Without a doubt, the best news about 2009 was that income investments of all stripes prospered. Canadian trusts, master limited partnerships (MLP), utility stocks, telecoms, small banks, Super Oils and even real estate investment trusts (REIT) were well in the black. The magnitude of the gains is even more astounding considering the markets continued to fall during the first two months of the year before bottoming in March.

I'm beginning a new stake - about 0.9% exposure - in DragonWave (DRWI). On fundamentals I would like to be buying more, but the stock is very extended versus its moving averages, so I am going to get our feet wet just over $11.00 (0.9% exposure) and hope for a pullback to $10 - $10.50 to make the position larger. This stock is also running into a "double top" with mid October highs, so I want to see how it handles that. First, the chart...

This is an interesting $300M market cap, Canadian company that we're going to throw into the pile of 3G/4G global suppliers that we either currently own, have owned, or one day plan to own. As a fan of secular growth, the convergence of wireless electronics and all the applications involved is one of our top themes. Website here.

Stocks discussed on the in-depth session of Jim Cramer's Mad Money TV Program, Friday December 11.

Game Plan for the Coming Week: Best Buy (BBY), Adobe (ADBE), Boeing (BA), Precision Castparts (PCP), Honeywell (HON), Joy Global (JOYG), Bucyrus International (BUCY), Paychex (PAYX), Discover Financial Services (DFS), General Mills (GIS), Darden Restaurants (DRI), Oracle (ORCL), Nike (NKE), Research in Motion (RIMM), Palm (PALM), Sun Microsystems (JAVA), Nokia (NOK), Apple (AAPL)

As long as Verizon Wireless (VZ) (VOD) and AT&T Inc. (T) continue to expand their dominance of the mobile phone market, speculation about a merger of Sprint Nextel Corp. (S) and Deutsche Telekom (DT) AG's T-Mobile USA will resonate.

Buzz about the creation of "Sprint Nextel T-Mobile USA" resurfaces every few months, and will probably continue to do so unless there is a strategic shift in the industry.

Near-zero interest rates and runaway money supply growth have made the US economy more vulnerable than ever to hyper-inflation and a currency crisis. But little of this free money is flowing into the economy because banks are still more focused on enriching themselves than loaning to customers.

That’s a line that’s being repeated a lot lately in the financial media. And with 2010 elections approaching--and the policies of the Obama Treasury Dept increasingly under fire--odds are we’re going to hear it a lot more in coming months.

