Sunday, January 21, 2007

Monday Watch

Weekend Headlines
Bloomberg:
- The board of Tribune Co.(TRB), which put itself up for sale in September, is reviewing separate offers, one from the Chandler family, and another from two California billionaires.
- The yen tumbled to the lowest in almost four years against the dollar, logging a second straight weekly loss, after the Bank of Japan left interest rates unchanged.
- President Bush will propose next week changes to the US tax system that would penalize individuals enrolled in expensive health-care plans and encourage the uninsured to buy low-cost coverage.
- China’s central bank will use a combination of monetary policy tools this year to soak up excess liquidity in the banking system as continued trade surpluses increase the nation’s foreign exchange reserves.
- NYSE Group(NYX) and NASD won approval from brokerages to form a single regulator for the US securities industry, overcoming opposition from a group of small firms.
- China’s stock market has become the most expensive in Asia, leading strategists at Citigroup(C), HSBC Holdings Plc and UBS AG to warn investors to stay away. Shares traded on mainland Chinese exchanges cost twice as much relative to earnings as they did 18 months ago, and double the average for emerging markets, after extending last year’s 121% rally in the Shanghai and Shenzhen 300 Index. The surge sent their value above $1 trillion and prompted the government to caution shareholders that “blind optimism” is driving gains.
- NY Senator Hillary Clinton today said she will seek the US presidency in the 2008 election. While Clinton has the best shot to win the White House, her unfavorable ratings hover in the 40% range, well above John Edwards or Barack Obama.
- Former Israeli Prime Minister Benjamin Netanyahu urged global financial institutions to stop doing business with Iran until it no longer threatens Israel. Netanyahu, now Israel’s parliamentary opposition leader, said today he will start a campaign in NY and London under the slogan “Divest Genocide,” appealing at first to pension funds to halt investments in Iran.
- US gasoline at the pump fell 14 cents in the past two weeks to an average $2.18 a gallon as crude oil prices fell, Trilby Lundberg said, citing her survey of about 7,000 filling stations nationwide.
- Venezuelan President Hugo Chavez said he government won’t pay investors the market value for their holdings in CA Nacional Telefonos de Venezuela as he moves to nationalize the country’s biggest phone company.

Wall Street Journal:
- A largely overlooked factor in the recent plunge in oil prices may portend an end to the multiyear rise in crude. Recent International Energy Agency(IEA) data show oil consumption in the 30 member countries of the OECD fell .6% in 2006. It marks the first annual decline in more than two decades among the OECD countries, which consume almost 60% of global production.
- Google Inc.(GOOG) is in talks to buy Adscape Media Inc., a closely held San Francisco-based developer of technology for Internet and video-game advertising. Google had been talking to game publishers for months about delivering advertising into games through the Internet, using methods such as virtual billboards or posters within the action.

NY Times:
- California may become the first US state to make spanking children three years old or less a misdemeanor under a bill proposed by Democratic Party Assemblywoman Sally Lieber. Penalties may include as much as a year in jail, and Lieber said the legislation would set “a bright line” for jurors, who are now instructed to take into account that Californian gives parents discretion on punishment that isn’t abusive.
- Billionaire hedge fund investor and left-wing political activist George Soros supported the US presidential campaign of Senator Barack Obama instead of Senator Hillary Clinton. Obama has the potential to be a transformational leader, citing Soros spokesman Michael Vachon. Soros, who has donated millions of dollars to Democratic candidates and causes, has previously made maximum donations to both candidates.
- Iraqi lawmakers have produced a draft law calling for the country’s oil industry to be overseen by the central government in Baghdad. The oil law has been described as the most critical pending legislation because control of the oil industry is a common beef among Iraq’s warring sectarian groups.
- Major League Baseball is close to announcing an agreement which will put its out-of-market pay television package and a planned baseball channel exclusively on DirecTV(DTV).
- Home Depot(HD) board members will meet a shareholder who wants the company to sell its wholesale-supply business.
- President Bush will address an annual retreat held by Democrats in the US House of Representatives in Williamsburg, Virginia, next moth.
- Virgin Mobile USA LLC and Amp’d Mobile are cutting charges for subscribers who watch ads on their mobile telephone screens. Procter & Gamble(PG), Burger King Corp.(BKC) and PepsiCo(PEP) have experimented with mobile phone ads, which had sales of about $421 million in the US in 2006, citing eMarketer.
- Comcast Corp.(CMCSA) CEO Roberts has implemented a strategy enabling the cable-television operator to overcome doubters who thought the company was moribund.

Washington Post:
- Former Democratic US presidents Jimmy Carter and Bill Clinton are trying to form a coalition of small and mid-sized Baptist organizations, citing Carter.
- Governors of both parties and state lawmakers nationwide have introduced legislation to ease voters’ economic concerns at the start of the new session this month. Proposals include eliminating sales taxes on groceries, ensuring public kindergarten for low-income children, tax relief for low- and moderate-income families as well as job training.

Oil & Gas Journal:
- US oil demand fell 1.1% last year as high prices and warm weather cut use, the American Petroleum Institute said. Gasoline demand rose .8%, well below the long-term average rate of 1.7% demand growth. Ethanol is now an ingredient in about 40% of all gasoline used in the US. US refining capacity expanded for a 10th consecutive year. The average refinery utilization rate fell below 90% for the first time in years, but only because capacity grew as refiners produced record amounts of gasoline and distillate.

Financial Times:
- London Stock Exchange Plc has not met with suitor Nasdaq Stock Market(NDAQ) to discuss its approach for the UK company, and no talks are planned.
- Large institutional investors owned 61.2% of the US stock market in 2005, worth over $10.7 trillion, compared with 51.4% at the end of 2000, citing Conference Board figures.

London-based Times:
- CVC Capital Partners Ltd., a UK buyout firm, hired Chris Stadler from Investcorp to lead an expansion into the US.

Der Spiegel:
- US Secretary of State Condoleezza Rice received “broad support” from Germany for President Bush’s Iraq strategy during her visit in Berlin.

Le Monde:
- Iranian legislators said the country must work to prevent the imposition of economic sanctions such as an embargo on oil exports because economic and social stability would be harmed.

Bolivarian News Agency:
- Venezuelan President Hugo Chavez would use executive authority to decree between 40 and 60 laws in a three-month period, citing VP Jorge Rodriquez.

Weekend Recommendations
Barron's:
- Made positive comments on (HCR) and (CCU).
- Made negative comments on (UA).

Citigroup:
- (SNPS) High-Conviction Buy, take positions now.
- Field checks suggest the PC supply chain is seeing an improvement in January with some companies pointing to a 10% m/m increase versus a normal 3%-5% decline.

Morgan Stanley:
- Reiterated Buy on (MRVL), target $32.

Night Trading
Asian indices are unch. to +1.0% on average.
S&P 500 indicated +.04%.
NASDAQ 100 indicated +.10%.

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
Conference Calendar
Daily Stock Events
Macro Calls
Rasmussen Consumer/Investor Daily Indices
CNBC Guest Schedule

Earnings of Note
Company/Estimate
- (AXP)/.76
- (CSX)/.57
- (ETN)/1.59
- (ENR)/1.92
- (PFE)/.42
- (TXN)/.38

Upcoming Splits
- None of note

Economic Releases
10:00 pm EST
- Leading Indicators for December are estimated to rise .2% versus a .1% gain in November.

BOTTOM LINE: Asian Indices are mostly higher, boosted by technology and commodity shares in the region. I expect US stocks to open mixed and to rally into the afternoon, finishing modestly higher. The Portfolio is 75% net long heading into the week.

No comments: