Stocks Soaring into Final Hour on Less Financial Sector Pessimism, Short-Covering and Bargin-Hunting

BOTTOM LINE: The Portfolio is higher into the final hour on gains in my Computer longs, Biotech longs, Semi longs, Retail longs and Medical longs. I have not traded today, thus leaving the Portfolio 100% net long. The tone of the market is very bullish as the advance/decline line is substantially higher, every sector is gaining and volume is above average. Investor anxiety is high. Today’s overall market action is very bullish. The VIX is falling 13.2% and is very elevated at 63.04. The ISE Sentiment Index is below average at 124.0 and the total put/call is slightly below average at .75. Finally, the NYSE Arms has been running low most of the day, hitting .31 at its intraday trough, and is currently .45. The Euro Financial Sector Credit Default Swap Index is falling 2.78% today to 113.17 basis points. This index is up from a low of 52.66 on May 5^th, but down from 157.81 on Sept. 16^th. The North American Investment Grade Credit Default Swap Index is down 8.7% to 254.86 basis points. The TED spread is rising .5% to 215 basis points. The TED spread is now down 249 basis points in under six weeks. The 2-year swap spread is up 3.73% to 113.38 basis points. The Libor-OIS spread is falling .9% to 168 basis points. The 10-year TIPS spread, a good gauge of inflation expectations, is rising 22 basis points to .23%, which is down 239 basis points in under five months and at the lowest level since Bloomberg record-keeping began in August 1998. The 10-year TIPS spread bottomed at .65% in October 1998 during the Asian financial crisis and at 1.24% in October 2001 during the technology bubble-bursting meltdown. The 3-month T-Bill is still yielding .01%. Many market-leading stocks are substantially outperforming the major indices today. As well, the 16.2% spike in the (XLF) in response to the (C) news is a huge positive. I am getting a technical sell signal on the VIX Index for the first time in almost five months today, which is also a positive. I haven’t added back to my (GOOG) long yet, but longer-term investors selling around current levels are making a big mistake, in my opinion. The stock has become absurdly cheap given future growth opportunities. I expect Asian equities to play catch-up to US/European stocks tonight, which could provide another boost here in the morning. While we are getting extended very short-term, I still see substantial upside to stocks from current levels by year-end. Nikkei futures indicate an +610 open in Japan and DAX futures indicate a +30 open in Germany tomorrow. I expect US stocks to trade modestly higher into the close from current levels on less financial sector pessimism, diminished forced selling, short-covering, bargain-hunting, technical buying and seasonal strength.

Today's Headlines

Bloomberg:
- Citigroup Inc.(C) received a U.S. government rescue package that shields the bank from losses on toxic assets and injects $20 billion of capital, bolstering the stock after its 60 percent plunge last week. The second-biggest U.S. bank by assets surged more than 70 percent in New York trading after the Treasury, Federal Reserve and Federal Deposit Insurance Corp. announced the aid plan in a joint statement. In return for the cash and guarantees, the government will get $27 billion of preferred shares paying an 8 percent dividend.

- Citigroup Inc.(C) led a decline in the cost of protecting bonds sold by Wall Street banks from default after the U.S. government guaranteed $306 billion of the lender’s troubled mortgages and toxic assets. Credit-default swaps on Citigroup fell 250 basis points to 250, according to Phoenix Partners Group prices as of 10:30 a.m. in New York. Contracts on Goldman Sachs dropped 73 basis points to 311 and Morgan Stanley fell 55 to 463, CMA Datavision prices show. JPMorgan declined 18 to 172, Merrill Lynch slid 18 to 270 and Bank of America Corp. decreased 16 to 178. Credit-default swaps on the Markit CDX North America Investment Grade Index of 125 companies in the U.S. and Canada dropped 14 basis points to 252, according to Phoenix prices.

