Today's Headlines

Bloomberg:

- Iran’s Revolutionary Guards said the security forces will crush further protests over the disputed presidential vote, as the country’s elections supervisory body acknowledged some balloting discrepancies. “The saboteurs must stop their actions” or face “the decisive and revolutionary action of the children of the nation in the Revolutionary Guards, the Basij, and other security and military forces, to put an end to the chaos,” the state-run Mehr news agency cited the Revolutionary Guards as saying today in a statement.

- French President Nicolas Sarkozy said the country’s National Assembly should debate a ban on the burqa, the Muslim garment that conceals a woman’s face and body, saying it was “not welcome” in France. “The burqa is not a religious sign, it’s a sign of servitude,” Sarkozy said today in a speech to both houses of parliament at the Versailles Palace on the outskirts of Paris. Calling it a violation of women’s “dignity and freedom,” Sarkozy said the burqa “will not be welcome on French soil.” A group of French lawmakers have called for a total burqa ban.

- Russia’s Micex Index tumbled more than 20 percent from its 2009 peak, becoming the world’s first benchmark equity index to enter a bear market since global stocks began rallying in March. The index of ruble-denominated shares slid 5.9 percent to 957.56 as of 5:58 p.m. in Moscow, bringing its decline since June 1 to 20.6 percent, according to data from the Micex exchange’s Web site and Bloomberg.

- Hedge funds should be required to register and disclose data to regulators to guard against their trading destabilizing financial markets, the International Organization of Securities Commissions said today. Financial watchdogs worldwide should be able to demand information on funds’ risk management and have authority to work together and share data to track “globally active” funds and managers, Madrid-based IOSCO said in guidelines that seek to address gaps in oversight that contributed to the global financial crisis.

- Congress will take a second shot at the derivatives industry after its decision nine years ago to forgo regulations led to a $592 trillion market that brought some financial firms to their knees. “We’ve got to bring broad reform to the over-the-counter derivatives marketplace,” Commodity Futures Trading Commission Chairman Gary Gensler told Bloomberg Radio today. “This means regulating both the actors and the stages they use.” “One of the key underlying problems in the whole lead-up to the meltdown was too much leverage, too little capital or too little collateral,” Mark Halverson, a staff director for Senate Agriculture Committee Chairman Tom Harkin, said in an interview. Trading in credit-default swaps should be banned, Christopher Whalen, managing director of Institutional Risk Analytics in Hawthorne, California, said in prepared testimony for today’s Senate hearing. Regulators are too cozy with the banks in the market to be counted on to make changes, he said. Banks such as JPMorgan are already subject to capital requirements through their federal regulator. Unregulated hedge funds, energy companies and other corporations “whose activities in those markets create large exposures to counterparties” could also be required under Obama’s plan to set aside cash and collateral to back trades. JPMorgan is the largest user of over-the-counter derivatives, with $87.4 trillion in notional value last year, more than the next two largest, Bank of America Corp. and Citigroup Inc., combined, according to the Office for the Comptroller of the Currency.

- Crude oil fell for a second day after the World Bank said the global recession will be deeper than expected, stoking concerns that fuel demand will remain depressed. Oil was also hurt by the strengthening dollar, dulling the need for investors to buy commodities as an inflation hedge. The World Bank projects the global economy will contract 2.9 percent this year, more than its previously forecast decline of 1.7 percent. Speculative long positions, or bets prices will rise, outnumbered short positions by 26,430 contracts on the New York Mercantile Exchange, the Washington-based commission said in its Commitments of Traders report. Net-long positions fell by 21,453 contracts, or 45 percent, from a week earlier.

- India may raise its budget deficit estimate next month to as high as 6.5 percent of gross domestic product, the most in 19 years, as the government increases stimulus spending, Standard & Poor’s said.

- Oil prices moved out of a so-called ascending channel that started in April, signaling crude’s rally may falter. Friday’s close was outside a channel that’s bounded intraday highs and lows during the last two months, Zug, Switzerland-based consultant Petromatrix GmbH said. “The ascending channel was invalidated for the first time and this clearly needs to be taken as a negative,” Petromatrix managing director Olivier Jakob said. Traders will watch today’s close on the more-actively trade August contract to gauge whether prices are set to fall further, Jakob said. A settlement below $70 a barrel would be a bearish signal, he said.

- European Central Bank President Jean-Claude Trichet said there’s still a risk that renewed financial turmoil could hamper an economic recovery. “We are in uncharted waters, and there are still risks of a sudden emergence of unexpected financial turbulence,” Trichet said at a conference in Madrid today. “While there are first signs that the pace of economic weakening is decelerating, we must remain alert.” The cautious stance suggests the ECB won’t rush to raise interest rates or withdraw the emergency measures it has put in place to help stem Europe’s worst recession in six decades. ECB council member Ewald Nowotny said in an interview published today he expects the bank to hold rates at a record low into 2010.

- Apple Inc.(AAPL) sold more than 1 million iPhone 3G S units in its opening weekend, beating some analysts’ estimates and keeping pace with sales of the previous model. The handset, which sports a video camera and more memory than predecessors, went on sale June 19. Apple also said six million customers have downloaded the new iPhone software since it was introduced, according to a statement today. The successful debut positions Apple as the dominant player in the market for so-called smart phones, said Shannon Cross, an analyst at Cross Research.

- OpenTable Inc.(OPEN), the online reservation service, will grow by gradually adding more restaurants, rather than rushing to make deals with other companies, Chief Executive Officer Jeffrey Jordan said.

Wall Street Journal:

- President Barack Obama trumpeted on Monday the pharmaceutical sector's pledge to cut the cost of prescriptions under Medicare Part D as a "significant breakthrough" toward the health-care overhaul he wants to sign into law this year." Today marks a major step forward but it will only be meaningful if we complete the journey," Mr. Obama said in remarks at the White House. Under the deal, which emerged over the weekend, pharmaceutical companies will pay for half of the cost of drugs for people who are in the so-called doughnut hole in the Medicare Part D prescription benefit. That's the gap in coverage under which beneficiaries have to pay for drugs between the cost of $2,700 and $6,154 per year. It's unclear, however, how much of the expected $80 billion in savings over 10 years will go toward paying for the proposed health-care overhaul. Lawmakers in both parties have balked at the price tag, which the nonpartisan Congressional Budget Office said last week could run as high as $1.6 trillion over 10 years.

- Iran's Guardian Council said it had uncovered some irregularities in the polls, finding the number of votes in 50 districts exceeded the number of voters, while riot police attacked hundreds of protesters in the capital.

