THE ECONOMIC MONITOR

24 September 2010

U.S.
Free Edition

INSIDE THE REPORT MARKETS AT A GLANCE

 Stock recommendations and price targets from top
brokerage firms
 Forecasts on Economic Indicators
 Important Events Scheduled on September 27.
Economic Events
 Menthol Report Subcommittee of the Tobacco Products
Scientific Advisory Committee (0900 1300 ET/GMT)
 Sixty-second session of the WHO Regional Committee for
the Americas (Sep. 27 to Oct. 1).
 U.S. stocks notched their fourth week of gains on Friday. The Dow
Jones industrial average gained 197.84 points, or 1.86 percent, to
end at 10860.26.
 The 10-year Treasury note fell 10/32, its yield rising to 2.60
percent from 2.56 percent on Thursday.
 Against the yen, the dollar was unchanged at 84.33 .
 Spot gold hit an all-time high of $1,299.95 an ounce and was bid
at $1,298.30 an ounce at 1416 GMT, against $1,293.50 late in New
York on Thursday.
 U.S. crude oil futures rose sharply on Friday, lifted above $76 a
barrel.

Corporate Events
STOCK INDICES
 Cal-Maine Foods first quarter fiscal 2011 result and Palatin
Technologies will announce fiscal year 2010 fourth quarter INDEX LAST CHNG % CHNG

results DJIA* 10860.26 197.84 1.86

Nasdaq* 2381.22 54.14 2.33

Breaking News S&P 500* 1148.67 23.84 2.12

 New CEO for HSBC DJ Total Stock Market* 11991.77 262.6 2.24

Russell 2000* 671.01 22.17 3.42

 First obstacle cleared in BHP Potash bid
Global Dow* 1953.32 30.69 1.6

 Brazil basks in record Petrobras deal NYSE Composite* 7301.04 159.53 2.23
Nasdaq 100* 2023.84 41.69 2.10
 Ellison says microchip firms could be good fit
DJ Transportation Avg* 4515.01 132.08 3.01
 India, RIM working on glitches in email access: Source S&P 100* 519.34 9.88 1.94

* CLOSING VALUES
 Durable orders rise in August

 Economy still "very tough": Geithner

CURRENCIES

INDEX LAST PRIOR

 Japan suspected of yen intervention
Euro (EUR/USD) 1.3489 1.3319
 US House panel backs China currency bill
U.K. Pound (GBP/USD) 1.5824 1.5676
Japanese Yen (USD/JPY) 84.26 84.33

