Stocks Falling into Final Hour on Forced Selling, Global Growth Concerns and More Shorting

BOTTOM LINE: The Portfolio is lower into the final hour on losses in my Internet longs, Retail longs and Computer longs. I added (IWM)/(QQQQ) hedges and added to my (EEM) short today, thus leaving the Portfolio 75% net long. The tone of the market is very bearish as the advance/decline line is substantially lower, every sector is declining and volume is light. Investor anxiety is above average. Today’s overall market action is bearish. The VIX is rising .5% and is elevated at 45.19. The ISE Sentiment Index is below average at 113.0 and the total put/call is below average at .72. Finally, the NYSE Arms has been running very high most of the day, hitting 3.03 at its intraday peak, and is currently 2.75. The Euro Financial Sector Credit Default Swap Index is falling 5.82% today to 115.10 basis points. This index is up from a low of 52.66 on May 5^th, but down from 157.81 on Sept. 16^th. The North American Investment Grade Credit Default Swap Index is falling 2.21% to 213.50 basis points. The TED spread is falling 2.07% to 148 basis points. The TED spread is now down 318 basis points in just over two months. The 2-year swap spread is down 6.34% to 77.50 basis points. The Libor-OIS spread is dropping 2.89% to 125 basis points. The 10-year TIPS spread, a good gauge of inflation expectations, is down 2 basis points to .08%, which is down 253 basis points in just five months and at the lowest level since Bloomberg record-keeping began in August 1998. The 10-year TIPS spread bottomed at .65% in October 1998 during the Asian financial crisis and at 1.24% in October 2001 during the technology bubble-bursting meltdown. The 3-month T-Bill is yielding .00%, which is unch. today. 1-month US Dollar-based Libor is dropping another basis point to .46% today. It has declined 414 basis points since October 10^th. Today’s action has many characteristics associated with “forced selling.” After failing to meaningfully break above their 50-day moving averages, many stocks are now rolling over. On the positive side, volume is very light and the NYSE Arms is very high, which usually indicates a sharp snapback rally will materialize over the next few days. As well, credit angst gauges continue to improve significantly. Nikkei futures indicate a -175 open in Japan and DAX futures indicate a -29 open in Germany tomorrow. I expect US stocks to trade mixed-to-higher into the close from current levels on lower energy prices, diminishing credit market angst, short-covering and bargain-hunting.

Today's Headlines

Bloomberg:
- Magnetar Capital LLC, the $8 billion hedge-fund firm co-run by former Citadel Investment Group LLC trader Alec Litowitz, limited withdrawals from its biggest fund after it lost 30 percent this year through November, according to two people familiar with the fund. The restrictions, known as gates, were triggered after clients sought to pull more than 15 percent of their money from the firm’s $4.8 billion multistrategy fund, said the people, who asked not to be identified because the information is private.

- The TED spread, a gauge of banks’ reluctance to lend, slipped below 150 basis points for the first time since before the collapse of Lehman Brothers Holdings Inc. amid speculation U.S. borrowing costs near zero and promises of further government cash will help unfreeze credit.

- Banks have increased cash balances by $700 billion in three months, creating a $7 trillion stockpile that may be used for new loans, according to Miller Tabak’s Tony Crescenzi. Lenders have “enough money to propel lending by $7 trillion if banks were willing and able,” Crescenzi said. Bankers in the US put a “disproportionate” amount of assets into buying securities and now are selling some of their investments, “which optimists would hope is a precursor to lending,” Crescenzi said.

- UBS AG, Switzerland’s biggest bank, agreed to sell its agricultural and Canadian energy-commodities units to JPMorgan Chase & Co, and said it may dispose of other commodities operations.

- Crude oil fell on speculation OPEC will be unable to bolster prices as the global recession curbs demand faster than the group can make production cuts. South Korea consumed 12.4 percent fewer oil products in November from a year earlier. The country used 60.3 million barrels of refined products, data from state-run Korea National Oil Corp. showed today. “OPEC may be determined to stabilize oil prices, but with such poor demand it’s hard to see how any supply-driven initiatives can have a positive impact on prices,” said Addison Armstrong, director of market research for Tradition Energy in Stamford, Connecticut.