- The fate of the leading proposal to curb U.S. greenhouse-gas emissions is in the hands of Rep. Collin Peterson, a Marlboro-smoking free spirit who scoffs at warnings about climate change and says the Environmental Protection Agency is "in bed with" corporations opposed to the ethanol industry. Mr. Peterson -- a Minnesota Democrat whose chairmanship of the House Agriculture Committee gives him sway over Farm Belt lawmakers -- has forced Democratic Party leaders to slow their drive to pass climate legislation and to consider amending it in ways that some environmentalists worry will lessen its effectiveness.

- Obama’s Persian Tutorial. The president has to choose between the regime and the people in the streets.

CNBC:

- Recession-weary consumers may be getting very close to the point where they will change their behavior to cope with rising gasoline prices. A new survey conducted by BigResearch and commissioned by the National Retail Federation finds most consumers will start adjusting their driving habits once prices at the gas pump rise to an average of $2.75 a gallon. Although gas prices remain below last year's record-high levels, prices have risen rapidly in the past two months. The price of a gallon of unleaded gasoline averaged $2.69 on Monday, according to the AAA Daily Fuel Gauge Report. The price is actually down 0.3 cents in the past day, marking the first decline in nearly two months, AAA says. The higher gasoline prices are prompting some consumers to adjust their plans to celebrate the upcoming Fourth of July holiday, according to the NRF survey. About 44.5 percent of the 8,635 consumers polled said they would change their Independence Day plans on account of higher gas prices.

AlterNet:
- “Suck on Our Yachts”: Goldman Sachs Issues Non-Apology for Destroying the World Economy. Anyone else out there find himself doubled over laughing after reading Goldman, Sachs chief Lloyd Blankfein's "apology" for his bank's behavior leading up to the financial crisis? Just yesterday I was talking to Guy Cecala at Inside Mortgage Finance, the trade publication that tracks statistics in the mortgage lending industry. He said that at the height of the boom, in 2006, Goldman Sachs underwrote $76.5 billion in mortgage-backed securities, or 7% of the entire market. Of that $76.5 billion, $29.3 billion was subprime, which is bad enough -- but another $29.8 billion was what's called "Alt-A" paper. Alt-A mortgages are characterized, mainly, by crappy documentation and lack of equity: no income verification, no asset verification, little-to-no cash down. So while "only" 38% of the mortgage-backed securities Goldman underwrote were subprime, more than three-fourths of their securities were what is called "non-prime," ie either subprime or Alt-A. "There's a lot of crap in there too," says Cecala. Any way you slice it, Goldman was responsible for putting tens of billions of toxic mortgages on the market, resulting in mass foreclosures, mass depletion of retirement funds, and a monstrously over-leveraged financial system that we will now all be bailing out for the next half-century or so. All of this so that Goldman could make a few billion bucks acting as the middleman in all of these deadly transactions. What is particularly obnoxious about this phrase is that Goldman is bragging about the fact that it actually made money while it was pumping the economy full of explosive leverage. While companies like Lehman and Bear were dumb enough to actually eat their own rat meat, Goldman knew what it was doing and was careful to bet against the same stuff it was selling, which makes its behavior many times worse than that of other banks, not better. Beyond that, Goldman's "risk management" also involved buying massive hedges on its mortgage exposure from...drum roll please... AIG. In fact Goldman was AIGFP's single largest customer; while the bank was busy flooding the world financial system with doomed mortgages, it was also busy piling bets on the back of the insurance behemoth -- $20 billion worth, to be exact. And AIG's death spiral was triggered not so much by its bets going sour, but by companies like Goldman that demanded that AIG put up cash to show its ability to pay. These collateral calls were what killed AIG last September, and Goldman was one of those creditors pulling the trigger: what makes this fact even more obnoxious is that ex-Goldmanite Henry Paulson then stepped in and green-lighted an $80 billion taxpayer bailout. Ultimately another ex-Goldmanite named Ed Liddy was put in charge of AIG, and Goldman ended up getting paid 100 cents on the dollar for its AIG debt.So basically Goldman helped kill AIG, necessitating a federal bailout, after which time it got paid off handsomely for bets that it certainly would not have been paid off completely for had AIG simply been liquidated. And again, AIG probably does not have a market to sell its CDS insurance to firms like Goldman, if firms like Goldman had not cooked up this insane scheme to underwrite billions upon billions of toxic debt and sell it off to secondary buyers as safe investments. Moreover AIG would not have even had this business of selling CDS insurance had not a bunch of ex-Goldman guys, in particular Bob Rubin, quietly pushed to deregulate the derivatives market back at the end of the Clinton administration.

zerohedge:

- Bloomberg out with an article disclosing what every "tinfoil" hat wearer has known for a long time, namely that it was precisely Goldman's(GS) collateral extractions out of AIG that were the cause for the firm's collapse, and the ensuing financial catastrophe that to this day has been propped up only thanks to the US government's backstop of nearly $10 trillion in various worthless assets. The article goes into some juicy details on everyone favorite Joseph Cassano, who singlehandedly created a half a trillion derivative monster, that blew up, essentially to the benefit of Goldman. But the take home message is that Bill Poole believes that by precipitating the biggest financial collapse in history, Goldman was doing an admirable thing, and while making money for itself it put the fate of every other bank at the forced mercy of America's taxpayers. The outcome: first - paying back TARP after orchestrating a 40% bear market rally and second - guaranteeing its employees record bonus payments. Everything on Wall Street is back to normal until the next and potentially final collapse, likely anticipated and once again monetized by Goldman. The only remaining question: what is Goldman Sachs currently shorting in order to make money out of the next collapse, while everyone else has to get bailed out by Team Bailout America. For some recommended names, we suggest readers familiarize themselves with the Goldman Sachs Conviction Buy List.

NY Times:

- On a PC, having to fill out a form and type in a credit card number to buy something is only mildly annoying. On a cellphone, it could make you want to skip the purchase entirely. This is why investors, start-ups and major corporations are pouring money into services that make it easier to use cellphones to buy goods and transfer money. The aim is to turn phones into virtual credit cards or checkbooks, enabling the kind of click-and-buy commerce and online banking that people have come to expect on their PCs. But shrinking down those services to fit onto cellphones presents serious challenges.

- European governments have set aside $5.3 trillion to aid the region’s stricken financial institutions, according to a European Union document obtained by Bloomberg News. That’s more than the annual gross domestic product of Germany, Bloomberg points out.

- Len Blavatnik, the Russian-American investor, plans to file a lawsuit against JPMorgan Chase(JPM) on Monday that accuses the bank of mismanaging an investment account that held $1 billion in assets owned by his industrial holding company, Access Industries. Writing in The New York Times, Zachery Kouwe reported that in the lawsuit, Mr. Blavatnik’s lawyers blame Ted C. Ufferfilge, a JPMorgan banker advising Access, for losing $98 million of the company’s money betting on risky subprime mortgage securities. The suit contends that Mr. Ufferfilge told Access that its funds were being invested in conservative instruments — not securities that wound up at the center of the American mortgage crisis, according to a draft of the complaint prepared by the law firm Quinn Emanuel Urquhart Oliver & Hedges. An Access spokesman said that JPMorgan bought the subprime securities for Access “at a time when the bank itself was unwinding its positions in similar investments.”

