Late-Night Headlines
Bloomberg:
- The Obama administration is considering elevating Ron Bloom, head of the government's auto task force, to a job that would set U.S. manufacturing policy more broadly, people familiar with the matter said. Bloom, a former United Steelworkers union adviser and Lazard Ltd. investment banker, helped guide General Motors Co. and Chrysler Group LLC through bankruptcy as part of the government's rescue of the auto industry. The task force will continue, and it hasn't been decided whether Bloom will remain its leader while taking on the new role, the people said. Bloom became head of the Treasury Department's auto task force in July when Steven Rattner stepped down. The government controls about 61 percent of Detroit-based GM and 10 percent of Chrysler in exchange for loans that kept the automakers from liquidating.
Wall Street Journal:
- The White House and Senate Democratic leaders, seeing little chance of bipartisan support for their health-care overhaul, are considering a strategy shift that would break the legislation into two parts and pass the most expensive provisions solely with Democratic votes. The idea is the latest effort by Democrats to escape the morass caused by delays in Congress, as well as voter discontent crystallized in angry town-hall meetings. Polls suggest the public is losing support for the overhaul plans. Democrats hope a split-the-bill plan would speed up a vote and help President Barack Obama meet his goal of getting a final measure by year's end. Most legislation in the Senate requires 60 votes to overcome a filibuster, but certain budget-related measures can pass with 51 votes through a piece of parliamentary sleight-of-hand called reconciliation. In recent days, Democratic leaders have concluded they can pack more of their health overhaul plans under this procedure, congressional aides said. They might even be able to include a public insurance plan to compete with private insurers, a key demand of the party's liberal wing, but that remains uncertain. "We will not make a decision to pursue reconciliation until we have exhausted efforts to produce a bipartisan bill," said Jim Manley, a spokesman for Mr. Reid. "However, patience is not unlimited, and we are determined to get something done this year by any legislative means necessary." Privately, those involved in the talks now say there is a 60% chance the split-bill tactic will be used. Sen. Mike Enzi (R., Wyo.) said the Democrats would be making a mistake by forging ahead on their own. "We need to get a bill that 75 or 80 Senators can support," he said. "If the Democrats choose to shut out Republicans and moderate Democrats, their plan will fail because the American people will have no confidence in it." Democrats must also deal with intraparty differences even if they abandon hope of Republican support for a comprehensive bill. Some Democrats in the Senate oppose using reconciliation. And Democrats can't agree whether a public insurance option is essential, as liberals say, a "preferred option" -- the White House's stance -- or a bad idea, as some on the Finance Committee believe. "From day one, the White House has taken a go-it-alone approach on health care," said House Minority Leader John Boehner (R, Ohio). "The administration rejected our efforts to work together, choosing instead to craft a costly government takeover of health care."
- Chrysler Group LLC next month will begin production of right-hand drive diesel minivans for export at its plant in Windsor, Ontario, according to people familiar with the plans. This is the first time the right-hand drive diesel minivans will be produced at the Canadian plant, the people said, and production is slated for the middle of September. Chrysler added a third shift at its Windsor plant earlier this month where it makes the Dodge Grand Caravan, Chrysler Town & Country and Volkswagen Routan.
- The Securities and Exchange Commission says it is taking a close look at flash quotes, high-frequency trading and other dark corners of the stock markets. But by many accounts, the agency is outmatched by the traders and market venues with technology that is remaking the trading world. The agency lacks its own traders with knowledge about cutting-edge strategies and how the markets operate. It long ago ceded the daily surveillance of trading to self-regulatory organizations, like NYSE Regulation and the Financial Industry Regulatory Authority. And it takes a lawyerly approach to regulation and rule making that rarely employs deep analyses.
- In the depths of the recession, the tiniest private firms accounted for a disproportionate share of the job losses, the Labor Department said Wednesday. Companies that employed fewer than five workers -- where 5.1% of the private-sector work force is employed -- accounted for 14.5% of the job losses in the fourth quarter of 2008. They also were responsible for 16.8% of the job gains. The department reported a net loss of 1.8 million private-sector jobs in the quarter, as 6.7 million private-sector jobs were created and 8.5 million were lost. The only industries that posted net job growth were health and education and utilities.
- China is making its presence felt by the hedge-fund industry, replacing London as the most popular base for Asia-focused managers and replacing Japan as the focus for Asian hedge funds. Data provider Hedge Fund Research said in a report Tuesday on the $68.2 billion Asian hedge-fund industry that 24% of Asia-focused hedge funds now are located in China, a rise of more than 5% from a year ago.