Wall Street Journal:

- Bankers are seeing a wave of mortgage-loan applications triggered by falling interest rates, and are reassigning scores of workers to handle the crush of would-be borrowers. A large percentage of the applications are for refinancings rather than purchases, and the phenomenon is so new it isn't yet clear how many of the borrowers will actually receive loans. But some bankers say it could be the beginnings of a possible turning point in a battered lending sector and a still-weak housing market.

- General Motors Corp., while holding preliminary discussions now with key constituents, is expected to wait until early January to begin deep talks with the United Auto Workers union, bondholders and the coming Obama administration, in an effort to work out agreements to comply with the terms of the bailout President George W. Bush announced last week.

NY Times:
- Since Bernard L. Madoff was arrested 11 days ago in connection with a $50 billion Ponzi scheme, the Fairfield Greenwich Group has portrayed itself as an unwitting victim of the fraud, the biggest of Mr. Madoff’s many losers. Clients of Fairfield, a secretive hedge fund advisory company based in Connecticut, lost $7.3 billion to Mr. Madoff’s fund. But for Fairfield, working with Mr. Madoff was hugely profitable.

- Clinton Foundation Got Big Lift From Hedge Funds.

LA Times:

- When money manager Bernard L. Madoff was arrested in New York recently for allegedly engineering a massive Ponzi scheme, Wall Street financiers were left slack-jawed at the unmasking of an establishment figure who seemed to be an unlikely fraud. The reaction was similar among many politicians in Washington. For years, Madoff was a generous donor to mostly Democratic causes and maintained a steady lobbying presence through the government relations firm of a former New York congressman. Few of Madoff's political beneficiaries want to talk about the New York money manager for fear of being tied to his legal problems. But one former Democratic fundraiser who asked not to be identified said the political community that knew him was shocked by his arrest because Madoff, a former chairman of Nasdaq, was known for his expertise as well as his deep pockets. Since 1999, Madoff spent at least $540,000 for lobbying by the Lent Scrivner firm. Madoff, his wife and individuals at his company gave $392,900 to federal candidates, parties and committees since 1998, with 89% going to Democrats, according to a Times analysis. Fully $238,200 of that total came from Madoff and his wife alone.
Most of the 13 members of Congress who received funds are New York-area lawmakers or members of committees overseeing financial services. "His profile as a large giver certainly gave him more access," said the former Democratic fundraiser who dealt with Madoff but did not want to be identified because he wants to stay out of the scandal.

Boston Herald:

- State and city or town crews around New England are attacking ice and snow with high-tech engineering and a low-salt diet — changing during the last decade or so from plowing, salting and sanding to spraying liquids that prevent snow and ice from bonding with the road.

USA Today:

- Utah is the nation's fastest growing state, knocking Nevada from its usual top spot.

Dealbreaker:

- It is no secret that quant funds (and a number of what we will call "quasi-quant" funds) as a whole have taken it on the chin the last several months. Funds with heavy quant components of neutral equity market strategies, for instance, have been handed their mud-stomped hats in 2008- many with 40%+ losses in November alone. Some subsets of neutral equity market strategies, fundamental long-short strategies for instance, have performed slightly better, but overall, you would have done better investing in the S&P 500 index for 1 month, 3 month, 6 month, 1 year, 2 year, 3 year and 5 year periods than touching most neutral equity market funds.

Interfax:

- Russia’s economy shrank .7% in November compared to the previous month, citing a government official.

- Russia may resort to external borrowing after 2010 if oil prices stay below $30 a barrel, citing Deputy Finance Minister Dmitry Pankin.

Arab News:

- A majority of Saudi Arabian women suffer financial and economic abuse by their husbands or male siblings, citing a study by Khaled Al-Radihan, an assistant professor at King Saud University. Of 267 women involved in the university study, 67% had their money taken or had loans taken in their names without their consent.

Bull Radar

Style Underperformer:
Small-cap Growth (-3.46%)

Sector Underperformers:
Coal (-8.45%), Oil Tankers (-7.51%) and Steel (-5.81%)

Stocks Falling on Unusual Volume:
SU, JCP, SINA and COGT

Stocks With Unusual Put Option Activity:
1) BUCY 2) LTM 3) LEG 4) MCO 5) MTH

Bull Radar

Style Outperformer:
Large-cap Value (-1.03%)

Sector Outperformers:
Computer Hardware (+1.0%), Telecom (+.78%) and Airlines (+.70%)

Stocks Rising on Unusual Volume:
CAL, EBS, AOC, NVS, PNW, MRK, GEOY, NTT, HES, SUN, AGNC, NNDS, FSYS, DYS, TMB and HEI

Stocks With Unusual Call Option Activity:
1) CMCSK 2) WB 3) NCC 4) ZION 5) UAUA

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Monday Watch

Weekend Headlines
Bloomberg:

- President-elect Barack Obama, faced with a deteriorating economy, is expanding his stimulus package with a goal of creating or saving 3 million jobs over two years, a transition aide said last night.

