Tuesday, September 18, 2007

Tuesday Watch

Late-Night Headlines
Bloomberg:
- VeraSun Energy Corp., the third-largest ethanol producer by capacity, and three other makers slid to one-year lows after separate analyst reports suggested an oversupply of the fuel would push prices lower. Ethanol has declined 35% this year, closing today on the Chicago Board of Trade at $1.61/gallon.

Wall Street Journal:
- E*Trade(ETFC) Warns of Mortgage Fallout.

MarketWatch.com:
- NY Times(NYT) said Monday evening that online content previously available through its paid, TimeSelect subscription service will be free, starting Wednesday.
- Fox Business Network opens a window. Commentary: Strategy becomes clearer before Oct. 15 launch.

NY Times:
- Some Toy Makers Shun the China Label.
- Google(GOOG) to Sell Web-Page Ads Visible on Mobile Phones.

CNNMoney.com:
- Why $80 oil won’t mean $3 gas. Experts say declining demand, cheaper blends will keep gasoline prices from following crude much higher.

Financial Times:
- The French government of President Nicolas Sarkozy on Monday stepped up its hostile stance towards Iran’s nuclear programme, raising for the first time the prospect of a European-wide sanctions regime against Tehran.
- Microsoft(MSFT) faces the threat of fresh antitrust probes and escalating financial penalties after a top European Union court upheld Brussels’ landmark 2004 competition ruling that found the world’s biggest software group guilty of abusing its dominant market position.

Late Buy/Sell Recommendations
Citigroup:
- Reiterated Buy on (CAG), target $33.
- Reiterated Buy on (HUM), target $66.
- Rated (CYPB) Buy, target $22.

Morgan Stanley:
- We have analyzed Countrywide’s(CFC) liquidity position in the wake of recent market disruptions. According to our revised projections, we tentatively conclude that the company has enough cash and cash flow to operate and repay financial obligations through 2008, without unsecured capital markets access. Our revised estimates of intrinsic value range from $20 to $31, based on assumptions of normalized profitability two-three years out, after the current crisis subsides. However, limited visibility into 2008 EPS, which range from $1.20 to $2.35 in our bear and bull cases, could limit upside potential in the short term. We remain Equal-weight.
- Reiterated Overweight on (MON), target raised to $95.

Night Trading
Asian Indices are -1.0% to unch. on average.
S&P 500 futures -.11%.
NASDAQ 100 futures -.11%.

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
- (AZO)/3.25
- (BBY)/.44
- (CBRL)/1.02
- (DRI)/.70
- (KR)/.34
- (LEH)/1.48

Upcoming Splits
- None of note

Economic Releases
8:30 am EST

- The Producer Price Index for August is estimated to fall .3% versus a .6% gain in July.
- The PPI Ex Food & Energy for August is estimated to rise .1% versus a .1% gain in July.

9:00 am EST
- Net Long-term TIC Flows for July are estimated to fall to $100.0 billion versus $120.9 billion in June.

1:00 pm EST
- The NAHB Housing Market Index for September is estimated to fall to 20 versus 22 in August.

2:15 pm EST
- The FOMC is expected to lower the fed funds rate to 5.0% from 5.25%.

Other Potential Market Movers
- The (CMI) Investor Conference, (AHS) analyst meeting, (WM) Investor Day, (AMB) Investor Forum, (PFE) analyst meeting, ThinkEquity Growth Conference, AG Edwards Emerging Growth Conference, CSFB Homebuilders Conference, Bank of America Investor Conference, Goldman Sachs Communacopia Conference, Merrill Lynch Media Fall Preview, UBS Global Paper and Forest Products Conference, Keybanc Basic Materials & Packaging Conference and Merriman Curhan Ford Investor Summit could also impact trading today.

BOTTOM LINE: Asian indices are mostly lower, weighed down by automaker and financial stocks in the region. I expect US equities to open modestly higher and to weaken into the afternoon, finishing mixed. The Portfolio is 75% net long heading into the day.

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