Late-Night Headlines
Bloomberg:
Platinum Grove Asset Management LP, the hedge-fund firm co-founded by Nobel laureate Myron Scholes, temporarily stopped investor withdrawals from its biggest fund after it lost 29 percent in the first half of October. The decline left Platinum Grove Contingent Master fund with a 38 percent loss this year through Oct. 15, according to investors.
- Carl Icahn is putting more money into his $6.6 billion of hedge funds as losses mount and outside clients abandon the activist investor. Investors plan to withdraw about 15 percent of the fund's total assets at year-end, according to regulatory filing yesterday by Icahn's New York-based holding company.
- Before Barack Obama takes the oath, he should read ``The Great Inflation and Its Aftermath,'' Robert J. Samuelson's timely history of how good political intentions stoked an inflationary hell in the 1970s -- and how only bold, painful action smothered the flames. The Great Inflation refers to the period when U.S. inflation rose from negligible levels in the mid-1960s to double digits in the early 1980s. Though the episode scarred a generation, our memory of the fire has faded, says Samuelson, an award-winning columnist for Newsweek and the Washington Post.
- Independent Senator Joe Lieberman's backing of the Republican presidential ticket raises ``serious concerns'' about his status in the Democratic caucus, Senate Majority Leader Harry Reid said.
- Eliot Spitzer, who quit as governor of New York in March, won't face criminal charges for patronizing a ring of high-priced prostitutes, federal prosecutors said.
- Rio Tinto Group(RTP), the world's third- largest mining company, had its rating outlook cut by Moody's Investor Services because of global market turmoil, falling metal prices and slow progress in asset sales.
- Investors should sell Australia’s currency against the US dollar because it may lose 29% as it slumps toward a record amid a global recession, Morgan Stanley said.
- Global ship orders tumbled 90 percent last month as the credit crunch damped world trade and made it harder for shipping lines to borrow money, according to Lloyd's Registers Group.
- Microsoft Corp.(MSFT), which previously offered as much as $47.5 billion for Yahoo! Inc.(YHOO), may have partnership deals with the Internet company and isn't planning to make another bid, Chief Executive Officer Steve Ballmer said.
Wall Street Journal: House Speaker Nancy Pelosi called for a two-stage effort to boost the shaky U.S. economy: a $60 billion-to-$100 billion stimulus package this month, followed early next year by a companion measure that would include a "permanent tax cut."
- President-elect Barack Obama's choice of Rep. Rahm Emanuel as chief of staff drew fire Thursday from Republicans, and a few Democrats, who noted that a candidate elected on a call for change had turned to a veteran partisan pugilist for his first appointment. The Republican National Committee called the choice Mr. Obama's first "broken promise." "This is an ironic choice for a president-elect who has promised to change Washington, make politics more civil, and govern from the center," said House Minority Leader John Boehner (R., Ohio). Some Democratic aides on Capitol Hill were similarly struck by the partisan nature of the appointment -- and even more so by the extended rollout.
- Hedge funds are selling billions of dollars of securities to meet demands for cash from their investors and their lenders, contributing to the stock market's nearly 10% drop over the past two days. One of the biggest funds, $16 billion Citadel Investment Group, is being asked by several major banks to post additional collateral to cover big losses on its investments, according to people familiar with the situation. Citadel, which is run by Kenneth Griffin, was until recently considered a possible savior for troubled Wall Street firms. But his biggest hedge fund has fallen nearly 40% this year.
CNBC.com:
- This is a stunner for Apple(AAPL) and its iPhone, and just goes to show why Research in Motion and its BlackBerry have a little more to worry about: JD Power and Associates ranked the iPhone highest in customer satisfaction, not for everyday consumers as you might expect. But for "business wireless smartphone users."
NY Times: Once Sizzling, China’s Economy Shows Rapid Signs of Fizzling
USA Today.com:
- Mortgage rates dropped this week, providing a dose of welcome news to prospective home buyers. Freddie Mac, the mortgage giant, reported Thursday that rates on 30-year, fixed-rate mortgages averaged 6.20% for the week ending Nov. 6. That was down sharply from 6.46% last week.
Reuters:
- Al Gore's Alliance for Climate Protection has some environmental advice for the incoming Obama administration: focus on energy efficiency and renewable resources, and create a unified U.S. power grid. On Thursday, the group Gore founded rolled out a new media campaign to push for immediate investments in three energy areas it maintains would help meet Gore's previously announced challenge to produce 100 percent clean electricity in the United States in a decade. Pegged to Obama's election victory on Tuesday, the Gore group's ads on television, in newspapers and online, pose the question, "Now what?"
- The love affair between U.S. pension funds and hedge funds is cooling. After helping the hedge fund industry double their assets to $1.7 trillion over the last three years, pensions funds, in their search for plump returns, are reconsidering their commitments. In September, the School Employees System of Ohio, which had planned to invest 10 percent of its $11 billion portfolio in hedge funds, decided to stop investing directly with them for a time, according to fund spokeswoman Laurel Johnson. Florida's government workers, who have already put money into private equity and real-estate investments and are permitted to put money into hedge funds, have shied away. Other pension funds that have already committed money are pulling some cash out, managers familiar with their negotiations have said. Ever since the California Public Employees' Retirement System, the largest U.S. pension fund known as Calpers, picked a handful of hedge funds in 2002 to help invest $1 billion, dozens of funds that manage retirement money for public employees such as teachers, police officers and transit workers have followed suit. With other parts of their portfolios tumbling, some pension funds have exceeded the percentage their trustees permit them to allocate to hedge funds, consultants said.
TimesOnline: Blackstone Group(BX) calls bottom after loss of $509M. Blackstone Group posted much wider than expected losses yesterday, but the world’s second-biggest private equity company has called the bottom of the credit crunch.
Late Buy/Sell Recommendations
Citigroup:
- Reiterated Buy on (GLBC), target $16.
- Reiterated Buy on (PCLN), target $83.
- Reiterated Buy on (GT), target $21.
Night Trading
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 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 Upgrades/Downgrades Rasmussen Business/Economy Polling
Earnings of Note
Company/EPS Estimate
- (ED)/1.00
- (GM)/-3.51
- (EIX)/1.54
- (SUP)/-.06
- (S)/.03
- (RRI)/-.06
- (LPNT)/.61
- (F)/-.93
- (DISCA)/.18
- (CEP)/.28
Economic Releases
8:30 am EST
- The Change in Non-farm Payrolls for October is estimated at -200K versus -159K in September.
- The Unemployment Rate for October is estimated to rise to 6.3% versus 6.1% in September.
- Average Hourly Earnings for October are estimated to rise .2% versus a .2% gain in September.
10:00 am EST
- Wholesale Inventories for September are estimated to rise .3% versus a .8% gain in August.
11:30 am EST
- Pending Home Sales for September are estimated to fall 3.4% versus a 7.4% gain in August.
3:00 pm EST
- Consumer Credit for September is estimated to fall to $0.0 billion versus -$7.9 billion in August.
Upcoming Splits
Other Potential Market Movers
BOTTOM LINE: Asian indices are mostly lower, weighed down by commodity and automaker stocks in the region. I expect US equities to open modestly lower and to rally into the afternoon, finishing higher. The Portfolio is 75% net long heading into the day.
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