Wednesday, September 19, 2007

Thursday Watch

Late-Night Headlines
Bloomberg:
- US Treasury Secretary Henry Paulson will tell Congress tomorrow that Fannie Mae(FNM) and Freddie Mac(FRE) should be allowed to temporarily buy home loans above $417,000 if Congress creates a tougher regulator for the two largest US mortgage finance companies.
- Overnight yields on US asset-backed commercial paper fell to the lowest in more than a year after the Fed cut benchmark interest rates by 50 basis points to stem a credit crunch.
- Japan’s manufacturers became optimistic this quarter, a government report showed, indicating they’re confident the economy will rebound from a contraction.
- Israel was awarded “developed” status by FTSE Group, helping its stock market attract more of the estimated $2.5 trillion in funds that track the index provider’s global benchmarks.

- Macquarie Bank Ltd. is planning the first sale of mortgage-backed bonds in Australia in two months, tapping a market shut down by the US subprime mortgage rout.

Wall Street Journal:
- ABC’s AOL Pact Marks Web’s Growing TV Allure.

MarketWatch.com:
- Korea’s status as emerging market seen changing. Move by FTSE expected; rival MSCI sticking with developing country tag.
- Bear(BSC) may have slipped in prime brokerage: analyst. Morgan Stanley’s(MS) record prime brokerage result raises questions, Mayo says.
- With its impressive Tuesday rally, the stock market has risen to within shouting distance of the all-time high set in mid-July. And yet the editor of the average market timing investment newsletter is not nearly as optimistic today as then. That, in a nutshell, is why contrarians expect the stock market to continue to have an upside bias.

NY Times:
- NBC to Offer Downloads of Its Shows.

Financial Times:
- China’s government will freeze prices it controls in a bid to stem inflation, now at its highest rate in more than a decade.
- CIT Group(CIT), a leading US commercial finance company, said on Wednesday it would sell its subprime loan portfolio to Freddie Mac(FRE) in a move to quit the home-lending business, triggering a sharp rally in its shares.

Reuters:
- Chinese banks to invest in US, UK stocks via QDII.

Late Buy/Sell Recommendations
Citigroup:
- August appears to have been a strong month for Google(GOOG). Google “core” queries were up 1.68% M/M(as defined by comScore, this metric excludes properties like YouTube, etc.), and Google was the only major player to post M/M growth. Google’s share increased 130 bps M/M to 56.5%, tying its record high in May. Yahoo!’s(YHOO) queries declined 1.5% M/M, while its share dropped 20 bps M/M to 23.3%. Microsoft(MSFT) share dropped to 11.3%, down 100 bps M/M following an 8.9% M/M decline in queries. We believe much of the decline is due to lower Club Live usage but currently lack empirical support for this hypothesis.

Night Trading
Asian Indices are unch. to +.75% on average.
S&P 500 futures -.27%.
NASDAQ 100 futures -.28%.

Morning Preview
US AM Market Call
NASDAQ 100 Pre-Market Indicator/Heat Map
Pre-market Commentary
Pre-market Stock Quote/Chart
Before the Bell CNBC Video(bottom right)
Global Commentary
WSJ Intl Markets Performance
Commodity Movers
Top 25 Stories

Top 20 Business Stories
Today in IBD
In Play
Bond Ticker
Economic Preview/Calendar
Daily Stock Events
Macro Calls
Upgrades/Downgrades
Rasmussen Business/Economy Polling
CNBC Guest Schedule

Earnings of Note
Company/EPS Estimate
- (COMS)/.02
- (AM)/-.05
- (BSC)/1.79
- (CCL)/1.62
- (CC)/-.12
- (CAG)/.29
- (FDX)/1.55
- (GS)/4.34
- (NKE)/.87
- (ORCL)/.21
- (SCHL)/-.47
- (SCS)/.24
- (TEK)/.39

Upcoming Splits
- None of note.

Economic Releases
8:30 am EST
- Initial Jobless Claims for last week are estimated to rise to 321K versus 319K the prior week.
- Continuing Claims are estimated to fall to 2575K versus 2585K prior.

10:00 am EST
-.Leading Indicators for August are estimated to fall .4% versus a .4% gain in July.

12:00 pm EST
- The Philly Fed for September is estimated to rise to 2.6 versus 0.0 in August.

Other Potential Market Movers
- The Fed’s Bernanke speaking on the mortgage market, weekly EIA natural gas inventory report, (WW) analyst meeting, (NDAQ) analyst day, (CMS) analyst meeting, (BRCD) analyst meeting, RBC Consumer Conference, DA Davidson Engineering & Construction Conference, ThinkEquity Growth Conference, Merrill Lynch Global REITs Conference and Maxim Growth Conference could also impact trading today.

BOTTOM LINE: Asian indices are higher, boosted by commodity and real estate stocks 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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