North American Investment Grade CDS Index 86.09 bps -2.40%
European Financial Sector CDS Index 144.27 bps +1.14%
Western Europe Sovereign Debt CDS Index 187.50 bps +1.08%
Emerging Market CDS Index 209.51 bps -1.98%
2-Year Swap Spread 21.0 -2 bps
TED Spread 18.0 -1 bp
Economic Gauges:
3-Month T-Bill Yield .12% +1 bp
Yield Curve 269.0 +1 bp
China Import Iron Ore Spot $166.90/Metric Tonne +.72%
Citi US Economic Surprise Index +1.40 -.3 point
10-Year TIPS Spread 2.20% +2 bps
Overseas Futures:
Nikkei Futures: Indicating +57 open in Japan
DAX Futures: Indicating +6 open in Germany
Portfolio:
Slightly Higher: On gains in my Tech long positions
Disclosed Trades: Added (IWM)/(QQQQ) hedges, added to my (EEM) short
Market Exposure: Moved to 75% Net Long
BOTTOM LINE: Today's overall market action is mildly bullish as the S&P 500 trades slightly higher despite recent equity gains, China inflation worries, US tax policy uncertainty and rising eurozone sovereign debt angst. On the positive side, Education, Homebuilding, Disk Drive, Steel, Gold, Oil Service, Energy, Oil Tanker and Utility shares are especially strong, rising more than 1.0%. (XHB) is continuing its recent outperformance. Copper is rising +2.54% and is breaking convincingly to a new 52-week high. The S&P GSCI Ag Spot Index is also surging +2.37%. The Italy sovereign cds is dropping -5.1% to 208.67 bps, the Hungary sovereign cds is falling -2.28% to 367.22 bps and the UK sovereign cds is declining -4.16% to 67.97 bps. On the negative side, Hospital and Restaurant shares are under pressure, falling more than 1.0%. Small-caps are underperforming. Transport shares are also relatively weak. The China sovereign cds is gaining +2.18% to 72.05 bps and the Greece sovereign cds is climbing +1.58% to 961.26 bps. Moreover, the Emerging Markets Sovereign CDS Index is up +2.43% to 196.97 bps. The European Financial Sector CDS Index continues to trend higher(still below May/June levels). Short/Intermediate-term gauges of investor sentiment remain overly bullish, which is a big negative. Given the jump in the Shanghai Composite last night and strength in the euro currency today, I am somewhat surprised that equities aren't putting in a better showing. Today may just be another healthy consolidation day, however some stocks look a bit "tired." I expect US stocks to trade mixed-to-lower into the close from current levels on China inflation worries, profit-taking, US tax policy uncertainty, more shorting and ongoing eurozone debt fears.
Credit-Default Swaps Decline in Longest Stretch Since November 2009. The cost of protecting bonds from default in the U.S. fell for a ninth trading day, the longest streak in 13 months. The Markit CDX North America Investment Grade Index, which investors use to hedge against losses on corporate debt or to speculate on creditworthiness, decreased 1.2 basis points to a mid-price of 86 basis points as of 12:24 p.m. in New York, according to index administrator Markit Group Ltd. said the central bank may boost purchases of debt. The gauge has further declined on speculation that President The swaps benchmark has dropped from 99.4 at the end of November as Chairman Ben S. BernankeBarack Obama’s extension of his predecessor George W. Bush’s tax cuts will help spur economic growth and investors wager Europe’s sovereign debt crisis will be contained. “With the deal to extend the Bush tax cuts fueling the rally, and, in turn, entirely displacing the sovereign story from the headlines, markets are poised to continue their grind tighter, especially as we head into the holidays,” Michael Reiner, a New York-based credit strategist with Societe Generale, said today in an e-mailed note.
No New Normal Next Year Seen by Strategists Predicting 11% Gain in S&P 500. Rising profits and cash balances will push the Standard & Poor’s 500 Index to the biggest three- year advance since the 1990s, surpassing forecasts for below- average returns, strategists at Wall Street’s biggest banks say.
Thermo Fisher to Acquire Dionex for $2.1 Billion. Thermo Fisher Scientific Inc., the world’s largest maker of laboratory instruments, agreed to acquire Dionex Corp. for about $2.1 billion to expand in the water-analysis business in China. The $118.50-a-share price represents a premium of 21 percent over the closing value of Dionex on Dec. 10, the last trading day before the announcement.