• Geithner pressured to resign over AIG. Loud calls for Treasury Secretary Timothy Geithner's resignation continued on Thursday, over his handling of the AIG (AIG) bailout in particular, and for his management of the financial crisis in general. Geithner, then chairman of the New York Fed, was blamed in a special inspector's report [.pdf] for not being tough enough with AIG's creditors. During hearings in the House Financial Services Committee on Thursday, several Republican Congressmen claimed that Geithner was too "cozy with big banks." Geithner defended his position, saying, "The U.S. ... came into this crisis without anything like the basic tools countries need to contain financial panics. Coming into AIG, we had basically duct tape and string."
• House panel gives green light to Fed audit. The House Financial Services Committee gave the Fed a slap in the face on Thursday when it approved an amendment to the financial services reform bill that would allow the General Accounting Office to audit the bank. Many lawmakers don't approve of the Fed's role in and handling of the financial crisis. Rep. Ron Paul, who has been trying for decades to obtain greater congressional control over the Fed, sponsored the provision. Former Fed Chairman Alan Greenspan and Paul Volcker voiced opposition to the provision in a letter (.pdf) to the House Financial Services Committee early this month and made public yesterday, saying that the measure would destroy the central bank's independence. Fed chief Ben Bernanke told Congress in June that Paul's provision "would effectively be a takeover of policy by the Congress and would be highly destructive to the stability of the financial system, the dollar and our national economic situation."
• Goldman shareholders nix big bonuses. Some of the largest shareholders in Goldman Sachs (GS) are peeved about the $717,000-average bonuses that the bank's staff are to get this year, sources say. Shareholders believe more earnings should go to investors, especially since, despite record net income, analysts expect Goldman's 2009 earnings per share to be 22% lower than in 2007. A spokesman for the bank pointed out that, since going public in 1999, the company has generated a total return of 159%, and Goldman shares have more than doubled this year.
• BOJ keeps rates on hold. The Bank of Japan kept its key interest rate at 0.1% on Friday, despite pressure from the Japanese government to take action on deflation. Finance Minister Hirohisa Fujii said there’s a sense of crisis about falling prices - deflation was one of the causes of Japan's 'lost decade' in the 1990s. The government would like the BOJ to cut rates further and to step up its support of debt markets with asset purchases. Governor Masaaki Shirakawa warned that increasing liquidity would not help to push prices higher. The BOJ is expected to maintain the key interest rate at its current level well into 2010.
• Fed has biggest balance sheet since December. The Fed's balance sheet swelled to its largest point since December as its holdings in agency and mortgage-backed securities increased, data released Thursday showed. Balance sheet liabilities had expanded to $2.19T as of Nov. 19, the highest point recorded since liabilities hit $2.25T on Dec. 31, 2008. The Fed's holdings of mortgage-backed securities increased to $847B, from $776B a week earlier, while its agency debt ownership rose to $153B from $150B. The Fed has said it will continue its support for markets with ongoing purchases of securities, buying $1.25T worth of mortgage-backed securities and $175B in bonds issued by Fannie Mae (FNM), Freddie Mac (FRE) and the Federal Home Loan Bank System.
• Treasury frees banks from TARP. The Treasury announced Thursday that it will auction warrants that the government received from banks as part of the Troubled Asset Relief Program, meaning that JPMorgan Chase (JPM), Capital One Financial (COF) and TCF Financial (TCB) will no longer have obligations under TARP, and will no longer be subject to any restrictions linked to it. The warrants are expected to fetch about $2.75B for the Treasury, and will include a tidy profit, according to professor Linus Wilson. Goldman Sachs (GS) bought back its warrants from the Treasury for $1.1B in July to avoid share dilution, but the Treasury could have earned $1.24B by auctioning the warrants instead. In the auctions, which will be run by Deutsche Bank (DB), banks provide determinations of market value for the warrants, and then the Treasury fixes the prices using independent appraisers.
• Deutsche Telekom seeks U.S. partner. Deutsche Telekom (DT) is reportedly seeking a partner for T-Mobile, its U.S. mobile communications business, one that could help it finance investments in networks with fast data transfers. MetroPCS (PCS), Clearwire (CLWR) and AT&T (T) are all potential candidates, but the company might also look for a purely financial investor from outside the sector. T-Mobile has been losing market share to competitors. Other plans for growing T-Mobile that the company had been considering, including a share sale and a takeover of rival Sprint-Nextel (S), have been abandoned, according to media reports.
• FDIC wants performance-linked pay for rating agencies. The FDIC wants the underwriters of securitized instruments and the agencies that rate them to be paid based on how those issues perform, a key adviser says. "The underwriters get all their cash upfront, the ratings agencies get all their cash upfront, and nobody really has a strong incentive to make sure the loan performs in the long term," FDIC adviser Michael Krimminger said in an interview Thursday. Securitization was at the heart of the credit crunch, as packages of securitized loans with high ratings turned out to be unsound. Other FDIC proposals include requirements for greater disclosure on debt rolled up in securitizations, limits to the amount of debt that can be bought from other companies and a demand that asset-backed issuers retain a certain amount of the credit risk from the pools, Krimminger added.
• Fed's Fisher wants action on "too-big-to-fail" companies. Action must be taken on companies deemed "too-big-to-fail," Dallas Fed President Richard Fisher said on Thursday, but he stopped short of calling for them to be broken up. Fisher wants to force banks to spin off some of their high-risk operations, as the "basic pathology" of these companies must be "treated," if the Fed is to return to traditional policy making. Operations such as proprietary trading, that place the deposit and lending function at risk and otherwise present conflicts of interest, should be stripped away. Fisher also wants to change the regulatory structure so that such firms can no longer come into existence, and to do that he would remove parts of the government safety net to end the moral hazard threat.
• Ferrero, Hershey would break up Cadbury. Ferrero and Hershey (HSY) would probably break up Cadbury (CBY) into separate businesses if the takeover bid that the two companies are mulling for the U.K. candy maker should succeed, an Italian newspaper reported on Friday. Ferrero is reportedly interested in Cadbury's lucrative candy and gum business. The pair would have to beat out U.S. rival bidder Kraft (KFT), whose 9.9B pound ($16.5B) bid has been decisively rejected by Cadbury's board.
• Google unveils Chrome OS. Google (GOOG) aired its new Chrome operating system on Wednesday in a move calculated to compete directly with market-leader Microsoft (MSFT). The new system, which will be available on netbooks for the 2010 holidays, acts more like a web browser than a traditional operating system, which will enable Google to push through advertising to application users. Netbooks running Chrome OS will only be able to run web applications and the user's data will automatically be stored in Google's cloud of internet servers. Google claims the system can boot up in seven seconds, almost as fast as a TV.
• Foreclosures keep rising. Home foreclosures hit a record at the end of September, with one out of seven home loans going bad, and the number is likely to keep growing through next year, the Mortgage Bankers Association said in its Q3 Delinquency Survey Thursday. The record number of foreclosures, up from 1/10 homes at the beginning of the year, shows the housing market isn't close to recovery, the association said. Applications for mortgages to buy homes have declined for six straight weeks despite interest rates below 5% on 30-year fixed-rate loans. And housing starts were down 10% in October, from the previous month, the Commerce Department said on Wednesday. The association blames high unemployment for the trend, but analysts said adjustable-rate mortgages, which cost owners much more now than they did when they were taken out, are equally at fault.
• Dell sees increasing demand. Even though third-quarter results were down 54% - with shipments tumbling 6.7% to 10.3M units year-on-year - Dell (DELL) said on Thursday that demand for its PCs picked up "pretty substantially" following the launch of Microsoft's (MSFT) new Windows 7 operating system in October. Dell CEO Michael Dell said that the company will see increased benefits from the launch of Windows 7 in Q4. Dell also expects its Asia business to return to revenue growth in the near future.
• China to tighten monetary policy. Chinese officials said on Friday that moves to cautiously tighten the country's loose-money policy would begin at the end of the year. Chinese legislator Wu Xiaoling said hikes in the reserve ratio may begin next year. But Wu said that the changes would be small, and the overall accomodative stance of the central bank would not change, noting the government is also concerned about the dangers of an asset bubble. Separately, the government cited progress in stimulating economic growth. Beijing is also closely monitoring surging housing demand. Separately, Senator Charles Schumer asked the Commerce Department to launch an investigation on whether the yuan's peg to the dollar constitutes currency manipulation.