- The cost of protecting European corporate bonds from default fell, according to traders of credit-default swaps. Contracts on the Markit iTraxx Crossover Index of 50 companies with mostly high-risk, high-yield credit ratings dropped 33 basis points to 880, according to JPMorgan Chase & Co. prices at 7:16 a.m. in London.
- The risk of default on top-rated commercial-mortgage bonds fell after the government said it will guarantee $306 billion of troubled Citigroup Inc. assets. The cost to protect AAA securities backed by commercial mortgages from default on Markit Group’s CMBX credit-default swap index fell 153 basis points to 490 basis points at 12:14 pm in NY, according to a Bank of America Corp. note to clients.

- The ruble may weaken as much as 30% against the central bank’s dollar-euro basket in coming months as the currency undergoes an “inevitable” depreciation, said Eveny Gavrilenkov, Troika Dialog’s chief economist. Moscow-based Troika Dialog is Russia’s oldest investment bank.

- Mark Pervan, a senior commodity strategist at Australia and New Zealand Banking Group Ltd., says oil may fall below $40 in early 2009. (video)

- Crude oil, copper and corn rose as a U.S. rescue of Citigroup Inc. shored up investor confidence and a weaker dollar enhanced the appeal of commodities.

- Treasury Secretary Henry Paulson, less than a week after indicating he would let the Obama administration decide how to use the second half of the $700 billion financial fund, is considering asking for the money. Paulson may ask Congress for the remaining $350 billion from the Troubled Asset Relief Program as he puts together plans to boost consumer credit. Treasury and Federal Reserve officials are working on an effort to buttress the market for securities backed by auto, student and credit-card loans, Paulson said last week. He’s also assembling an office to address mortgage foreclosures.

- Apple Inc.(AAPL) gained the most this month after JPMorgan Chase & Co. lifted its 2009 and 2010 profit estimates for the maker of Macintosh computers and iPhones, saying sales growth for notebook computers is accelerating. Apple’s opportunity to increase its market share in portable computers “warrants increasing attention,” Mark Moskowitz, a San Francisco-based analyst at JPMorgan, wrote in a report distributed to clients today.

- Barack Obama today unveiled an economic team steeped in fighting crises and likely to push for an unprecedented government role in reviving growth and stabilizing the financial system.

- Germany’s DAX gained 426.92, or 10 percent, to 4,554.33, the steepest one-day advance since Oct. 28. DAX futures expiring next month rose 11 percent as of 5:45 p.m. in Frankfurt. The broader HDAX Index climbed 9.9 percent.

Wall Street Journal:

- Two days after Lehman Brothers Holdings Inc. sought bankruptcy protection, an explosive rumor spread that another big Wall Street firm, Morgan Stanley, was on the brink of failure. The chatter on trading desks that Sept. 17 was that Deutsche Bank AG had yanked a $25 billion credit line to the firm. That wasn't true, but it helped trigger a cascade of bearish bets against Morgan Stanley. Chief Executive Officer John Mack complained bitterly that profit-hungry traders were sowing panic.

- With sports fans still getting used to their high-definition television sets, the National Football League is already thinking ahead to the next potential upgrade: 3-D. Next week, a game between the San Diego Chargers and the Oakland Raiders will be broadcast live in 3-D to theaters in Los Angeles, New York and Boston. It is a preliminary step on what is likely a long road to any regular 3-D broadcasts of football games.

- Are you ready for some dot-com? The gridiron match-up for Super Bowl XLIII may still be up in the air, but the ad battle between the country's two leading online job sites is already joined. After sitting it out for the past four years, Monster Worldwide is returning to the Super Bowl. Its Monster.com will be going up against rival CareerBuilder.com, which will air two ads on game day, Feb. 1.

MarketWatch.com:

- Counterparty credit risk in the derivatives market fell sharply Monday after the U.S. government bailed out Citigroup Inc.

NY Times:
- States Flirting With Higher Gas Taxes.

DigiTimes:

- HTC Raises Shipment Forecast for Google Phone. High Tech Computer (HTC) expects cumulative shipments of the T-Mobile G1 to reach one million units by the end of 2008, according to company CEO Peter Chou on November 21. The company also expects to ship three million Touch Diamond models by year's end. Both forecast are higher than the company's original projections.

