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Bloomberg:
- China Unicom (Hong Kong) Ltd. Chairman Chang Xiaobing said he expects Apple Inc.’s(AAPL) iPhone to become China’s best-selling smart phone, countering skepticism by analysts who say the handset is too expensive. “We’re very confident about the market position of the iPhone,” Chang said in an interview in
- Google Inc.(GOOG) and Microsoft Corp.(MSFT) took a bigger chunk of U.S. searches in October, while Yahoo! Inc. lost market share for the second month in a row, according to ComScore Inc. Google’s share climbed to 65.4 percent last month, from 64.9 percent in September, said ComScore, a Reston, Virginia- based research firm. Microsoft rose to 9.9 percent from 9.4 percent, and Yahoo fell to 18 percent from 18.8 percent.
- The United Nations atomic agency said it has lost confidence in Iran’s truthfulness and can’t be sure the country isn’t hiding more nuclear facilities. Iran’s concealment of its Fordo plant, built into the side of a mountain and revealed in a Sept. 21 letter, “gives rise to questions about whether there were any other nuclear facilities in Iran which had not been declared,” the International Atomic Energy Agency said today in a seven-page report.
- Loehmann’s Inc., a U.S. seller of discounted designer goods, will get a $35 million revolving line of credit from GE Capital to replace one from CIT Group Inc., according to two people familiar with the situation.
- Federal Reserve Chairman Ben S. Bernanke said regulators should have the power to shrink banks that pose risks to markets, signaling support for proposals in Congress that let the U.S. cut the size of financial companies. “The supervisors should be allowed by law to insist that the company divest itself or shrink its activities,” Bernanke said today in response to a question after a speech to the Economic Club of New York.
- The U.S. Postal Service said its deficit widened by $1 billion to $3.8 billion in fiscal 2009 and is likely to balloon to $7.8 billion next year if it’s not permitted to reduce delivery days or other expenses. The agency got congressional permission to fill a budget hole by deferring $4 billion in payments that had been due by Sept. 30 for a retiree benefits trust fund. The Postal Service will push Congress for another deferral of the $7.7 billion due to the retiree account this year and for permission to cut delivery from six to five days a week, Corbett said. “The business model, quite frankly, is broken,” he said. “It doesn’t work in a declining volume scenario. It’s becoming much more difficult to manage the organization in the old ways.”
- China’s military is close to fielding the world’s first anti-ship ballistic missile, according to U.S. Navy intelligence. The missile, with a range of almost 900 miles (1,500 kilometers), would be fired from mobile, land-based launchers and is “specifically designed to defeat U.S. carrier strike groups,” the Office of Naval Intelligence reported. Five of the U.S. Navy’s 11 carriers are based in the Pacific and operate freely in international waters near
Wall Street Journal:
- Verizon(VZ) ‘Very Pleased’ With Droid Sales.
- When it comes to terrorists, you would think that an al Qaeda operative who targets an American mom sitting in her office or a child on a flight back home is many degrees worse than a Taliban soldier picked up after a firefight with U.S. Army troops. Your instinct would be correct, because at the heart of terrorism is the monstrous idea that the former is as legitimate a target as the latter. Unfortunately, by dispatching Khalid Sheikh Mohammed and other al Qaeda leaders to federal criminal court for trial, U.S. Attorney General Eric Holder will be undermining this distinction. And the perverse message that decision will send to terrorists all over this dangerous world is this: If you kill civilians on American soil you will have greater protections than if you attack our military overseas.
CNBC.com:
CNNMoney.com:
- Buffett’s Berkshire ups Wal-Mart(WMT) stake.
