Sunday, December 23, 2007

Monday Watch

Weekend Headlines
- US stocks rose for the third time in four weeks as higher consumer spending and the Federal Reserve’s efforts to provide cash to banks spurred speculation the economy will keep expanding.
- US 10-year Treasury note yields rose to a three-day high on signs that central banks were adding enough funds to the financial system to spur bank lending.
- The yen fell to a six-week low against the dollar and declined versus the euro as concern eased that credit-market losses will deepen, boosting demand for higher-yielding assets funded by loans in Japan.
- Rank Group Ltd., owned by New Zealand billionaire Graeme Hart, agreed to buy Alcoa’s(AA) packaging and consumer businesses for $2.7 billion to expand in the US and gain control of units including Reynolds Wrap foil.
- China, which produces a third of the world’s steel, will raise export tariffs on some steel products from Jan.1 to help rein in a record trade surplus and reduce energy consumption and pollution.
- China will support international investment by companies next year as part of its effort to expand channels for such outbound ventures, said Wei Benhua, deputy director of the State Administration of Foreign Exchange. China will also relax controls on individual overseas investment, Wei said.
- China should take measures to cool economic growth and reduce energy consumption, an official with the National Development and Reform Commission said.
- News Corp.(NWS/A) agreed to sell eight of its Fox network-affiliated television stations in the US to Oak Hill Capital Partners LP for about $1.1 billion in cash.

Wall Street Journal:
- JPMorgan Chase(JPM) and Deutsche Bank AG are among companies planning to start an exchange to compete with CME Group Inc.(CME), operator of the Chicago Mercantile Exchange. The exchange is expected to open next year and will be backed by a dozen firms, including Merrill Lynch(MER), Credit Suisse Group and Citigroup(C).
- Banks Abandon Effort to Set Up Big Rescue Fund. The banks had been trying since September to set up a fund that would buy securities tied to mortgages and other assets that were controlled by banks in off-balance-sheet funds. By the time it began to try to gather assets, banks were already handling the problems themselves.
- Nardelli Says Chrysler Hitting Targets.

- Getting the red carpet treatment. Preferred shares of Fannie Mae, WaMu and others now look enticing.
- Contrarians Beware: Putin May Mark the Top of Emerging Markets. Is Vladimir Putin the new Jeff Bezos?

NY Times:
- The IRS issued a new rule yesterday that bans selling stock at a loss to get a tax deduction, then immediately buying replacement shares through a retirement account.
- With customers leery of buying toys made in China, makers of wooden toys say in the US they can barely keep up with demand and are hiring extra employees.
- Growth Fund Smokes With Potash and RIM.
- SEC Launches Web Tool to Compare Executive Pay.
- Top Manager: Invest in The Next Info Revolution.
- The national average price for gasoline dropped about 3 cents over the last two weeks, according to a survey released Sunday.
- NetSuite(N): Deja Google(GOOG) all over again. Commentary: NetSuite evolves into key player in online business software.
- Retailers Hope for Big Final Push. The final weekend of the holiday shopping season will likely bring a sigh of relief from many retailers who feared that sales would be weak. This holiday season, “we had projected a 3.6% increase and we expect that number will be hit and, potentially, could go a little bit higher,” said Bill Martin, co-founder of ShopperTrak RCT Corp., which monitors retail sales.

- With some 275 biotech stocks trading on major US markets, the biotechnology sector can seem overwhelming to even seasoned investors. Finding the right stocks takes real discernment.
- Shoot To Kill. Nvidia(NVDA)

Business Week:
- What the Pros Are Saying. Most of the experts we surveyed the market going up a bit – but the climb will be tough.
- For Nokia(NOK), Excess is a Vertu. Its luxury division is booming as a high-end cell phone becomes the latest status symbol for the world’s richest people.
- A Wily Road Warrior’s Airport Tips.
- Tech Sector Outlook 2008: Part 1.
- Research In Motion(RIMM): What Slowdown?
- Deconstructing the Energy Bill.
- Microsoft’s(MSFT) Games Get Serious. ESP is a new software product based on the popular PC game Flight Simulator. It’s also Microsoft’s first foray into non-entertainment games.

USA Today:
- MySpace cranks up heat in Facebook turf war.
- Internet renovates how homes get sold.
- X-mas electronics: Apple Inc.(AAPL) rules on
- The odds on an Apple(AAPL) flash memory laptop.

- Microsoft’s(MSFT) piracy fight gains momentum in China.

- Merrill Lynch(MER) may get up to $5 billion in a capital infusion from Singapore state investor Temasek Holdings.
- Consumer spending strong in November.
- Research In Motion(RIMM) stock shoots higher after results.

Financial Times:
- Saudi Arabia plans to establish a sovereign wealth fund that is expected to dwarf Abu Dhabi’s $900 billion and become the largest in the world. The new fund will be a formidable rival for other government-owned investment funds in the Middle East and Asia, which are playing an increasingly active role in channeling capital to western companies, particularly financial companies hard hit by the US mortgage meltdown.
- Central banks resolve eases year-end fears. Interbank lending rates have fallen throughout this week, with the three-month euro Libor rate fixing on Friday at 4.78%, down 17 basis points since action by central banks was announced on December 12.
- iPhone users raise network hopes. Buyers of Apple’s(AAPL) iPhone have turned out to be voracious users of electronic mail and other data services, giving network operators hope that the much-hyped device will finally unlock billions of dollars in mobile advertising revenue.
- Cisco to network whole cities. Cisco Systems(CSCO) plans to launch a business group, based in Bangalore, India, that will wire new buildings and even entire new cities with state-of-the-art networking technology.
- iPhone key to O2 growth. Mathew Key was in California last week, briefing Steve Jobs on the iPhone’s impact in the UK.

- Saudi Arabia’s security forces arrested an al-Qaeda-linked group allegedly planning a terrorist attack during the hajj pilgrimage. The suspects “planned to carry out an attack aimed at harming security and damaging the pilgrimage,” citing General Mansur al-Turqi, a spokesman for the Interior Miinstry.

Weekend Recommendations
- Made positive comments on (TWP) and (RHI).
- Made negative comments on (CWCO).

Night Trading
Asian indices are +1.0% to +2.0% on avg.
S&P 500 futures unch..
NASDAQ 100 futures -.08%.

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
- None of note

Upcoming Splits
- (CAM) 2-for-1

Economic Data
- None of note

Other Potential Market Movers
- None of note - US stock exchanges close at 1pm EST

BOTTOM LINE: Asian indices are higher, boosted by technology and commodity shares in the region. I expect US stocks to open mixed and to rally into the afternoon, finishing modestly higher. The Portfolio is 100% net long heading into the week.

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