Dow Jones:

- Iraq, holder of the world’s third-largest oil reserves, has begun producing crude from its Nassiriyah field in southern Iraq. The field is producing at a rate of 10,000 barrels a day and will increase to 20,000 barrels a day in the next “few days,” citing an official from South Oil Co.

Washington Post:

- The likelihood of severe unemployment extending into the 2010 midterm elections and beyond poses a significant political hurdle to President Obama and congressional Democrats, who are already under fire for what critics label profligate spending. Continuing high unemployment rates would undercut the fundamental argument behind much of that spending: the promise that it will create new jobs and improve the prospects of working Americans, which Obama has called the ultimate measure of a healthy economy. Obama has defended his economic approach -- which includes the $787 billion economic stimulus plan and record investments in health care, alternative energy, education and job training -- as necessary to stabilize the shaky economy and point the way to job growth. With many forecasters projecting unemployment to remain above 10 percent next year and not return to pre-recession levels of roughly 5 percent for years after that, Obama is likely to be confronted with defending the effectiveness of his economic policies as the nation endures its worst employment situation in a generation. Before passage of the stimulus bill, the Obama administration had predicted that unemployment would peak at 8 percent before beginning to abate this fall. But unemployment has already reached 9.4 percent, the highest level in a quarter-century, and the situation is not projected to start improving until long after the White House had predicted. "They even predicted that if we passed it quickly, unemployment wouldn't go higher than 8 percent. Well, here we are just a few months later and the unemployment rate is approaching 10 percent," said Senate Minority Leader Mitch McConnell (R-Ky.). "The administration admits that their earlier predictions were a guess -- and that they guessed wrong."

NY Post:

- When it comes to mergers and acquisitions this year, John Mack is the new king. Year-to-date through Friday, Mack's Morgan Stanley(MS) has been the lead adviser on $175 billion worth of US-based M&A deals, surpassing the former top dog, Goldman Sachs, which advised on $158 billion worth of deals, according to an analysis provided by ThomsonReuters for The Post. Goldman had been Wall Street's top-ranked M&A adviser since 2005, but the Lloyd Blankfein-led bank has fallen to second place this year.

LA Times:

- Coal-fired power plants are the largest source of heat-trapping gases that cause global warming, but President Obama's plan to fight climate change would result in the nation burning more coal a decade from now than it does today. The administration's plan, the centerpiece of a 700-page legislative package, proposes strict limits on emissions of greenhouse gases, such as carbon dioxide. But to attract vital support from congressional Democrats representing heavily coal-dependent areas, authors of the legislation, including Rep. Henry A. Waxman (D-Beverly Hills), have made a series of concessions that substantially soften its effect on coal -- at least over the next decade or so. As a result, the Environmental Protection Agency projects that even if the emissions limits go into effect, the U.S. would use more carbon-dioxide-heavy coal in 2020 than it did in 2005. Environmental groups also say the bill could set off a boom in the construction of new coal plants because of provisions that would restrict legal efforts to block such projects. "This is greens making a deal with the devil," said Ted Nordhaus, chairman of the Breakthrough Institute, an environmentalist think tank that recently completed a detailed critique of the bill’s coal provisions. Obama and House leaders "gave the coal guys everything they wanted," said Michael Shellenberger, the institute's president. "The result is legislation that, when all is said and done, will increase coal generation and make it harder to move away from it."

Politico:

- Eroding confidence in President Barack Obama’s handling of the economy and ability to control on spending have caused his approval ratings to wilt to their lowest levels since taking office, according to a spate of recent polls, a sign of political weakness that comes just as he most needs leverage on Capitol Hill.

Seeking Alpha:

- The 7 Habits of Highly Suspicious Hedge Funds.

The Detroit News:

- Former Chrysler CEO Lee Iacocca has some advice for the people who are running his old company, and those who will lead the new General Motors: Get the government out of your business as soon as possible. Iacocca, a slick pitchman who became an American hero in the early 1980s when he used more than $1 billion in government loan guarantees to rescue the nearly defunct Chrysler, said in a recent interview that government intervention is strong motivation to repay the loan early. "They're on you day and night. Their oversight is just too extreme," said Iacocca, who is promoting a new limited-edition customized Iacocca Ford Mustang. "That's why our 10-year loan, we paid it back in three years. We couldn't stand the government. The bureaucracy kills you." He said he's also impressed with how Ford Motor Co.'s leadership has kept America's No. 2 automaker free of government loans.

Reuters:
- General Electric Co (GE) opposes any regulation that would force it to split off its hefty finance business, the conglomerate's chief executive said in a memo to staff on Monday. Some investors and analysts have said that the Obama administration's proposed revamping of the U.S. financial regulatory system could force GE to sell or exit its GE Capital unit, which has businesses ranging from leasing commercial aircraft to investing in real estate. "One proposal in particular, pertaining to the separation of banking and commerce, has led to some media speculation that, if enacted, could require the separation of GE and GE Capital," GE CEO Jeff Immelt said in the memo. "It is very early in the process, and Congress will now spend months reviewing and drafting legislation. We are certainly opposed to it, since this issue had nothing to do with the financial crisis," said Immelt, who tends to address GE's employees about once a month by memo, according to a spokeswoman. "GE is and will remain committed to GE Capital and we like our strategy." The Fairfield, Connecticut-based company is already working to scale back GE Capital, which had accounted for half of GE's profit in 2007. Immelt has said he plans to downsize the unit so that in the future the world's largest maker of jet engines and electricity-producing turbines would rely on it for just 30 percent of earnings.

Financial Times:
- About half of the top executives of US small and medium-sized manufacturers are optimistic about their companies’ growth prospects for the rest of this year, according to a survey to be published on Monday. The report by RSM McGladrey, the consultancy, lends further weight to the view that the manufacturing sector, which has been hard hit by the global downturn, may be on the verge of a recovery. Respondents in the RSM McGladrey survey were more gloomy, however, when asked about the US economy as a whole. Less than a fifth said they felt optimistic about US growth prospects this year. Among companies making medical devices, for example, almost 90 per cent said they were optimistic about their own growth this year, with only about 13 per cent bullish on the US economy. Forty per cent of respondents also said their companies were “declining”, up from 12 per cent last year, while less than 9 per cent said their businesses were “thriving and growing”. In spite of the recession, half of the manufacturing executives said they were finding it difficult to recruit new skilled staff. “Respondents to the survey continue to struggle to find workers with the skills required by today’s technologically advanced work environment,” the study noted. “Even with unemployment up sharply, these companies still have trouble finding workers to fill key needs.” This echoes a report last month by Manpower, one of the world’s largest recruitment companies, showing 30 per cent of employers around the world struggling to find the right people to fill positions. The biggest need reported in the RSM McGladrey survey was for sales staff: 49 per cent of respondents said they were looking for new salespeople.

