Friday Watch

Late-Night Headlines
Bloomberg:

- U.S. Securities and Exchange Commission Enforcement Director Robert Khuzami said the recent insider-trading cases among hedge funds including Galleon Group LLC reflect “systemic behavior” within the industry. “You have funds whose business model consisted of vigorous attempts to collect information from corporate insiders and to utilize that information to trade,” Khuzami said today at the Bloomberg Washington Summit. Such an approach is “potentially more dangerous” than previous insider-trading cases that reflected “opportunistic” behavior, he said. Aspects of hedge-fund operations are giving the agency’s enforcement division “concern,” Khuzami said, referring to algorithmic trading, dark pools and lack of a corporate culture oriented toward compliance with regulations. Since the arrests were announced, the SEC has seen an “uptick” in individuals coming forward with information on misconduct, Khuzami said, adding that people trading on confidential information “should be worried.” Khuzami, 53, said prosecutors will continue using undercover techniques including informants and front businesses to attract wrongdoing and wiretaps to “ferret out” misconduct. The SEC has endorsed legislation that would let the agency pay whistleblowers for information leading to a case. Khuzami, a former federal prosecutor who joined the agency in March, is reorganizing the division to add front-line investigators, speed inquiries and create specialized units after the agency was faulted for missing Bernard L. Madoff’s Ponzi scheme. He’s also seeking to bolster his attorneys’ powers by gaining greater access to grand-jury evidence and expanding deal-making and cooperation with informants.

- The U.S. budget deficit widened in October from a year earlier, reaching a record for that month, as rising unemployment cut revenue at the start of the first full fiscal year under President Barack Obama. The excess of spending over revenue widened to $176.4 billion last month, compared with a deficit of $155.5 billion in the same month a year earlier, the Treasury Department announced today in Washington in its monthly budget statement. It was a record 13th consecutive shortfall and the fifth-largest monthly gap on record, the department said. Unemployment in the U.S. at a 26-year high of 10.2 percent in October and spending from the $787 billion economic stimulus plan are straining the Treasury’s finances. The government is headed for a second straight year of a deficit exceeding $1 trillion. “We’ve got to see some positive job growth” to stem the revenue losses, said Gary Thayer, macro strategist at Wells Fargo Advisors LLC in St. Louis. “We really need to see the economic recovery become more solid both for businesses and workers.” The budget probably won’t show much improvement during the new fiscal year, Thayer said. Officials have estimated that the country’s legal limit on debt of $12.1 trillion may be reached in December. During the fiscal year that ended Sept. 30, the Treasury reported a record deficit of $1.4 trillion. Spending by the Social Security Administration rose to $65.2 billion last month from $59.2 billion; spending by the Department of Health and Human Services, which administers the Medicare and Medicaid health programs, rose to $85.9 billion from $76.5 billion and spending by the Defense Department rose to $67.8 billion from $66.1 billion, according to the data. The Treasury also spent $175 million last month on the financial rescue plan called the Troubled Asset Relief Program compared with $33.4 billion a year earlier, the budget statement showed.

- More than 111,000 illegal immigrants are serving time in state and local prisons and jails in the U.S., Obama administration officials said today. The figure is based on reports from 95 jurisdictions in 11 states participating in a national program, Secure Communities. The program, which began in October 2008, identified people who were charged with or convicted of murder, kidnapping, rape and burglary, according to the Department of Homeland Security. The federal government has struggled for years to identify imprisoned illegal immigrants, with an eye toward deporting them after they finish their sentences. Immigration officials say they have had difficulty collecting accurate information from such a diffuse system. By providing links to federal fingerprint databases, the government is having more success identifying illegal immigrants, Homeland Security Secretary Janet Napolitano said. “Secure Communities provides our local partners with an effective tool to identify and remove dangerous criminal aliens,” she said in a statement.

- China’s surging asset prices, a dollar “crisis” and oil prices above $100 a barrel are among the “tail risks” that investors face in 2010, said Bank of America Corp.’s chief global equity strategist Michael Hartnett. Rising Chinese equity and real estate markets and the government’s “stubborn refusal” to revalue the yuan could fuel “liquidity-driven speculation” and inflation expectations across emerging markets, Hartnett wrote in a note to clients obtained today. The Shanghai Composite Index has climbed 74 percent this year as record lending and government stimulus spending helped drive the nation’s economic rebound. Tail risks are unpredictable, low probability events that can have a “meaningful impact” on investors portfolios, he said. Other events include a “double-dip” recession, growing protectionism, a debt default in Japan and recoveries in U.S. housing and the American consumer, he wrote.