SmartMoney:

- Finally, Berkshire(BRK/A) Looks Undervalued.

Portfolio.com:

- In the next few months, thousands of hedge funds will go out of business. What the world will look like for the survivors.

TechCrunch:

- Google(GOOG) Relies On Akamai(AKAM) To Stream YouTube Live.

USA Today:

- Agents along the Canada and Mexico borders are using a controversial new machine that can "read" the personal information contained in some government-issued ID cards — such as passports and driver's licenses — as travelers approach a checkpoint.

Reuters:
- Global hedge funds hard hit by the credit crisis are becoming more open to offering lower fees to institutional investors amid diminishing returns and assets under management, investment consultant Watson Wyatt said on Monday.

Financial Times:
- Hedge funds slashed their borrowings at the start of this year amid credit crunch worries but remained geared ahead of the rout of the sector in the autumn, according to figures from the UK’s Financial Services Authority. The half of the hedge fund industry covered by the FSA’s biannual survey of hedge funds serviced by prime brokers in London cut borrowings from $754bn in October last year, when they were 1.92 times geared, to $375bn, or 1.45 times, by April, the data show. Since then the industry has cut its leverage to virtually nothing as wild market swings left funds nursing the biggest losses on record, prime brokers say. However, it could be good news for stock markets - battered by hedge funds deleveraging, selling shares to pay off debt - as it suggests there is little more to come. Research by Goldman Sachs last week estimated that hedge funds owned 3.5% of US equities at the end of September, down from 4.5% in June.

- Insight: The bear’s about to roar. By Barton Biggs. Before we all are swept away into total despair, let's take a step back and imagine what could get stocks around the world going up for a while. First, let me point out that by definition the bottom of a bear market has to be the point of maximum bearishness. Thus sentiment becomes a crucial indicator. The systematic work that we do on measuring sentiment (and we monitor about twenty indicators for the US and a dozen or so for other equity markets) show very extreme and in many cases record levels of bearishness. I've never seen capitulation and despair like this. We must be pretty close to maximum bearishness. The 4 per cent dividend return on the S&P 500 exceeds the yield on the ten and thirty year Treasury bonds for the first time in fifty years. History shows that even in enduring, secular bear markets there are not just 20 per cent bounces but usually one 30 to 50 per cent rally. We should be due. In the US average hourly earnings are rising at a 3 per cent annual rate and the CPI is probably declining at a 5 per cent rate thanks to the fall in gasoline, fuel, and food prices, so real average hourly earnings are rising at an 8 per cent pace. The savings rate is rising. The sharp collapse in the price of oil while hurtful to parts of the world, is very beneficial to the US, Europe, and Asia. Hedge fund redemptions are substantial and will continue into next year, but hedge fund liquidity is at a record high and hedge funds' gross exposure and net long is at a record low. Conversely investor liquidity is at a record high. All good contrary indicators. I have no idea when the next bull market starts, but I do think we are setting up for the mother of all bear market rallies.

Guardian:
- The UK coal industry may grow at its fastest pace in 40 years, citing freedom-of-information requests and council records. In the past 18 months, 14 companies have applied to mine nearly 60 million metric tons of coal at 58 new or expanded opencast mines. At least six coal-fired power plants are planned, it said. Expansion is being driven by coal prices that have quadrupled in two years.

Intereconomia Radio:

- European Central Bank Executive Board member Joese Manuel Gonzalez-Paramo said the bank may lower borrowing costs next week.

Die Welt:

- Chancellor Angela Merkel faces growing pressure from members of her Christian Democratic Union Party to reduce taxes to spur the economy. Government spending should be cut 5% across the board to pay for tax cuts, the party says.

National:
- The average hotel room rates in Dubai have fallen as much as 30% as consumers cut leisure spending amid the global economic slowdown, citing Sharaf Travel Holidays. Four-and five-star hotels in the emirate have cut room rates from 10% to 30%, Aloke Dey, the manager of Sharaf said.

