Monday, January 29, 2007

Morning Market Comment 1/29/2007

First a hearty thanks to JLP over at AllFinancialMatters for the nice words on his very nice blog. We had a nice email exchange over the weekend. I've put his blog on my blog roll because it is an excellent read about all matters financial. He covers the full range of topics such as budgeting, asset allocation, 401K, IRA, cash flow, insurance, financial planning, portfolio management, and other areas in personal finance at:

Stock futures are little changed this morning ahead of a big week of economic data (see last night's "state of play" post for the full calendar) that climaxes with the release of the monthly employment data on Friday. Last month the ADP employment index low balled the November non farm payrolls number and it will be interesting to see if ADP was just a month early, though the economists are expecting a 160k rise in the December payrolls. Today the economic calendar is clear.

Markets are also bracing from the two day Fed meeting which starts tomorrow and completes on Wednesday with the 2:15 rate announcement. Of course, no rate move is expected, but what's said in the statement will be closely looked at. Most Fed watchers expect the Fed will continue to harp on the risks that growth could accelerate inflation.

Early earnings scoreboard features better than expected operating earnings from from both Mattel (MAT) and Verizon (VZ), in-line numbers from Schering Plough (SGP).

There's some wheeling and dealing - a little merger Monday action:

-US Airways (LCC) could lift its bid for Delta by another billion dollars.
-Citigroup is buying Egg Banking from Prudential of Britian for $1.13 bln.
-A deal made in the forest: Abitibi and Bowater merging in a $1bln deal.

No deal this morning for Countrywide (CFC). Friday a rumor popped up by way of that CFC might be a target of BAC. That was amusing. This morning there's chatter that a better suitor for CFC might instead be JPMorgan (JPM). Hardy har har once again. CFC is up 4-cents.

Goldman Sachs reiterated a "sell" on CFC saying a BAC buyout of CFC is unlikely.

Ahead of Google's (GOOG) earnings on Wednesday, OPCO has reiterated a "buy" and lifted its price target from $540 to $550.

The analyst covering GOOG at Citi is really sticking his neck out. Citi is telling clients NOT to expect shares of GOOG to trade up on the Q4 numbers. While the firm has a "buy" on the stock based on future growth expectations, it expects earnings of $2.77 which is below the street consensus of $2.90. hmmm. Citi feels Checkout and YouTube will be the wildcards.

Intel and IBM cross the 45nm barrier. Moore's Law is alive and well:

Matrix USA ups ConocoPhillips (COP) to a "strong buy" saying recent weakness in shares is a buying opportunity. Matrix says COP's intrinsic value is $125 a share. COP is down 42-cents to $64.35 as crude moves lower this morning.

Speaking of crude. The Saudi's are indeed trying to keep crude closer to $50 these days. That's the word from the NY Times (Read about Oil here). Crude is hovering right around the $55 mark this morning. As I mentioned a few weeks ago, the Saudis realize, according to the link, that restraining oil prices acts as a leash on the Iranians. If I can figure this out, anyone can.

Dollar holding steady ahead of the data barrage; gold down $3 as the $640 area comes in for more testing; treasuries drifting a touch higher.

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