Earnings: Fri. Before Open

• D.R. Horton (DHI): FQ4 EPS of -$0.73 misses by $0.43. Revenue of $1.01B (-34.6%) vs. $1.11B. Backlog of 5,628 homes vs. 5,297 last year. Net sales of 5,008 homes vs. 3,977 last year. (PR)
• J.M. Smucker Company (SJM): FQ2 EPS of $1.22 beats by $0.18. Revenue of $1.28B in-line. Sees full-year EPS of $3.95-4.05 vs. $3.83 consensus. (PR)

Earnings: Thur. After Close

• Dell (DELL): Q3 EPS of $0.23 misses by $0.05. Revenue of $12.9B (-15%) vs. $13.2B. "We are seeing improvement in overall underlying IT demand that is continuing into the fourth quarter. The same is true with momentum in Dell's business, specifically in our Large Enterprise and SMB segments." Shares -6.1% AH. (PR)
• Dress Barn (DBRN): FQ1 EPS of $0.38 beats by $0.05. Revenue of $404M (+7%) vs. $390M. Same-store sales up 4%. Shares +6% AH. (PR)
• Foot Locker (FL): Q3 adjusted EPS of $0.10 misses by $0.03. Revenue of $1.2B (-7%) in-line. Same-store sales down 8.2%. Sales in U.S. lower than anticipated; sales trend improvement in Europe and continuing sales gains in Asia/Pacific. Shares -4.6% AH. (PR)
• Gap (GPS): Q3 EPS of $0.44 in-line. Revenue of $3.6B (+1%) in-line. Same-store sales flat. Announces stock buyback of up to $500M. Shares -1.2% AH. (PR)
• Intuit (INTU): FQ1 EPS of -$0.10 beats by $0.06. Revenue of $493M (+2%) vs. $488M. Sees Q2 EPS of $0.29-0.32 vs. $0.37. Reaffirms full-year guidance. Shares -2.5% AH. (PR)
• Wet Seal (WTSLA): Q3 EPS of $0.04 in-line. Revenue of $141.5M (-3%) vs. $140.6M. Sees Q4 EPS of $0.03-0.07 vs. $0.08, on revenue of $149M-155M vs. $156M. Shares -6.1% AH. (PR)

