Wake Up Call - Jan 9

Good Morning. This is your wake up call for Tuesday January 9, 2007. The time is 8:45 AM EST, and major U.S. equity index futures are indicating a higher open across the board. The realization that the economy is at a crossroads, but that the outlook is not so scary, may have some portfolio managers reexamining valuation. Lower oil, if it holds, surely reduces inflationary pressure and increases consumer spending capabilities while reducing operating costs for Americans and American businesses. Overseas, more restrictive rules for foreign investment, sent Thailand's SET Index lower again, as it fell 2.69%. Mainland Chinese shares continued their 2007 rally. Look for more detail on international markets in "Today's Morning Coffee."

Asia:
Hang Seng Index -0.66%; Shanghai/Shenzhen 300 +3.22%; NIKKEI 225 +0.86%; BSE SENSEX 30 -0.63% ; S&P/ASX 200 +1.59%; SET -2.69%

U.K. & Europe:
DJ STOXX 50 Index +0.32%; FTSE 100 +0.07%; CAC 40 +0.49%; DAX +0.56%; Russian RTX Index $ -5.45%; SOFIX +2.13%

KEY HEADLINE NEWS

• Oil is testing the $54 level today, as speculation abounds that energy portfolios with heavy one-sided bets may be in trouble, and forced to sell due to redemptions. Yesterday, Goldman Sachs reduced its oil forecast, but its average price estimate is $69 for 2007. OPEC is rumored to be discussing action ahead of the scheduled March meeting and planned February production cut of 500,000 barrels.
• Belarusian and Russian representatives are meeting in order to resolve their oil dispute that has one-fifth of Germany's oil supply cut off.
• With anticipated further rate hikes in Europe and the U.K. in coming months and possible rate reductions ahead for the U.S. in 2007, the dollar weakens against the euro.
• The SEC is reviewing the borrowing habits of hedge funds, considering whether lending limits are adequate and might require some regulatory supervision. Anything that restricts such a huge capital base, poses a near-term threat to stocks by threatening liquidity, no matter how helpful it may prove in limiting blow ups in the future.
• Hugo Chavez moves to nationalize the telecommunications industry and other "strategic utilities" including electricity providers. After he moved to take over the metals mining effort within the country impacting a Canadian gold producer, it looks like an American-based company will be robbed this time around, as Arlington, Virginia based AES faces the potential of losing its assets in subsidiary Electricidad de Caracas.
• Fed Vice Chairman Donald Kohn addressed the economy yesterday, and was listened to closely by market participants. Here's a summary of what he had to say.

Your issue of "Today's Morning Coffee" is set for publishing later this morning. It will provide you with great depth into what moved and is moving international markets and commodities today, and provide you with the economic calendar that could impact U.S. stocks. We also list all companies set to report earnings, as earnings season officially kicks off today with the report from Alcoa.

(disclosure)