THE ECONOMIC MONITOR

08 September 2010

U.S.
Free Edition

INSIDE THE REPORT MARKETS AT A GLANCE

 Stock recommendations and price targets from top  The Dow Jones Industrial Average gained 28.23 points, or 0.27
percent, to 10,415.24. The S&P 500 rose 5.31 points, or 0.48
brokerage firms percent, to 1,104.18.

 Important Events Scheduled on 10 September  In late trading in New York, the dollar was down 0.1 percent at
83.82 yen.
Economic Events
 The benchmark 10-year note fell 27/32 in price to yield 2.76
percent, right in the area of trend-line support on the charts and
 USDA releases monthly Crop Production, World above Wednesday's close of 2.66 percent.
Agricultural Supply and Demand Estimates; weekly
Export Sales  U.S. crude for October delivery settled down 42 cents at $74.265 a
barrel.
 Commerce Department issues Wholesale
 U.S. gold futures for December delivery were last $8.0 lower at
Inventories for July $1,249.50 an ounce.

Corporate Events
STOCK INDICES
 No S&P 500 companies reporting results on
September10, 2010 INDEX LAST CHNG % CHNG

DJIA* 10415.24 28.23 0.27

 Duckwall-ALCO Stores, Aceto, Brady Corporation,
NYSE Composite* 7034.37 34.43 0.49
U.S. Global Investors report quarterly earnings
Nasdaq* 2236.2 7.33 0.33

Breaking News S&P 500* 1104.18 5.31 0.48

DJ Total Stock Market* 11500.1 46.75 0.41

 BP CEO Hayward may face British MPs Russell 2000* 634.62 0.37 0.06

Global Dow* 1868.39 12.41 0.67

 Goldman hit with £17.5m fine
Nasdaq 100* 1886.14 6.14 0.33
 McDonald's August sales low DJ Transportation Avg* 4388.07 -12.33 -0.28

S&P 100* 499.8 3.02 0.61

 Sanofi stands at $69 per share offer
* CLOSING VALUES
 Air Products proposal on Airgas
CURRENCIES
 Alibaba may rethink Yahoo ties
INDEX LAST PRIOR
 Economic recovery still on track shows data Euro (EUR/USD) 1.2695 1.2715

U.K. Pound (GBP/USD) 1.5429 1.5464

 Trade gap narrows in July
Japanese Yen (USD/JPY) 83.84 83.92
 FSA penalizes Goldman on nondisclosures All prices are at 04:41 PM EDT

FUTURES
SETTLE CHANGE

Crude Oil (Sept) 74.05 -0.62

Natural Gas (Oct) 3.784 -0.03

Gold (Dec) 1245.8 -11.70

Copper ( Dec) 343 -7.05
Wheat (Dec) 737.25 0.00

All prices are at 04:30 PM EDT

THE ECONOMIC MONITOR - U.S.