Hedge Funds Raise Bets on Commodity Rally to Highest Level in Four Years. Hedge funds and large speculators increased their bets on a commodity rally to the highest level since at least 2006 as copper and gold gained to records. An index tracking speculative positions in 20 commodity futures in the U.S. advanced 8.4 percent from the week before to 1.54 million contracts as of Dec. 7, the highest level since at least February 2006, Commodity Futures Trading Commission data show.
Orange Juice Jumps to Three-Year Highs as Florida Freeze May Damage Citrus. Orange-juice futures jumped to the highest price in more than three years after Florida, the biggest grower after Brazil, declared a state of emergency because of the threat of severe cold and crop damage. Governor Charles Crist said “extreme temperatures” and possible crop destruction threatens the state with a “major disaster.” Some areas may be subject to freezes through Dec. 15, Crist said in a Dec. 10 statement posted on the Florida government’s website, citing National Weather Service forecasts. Prices jumped as much as 6.2 percent.
OPEC Cheating Most Since 2004 as Options Signal Oil Hitting $100 Next Year. OPEC is breaching its production limits the most in six years, signaling the world’s biggest suppliers are ready to pump more crude next year as oil rallies toward $100 a barrel. The Organization of Petroleum Exporting Countries excluding Iraq pumped 26.78 million barrels a day this year, exceeding the quotas by an average of 1.934 million a day, the highest level since 2004, according to data compiled by Bloomberg.
'Shadow' Lenders' Emergency Fed Loans Boosted Aid to Barclays(BCS), Citigroup(C). The Federal Reserve gave more support to the world’s biggest financial companies, including Barclays Plc, Citigroup Inc. and Royal Bank of Scotland Plc, than the direct loans it disclosed this month in response to congressional mandates. That’s because about $140 billion, or 20 percent of the Fed’s Commercial Paper Funding Facility, went to affiliates of four firms that provided financing to banks and other companies: Hudson Castle, BSN Holdings, Liberty Hampshire Co. and Northcross, central bank data show.
Moody's Maintains Negative Outlook on Spanish Banks. The outlook for the Spanish banking system remains negative because profitability will be “severely tested” as loan demand falls and defaults and funding costs increase, Moody’s Investors Service said.
Senators Brown, Snowe Said to Seek Yuan Measure as Amendment to Tax Bill. Two U.S. senators are preparing to propose a China currency measure as an amendment to legislation extending tax breaks, according to two people familiar with the proposal. Senators Sherrod Brown, an Ohio Democrat, and Olympia Snowe, a Maine Republican, plan to submit the amendment today, said the people, who spoke on condition of anonymity because the amendment hasn’t been filed. The action may lead to a vote in the Senate this week on the measure aimed at pressing China to revalue it’s currency.
Wall Street Journal:
Judge Calls Health Law Unconstitutional. A federal judge ruled Monday that a central plank of the health law violates the Constitution, dealing the biggest setback yet to the Obama administration's signature legislative accomplishment. In a 42-page ruling, U.S. District Judge Henry E. Hudson said the law's requirement that most Americans carry insurance or pay a penalty "exceeds the constitutional boundaries of congressional power." While Monday's decision creates a headache for the law's supporters, it doesn't mean that states or the federal government must stop implementing the law. Judge Hudson didn't grant the plaintiffs' request for an immediate nationwide injunction against the entire law or against the requirement that most Americans carry insurance. That requirement begins in 2014.
Marketers Test Ads In E-Books. The marketing world is drawing up plans to invade one of the last bastions of media that is largely advertising-free: books. As e-books proliferate, advertisers are experimenting with ways to pitch to consumers while they read, a trend that could change the publishing business but faces opposition from some traditionalists. Marketers are exploring a variety of formats, including sponsorships that give readers free books. Videos, graphics or text with an advertiser's message that appear when a person first starts a book or along the border of the digital pages are also in the works. Ads can be targeted based on the book's content and the demographic and profile information of the reader.
Firms Feel Pain From Health Law. Big employers faced with incorporating the first round of health-care changes next month are grappling with how to comply with the long list of new rules. Many companies are hiring consultants to help sort though the mountain of new mandates, which include extending dependent coverage to children up to age 26, and may eventually result in covering more employees. Some are also considering changes to their plans—including pushing costs to workers.
Hoyer Hopes to Complete Tax Bill This Week. Majority Leader Steny Hoyer (D., Md.) said Monday that the House of Representatives will vote on a bill extending the Bush-era tax cuts and that he hopes to complete work on legislation by the end of the week.
