BETWEEN THE HEDGES

Late-Night Headlines
Bloomberg:
- The cost of protecting corporate bonds from default fell as Lehman Brothers(LEH) replaced CFO Erin Callan and President Joseph Gregory to reassure investors. Contracts on New York-based Lehman fell 10 basis points to 280 basis points, according to CMA Datavision. Contracts on Goldman Sachs Group Inc., the biggest securities firm, fell 4 basis points to 115.5 basis points, CMA prices show. Merrill Lynch & Co., the biggest U.S. brokerage, declined 13.5 basis points to 199, according to CMA.
- The US dollar headed for its biggest weekly gain since December 2004 against the yen on speculation officials from the Group of Eight nations will make comments discouraging the dollar’s decline when they meet today.
- G-8 Seeks to Aid Growth as Oil Fans Inflation Threat.
- Yahoo!(YHOO) agreed to let Google Inc.(GOOG) sell some of the advertisements it runs alongside Internet search results, seeking to shore up sales after ending talks with Microsoft Corp.(MSFT) about a combination.
- Petroleo Brasileiro SA(PBR) said it found a new light-crude deposit in the BM-S-9 block off the coast of Sao Paulo state.
- Investors should cut holdings of Asian local-currency bonds as quickening inflation is set to push up yields and put pressure on central banks to raise interest rates, Deutsche Bank Private Wealth Management said. The likelihood the US dollar will rebound against Asian currencies in the next 12 months also makes the region’s bonds less attractive.
- Investors should enter swap contracts in India to receive floating interest rates and avoid bonds as the central bank raises borrowing costs to curb inflation, JPMorgan Chase(JPM) said.

MarketWatch.com:
- Rising inflation poses threat to emerging markets. China, India, Turkey hardest hit; Brazil, a top performer, fights back.
- Lawmakers want to strip energy’s “veil of secrecy” House, Senate bills seek to reveal more on speculative practices, boost CFTC. Oil prices hitting a record $139-plus a barrel last week "has galvanized lawmakers and the regulators they oversee into actions that are increasingly likely to impact market fundamentals," said Kevin Book, an energy policy analyst at Friedman Billings Ramsey. The most visible Congressional efforts over the next several weeks "are likely to be directed at commodity investors themselves," he said.

CNBC.com:
- Lehman(LEH) CEO Is Listening To Possible Bids for Bank.
- Amid all the headlines about soaring energy and food prices, many consumers may not notice that they're getting a break on some items they buy every day.

Smart Money.com:
- Think Oil Peaked? Here’s How to Play Your Hunch.

BusinessWeek.com:
- Inside the War Against China’s Blogs.

San Francisco Chronicle:
-.Call it Goo-Hoo – search portals form online ad partnership. For Google, the agreement is a major victory because adding a partner the size of Yahoo will add substantially to its already formidable financial might. At the same time, it deals a blow to Microsoft, which began its courtship of Yahoo hoping to win more traction online by gaining control of Yahoo's ad business. In the end, Microsoft only succeeded in pushing Yahoo into the embrace of mutual rival Google, of Mountain View.

Forbes.com:
- The 75 Most Reputable Companies in the US.

AP:
- Exxon Mobil(XOM) will sell its retail gasoline business. Exxon will sell its 820 company-owned gas stations and another 1,400 dealer-operated outlets.

Portfolio.com:
- Firefox 3 v. Explorer 7! Coming To A Computer Near You: June 17.
- Democratic Senators Dodd and Conrad are among the government officials who scored VIP loans from CEO Angelo Mozilo. Two US senators, two former Cabinet members, and a former ambassador to the UN received loans from Countrywide Financial(CFC) through a little-known program that waived points, lender fees, and company borrowing rules for prominent people.

USA Today.com:
- Some US firms seen as bargains. America is on sale, at least in the eyes of foreign companies.
- Consumers are the winners as wireless plans get cheaper.

Reuters:
- News and information company Bloomberg LP could be a hotly contested asset if a stake went on the block, although the most likely buyer was seen by some as founder and billionaire Michael Bloomberg himself.

Late Buy/Sell Recommendations
Citigroup:
- Reiterated Buy on (MRVL), target $22.
- Reiterated Buy on (GME), target $66.

Night Trading
Asian Indices are -.75% to +.25% on average.
S&P 500 futures -.03%.
NASDAQ 100 futures -.10%.

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
Upgrades/Downgrades
Rasmussen Business/Economy Polling

Earnings of Note
Company/EPS Estimate
- (CAO)/.05

Upcoming Splits
- None of note

Economic Releases
8:30 am EST
- The Consumer Price Index for May is estimated to rise .5% versus a .2% gain in April
- The CPI Ex Food & Energy for May is estimated to rise .2% versus a .1% gain in April

10:00 am EST
- The Preliminary Univ. of Mich. Consumer Confidence Index for June is estimated to fall to 59.0 versus a reading of 59.8 in May.

Other Potential Market Movers
- The (N) analyst meeting could also impact trading today.

BOTTOM LINE: Asian indices are mostly lower, weighed down by shipping and financial shares in the region. I expect US equities to open modestly lower and to rally into the afternoon, finishing mixed. The Portfolio is 50% net long heading into the day.

BOTTOM LINE: The Portfolio is higher into the final hour on gains in my Software longs, Medical longs and Commodity shorts. I covered some of my (IWM)/(QQQQ) hedges this morning and then added them back, thus leaving the Portfolio 50% net long. The tone of the market is mildly positive as the advance/decline line is slightly higher, most sectors are rising and volume is about average. Investor anxiety is about average. Today’s overall market action is slightly bearish. The VIX is falling 1.3% and remains above average at 23.81. The ISE Sentiment Index is below average at 115.0 and the total put/call is slightly above average at .95. Finally, the NYSE Arms has been running below average most of the day and is currently .67. The reversal higher in oil, global growth concerns and higher long-term rates are pressuring stocks this afternoon. The Shanghai Composite is now down 52% from its high and down 44% just this year. On the positive side, the Euro Financial Sector Credit Default Swap Index is falling 4.7% today to 79.62 basis points. This is up from a low of 52.66 on May 5^th, but still down from 129.46 basis points on March 20^th. The TED spread is also falling 7.4% to .79 basis points. Despite the fact that the (LEH) equity remains under pressure, its credit default swap is 289.80, still down from the 450+ reached during mid-March. The AAII % Bulls fell 28.1% this week to 31.2%, while the AAII % Bears jumped 40.8% to 53.6%. If the reports about an impending (GOOG)/(YHOO) search deal are true, it would be a major positive for GOOG. Nikkei futures indicate an +162 open in Japan and DAX futures indicate a -46 open in Germany tomorrow. I expect US stocks to trade mixed-to-lower into the close from current levels on rising commodity prices, global growth worries, rising long-term rates and more record shorting.

BETWEEN THE HEDGES

Top Menu

Friday, June 13, 2008

Bull Radar

Links of Interest

Thursday, June 12, 2008

Friday Watch

Stocks Finish Higher, Boosted by Hospital, Retail, Software, Homebuilding, Insurance Shares

Stocks Slightly Higher into Final Hour on Short-Covering, Less Economic Pessimism

Today's Headlines