All prices are at 04:39PM EDT

FUTURES
SETTLE CHANGE

Crude Oil (Oct) 76.59 1.41

Natural Gas (Nov) 4.02 -0.136

Gold (Dec) 1298 1.7

Copper ( Dec) 362.75 3.7
Wheat (Dec) 720 22.75

All prices are at 04:39PM EDT

THE ECONOMIC MONITOR - U.S.
COMPANY NEWS
New CEO for HSBC
HSBC's top management seems shaken after a boardroom row has left
the bank. Stuart Gulliver, the head of investment banking will replace
the existing chief executive Michael Geoghegan, while Finance
Director Douglas Flint is to take over as chairman.
First obstacle cleared in BHP Potash bid
The first regulatory obstacle gets cleared by BHP Billiton in its bid for
Canada's Potash Corp, though still contingent on other regulatory
approvals. The company said it received antitrust clearance from the
U.S. Federal Trade Commission to proceed with its $39 billion hostile
bid for the world's largest fertilizer maker.
Brazil basks in record Petrobras deal
Brazil state oil company Petrobras sold $70 billion in shares at a higher-
than-expected price, a record deal that could make the country one of
the top global energy exporters. The deal is part of Petrobras' $224
billion investment plan over the next five years to exploit the so-called
subsalt area, a reserve discovered off Brazil's southern coast in 2007. It
contains up to 50 billion barrels of difficult-to-extract but high-quality
crude under a thick layer of salt four miles (7 km) beneath the ocean's
surface.
President Luiz Inacio Lula da Silva told a gathering of business leaders
at the Sao Paulo stock exchange that the transaction should provide
billions of dollars for investment that will propel Brazil closer to its
dream of developed-world status.
"God has been very generous with the Brazilian people, who have long
waited for the chance to be as respected in the world as we are today,"
Lula said to cheers and applause.
Ellison says microchip firms could be good fit
Software giant Oracle Corp’s CEO Larry Ellison said the company is
keen to make more acquisitions to bolster its technology. Oracle-
founder Ellison responded to a question from an analyst at an event
that he was more interested in acquiring companies with attractive
technology than companies that provide services, like Accenture. Oracle
reiterated it plans to invest $4 billion on research and development in
fiscal 2011 despite the tepid economy.
India, RIM working on glitches in email access: Source
India and Research in Motion have hit technical snag in their talks on
access to corporate email from blackberry phones. But access to the
messenger services is satisfactory, a government source said on Friday.
"Messenger service is working fine, so far. We are getting manual
reports, we are satisfied," the source said.
Hertz says not to raise offer for Dollar Thrifty
Hertz Global Holdings said it would not raise further its offer for
Dollar Thrifty , a day after rival Avis Budget outbid it again in the
battle for gaining control over the smaller car rental firm. On Thursday,
Avis Budget raised its bid to about $1.51 billion, or $52.71 per share,
based on Avis' last closing price, but refused to include a break-up fee.
In a statement, Hertz said its raised bid earlier this month -- currently
worth about $1.44 billion -- was its "best and final" offer.
ECONOMY NEWS
Durable orders rise in August
The U.S. Commerce Department said that new orders for long-lasting
U.S. manufactured goods excluding transportation rose in August.
Orders excluding transportation rose 2.0 percent after falling by 2.8
percent in July. However, overall orders dropped 1.3 percent, the largest
decline in a year, after a 0.7 percent increase in July. Markets had
expected orders to fall 1.0 percent. Durable goods inventories rose 0.4
percent after increasing 0.6 percent in July. Shipments declined 1.5
percent last month.
Economy still "very tough": Geithner
In a meeting at Hispanic Chamber of Commerce, Treasury Secretary
Timothy Geithner said that America's economy remained "very tough"
and that key sectors such as construction were still struggling. "It is a
very tough economy still," he said.
"Parts of the economy are still very hard ... anyone in construction
knows that," he said in brief remarks.
Gold riding high
Gold rallied to record highs in market on Friday, with spot prices
knocking on the door of $1,300 an ounce due to increase in jobless
claims and weaker-than-expected. December-delivery gold on the
Comex in New York gained 1.4 percent this week at $1,295.20 an
ounce.
Spot gold was at record high of all-time high of $1,298.25 an ounce and
was bid at $1,297.70 an ounce at 0917 GMT.
REGULATORY NEWS
Japan suspected of yen intervention
Market experts raised their doubt on Japan once again as the yen slide
against the dollar this Friday. They suspect that the Japanese authorities
intervened for a second time this month to try to prevent the currency's
strength from worsening a faltering recovery. Traders in Tokyo
reckoned a sharp yen drop was likely due to intervention, though the
fall happened at levels where authorities were not expected to act.
Japan spent an estimated 2 trillion yen ($23 billion) last Wednesday to
combat a rise in the currency to a 15-year high against the dollar.
US House panel backs China currency bill
In a move likely to increase trade tensions with China, as the
congressional panel turned up the pressure on China over the yuan.
The House of Representatives Ways and Means Committee backed
the legislation on a voice vote and cleared the way for the full House to
take it up next week. If the bill gets approved then that would let the
United States slap duties on goods from countries with undervalued
currencies.
Economists believe China enjoys an unfair trade advantage by
undervaluing the yuan against the dollar by as much as 25 percent to
40 percent, hurting U.S. exports and employment.
"We will carefully examine any proposals put forward by Congress, but
we have not taken a position on the legislation," a Treasury spokesman
said after the committee vote.