- China, the world’s largest steelmaker, said it this year rejected requests to build 47 industrial projects worth 200 billion yuan ($29 billion) to curb excessive capacity and pollution. The projects include steel, metals and petrochemical plants, Zhu Xingxiang, director of environment evaluation department at the Ministry of Environmental Protection, said at a press conference in Beijing today. China is aiming to curb excessive investment, fueled by record lending this year, without imposing restrictions that may endanger its economic recovery. Overcapacity is stalling a profit recovery at steelmakers including Baoshan Iron & Steel Co. with benchmark prices falling 18 percent since touching a 10- month high on August 4. “The steel industry is the focus of our supervision,” Zhu said. “There is too much capacity being built without government approval. In the future, we are also tightening approval for hydropower projects as they will damage local biology and fishing.”

- Crude oil fell to the lowest in a month in New York after a report yesterday showed inventories in the U.S., the world’s biggest energy consumer, climbed amid a drop in processing runs. Oil extended yesterday’s 3 percent decline after an Energy Department report showed crude stockpiles rose a more-than- expected 1.76 million barrels last week. Refinery operating rates fell to 79.9 percent of capacity, the lowest in more than a year. Gasoline inventories rose 2.56 million barrels to 210.8 million, more than a forecast drop of 350,000 barrels. “The U.S. numbers were incredibly bearish, especially the gasoline build,” said Clarence Chu, an options trader at Hudson Capital Energy in Singapore. The decline in U.S. processing runs is in line with low rates in other developed countries. Japan’s refiners operated at 71 percent of capacity last week, an industry report said on Nov. 11. The two nations were responsible for about 29 percent of global demand last year, according to data from BP Plc. “Demand is just so anemic and the crack is so bad,” said Anthony Nunan, an assistant general manager for risk management at Mitsubishi Corp in Tokyo. “It behooves refiners to keep runs low to try to support this market.” U.S. fuel consumption dropped 4.3 percent to 18.3 million barrels a day, the lowest since June, according to the Energy Department report. Imports of crude oil increased 6.5 percent to 8.66 million barrels a day, the report showed. Fuel imports dropped 3.3 percent to 2.51 million.

- Petroleo Brasileiro SA, Brazil’s state-controlled oil producer, said additional drilling reinforced estimates that its offshore Tupi field may hold 5 billion to 8 billion barrels of recoverable light oil and natural gas. Tupi, in Brazil’s so-called pre-salt region, was the largest discovery in the Americas since Mexico’s Cantarell in 1976.

- OPEC crude production rose in October to the highest level since January and the group may increase it further at a meeting next month in Angola if oil prices keep gaining, the International Energy Agency said. Production from 11 members excluding Iraq rose by 150,000 barrels a day from September, to 26.48 million barrels a day, as Gulf members allowed more oil to flow to Asia. Compliance with output cuts agreed late last year by the Organization of Petroleum Exporting Countries slipped to 61 percent in October, from 64 percent in September, the Paris-based IEA estimated in its monthly report today. There appears to be a “quasi-consensus” among some OPEC members “that an increase in output targets may be in the offing at the next meeting if prices move significantly above current levels,” the IEA report said. “OPEC members, especially in the Middle East Gulf, are worried that higher oil prices could threaten the global economic recovery and further strain relationships with consuming nations ahead of climate change talks in Copenhagen.”Saudi Arabia, OPEC’s biggest oil producer and de facto leader, produced 8.2 million barrels a day in October, 1.9 percent more than its 8.051 million barrel-a-day target, the IEA said. State-run oil company Saudi Aramco will supply the full quantity of cargoes under long-term contracts to refiners in Asia for the first time in a year next month, a Bloomberg survey of refiners showed this week. “OPEC output could edge higher in the last two months of the year as Nigeria presses ahead with restoring damaged oil infrastructure following the unexpected success so far of the country’s amnesty program for militant groups,” the IEA said in the report.

- “Tens of billions” of dollars have been lost on the bailout of U.S. automobile manufacturers, said Neil Barofsky, the U.S. Troubled Asset Relief Program’s special inspector-general.