Forbes:
CNNPolitics:
- Two-thirds of Americans disagree with the Obama administration's decision to try Khalid Sheik Mohammed in a civilian court rather than a military court, according to a new national poll. But six in 10 people questioned in a CNN/Opinion Research Corporation survey released Monday say that the alleged mastermind of the 9/11 attacks should be tried in the
Politico:
- As Senate Majority Leader Harry Reid (D-Nev.) aims this week to secure the votes of moderate Democrats on health care reform, a group of liberal senators Monday warned him not to abandon the public insurance option. Sen. Sherrod Brown (D-Ohio), who requested the meeting with Reid, said progressives believe they have compromised enough on the public option – from a Medicare-for-all proposal to Reid’s proposal to create a national government plan with a provision for states to opt-out. “Most of us in the caucus want a strong public option, support the Reid way of doing it,” Brown said. “And we’re confident that over time, as the debate unfolds and we take amendment after amendment after amendment, that we can get 60 votes.” He acknowledged several moderates need convincing, but said there is little willingness among progressives to back down.
- The government’s watchdog over the bank bailout program is criticizing Treasury Secretary Timothy Geithner’s handling of one of the most sensitive moments of last year’s financial meltdown, questioning decisions he made while heading up the New York Federal Reserve Bank. The new report criticizes the New York Fed’s decision in the fall of 2008 to bail out insurance giant AIG by covering its clients’ losses, sending tens of billions in taxpayer dollars to overseas banks. “The decision to acquire a controlling interest in one of the world’s most complex and most troubled corporations was done with almost no independent consideration of the terms of the transaction or the impact that those terms might have on the future of AIG,” reads the report, which is signed by special inspector general Neil Barofsky. The decision to cut the counterparty deal has come under fire because it effectively passed money along to financial companies that had signed intricate contracts with AIG, and sent tens of billions in
The Business Insider:
Reuters:
- Hedge funds will soon play a bigger role in portfolios, but investors still worry about getting their money back and understanding what a manager is doing, according to a new survey released on Monday. Nearly 60 percent of all financial advisers who help wealthy people invest their money and institutional investors said they expect hedge funds to be as important to much more important as traditional investments over the next five years. Currently 34 percent of the financial advisers think that these loosely regulated portfolios will be as important as their traditional cousins, up from 27 percent last year, the survey from research firm Morningstar and magazine Barron's found. The results come less than one year after the $1.5 trillion hedge fund industry reported its worst-ever losses and investors pulled billions of dollars out of funds as many lost more than half of their capital during the financial crisis.
- Qualcomm (QCOM), the world's biggest chip designer, said on Tuesday that it expects to be selling its TD-SCDMA chips in mainland China within the next year. The company expected to be able to grab much of the market for such chips, Chief Executive Paul Jacobs told reporters during a media event in
Late Buy/Sell Recommendations
Citigroup:
- Reiterated Buy on (UTX), target $76.
Night Trading
Asian Indices are -.50% to +.25% on average.
Asia Ex-Japan Inv Grade CDS Index 110.0 +6.0 basis points.
S&P 500 futures -.30%.
NASDAQ 100 futures -.30%.
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- (JEC)/.65
- (SKS)/-.11
- (TJX)/.78
- (CNQR)/.18
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Economic Releases
8:30 am EST
- The Producer Price Index for October is estimated to rise +.5% versus a -.6% decline in September.
- The PPI Ex Food & Energy for October is estimated to rise +.1% versus a -.1% decline in September.
9:00 am EST
- Net Long-Term TIC Flows for September are estimated at $30.0B versus $28.6B in August.
9:15 am EST
- Industrial Production for October is estimated to rise +.4% versus a +.7% gain in September.
- Capacity Utilization for October is estimated to rise to 70.8% versus 70.5% in September.
1:00 pm EST
- The NAHB Housing Market Index for November is estimated to rise to 19.0 versus a reading of 18.0 in October.
Upcoming Splits
- None of Note
Other Potential Market Movers
- The Fed’s Yellen speaking, Fed’s Lacker speaking, Fed’s Pianalto speaking, Treasury’s Geithner speaking, TAF results, weekly retail sales reports, ABC consumer confidence reading, API Energy Inventories, Citi Credit Conference, Lazard Healthcare Conference, Oppenheimer Industrial Conference, (STEC) analyst day, (SXCI) analyst meeting, (KO) analyst meeting and the (FLEX) mid-year business update could also impact trading today.