Bild-Zeitung:

- Israeli Prime Minister Benjamin Netanyahu said Iran and Israel could reestablish peaceful relations under a different regime. “There is no conflict between the Iranian and Israeli people,” he said. Netanyahu said that Iran posed a threat to the Jewish state as well as moderate Arab countries. He said the “mask has been torn” from the face of the Iranian regime as it cracks down on protesters following President Mahmoud Ahmadinejad’s disputed victory.

Globe and Mail:

- Alberta’s oil sands show signs of life.

Economic Daily:

- China’s 2009 export growth will slow while overseas shipments enter a “low-growth” period in the near future, Vice Commerce Minister Zhong Shan wrote.

The Jerusalem Post:
- Only 6 percent of Jewish Israelis consider the views of American President Barack Obama's administration pro-Israel, according to a new Jerusalem Post-sponsored Smith Research poll. The numbers were a stark contrast to the last poll published May 17, on the eve of the meeting between Netanyahu and Obama at the White House. In that poll, 31% labeled the Obama administration pro-Israel, 14% considered it pro-Palestinian and 40% said it was neutral.

Bear Radar

Style Underperformer:
Small-cap Value (-3.30%)

Sector Underperformers:
Steel (-7.36%), Gold (-6.64%) and Oil Service (-6.32%)

Stocks Falling on Unusual Volume:
GMXR, XCO, FCX, STO, DB, CMED, FUQI, EURX, RIMM, PALM, POOL, UFPI, CSIQ, TWGP, PAAS, ANEN, CWEI, AKAM, BIIB, CEDC, GMCR, MFC, ARL, GNI, WAG, MTA, RGR, TUC, KYE, XCO, BPT and EMF

Stocks With Unusual Put Option Activity:
1) SPWR/A 2) COST 3) PMCS 4) SUN 5) CMA

Bull Radar

Style Outperformer:
Large-cap Value (-2.19%)

Sector Outperformers:
Utilities (+.58%), Telecom (-.31%) and Retail (-.85%)

Stocks Rising on Unusual Volume:
BTI, CRTX, MNRO, BOBE, AAUK, PLCE, NCTY, ASCA, DBRN, CTR and IBA

Stocks With Unusual Call Option Activity:
1) COH 2) MEDX 3) AKAM 4) ANF 5) SHW

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Monday Watch

Weekend Headlines
Bloomberg:

- Splits within Iran’s ruling elite deepened, with police arresting family members of an ex- president and a former nuclear negotiator saying most Iranians questioned President Mahmoud Ahmadinejad’s electoral victory. Security forces detained five relatives of former President Ali Akbar Hashemi Rafsanjani, one of the most influential politicians in the country, state media said yesterday. Bolstering the opposition, Parliament Speaker Ali Larijani, who served as nuclear negotiator until 2007, criticized the top election body for siding with Ahmadinejad and said most Iranians don’t accept the results. “There is some serious dissatisfaction within the ranks,” said Ilan Berman, an analyst with the American Foreign Policy Council in Washington. “Anytime a regime begins to eat its own, it signals significant transformation.”

- Republican John McCain, who has criticized President Barack Obama’s handling of the protests in Iran, praised Obama’s statement yesterday that the Iranian government must “stop all violent and unjust actions.” McCain told CBS’s “Face the Nation” that supporting the protesters in Iran is about the “moral leadership” the U.S. must show in the world. “I appreciate the statement that he made yesterday that was far stronger, and I think we will need to continue to send that message,” said McCain, who was defeated by Obama in last year’s presidential election. “It’s not so much about Iran, it’s about being on the right side of history.”

- The U.S. military is “fully prepared” should North Korea launch a missile toward Hawaii, President Barack Obama said in an interview to be broadcast by CBS News today. “I do want to give assurances to the American people that the T’s are crossed and the I’s are dotted in terms of what might happen,” Obama said in an interview to be aired on the “Early Show,” according to a transcript on the CBS News Web site. Defense Secretary Robert Gates said on June 18 he ordered the military to take measures against a possible missile launch by North Korea in the direction of Hawaii. A long-range missile launch would be a breach of a United Nations resolution passed after North Korea tested a nuclear weapon on May 25.

- President Barack Obama may not have enough votes in the U.S. Senate to pass his effort to overhaul the nation’s health-care system, California Democrat Dianne Feinstein said. “I don’t know that he has the votes right now,” Feinstein said today on CNN’s “State of the Union” program. “I think there’s a lot of concern in the Democratic caucus.” Controlling costs of the new system is a “difficult subject.” Republican Senator Richard Lugar of Indiana said on the same program that the overhaul should be done slowly, and not this year, to ensure it doesn’t “threaten the basic structure of the economy.” As a presidential candidate he pledged to expand coverage to the 46 million people who lack health insurance while lowering the cost of a system of care that makes up 17 percent of the economy. Iowa Republican Senator Charles Grassley said on CNN that the Senate Finance Committee is “dialing down some of our expectations” of the legislation in response to an estimate by the nonpartisan Congressional Budget Office that earlier options under consideration would cost $1.6 trillion. “Our goal is affordability,” said Grassley, who is the top-ranked Republican on the finance panel. Senators from both parties are wary of health-care overhaul because of the $1.6 trillion cost estimate, Senator Lindsey Graham, a South Carolina Republican, said on ABC’s “This Week” program today. The budget office calculation “was a death blow to government-run health care plan,” he said. Democratic senators are “running away from the government- run health care where the bureaucrat stands between the doctor and the patient,” Graham said. The Finance Committee “has abandoned” the plan, he said.

- A proposed “cap-and-trade” law to cut U.S. greenhouse gas emissions would cost $22 billion a year by 2020, or $175 for every household, the Congressional Budget Office said. “Higher costs would stem from the fact that most economic activity is based on fossil fuels” that produce greenhouse gases when burned, the CBO analysis said. “In most cases, the firms required to hold the allowances would not bear that cost; rather, they would pass it onto their customers in the form of higher prices.” CBO’s analysis of the Waxman-Markey bill was released as Democrats work to resolve a dispute over the bill’s economic impact on U.S. farmers. House Agriculture Committee Chairman Collin Peterson of Minnesota and other Democrats from farm states want changes to the legislation, including more free allowances to non-profit utilities that serve rural parts of the country, before they will support Waxman’s plan to bring the bill to a vote in the 435-member House next week. In its analysis, CBO said the market value of the cap-and- trade allowances in 2020 would be $91.4 billion, or $28 for each permit. “The ultimate effects of the cap-and-trade program on U.S. households would depend crucially on policy makers’ decisions about how to allocate that value,” CBO said.