- Over the past week, President Obama has held three town-halls to make the case for his health-care plan. While he didn't say much that he hasn't said a thousand times before, his remarks did offer another explanation for the public's skepticism of ObamaCare. Namely, the President contradicts himself every other breath. Consider:
- Appliance manufacturers are counting on a "cash for clunkers"-type rebate program to revive slumping sales of refrigerators, washing machines and dishwashers. Beginning late this fall, federal rebates will be available for purchasers of high-efficiency household appliances, furnaces and air-conditioning systems. Congress authorized $300 million for the program earlier this year as part of the federal economic-stimulus bill.
- A series of car bombings and explosions rocked the capital on Wednesday morning, killing at least 95 people and directly challenging the effectiveness of Iraqi security services amid a U.S. pullback. The blasts, the worst episode of coordinated violence since American forces withdrew from Iraqi cities on June 30, injured at least 563 people, according to Iraqi officials. Another person was killed in Kirkuk in what appeared to be the deadliest day in Iraq in more than a year. The attacks underscored the calculated risk that American officials took with the withdrawal, and they came as the U.S. strategy in Afghanistan also is coming under stress from insurgent violence. U.S. officials say they are closely monitoring the reaction of the Iraqi government, saying there is increasing anxiety that such high death tolls could tip Iraq back into a cycle of sectarian fighting.
MarketWatch.com:
- The fallout from an agreement to give U.S. tax authorities information on thousands of Americans with Swiss bank accounts is likely to hit financial advisers who enabled clients to hide money overseas in an attempt to evade taxes.
CNBC.com:
- The Swiss government will convert its $1.67 billion stake in UBS and sell the shares to investors, it said Wednesday.
NY Times:
- Of all the hedge fund managers on Wall Street, the thoughts of Paul E. Singer are some of the most revered. In his latest confidential letter to clients, Mr. Singer, the founder of Elliott Management, a $14 billion hedge fund firm, shares his views on a wide range of topics from the auto industry bailouts to new financial regulation:
CNNMoney.com:
- The National Automobile Dealers Association is urging the federal government to begin shutting down the Cash for Clunkers program immediately.
Politico:
- Passing a Democratic-only overhaul plan is getting a serious look from a beleaguered White House - but for President Barack Obama, corralling his own fractious party to pass health legislation will be a lot harder than it sounds. Aides to Obama made clear Wednesday that they will move ahead with health care legislation in the fall with or without Republican support - though later in the day, seemed to soften on that stance a bit and leave open room for negotiations for Republicans. No matter which way they go, the White House and congressional Democrats face long odds, and no guarantee of a bill at the end of the process.
MSN:
- A commodity investment unit of Deutsche Bank and another fund group have been stripped of their exemption from speculative limits in key agricultural futures including corn and wheat. The move by the Commodity Futures Trading Commission reflects the US regulator's growing skepticism towards commodity index investing and its concerns over the role of speculators in raw material markets. Both the Deutsche Bank unit that operates two exchange-traded funds holding the agricultural futures contracts and New York-based commodity manager Gresham Investment Management will lose so-called "no-action letters" that let them surpass federal caps on holdings. They were the only two such letters issued in these crop markets. The CFTC has been considering federal limits on traders' positions in US energy futures markets, where the job of setting caps is currently delegated to exchanges. In selected agricultural products the agency already controls limits and exemptions from them. The Senate Permanent Sub-committee on Investigations in a June report concluded commodity index traders artificially pumped up US wheat markets.
Reuters:
- Northrop Grumman Corp (NOC) has hired two investment banks to sell a unit that advises government military agencies in a deal that could fetch up to $2 billion, a source familiar with the matter told Reuters. The defense contractor has hired Goldman Sachs (GS) and Credit Suisse(CS) to shop its TASC unit, said the source, who requested anonymity because the auction is not public yet. The source also said that a sales prospectus for the business had not yet been sent out to potential buyers, but added that private equity firms are expected to bid for the business.
- Limited Brands Inc (LTD) posted a better-than-expected quarterly profit on Wednesday, sending shares of the operator of the Victoria's Secret and Bath & Body Works chains up nearly 3 percent.
- Fidelity Investments' assets under administration increased to $2.9 trillion in the first seven months of the year despite a choppy time for the industry, company President Rodger Lawson said on Wednesday. Total assets under administration rose from $2.6 trillion at the start of the year, and for the year through June 30 Fidelity recorded $74 billion of net inflows into its products and those it sells for other companies, he said. "In spite of all the stresses and strains (of the financial crisis) we are coming out of this strong," Lawson said in a rare interview at the company's headquarters in Boston's financial district.