STOCK RECOMMENDATIONS BY BROKERAGE HOUSES

BROKERAGE/COMPANY ACTIONS RATING

Stifel
Amgen Starts with buy rating Buy
Biogen Starts with sell rating Sell
Celgene Starts with buy rating Buy
Gilead Sciences Starts with hold rating Hold
Acorda Therapeutics Starts with buy rating Buy
Human Genome Sciences Starts with buy rating Buy
Microvision Starts with price target of $3.50 Buy
Citigroup
Allegheny Energy Raises price target to $24 from $22 Hold
Celanese Raises to buy from hold Buy
Oclaro Removes from top picks live list Buy
Silicon Laboratories Cuts price target to $36 from $45 Hold
Valspar Cuts price target to $32 from $35 Hold
Raymond James
Best Buy Cuts price target to $42 from $47 Strong Buy
Methanex Raises price target to $32 from $30 Strong Buy
Tempur Pedic International Upgrades to strong buy from market perform Strong Buy
Goldman Sachs
International Paper Raises price target to $29 from $28 Buy
Boise Raises price target to $8 from $7 Neutral
Temple Inland Raises price target to $26 from $24 Buy
Soleil Securities
Tellabs Cuts price target to $8 from $9 Hold
Infinera Raises price target to $12.50 from $8.50 Buy
HSBC
Alcoa Cuts price target to $12 from $14 Neutral
Jefferies
Central European Distribution Cuts price target to $33 from $37.50 Buy
Exact Sciences Initiates with $7 price target Buy
Silicon Laboratories Cuts price target to $43 from $52 Buy
JP Morgan
Las Vegas Sands Raises price target to $36 from $32 Overweight
Melco Crown Entertainment Cuts to neutral from overweight Neutral
Sandler O'Neill
City National Reduces price target from $58 to $55 Hold
FPIC Insurance Downgrades to hold from buy on valuation Hold
Needam
Comtech Telecommunications Raises to buy from hold Buy
Stereotaxis Upgrades to buy from hold Buy
Susquehanna
Asiainfo Linkage Cuts price target to $26 from $34 Positive
UBS
Arris Group Cuts price target to $9 from $10.75 Neutral
Wedbush
Curtiss-Wright Cuts price target to $38 from $42 Outperform
CL King
Dollar Financial Initiates with target price $26 Strong Buy
RBC
JA Solar Holdings Raises price target to $7 from $5 Sector Perform
Key Banc
Spartech Cuts to hold from buy Hold
Gleacher & Co
Silicon Laboratories Cuts price target to $38.50 from $46 Neutral
Caris
Silicon Laboratories Cuts to average from buy Average
BMO
Smurfit Stone Containers Raises to outperform from market perform Outperform

