Friday, September 30, 2005

Friday Watch

Late-Night Headlines
Bloomberg:
- China, producer of a third of the world’s steel, may increase output of the alloy by 25% this year, pushing down prices and increasing demand for steelmaking raw materials including iron ore and coking coal.
- The US dollar gained against the yen, heading for a third winning week, on speculation of further interest-rate increases by the Federal Reserve, which will lure funds from overseas.
- Japan’s consumer prices fell in August for a third month, suggesting more than seven years of deflation lingers and the central bank won’t rush to end its policy of flooding the world’s second-largest economy with cash.
- Crude oil is falling in NY amid concern high fuel prices after hurricanes Katrina and Rita are eroding energy demand.

Wall Street Journal:
- Delphi Corp. may have breached a loan agreement with bank lenders.

AFP:
- France’s jobless rate was unchanged for a second month in August at 9.9%, almost twice the rate in the United States.

Financial Times:
- Morgan Stanley plans to spend as much as $3 billion to quadruple its investment in Japan’s hotel sector.
- Liz Claiborne, the maker of the Mexx and Juicy Couture clothing brands, is considering re-establishing a presence in China after closing stores there in the 1990s.

Late Buy/Sell Recommendations
Goldman Sachs:
- Reiterated Outperform on ENH, CAH, DO and RE.
- Reiterated Underperform on MU.

Business Week:
- Medis Technologies’(MDTL) shares may climb as the fuel-cell maker’s disposable, portable Power Packs used to recharge cellular telephones, are more widely adopted.
- NuVasive’s(NUVA) shares may benefit from growing sales at the make of tools and implants used to treat spinal problems.

Night Trading
Asian Indices are -.25% to +.50% on average.
S&P 500 indicated +.11%.
NASDAQ 100 indicated +.19%.

Morning Preview
US AM Market Call
NASDAQ 100 Pre-Market Indicator/Heat Map
Pre-market Commentary
Before the Bell CNBC Video(bottom right)
Global Commentary
Asian Indices
European Indices
Top 20 Business Stories
In Play
Bond Ticker
Daily Stock Events
Macro Calls
Rasmussen Consumer/Investor Daily Indices
CNBC Guest Schedule

Earnings of Note
Company/EPS Estimate
NDN/.11
DRL/.41
IPG/.15
SKS/-.20
TOM/-.06

Upcoming Splits
- RMD 2-for-1

Economic Releases
8:30 am EST
- Personal Income for August is estimated to rise .3% versus a .3% gain in July.
- Personal Spending for August is estimated to fall .2% versus a 1.0% increase in July.
- PCE Core(MoM) for August is estimated to rise .1% versus a .1% increase in July.

9:45 am EST
- Final Univ. of Mich. Confidence for September is estimated to rise to 78.0 versus a prior estimate of 76.9.

10:00 am EST
- Chicago Purchasing Manager for September is estimated to rise to 52.0 versus a reading of 49.2 in August.

BOTTOM LINE: Asian indices are mostly higher, boosted by technology companies in the region after Micro Technology of the US reported a much better-than-expected quarter. I expect US equities to open modestly higher and to build on gains throughout the day. I am seeing evidence all over the globe of a substantial increase in energy demand destruction. While the effects of the hurricanes are propping up energy prices in the short-run, they greatly increased the odds of an outright collapse in oil over the intermediate-term. I can not stress enough how flawed I believe the peak oil theory is. These types of doomsday predictions were commonly accepted in the early 80s. It has taken over 20 years for oil to approach those inflation-adjusted prices. Is it really different this time? If anything the collapse may be even more breathtaking this go around as technological innovation is accelerating at a far more rapid pace. The Portfolio is 100% net long heading into the day.

No comments: