Tuesday, November 13, 2007

Wednesday Watch

Late-Night Headlines
- Goldman Sachs(GS) is starting three new hedge funds to woo investors after two funds lost money this year, CEO Lloyd Blankfein said.
- Australian consumer confidence dropped to an 11-month low and wages growth slowed in the third quarter, suggesting the central bank doesn’t need to increase interest rates again next month.
- The prime ministers of North Korea and South Korea begin three days of talks in Seoul today on developing joint economic zones and stronger ties as a follow-up to last month’s summit between the countries.
- Tokyo Electron Ltd., the world’s second-largest maker of machines used to produce semiconductors, rose the most in four years in Tokyo trading after saying orders will climb and Deutsche Bank raised its rating on the stock.
- The yen fell for a second day against the euro as Asian stocks rose, giving traders confidence to buy high-yielding assets with loans in Japan.
- Wendy’s Intl.(WEN), the third-largest US hamburger chain, received a bid from Nelson Peltz’s Triarc Cos. that was less than the $3.2 billion he said he might pay in July.

Wall Street Journal:
- Gates Foundation, China to Fight AIDS.

NY Times:
- Democratic Governor Eliot Spitzer is abandoning his plan to issue driver’s licenses to illegal immigrants, saying that opposition is just too overwhelming to move forward with such a policy.

- Fed chief to announce changes in Fed communications strategy.
- Philanthropy at work. Companies make strategic donations of money, products, workers’ labor.

- Short-term market-timers’ pessimism cheers contrarians.
- Rupert Murdoch said Tuesday he expects to make the Wall Street Journal’s online edition a free Web site, moving away from the paid-subscription model it has successfully employed since its inception in 1996.

- Meet the entrepreneurs, age 25 and under, behind this year’s five winning US businesses, as voted by BusinessWeek.com readers.

- After months of skittishness around anything tied to risky subprime mortgages, a handful of sophisticated investors are looking to increase their exposure to such assets.

- Bank Loans Surge As Businesses Find Wall St. Tight-Fisted.

- E*Trade Shares Rebound, CEO Cancels Presentation.

- Oil prices slumped more than 3.5% Tuesday after the IEA cut its forecast for world oil demand growth, saying that the recent surge in crude prices had already hurt consumption. Crude oil imports by China, the world’s second-largest oil consumer, fell to a 10-month low in October, according to preliminary government data.

Financial Times:
- Morgan Stanley(MS) has taken a minority stake in Traxis Partners, the hedge fund group founded by Barton Biggs, Morgan Stanley’s outspoken former chief strategist.
Citigroup’s(C) first shortlist of CEO candidates doesn’t include John Thain, who was widely seen as a favorite. Thain could be added to the list later. The shortlist includes a number of internal and external candidates, the newspaper said, naming Bob Willumstad, chairman of American International Group, as one.

Late Buy/Sell Recommendations

- Reiterated Buy on (AMAT), target $23.
- Reiterated Buy on (NTAP), target $31.
- Reiterated Buy on (WMT), target $53.

Night Trading
Asian Indices are +.75% to +2.75% on average.
S&P 500 futures +.05%.
NASDAQ 100 futures +.04%.

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
Rasmussen Business/Economy Polling
CNBC Guest Schedule

Earnings of Note
Company/EPS Estimate
- (PCS)/.12
- (DAKT)/.22
- (KALU)/.98
- (ARM)/.00
- (WGOV)/.68
- (AMAT)/.29
- (NTAP)/.26
- (PETM)/.22
- (SINA)/.28
- (FDC)/.33
- (HLT)/.33
- (SNDA)/.42
- (LDG)/.44
- (M)/.07

Upcoming Splits
- (MPR) 4-for-3
- (TNP) 2-for-1
- (CRS) 2-for-1
- (APAGF) 4-for-1

Economic Releases
8:30 am EST

- The Producer Price Index for October is estimated to rise .3% versus a 1.1% gain in September.
- The PPI Ex Food & Energy for October is estimated to rise .2% versus a .1% gain in September.
- Advance Retail Sales for October are estimated to rise .1% versus a .6% gain in September.
- Retail Sales Ex Autos for October are estimated to rise .2% versus a .4% gain in September.

10:00 am EST
- Business Inventories for September are estimated to rise .4% versus a .1% gain in August.

10:30 am EST
- Bloomberg consensus estimates call for a weekly crude oil drawdown of -750,000 barrels versus a -821,000 barrel decline the prior week. Gasoline supplies are expected to fall by -500,000 barrels versus an -819,000 barrel decline the prior week. Distillate inventories are estimated to fall by -500,000 barrels versus a 98K barrel increase the prior week. Finally, Refinery Utilization is estimated to rise by .50% versus a .07% gain the prior week.

Other Potential Market Movers
- The Fed’s Bernanke speaking, Fed’s Fisher speaking, weekly EIA energy inventory data report, weekly MBA Mortgage Applications report, (SE) analyst meeting, (SMOD) analyst meeting, (TLM) analyst meeting, (LEG) analyst meeting, (LXK) analyst day, (PCL) analyst day, (QCOM) analyst meeting, (UFI) investor meeting, (GWW) analyst meeting, (CSAR) analyst meeting, Piper Jaffray Global Internet Summit, Stephens Investment Conference, CSFB Healthcare Conference, CSFB Insurance & Asset Management Conference, Morgan Stanley Global Consumer & Retail Conference, UBS Global Tech & Services Conference, Bear Stearns SMid Cap Conference and Merrill Lynch Banking & Financial Services Conference could also impact trading today.

BOTTOM LINE: Asian indices are sharply higher, boosted by technology and automaker stocks in the region. I expect US equities to open modestly lower and to rally into the afternoon, finishing modestly higher. The Portfolio is 75% net long heading into the day.

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