- Investment bankers are wielding their political influence to override popular support for legislation to break up lenders’ trading and retail operations, economist John Kay said. “You have a group of politically powerful oligarchs, whom other people hate, but who are entrenched there,” Kay, a visiting professor at the London School of Economics, said in an interview yesterday. “It will require something of a political earthquake” to reduce the bankers’ sway, he said.

- Boehringer Ingelheim GmbH is banking on sex really being all in women’s heads. The German drugmaker is putting the finishing touches on a pill designed to reawaken desire by blunting female inhibitions. Unlike Viagra, which targets the mechanics of sex by boosting blood flow to the penis, this drug works on the brain. The desire drug, the focus of a meeting on sexual disorders in Lyon next week, has the potential to revolutionize sexual medicine much as Pfizer Inc.’s blue pill did a decade ago. That could put family-owned Boehringer at the center of a debate about whether the medicine is a chemical shortcut around a complex dysfunction involving body and mind -- or whether disinterest in sex is a legitimate medical condition.

Wall Street Journal:

- While Qualcomm Inc. (QCOM) issued fiscal-year forecasts that fell short of Wall Street expectations, Chief Financial Officer Bill Keitel said Thursday he is much more confident about the estimates now than a year ago. "Our confidence is substantially higher relative to where we were last year," Keitel told analysts during the company's investor day conference.

- Acorn and the Housing Bubble. All agree that the bursting of the housing bubble caused the financial collapse of 2008. Most agree that the housing bubble started in 1997. Less well understood is that this bubble was the result of government policies that lowered mortgage-lending standards to increase home ownership. One of the key players was the controversial liberal advocacy group, Acorn (Association of Community Organizations for Reform Now). The watershed moment was the 1992 Federal Housing Enterprises Financial Safety and Soundness Act, also known as the GSE Act. To comply with that law's "affordable housing" requirements, Fannie Mae and Freddie Mac would acquire more than $6 trillion of single-family loans over the next 16 years. Congress's goal was to force these two government-sponsored enterprises (GSEs) to purchase loans that had been originated by banks—loans that were made under the pressure of another federal law, the 1977 Community Reinvestment Act (CRA), to increase lending in low- and moderate-income communities.

- When Hewlett-Packard Co. announced the $2.7 billion purchase of 3Com Corp., it let the world know that H-P intends to compete fully with Cisco Systems Inc. in the corporate data center. With its strength in Ethernet, 3Com gives HP a major piece of the pie, but it still needs a few more slices if it wants to be a one-stop-shop for data centers. One such slice it might go after next is application acceleration, said Catharine Trebnick, a senior research analyst with Avian Securities. Application acceleration appliances speed up the delivery of programs from a data center to the people using it, using methods such as balancing the workload across machines. Prior to HP’s announcement yesterday, many analysts speculated publicly traded F5 Networks Inc., a leader in this space, was a likely acquisition target, but most now have soured on that idea. HP’s chief executive, Mark Hurd, “showed his hand” with the purchase of 3Com, Trebnick said. “He doesn’t want to pay a premium.” That makes venture-backed Silver Peak Systems Inc. a good candidate for acquisition, she said. Having raised nearly $60 million in venture capital from investors including Benchmark Capital and Greylock Partners, Silver Peak appliances are built to store redundant information coming across a network, so that much of an application can be delivered locally. Silver Peak is not the only venture-backed company in this space. Here’s a look at some of the others:

- Former bank executives are returning to the battered industry to bid on failed financial institutions, putting them in competition with healthy banks and private-equity firms for the rising number of doomed banks. Wall Street firms such as Goldman Sachs Group Inc. and Deutsche Bank AG are racing to form investment pools that plan to fund acquisitions by the bankers, who hope to leap into the auction process for failing banks led by the Federal Insurance Deposit Corp. One trio of banking veterans who are considering such plans is former J.P. Morgan Chase & Co. Chief Executive William Harrison, former Wachovia Corp. CEO Robert Steele, and Herb Boydstun, former CEO of Hibernia Corp., a regional bank in New Orleans that was sold to Capital One Financial Corp., according to people familiar with the situation. Mssers. Harrison, Steele and Boydstun couldn't be reached for comment.