- The Organization of Petroleum Exporting Countries, supplier of more than 40 percent of the world’s crude, is “determined to bring stability to the oil market” after prices plunged more than $100 from a high in July, Saudi Oil Minister Ali al-Naimi said.

- President-elect Barack Obama’s Cabinet is notable for its diversity, experience in government, and absence of people from the business community. Obama, who campaigned as an advocate for Main Street against the influence of lobbyists and special interests, hasn’t staffed his Cabinet with a single person who has executive business experience.

- General Motors Corp. and Chrysler LLC will get C$4 billion ($3.3 billion) in government loans from Canada and the province of Ontario, Canadian Prime Minister Stephen Harper said yesterday, refusing to rule out further aid.

- The average price of regular gasoline at U.S. filling stations fell to $1.66 a gallon. Gasoline slipped 9 cents, or 5.1 percent, in the two weeks ended Dec. 19, according to oil analyst Trilby Lundberg’s survey of 7,000 filling stations nationwide. Crude oil, which accounts for about 59 percent of gasoline’s pump price, has tumbled 77 percent from a record $147.27 a barrel reached July 11 on the New York Mercantile Exchange. AAA, the nation’s biggest motoring club, said today that regular gasoline at the pump averaged $1.668 a gallon, down 59 percent from the record $4.114 in July. Supplies at Cushing, where oil that’s traded in New York is stored, rose 21 percent to 27.5 million barrels last week, the highest since May 2007, the Energy Department said on Dec. 17. Motorists bought an average 9.098 million barrels of gasoline a day, down from 9.617 million a year earlier, MasterCard, the second-biggest credit-card company, said in its weekly SpendingPulse report.

- China’s foreign-exchange reserves dropped for the first time in five years as a result of the global financial crisis, Market News International reported, citing Cai Qiusheng, head of the investment management bureau under the State Administration of Foreign Exchange.

- The yen fell on speculation $13.4 billion in emergency government loans to General Motors Corp. and Chrysler LLC will give investors confidence to add to holdings of higher-yielding assets financed in Japan. The currency also declined against the euro on the prospect that Bank of Japan Governor Masaaki Shirakawa will say in a speech today that the yen’s 25 percent gain against the dollar this year is harming Japanese exports.

- The cost of protecting investors of corporate bonds and government bonds from default in Asia-Pacific region fell, according to traders of credit-default swaps. The Markit iTraxx Australia index fell 10 basis points to 345 at 11:26 a.m. in Sydney, Citigroup Inc. data show. The Markit iTraxx Japan index traded down 12 basis points at 288 at 9:25 a.m. in Tokyo, BNP Paribas SA prices show.

Wall Street Journal:

- China’s wireless services providers will spend about $40 billion on third-generation mobile phone and data networks over the next two years to introduce the new system, which allows faster data transmission, citing Li Yizhong, the nation’s minister of industry and information technology.

- Oligarchs like Oleg Deripaska rode surging commodities prices to snap up assets in Russia and abroad. Now the torrent of revenue has slowed to a trickle, the rivers of easy foreign credit have dried up and the debts are due.

- As China's economy stalls, rising public unrest has bubbled up in a series of labor strikes across the country.

Barron’s:

- US stocks may rebound by 18% next year to an average of 1,045 on the S&P 500 as most of the 12 strategists and chief investment officers expect the economy to continue to contract. 12 of 13 recommendations were against investment in energy, commodities and industrial companies. Health care was favored by 10 of the 12 strategists, while technology was favored by 5 of 6 chief investment strategists from investing institutions. Tobias Levkovich, Citigroup’s chief equity strategist, said the stock market may have some strong rallies as well as retreats, citing at least five rallies that averaged 93% after the 1932 stock market bottom. Merrill Lynch economist David Rosenberg said a gain in the US personal savings rate to 8% from 2%, a decline in the number of unsold new homes and a drop in the after-tax income used to pay off debt could help fuel a new economic expansion.