- George Mitchell, President Barack Obama’s envoy to the Middle East and a former Democratic Senate majority leader, told a jury he had no reason to believe bribes had been paid as part of his $200,000 investment in an oil deal. Mitchell took the witness stand yesterday in the defense of Connecticut entrepreneur Frederic Bourke, who is on trial on charges that he joined a 1998 conspiracy to bribe government leaders in Azerbaijan in a failed bid to buy the state oil company. Bourke invested $8 million and brought his friend Mitchell into the deal. Bourke says he didn’t know the architect of the deal, Viktor Kozeny, had paid bribes.

- General Motors Corp.’s planned sale drew objections from Chrysler Group LLC, the other U.S. automaker that filed for bankruptcy protection this year, as well as at least 10 states and union retirees. Attorneys general from Connecticut, Kentucky, Missouri, Nebraska, Maryland, Vermont, Minnesota, North Dakota, Ohio and West Virginia objected to the sale, saying it would circumvent state laws that protect GM dealers’ contracts and consumers with product liability claims.

- Treasuries rose, with 30-year bond yields falling the most in five weeks, as a report showing consumer prices tumbled the most in six decades eased concern efforts to revive the economy would generate inflation.

- Cotton fell, capping the biggest weekly decline in more than four months, on speculation that China, the world’s largest fiber user, will curb purchases from the U.S., the top exporter. “China’s cotton reserves are at a record,” Jeffery Lu, an analyst with Noble Group Ltd.’s cotton unit, said yesterday in a telephone interview from Shanghai. “Without new import quotas, textile mills can’t import much, even though foreign cotton is less expensive than domestic fiber.”

- Vale SA, the world’s largest iron- ore producer, said it agreed to cut contract prices for iron-ore fines for ArcelorMittal by 28 percent in 2009. Vale will also cut so-called benchmark prices from last year by more than 44 percent for lump ore and by 48 percent for pellets, the Rio de Janeiro-based company said in a filing to Brazil’s securities regulator today.

- Copper fell in New York, marking its first weekly drop since mid-May, on speculation that China, the largest user of the metal, will import less after stockpiles monitored in Shanghai rose to the highest since March 2008. Copper held in warehouses certified by the Shanghai Futures Exchange climbed 13 percent this week to the highest since August 2007. China accounted for 38 percent of global copper demand in the first quarter, up from 27 percent a year earlier, Barclays Capital estimates. The metal declined on speculation that China’s State Reserve Bureau is done stockpiling copper. “The market is worried about Chinese demand,” David Wilson and Stephanie Aymes, Societe Generale analysts in London, said today in a report. The analysts said they are “bearish” on copper because of “fundamentals and sentiment.”

- More iron-ore carriers are tied up outside ports in Brazil, Australia and China than at the peak of last year’s shipping boom. That helps explain this year’s fivefold gain the Baltic Dry Index, a measure of commodity shipping costs. It also indicates the gauge may drop should Chinese demand for the raw material, used in steel production, abate, according to Tufton Oceanic Ltd., the largest shipping hedge-fund group. “It’s a one-trick pony, it’s just about iron ore in China,” Andreas Vergottis, Tufton’s Hong Kong-based research director, said June 18. A decline can “happen at any time. It would not surprise me if it’s in one week or one month.” China’s steel production fell in April from a month earlier, while iron-ore imports in May were lower than the preceding month. About 18% of the world’s fleet of capsizes is sitting outside iron-ore ports, according to London-based shipbroker Simpson, Spence & Young Ltd. That compares with 14% about a year ago, when the Baltic Dry Index was almost three times higher.

- France’s budget deficit may widen to between 7 percent and 7.5% of gross domestic product in 2009 and “probably” the same in 2010 as the government lifts spending and the recession erodes revenue, Budget Minister Eric Woerth said.

- Japanese manufacturers became less pessimistic this quarter and demand for services rose in April amid signs the country’s worst postwar recession is easing. Sentiment was minus 13.2 points this quarter compared with minus 66 three months earlier, a joint survey by the Cabinet Office and Finance Ministry showed today. The tertiary index, a gauge of money spent on phone calls, power and transportation, climbed 2.2 percent from March, the Trade Ministry said.

- Pakistan will wage war against Taliban insurgents in the northwestern Swat Valley region until “complete victory” is achieved, Prime Minister Yousuf Raza Gilani said. “We are engaged in a relentless struggle to safeguard our land from terrorists and to make it a safe haven for the people,” Gilani said yesterday as he marked the birthday of assassinated former premier Benazir Bhutto, state media reported.

Wall Street Journal:

- Irish property prices have plummeted since 2002. But a "cottage" in County Galway owned by Connecticut Senator Chris Dodd has tripled in value during the same period, according to a financial disclosure form filed by the Senator this month. There are two possible explanations for this remarkable turn of fortune. Maybe Mr. Dodd is luckier than a leprechaun. Or could it be that he paid well below the market price when he bought out a co-owner in 2002 and had undervalued the property accordingly? If it's the latter, then Mr. Dodd received a "gift," in IRS parlance, and should have declared it on his financial disclosure form that year. He did not. Oh, and by the way, the seller at that low, low price has been the business partner of a man for whom Mr. Dodd lobbied to receive a Presidential pardon.

- A home-sales revival that began last year in some of California's cheaper inland areas has begun to spread to several more expensive coastal areas, another hint that devastated real-estate markets in the state -- and other parts of the country -- may see less grim days ahead. Homes are selling briskly again in the lower end of the market in Santa Clara County, just south of San Francisco, with prospective buyers making multiple offers and bidding well above asking prices. The median sales price of a single-family home in May was $445,000 in the county, up 5.7% from February, when prices stopped dropping.

- Steve Jobs, who has been on medical leave from Apple Inc.(AAPL) since January to treat an undisclosed medical condition, received a liver transplant in Tennessee about two months ago. The chief executive has been recovering well and is expected to return to work on schedule later this month, though he may work part-time initially. When he does return, Mr. Jobs may be encouraged by his physicians to initially "work part-time for a month or two," a person familiar with the thinking at Apple said. That may lead Tim Cook, Apple's chief operating officer, to take "a more encompassing role," this person said. The person added that Mr. Cook may be appointed to Apple's board in the not-too-distant future. Recovery from a liver transplant is relatively fast, said William Chapman, a specialist at Washington University who has no direct knowledge of Mr. Jobs's case. During his leave, Mr. Jobs has remained involved in key aspects of the company and reviewed products and product plans from home. He has also been seen at Apple's headquarters, according to people who have seen him there.