- Economists in the latest Wall Street Journal survey, on average, expect the Federal Reserve to raise interest rates around September 2010, a politically sensitive time considering midterm elections will be right around the corner and unemployment is forecast to still be over 9.5%. The 52 surveyed economists—not all of whom answer every question—on average expect the unemployment rate to rise to 10.3% by the end of this year from its current 10.2%, and they expect it to stay above 9.5% through 2010. The respondents expect job growth to return over the next 12 months, but the forecast calls for an average of about 50,000 jobs to be added per month over that period. The economy needs to add about 100,000 jobs a month just to keep up with new entrants to the labor force.

- Military prosecutors plan to seek the death penalty for alleged Fort Hood shooter Maj. Nidal Malik Hasan, who was formally charged Thursday with 13 counts of premeditated murder, according to a senior Army officer familiar with the matter. The last execution of an active-duty serviceman took place in 1961. Despite evidence that Maj. Hasan had contact with a radical Muslim cleric, the decision to file the murder charges against him in military court, rather than in a civilian one, reflects the Army's belief that the suspect acted alone and without any assistance from foreign or domestic terror groups. Christopher Grey, a spokesman for the Army's Criminal Investigation Command, said military investigators believe Maj. Hasan was the sole gunman in the assault, which killed 13 people and wounded 43.

- Give the Environmental Protection Agency credit: At least it practices equal opportunity censorship of its employees. Dr. Alan Carlin, a 37-year agency veteran, was muzzled earlier this spring. Dr. Carlin offered a report poking holes in the science underlying the theory of manmade global warming. His superior, Al McGartland, complained the paper did "not help the legal or policy case" for Team Obama's decision to regulate carbon, told him to "move on to other issues," and forbade him from discussing it outside the office. Now come Laurie Williams and Allan Zabel, married, and each with more than 20 years tenure at the EPA. They too are dismayed by Democrats' approach to climate, though for different reasons. Dedicated environmentalists, they created a 10-minute YouTube video arguing Congress's convoluted cap-and-trade bill was a "big lie" that is too weak. They instead propose imposing taxes, lots of them, on fossil fuels.

- Wall Street's mantra is that a weak dollar is a good thing, boosting U.S. exports and, by extension, the economy and employment. But any export surge might not be big enough—or at least come quickly enough—to outweigh the potential downsides of a weaker currency. The question will be front-and-center when the Census Bureau releases September trade data on Friday morning. Economists estimate that the U.S. trade deficit widened to $32 billion.

- White House Counsel Greg Craig is expected to announce as soon as Friday that he plans to depart his post following a rocky tenure, two people familiar with the matter said. Mr. Craig, the top lawyer at the White House and a close aide to President Barack Obama, has helped lead the administration's efforts on several national-security policies that initially enjoyed popular support but have since become liabilities for Mr. Obama. These include the planned closure of the prison for terrorism suspects at Guantanamo Bay, Cuba, and the release of Bush administration-era national-security documents.

Google Voice Blog:

- Today we're pleased to announce we've acquired Gizmo5, a company that provides Internet-based calling software for mobile phones and computers. While we don't have any specific features to announce right now, Gizmo5's engineers will be joining the Google Voice team to continue improving the Google Voice and Gizmo5 experience.

The Business Insider:

- The China bears tell us that stimulus spending there is largely being wasted. This report from Al Jazeera offers startlingly strong support for that proposition: China’s economy is continuing to grow despite the global recession, helped by a massive government stimulus package of $585bn. But doubts remain whether such strong growth can be sustained by public spending alone. Al Jazeera’s Melissa Chan reports from Inner Mongolia, where a whole town built with government money is standing empty. (video)

AP:

