Wednesday, January 17, 2007

Thursday Watch

Late-Night Headlines
Bloomberg:
- The Senate Finance Committee voted to add $8.3 billion in tax breaks for small businesses to legislation that would increase the minimum wage.
- Vincent Reinhart, one of Fed Chairman Bernanke’s top advisers on interest rates, will leave the central bank.
- News Corp.’s(NWS) HarperCollins publishing unit is shutting down its ReganBooks division one month after firing founder Judith Regan, who backed a book by OJ Simpson on how he could have killed his ex-wife.
- Jim Rogers, author of the book “Hot Commodities”, said “when you have big bull markets, 50% corrections, or retractions, are normal.” The CRB Index is currently down 20.9% from its May 2006 high. Rogers still expects oil to eventually exceed $150/bbl. However, Rogers doesn’t buy individual commodities on the advice of his lawyers.
- The US ethanol industry will continue to expand even as soaring corn prices trim profits, said Bruce Rastetter, who runs Hawkeye Holdings, the nation’s third-largest producer of the grain-based fuel.
- Japan’s steel production may surpass a 34-year-old record this year.
- The Bank of Japan left its benchmark interest rate at .25%, appeasing government officials who say consumer spending and inflation are too weak to withstand higher borrowing costs. The yen fell to a 13-month low on the report.
- Hewlett-Packard(HPQ) beat Dell Inc.(DELL) in sales of personal computers for the second straight quarter, extending its lead as the world’s biggest PC maker. HP’s worldwide PC shipments surged 23.8%, while Dell’s fell 8.4% in 4Q.
- The worldwide PC market grew 8.7% in the fourth quarter, according to IDC.

Wall Street Journal:
- The International Energy Agency and China are near an agreement to share plans for the use of oil stockpiles, citing IEA executive director Claude Mandil. Mandil is expected to meet China’s top energy official Chen Deming on Jan. 19 to discuss a non-binding agreement for China to give notice to the IEA before releasing oil from its stockpiles.
- General Electric(GE) is close to buying the diagnostics division of Abbott Labs(ABT).

Nikkei:
- Iraq will “soon” announce a final plan on oil revenue distribution, Foreign Minister Hoshyar Zebari said in an interview in Baghdad. Iraqi officials are close to a deal on a national oil law that would give the central government the power to distribute current and future oil reserves to regions based on their population. An oil law guaranteeing equitable distribution of sales was crucial to the process of national reconciliation and ending the war, according to the Iraq Study Group.

Late Buy/Sell Recommendations
Citigroup:
- Upgraded (ERTS) to Buy, target $64.
- Reiterated Buy on (SCHW), target $22.

Night Trading
Asian Indices are -.25% to +.50% on average.
S&P 500 indicated -.07%.
NASDAQ 100 indicated -.18%.

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/EPS Estimate
- (BK)/.55
- (BBT)/.77
- (BGG)/-.05
- (COF)/1.24
- (CMA)/1.21
- (CAL)/-.15
- (CREE)/.06
- (ET)/.39
- (FITB)/.07
- (HDI)/.96
- (HTLD)/.22
- (IBM)/2.19
- (IGT)/.35
- (MER)/1.92
- (PPG)/1.02
- (SLM)/.75
- (UB)/1.06
- (UNH)/.85
- (XLNX)/.23

Upcoming Splits
- None of note

Economic Releases
8:30 am EST
- The Consumer Price Index for December is estimated to rise .4% versus an unch. reading in November.
- The CPI Ex Food & Energy for December is estimated to rise .2% versus an unch. reading in November.
- Initial Jobless Claims for last week are estimated to rise to 314K versus 299K the prior week.
- Continuing Claims are estimated to rise to 2438K versus 2428K prior.
- Housing Starts for December are estimated to fall to 1565K versus 1588K in November.
- Building Permits for December are estimated to fall to 1505K versus 1513K in November.

10:30 am EST
- Bloomberg consensus estimates call for a weekly crude oil build of 100,000 barrels versus a -4,990,000 barrel decline the prior week. Gasoline supplies are expected to rise by 2,225,000 barrels versus a 3,763,000 barrel increase the prior week. Distillate supplies are expected to rise by 1,350,000 barrels versus a 5,402,000 barrel increase the prior week. Refinery Utilization is expected to fall by -.5% versus a .41% gain the prior week. Natural gas supplies are expected to fall -80 bcf versus a -49 bcf withdrawal the prior week.

12:00 pm EST
- The Philly Fed for January is estimated to rise to 3.1 versus -2.3 in December.

BOTTOM LINE: Asian indices are mostly higher, boosted by financial and commodity shares in the region. I expect US equities to open modestly lower and to rally into the afternoon, finishing mixed. The Portfolio is 100% net long heading into the day.

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