Today's Markets

Asian markets were mixed Friday, but Europe stocks and U.S. futures have moved lower.

Sprint Nextel (S) has expanded its fourth-generation (4G) wireless broadband network to two more US cities. The third largest US carrier has officially launched commercial services in San Antonio and Austin in Texas. The company’s 4G services now covers about 25 markets in the US, with plans to address more than 120 million people by the end of 2009.

Subscribers across the newly launched markets can now enjoy lightning fast mobile broadband experience by paying just $10 per month over their existing 3G wireless data plans. The 4G WiMax network offers up to 10 times faster network speeds than the existing 3G deployments. The download speeds enabled by the 4G WiMax network average 3−6 megabits per second (Mbps), with peak speeds exceeding 10 Mbps.

Clearwire (CLWR) recently announced its third quarter results, along with $1.8 - $2.1 billion in new debt and equity transactions that will finance their 4G mobile broadband expansion to cover 120 million POPs.

Clearwire (CLWR) has a larger war chest, but still lacks a significant subscriber base for its WiMax, or 4G, wireless services. However, the company maintains that it is in the right place at the right time to become a powerhouse.

Those were some of the takeaways as Clearwire CEO William Morrow put on a confident front on the company’s third quarter earnings call on Tuesday. Morrow addressed why Google (GOOG) sat out the latest $1.56 billion funding round and how the wholesale business—Time Warner Cable (TWC) and Comcast (CMCSA) reselling WiMax service—will be huge.

• AIG steward threatens to jump ship. Just three months after taking the job, AIG (AIG) CEO Robert Benmosche has told the board he's ready to quit. Insiders say Benmosche feels compensation restrictions imposed by pay czar Kenneth Feinberg have left him in an impossible situation, without the ability to retain talent. Benmosche's own $10.5M package is the largest approved under the Treasury Department's recent curbs on executive pay. A departure could be highly disruptive, but it's not altogether clear whether the threat was serious, or was meant to ruffle feathers; insiders say Benmosche made a similar threat in August. As far as a possible replacement - how about Ken Lewis?
• Bad trades aren't criminal. A jury found two Bear Stearns fund managers did not lie by presenting an upbeat picture while their funds plunged in value, a setback for lawmakers hoping for easy convictions in the wake of bailouts and foreclosures. Investors lost $1.6B when Bear funds, managed by Ralph Cioffi and Matthew Tannin and heavily invested in mortgage-backed securities, collapsed in the summer of 2007. Jurors said that while the pair clearly made some bad investments, their salesmanship did not cross the line into fraud.
• Strong dollar critical to recovery - Geithner. Treasury Secretary Tim Geithner said Wednesday that maintaining a strong dollar is "very important" for the economy. Speaking to Japanese reporters, Geithner said, "We bear special responsibility for trying to make sure that we are implementing policy in the U.S. that will sustain confidence not just among American investors... but investors around the world" that the U.S. will fix its budgetary problems as its economy improves. Geithner also said he sees no contradiction between a strong dollar and the desire to bolster exports.
• World Bank frets U.S. joblessness. World Bank president Robert Zoellick warned Wednesday that untamed U.S. unemployment threatens to trigger loan defaults and drag on consumption, hobbling a nascent recovery. "You're going to have problems with delinquencies of credit card loans, consumer loans, people won't be able to pay their mortgages," he told reporters in Singapore. "Some banks are going to continue to be troubled by bad loans." While Zoellick concedes government stimulus spending will fuel growth through the middle of 2010, he's worried what happens afterward: "What's the other source of demand?"
• Logitech buys LifeSize, gains foothold in videoconferencing. Logitech (LOGI) agreed to buy privately-held LifeSize Communications, a developer of high-definition video systems, audioconferencing equipment, and video management software, for $405M, bolstering its position in the much-prized video communication market. LifeSize Communications has more than 9,000 video conferencing customers. On Tuesday, Cisco (CSCO) revealed that most shareholders in videoconferencing developer Tandberg had spurned its $3.1B takeover offer.
• Dodd unveils rival financial overhaul. Sen. Chris Dodd, who chairs the Senate banking committee, unveiled a 1,136 page plan to overhaul financial regulations that is substantially different from plans discussed in the House and favored by President Obama. Dodd's plan calls for removing the Fed and FDIC from day-to-day supervision of banks, opting for a new two-pronged agency, one branch to monitor and diffuse systemic risks posed by large financial companies, and the other to regulate smaller banks. Conversely, the SEC would see its power and budget increase by allowing it to keep fees it collects from Wall Street firms, instead of relying on Congress. With fewer than 20 days left in the legislative session, it's almost certain Congress will not deliver on President Obama’s request to repair the financial regulatory system by year-end.
• GM's chairman clashes with CEO. In a growing clash between GM CEO Fritz Henderson and his board, GM's chairman Ed Whitacre said he's not comfortable with management's 2010 forecasts, and indicated Henderson's timetable for an IPO - the second half of 2010 - may be too optimistic. Rather than worrying about selling shares, the former AT&T chief says the company's focused on repaying the $6.7B it owes to taxpayers. In an interview with the Wall Street Journal, he said management needs to make progress on such issues as reducing customer-sales incentives, changing perceptions about GM, and constructing a realistic business plan.
• Global confidence dips. Confidence in the world economy dropped in November after some central banks took or spoke about steps to start unwinding emergency stimulus. Bloomberg's Professional Global Confidence Index fell to 60.3 from 61.7 in October. At well above 50, optimists still outnumber pessimists, but their confidence "hinges almost entirely on the level of stability produced by extraordinary monetary support," one economist who participated in the survey said.
• United on verge of GE security purchase. United Technologies (UTX) in nearing a purchase of GE's fire alarm and security systems unit for at least $1.8B, and a deal could be announced as early as Thursday, sources say. GE's security unit includes Edwards Systems Technology, which GE bought for $1.4B from SPX Corp. (SPW) in 2005. The Edwards business offers building management systems that help control commercial structures during fires, earthquakes and other emergencies, and would take United "beyond just perimeter and access security," one analyst says.
• Blackstone, KKR prepare to sell TDC stake. Sources say Blackstone (BX), KKR and three more private-equity firms that bought an 88% stake in Denmark's TDC are preparing for an exit. The group bought the stake in 2006 with about $3B in cash and $12B in debt; it's thought to be worth about $7.4B today.
• Credit card issuer fails. Advanta (ADVNA), a large issuer of credit cards to small businesses, filed for bankruptcy after massive customer defaults led to an unsustainable capital shortfall. Advanta has assets of $363M and debts of $331 million. It said it has almost $100M in cash, but cannot meet all its obligations.
• China exports recover some more. China's exports continued to improve, falling 13.8% in October vs. a 15.2% decline in September and 20%-plus drops earlier in the year. Chinese authorities have begun urging banks to be more cautious in lending, and today the PBOC warned "definite expectations of inflation have formed in the market." The fall in China's consumer prices narrowed to 0.5% in October from 0.8% in September, and is widely expected to turn positive in coming months.
• Mortgage mod program picks up speed. The Treasury said Tuesday one-in-five eligible homeowners have now enrolled in its mortgage-modification program, although few of the trial modifications are turning into permanent fixes. Treasury's Making Home Affordable program has now initiated 650,000 loan modifications, up from 500K in late September. "The program is having a pronounced impact in areas particularly hard hit by the housing crisis," Treasury's Barr said in a statement.