CNBC:
Christmas 2010 Could be Merriest Since Recession: Survey. Christmas 2010 could turn out to be the merriest since the recession began, with the exclusive CNBC All-America Economic Survey finding Americans somewhat more optimistic but real optimism remains elusive.
Racketeering Suit Raises New Questions About Madoff Son. In addition to Mark Madoff's children being sued—three days before his suicide—by Bankruptcy Trustee Irving Picard, Mark Madoff himself was implicated in another lawsuit Picard filed on Friday.
Apple(AAPL) Higher as Goldman Gushes. Apple (AAPL) shares are continuing their bullish ways today, moving higher by 1%, after Goldman Sachs Group (GS) added the high-flying stock to its Conviction Buy list with a $430 price target, implying 34% upside from where the stock currently trades.
Massachusetts Business Group Challenges Wind Power Deal. A Massachusetts business group is asking the state’s highest court to set aside state approval of the power-purchase deal between the Cape Wind project and utility National Grid. The 6,000-member Associated Industries of Massachusetts said in a statement Monday the Department of Public Utilities overstepped its powers and set a dangerous precedent for allowing utilities to negotiate agreements outside the competitive bidding process when it approved the deal last month. The business group said the agreement will drive up electricity rates.
Telegraph:
Snooty Europhiles Should Be Forced to Crawl in Penitence. The 'blimpish Little Englanders’ who opposed monetary union were right all along, says Boris Johnson. I think we deserve an apology. By “we” I mean all the Euro-sceptics, Euro-pragmatists, Euro-realists and Euro-hysterics who were alarmed by some of the optimism that surrounded the birth of the single currency. Do you remember the disdain with which we were treated? We were told that we were boss-eyed Little Englanders. They used to say we were a bunch of xenophobic, garlic-hating defenders of the pint and the yard and the good old bread-filled British banger. Whenever we protested about any detail of the plan for monetary union, we were told that we were in danger of stopping the great European train, boat, bus, bicycle or whatever it was. We were a blimpish embarrassment to our country, a bunch of idiot children who had to be shooshed while the grown-ups got on with their magnificent plans.
Handelsblatt:
Greece, Ireland, Portugal and Spain owe German banks $551 billion, citing data from the Bank for International Settlements. The sum constitutes about one fifth of the countries' foreign debt.
Xinhua:
The Beijing municipal government plans to limit car use or purchases to help relieve the city's worsening traffic problems, citing a draft traffic plan.
China Inflation 'Fight' May Widen as Growth Withstands Tightening Measures. China’s economic data for November showed growth is withstanding government curbs and extra measures may be needed to tame the highest inflation rate in more than two years. Industrial-output gains accelerated to 13.3 percent last month from a year earlier, exceeding economists’ median estimate, a statistics bureau report showed in Beijing yesterday. Consumer prices rose a more-than-forecast 5.1 percent, the most since July 2008.
Axelrod Tells CNN He Expects House Will Support Administration's Tax Plan. White House adviser David Axelrod said the administration expects House Democrats, including Speaker Nancy Pelosi, to back the compromise tax package negotiated by President Barack Obama and the Republicans. “At the end of the day no one wants to see taxes go up for 150 million Americans on January 1st,” Axelrod said on CNN’s “State of the Union” program.
German Family Run Firms Tell Merkel Eurobonds Would Be Damaging. Germany’s family-run companies said joint euro-area government bonds would be “damaging” and urged Chancellor Angela Merkel to make sure private investors will share the costs of bailouts. “We are greatly concerned that the wrong measures will be chosen and will cause the common currency to fail even in the medium-term,” the German associations of family-run businesses and young entrepreneurs said in an open letter to Merkel. “Introducing damaging euro bonds also stems from a wrongly- understood willingness to help out.” There is “no alternative to a clear participation of investors” and future government bonds “should never be issued without investors’ liability,” the Berlin-based groups said. “We urge you to commit to an immediate participation of investors and we warn you of the grave long-term consequences if this does not happen.”