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Bloomberg:
- The U.S. economic recovery will be stronger than most forecasters anticipate, with job growth coming back faster, said Joseph LaVorgna, chief U.S. economist at Deutsche Bank Securities Inc. LaVorgna, in an interview today with Bloomberg Radio in New York, predicted the economy will expand at an average 4 percent pace next year, compared with about 2.6 percent forecast by economists surveyed by Bloomberg this month. The jobless rate will fall from October’s 26-year-high of 10.2 percent, he said. “Any time the economy is growing at least 3 percent for two quarters in a row, you always get job growth,” he said.
- Senate Majority Leader Harry Reid will unveil legislation to overhaul the U.S. health-care system as early as this week. The floor debate that follows is likely to divide his Democratic Party. Reid wants to include a government-run insurance program that would let states opt out, which may cost him Senate votes. His version probably won’t require employers to cover workers and will be funded through a tax on high-end insurance plans, which would put him at odds with House Democrats. Reid needs 60 votes to pass the legislation, and he risks losing Senator Joseph Lieberman, a Connecticut independent who caucuses with the Democrats and opposes the government insurance plan. He also hasn’t won over the two Republicans most likely to back the bill, Maine Senators Olympia Snowe and Susan Collins. “He’s going to have to walk a tightrope in order to end up with a package that can get him 60 votes,” said former Senator John Breaux, a Democrat who now heads a lobbying firm that represents the Pharmaceutical Research and Manufacturers of America, the drug industry’s Washington trade group.
- Inventories at U.S. businesses fell in September to the lowest level in almost four years, signaling orders will rise in coming months as spending picks up. The 0.4 percent decrease in stockpiles was smaller than anticipated and brought the value of goods on hand down to $1.3 trillion, the fewest since November 2005, figures from the Commerce Department showed today in Washington. Companies depleted inventories at a record rate in the first half of the year, laying the groundwork for economic growth in the second half as consumers and businesses started spending again. Lean stockpiles at manufacturers such as carmakers and growing exports will spur a factory rebound that will propel the economic expansion into next year.
- Yields on Fannie Mae and Freddie Mac mortgage securities tumbled to the lowest in almost six months, signaling that interest rates on new home loans will decline.
- Crude oil rose the most in a month as the dollar weakened and the Standard & Poor’s 500 Index increased to a 13-month high, bolstering confidence that the global economy and energy demand are recovering. Oil climbed as much as 3.8 percent as the U.S. currency’s drop encouraged the purchase of alternative investments.
- General Electric Capital Corp.(GE) plans to sell five-year Islamic bonds in dollars in its first Shariah compliant debt offer, according to two bankers involved in the transaction. The unit of General Electric Co., the world’s biggest provider of energy equipment and services, hired Citigroup Inc., Goldman Sachs Group Inc., National Bank of Abu Dhabi PJSC, and the Bahrain-based Liquidity Management Centre BSC to manage the sale, according to bankers who declined to be identified because the transaction isn’t complete yet. The Islamic bonds, or sukuk, will be sold through GE Capital Sukuk Ltd. and the issue will be of a benchmark size, which usually means $500 million or more, the bankers said.
- Syphilis increased 36 percent among women living in the U.S. after the disease was almost eliminated a decade ago, and rates of chlamydia reached a record, U.S. researchers said. About 13,500 cases of early-stage syphilis were reported for men and women in 2008, an 18 percent increase from the year earlier, according to a study today by the U.S. Centers for Disease Control & Prevention in Atlanta. Chlamydia sickened 1.2 million Americans, up from a record 1.1 million. Better screening is responsible for increased detection of chlamydia, while syphilis has seen resurgence since 2001 led by new cases among gay men and heterosexual women, according to the report.