Earnings: Wed. Before Open

• ING Group (ING): Q3 net profit of €778M vs. €229M last quarter and -€568M a year ago. CEO Jan Hommen said ING wants to repay the remainder of the €10B in rescue funds it received, and plans to pay back €5B before year-end. Shares +6.4% premarket. (PR)
• Macy's (M): Q3 EPS of -$0.03 beats by $0.04. Revenue of $5.28B (-3.9%) in-line. Sees Q4 EPS of $1.00-1.05 vs. $1.17 consensus. Sees Q4 SSS down 1-2% vs. -2.7% consensus. Shares -2.7% premarket. (PR)

Earnings: Tue. After Close

• A123 Systems (AONE): Q3 EPS of -$1.78 may not compare to consensus estimates of -$0.33. Revenue of $23.6M (+3%) vs. $19.2M. Shares -3.5% AH. (PR)
• Atmos Energy (ATO): FQ4 EPS of -$0.17 misses by $0.09. Revenue of $1.35B (+2%) vs. $1.32B. Shares -2.5% AH. (PR)
• Clearwire (CLWR): Q3 EPS of -$0.43. OIBDA of -$198.8M. Revenue of $69M (+13%) vs. $67M. Revenue comparison to Sprint's WiMAX business in prior year. Shares -1.2% AH. (PR)

Today's Markets

Asia stocks were mostly higher Wednesday. Europe is sitting on healthy gains, and futures are higher.

Q3 2009 Earnings Call

November 10, 2009 4:30 pm ET

Sprint Nextel (S) and other Clearwire (CLWR) investors are reportedly going to pump another $1.5 billion into the WiMax provider.

According to the Wall Street Journal (Techmeme):

• Northrop unloads TASC. Northrop Grumman (NOC) agreed to sell its TASC consulting unit to a pair of private-equity firms - KKR and General Atlantic - for $1.65B. TASC unit provides engineering and consulting services to the U.S. military and state governments. Northrop said it expects the sale to generate net cash proceeds of $1.1B, which it will use to repurchase shares. The deal is the latest in a recent uptick in LBO acquisitions which have returned after a two-year dry stretch. Still, with four banks - Barclays (BCS), Royal Bank Of Canada (RY), Deutsche Bank (DB) and a lending unit of the CPP - combining to put up senior debt of well under $1B, today's deals are still a far cry from the mega-mergers of the credit boom.
• G-20 keeps drip open. G-20 leaders said it's too early to withdraw global stimulus efforts despite signs that a global economic recovery is underway. "Economic and financial conditions have improved following our coordinated response to the crisis," officials said in a communique (.pdf) following a two-day gathering in St. Andrews. "However, the recovery is uneven and remains dependent on policy support, and high unemployment is a major concern. To restore the global economic and financial system to health, we agree to maintain support for the recovery until it is assured." Stocks, commodities and futures rallied Monday: "Markets don't need to be worried that these governments and central banks are suddenly going to take away all the stimulus measures," one strategist said. "Risk appetite should remain supported into the end of the year."
• Put up or shut up day for Kraft. Kraft (KFT) could raise the cash portion of its bid for Cadbury (CBY) to 400p ahead of today's deadline, and is expected to take the bid directly to Cadbury's shareholders. Kraft has enlisted Royal Bank of Scotland (RBS), Credit Suisse (CS), Barclays (BCS) and BNP Paribas to help provide a £5.5B bridge loan. Kraft's initial bid of 300p and 0.2589 KFT shares per CBY share was valued at 745p/share, but is now worth about 720p with the decline in Kraft's stock. According to U.K. takeover rules, by launching an offer today Kraft would set in motion a 28-day deadline to publish a prospectus on the offer for Cadbury shareholders, and would have 60 days to collect enough shares to clinch a deal.
• Healthcare bill: next stop Senate. The Obama healthcare overhaul passed a House vote by a narrow margin Saturday (220-215), setting up a fractious debate in the Senate - where Democrats don't enjoy the same broad majority - this week. The bill would cost $1.05T over a decade to provide health insurance to another 36M Americans. It requires most Americans to carry insurance, creates a new exchange where they can shop for it, and gives low income earners tax credits to help them pay for it. In an appearance Sunday, Obama said he is "absolutely confident" a healthcare bill will also pass through the Senate.
• Sprint group to pour another $1.5B into Clearwire. Sources say Sprint Nextel (S) and a number of its Clearwire JV (CLWR) partners are preparing to pump another $1.5B or more into the wireless broadband provider. The Sprint group first invested $3.2B in Clearwire 18 months ago, taking a majority stake in a bet on Clearwire's version of 4G wireless broadband, WiMax. Some rivals have favored a comparable technology knows as LTE. $1B of a new infusion would come from Sprint, with Comcast (CMCSA), Intel (INTC), Time Warner Cable (TWC) and Bright House Networks kicking in another $500M. Google, a key JV partner, isn't thought to be involved in this round.
• Comcast, GE agree on CNBU valuation. After weeks of wrangling, GE (GE) and Comcast (CMCSA) reportedly agreed to value NBC Universal at about $30B, and a deal to give Comcast a 51% stake in GE's media and entertainment arm could come as early as this week, though it's still unclear whether 20% NCBU stakeholder Vivendi has signed off on the proposal. Sources say the pair met last week with debt-raters to ascertain the impact of $9B in debt a new NBCU would assume as part of the combination, and hope this week to be told it would be considered investment grade.
• Murdoch paper cleared of spy charges. The U.K. Press Complaints Commission said Monday it has found no proof journalists at Rupert Murdoch's The News of the World regularly hacked the phones of public figures to secure sensational stories. The probe was prompted after reports in The Guardian said the practice at the tabloid was widespread. In response, the Guardian described the PCC's report as complacent, saying the PCC did not have the "ability, the budget or the procedures to conduct its own investigations."
• Axa Asia Pacific shuns $10B bid from parent. Axa Asia Pacific (AXAPY.PK), the Australian unit of France’s biggest insurer (AXA -1.1% premarket), rejected an unsolicited $10B bid from its parent and AMP Ltd. (AMLTF.PK). CEO Rick Allert said Axa Asia Pacific would consider a higher offer, but called today's offer too low. Axa said today it will raise £2B through a rights offer to finance acquisitions.
• Brown backs down on transactions tax. World leaders publicly snubbed U.K. PM Gordon Brown's bold pitch for a global tax on financial transactions which would be used to fund future bailouts. Brown surprised ministers by pitching the initiative during a speech to the G-20 assembly Saturday to the dismay of his peers, who unanimously agreed with U.S. Treasury chief Tim Geithner in saying economic leaders don't think taxpayers should have to pay for future financial sector foibles. Brown backed down Sunday, though he continues to believe tighter bank regulation may not suffice to protect against future risk.
• Reynolds eyes stake in smokeless tomorrow. Cigarette giant Reynolds American (RAI) is in advanced talks to buy closely held Niconovum AB, a Swedish maker of nicotine-replacement therapies such as Zonnic pouch and Zonnic gum. A deal would be the largest move by Reynolds into nicotine products, as sales of cigarettes continue to decline. Reynolds controls about 28% of the U.S. cigarette market, second to Altria (MO) which has about 50%. Sources say the deal could be valued at €30M.