- David Ellison is paid to invest in banks, but a year ago with his fears growing about falling home prices, rising unemployment and bank failures, he sold most of his investments. Today, Mr. Ellison's funds, FBR Small Cap Financial and FBR Large Cap Financial, are once again full of banks and his cash levels, which had hit 60%, are down to 10%. He believes most banks are cheap, even after recent rallies, and sees a better attitude among the now-humbled management of the major banks, which are working to rebuild their business, not jack up their own bonuses. "This is the time to take a little more risk," says Mr. Ellison, 52 years old, who launched the two funds in 1996 after a long career at Fidelity Investments. "The machinery is in place to fix the problems, and the companies all want to get better now." Banks are relatively cheap, even with the run-up in the sector's stocks. Bank of America now trades for a little more than one times tangible book value -- essentially, assets (not including goodwill) minus liabilities and preferred stock. At the end of 2007, before disaster hit, the BofA share price was at almost three times book, according to SNL Financial. With the cost of funds low and risk a dirty word, Mr. Ellison figures now is a good time for banks to make loans. "Borrowers and lenders are both being cautious."

- The bankruptcies of General Motors and Chrysler are changing the landscape of the auto industry. The two U.S. companies are shuttering plants, shedding dealers and reducing their product lines. As a result, Toyota Motor will become the largest seller of light vehicles in the U.S. It has held the top spot globally since last year. The Japanese auto maker won't be the only beneficiary of the two companies' woes. But in terms of status, market clout and bragging rights, Toyota will be the No. 1 winner. Its share of the North American light-truck and car market probably will rise to around 20% from 18.4%. GM will end up in second place with 13% to 16% -- with Ford hot on its tail. Although Toyota stock doesn't change hands directly in the U.S., the company's American depositary shares (TM), which represent them, are listed on the New York Stock Exchange. And, at a recent price of around $76 -- about $30 below their 52-week high -- they're a good bet for long-term investors.

- A growing number of big investors are concluding that stock and bond pickers failed to add any value during the market turmoil and are shifting to index funds, a move that threatens to cut profits for asset managers. "Active managers have not given us the added performance in a down market that we hoped for," says Bill Atwood, executive director of the $9 billion Illinois State Board of Investment. In a recent survey by Greenwich Associates, a Greenwich, Conn., consulting firm, about one in five institutional investors said they have recently shifted money away from active managers and into passive index strategies. That is up from just 4% who expected to make that shift when asked from July to October 2008. Thanks in large part to a growing preference for index funds, the Bank of New York Mellon Corp. unit is forecasting a record number of asset managers will be replaced in the second half of this year.

- Former General Electric Co.(GE) Chief Executive Jack Welch is putting his name and money behind a little-known educational entrepreneur, injecting some star power into the budding industry of online education. Mr. Welch is paying more than $2 million for a 12% stake in Chancellor University System LLC, which is converting formerly bankrupt Myers University in Cleveland into Chancellor University. It plans to offer most courses online. Chancellor will name its Master of Business Administration program The Jack Welch Institute.

- Two Democratic lawmakers are calling on Fannie Mae and Freddie Mac to relax recently tightened standards for mortgages on new condominiums, saying they could threaten the viability of some developments and slow the housing-market recovery.

- The flight of traders and bankers to smaller boutiques continued last week as a new bond-trading specialist finished a hiring binge of 50 people from larger financial firms. StormHarbour Partners LP, founded by former Citigroup Inc. bond-trading executives Antonio Cacorino and Fredrick Chapey, has hired 50 people in the last few months, including about 20 from Citigroup.

- Many hedge funds were relieved last week when the Obama administration's financial-overhaul plan included no big surprises or threats to the lucrative, secretive industry. It isn't clear exactly why hedge funds escaped their worst fears. But one factor might have helped: The hedge-fund industry has been spending a lot more time and money in Washington during the past few years. In 2008, major hedge funds and their trade groups spent $6.1 million lobbying Washington, up from $4.2 million in 2007 and nearly seven times the $897,000 average from 2003 to 2006. The growth rate in hedge-fund lobbying far exceeds the 38% increase for the overall financial-services industry between 2006 and 2008, according to figures compiled by the Center for Responsive Politics, a research group that tracks political spending. "You name a senior member of the [House] financial-services committee or the [Senate] banking committee, and I or a member of my staff have been in that office within the past six months," Mr. Baker says. The new approach was evident as the Obama administration pieced together its financial-regulation proposal. In meetings with representatives of the Federal Reserve, hedge-fund representatives said they would be less likely to participate in government programs to buy bank assets if they were subjected to extensive disclosure requirements as part of the regulatory changes, a person familiar with the discussions says. Hedge funds faced intense scrutiny from lawmakers and regulators last fall amid short-selling and swaps activity that helped drive down already battered financial stocks. Hedge-fund paychecks surpassing $1 billion last year became a lightning rod for criticism. One of the biggest hedge-fund lobbyists is Citadel Investment Group, which spent a total of $1.9 million from 2007 through the first quarter of this year, records show. The Coalition of Private Investment Companies, a group led by the famous short-seller Jim Chanos, founder of hedge fund Kynikos Associates, spent $1.1 million on lobbying in the same period. Mr. Chanos testified before Congress this year on regulatory reforms in the financial sector and attended President Obama's announcement of regulatory changes on Wednesday.

- In Washington, officials are keeping a close eye on Hawaii amid concerns that North Korea will fire a missile at the state.

- Developing countries' net private capital inflows fell 41% last year and will be cut nearly in half this year, the World Bank said in a report that offers little hope that the countries will provide the spark for the global economic engine. Meanwhile, European Central Bank Gov. Jean-Claude Trichet said Sunday that the ECB expects the global economy to moderate its slide over the remainder of the year and resume climbing in 2010. The World Bank estimated in its annual development-finance review that gross domestic product in developing countries will grow just 1.2% this year, well off the 8.1% pace in 2007 and the 5.9% gain in 2008. The report, issued at a conference in Seoul, projects a 2.9% contraction in global GDP this year, as rich countries contract by 4.5%.

MarketWatch.com:

- About 800 gathered this past week for the GAIM International hedge fund and alternative investment event in Monaco. A year ago, with 1,000 in attendance, the conference was kicking off just as markets were starting to fall apart, with the biggest slump yet to come. Of course, it should be noted that hedge funds have been blamed by many for contributing to last year's financial mess. As for the look ahead, a survey of attendees by conference organizers revealed that 65% of those polled expect the crisis to "rumble on," with just 17% saying it was over and that same amount expecting the crisis to diminish significantly.

IBD:
- In some mythologies, battles between the gods create the world as we know it. At Perfect World (PWRD), they're certainly creating profits. On Friday, Perfect World raised its second-quarter outlook, citing a friendly reception for its new online game, "Battle of the Immortals." The market responded by pushing shares to a 52-week high.

