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CURRENT MARKET SENTIMENT

All eyes are in the manufacturing sector number 216, the key to the
treasure box. They hold the secret to lead the recovery out of recession.
This poses a dilemma to the street in the following: MARKET
• A period of “malaise,” resulting consumption lagging and private
investment unable to accelerate.
HIGHLIGHTS
09/04/2009
• A rebound fueled by government stimulus, followed by an abrupt
downturn dubbed as W-shaped’ recovery.

Whichever one, the street motto is selling on the news as the risk reward
ratio is less than exceptional. Since there is no guarantee the economy will
PRISM CALL
maintain its momentum, no investor is willing to wait and see.
Market initially reacted negatively
to the economic data, but then
ECONOMIC NUMBERS AND DATA
Time Indicator Date Actual Expectation Range Prior
reversed course and spiked up. I
(ET) am using this as an opportunity to
8:30 Change in Sep 4 216K -230K -365K -247K get short the market. We think
AM Nonfarm to futures have room to go up to
Payrolls -100K about 1010 and Dow has room till
8:30 Unemployment Sep 4 9.7% 9.5% 9.3% to 9.4%
Rate
9421. What has been working is
AM 9.8%
fading the big spikes and that is
8:30 Avg Hourly Sep 4 0.3% 0.1% 0.0% to 0.2% what we will continue to do
AM Earnings 0.3%
today. Going into this long
8:30 Avg Weekly Sep 4 33.1 33.1 33.0 to 33.1 weekend, we think the market is
AM Hours 33.2 bringing the futures up, in order
to take them down. Last time this
TECHNICAL number came out, job data was
Indices S2 S1 Pivot R1 R2 negative, but they lowered the
unemployment rate. This time
INDU 9219 9256 9315 9374 9411 they readjusted the rate to a
(DOW) whopping 9.7% . Look to short
rallies, it has been working and
SPUZ 988 992 999 1006 1010 why mess with what works.
(S&P)

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DOW STOCK TO WATCH
Strong Weak
CAT CVX

JPM JNJ

WMT MRK

DD PFE

UPGRADES / DOWNGRADES
Stock
Current Price Target
Upgraded House
Price Adjustment Price


Gafisa (GFA) Morgan 27.18 Overweight
Stanley
CTC Media Goldman 13.51 Buy
(CTCM)

Stock
Current Price Target
Downgraded House
Price Adjustment Price

Abercrombie Citigroup 30.98 Sell $24
(ANF)

COMMODITY PRICES
Commodity Price


OIL 68.61 0.65

GOLD 991.90 -5.80

FOREIGN MARKETS
Market Price
 %

FTSE 4861.62 64.87 1.35

DAX 5372.75 71.33 1.35

NIKKEI 10187.11 27.53 -0.27

HANG SENG 20318.62 556.94 2.82

CHINA 2861.609 16.585 0.58

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 NEWS ALERT
FRE Freddie Mac notified by NYSE that it has returned to compliance with the
NYSE's minimum share price listing requirement (1.87 )

BIDU Baidu.com: Pali says new policy on music content negative to Baidu
(329.48 )

CS Credit Suisse in talks to acquire Mesirow Hedge-Fund Investment Arm -

WSJ.com (48.86 )

OWW Orbitz filed for a $150 mln mixed shelf offering

RTP Rio Tinto PLC: China buys record iron ore at Rio's discount price - UK
TimesOnline (156.33 )

MCO Moody's 10% owner Berkshire Hathaway sells 794,388 shares at $26.30-
27.74 on 9/1-9/2 (24.26 )

IMF warns spending cuts will derail recovery - UK TimesOnline

ECB has exit plan in mind, but not time yet, according to Trichet - Forbes.com

Nobel laureate Stiglitz says chance of robust U.S. rebound "very very weak" –
Reuters

Pace of delinquencies for prime borrowers is accelerating - WSJ.com

Fed's Fisher says growth may slow to a 'crawl' – CNNMoney

ECONX Treasury wants tougher bank capital standards - CNBC.com

HGSI Human Genome announces novel evidence-based systemic lupus

erythematosus responder index described in peer reviewed publication as
potentially significant advance in lupus drug development (18.16 )

August sales were slightly better than already-conservative expectations - FBR

Capital

FBR Capital notes Aug comps came in generally slightly better than expectations,
with upside surprises from AEO, ARO, and GPS and downside surprises from ANF,
BKE, and HOTT.

European shares led higher by banks; FTSE +0.95%, CAC +0.58%, DAX +0.87%.

Asia markets close, HK shares higher on increased limit for foreign funds
investment; Nikkei -0.27%, Shanghai Comp. +0.58%, Hang Seng +2.82%, Sensex
+276 pts

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 NEWS ALERT
HRB H & R Block misses by $0.02, misses on revs; reaffirms FY10 EPS in-line
(17.01 )

G20 plans for stimulus exit - Financial Times

Loan losses spark concern over FHA – WSJ

The Wall Street Journal reports the Federal Housing Administration, hit by
increasing mortgage-related losses, is in danger of seeing its reserves fall below the
level demanded by Congress

SNDA Shanda Games Ltd announces filing of registration statement for an IPO of
American Depositary Shares (50.99 )

SNDA Shanda Interactive beats by $0.06, beats on revs (50.99 +1.10)

LMNX Luminex receives 510(K) clearance for new cystic fibrosis test (14.86 -
0.29)

GIII G-III Apparel beats by $0.09, reports revs in-line; guides FY10 EPS in-line,
revs below consensus (15.93 +0.77)

NVLS Novellus raises bottom end of Q3 EPS guidance; co sees EPS at ($0.09) to
breakeven vs First Call consensus of ($0.06), from its prior guidance of ($0.15)
to potentially breakeven; co narrowed revs to $160-180 vs. $167.8 mln
consensus, from prior guidance of $150-180 mln (19.08 +0.32) –Update

NVLS Novellus also provided upside Q4 guidance; co sees Novellus guides Q4 EPS
of $0.10-0.20 vs $0.01 First Call consensus; sees revs of $220-230 mln vs $181.3
mln consensus (19.08 +0.32) –Update

NVLS Novellus is trading ~4.2% higher after hours following Q3 and Q4 guidance
given on the conf call (19.08 +0.32) -Update-

ETP Energy Transfer files 7.5 mln common unit shelf offering (40.51 +0.71)

X-Rite (XRIT) filed for a ~58.15 mln share common stock offering by selling
shareholders

SunTrust Banks (STI) filed for a mixed shelf offering for an indeterminate amount

HCP Inc (HCP) filed for a mixed shelf offering for an indeterminate amount

SVA Sinovac Biotech obtains initial order of H1N1 Vaccine from Chinese Central
Government (9.39 )

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 NEWS ALERT
MCO Moody's and McGraw-Hill (MHP) ruling shows how ratings firms may be
legally vulnerable - WSJ.com (24.26 ) –Update

Shares in Moody's and McGraw-Hill, parent of Standard & Poor's, plunged Thursday
after a federal judge ruled that the companies had to defend themselves against
fraud claims relating to ratings on a collapsed investment vehicle.

PSO Pearson Plc cut to Sell from Neutral by Goldman- DJ (12.08)

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