Weekend Headlines
Bloomberg:
- US stocks posted their biggest weekly gain since March after Federal Reserve officials including Chairman Ben S. Bernanke signaled more interest rate cuts may be on the way.
- The US dollar gained the most in almost three years versus the yen and Swiss franc as global stocks rallied and traders boosted bets the Fed will cut borrowing costs a half-percentage point this month.
- The fuel standard for cars and light trucks will increase to 35 miles per gallon by 2020, US lawmakers said last night.
- North Korea should take an “active approach” toward improving relations with the US while dismantling its nuclear program, South Korean President Roh Moo Hyun told a top envoy at the communist nation.
- OPEC may not need to increase oil supply when it convenes Dec. 5 to meet the expected advance in energy demand next year, Saudi Arabia’s oil minister said.
- Vivendi SA agreed to combine its games unit with Activision Inc.(ATVI), the maker of the “Guitar Hero” video games, in a transaction valued at $18.9 billion. Activision shareholders will receive $27.50 a share.
- Venezuelan President Hugo Chavez’s bid to overhaul the state and possibly stay in power for life will be decided today as his proposal to revamp the nation’s constitution goes to the voters.
- Chavez Threatens to Seize Banks, Media as Vote Nears.
- Online sales last week rose 18% as consumers hunted for bargains on electronics, toys and computers. Internet retail purchases jumped to $4.06 billion in the week ended Nov. 30, led by Yahoo!(YHOO) and Web sites for Target(TGT), Apple(AAPL), Circuit City(CC) and Toys “R” Us, Reston, Virginia-based ComScore(SCOR) said today. Online sales of video games and consoles jumped 170%, toy sales gained 36% and computer hardware rose 21%, ComScore said.
- Dell Inc.(DELL) awarded its advertising account, valued at $4.5 billion over three years, to WPP Group, giving one of the most-notable wins of 2007 to the London advertising company.
- New Zealand’s dollar dropped after Gulf Arab nations said they won’t revalue their currencies, pegged to the dollar, spurring investors to boost holdings of the US currency.
- China Shipping Container Lines Co., Asia’s second-largest container line, said it will beat its profit forecast after raising rates for shipments from Europe and carrying more cargo from the US. US exports rose 10.7% in the first nine months. The US sold $55.2 billion of goods to China last year, its fourth biggest export market.
Wall Street Journal:
- Ever since debt markets seized up this summer, investors have struggled with the question of how much securities backed by risky mortgages are worth. Now, thanks to Citadel Investment Group’s purchase of $3 billion in debt held by E*Trade Financial, there is at least one answer. Citadel paid an average of about 27 cents on the dollar for these assets.
NY Times:
- Citigroup(C) is closing in on a CEO and the board appears to be leaning toward an insider.
- The Long and Short of It at Goldman Sachs(GS). An analysis by a Goldman economist deserves its own analysis.
- Inexpensive broadband access has done far more for online video than enable the success of services like YouTube and iTunes. By unchaining video watchers from their TV sets, it has opened the floodgates to a generation of TV producers for whom the Internet is their native medium.
- If the Shoe Fits, Wear It. If Not, Design One That Does.
- Contrarians Make a Case for Gains in the Recent Turmoil. Don’t be too upset by the stock market’s recent decline. It may have been painful, but it’s probably just a stumble by a bull market that still has room to run.
TheStreet.com:
- Sears' Lampert Lashes Out.
MarketWatch.com:
- The last time bond timing newsletters were as optimistic about bonds as they are now was one year ago. That turned out to be a bad time to buy bonds.
- Citi cuts assets of sponsored SIVs by $17 billion. Moody’s warns it may downgrade investment vehicles advised by giant bank.
IBD:
- Treasury, Fed Ride To Rescue Lenders, Subprime Borrowers.
Washington Post:
- Mortgage rates for homeowners with spotty credit histories would be temporarily frozen under a nearly completed agreement between top Bush administration officials and a broad alliance of Wall Street’s biggest banks, mortgage investors, nonprofits and consumer groups.
ABCNews.com:
- Treasury Secretary Henry Paulson told ABC News in an exclusive interview that the Bush administration’s plant to help troubled subprime borrowers should be finalized soon – ideally by next week.
Business Week:
- The Dangerous Wealth of the Ivy League. Higher education is increasingly a tale of two worlds, with elite schools getting richer and buying up all the talent.
- Internships: The Best Places to Start. More than just resume-padding, these summer opportunities have become great tools for students and employers to find that perfect fit.
- S&P’s latest list finds the names with the lowest price-to-earnings growth ratios in each of the 10 S&P sectors.
- Meet This Year’s Tech Pioneers. The World Economic Forum as bestowed the coveted honor on 39 companies, which could become the Googles, a previous winner, of tomorrow.