- Federal prosecutors took steps Thursday to seize four U.S. mosques and a Fifth Avenue skyscraper owned by a nonprofit Muslim organization long suspected of being secretly controlled by the Iranian government. In what could prove to be one of the biggest counterterrorism seizures in U.S. history, prosecutors filed a civil complaint in federal court against the Alavi Foundation, seeking the forfeiture of more than $500 million in assets. The assets include bank accounts; Islamic centers consisting of schools and mosques in New York City, Maryland, California and Houston; more than 100 acres in Virginia; and a 36-story glass office tower in New York. Confiscating the properties would be a sharp blow against Iran, which has been accused by the U.S. government of bankrolling terrorism and trying to build a nuclear bomb. The action against the Shiite Muslim mosques is sure to inflame relations between the U.S. government and American Muslims, many of whom are fearful of a backlash after last week's Fort Hood shooting rampage, blamed on a Muslim American major. The mosques and the skyscraper will remain open while the forfeiture case works its way through court in what could be a long process. What will happen to them if the government ultimately prevails is unclear. But the government typically sells properties it has seized through forfeiture, and the proceeds are sometimes distributed to crime victims. Prosecutors said the Alavi Foundation managed the office tower on behalf of the Iranian government and, working with a front company known as Assa Corp., illegally funneled millions in rental income to Iran's state-owned Bank Melli. Bank Melli has been accused by a U.S. Treasury official of providing support for Iran's nuclear program, and it is illegal in the United States to do business with the bank. The U.S. has long suspected the foundation was an arm of the Iranian government; a 97-page complaint details involvement in foundation business by several top Iranian officials, including the deputy prime minister and ambassadors to the United Nations. "For two decades, the Alavi Foundation's affairs have been directed by various Iranian officials, including Iranian ambassadors to the United Nations, in violation of a series of American laws," U.S. Attorney Preet Bharara said in a statement. Rents collected from the building help fund the centers and other ventures, such as sending educational literature to imprisoned Muslims in the U.S. The foundation has also invested in dozens of mosques around the country and supported Iranian academics at prominent universities. If federal prosecutors seize the skyscraper, the Alavi Foundation would have almost no way to continue supporting the Islamic centers, which house schools and mosques. That could leave a major void in Shiite communities, and hard feelings toward the FBI, which played a big role in the investigation. The forfeiture action comes at a tense moment in U.S.-Iranian relations, with the two sides at odds over Iran's nuclear program and its arrest of three American hikers.

Reuters:

- John Horseman, regarded as one of the UK's top stockpickers, is to step down from day-to-day management of his hedge funds, which have run up losses in 2009. London-based Horseman Capital Management said Horseman and assistant Mark Driver will stand down as managers of the Global fund and associated portfolios at the end of the year although they would maintain an active role at the firm. The long-short equity fund has made a compound annual return of more than 16 percent since it was set up in early 2001 but has lost 23 percent in the first 10 months of what has proved to be a strong 2009 for the hedge fund industry. "I feel that after almost three decades managing funds for clients it is time to pass on the baton," said 51 year-old Horseman in the statement. "I feel now is the most appropriate time to make way for others." The firm said Russell Clark, assisted by colleague John-Paul Burke, would take over management of the fund, while Clark's Horseman Emerging Market Opportunities fund would be shut.

- The U.S. government is expected to plow ahead with its antitrust case against Intel Corp (INTC) even after losing critical support from the chip maker's main rival Advanced Micro Devices Inc (AMD). AMD and Intel announced on Thursday that they have settled more than a decade of legal wrangling, with Intel agreeing to pay its smaller rival $1.25 billion and AMD withdrawing all regulatory complaints against the world's largest chipmaker.

- The Obama administration should resist any calls to re-regulate or otherwise intervene in airline operations in an attempt to ensure the industry's viability, major U.S. carriers said on Thursday. The comments came as Transportation Secretary Ray LaHood chaired a conference sought by labor unions on the competitiveness of an industry that continues to struggle financially after restructuring earlier this decade. LaHood said the agency would establish an advisory committee to study the matter and formulate recommendations.

Financial Times:

- Clive Capital, the world’s largest commodity hedge fund, is shutting its doors to new investors just two years after its launch as raw materials have regained allure. The London-based fund, which trades commodities ranging from oil to metals and meats, has swelled to $3.5bn in assets since its 2007 launch by former Moore Capital trader Chris Levett. The closure is the latest indication that investors are flocking to commodities on signs of revival in emerging economies, fears of inflation risk and a weak US dollar. “If anything the commodity managers are seeing the flows accelerating,” said Keith Black at Ennis Knupp. Policymakers, particularly in Washington, are concerned that investor flows are inflating oil and other commodities prices, putting the economic recovery at risk.

- Jim Balsillie, co-chief executive of Research in Motion(RIMM), has decided to take the fight to its new rivals in the smart phone market. He brought the Canadian company that makes the highly successful BlackBerry to the San Francisco Bay Area this week, home of rivals Google(GOOG) and Apple(AAPL), for a developer conference with the aim of proving RIM could keep up with its two US rivals in the hottest part of the mobile market. Jim Balsillie: 'We feel very good about our portfolio' “I think close to 50 per cent of the phones sold in the US this year will be smartphones. Not long ago it was 5 to 6 per cent,” he told the Financial Times in an interview. RIM is under attack from Apple’s iPhone and a host of Google-inspired Android devices but Mr Balsillie believes RIM can stay out in front.