Disclaimer: The views and investment tips expressed by investment experts are their own, and not that of IBTimes or its management. We advise users to check with
certified experts before taking any investment decisions.
THE ECONOMIC MONITOR - U.S.
COMPANY NEWS
BP CEO Hayward may face British MPs
British Members of Parliament (MPs) will next week
grill outgoing BP Plc Chief Executive Tony Hayward.
Hayward will face the MPs as part of an investigation
into risks around deepwater drilling in the North Sea
as it has raised concerns globally about the dangers
of drilling in ever-deeper waters. Meanwhile,
Hayward is due to be replaced next month by Bob Dudley, who is currently
leading the BP cleanup effort in the Gulf. A statement from the Commons
Energy and Climate Change Select Committee said Hayward would testify on
Wednesday next week.
Foster's wine arm bid from Cerberus –Report
According to Reuters the U.S. buy-out house Cerberus has been revealed as the
mystery party behind a $2.5 billion bid for the wine arm of Australian brewer
Foster’s. In a statement released yesterday, the company said that it had
rebuffed a multi-billion dollar bid for its Treasury Wine Estates unit, but did not
reveal the identity of the bidder. Cerberus made a cash offer of between $2.1
billion to $2.5billion for Treasury Wine Estates, the group’s wine division.
Cerberus recently sold its remaining stake in pharmaceutical company Talecris
Biopharmaceuticals to Spanish company Grifols.
McDonald's August sales low
The weakness in France McDonald's Corp's
European led sales growth fall in August from a
year ago. France generates the company's
biggest European sales. McDonald's
spokeswoman Heidi Barker said France's
August sales were "slightly negative due to less
effective promotions versus the same time last
year." Europe generates about 40 percent of
McDonald's revenue. Despite high unemployment, U.S. sales at established
restaurants were a bit stronger, rising 4.6 percent for August as hot weather
increased demand for new high-margin fruit smoothies. The United States
contributes 35 percent of company sales. The company's same-restaurant sales
rose 7.8 percent in the Asia Pacific, Middle East and Africa segments, slightly
better than analysts' expectations.
Sanofi stands at $69 per share offer
French drugmaker Sanofi-Aventis denied the reports that it had raised its offer
for Genzyme. Company spokesman Jean-Marc Podvin said "There is one offer,
at $69 a share."
Air Products proposal on Airgas
The proposal between Air Products and Airgas took interesting turn when a
proxy advisory firm, ISS, recommended industrial gas supplier Airgas Inc's
shareholders to vote in favor of Air Products and Chemical's board nominees. Air
Products sweetened its all-cash offer by 3 percent to $65.50 per share.
Meanwhile, Airgas said it "respectfully disagrees" with ISS about the Air Products’
offer. Air Products initially offered $60 per share in February and has increased
the offer since then.
Alibaba may rethink Yahoo ties
China's Alibaba Group said it may re-evaluate its relationship with its largest
stakeholder Yahoo Inc. Yahoo does its own direct business through its
subsidiary Yahoo Hong Kong in Hong Kong. And Yahoo has no direct presence
in China and prefers Alibaba for business. Alibaba Group, which is 40 percent
owned by the U.S. giant, owns China's largest business-to-business e-commerce
website Alibaba.com and its largest consumer e-commerce website Taobao.
ECONOMY NEWS
Economic recovery still on track shows data
New U.S. claims for unemployment benefits fell more than expected last week to
a two-month low. Initial claims for state unemployment benefits dropped 27,000
to 451,000, the lowest since the week ended July 10, the Labor Department said.
And the trade deficit shrank 14 percent to $42.8 billion in July, smaller than the
$47.3 billion gap that markets had expected.
Trade gap narrows in July
According to the Commerce Department report the trade deficit narrowed
more than expected in July, as imports retreated and exports shot to their
highest since August 2008.
The monthly trade deficit shrank 14 percent to
$42.8 billion. Exports rose to 1.8 percent to
$153.3 billion, led by strong overseas demand
for U.S. civilian aircraft, machinery, computers
and other capital goods. Imports fell 2.1
percent to $196.1 billion.
July imports from both China and Germany
were the highest since October 2008. Prices for imported oil fell slightly in July to
an average of $72.09 per barrel, the second consecutive monthly decline.
Economists see low growth
The latest Blue Chip Economic Indicators report said the Projected U.S.
economic growth for the rest of this year and next was revised down for a third
month in a row and the economists see weaker outlook for second-half 2010 for
consumer spending, business investment and private construction. Its consensus
forecast for real GDP growth in 2011 was cut by 0.3 of a percentage point from a
month ago to 2.5 percent.
REGULATORY NEWS
FSA penalizes Goldman on nondisclosures
Goldman Sachs has been fined $31 million or £20 million by the U.K. City
regulator a sit has failed to notify the FSA that it was under investigation in the
U.S. after it was charged with misleading investors in a mortgage-backed
security known as Abacus, the Financial Services
Authority said.
FSA and Goldman Sachs spokesman declined to
comment as the official declaration is expected
soon and the fine is less than 20 million pounds.
Goldman Sachs created and sold the CDOs,
which are pools of assets such as mortgage
bonds packed into new securities in 2007, as the
U.S. housing market weakened. It had also hidden facts that hedge fund Paulson
& Co. helped pick the underlying securities and bet against the investment
vehicles, which was disclosed by the SEC.
The SEC had sued Goldman Sachs and Tourre in April after it misled investors in
collateralized debt obligations linked to subprime mortgages.
The final settlement comprised of $300 million fine and $250 million in
compensation for investors, and was the largest penalty levied by the SEC
against a Wall Street firm, the agency said. Goldman Sachs, accepted its mistake,
while FSA said that it would formally scrutinize Goldman Sachs related to the
SEC’s claims.
THE ECONOMIC MONITOR - U.S.

NEXT TRADING DAY MARKET PERFORMANCE

Economic Events DJIA

WASHINGTON - USDA releases monthly Crop Production, World
Agricultural Supply and Demand Estimates; weekly Export Sales,
0830/1230

The USDA issued August 12 its Crop Production report based on

August 1 conditions, corn production was forecasted at a record high
13.4 billion bushels, up 2 percent from the previous record set in 2009.
The soybean production was forecasted at a record high 3.43 billion
bushels, up 2 percent from last year. While all wheat production, at 2.26
billion bushels, was up 2 percent from the July forecast and up 2
percent from 2009. Winter wheat production was forecasted at 1.52
billion bushels, up 1 percent from last month and up slightly from 2009.