"China's persistent manipulation is a major distortion in the
international marketplace," Levin, a Democrat, said. China's
undervalued currency "has a major impact on American workers and
therefore American jobs. That's what this is really all about."
THE ECONOMIC MONITOR - U.S.
MARKET BRIEFING
 U.S. stocks notched their fourth week of gains on Friday, as
investors used an increase in business spending to revive the
September rally after three days of losses. The Dow Jones
industrial average gained 197.84 points, or 1.86 percent, to end
at 10860.26. The Standard & Poor's 500 Index climbed 23.84
points, or 2.12 percent, to finish at 1,148.67. The Nasdaq
Composite Index jumped 54.14 points, or 2.33 percent, to close
at 2,381.22. For the week, the Dow was up 2.4 percent, while the
S&P 500 was up 2.1 percent and the Nasdaq was up 2.8 percent.
 U.S. Treasuries fell on Friday as news businesses spent heavily in
August dented bond investors' confidence the Federal Reserve
would need to buy debt to help the economy. The government
said total orders for long-lasting goods fell in August. But what
grabbed attention was what the report said about business
spending: orders excluding non-defense capital goods and
aircraft rose sharply. The 10-year Treasury note fell 10/32, its
yield rising to 2.60 percent from 2.56 percent on Thursday. The
30-year bond fell 26/32, its yield rising to 3.78 percent from 3.74
percent on Thursday.
 The dollar fell against a basket of currencies on Friday to its
lowest level since February as stronger-than-expected data in
Europe and a drop in U.S. durable goods orders hurt demand for
the greenback. The dollar also fell to its lowest in more than a
week against the yen. Earlier it rose on talk Japan had again tried
to weaken its currency. It reversed gains against the yen as
doubts crept in about a new Japanese intervention. Against the
yen, the dollar was unchanged at 84.33 . It fell to 84.12 yen its
lowest since September 15. The euro rose 1.2 percent at
$1.3471 while an index of the dollar against six major currencies,
slid 0.8 percent to 79.281, its lowest level since February.
 Gold rallied to record highs in Europe on Friday, with spot prices
knocking on the door of $1,300 an ounce, as expectations grew
that further quantitative easing may lead to increased volatility
in the currency markets. Spot gold hit an all-time high of
$1,299.95 an ounce and was bid at $1,298.30 an ounce at 1416
GMT, against $1,293.50 late in New York on Thursday. U.S. gold
futures for December delivery hit a record $1,301.60 an ounce
and were later at $1,299.60 an ounce, up $3.30. Silver also
reached its strongest in 30 years at $21.45 an ounce, tracking
gains in gold. Spot gold prices are struggling to take out
resistance at the $1,300 an ounce level, but remain firmly
underpinned by expectations of further weakness in the dollar,
which slipped 1 percent versus the euro on Friday.
 U.S. crude oil futures rose sharply on Friday, lifted above $76 a
barrel by a sliding dollar as investors continued to bet the
Federal Reserve would pump money into the financial system to
support the economy. On the New York Mercantile Exchange,
November crude rose $1.31, or 1.74 percent, to settle at $76.49 a
barrel. It traded from $74.66 to $76.68, the highest intraday price
since the $77.99 struck on Sept. 14. For the week, crude futures
rose $2.83, or 3.84 percent, the biggest percentage rise since
they jumped $2.97, or 3.91 percent, in the week to July 23.
ECONOMIC INDICATOR WATCH (27 SEPT)
National Activity Index (August)
Forecast : N/A Prior : 0.00
Federal Reserve Bank of Chicago will release its National Activity
Index for the month of August at 08:30 EDT. The previous month data
showed that the economic activity rebounded in July. The Chicago Fed
National Activity Index returned to its historical average of zero in July,
up from –0.70 in June. The index’s three-month moving average, CFNAI
-MA3, edged lower to –0.17 in July from –0.12 in June. Production-
related indicators made a contribution of +0.43 to the index in July, up
from –0.16 in June. Total industrial production increased 1.0 percent
in July after edging lower 0.1 percent in June. In addition,
manufacturing production rose 1.1 percent in July after decreasing
0.4 percent in the previous month, and manufacturing capacity
utilization increased to 72.2 percent in July from 71.4 percent in June.
Midwest Manufacturing (August)
Forecast : N/A Prior: 81.4
Federal Reserve Bank of Chicago will release its midwest
manufacturing for the month of August at 12:00 EDT.
The Chicago Fed Midwest Manufacturing Index (CFMMI) increased
2.2% in July, to a seasonally adjusted level of 81.4 (2007 = 100). Revised
data show the index fell 0.2% in June to 79.6. The Federal Reserve
Board's industrial production index for manufacturing (IPMFG)
increased 1.1% in July. Regional output in July rose 13.1% from a year
earlier, and national output increased 8.1%. The Midwest's automotive
output was up 27% in July relative to its year-ago level; more than
double the nation's auto output 12.5% gain. The Midwest's machinery
sector production went up 0.9% in July after increasing 0.5% in June.
The Midwest resource sector's output ticked down 0.1% in July after
declining 0.4% in June.
Building Permits Rate Change (August)
Forecast : N/A Prior – :1.8 %
Build Permits numbers (August)
Forecast : N/A Prior : 0.569 mln
U.S. department of Commerce is expected to release building permits
rate change and numbers for the month of August. Sales of new single-
family houses in July 2010 were at a seasonally adjusted annual rate of
276,000. This is 12.4 percent (±10.8%) below the revised June rate of
315,000 and is 32.4 percent (±8.7%) below the July 2009 estimate of
408,000. The median sales price of new houses sold in July 2010 was
$204,000; the average sales price was $235,300. The seasonally adjusted
estimate of new houses for sale at the end of July was 210,000. This
represents a supply of 9.1 months at the current sales rate.
THE ECONOMIC MONITOR - U.S.