NY Times:

- In 1936, Atlanta built Techwood Homes, the nation’s first housing project. By the 1990s, a greater percentage of the city’s residents were living in housing projects — sprawling red-brick barracks that pockmarked the skyline — than in any other city in America. Now, Atlanta is nearing a very different record: becoming the first major city to knock them all down. By next June, officials here plan to demolish the city’s last remaining housing project, fulfilling a long and divisive campaign to reduce poverty by decentralizing it. Mixed-income developments oriented toward families, with trendy shops, golf courses and Y.M.C.A.’s, are emerging where bleak, uniform towers once stood. Displaced residents are receiving vouchers to move to private housing. And a landmark experiment in housing the urban poor in large government-run facilities that began under the New Deal is being undone. “We’ve realized that concentrating families in poverty is very destructive,” said Renée L. Glover, the executive director of the Atlanta Housing Authority. “It’s destructive to the families, the neighborhoods and the city.” “Atlanta’s plan signifies in a very clear way that the social contract that cities and citizens have with the poor has fundamentally changed,” said Sudhir Venkatesh, a sociologist at Columbia University who studies urban neighborhoods. “We’ve decided that the market can function to create housing and the role of government should be to move people into the market.” Some researchers and policy makers say the model is succeeding. Thomas D. Boston, an economist at the Georgia Institute of Technology who has tracked Atlanta’s housing-project residents since 1995, said those who move are more likely to find work, their children were likely to perform better in school and they report higher satisfaction with their living conditions. The housing authority says the overwhelming majority of residents support the relocations. Ms. Glover does not blame the social engineers of the 1930s for creating housing projects. Their solution worked during the New Deal, she said, but collapsed as public housing became more racially segregated and attracted drug crime. These days, Atlanta is again the vanguard in an experiment that Ms. Glover acknowledged could have unintended consequences. But her greater concern, she said, is that cities will safeguard the status quo. “For us to think that a program that was conceptualized 70 years ago is still the right answer, it makes no sense,” she said. “Today is a whole new era.”

- The central bank is holding the Fed funds rate at nearly zero and has created a mountain of bank reserves to fight the financial crisis. Yes, these moves are unusual, but these are unusual times. Concluding that the Fed is leading us into inflation assumes a degree of incompetence that I simply don’t buy. Let me explain.

- As if Detroit didn’t have enough worries. In addition to the recession, and the bankruptcies of Chrysler and General Motors, a new threat has appeared in the rearview mirror. Many smaller automakers are gaining a bigger share of the market, most notably Hyundai and Kia. Together, the two Korean brands hold 7.3 percent of the American market, the same as Nissan, which ranks sixth in American sales, behind G.M., Toyota, Ford, Honda and Chrysler. Last year, Hyundai and Kia had 5 percent of the market.

CNNMoney.com:

- How the bailout bashed the banks. They were rescued from a crisis of their own making, but the political thrashing has left bad blood between business and government. An inside look at the trouble with TARP.

Business Week:
- Yes, the Fed is expanding the money supply. But any inflationary effect will be offset by consumers' new frugality.

- TiVo(TIVO) Wants to Be the Google(GOOG) of Television. How?

USA Today:

- A couple of tech giants you wouldn't expect are heavily wooing small businesses. IBM(IBM) and Google(GOOG) have stepped up efforts to nudge Microsoft (MSFT) aside and become tech suppliers of choice to small- and medium-size business (SMBs).

Politico:

- Giving a boost to health legislation after a bruising week, the pharmaceutical industry struck a deal Saturday with Senate Finance Chairman Max Baucus (D-Mont.) and the White House to commit $80 billion over 10 years to help pay for comprehensive reform. The promised savings from the industry will be written into the reform bill, making them binding. Capping months of private talks, Baucus announced the deal in a Saturday afternoon press release that drug companies agreed to narrow the so-called doughnut hole in the Medicare Part D prescription drug plan.

Rasmussen Reports:

- The Rasmussen Reports daily Presidential Tracking Poll for Sunday shows that 32% of the nation's voters now Strongly Approve of the way that Barack Obama is performing his role as President. Thirty-four percent (34%) Strongly Disapprove giving Obama a Presidential Approval Index rating of -2. That’s the President’s lowest rating to date and the first time the Presidential Approval Index has fallen below zero for Obama (see trends).

Reuters:

- Saudi Electricity, the Gulf's largest utility by market value, said on Sunday it has obtained a 12-year loan worth 4.1 billion riyal ($1.09 billion) from U.S. Export-Import Bank and Canada's Export Development Credit (EDC). The cash will fund the purchase by the state-controlled company from U.S.-based GE Energy of 23 gas turbines with a capacity to generate 2.9 megawatts from , Electricity's Chief Executive Ali Saleh al-Barrak said. "This is the first direct loan to Saudi Electricity from the two banks," he said at a signing ceremony. Eximbank's share of the loan is $912 million and the remainder is from Canada's EDC.

- There is no room for governments that have borrowed billions to fight the economic crisis to accumulate more debt, European Central Bank President Jean-Claude Trichet said on Sunday. "There is a moment where you can't spend anymore and you can't accumulate any more debt. I think we are at that moment," Trichet told Europe 1 radio.

Financial Times:

- The US has complained officially to China over its strict new internet censorship rules as tension builds over an issue causing consternation among international technology companies and Chinese internet users. The development is a rare direct intervention by the US over internet freedom, which has steadily risen in importance as an issue between the two countries in recent years. US technology companies see it as a back-door way of keeping them out of the Chinese market.

- A political party affiliated with Akbar Hashemi-Rafsanjani, the former president and key member of the Iranian regime, on Sunday called on Mir-Hossein Moussavi, the opposition leader, to form a “political bloc” that would pursue a long-term campaign to undermine the “illegitimate” government. Hossein Marashi, spokesman for the Kargozaran, stayed clear of directly challenging the supreme leader, Ayatollah Ali Khamenei, but told the Financial Times in a telephone interview that Mr Moussavi was now the leader of an opposition that was not without options. “With the lack of legitimacy of the Ahmadi-Nejad government, sooner or later the country’s management will face various crises,” he said. “Mr Moussavi should set up an official political front which can embrace the defenders of the real Islamic republic . . . against those who are distorting it and are represented by Mr Ahmadi-Nejad.”

The Guardian:

- Gordon Brown has admitted that he has been "hurt" by the personal attacks on him during the failed attempt to oust him this month, and said that he might move to teaching after he leaves office. Speaking to the Guardian in his first interview since the attempted coup by Labour backbenchers, the prime minister made an unprecedentedly frank series of observations on his time in office, reflecting that the recent weeks have been the worst of his political life.