MarketWatch.com:

- Hedge funds have been among the most aggressive activist investors in recent years, but as the industry struggles in the face of a withering financial crisis, the hunters may become the hunted. The $1.5 trillion industry has suffered record losses and a wave of redemption requests in recent months. At least 75 managers are trying to slow or halt withdrawals to avoid forced selling at knock-down prices. The trend is raising tension between investors, who may need cash quickly, and managers, who may be more interested in holding on to assets to protect their businesses.

- 4 of 5 newsletters on Honor Roll are bullish.

CNBC.com:
- U.S. President-elect Barack Obama underscored Saturday his intent to push initiatives on climate change by naming John Holdren, an energy and climate specialist, as the new White House science adviser. Holdren is a Harvard University physicist who has focused on the causes and consequences of climate change and advocated policies aimed at sustainable development. He has also done extensive research on the dangers of nuclear weapons.

- Low Mortgage Rates Toss Housing Market a Lifeline. With the $500 of monthly savings Jim Hennessy just gained by cutting the rate on his $417,000 mortgage in San Diego, he plans on rebuilding his beaten-up retirement savings and maybe even taking a cruise. This is the outcome the U.S. government was driving at when it said it would pump hundreds of billions of dollars into buying mortgage bonds, freeing up lenders to make new loans and lower-rate refinancings that spur consumer spending and the economy.

IBD:
- Apollo Group(APOL): Tough Economy Sends Workers Back to School to Get New Skills.

NY Times:

- The Madoff scandal is proving so big that even some large charities will not recover. One of the nation’s leading philanthropies, the Picower Foundation, announced on Friday that it was shutting down. The foundation has given $268 million to groups like the Picower Institute for Learning and Memory at the Massachusetts Institute of Technology, Human Rights First, the New York Public Library and the Children’s Health Fund since it was established in 1989 by Barbara Picower and her husband, the investor Jeffry M. Picower, in Palm Beach, Fla.

- Chinese authorities have begun blocking access from mainland China to the Web site of The New York Times even while lifting some of the restrictions they had recently imposed on the Web sites of other media outlets.

- Gov. David A. Paterson rolled out 137 proposed tax and fee increases last week on items including iTunes downloads and soft drinks, but there could very well be another big one to come. Increasing income taxes on the richest residents of New York is still a last resort, Mr. Paterson said in an interview, but one that may become necessary as a result of the state’s precarious financial condition.

- Hedge funds have suffered a shakeout in 2008. The average hedge fund fell almost 20 percent, according to Hedge Fund Research. No fund has yet required a bailout. But many won’t be around in the new year, and those that have survived are battered and bruised. Hedge fund managers must accept that the industry won’t be quite the same again. Here are six changes they need to prepare for:

CQ Politics:

- CFTC Pick Worked to Exempt Credit Default Swaps. Gary Gensler, a veteran Treasury Department official tapped this week by President-elect Barack Obama to head the Commodity Futures Trading Commission, could face tough questions at confirmation hearings about his role in enacting a law exempting credit default swaps from regulation. That decision has been blamed by many for contributing to the current financial crisis. As Treasury under secretary for domestic finance, Gensler helped broker a deal on the Commodity Futures Modernization Act of 2000 (PL 106-554), which governs trading in energy and agriculture futures, that exempted credit default swaps from regulation.

Business Week:
- History Rewards the Stalwart Equity Investor. Devastating bear markets always scare many investors away from stocks, but that’s just when the greatest returns tend to be brewing in what seem to be the riskiest assets: stocks.

EIA:

- EIA’s Short Term Energy Outlook is forecasting increasing 2009 oil production for the United States. Most of this increase will come from three Federal Offshore Gulf of Mexico platforms. The Thunder Horse, Atlantis, and Tahiti platforms will account for two-thirds of the total national increase in 2009. All three platforms are in the deep waters of the Gulf of Mexico. Only large deposits with high flow rate wells are economic in deep water, and production rates from these platforms far exceed most other production facilities. The fewer than 30 wells planned for Thunder Horse are expected to produce more oil than the 18,000 oil wells in the State of Louisiana. By early 2010, the three platforms should reach their combined designed production capacity of 575 thousand barrels per day. The Minerals Management Service reports that the entire Federal Offshore Gulf of Mexico was producing about 1,300 thousand barrels per day before the 2008 Hurricanes Gustav and Ike.