Default Swaps Jump Most Among BRICs as Inflation Breaches 5%: China Credit. Investor perceptions of China’s credit are worsening at the fastest pace among the largest emerging markets on concern policy makers will slam the brakes on economic growth to curb inflation. The cost to insure against default on Chinese government debt in the past month advanced 13.5 basis points, more than in any of the so-called BRIC markets, according to CMA prices. “If you look at China risk in the last two or three weeks we’ve seen a fairly pronounced reversal in trends evident for the last six months,” said John Woods, the Asia chief investment strategist at the private banking unit of Citigroup Inc. “China’s golden era of low inflationary growth, underpinned by compliant domestic savers and enthusiastic external consumers, could well be at an end.”The spread between China’s dollar bonds over Treasuries as measured by a JPMorgan index widened to 150 basis points at the end of November, its highest level since May 2009, from 87 basis points on Nov. 1, indicating investors are more concerned about deteriorating credit quality. It was at 119 on Dec. 10. Five-year default swap contracts on the nation’s bonds rose to 71.5 basis points, from a two-year low of 52 basis points on Oct. 13, according to data compiled by CMA. Timothy Ash, an analyst at Royal Bank of Scotland Group Plc, predicted this month that the swaps may trade as high as 150 basis points next year and recommended investors buy them as a hedge. “China is trying to cool things down and manage a deflation of the bubble,” Ash said in a phone interview from London. “If that fails then that’s how CDS gets driven up, because concern will be that the sovereign balance sheet will have to bear the costs of restructuring banks.”
OPEC Dismisses $90 Oil Price as 'Blip,' Maintains Production Targets Again. OPEC discounted last week’s $90 oil price and kept its output targets unchanged yesterday, betting supplies in storage and a fragile global economic recovery will prevent crude from surging. Supply and demand are “in balance,” and $70 to $80 is “a good price” for oil, Saudi Arabian Oil Minister Ali al-Naimi said at the group’s meeting in Quito, Ecuador. OPEC forecasts demand growth will slow as the economy struggles to recover, amid ample supplies, according to a group statement. “The issue they looked at was whether $90 is a blip or a trend,” said Bill Farren-Price, founder of consultant Petroleum Policy Intelligence, based in Winchester, U.K. “They’ve taken the view that there are one-off factors such as the cold snap, a weak dollar, that won’t be sustained in the new year.”
Obama Plans Meeting With CEOs Next Week for Discussion on Economic Issues. President Barack Obama plans to extend his outreach to the business community by convening a meeting in Washington with about 20 chief executives, senior adviser Valerie Jarrett said. The executives from companies in a range of industries are being invited to discuss topics including education, exports, regulation and the budget deficit, Jarrett, who is the White House liaison to the business community, said. She declined to name the executives who are being invited.
Climate Talks Back $100 Billion Aid Fund, Forest Protection; No Kyoto Deal. Envoys at United Nations talks agreed to a package aimed at limiting global warming by protecting forests, advising nations on adapting to higher temperatures and opening a $100 billion Green Climate Fund. The group representing 193 nations set aside differences between rich and poor nations about how to limit greenhouse gas emissions after 2012, when restrictions in the 1997 Kyoto Protocol expire.
Life Insurers' Corporate Debt Tops $2 Trillion: Credit Markets. U.S. life insurers are boosting their holdings of corporate bonds at the fastest rate in six years in an effort to jolt returns by taking on more credit risk amid near-zero interest rates. Net purchases by the insurers climbed to a seasonally adjusted annual rate of $165.4 billion last quarter from $64.5 billion in the three months ended June 30, the biggest inflow since 2004, according to data released by the Federal Reserve in Washington last week. For the first time, they now own more than $2 trillion in the securities issued by companies.
South Korean Fishing Boat Sinks in Antarctic Ocean; Four Dead. A South Korean fishing vessel sank in waters near Antarctica today, killing four sailors and leaving 18 others missing, the government said. Twenty sailors have been rescued after the 614-ton boat sank in an area about 1,400 miles (2,250 kilometers) south of New Zealand, the foreign ministry in Seoul said. South Korea has asked New Zealand to help with rescue efforts, the ministry said. The 42 from the vessel included sailors and fishermen from South Korea, China, Indonesia, the Philippines, Russia and Vietnam, the foreign ministry said.
Germany Vows Defense of Euro. Germany's finance minister said his country is prepared to pursue bold action to preserve Europe's common currency, including deeper economic integration with its neighbors, and issued a warning to markets not to underestimate Berlin's resolve to protect the euro. In an interview with The Wall Street Journal, Finance Minister Wolfgang Schäuble hinted that Germany could accept steps toward fiscal union if current attempts to improve the euro zone's governance proved insufficient to end the year-old debt crisis. "All European countries are determined to keep this European currency stable, and we have the means to do it," Mr. Schäuble said. "Sometimes it takes crises so that Europe moves forward. In this crisis, Europe will find steps toward further unification." Many Germans, including leading members of the government, oppose further economic integration within the 16-nation euro zone over fears that Germany would be forced to pay the debts of others. Echoing such concerns, Mr. Schäuble said more time was needed to determine whether recent reforms to the euro zone's structure would be sufficient to halt the crisis and said it was premature to pursue further integration. Still, the powerful German finance chief's comments suggest his country is prepared to go much further than many observers had expected to defend the euro.
