BETWEEN THE HEDGES

Monday, January 28, 2008

Tuesday Watch

Posted by Gary .....at 11:47 PM

Late-Night Headlines
Bloomberg:
- VMware Inc.(VMW) said fourth-quarter profit more than doubled. Sales missed analysts’ estimates, sending the shares down 24% in late trading.
- California Governor Arnold Schwarzenegger’s $15 billion plan to provide health insurance for everyone in the most populous US state was rejected by a Senate committee on concerns it would cost too much.

Wall Street Journal:
- Bush’s Aim Is to Reassure a Worried Country.
- Liberty Media Corp., the media company controlled by billionaire John Malone, is trying to force Barry Diller out of IAC/InteractiveCorp.

NY Times:
- The credibility of Societe Generale’s management came under fresh scrutiny Monday after Jerome Kerviel told French prosecutors that his fictitious trading started as far back as 2005 – a year earlier than the bank had acknowledged.
- Edward S. Lampert has a new strategy for Sears(SHLD): less Edward S. Lampert.
- Good News in the 1 Million Missing iPhones.

BusinessWeek.com:
- Cisco Systems(CSCO) revealed a major offensive today in its ongoing assault on the data center market.
- Top Tech Trends in ’08.
- Broadband’s Growing ‘Need for Speed’

CNNMoney.com:
- Bush hammers home on economy. Bush lobbies for enactment of $150 billion stimulus plan ‘as soon as possible’ and calls for permanent extension of tax cuts.

Forbes.com:
- America’s Richest Counties.
- iPhone Apps In The Works.

Reuters:
- US Treasury Assistant Secretary Anthony Ryan said on Monday there were signs that market liquidity was starting to return but it won’t happen overnight and requires greater investor caution in future.
- JPMorgan(JPM) disclosed on Monday that it has raised its stake in bond insurer AMBAC Financial Group(ABK) to 7.7% from 5.4%.

Financial Times:
- Efforts to shore up US bond insurers gathered pace yesterday as NY state regulators appointed investment bankers to advise on a rescue plan that could include back-up credit lines for the troubled guarantors.

TimesOnline:
- Hedge funds worldwide are heading for their worst monthly performance in almost ten years amid signs that the credit crunch is claiming fresh victims across the investment markets.
- India’s love affair with gold is waning as high prices deter casual buyers in the world’s largest gold importer and savvy housewives try to sell their spare jewelry to capitalize on rocketing prices.

Late Buy/Sell Recommendations
Citigroup:
- Reiterated Buy on (CBG), target lowered to $31.
- Downgraded (DIS) to Sell, target $26.
- Reiterated Buy on (ACV), target raised to $30.
- Reiterated Buy on (MCD), target lowered to $64.
- Raised (GASS) to Buy, target $20.
- Reiterated Buy on (VZ), target $45.

Night Trading
Asian Indices are +.25% to +2.0% on average.
S&P 500 futures -.04%.
NASDAQ 100 futures -.44%.

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
Upgrades/Downgrades
Rasmussen Business/Economy Polling
CNBC Guest Schedule

Earnings of Note
Company/EPS Estimate
- (NNDS)/.61
- (X)/2.22
- (CAH)/.88
- (LLY)/.89
- (COCO)/.10
- (DOW)/.80
- (ENR)/2.21
- (OXY)/1.69
- (TRV)/1.61
- (UIS)/.14
- (CNX)/.34
- (LXK)/.56
- (VLO)/.59
- (SII)/.88
- (MMM)/1.17
- (PII)/1.04
- (CFC)/-.28
- (BNI)/1.39
- (SHW)/.85
- (ALL)/1.34
- (YHOO)/.11
- (CB)/1.47
- (ZMH)/1.04
- (CTX)/-1.06
- (JBHT)/.40
- (EMC)/.22
- (FLEX)/.26
- (PPC)/.38
- (RHI)/.47
- (HTCH)/.35

Upcoming Splits
- (BTJ) 3-for-2
- (KWK) 2-for-1

Economic Releases
8:30 am EST
- Durable Goods Orders for December are estimated to rise 1.6% versus a -.1% decline in November.
- Durables Ex Transports for December are estimated to rise .1% versus a -.8% decline in November.

8:30 am EST
- Consumer Confidence for January is estimated to fall to 87.0 versus a reading of 88.6 in December.

Other Potential Market Movers
- The S&P/CS Home Price Index, weekly retail sales reports, Wachovia Healthcare Conference, Banc of America Gaming Conference and Citigroup Financial Services Conference could also impacting trading today.

BOTTOM LINE: Asian indices are higher, boosted by technology 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 100% net long heading into the day.

Stocks Finish at Session Highs, Despite Overseas Weakness

Posted by Gary .....at 4:47 PM

Evening Review
Market Summary
Today’s Movers
Market Performance Summary
WSJ Data Center
Sector Performance
ETF Performance
Style Performance
Commodity Movers
Market Wrap CNBC Video(bottom right)
S&P 500 Gallery View
Timely Economic Charts
GuruFocus.com
PM Market Call
After-hours Commentary
After-hours Movers
After-hours Stock Quote
In Play

Stocks Higher into Final Hour, Boosted by Financial and Homebuilding Shares

Posted by Gary .....at 3:36 PM

BOTTOM LINE: The Portfolio is higher into the final hour on gains in my Retail longs, Healthcare longs and Medical longs. I covered all of my (IWM)/(QQQQ) hedges and some of my (EEM) short this morning, thus leaving the Portfolio 100% net long. The overall tone of the market is positive as the advance/decline line is higher, most sectors are rising and volume is about average. Investor anxiety is above average. Today’s overall market action is bullish. Considering the outsized losses overseas last night and this morning, today’s action is impressive. Small-caps are especially strong. The only real areas of weakness are the restaurant sector and large-cap growth stock leaders. The rotation into the most heavily-shorted and beaten up sectors remains pronounced. I suspect this will last a bit longer, but is not the beginning of a longer-term trend of outperformance by these groups. The VIX is falling 2.75% today, but remains high at 28.3. Insider buying was brisk again last week. GE, PH, MON, TIE, JCI, T and CHK all saw meaningful insider purchases. I expect US stocks to trade mixed-to-higher into the close from current levels on short-covering and bargain-hunting.