Sarmayeh:

- Iran’s annual inflation may accelerate to 50% if a plan to introduce cash payments for the poor is implemented, citing the head of the Iranian Parliament’s Strategic Research Center. Iran’s inflation accelerated to an annual 29.4% in September.

Bear Radar

Style Underperformer:
Small-cap Value (+4.26%)

Sector Underperformers:
Utilities (+.46%), Tobacco (+1.46%) and Foods (+1.75%)

Stocks Falling on Unusual Volume:
PSYS and CASY

Stocks With Unusual Put Option Activity:
1) GCI 2) LAMR 3) ROST 4) DUK 5) NBR

Bull Radar

Style Outperformer:
Large-cap Value (+4.05%)

Sector Outperformers:
I-Banks (+12.10%), Banks (+11.54%) and Homebuilding (+10.44%)

Stocks Rising on Unusual Volume:
BAC, BBL, OMRI, HUGH, CBRL, CASY, LFUS, AXYS, BWLD, GPRO, OYOG, CHCO, HMSY, LIHR, MSCC, SPWRA, SCHS, SHLM, TECD, CETV, AMSC, PTRY, ALO, IGN, DEG, NYC, TPP, IYR, IX, KIE, IT, RDS/A, CHU, WBD and NY

Stocks With Unusual Call Option Activity:
1) ITU 2) WMI 3) HL 4) AIG 5) NUE

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Monday Watch

Weekend Headlines
Bloomberg:

- Congress will send President-elect Barack Obama an economic stimulus package the day he takes office Jan. 20, two Democratic lawmakers said today. Senator Charles Schumer of New York said on ABC’s “This Week” program that the package will be between five and $700 billion. House Majority Leader Steny Hoyer, of Maryland, said on “Fox News Sunday” that he believed the Inauguration Day goal would be met, but he declined to put a price tag on the bill.

- Citigroup Inc.(C) and U.S. regulators are in talks to limit the bank’s potential losses on more than $100 billion of toxic assets after the stock’s plunge last week sparked concerns about the company’s fate, four people familiar with the matter said. The Federal Reserve and Treasury Department were locked in discussions with Citigroup and other regulators throughout the weekend and a deal may be reached as soon as today, according to the people, who declined to be identified because the negotiations are confidential. The assets would remain at Citigroup, with the government agreeing to assume losses beyond a specified amount, two of the people said.

- A purchase of Citigroup Inc.(C) would “significantly” add to Goldman Sachs Group Inc. or Morgan Stanley’s earnings as long as the U.S. government absorbed losses on the embattled bank’s assets, according CreditSights Inc. Buying Citigroup “would be significantly accretive to Goldman and Morgan Stanley’s earnings as the potential buyer would be acquiring a significant future earnings stream for a relatively low price,” David Hendler, an analyst at CreditSights in New York, wrote in a report yesterday. The buyer “would probably receive government support if it was needed.”

- General Motors Corp.(GM), in danger of running out of cash this year, will seek to negotiate a cut in debt levels and new union work rules to help boost its chances of winning federal loans, people familiar with the plan said. The largest U.S. automaker also may ask to delay a $7 billion payment to a union retiree health fund, drop more brands and rework an accord with GMAC LLC to prove it can survive and repay the government, said the people, who asked not to be named because the details haven’t been presented to Congress.

- Hollywood’s largest actors union plans to seek strike authorization from its members after a breakdown of federally mediated talks with film and television studios. Two days of meetings, with the last one ending earlier today, failed to produce an agreement, the Screen Actors Guild and the Alliance of Motion Picture and Television Producers said in separate, e-mailed statements. A strike would idle most production at major studios for a second time in a year and put thousands of writers and support staff out of work. Hollywood was shut for three months after members of the Writers Guild of America walked off their jobs last November.