- U.S. regulators plan to gauge how severe of a hit banks will take from an accounting change that will force them to bring more than $1 trillion of assets back on their books. Next week regulators expect to propose a rule that seeks input on whether banks need more time to build capital cushions against the assets that were once held by off-balance-sheet trusts. Banks will still have to move the assets back on to their books on Jan. 1, 2010, but regulators want feedback on the impact of the accounting change and whether it might be prudent to phase in the risk-weighted capital that must be held against the assets.
- China's Benchmark stock index opened up on Thursday, led by Yangtze Power, after state media said the stock regulator had approved several mutual funds this week in quiet support to the market, which has dropped 20 percent over the past two weeks.
Financial Times:
- A coalition of large US state pension funds has backed the private equity industry's opposition to new rules on takeovers of troubled lenders, saying the plan would have a chilling effect on attempts to revive the country's banking system. The warning by funds from states including New York, New Jersey and Oregon, which manage billions of dollars on behalf of public workers and are big investors in private equity, will strengthen the buy-out industrys lobbying against the proposed measures.
- A hedge fund has made a large bet that natural gas prices will triple by winter just as the price of the commodity slides to a seven-year low. Traders took notice last week when the fund, as yet undisclosed, spent millions for the right to buy US natural gas at $10 (£6.03) per million British thermal units in January and February, up from Wednesday's spot level just above $3 per mBtu. This is the first bullish play I've seen in quite a while, said Raymond Carbone, president of Paramount Options on the New York Mercantile Exchange floor. It caught the eyes of people in the [options] ring.
TimesOnline:
- Colonel Muammar Gaddafi will send his private jet to collect the Lockerbie bomber and take him home to Libya if, as expected, he is released from jail today on compassionate grounds.
Excelsior:
- The Mexican economy has touched bottom and businesses should invest to create jobs, billionaire Carlos Slim said.
South China Morning Post:
- A majority of the building sites in 12 Chinese mainland cities that were sold at exceptionally high prices during the feverish market peak in 2007 remain idle today because the cost of the land has made it difficult for developers to turn a profit, according to a survey.
Late Buy/Sell Recommendations
Citigroup:
- Reiterated Buy on (DE), target $52.
- Reiterated Buy on (GLW), target $20.50.
- Reiterated Buy on (PVH), target $43.
- Reiterated Buy on (SMTC), target raised to $25.
Night Trading
Asian Indices are -.25% to +1.25% on average.
Asia Ex-Japan Inv Grade CDS Index 146.0 +6 basis points.
S&P 500 futures unch.
NASDAQ 100 futures -.03%.
Morning Preview
BNO Breaking Global News of Note
Google Top Stories
Bloomberg Breaking News
Yahoo Most Popular Biz Stories
MarketWatch News Viewer
Asian Financial News
European Financial News
Latin American Financial News
MarketWatch Pre-market Commentary
TradeTheNews Morning Report
Briefing.com In Play
SeekingAlpha Market Currents
Briefing.com Bond Ticker
US AM Market Call
NASDAQ 100 Pre-Market Indicator/Heat Map
Pre-market Stock Quote/Chart
WSJ Intl Markets Performance
Commodity Futures
IBD New America
Economic Preview/Calendar
Earnings Calendar
Conference Calendar
Who̢۪s Speaking?
Upgrades/Downgrades
Politico Headlines
Rasmussen Reports Polling
Earnings of Note
Company/EPS Estimate
- (PDCO)/.37
- (GME)/.28
- (HNZ)/.62
- (SHLD)/.35
- (TECD)/.44
- (HRL)/.53
- (DKS)/.31
- (SSI)/.23
- (TTC)/.49
- (ROST)/.81
- (GPS)/.32
- (CRM)/.15
- (ARO)/.55
- (INTU)/-.12
- (HIBB)/.10
- (BRCD)/.11
- (BKS)/.10
- (FL)/.06
- (PLCE)/-.44
Economic Releases
8:30 am EST
- Initial Jobless Claims for last week are estimated to fall to 550K versus 558K the prior week.
- Continuing Claims are estimated to rise to 6215K versus 6202K prior.
10:00 am EST
- Leading Indicators for July are estimated to rise .7% versus a .7% gain in June.
- Philly Fed. for August is estimated to rise to -2.0 versus -7.5 in July.
- 2Q Mortgage Delinquencies(9.12% in 1Q)
Upcoming Splits
- None of note
Other Potential Market Movers
-
BOTTOM LINE: Asian indices are mostly higher, boosted by financial and commodity shares in the region. I expect US equities to open mixed and to rally into the afternoon, finishing modestly higher. The Portfolio is 100% net long heading into the day. 
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