Earnings: Mon. Before Open

• DISH Network (DISH): Q3 EPS of $0.18 misses by $0.26. Revenue of $2.89B (-1.5%) vs. $2.93B. Net customers +241K to 13.85M. (PR)
• Energy Conversion Devices (ENER): FQ1 EPS of -$0.34 misses by $0.03. Revenue of $42.9M (-55.2%) vs. $56.4M. Shares -0.1% premarket. (PR)
• GTx (GTXI): Q3 EPS of -$0.35 in-line. Revenue of $3.6M (+20%) vs. $4M. (PR)
• Hospitality Properites Trust (HPT): Q3 FFO of $0.77 misses by $0.01. Revenue of $264M (-15.4%) vs. $272M. (PR)
• Nationwide Health Properties (NHP): Q3 FFO of $0.56 in-line. Revenue of $97.8M (+3.4%) vs. $94.4M. Sees full-year EPS of $2.22-2.23 vs. $2.28. (PR)
• Quicksilver Resources (KWK): Q3 EPS of $0.25 beats by $0.03. Revenue of $207M (-12.5%) in-line. (PR)
• Rockwell Automation (ROK): FQ4 EPS of $0.37 beats by $0.10. Revenue of $1.07B (-27.6%) in-line. (PR)
• Tesoro (TSO): Q3 EPS of $0.24 beats by $0.23. Revenue of $4.74B in-line. Expects to spend less than its stated capex budget of $600M. Shares +3.7% premarket. (PR)
• Warner Chilcott (WCRX): Q3 EPS of $0041 misses by $0.01. Revenue of $253M (+9%) in-line. (PR)
• Western Refining (WNR): Q3 EPS of -$0.05 beats by $0.01. Revenue of $1.83B (-40.6%) vs. $1.75B. Shares +0.5% premarket. (PR)
• Windstream (WIN): Q3 EPS of $0.24 beats by $0.03. Revenue of $734M (-7.5%) vs. $747M. (PR)