- Mexican President Felipe Calderon warned Barack Obama against trying to renegotiate the North American Free Trade Agreement, saying restricting commerce would only encourage illegal Mexican emigration to the U.S. ``The day access is closed, workers will jump over whatever river or wall you put there,'' Calderon told business leaders today at the Asia-Pacific Economic Cooperation forum in Lima, Peru, where leaders of 21 nations are meeting.

- The average price of regular gasoline at U.S. filling stations fell to $1.97 a gallon as demand declined in a slumping economy. Gasoline slipped 33 cents, or 14 percent, in the two weeks ended Nov. 21, according to oil analyst Trilby Lundberg’s survey of 7,000 filling stations nationwide.

- General Motors Corp.(GM), under pressure after Congress delayed action on automaker aid, is idling four plants for an additional week, extending the shutdown of an engineering center and returning some corporate jets.

- Amlak Finance PJSC and Tamweel PJSC, Dubai’s two-largest mortgage lenders, will be taken over by a government-owned bank as the global financial crisis squeezed their access to credit and slowed the regional property market.

- Iran, OPEC’s second-largest crude producer, can survive even with oil prices at $8 or $5 a barrel, President Mahmoud Ahmadinejad said. Iran’s Central Bank warned earlier this month that the country will face with “big trouble” should oil price falls below $60.60 a barrel. Iran will deplete its oil stabilization fund within five months if oil drops to $60 a barrel, the bank said. Ahmadinejad has been criticized by local economists and analysts for tapping the fund to pay for the government’s expansion programs and for failing to decreased the country’s dependence on oil revenue.

- Leaders of Pacific Rim nations promised to ``act quickly and decisively'' to resolve the global economic crisis even as they failed to offer specific steps they'll take to address it. Heads of state from the 21-nation Asia-Pacific Economic Cooperation group, which includes the U.S., China and Japan, said they support a ``prompt'' conclusion of the Doha Round of global trade talks. The leaders issued their comments following a two- day summit in Lima.

- A U.S.-triggered spate of global carmaker-bailout proposals may spark trade disputes over whether the Americans are unfairly trying to subsidize their industry or just making up for state aid that foreign rivals already enjoy. As the U.S. considers a lifeline for its auto companies, officials in Europe, Canada and Asia are considering their own aid packages -- even as the European Union threatens to lodge a complaint against any U.S. bailout to protect manufacturers from Renault SA in France to Fiat SpA in Italy. China also may complain, though the government is considering helping SAIC Motor Corp. and Guangzhou Automobile Group Co. Any World Trade Organization complaints may open a Pandora’s Box, bringing to a head a long-simmering dispute over policies that U.S.-based General Motors Corp., Ford Motor Co. and Chrysler LLC say unfairly aid rivals, including state-financed health-care and retirement benefits, and currency policies.

- Asian currencies fell this week, led by Indonesia's rupiah, as investors flee emerging markets to avoid risk from a deepening global economic slump. Nine of the 10 most-active currencies in Asia dropped this week as the MSCI Asia Pacific Index slumped 6.9 percent, the worst since the five-day period ended Oct. 24. The rupiah fell to a decade low after Bank Indonesia Governor Boediono said the deposit guarantee agency will take over the operations of PT Bank Century, Indonesia's 13th-biggest bank by market value, to provide more security for customers.

- Vaccines against rotavirus, the main cause of severe diarrhea in preschoolers, may win recommendation for global use by the World Health Organization, potentially boosting sales for producers Merck & Co.(MRK) and GlaxoSmithKline Plc.(GSK).

- Cnooc Ltd., China's top offshore oil producer, and its partners may spend about 200 billion yuan ($29 billion) to develop fuel deposits in the South China Sea in the nation's biggest push to tap reserves off the country's coast.

- President-elect Barack Obama will name Lawrence Summers to head the National Economic Council, one of the three top economic jobs in the new administration, a Democratic aide said.

