Friday, January 22, 2010 – my comments are in italics

GE announces earnings of 0.28 vs estimates of 0.26. Their order backlog rose and the company
benefited from a tax gain and cost-cutting efforts. Stock is trading up ~4% in pre-market

KMB announces earnings of 1.17 vs estimates of 1.26. Despite the number being below estimates,
profit was still up 17%. They benefited from a drop in the price of the fiber used to make tissue and
disposable diapers (their big brands are Huggies and Kleenex). Stock is trading down ~2.5% in pre-
market

China equities fell 1% overnight on speculation the country will officially shift its monetary/fiscal stance
after the gov’t Q4 eco growth announcement omitted a reference to maintaining a “moderately loose
monetary policy” and a “proactive fiscal policy” in its outlook section. In addition, CNBC noted market
concerns that China could hike rates 27bp as early as this weekend and China’s one-year swap rate is
now headed for its biggest weekly increase in two months. The Reserve Bank of India is widely expected
to follow China's move in raising reserve requirements at a policy review next Friday (Reuters).

Shanghai Composite – been consolidating since August

Internets – EBAY kicked off earnings on upbeat note although GOOG last night more disappointing
(mostly b/c of top line, which came in under actual St ests of up 15%+ Q/Q). We hear from YHOO and
AMZN next week – GOOG trading down ~3.5% in pre-market

Fund Flows - Total equity fund flows (excluding ETFs) saw inflows of $685 mm compared to $710 mm of
inflows last week. Domestic equity funds had $207 mm of inflows compared to $102 mm of inflows in
the prior week. International and Global equity funds gained $478 mm of assets compared to inflows of
$609 mm in the prior week. K Worthington – retail investors are still pouring more money into
international than domestic equities. In fact, flows into emerging market equities have reached
worrisome levels. Are the people adding money to Emerging Market equities a little late to the party?

AAPL - Fox News reports that Apple is in last minute negotiations with both AT&T and Verizon to provide
wireless service for their upcoming tablet device. Support for both networks suggests that Apple will be
producing two versions of the device to support the different wireless standards

Bernanke faces tighter Senate vote than expected – the Senate was expected to hold a vote to
reconfirm the Fed chairman today although this has been pushed out again; it will now take place next
week. If a vote doesn’t happen before 1/31, Bernanke will have to step down. Sen Sanders maintained
he has a shot at getting enough Democrats to join a long list of Republicans who are expected to vote
against Mr. Bernanke. "It's going to be close," he said. WSJ

Will Ben Bernanke to win Senate confirmation for a second term as Fed Chairman?

This means that people are betting there is an 80% chance that Bernanke is re-confirmed. If you think
that is low, buy the contract and if he is confirmed, then it will go to 100 and you make money. If you
think there is less of a chance he will be confirmed, sell the contract. At 80%, this could be a good sale.