Is Ford still your best bet in the auto sector?

True story. I dropped the daughter off at dance class last night and, at my wife’s suggestion, set out for a “nice little wine bar just north of the school” she had enjoyed once with a famous classical pianist friend some years ago (that’s right, I said pianist). I knew I had the right place when the fedora-wearing guy next to me dropped a well-thumbed copy of Revolutionary Social Change in Colombia on the bar. Latin-inspired jazz played quietly and the barmaid told my drinking companion about a terrific novel she was reading about two people who were falling in love as they attended meetings to discuss the death of the “left.”  I would have asked her the title but would have been revealed as an eavesdropper. Another man entered, ordered a beer and sat down in a care-worn chair, back to the wall, flipped open the New Yorker and appeared to focus on an article, not the cartoons. A woman with a beret walked in and was greeted by one and all. She ordered a glass of red wine. The air was bristling with intent. Thankfully I had changed out of my suit earlier and into a plaid flannel shirt. I recalled that this was Andy Bell’s neighbourhood, but the thought gave me no comfort at all.  I was about to order another when I noticed the older gentleman on my left was reading something called Revenge Fantasies of the Politically Dispossessed. I settled my bill rather than become the first against the wall. “Unrest Spreading” hollers the Wall Street Journal this morning. You got that right. Cairo today, Cabbagetown tomorrow. You heard it here first.

• Even as Egyptian police fire rubber bullets at protesters in Cairo, we need to maintain a focus on the stories and events that are likely to affect North American markets and money in the coming hours and days. Not to be outdone by S&P, the folks at Moody’s warned the U.S. they may place a negative outlook on the country’s AAA rating within a few years time if the deficit continues to worsen. Moody’s went to great lengths to explain that no action is imminent so the market could take this as something of a negative outlook on the stable outlook. Gary Jenkins at Evolution Securities adds that it would be “a brave rating agency analyst who took action on the U.S. rating in the current climate. I believe that Guantanamo Bay is still open…”
• Ford surprised the market this morning by reporting an 80-percent plunge in fourth quarter net profit as its European operations reported a loss and it took a one-time charge of almost a billion dollars to recognize a convertible debt swap. Strip out the one-time items and it appears that Ford still missed expectation, and yet the company raised its forecast for full-year industry sales. What’s the market to make of this complex report? Is Ford still your best bet among the auto stocks? Buy? Sell? Hold? There is a lot to examine here.
• Microsoft, meanwhile, topped expectations after the close of trading last night. Corporate customers bought more Office and server programs and products while digital athletes snapped up millions of Xbox Kinect boxes – you know the things, where you stand up and pretend to exercise and play games so a digital you can exercise and play on a screen.
• Sara Lee said a short time ago that since no one wanted to spend money on her, she would go ahead and split in two. See how you like that, she said. Is this the end of the drawn-out takeover battle that wasn’t? Iconic brands, epic troubles.
• Last year was the Year of the Pig. Soaring feed costs drove hog farmers to reduce the size of the herds sending lean hog prices to record highs and making them the best performing commodity of the year. This year, the U.S. cattle herd has shrunk to the smallest size since 1958, according to analysts surveyed by Bloomberg News. Could this be the ag commodity play of 2011? What could it mean for Canadian ranchers? How big is our industry now? Where are our export markets? Some very smart investors have been buying Canadian farm and ranchland in recent years. Is this the payoff? I think we could do a lot with this story. 
•  LinkedIn filed with U.S. regulators for an IPO of up to $175 million US. Sure, that’s a small sum, but the market could learn a few things from the offering. First of all, it could prove to be something of an indication for sales of Facebook and Twitter. Also, it tells us a little bit more about private equity’s thinking right now.
• America's growth check-up will be a top story for us this morning.  After expanding 2.6% in the third quarter, today we find out how much momentum carried into the final three months of the year.  The Street needs analysis. The most important question that needs to be answered is whether the economy is growing fast enough to meaningfully reduce unemployment.  There’s also a consumer sentiment index at 9:55. 
•  A quiet end to the week for earnings in Canada.  AGF Management gives us the first look at how fund managers are faring; it's especially timely as we approach the RRSP contribution deadline.  We're also tracking results from Chevron, Honeywell and Norborg.
• Statscan's less noticed jobs report is scheduled for release.  We'll be particularly interested by the average hourly earnings component.

Every morning Managing Editor Marty Cej writes a "chase note" to BNN's editorial staff listing the stories and events that will be in the spotlight that day. Never miss an edition of The Chase...follow http://twitter.com/martycej

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