- The cost of protecting Australian and Asian bonds from default fell after U.S. stocks rallied following President-elect Barack Obama’s selection of New York Federal Reserve Bank chief Timothy Geithner to head the Treasury. The Markit iTraxx Australia index of credit-default swaps declined 30 basis points to 325 at 11:30 a.m. in Sydney, ABN Amro Holding NV prices show. The Markit iTraxx Asia index of 50 investment-grade borrowers outside Japan, including the Thai government and Hutchison Whampoa Ltd., declined 15 basis points to 400 today while the region’s benchmark for high-yield borrowers was last quoted at 1,225 basis points, Barclays Capital prices show.

Wall Street Journal:

- In 2006, Lawrence Summers resigned as president of Harvard University and took a position as a part-time managing director with D.E. Shaw Group, a New York hedge fund with a reputation as one of the most secretive trading outfits in the world. D.E. Shaw is known for using sophisticated computer-based quantitative strategies to make money on fleeting movements in the stock and bond markets.

- Timothy Geithner devoted much of his five-year tenure at the Federal Reserve to pinpointing potential risks to the nation's sprawling financial system. His approach was methodical and cautious, searching for a middle ground between Wall Street's needs and the public interest.

- Fed Has More Ammunition After Firing Rate-Cut Bullets.

MarketWatch.com:

- Members of the board of directors at General Motors Corp. may be at odds with the ailing automaker's top executive in their willingness to consider all options, even bankruptcy, according to a published report.

CNBC.com:
- The U.S. government will make an equity infusion of between $10 to $20 billion into Citigroup, Capitol Hill sources close to the ongoing negotiations tell CNBC. The Citigroup(C) infusion plan is provisional and subject to change. The plan will probably be a multi-layered one, which means the government could backstop losses on Citigroup's troubled assets as well. In exchange, Citi may issue preferred stock to the government Sources add that other actions are "not off the table", meaning that even the government plan of buying the troubled assets could be revived.

NY Times:

- Former Disney(DIS) Chief Eisner Crafting Internet Programs.

NY Post:
- Buffet’s Liquidity Is Pinched. Oracle of Omaha’s Bet On S&P Feeling Pressure.

- There they were last week, five noted hedge-fund traders getting sworn in and giving testimony before Congress. Phil Falcone, Ken Griffin, John Paulson, James Simons and George Soros, no strangers to earning $1 billion a year by successfully shorting companies their research showed were over-leveraged or otherwise poised to fall, defended their shorting of stocks. Missing from this lineup was Jim Chanos, whose $7 billion Kynikos Associates is enjoying a better 2008 than any of the less-fab five. Chanos, readers of The Post learned last week, has posted a 53.2 percent increase through Oct. 31 for his $5 billion short-only Ursus fund.

Forbes.com:

- China joins other Asian nations that are feeling the growing fiscal pressure of paying subsidies. China is readying the introduction of a fuel tax, replacing the price controls it now imposed on refined petroleum products such as gasoline and diesel.

The Star-Ledger:

- After making millions selling New Jersey bonds to investors, Wall Street giant Goldman Sachs(GS) told other wealthy clients they could profit by betting the Garden State may not be able to pay off its bonds as scheduled, according to a confidential presentation made two months ago. The advice would cost state taxpayers if investors believe New Jersey bonds appear riskier than they actually are -- and force the state to pay higher interest rates on future bonds. While not illegal, it is troubling Goldman Sachs almost simultaneously marketed New Jersey bonds to one set of investors, while suggesting to others they would be smart to buy insurance from the investment bank because those bonds may not be repaid, according to Geoffrey M. Heal, professor of public policy and business responsibility at Columbia University. "That's not a good way to do business," he said. "They've got a conflict of interest and they're acting against the interest of their customers. Goldman's strategy of "shorting municipal credit," or essentially betting the state bonds would decline in value, was outlined in a 58-page report obtained by ProPublica, a New York-based nonprofit group specializing in investigative reporting.

