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Before The Bell: ABCP Rebound; Xbox Strong


The ABCP market grew for the first time in 20 weeks. Xbox sales are surging. Futures fall due to disappointing Jobs data.

Morning Perspective: ABCP Rebound

According to Bloomberg, the asset-backed commercial paper market grew for the first time since August to $26.3 bln for the week ended January 2. The increase of 3.5% was the largest in seven years, signaling a positive effect of the recent efforts by the world's central banks. In December, the European Central Bank injected an unprecedented $500 bln into the banking system in concert with efforts by the central banks in the U.S., U.K, and others. Yet some analysts remain skeptical. "After 20 straight weeks of declines, it's not unusual to see some rebound," said a Merrill Lynch economist. For more background on the ABCP market, see Professor Kevin Depew's Five Things You Need To Know from September.

From the Bull Pen: Bulls seeking financial exposure may look to MasterCard (MA). Earlier this week Professor Kevin Depew noted on the Buzz a Point and Figure bullish triangle break; sell-stops may be set below recent lows, $202.

From the Bear Cave: Todd has pointed out a short-side play in Citigroup (C) and noted the multi-year $30 support level. Bears may press the downside with buy-stops above.

Xbox Strong!

Reuters reports Microsoft (MSFT) sold 4.3 mln Xbox 360 video game consoles in the last three months of 2007, bringing the total number to 17.7 mln since the console first went on sale in late 2005. The company said it was pleased with the 2007 holiday season with sales helped in part by hit titles such as "Halo 3" and "Mass Effect," but it did express disappointment with problems in its online gaming service, Xbox Live. Microsoft's announcement comes ahead of this weekend's annual Consumer Electronics Show when Bill Gates and company executives are expected to give a preview of the company's future products. Professor Sean Udall mentioned the Microsoft story in 18 Themes For 2008.

From the Bull Pen: Professor Udall said Halo 3 is more successful than even bullish predictions and the Xbox platform could generate additional sales channels. Those bullish on Microsoft may place near-term sell-stops below the 50 DMA ($34.60).

From the Bear Cave: Those looking for a bearish play in the tech sector may find one in Electronic Arts (ERTS); buy-stops above $60.

Click on Minyanville's Stocks To Watch for more company-specific ideas.

Quick Check Around the World

This first week of the year winds to a close as foreign markets show up all mixed up.

Asian trading closed with the Nikkei -4.03%, Hang Seng +2.35%, Sensex +1.68%, Taiwan -1.22% and Shanghai +0.78%

A quick check towards Europe finds the CAC -0.09, DAX -0.36%, FTSE +0.53%, ATX +0.96%, Swiss Mkt. +0.01% and Stockholm -1.06

A Look At Commodities

Crude oil is down -0.15 to 99.04. Gold is lower -3.50 to 865.60. Silver is up +0.215 to 15.382, and copper is higher +4.10 to 321.40.

As of 8:40 AM ET, S&P and Nasdaq futures are lower -13.30 and -28 points respectively to 1444 and 2048.

On the Radar

Average Hourly Earnings: m/m 0.4% vs +0.3% consensus
Dec. Avg. Weekly Hours: 33.8 vs. 33.8
Unemployment Rate: 5.0% vs. 4.8% consensus
Dec. Change in Manufacturing: Payrolls -31 vs. -15K consensus; Prior revised to -13 vs. -11K.
10:00 ISM Services: 53.5

TGI Friday! Good luck!

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No positions in stocks mentioned.

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