WASHINGTON - USDA releases monthly World Markets and Trade:

Cotton (early report), Grain, Oilseeds, 0930/1330

WASHINGTON - Commerce Department issues Wholesale Inventories

for July, 1000/1400

Wholesale inventories rose only slightly
in June while sales unexpectedly
slumped, total wholesale inventories
rose 0.1 percent to $399.2 billion at the
end of June after an unrevised 0.5
percent rise in May. Sales at wholesalers
fell 0.7 percent after a downwardly
revised 0.5 percent decline in May.
Business inventories added slightly more than one percentage point to
gross domestic product in the second quarter, accounting for roughly
40 percent of the 2.4 percent growth rate.
Corporate Events
No S&P 500 companies reporting results on September10, 2010
A. Index stocks jumped at morning session start, bringing the Dow
industrials back into the black for 2010, as a drop in weekly jobless
claims cheered Wall Street. The Dow Jones climbed 78.33 points to
10,465.34.
B. The Dow Jones rose 60 points, setting the stage for gains by
petroleum and natural gas producers. DJIA components Exxon
Mobil and Chevron rose 1% and 0.8% respectively.
C. The Dow Jones lately rose 44.12 points, or 0.4%, at 10,431.13, with
26 of its 30 components rising, led by J.P. Morgan Chase & Co.,
up 2.2%. The blue-chip index's biggest weight was McDonald's
Corp., off 2.5% after the fast-food chain reported less of a lift in
August sales than expected.

Non – S&P 500 Companies ECONOMIC CALENDAR

Duckwall-ALCO Stores will release its second quarter results.
DATE EDT INDICATOR F’CAST PRIOR
Analysts expect Aceto to report a profit of 10 cents per share, up from
FRI 09/10 1000 Wholesale Invents, Jul 0.4% 0.1%
4 cents a year earlier for the third quarter.
1000 Wholesale Sales 0.3% -0.7%
Brady Corporation is expected to post a profit of 48 cents per share 1030 ECRI Weekly Index NA 120.6
for the fourth quarter, up from 43 cents for the same period a year ago.
The facility and people identification products maker reported an MON 09/13 1400 Federal Budget -$100 bln -$103.6 bln
increase in the recent third-quarter profit, as sales grew worldwide. TUE 09/14 0745 ICSC/GS Report ww NA NA
Brady recorded operating income of $35.91 million, up 22.7% from 0830 Retail Sales mm 0.30% 0.40%
$29.27 million in the three-month period of the fiscal 2009. Net sales for
the quarter surged 16.3% to $321.88 million from $276.73 million. 0830 Ex-autos mm 0.30% 0.20%

0855 Redbook mm NA NA
U.S. Global Investors will release its fourth quarter results. 1000 Business Invents 0.40% 0.30%
1000 IBD Consumer Conf NA 43.6

CORPORATE RESULTS 1700 ABC CCI NA NA

WED 09/15 0700 Mortgage Index NA NA
DATE - 10/September2010
0700 Refinancing Index NA NA
COMPANY NAME EVENT
0830 Import Prices 0.20% 0.20%
AEP Industries Q3 2010
0830 Export Prices 0.20% -0.20%
Aceto Corporation Q4 2010
0830 Empire State Index 8.5 7.1
Brady Q4 2010

US Global Investors Q4 2010 0915 Indust Output mm 0.20% 1%

Duckwall Alco Stores Q2 2011 0915 Capital Utilization 74.90% 74.80%

THE ECONOMIC MONITOR - U.S.

MARKET BRIEFING

 U.S. stocks rose as stronger-than-expected jobs and trade data helped lift optimism about the economic recovery, although sentiment was fragile as
investors fretted over European banks. Financials, hit hard in the August downturn, were among top gainers as new U.S. claims for unemployment
benefits fell to a two-month low, while the trade deficit narrowed sharply in July. JP Morgan Chase rose 2.5 percent to $40.10. However, defensive
sectors such as healthcare, utilities and telecommunications services also gained in a sign investors remain cautious. The Dow Jones Industrial Average
gained 28.23 points, or 0.27 percent, to 10,415.24. The S&P 500 rose 5.31 points, or 0.48 percent, to 1,104.18. The Nasdaq Composite added 7.33 points,
or 0.33 percent, to 2,236.20.