Madoff's Kin Eyed as Probe Grinds On. Federal prosecutors are ratcheting up pressure on one of Bernard L. Madoff's former "back office" employees to cooperate with their investigation as they have continued in recent months to scrutinize his brother and sons, according to people familiar with the situation. The former longtime employee, 62-year-old Annette Bongiorno, was arrested last month and accused by prosecutors of fabricating account documents reflecting fraudulent trades and securities fraud, among other offenses.
Madoff's Son Is Found Dead in Apparent Suicide. Bernard Madoff's elder son was found dead Saturday of an apparent suicide on the second anniversary of his father's arrest, according to law-enforcement officials. Mark Madoff, 46 years old, was found hanged with a dog leash attached to a living-room-ceiling pipe in his apartment by his father-in-law, Martin London, law-enforcement officials said. A relative notified police around 7:30 a.m. No suicide note was found, the officials said. Mark Madoff's 2-year-old son, Nick, was found unharmed in a bedroom in the apartment, along with a dog.
Illinois Seeks Wall Street Cash. Times have gotten so tough for the Illinois state government that it has begun turning to Wall Street trading houses and hedge funds to help pay its bills. The state owes more than $4.5 billion to vendors large and small, ranging from prison-cleaning crews to schools for the disabled. Tax shortfalls and pension obligations continue to leave the state light on cash.
Commodities' Paths Diverge. For much of this year, prices of basic crops, fuels and industrial metals have moved in sync with one another and in step with the global economic beat. But in recent weeks, markets for commodities ranging from cotton to oil to copper have been driven more by their own supply-and-demand dynamics than by the broader outlook for the world economy.
Financial ETFs Could Extend Rally. Exchange-traded funds that invest in financial shares have jumped almost 10% so far this month, raising hopes the lagging sector will perk up and be a catalyst that extends the stock-market rally into 2011. Although the bounce in the broad market since the beginning of September has been impressive, bank shares were noticeably absent from the party until last week’s strong showing.
CNBC:
Nissan Delivers First Electric Car in Challenge to GM(GM). Japan's Nissan Motor delivered the first mass-market all-electric car to a technology entrepreneur in California on Saturday as the company tries to get a jump in the nascent green vehicle race.
A Secretive Banking Elite Rules Trading in Derivatives. On the third Wednesday of every month, the nine members of an elite Wall Street society gather in Midtown Manhattan. The men share a common goal: to protect the interests of big banks in the vast market for derivatives, one of the most profitable — and controversial — fields in finance. They also share a common secret: The details of their meetings, even their identities, have been strictly confidential. Drawn from giants like JPMorgan Chase(JPM), Goldman Sachs(GS) and Morgan Stanley(MS), the bankers form a powerful committee that helps oversee trading in derivatives, instruments which, like insurance, are used to hedge risk.
As China Rolls Ahead, Fear Follows. For nearly two years, China’s turbocharged economy has raced ahead with the aid of a huge government stimulus program and aggressive lending by state-run banks. But a growing number of economists now worry that China — the world’s fastest growing economy and a pillar of strength during the global financial crisis — could be stalled next year by soaring inflation, mounting government debt and asset bubbles.
NY Post:
Live From NY: SNL Deal$. Is NBC Universal CEO Jeff Zucker agreeing to deals that line the pockets of his closest allies before the Comcast(CMCSA) takeover? That's what some folks inside 30 Rock are saying in light of NBC Universal's pact to sell video-streaming service Netflix(NFLX) fresh episodes of "SNL" a day after they air on TV. The move would appear to undermine Hulu in its quest to be the only place for in-season broadcast network fare. It's all the more strange when one considers who created Hulu: NBC Universal. Post owner News Corp.(NWS), Walt Disney Co.(DIS) and Providence Equity are other Hulu backers.
ObamaCare: Flight of the MDs. For all the times that President Obama promised "you'll get to keep your doctor" under his health-care reforms, he apparently failed to ask any practicing doctors. A recent survey finds that countless MDs will respond to ObamaCare by limiting which patients they'll see. The Physicians Foundation asked 2,400 doctors and American Medical Association members what they thought of the new law; a full 67 percent were against it. More important, it asked how they'd cope with the new rules (which don't fully kick in until 2014). Sixty percent said they feel compelled to "close or significantly restrict their practices to certain categories of patients." And 59 percent said the "reform" would oblige them to spend less time with the patients they do have. In the survey, some 87 percent said they would significantly restrict Medicare patients and 93 percent said they'd significantly restrict Medicaid patients. How can the government claim its health programs are popular when folks who would actually deliver care are running away? I'm not worried about physicians (we'll find ways to survive), but about our patients. All in all, the survey found that 74 percent of doctors will alter how they practice.