USA Today:

- The 2010 Equinox offers direct-injection engines. GM said the 2.4-liter, four-cylinder model is expected to get 30 miles per gallon on the highway and 21 mpg in the city — a 25% improvement over the previous model. A 3.0-liter, six-cylinder engine increases horsepower from 182 to 255 and gets an estimated 25 mpg on the highway and 18 mpg in the city.

CNNMoney.com:

- A closer look at Madoff’s web. A small network of connections that helped to facilitate many of the investments.

- Money gets tight. Buyers get picky. Price-sensitive consumers — the kind Steve Jobs and Apple(AAPL) famously “choose not to serve” — start shopping for bargain basement PCs and Taiwanese netbooks. Mac sales plummet. The only trouble with this argument, as Turley Muller of Financial Alchemist points out, is that it flies in the face of Macintosh unit sales for the first 12 months of the recession.

- President Bush's bailout plan contains some "targets" the government wants the automakers and the United Auto Workers union to achieve before agreeing to a bailout loan. All of the terms are still negotiable as long the automakers can produce a plan to become viable without them. The terms, as laid out by the White House, appear simple on the surface, but the issues they cover are a lot more complicated. Here's a rundown:

Reuters:

- The United States is aiming to send 20,000 to 30,000 extra troops to Afghanistan by the beginning of next summer, the chairman of the U.S. Joint Chiefs of Staff said on Saturday. Washington is already sending some 3,000 extra troops in January and another 2,800 by spring, but officials previously have said the number would be made up to 20,000 in the next 12 to 18 months, once approved by the U.S. administration. U.S. President-elect Barack Obama has pledged a renewed focus on Afghanistan, where U.S.-led forces toppled the Taliban government in late 2001 after the September 11 attacks.

- Top U.S. electronics retailer Best Buy Co has been gaining market share as rival Circuit City closes stores, and smart cost cutting could keep it shining throughout 2009, Barron's said in its December 22 edition.

- A forced restructuring at General Motors Corp could make the U.S. automaker's debt appealing, according to weekly business newspaper Barron's in its December 22 edition.

Financial Times:

- Britain will not ban the construction of coal-fired power stations while new technology is being developed to cut their carbon emissions, Ed Miliband, the UK energy secretary, has said. The contentious application, fiercely opposed by environmental groups and the main opposition parties, is seen as a bellwether for a new generation of coal plants. Several other energy companies have plans for new coal plants in the pipeline. In an interview with the Financial Times, the energy secretary stated: “I will not take a position which ignores our security of supply needs.” He attacked the opposition Tories’ “knee jerk” and “not thought through” call for a ban on construction of new stations until technology to capture and store carbon dioxide emissions – as yet unproven on a commercial scale – is installed.

- Lawrence Eagles, head of commodities research at JPMorgan, said the onus was firmly on Opec. “If it does not manage to get output down to at least 30m b/d in January, the dire downside predictions [of oil falling to $25 a barrel] could be realized.” Saudi Arabia has said it had implemented its share of Opec’s 4.2m b/d cut from September’s output levels, requiring rigorous compliance by other members to bring the market into balance. Mr Eagles said: “Quite frankly, that is a tough ask”. He estimates that to ensure full compliance with the new quotas, Iran would have cut production by 464,000 b/d while Venezuela and Kuwait need reductions of about 330,000 b/d. Output cuts will put a strain on the public finances of Opec’s members, many of which require oil prices well above current levels to balance their budgets. Analysts expect a fall in global oil demand in 2008, the first annual contraction for 25 years, but the outlook for consumption next year remains dependent on the global economy’s recovery from recession and the credit crunch. Deutsche Bank, which is forecasting a fall of 1m b/d in oil demand next year, warns “additional supply cuts will be required throughout next year”and says oil prices might not recover until the first quarter of 2010.

- Tackling unemployment among university graduates will be China’s priority next year as the economy falters, Wen Jiabao, the prime minister, said at the weekend. The attention given by state media to Mr Wen’s visit to a Beijing university was the latest sign of the government’s increasing fear of widespread unrest as growth declines much faster than expected. He said the government was also extremely concerned about migrant workers who had been laid off in the cities. By the end of November, 10m migrant workers had lost their jobs nationwide and 4.85m of those had returned home, according to government figures. A survey last week by a government think-tank estimated the number of recent graduates who have been unable to find work at 1.5m. Tertiary institutions are expected to churn out another 6.5m graduates next year. The creation of a huge population of educated unemployed is worrying for the ruling Communist party, which is keenly aware of the historic role disgruntled students have played in inciting rebellion. Next year marks the 20th anniversary of the June 4, 1989, crackdown in which party elders ordered troops to fire on student-led demonstrators in Tiananmen Square, Beijing.