- Google’s(GOOG) China Chief Sees Internet Boom.
- Media Predictions for 2008.
USA Today:
- Tech Giants Target Older Buyers – and Their Cash.
- Expert Tips Can Point the Way to Big Savings on Your Energy Bill.
CNNMoney.com:
- Why is housing in some cities still booming? The answers may help you navigate your own market.
- Most(and least) cost-effective hybrids.
- Apple Mac hits record 6.81% market share in Net Applications survey.
Reuters:
- RBC Upbeat About US Future, Despite Q4 Impact.
- The Federal Reserve would not hesitate to act to prevent financial strains from damaging the economy and any step it does take are not made to shield investors, a top Fed official said on Friday.
KWWL.com:
- Iowa’s largest biodiesel production plant will begin operation on Tuesday. The plant is owned by East Fork and has a production capacity of 60 million gallons a year. It will make biodisel from soybean oil and other refined oils.
Financial Times:
- The Federal Reserve is considering new steps to make liquidity more readily available to financial institutions, in the hope of easing strains in the money market.
Finanz und Wirtschaft:
- Royal DSM NV Chief Executive Officer Feike Sijbesma said prices for antibiotics and vitamins have been falling since the end of the third quarter.
El Universal:
- The United Nations and human rights organizations said Venezuelan President Hugo Chavez’s proposed constitution threatens free speech and other civil rights. Analysts Hina Jilani, Ambey Ligabo and Leanddro Despouy, members of the UN’s human-rights council, said a clause allowing removal of Supreme Justice Court judges who challenge decrees issued during declared emergencies runs counter to democracy. Restrictions on speech and news media allowed during an “emergency” also undermines liberties, citing analysts.
China Business Journal:
- China will cap commercial banks’ expansion of lending at 13% in 2008 after growth exceeded the 15% target this year.
Straits Times:
- Hedge funds betting big on US presidential race.
Al Khaleej:
- The United Arab Emirates, the second-largest Arab economy, has no plans to abandon its currency’s peg to the dollar, citing the Gulf state’s central bank governor.
Weekend Recommendations
Barron's:
- Made positive comments on (WU).
- Made negative comments on (PRKR).
Citigroup:
- Reiterated Buy on (PTV), target $35.
- Reiterated Buy on (OI), raised target to $55.
- Rated (CVI) Buy, target $27.
- Maintain Buy on (SNDK), target $65.
- Our take from conference call with ICSC’s Mike Niemira: Holiday retail store sales are expected to increase 4.3% in 2007(vs. 4.8% in 2006), driven by personal income growth, a 6% increase in electronics’ sales, and continued strength in gift card and Internet sales. For the past 18 years, November-December sales as a percentage of annual sales have been declining, falling from over 25% in 1988 to 22% in 2006. Gift card sales grew to 17.9% of overall holiday spending in 2006, up from 13.5% in 2003. Mr. Niemira believes that in 2007, gift cards could grow to 18-20% of consumers’ holiday spending. Internet and mail order sales are expected to increase 9% and comprise 8.2% of holiday sales this year versus 6.8% in 2003.
Night Trading
Asian indices are -.25% to +1.25% on avg.
S&P 500 futures -.14%.
NASDAQ 100 futures -.33%
Morning Preview
US AM Market Call
NASDAQ 100 Pre-Market Indicator/Heat Map
Pre-market Commentary
Pre-market Stock Quote/Chart
Before the Bell CNBC Video(bottom right)
Global Commentary
WSJ Intl Markets Performance
Commodity Movers
Top 25 Stories
Top 20 Business Stories
Today in IBD
In Play
Bond Ticker
Economic Preview/Calendar
Daily Stock Events
Macro Calls
Upgrades/Downgrades
Rasmussen Business/Economy Polling
CNBC Guest Schedule
Earnings of Note
Company/Estimate
- (CPWM)/-.80
- (PVH)/1.03
- (BE)/.02
Upcoming Splits
- (DE) 2-for-1
- (LKQX) 2-for-1
- (RSTI) 2-for-1
- (CAM) 2-for-1
Economic Data
10:00 am EST
- ISM Manufacturing for November is estimated at 50.7 versus 50.9 in October.
Afternoon
- Total Vehicle Sales for November are estimated to fall to 16.0M versus 16.1M in October.
Other Potential Market Movers
- The Bear Stearns Real Estate Conference, (CDE) shareholders meeting, Bank of America Credit Conference, (LSTR) mid-quarter conference call, (MET) investor’s day, UBS Global Media Conference and (TRT) shareholder’s meeting could also impact trading today.
BOTTOM LINE: Asian indices are higher, boosted by financial and commodity shares in the region. I expect US stocks to open modestly lower and to rally into the afternoon, finishing mixed. The Portfolio is 75% net long heading into the week.
