November 10, 2009: Morning Call

November 10, 2009: Morning Call

Fair Value: SP500 – 1090.92; NDX: 1766.35; DOW: 10193.82

Technical Levels:

SPX: 875-880, 910, 953, 986, 1003, 1039-1044 support/1081, 1110 resistance

5-Day Outlook:

Today: Bank of America Financial Conference – GS, BAC, STT, COF, AXP, MS, BK among the companies presenting. RW Baird Industrial Conference (ETN, PH, CAT, SWK, ITW among the companies presenting. MON analyst day. 3 Fed officials (Lockhart, Yellon, Rosengren) speak on the US economic outlook. Tuesday night: Chinese Economic Data releases: PPI, CPI, Retail Sales, Industrial Production.

Wednesday: UK Unemployment, Bank of America Banking Conference, TOL Q4 Guidance at 2pm ET.

Thursday: Euro-zone Industrial Production, WMT earnings, Initial Jobless Claims,

Friday: Euro-zone GDP, US Trade Balance, University of Michigan Confidence, Fed’s Evans speaks on asset-price bubbles.

Monday: Euro-zone CPI, US Retail Sales, Empire Manufacturing, Business Inventories

Notable Earnings: Tuesday Pre-market: BZH. Tuesday Post-Close: AONE. Wednesday Pre-market: M. Wednesday Post-Close: AMAT. Thursday Pre-market: WMT, KSS, ECA. Thursday Post-Close: JWN, DIS. Friday Pre-market: ANF, A, JCP. Monday Pre-Market: LOW

Detailed Daily Calendar of Events:

Pre-market EPS: ARM (-.31/1.0B); BZH (-1.24/338M); JASO (.03/136M); TYC(.54/4.3B)
02:00: AEM presents at Thomas Weisel Conference
05:00: Euro-zone ZEW Economic Sentiment Survey (Nov): 58 (weaker at 51.8)
08:00: BAC presents at Bank of America banking conference
08:50: GS presents at Bank of America banking conference
09:15: Fed’s Lockhart to speak on the US Economic Outlook
10:00: Fed’s Yellon speaks on the US Economic Outlook
10:30: COF presents at Bank of America banking conference
11:15: Fed’s Rosengren speaks on the US economy
12:10: AXP presents at Bank of America banking conference
13:30: FSYS presents at Thomas Weisel conference
13:45: MS presents at Bank of America banking conference
14:30: MON Investor Meeting
14:35: BK presents at Bank of America banking conference
14:55: CAT presents at Robert Baird Conference
16:15: NYX presents at Bank of America banking conference
16:30: API Crude Oil and Gasoline Inventories
16:30: TSO Analyst and Investor Conference
17:00: ABC Consumer Confidence
19:30: Fed’s Fisher speaks on the US economic outlook
21:00: Chinese Producer Price Index (Oct): -5.2% YoY
21:00: Chinese Consumer Price Index (Oct): -0.4% YoY
21:00: Chinese Retail Sales (Oct): 15.7% YoY
21:00: Chinese Industrial Production (Oct): 15.2% YoY
Post-market EPS: AONE (-.36/19.2M); PAAS (.21/116M); WTW (.64/318M)

Foreign Market Summary/Key Macro News/Commentary:

The S&P futures are trading 2 below fair value and the NASDAQ futures are trading 4 below fair value in very light overnight trading. European markets are flat after fluctuating on either side of unchanged for the early morning session. Earnings met with a mixed response as HSBC (HSBA.LN), Schroders (SDR.LN) and Imperial Tobacco (IMT.LN) rising whilst Barclays (BARC.LN), Trygvesta (TRYG.DC) and Vodafone (VOD.LN) fell. Euro-zone and German sentiment surveys came in weaker than expected, as did the French Industrial production number. Asian markets closed higher but many weakened into the close (India moved down 200 points from the opening session highs). A weaker US dollar pushed commodities prices and their associated stocks higher. Axa Asia Pacific (AXA.AU) rose again in the wake of rejecting a takeover bid yesterday and AMP (AMP.AU) rose on speculation it might become a takeover target. Trading firms rose in Japan with banks also up after the banking minister suggested the country might not strictly enforce capital requirements.

Research Calls/Market Moving News:

PCLN (173.73): priceline.com reports Q3 pro-forma EPS $3.45 vs Reuters $2.92:
Company reports revenues of $730.7M vs Reuters $699.9M. priceline.com reports Q3 gross bookings $2.72B vs StreetAccount consensus $2.56B: Represents y/y growth of +32.8% vs guidance for +20-26%. Q4 guidance: Gross bookings growth +30-40% vs SA +32%. International +50-60% vs SA +39% (local currency +37-46%). Domestic +15% vs SA +21%. PCLN shares are up 7%.

AIG (36.18): American International Group may be able to pay back Fed loan, says Moody's: Moody's says that AIG will be able to repay its credit line from the Federal reserve and "much or all" of Treasury's investment should financial markets stabilize. AIG shares are up 7.5%.

HMIN (32.89): HMIN Q3 profit .40 cents vs. street at .24 cents. Sales of 106 million exceeded consensus of 94.7 million. Guides revenues to between 98.9-101.8 million. Street at 89.4 million. Shares are indicated up 11% on tiny volume.

HBC (58.30): HBC up 4.5% after the company releases their Q3 interim management statement: Profitability for the first nine months of 2009 was stronger than expectations at the start of the year, as positive trends experienced in H1 continued into Q3. Year to date pre-tax profit was ahead of the comparable period in 2008 on an underlying basis, excluding movements in fair value on the company's own debt related to credit spreads. In the US consumer finance run-off portfolio, loan impairment allowances declined in the quarter.

BCS (23.17): BCS is trading down 3.5% following its Q3 interim management statement. The company reports it has maintained strong income momentum in Q3, particularly in Barclays Capital and across the international activities of GRCB, enabling the company to achieve consistent profitability across the first three quarters of 2009. Guides impairment for the full year currently expected to be around the bottom end of the previously referenced 2009 consensus range of £9.0-9.6B.

JASO (4.12): JA Solar reports Q3 EPADS $0.10 unclear if comparable to Reuters Reuters $0.03: Company reports revenues of $193.0M vs Reuters $137.2M. Q3 shipments: 177MW. Gross margin: 16.7% vs 11.4% seq. Mgmt expects Q4 shipments of 170-200MW. JASO shares are up 4.5%.

FLR (48.01): Fluor (FLR) reports Q3 EPS $0.89 vs Reuters $0.90, guides FY EPS to $3.75-3.90 vs prior $3.80-4.10 and Reuters $3.86. FLR is trading down 6%.

AAPL (201.46); GOOG (562.51): WSJ looks at the cooperation between Google and Verizon Wireless to take on the iPhone: Before the Droid, neither company had worked closely with the other before but now there is a growing friendship between the CEOs of the 2 companies. The largest marketing campaign in Verizon Wireless's history is backing the Droid. Argues that the deal that created the Droid was essentially the result of the growing friendship between the CEOs and that things like Verizon Wireless going with Microsoft for its phone search did not derail the deal because of the friendship.

ENER (10.93): Energy Conversion downgraded to sell from hold at Citi: Target cut to $7 from $12

WYNN (63.54); LVS (16.79): Water rationing may begin in Macau this weekend - London Times: Casino operators have not been told what to do. A drought has exacerbated what the article terms "years of mismanagement" at reservoirs that Macau relies on just across the Chinese border in Zhuhai.