- Nordstrom Inc.(JWN) is seeking early delivery of orders to replenish its stock after sales exceeded its expectations as it entered the holiday-selling season. The Seattle-based retailer’s merchandise buyers are spending more to purchase products for most of the chain’s departments, Pete Nordstrom, president of merchandising, said in a Nov. 13 telephone interview. The margin by which Nordstrom topped its own sales plan widened in October, accelerating its “open-to-buy,” the executive said. That is the industry term for the internal trigger to purchase more goods.
- The U.S. would spend as much as $20 billion over 10 years to develop energy technology and double domestic nuclear-power output, under a measure announced by Senator Lamar Alexander, a Tennessee Republican. The legislation, co-sponsored by Senator Jim Webb, a Virginia Democrat, would provide $100 billion in loan guarantees for new nuclear plants, costing the government as much as $10 billion. It would fund research into solar energy, advanced biofuels, carbon capture, nuclear-fuel recycling and improved batteries for electric vehicles. “If we were going to war, we wouldn’t mothball our nuclear Navy and start subsidizing sailboats,” Alexander, a critic of wind energy, said today. “If climate change as well as low-cost reliable energy are national imperatives, we shouldn’t stop building nuclear plants and start subsidizing windmills.”
- Developers Diversified Realty Corp.(DDR) sold $400 million of debt backed by shopping centers in the first sale of commercial-mortgage bonds through a U.S. program to jumpstart lending. The $323.5 million top-rated portion priced to yield 140 basis points more than benchmark swap rates, according to people familiar with the transaction who declined to be identified because terms are private. Investor demand allowed the company to reduce the so-called spread from as much as 175 basis points, or 1.75 percentage points, the people said. The offering from Beachwood, Ohio-based Developers Diversified, managed by Goldman Sachs Group Inc., is the first to use the Federal Reserve’s Term Asset-Backed Securities Loan Facility since it was opened to the debt in June. While representing a “positive for the market,” the transaction won’t necessarily lead to a flood of issuance, said James Grady, managing director at Deutsche Asset Management in New York.
- Federal Reserve Chairman Ben S. Bernanke said economic “headwinds” of reduced bank lending and a weak labor market will probably restrain the pace of the U.S. economic recovery, warranting continued low borrowing costs. “Significant economic challenges remain,” Bernanke said in a speech today to the Economic Club of New York. “The flow of credit remains constrained, economic activity weak and unemployment much too high. Future setbacks are possible.” He added that the Fed is “attentive” to changes in the dollar’s value and “will help ensure that the dollar is strong.” The central bank chief gave no indication he favors raising interest rates anytime soon.
Wall Street Journal:
- The bankruptcy boom is going bust -- for now. The financial crisis created one of the worst periods in U.S. history for corporate bankruptcies, felling the likes of Circuit City Stores Inc., General Motors Corp. and CIT Group Inc., the giant lender to small businesses. Now corporate failures have slowed, as companies once on the verge of default have found a new life. These companies are now refinancing their balance sheets with new debt, pushing out maturities on existing loans or using distressed-debt exchanges to avoid a bankruptcy filing.
- 'This is a prosecutorial decision as well as a national security decision," President Barack Obama said last week about the attorney general's announcement that Khalid Sheikh Mohammed and other al Qaeda operatives will be put on trial in New York City federal court. No, it is not. It is a presidential decision—one about the hard, ever-present trade-off between civil liberties and national security. Trying KSM in civilian court will be an intelligence bonanza for al Qaeda and the hostile nations that will view the U.S. intelligence methods and sources that such a trial will reveal. The proceedings will tie up judges for years on issues best left to the president and Congress. Whether a jury ultimately convicts KSM and his fellows, or sentences them to death, is beside the point. The treatment of the 9/11 attacks as a criminal matter rather than as an act of war will cripple American efforts to fight terrorism. It is in effect a declaration that this nation is no longer at war.