- US corporate tax policy is in need of reform by FedEx CEO Fred Smith. It is unfortunate that the US, which has led the capitalist world for so long, is woefully uncompetitive in corporate tax policy. We have the second highest corporate tax rate among Organisation for Economic Co-operation and Development countries and many other tax policies that make it difficult for US companies to compete. Studies such as one done by Dartmouth’s Matthew J. Slaughter in 2004 have estimated that 70 per cent of corporate taxes are ultimately borne by the American workforce. Our tax system is particularly onerous for asset-intensive, industrial businesses such as manufacturers and transport companies. For example, Caterpillar, Boeing, FedEx, commercial airlines and carmakers produce goods and services and provide jobs for millions. But to maintain or increase jobs and compete globally, these companies must be able earn an acceptable return on capital expenditure. How can we make US companies more competitive and increase their ability to offer good jobs? Two things: accelerate the expensing of capital investment; and reduce the corporate income tax rate.

BBC:

- Gordon Brown has been criticized by the head of Opec for warning about the danger of volatile oil prices and told that he is "confused" about the issue. In a speech in London, Mr Brown said "wild fluctuations" in prices in recent years had damaged the global economy. Mr El-Badri, Opec's secretary general, told the BBC the UK had benefited more than most countries from high oil prices because its taxes on petrol and oil extraction were the "highest in Europe". "Instead of looking at Opec he should look at his policies and try to reduce taxes," he told the World at One. "Then he can talk to us." Mr Brown angered many within Opec, whose members account for 40% of global oil production, in October when he said it was "scandalous" it was thinking of cutting output to stabilize prices.

Sueddeutsche Zeitung:

- Germany is planning a $56 billion stimulus package to build roads, reduce taxes and help Europe’s largest economy weather the economic turmoil.

El Pais:

- European Central Bank Governing Council member Miuguel Angel Fernandez Ordonez said the bank would cut rates if inflation expectations were significantly less than 2%. If the euro zone had “expectations of deep deflation” like the US, Ordonez would recommend following the same policy as the Federal Reserve.

Xinhua News:
- Slowing exports forced closure of 8,513 companies in China’s southern Guangdong province in October, more than in the first three quarters of 2008. A total 15,661 companies closed in the first 10 months of the year as exports by privately owned firms declined 35% from a year earlier. Growth slowing at 29 of 37 industries tracked, with electricity machinery, textiles and automobiles leading declines, the report said.

Shanghai Securities News:

- China may lose as many as half of its shipbuilders next year as the global financial crisis forces companies to close down, citing Ren Yuanlin, chairman of Yangzijiang Shipbuilding Holding Co.

Gulf Times:

- Dubai may struggle to gain a top-grade sovereign rating after Standard & Poor’s Rating Services and Fitch Ratings Agency downgraded outlooks on some of the emirate’s biggest government affiliated companies, according to leading analysts.

Haaretz.com:

- Syrian President Bashar Assad has told a number of European foreign
ministers and senior diplomats this month that he would not lift a finger to restrain Hezbollah's arming in Lebanon. "I am not Israel's bodyguard," he reportedly said. The future of Syria's relations with Iran and Hezbollah is one of the main subjects Israel has raised in its indirect negotiations with Syria. Assad's remarks show no willingness for a concession to Israel on this issue, let alone an overall change of policy. Israel claims that Iran is smuggling rockets and other weapons to Hezbollah through Syria, and that the Syrian army is even arming the organization.

Islamic Republic News Agency:

- Iran said it “finalized” a deal to buy S-300 missiles from Russia and expects delivery “soon.”

Weekend Recommendations
Barron's:
- Made positive comments on (MSFT) and (NMR).

Night Trading
Asian indices are -.75% to +1.0% on avg.
S&P 500 futures +.65%.
NASDAQ 100 futures +.56%.

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BOTTOM LINE: Asian indices are mostly higher, boosted by automaker and technology shares in the region. I expect US stocks to open mixed and to rally into the afternoon, finishing modestly higher. The Portfolio is 100% net long heading into the week.