Wednesday, March 14, 2007

Wednesday Watch

Late-Night Headlines
Bloomberg:
- A Bloomberg poll found that US residents approved of the way Ben Bernanke is handling his job as Fed Chairman by a margin of almost 5 to 1.
- Most managed futures funds lost money in February on speculation a slowing Chinese economy will reduce demand for commodities and cut global corporate profits, the Barclay Group said. Money invested with commodity futures trading advisers rose 30% to $170 billion at the end of 2006 compared with a year earlier, according to data on the Barclay Web site.
- China’s spending on factories, real estate and other fixed assets probably grew at a slower pace in the first two months of 2007 after the government curbed lending and project approvals.
- Chevron Corp.(CVX) expects to spend $7.5 billion more than planned on projects slated to begin in the next four years.
- Australian consumer confidence rose to a 19-month high in March as slowing inflation reduced expectations the central bank will raise interest rates.
- Shares of Benq Corp., Taiwan’s biggest maker of branded consumer electronics, fell by the daily limit after prosecutors searched its offices and detained two executives for questioning for alleged insider trading.
- Asian currencies fell, led by the Philippine peso, on concern investors will shun emerging market assets as the region’s stocks dropped.

Financial Times:
- Japanese companies could be shut out of European Union capital markets because of difficulties in harmonizing Japan’s accounting standards with EU rules in time to meet a deadline set by Brussels.

Chosun Ilbo:
- North Korea is showing signs it is preparing to shut down its Yongbyon nuclear reactor.

Late Buy/Sell Recommendations
Citigroup:
- Reiterated Buy on (TSCO), target $57.
- Reiterated Buy on (DKS), target $62.
- Reiterated Buy on (SMOD), target $15.50.
- We believe that concerns regarding the effects of subprime mortgages on broadline retail are overdone. Subprime borrowers only represent 4% of households and 2% of consumer spending, according to Citigroup economist Steven Wieting. The rise is subprime mortgage delinquencies is not expected to impact overall consumption trends.

Night Trading
Asian Indices are -2.75% to -1.75% on average.
S&P 500 indicated -.16%.
NASDAQ 100 indicated -.23%.

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
- (GM)/1.22
- (HIBB)/.38
- (HOTT)/.22
- (LEH)/1.95
- (PBY)/-.12
- (SSI)/.87
- (ZUMZ)/.36

Upcoming Splits
- (CBE) 2-for-1
- (JEC) 2-for-1

Economic Releases
8:30 am EST
- The 4Q Current Account Balance is estimated to shrink to -$203.5 billion versus -$225.6 billion in 3Q.
- The Import Price Index for February is estimated to rise .8% versus a -1.2% decline in January.

10:30 am EST
- Bloomberg consensus estimates call for a weekly crude oil build of 2,000,000 barrels versus a -4,848,000 barrel drawdown the prior week. Gasoline supplies are expected to decline by -2,375,000 barrels versus a -3,750,000 barrel fall the prior week. Distillate inventories are estimated to fall by -2,275,000 barrels versus a -1,331,000 barrel decline the prior week. Refinery Utilization is expected to rise by .5% versus a -.15% decline the prior week.

BOTTOM LINE: Asian indices are sharply lower, weighed down by automaker and commodity shares in the region. I expect US equities to open lower and to rally into the afternoon, finishing mixed. The Portfolio is 75% net long heading into the day.

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