CNBC:
- As strange as it might seem, the eight-month-old stock rally may just keep going because so many investors still think it won't last. Investment advisors say clients continue to view stocks with hesitancy and skepticism—a vestige of the panic that swept through the markets just a year ago. But that fear, ironically, has kept stocks from going up too far, too fast—allowing the market to move gradually higher as investors creep timidly back into stocks. "We're seeing a lot of evidence that they're buying this rally with a lot of apprehension," says Richard Sparks, senior analyst at Schaeffer's Investment Research in Cincinnati. "We would interpret that pessimism and apprehension in a positive way."
- More than 15 million taxpayers could unexpectedly owe taxes when they file their federal returns next spring because the government was too generous with their new Making Work Pay tax credit. Taxpayers are at risk if they have more than one job, are married and both spouses work, or receive Social Security benefits while also earning taxable wages, according to a report Monday by the Treasury Department's inspector general for tax administration. The tax credit, which is supposed to pay individuals up to $400 and couples up to $800, was President Barack Obama's signature tax break in the massive stimulus package enacted in February.
MarketWatch.com
NYPost:
- Investigators are poring over fresh evidence they say suggests Bank of America strong-armed Uncle Sam into ponying up billions in taxpayer support, using as leverage the threat of nixing its merger with Merrill Lynch. Government officials say the newly uncovered documents, which The Post reviewed, are further evidence BofA knew it did not have a basis for claiming a "material adverse change" (MAC) clause that would let it walk away from the merger.
- The government's plan to put Khalid Shaikh Mohammed and four others accused of masterminding the 9/11 attacks on trial in Manhattan is a bad idea, Gov. Paterson(D) said today. "This is not a decision that I would have made," Paterson said when asked about the upcoming federal trial. "Our country was attacked on its own soil on Sept. 11, 2001, and New York was very much the epicenter of that attack." "It's very painful. We're still having trouble getting over it," he added. "We still haven't been able to rebuild that site and having those terrorists tried so close to the attack is going to be an encumbrance on all of New Yorkers." I do not understand why they decommissioned [the detainees] from serving or being tried on Guantanamo Bay but that's a decision that the federal government made and our job is to help them," Paterson told PIX News. "We will cooperate to the full extent that we can."
The Business Insider:
- Insider trading is of course illegal, but there's plenty of gray area with regards to legitimately obtained information unknown to most of the market. And even the accusation of insider trading can finish a fund. What's a hedge fund to do? How to show regulators you're not the next Galleon Group? We asked legal expert Bart Mallon, who runs the Hedge Fund Law Blog, to weigh in. He did in this post, which we've reprinted with permission below.
- The Top 10 iPhone Apps For Investors.
CNNMoney.com:
- Apple's(AAPL) lips are sealed about its widely rumored tablet computer, but technology experts are giddy about the device, already exclaiming it will be the gadget to end all gadgets. Executives at Apple (AAPL) never discuss products that are in the works, so there's no confirmation that the thing even exists. But rumors are circulating that Steve Jobs and Co. have designed a magazine-sized, touch-screen, hand-held, all-in-one device that is half-iPhone, half-Macintosh computer. It's supposedly going to make its debut in the next few months, and you can have it for the low, low price of $600. Or $800. Maybe $1,000. No one's really sure.
Ticker Sense:
- This week's Blogger Sentiment poll recorded the highest bearish reading since September-08.
Pensions & Investments:
- Institutional investors are gearing up to integrate hedge funds into their equity and fixed-income portfolios, part of a growing trend toward allocating assets based on their sources of return — alpha and beta. After years of maintaining separate and usually quite small allocations to hedge funds, more investors are recasting the role of hedge funds in their portfolios, sources agreed. Consultants, hedge fund-of-funds managers and risk management system providers reported a dramatic spike in the number of pension executives who are seriously thinking about emulating their endowment and foundation brethren in being agnostic over whether managers run long-only or hedged strategies. The result, sources said, likely will be a boon for hedge fund managers as institutions abandon their low limits to hedge funds, now typically between 3% and 5% of assets.
- A European Commission draft proposal to strengthen regulations on alternative investment managers would hurt competition, restrict investor choice and put many hedge funds out of business, according to a report commissioned by the European Parliament's Committee on Economic and Monetary Affairs.