Today's Markets

Overseas markets and commodities surged Monday, and U.S. futures have gained overnight. The dollar is getting pounded in early trading.

Following Novatel’s (NVTL) 3Q report and 4Q guidance last Thursday evening, NVTL stock dropped over 25% on Friday. Investors had expected strong MiFi revenue growth for 4Q, but management stated that this was unlikely to happen, despite continued channel sell-through improvement. The culprit was simply an inventory build-up in 2Q and 3Q, presumably at Sprint and/or Verizon Wireless.

Aside from sell-through catching up with inventories by 1Q, there are other more fundamental technology shift reasons why NVTL should see very strong MiFi growth throughout 2010:

Last week, the stock indices returned to the levels they were at two weeks previously, after a deluxe correction, which means we are going into the reporting season with high expectations. For the first time since the crisis began, investors will not make do with results of the “it could have been worse” variety, and not even with companies meeting estimates, but will want much more than that: growth in sales and profits in comparison with the previous quarter beyond market expectations, and that goes for fourth quarter guidance too.

Last week’s outstanding stock in the portfolio I manage here was without doubt Ceragon (CRNT), which rose by more than 18%. In the past month, it has risen by more than 31%, and I mention this because exactly a month ago, Jim Cramer recommended the stock on CNBC. I wrote at the time that if Cramer recommends a small Israeli stock in a technological niche that not many people understand, then he knows something that the market doesn’t know yet, and on Thursday we found out what he knew then. Whoever listened to him made a nice profit.

The much-hyped next-generation (4G) technology of WiMAX is quickly losing ground to the alternative technology of Long-Term Evolution (LTE). Large telecom infrastructure equipment makers are gradually shifting from WiMAX to LTE, and as a result the WiMAX field is getting less crowded day by day.

This gives the smaller gear makers like PureWave Networks and Airspan Networks a chance to enter the WiMAX market.

We believe Sprint’s (S) share price does not reflect the company’s underlying value. This is the overriding reason management is pursuing its “slow liquidation” strategy. In total this liquidation will likely realize at least $12 per Sprint share. We suspect this deal may be about Deutsche Telecom (DT) or T-Mobile forming a JV with Sprint and possible Level3 (LVLT) for backhaul than DT buying the company.

Recently, the perspective on the wireless industry has been changing. After decades of growth, subscriber penetration in the US has saturated, and analysts are turning negative on the wireless industry, highlighting the superior positioning of cable TV (see "Cable vs Wireless: Which Is Growing Faster?"). Much of the enthusiasm for cable TV derives from limited competitive pressures and its superior ability to deliver broadband data, compared to the wireless carriers.

That’s one way to look at it. But it is applications, not the transport media, that drive service growth. Today, the best demarcation for success isn’t between cable and wireless, it’s the exposure to and positioning in the fastest growing application, notably broadband data.

Sprint Nextel (S - Analyst Report) officially launched its 4G wireless broadband services Monday, In line with expectations, in the markets of Atlanta, Las Vegas and Portland. This represents a significant expansion initiative by the third-largest US wireless carrier. The company’s 4G service is being offered under the "Sprint 4G" brand and leverages the WiMax (a mobile broadband technology) network operated by Clearwire Corp. (CLWR - Snapshot Report).

Subscribers to Sprint’s 4G services across these new markets can now enjoy lightning fast mobile broadband experience by paying just $10 over their existing 3G wireless data plans. This is enabled by the nation’s first dual-mode (operates on both 3G and 4G networks) mobile broadband modem which was launched by the company last December. The 4G WiMax network offers network speeds that are 3-5 times faster than the existing 3G deployments.