 The yen hovered near a 15-year high against the dollar as conflicting messages from policymakers led investors to bet Japanese authorities were not
ready to intervene to weaken their currency. The euro fell against the dollar and yen as concerns about the health of the European banking sector and
sovereign debt issues persisted. In late trading in New York, the dollar was down 0.1 percent at 83.82 yen. It earlier hit a session low of 83.49, according
to electronic trading platform EBS, within sight of the 15-year low of 83.34 yen hit on EBS on Wednesday. The euro was down 0.2 percent at $1.2701
after failing to convincingly break resistance at $1.2760. Against the yen, the euro fell 0.1 percent to 106.54 after hitting a session low of 105.98 yen,
moving closer to a nine-year low of 105.41 yen hit in late August.

 U.S. Treasuries fell after jobs and trade data suggested the economy wasn't as weak as feared, boosting riskier assets such as stocks and hurting
demand at the government's long-bond auction. Safe-haven bonds took a hit early in the day from news that claims for jobless benefits fell more than
expected last week and the trade deficit narrowed sharply in July, data which provided hopeful signs for the stuttering economic recovery. Long bonds
were under-performing in swaps, with the 30-year spread narrowing on the day. In contrast, the 10-, five- and two-year swap spreads were all wider on
the day. The benchmark 10-year note fell 27/32 in price to yield 2.76 percent, right in the area of trend-line support on the charts and above
Wednesday's close of 2.66 percent. Five-year notes were also affected, falling 16/32 to yield 1.57 percent versus Wednesday's close of 1.46 percent.

 Oil prices ended lower as total U.S. crude and product stockpiles rose to another 20-year high, prompting investors to sell on risk aversion. The selling
took hold despite government data showing a drawdown in crude inventories last week which surprised most analysts. U.S. crude futures shot up to a
three-week high on news of the drawdown, but gains eroded as traders raised more worries about oil demand with the summer driving season,
lackluster for gasoline as it turned out, now over. U.S. crude for October delivery settled down 42 cents at $74.265 a barrel, after hitting a session high of
$75.96, its highest since Aug. 18. ICE October Brent crude fell 70 cents to end at $77.47.

 Gold prices fell further in late trading, adding to losses in light volume as some investors unwound safe-haven trades, setting off automatic sell orders
on the way down. Earlier, gold prices came off modestly when U.S. weekly filings for unemployment benefits fell by more than forecast and the U.S.
international trade gap shrank by more than anticipated, but losses were limited. Spot gold was bid at $1,248.10 an ounce at 1:46 p.m. EDT, down from
$1,254.50 late in New York on Wednesday, after it attempted to shoot for June's record high at $1,264.90 an ounce. U.S. gold futures for December
delivery were last $8.0 lower at $1,249.50 an ounce.

ECONOMIC INDICATOR WATCH ECONOMIC INDICATOR WATCH (contd…)

Wholesale Inventories ECRI Weekly Leading Index

Forecast: 0.4% Prior: 0.1% Forecast: NA Prior: 120.6

Why Investors Care? Why Investors Care?

Wholesales Inventories is a signal of future business spending because ECRI Weekly Leading Index is a leading indicator of economic health and is more
companies are more likely to purchase goods when they have depleted timely as it is released more timely being a weekly data.
inventories.
Frequency: Weekly
Frequency: Monthly
Source: Economic Cycle Research Institute
Source: Department of Commerce

Wholesale Sales

Forecast: 0.3% Prior: -0.7%

Why Investors Care?

Wholesalers sell to industries and retailers in quantities far larger than most
consumers are willing to purchase. Changes in Wholesale Sales can be used as
an early indicator for the overall direction of the retail sector, consumption, and
the economy.

Frequency: Monthly

Source: Department of Commerce This report is produced by

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