Bloomberg:
- The California Public Employees’ Retirement System, the largest US public pension, will for the first time let investment managers take short positions in US stocks. As well, Calper’s investment committee approved allowing stock investments in China, Colombia, Egypt, Morocco, Pakistan, Russia, and Venezuela, which had until now been prohibited under the fund’s permissible market policy. Last month, the fund agreed to speculate in commodities for the first time.
- China, the largest source of overseas children adopted in the US, plans to bar would-be parents who are obese, single or over 50, according to notices posted on the Web sites of three leading US adoption agencies. Under rules effective from May 1, applicants must be married for more than two years with a high school education. The measures also ban multiple divorcees, the blind and those taking depression medication from becoming parents.
- Dirty Wall Street Secret: Hedge Funds of Funds Pay T-Bill Rates.
- South Korea’s won “has peaked” and is poised to weaken versus the US dollar in 2007 as increased overseas investment fuels demand for foreign currencies, a senior central bank official said.
- The Thai baht had the biggest two-day decline since May 2004, resulting in a 9% plunge in the country's stock market, after regulators yesterday required banks to lock up 30% of new foreign currency deposits for a year to curb speculation.
- EBay(EBAY) will close its primary China Web site and form a partnership with Beijing-based Tom Online to boost traffic in the world’s second-biggest Internet market.
- Crude oil was little changed in NY after posting yesterday its biggest decline in more than a month on signs mild weather will curb demand with supplies in the US near 7-year highs.
Nihon Keizai:
- Japan’s economy will grow by 2.0% in the year that begins in April 2007 in real terms and 2.2% on a nominal basis, citing a forecast the Cabinet is to approve today.
Late Buy/Sell Recommendations
Citigroup:
- Reiterated Buy on (CAG), raised target to $31.
CSFB:
- We maintain our view the US steel market is at risk of a prolonged de-stocking period characterized by low capacity utilization and continued high inventories. According to the Metals Service Center Institute, steel service center inventories totaled 3.8 months of supply at the end of November versus 3.6 months at the end of October and 2.8 months in November of last year. Absolute inventories are 33% above prior year levels. Shipments, an indication of demand, continued to slow. Total shipments of all steel products declined 6.3% sequentially and 3.3% year-over-year in November, marking the 3rd consecutive month of year-over-year declines in steel shipments(-1.1% on average during past three months following average year-over-year growth in shipments of 5.8% during the January-August period).
Night Trading
Asian Indices are -.75% to -.25% on average.
S&P 500 indicated -.01%.
NASDAQ 100 indicated -.01%.
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Earnings of Note
Company/EPS Estimate
- (CHAP)/1.26
- (CBK)/.24
- (CTAS)/.52
- (CC)/.05
- (DRI)/.40
- (FDS)/.46
- (MS)/1.77
- (PALM)/.15
- (SCHL)/1.71
Upcoming Splits
- None of note
Economic Releases
8:30 am EST
- The Producer Price Index for November is estimated to rise .5% versus a 1.6% decline in October.
- The PPI Ex Food & Energy for November is estimated to rise .2% versus a -.9% decline in October.
- Housing Starts for November are estimated to rise to 1540K versus 1486K in October.
- Building Permits for November are estimated to fall to 1540K versus 1553K in October.
BOTTOM LINE: Asian indices are mostly lower, weighed down by commodity and automaker shares in the region. I expect US equities to open mixed and to weaken into the afternoon, finishing modestly lower. The Portfolio is 50% net long heading into the day.
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