Politico:
- President Barack Obama made no effort to conceal his irritation when his press corps used the first question of his maiden Far East trip to ask what was taking him so long on Afghanistan. Jennifer Loven of The Associated Press had asked: “Can you explain to people watching and criticizing your deliberations what piece of information you're still lacking to make that call.” “With respect to Afghanistan, Jennifer,” the president scolded, “I don't think this is a matter of some datum of information that I'm waiting on. … Critics of the process … tend not to be folks who … are directly involved in what's happening in Afghanistan. Those who are, recognize the gravity of the situation and recognize the importance of us getting this right.” The cool president’s heated response reflected second-guessing from the press and Pentagon about a process that has spanned eight formal meetings with his war cabinet, totaling about 20 hours.
Detroit News:
Reuters:
- U.S. household product makers should see sales tick up next year, with international growth driving the likes of Colgate-Palmolive Co (CL) and Avon Products Inc (AVP), a Fitch Ratings director said on Monday. The household products and personal-care industry saw revenue climb every year from 2003 to 2008. This year, revenue is expected to decline modestly after the economic downturn forced consumers across the globe to rethink everyday purchases such as tissues, shampoo and lipstick. "Next year this industry will finally go back to normal, which is to have positive top line growth," Fitch Ratings Director Grace Barnett told Reuters ahead of the release of Fitch's sector report on Wednesday.
- Spanish-language media company Univision Communications Inc [UVN.UL] said on Monday it has reached an agreement to feature short and full-length programs on Google Inc's (GOOG) online video site YouTube. The revenue-sharing agreement covers new and archive Hispanic programming, including shows from Univision Communications' Univision, TeleFutura and Galavision networks. The revenue will be generated by advertising featured around the programming.
Guardian:
- Nigeria is pumping oil at a three-year high of 2.4 million barrels a day because of improved security in the Niger Delta, citing Mohammed Barkindo, head of the state oil company. Nigerian output, which dropped as low as 1.2 million barrels a day in July, stood at 2.4 million barrels a day on Nov. 12.
Sydney Morning Herald:
- BEIJING: Barack Obama championed the cause of open dialogue yesterday in what he had hoped to be the main public event of his first visit to China, but most of mainstream Chinese society may never know. Chinese propaganda authorities appear to have made last-minute decisions to pull internet and satellite television coverage of what had been billed as an unscripted ''town hall-style'' gathering in Shanghai. Satellite coverage on Hong Kong's Phoenix TV - which is accessible in southern China and in affluent residential areas - was cut after several minutes. The White House's own back-up plan of streaming the event on its own website was hamstrung by unusual technical problems, including that the broadcast was delayed by one minute and that the camera was mostly pointing away from Mr Obama or at his shoes. The event was broadcast on Shanghai television, with poor sound quality and censoring of some of Mr Barack's remarks about American values. There was no national coverage, although a diplomatic source said American officials were ''initially led to believe that the event would broadcast live''. The students on camera, who had been hand-picked by their government-controlled universities, sat straight-faced throughout Mr Obama's presentation, including his jokes. And none of their questions, or the Chinese Government-selected questions from the Chinese internet, touched on the main theme of the President's opening remarks: how a commitment to principles had guided the US through the ''darkest of storms'' including civil war, slavery and discrimination.
Digitimes:
- Although the global solar panel market remains in an acute state of oversupply, the inventory glut plaguing the industry has begun to abate somewhat due to surprisingly strong demand from Germany, according to iSuppli.
Nikkei Telecom:
- Japan’s government may declare that the economy is in deflation. The statement may be included in a Nov. 20 monthly economic report at the earliest.
Style Underperformer:
Large-Cap Growth (+1.37%)
Sector Underperformers:
Wireless (+.56%), Retail (+.69%) and Tobacco (+.84%)
Stocks Falling on Unusual Volume:
THOR and ESE
Stocks With Unusual Put Option Activity:
1) BMY 2) PARD 3) ABT 4) GOLD 5) GPS