- Managers of New Jersey's embattled pension fund, criticized by lawmakers for bailing out a struggling BlackRock(BLK) hedge fund in October, secretly gave two other hedge funds the same deal, records from the state investment council show. The Canyon Special Opportunities Fund and GoldenTree Credit Opportunities Fund were each awarded $49.5 million in state funds on the same day the controversial $49.5 million bailout of a BlackRock Inc. fund took place, according to a memo released by the investment council this week. The cash infusions were a shade below the $50 million threshold that triggers public scrutiny. The pension fund, which started the year worth $81.3 billion, has lost $23 billion in value so far this year amid the collapsing stock and credit markets. Declines, unless recouped in the future, must be made up in taxpayer payments into the pension system, which bankrolls retirement benefits for 700,000 public workers and teachers.

USA Today:

- Monday, Virgin America plans to become the latest airline to offer in-flight Wi-Fi Internet, a service with a problematic past that still promises far-ranging flexibility in entertainment.

Financial Times:

- Democratic officials made clear on Sunday that the cost of Barack Obama's economic rescue plan would run into hundreds of billions of dollars and hinted he was prepared to hold off introducing new taxes for his first two years as president.

O Estado de S. Paulo:

- Brazilian vehicle sales fell 20% in the first 20 days of November from a year earlier, prompting carmakers to intensify promotions.

Telegraph:

- Bankers are the new pantomime villains. Forget wicked stepmothers and ugly sisters, bankers are the pantomime villains this Christmas. Writers are capitalising on the rock-bottom reputation of bankers following the credit crisis and portraying them as leading pantomime baddies.

- Citigroup(C) is understood to have approached its existing sovereign wealth fund shareholders from the Middle East and Asia to gauge their appetite for buying additional stakes in the bank. The discussions, which are being held alongside negotiations with officials from the US Treasury and the New York Federal Reserve, follow a collapse in Citigroup's share price last week.

The Chronicle Herald:

- Global slowdown saps promise of emerging auto markets. Smoke and flashing lights, dancing girls in white go-go boots — the world’s top automakers put on dazzling shows as they wooed Chinese buyers with their latest models. But for all the flash at this year’s Guangzhou Auto Show, automakers face a dimmer outlook for global sales, even here in the world’s second-largest vehicle market. Just as GM and other manufacturers are desperately looking to emerging markets to compensate for falling sales in the U.S., Europe and Japan, potential car buyers in China, Russia and other once sizzling markets are pulling back.

The Peninsula:

- Qatari Real-Estate Prices Drop Almost 50%. Real estate prices have fallen by almost 50 percent in the suburbs of Doha, reviving hopes of a downslide in the rental market, property market operators said yesterday. The global financial crisis has put sudden brakes to the real estate boom in the country. While land prices have fallen by almost 30 percent in Doha city limits this month alone, the rates in the suburbs have been declining faster.

Gulfnews.com:

- Atlantis slashes room rates as visitors stay away. Dubai: Business at Atlantis, the $1.5 billion (Dh5.5 billion) hotel on the Palm Jumeirah is slow, with room rates slashed dramatically and occupancy low. Despite the grand opening of the resort on Thursday night, which saw stars and celebrities descend on the Palm, causing actual residents difficulty accessing their own homes, business is not so impressive.

Weekend Recommendations
Barron's:
- Made positive comments on (ESRX), (BRK/A), (YHOO), (PLXS), (URS) and (TEVA).

- Made negative comments on (NFP).

Night Trading
Asian indices are -1.0% to -.25% on avg.
S&P 500 futures +.43%.
NASDAQ 100 futures +.18%.

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Earnings of Note
Company/Estimate
- (CPB)/.76

- (CBRL)/.52

- (ADI)/.44

- (HPQ)/1.00

- (ATW)/1.13

- (DCI)/.54

- (NUAN)/.25

Upcoming Splits

- None of note

Economic Releases

10:00 am EST

- Existing Home Sales for October are estimated to fall to 5.0M versus 5.18M in September.

Other Potential Market Movers
- The (KMT) analyst meeting could also impact trading today.

BOTTOM LINE: Asian indices are mostly lower, weighed down by insurance and financial shares in the region. I expect US stocks to open modestly lower and to rally into the afternoon, finishing higher. The Portfolio is 100% net long heading into the week.