Wednesday, November 21, 2007

Wednesday Watch

Late-Night Headlines
- Japan’s exports rose to a record in October as companies shipped more cars and electronics.
- Pakistan will ensure elections on Jan. 8 are free and transparent, President Pervez Musharraf said, as the government released opposition supporters and journalists held under emergency regulations imposed almost three weeks ago.

- Copper Arch Capital LLC, the hedge-fund firm run by former Morgan Stanley managing director Scott Sipprelle, is liquidating and returning money to clients after returns trailed peers this year.

Wall Street Journal:
- US Treasury Secretary Henry Paulson, concerned that millions of homeowners aren’t being helped quickly enough, is pressing the mortgage-service industry to help broad swaths of borrowers qualify for better loans instead of dealing with mortgage problems on a case-by-case basis.
- Scientists have created human embryonic stem cells from mature cells in a breakthrough that avoids destroying human embryos. The technique could lead to new treatments for disease without the ethical questions involved in cloning.

- Life Sciences Stocks: A Healthy Outlook. S&P likes the fundamentals of one of the stronger-performing subindustries this year, and has buy ratings on seven names.

- Sales picture is bright for digital cameras; ’07 may see 16% rise.
- One more thing cellphones could do: Replace wallets.
- Oil’s record has analysts puzzled. The price of oil again set a record Tuesday, easily blowing through the previous high earlier this month, in a move some analysts said was absurd because there was no solid, supply-and-demand reason for it.

- GM’s November sales meeting expectations: Lutz.

Financial Times:
- US reports ‘phenomenal’ drop in Iraq violence. The figures show the number of suicide attacks, roadside bombings, mortar and other attacks on US forces and on the Iraqi population have plunged 50% since the 30,000 extra troops in June.
- BlackRock(BLK), the asset manager 49% owned by Merrill Lynch(MER), is set to be signed up as the manager of the $75 billion superfund being put together by the top three US banks.
- The failure rate of hedge funds is expected to double this year, citing an interview with Man Group Plc CEO Peter Clarke. As many as one in 10 funds will go out of business, and the number of funds introduced will drop by about a third, Clarke said.

London-based Times:
- Starbucks Corp.(SBUX) plans to open at least 100 new coffee shops in the UK and Ireland next year, 25% more than the company opened this year.

Australian Financial Review:
- Publishing & Broadcasting Ltd., Australia’s biggest casino owner, may spend at least $1.8 billion on gaming acquisitions in Pennsylvania.

Late Buy/Sell Recommendations

- Reiterated Buy on (EBAY), target $49.
- Reiterated Buy on (SKS), target $25.
- Reiterated Buy on (ROST), target $38.
- Removed Comcast(CMCSK) from Recommended List, added NYMEX Holdings(NMX).
- October appears to have been a very strong month for Google(GOOG). Google “core” queries were up 15% M/M and 50% Y/Y. Google’s share increased 150 bps M/M to 58.5%, a new record. Yahoo! Queries were up 8% M/M but were flat on a Y/Y basis. Its search share dropped 80 bps M/M to 22.9%, which is the lowest we have tracked. MSFT share dropped to 9.7%, down 60 bps M/M and the lowest we have seen since the June ’07 launch of Club Live. Queries were up 5.5% M/M and 11% Y/Y.
- Reiterated Buy on (CVS), raised EPS estimates, raised target to $50.

Night Trading
Asian Indices are -2.25% to -.25% on average.
S&P 500 futures -.66%.
NASDAQ 100 futures -.56%.

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
- (CHRS)/-.03
- (DE)/1.54
- (PDCO)/.40
- (PLCE)/.38
- (BKE)/.74
- (GPS)/.29
- (ANF)/1.28

Upcoming Splits
- None of note

Economic Releases
8:30 am EST

- Initial Jobless Claims for this week are estimated to fall to 330K versus 339K the prior week.
- Continuing Claims are estimated to rise to 2575K versus 2568K prior.

10:00 am EST
- The Final Univ. of Mich. Consumer Confidence reading for November is estimated at 75.0 versus a prior estimate of 75.0.
- Leading Indicators for October are estimated to fall .3% versus a .3% increase in September.

10:30 am EST
- Bloomberg consensus estimates call for a weekly crude oil build of 750,000 barrels versus a 2,814,000 barrel increase the prior week. Gasoline supplies are expected to rise by 950,000 barrels versus a 714K barrel build the prior week. Distillate Supplies are estimated to fall by -450,000 barrels versus a -1,965,000 barrel decline the prior week. Refinery Utilization is expected to rise by .5% versus a 1.43% increase the prior week. Finally, Natural Gas supplies are expected to rise by 3 bcf versus a -9 bcf decline the prior week.

Other Potential Market Movers
- The weekly EIA energy inventory report and weekly MBA Mortgage Applications Report could also impact trading today.

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

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