Is Now The Time to Call The Bottom On The Worst Housing Market In America? The worst housing market in America is Las Vegas, which has continued to plummet in recent readings, with little sign of letting up. But eventually it will hit bottom, and that could be right now. Two things to consider:
One Nation, Under Too Many Laws. America is choking on laws of our own making. Once a law is in place in the United States, it's almost impossible to dislodge. Our political class assumes that, after a law is forged in the crucible of democracy, it should be honored as if it's one of the Ten Commandments - except it's more like one of 10 million.
41% Now Say Global Warming is Caused by Human Activity, 47% Say Planetary Trends. Most U.S. voters continue to be concerned about global warming but still are more inclined to think it's caused by planetary trends rather than human activity. A new Rasmussen Reports telephone survey of Likely Voters finds that 41% think global warming is caused primarily by human activity, while 47% say long-term planetary trends are to blame.
Reuters:
EU Leaders to Agree on Law Change for Euro Stability.European Union leaders will agree next week to insert two sentences into the EU treaty to pave the way for the creation of the European Stability Mechanism from 2013, draft conclusions of the summit showed. The ESM is to open the way for private sector investors to take a loss in case of a sovereign debt restructuring, which will put market pressure on governments to conduct sound fiscal policies and prevent another sovereign debt crisis. The ESM would also provide financial support to euro zone countries which suffer liquidity, but not solvency problems, through a fund that is likely to be bigger than the current 750 billion euros bailout fund the euro zone has at its disposal. But to create the ESM, Germany and France insisted that the EU's highest law, the EU treaty, has to be amended so that its operations are not deemed unconstitutional by German courts.
China's Soaring Inflation Could Hit UK Shoppers. China's inflation surged to a two year high last month despite government efforts to increase food supplies and end fuel shortages, prompting fears that British consumers will soon face paying more for Chinese made products.
Why US Equities Could Be Hard to Beat in 2011. Hosting a debate between a panel of fund managers and asset allocators recently, I was struck by the unanimity of their views on what would be the best-performing geographic area next year.
Frankfurter Allgemeine Sonntagszeitung:
The introduction of joint euro-region government bonds would cost Germany at least an extra 22.5 billion annually, citing a calculation it has seen. Eurobonds would be "deeply undemocratic," the German newspaper cited former European Central Bank chief economist Otmar Issing as saying.
21st Century Business Herald:
China still has room to increase its bank reserve requirements, Wu Xiaoling, a former deputy governor of the central bank, wrote in a commentary.
Guangzhou Daily:
China began experiencing a period of stagflation in the second half of this year with high inflation and unemployment, citing He Keng, deputy director of the finance and economic affairs committee of the National People's Congress. The nation will also face the possibility of an economic double dip next year, He said.
Hexun:
Fan Gang, a former Chinese central bank adviser, said China's economy is "slightly overheated."
Weekend Recommendations Barron's:
Made positive comments on (PFE), GLW) and (MAT).
Made negative comments on (AMSC).
Citigroup:
Reiterated Buy on (MWW), raised target to $30.
Night Trading
Asian indices are unch. to +.75% on average.
Asia Ex-Japan Investment Grade CDS Index 106.0 +.5 basis point.
Asia Pacific Sovereign CDS Index 105.0 - 2.5 basis points.
The Deutsche Bank BioFEST Conference, BofA Merrill Industrial Conference, (ONXX) analyst briefing, (EW) investor conference and the (BCR) analyst meeting could also impact trading today.
BOTTOM LINE: Asian indices are mostly higher, boosted by commodity and real estate shares in the region. I expect US stocks to open mixed and to rally into the afternoon, finishing modestly higher. The Portfolio is 100% net long heading into the week.
BOTTOM LINE: I expect US stocks to finish the week modestly higher on diminishing economic fear, declining sovereign debt angst, seasonal strength, buyout speculation, less financial sector pessimism, investment manager performance anxiety, technical buying and short-covering. My intermediate-term trading indicators are giving mostly bullish signals and the Portfolio is 100% net long heading into the week.