NEXT TRADING DAY MARKET PERFORMANCE

ECONOMIC EVENTS DJIA

Menthol Report Subcommittee of the Tobacco Products Scientific
Advisory Committee (0900 1300 ET/GMT)

The subcommittee will receive a presentation and discuss the timelines

and structure of the Tobacco Products Scientific Advisory Committee's
required report to the Secretary of Health and Human Services
regarding the impact of use of menthol in cigarettes on the public
health.

Sixty-second session of the WHO Regional Committee for the Americas

(Sep. 27 to Oct. 1).

CORPORATE EVENTS

Cal-Maine Foods will announce its first quarter fiscal 2011 financial
results, analysts expect the company to report a profit of $0.117 per
share, against $0.160 reported for the corresponding period a year ago.

The company primarily engaged in the production, grading, packing

and sale of fresh shell eggs, posted net sales of $222.1 million for the
fourth quarter of fiscal 2010, compared with net sales of $213.6 million A. Stocks opened strongly higher Friday, with the Dow indus-
for the same quarter a year ago. The Company reported net earnings of
$21.0 million, or $0.88 per basic share, for the fourth quarter of fiscal
trials up more than 100 points, with Wall Street found rea-
2010 compared with net earnings of $10.3 million, or $0.43 per basic son for cheer in a report on U.S. manufacturing in August.
share, for the same period last year. The Dow Jones Industrial rose 142.66 points to 10,805.08.

Palatin Technologies will announce fiscal year 2010 fourth quarter B. The Dow Jones jumped 188 points, or 1.8%, to 10,851. All 30
results. of the measure's components rose, led by a 4.7% jump in
Caterpillar Inc. shares, a 3.7% climb in Alcoa Inc. and a
A biopharmaceutical company focused on discovering and developing 3.3% increase in Cisco Systems Inc. shares.
targeted, receptor-specific small molecule and peptide therapeutics,
reported a net loss of $2.0 million, or ($0.02) per share in third quarter C. Stocks surged to their fourth straight weekly gain, with the
against net income of $0.1 million, or $0.00 per share for the same Dow Jones Industrial Average and the S&P 500 Index both
period in 2009. Total revenues in the quarter was at $2.6 million,
compared to $5.2 million for the same period in 2009. Loss for the third
on track for their best September in more than half a cen-
quarter, compared to the net income for the quarter ended March 31, tury after data showing a rebound in demand for U.S. capi-
2009, was due to a decrease in the recognition of revenue under our tal equipment. Up 2.4% for the week, the Dow industrials
agreements with AstraZeneca. added 197.84 points, or 1.9%, to end at 10,860.26, its best
performance since September 1.
ECONOMIC CALENDAR
CORPORATE RESULTS
DATE EDT INDICATOR F’CAST PRIOR DATE - 27/September2010
MON 09/27 0830 Chicago Fed Index NA NA
COMPANY NAME EVENT
1200 Chicago Midwest (Aug) NA 81.4
Cal-Maine Foods Q1 2011
TIME TBA Building Permits NA NA
Palatin Technologies Q4 2010
TUE 09/28 0745 ICSC/GS Report ww NA NA
0855 Redbook mm NA NA
0900 S&P CS 20 mm sa NA 0.30%

0900 S&P CS 20 mm nsa NA 1%

0900 S&P CS 20 yy 3.20% 4.20%
This report is produced by
1000 Consumer Conf (Sep) 54 53.5
International Business Times
1000 Richmond Fed Mfg (Sep) NA 11 For questions or comments
reach us at
1000 Mfg Shipments NA 11 researchanalysis@ibtimes.com
1000 Service Revenues NA -10

1700 ABC CCI NA NA For more information about

our products visit
www.ibtimes.com

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