- Staff at Goldman Sachs(GS) staff can look forward to the biggest bonus payouts in the firm's 140-year history after a spectacular first half of the year, sparking concern that the big investment banks which survived the credit crunch will derail financial regulation reforms. A lack of competition and a surge in revenues from trading foreign currency, bonds and fixed-income products has sent profits at Goldman Sachs soaring, according to insiders at the firm. Staff in London were briefed last week on the banking and securities company's prospects and told they could look forward to bumper bonuses if, as predicted, it completed its most profitable year ever. Critics of the bonus culture in the City said the dominance of a few risk-taking investment banks is undermining the efforts of regulators to stabilize the financial system. Vince Cable, the Liberal Democrat treasury spokesman, said: "The investment banks more than any other institutions created the culture of excessive leverage, excessive risk and excessive bonuses that led to the downfall of the financial system. Now they are cashing in and the same bonus culture has returned. The result must be that we are being pushed to the edge of another crash." "These banks are intermediaries in the bond markets where governments and companies are raising billions of pounds of new money. There is also a lack of competition that means they can charge huge sums for doing business." Last week, the firm predicted that President Barack Obama's government could issue $3.25tn of debt before September, almost four times last year's sum. Goldman, a prime broker of US government bonds, is expected to make hundreds of millions of dollars in profits from selling and dealing in the bonds.

The Independent:

- The results were so startling that researchers decided to release details of the two cases before the drug trial – in which the patients took part – was complete. Doctors said their progress had exceeded all expectations. The men were treated at the Mayo Clinic in Minnesota in the US, one of the top medical centers in the world. Dr Eugene Kwon, the urologist who was in charge of their treatment, compared the results to the first pilot breaking the sound barrier. "This is one of the Holy Grails of prostate cancer research. We have been looking for this for years," he said.

Dagens Nyheter:

- Ikea, the world’s largest home-furnishings retailer, was “cheated” out of $190 million on over-prices gas and electricity bills in Russia, founder Ingvar Kamprad said in an interview. “We have been cheated good,” he said. “There will be law suits.”

Welt am Sonntag:

- SAP AG is in preliminary talks about an acquisition of as much as $2.1 billion, citing a SAP manager. SAP has made 5 billion euros available for purchases.

Nikkei English News:
- Nissan Motor Co. and NEC Corp. may invest as much as $1 billion in a US electric car plant. The Japanese automaker will tie up with NEC to produce lithium-ion batteries at the factory in Smyrna, Tennessee. Annual production capacity at the site may reach as many as 100,000 vehicles by 2012.

Kyodo:

- Japan’s government plans to expand and better equip its military in the wake of nuclear bomb tests by North Korea and China’s rise as a regional power.

The Jerusalem Post:

- Strategic Affairs Minister Moshe Ya'alon believes Iran is heading for a revolution but doesn't think it will have any effect on the country's nuclear program. "Since I was head of Military Intelligence, I have said, and I say it again now, that some 70 percent of Iranians are opposed to the ayatollah regime," Ya'alon said at a 'Shabbatarbut' event in Modi'in on Saturday. "[Opposition leader Mir Hossein] Mousavi and his wife have brought a new spirit of openness, and so I repeat - there will be a revolution in Iran." "It's impossible to hide the energy there now, and the Iranian regime is going to have to take that into consideration," he continued. "It makes no difference regarding the nuclear issue, but this regime will fall."

Weekend Recommendations
Barron's:
- Made positive comments on (CSCO), (ALXN), (COH), (CHA), (TEF), (YHOO), (LSI) and (MU).

- Made negative comments on (RGR) and (SWHC).

Citigroup:

- Reiterated Buy on (AMZN), target $100.

Night Trading
Asian indices are -.25% to +1.0% on avg.

Asia Ex-Japan Inv Grade CDS Index +.43%.
S&P 500 futures +.04%.
NASDAQ 100 futures +.14%.

Morning Preview
US AM Market Call
NASDAQ 100 Pre-Market Indicator/Heat Map
Pre-market Commentary
Pre-market Stock Quote/Chart
Global Commentary
WSJ Intl Markets Performance
Commodity Futures
Top 25 Stories
Top 20 Business Stories
Today in IBD
In Play
Bond Ticker
Economic Preview/Calendar
Earnings Calendar

Conference Calendar

Who’s Speaking?
Upgrades/Downgrades
Rasmussen Business/Economy Polling

Earnings of Note
Company/Estimate
- (WAG)/.56

Upcoming Splits

- None of note

Economic Releases

- None of note

Other Potential Market Movers
- The (TK) analyst meeting, (BMC) analyst meeting, (KMX) shareholders meeting, $40 billion 2-year Treasury Note Auction and the (DAL) stockholders meeting call could also impact trading today.

BOTTOM LINE: Asian indices are mostly higher, boosted by technology and financial stocks 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.

Weekly Outlook

Click here for Wall St. Week Ahead by Reuters.

Click here for stocks in focus for Monday by MarketWatch.

There are some economic reports of note and just a few significant corporate earnings reports scheduled for release this week.

Economic reports for the week include:

Mon. – None of note

Tues. – Richmond Fed Manufacturing Index, Existing Home Sales, House Price Index, weekly retail sales reports

Wed. – Weekly MBA mortgage applications report, weekly EIA energy inventory report, Durable Goods Orders, New Home Sales, FOMC Rate Decision

Thur. – Final 1Q GDP, Final 1Q Personal Consumption, Final 1Q GDP Price Index, Final 1Q Core PCE, Initial Jobless Claims, Continuing Claims

Fri. – Personal Income, Personal Spending, PCE Core, Univ. of Mich. Consumer Confidence Index

Some of the more noteworthy companies that release quarterly earnings this week are:

Mon. – Walgreen Co.(WAG)

Tues. – Steelcase(SCS), Jabil Circuit(JBL), Darden Restaurant(DRI), Oracle Corp.(ORCL), Commercial Metals(CMC), Kroger Co..(KR)

Wed. – Monsanto(MON), Nike Inc.(NKE), Paychex(PAYX), Red Hat(RHT), American Greeting(AM), Bed Bath & Beyond(BBBY)

Thur. – Lennar Corp.(LEN), Jackson Hewitt(JTX), ConAgra(CAG), Palm Inc.(PALM), Micron Technology(MU), McCormick(MKC)

Fri. – KB Home(KBH)

Other events that have market-moving potential this week include:

Mon. – (TK) analyst meeting, (BMC) analyst meeting, (KMX) shareholders meeting, $40 billion 2-year Treasury Note Auction, (DAL) stockholders meeting

Tue. – (BBY) shareholders meeting, $37 billion 5-year Treasury Note Auction, Wachovia Equity Conference

Wed. – (POL) Investor Day, Bernanke testimony on BAC/MER Deal, $27 billion 7-year Treasury Note Auction, (FSLR) investor meeting, Wachovia Equity Conference

Thur. – (CHS) analyst meeting, the Fed’s Fisher speaking

Fri. – None of note

BOTTOM LINE: I expect US stocks to finish the week mixed as diminishing financial sector pessimism, investment manager performance anxiety and lower energy prices offset profit-taking, more shorting and increasing economic angst. My trading indicators are giving mixed signals and the Portfolio is 100% net long heading into the week.