- European hedge funds face a more severe crackdown on pay than bankers, according to last-minute changes this week to forthcoming EU regulations for the alternative investment industry. A copy of the latest revision of the EU’s controversial new Alternative Investment Fund Manager directive, dated November 12, obtained by the Financial Times, now includes a three page annexe of provisions restricting remuneration policies. The proposed new rules include restrictions that may prevent fund managers from cross-subsidizing their internal revenue streams. Such a measure would prohibit fund managers from using fees earned from successful parts of their businesses to pay staff working in areas that are not performing so well. New measures also include rules for hedge fund employees to defer up to 60 per cent of their pay over as much as three years. Large hedge funds and private equity firms will meanwhile be required to establish independent remuneration committees. Several of London’s biggest funds said they were consulting legal advisers on the proposals. “Whilst the new proposed remuneration policies look a lot like those that apply to the biggest banks, even medium-sized banks or big broker/dealers are not caught by the details in the way that hedge fund managers will be,” said Rob Moulton, a partner at the London law firm Nabarro Nathanson. “Telling a star hedge fund manager that they will need to defer 60 per cent of their bonus is hardly likely to make them want to stay within the EU in what is quite a mobile industry.”

Guardian:

- A key adviser to Nato forces warned today that Barack Obama risks a Suez-style debacle in Afghanistan if he fails to deploy enough extra troops and opts instead for a messy compromise. David Kilcullen, one of the world's leading authorities on counter-insurgency and an adviser to the British government as well as the US state department, said Obama's delay in reaching a decision over extra troops had been "messy". He said it not only worried US allies but created uncertainty the Taliban could exploit. Speaking in an interview with the Guardian, he compared the president to someone "pontificating" over whether to send enough firefighters into a burning building to put a fire out.

AFP:

- Defense Secretary Robert Gates on Thursday angrily denounced leaks of sensitive details to the media about Afghan war deliberations and the probe into last week's army base shooting. "I have been appalled by the amount of leaking that has been going on," Gates told reporters on route to Oshkosh, Wisconsin, where he was to tour an armored vehicle factory. Responding to a flurry of media reports about troop numbers in AfghanistanTexas military base, the normally reserved Gates said in an unusually feisty tone that it "doesn't serve the country" and was not in the military's interest. He said the leaks were coming from different government sources but some were coming from his own department, adding that if someone was found leaking from the Pentagon "that would probably be a career ender." Details of President Barack Obama's deliberations with top commanders about the deployment of as many as 40,000 troops to Afghanistan have regularly appeared in newspapers in recent weeks.

Late Buy/Sell Recommendations
Citigroup:

- Reiterated Buy on (URBN), boosted estimates, raised target to $39.

- Reiterated Buy on (K), boosted estimates, raised target to $63.

CSFB:

- Rated (FITB) Outperform, target $15.

Night Trading
Asian Indices are -1.0% to +.25% on average.

Asia Ex-Japan Inv Grade CDS Index 110.5 +9.5 basis points.
S&P 500 futures +.06%.
NASDAQ 100 futures +.11%.

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

U.S. Equity Preview

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

Who’s Speaking?
Upgrades/Downgrades

Politico Headlines
Rasmussen Reports Polling

Earnings of Note
Company/EPS Estimate
- (ANF)/.20

- (A)/.23

- (JCP)/.11

- (TK)/-.71

Economic Releases

8:30 am EST

- The Trade Deficit for September is estimated to widen to -$31.8B versus -$30.7B in August.

- The Import Price Index for October is estimated to rise +1.0% versus a +.1% gain in September.

10:00 am EST

- Preliminary Univ. of Mich. Consumer Confidence is estimated to rise to 71.0 versus 70.6 in October.

Upcoming Splits
- None of Note

Other Potential Market Movers
- The Fed’s Evans speaking, Fed’s Dudley speaking, Treasury’s Krueger speaking, Treasury’s Wolin speaking, weekly EIA natural gas inventory report, CSFB Healthcare Conference and the (EL) shareholders meeting could also impact trading today.

BOTTOM LINE: Asian indices are mostly lower, weighed down by financial and commodity shares 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.