atomic work and prompting the US to consider seeking further international sanctions against the Islamic Republic.
- Crude oil is rising above $61/bbl. as a government report showed gasoline supplies fell as refineries shut units and Iran defied another UN mandate.
- Oil prices will be less than anticipated this year because a warm winter in the Northern Hemisphere and the absence of supply disruptions caused fuel stockpiles to gain, according to National Australia Bank Ltd.
- Prince Harry, third in line to the British throne, will serve alongside his military regiment in Iraq later this year, the UK Ministry of Defense said.
Wall Street Journal:
- BHP Billiton Ltd.(BHP), Rio Tinto Plc(RTP) and other world mining companies are boosting their investment and planning to open more mines, even though some commodity prices have dropped and their spending is likely to bring down prices in the future. The companies together have plans to spend tens of billions of dollars expanding production of iron ore, coal, nickel and other materials. The projects may show that mining executives are setting aside concerns that the industry may over-expand in good times and find a glut of metal in a slowdown.
- Costs incurred by North American corporations in order to comply with the 2003 Sarbanes-Oxley financial and accounting disclosure law are leveling off, as costs to meet environmental guidelines are increasing, citing a study to be published today by AMR, a Boston-based research firm.
- US crude-oil imports from Africa exceeded purchases from the Middle East in 2006 for the first time in 21 years.
NY Times:
- Executives at DaimlerChrysler AG(DCX) would prefer to sell the Chrysler unit as a whole, instead of breaking off assets.
- The campaigns of Democratic Senators Hillary Clinton and Barack Obama engaged in a series of sharply worded exchanges, changing the tone of the presidential race. Hollywood producer David Geffen’s remarks yesterday in a commentary in the Times prompted the exchange. Geffen wrote that the Clintons lie “with such ease, it’s troubling” and the NY senator’s politics are “going to be very unpleasant, unattractive and ineffective.”
- Advocates for medical marijuana sued the Dept. of Health and Human Services and the FDA over the agencies’ claims that smoking the drug isn’t medically beneficial.
Washington Post:
- China is undertaking a nationwide effort to keep teenagers from becoming addicted to the Internet.
National Post:
- Magna Intl.(MGA), Canada’s largest auto-parts maker, may make a bid for DaimlerChrysler AG’s(DCX) Chrysler unit, citing British researcher SupplierBusiness.
Arab News:
- Saudi Arabia reported a capital outflow of $800 billion, citing a member of the Riyadh Chamber of Commerce and Industry. The money is leaving the kingdom as a result of corruption, citing Majed Garoub, chairman of the lawyers committee at the Riyadh Chamber of Commerce and Industry.
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