GDP report better-than-expected

Morning News of Note:

• Q3 GDP: U.S. Economy Grew at a 3.8% Rate in Third Quarter, Survey Says The U.S. economy expanded at a 3.8 percent annual rate from July through September, powered by near-record auto sales early in the quarter and rising exports, according to economists surveyed before a government report today. The projected third-quarter gain for gross domestic product, the sum of all goods and services produced in the U.S., compares with 3.3 percent in the previous three months and is based on the median estimate of 67 economists in a Bloomberg News survey. (Full Story) Bloomberg
• XOM: As high fuel prices roil consumers and Congress considers a Backlash Spreads As Profits Surge At Oil Companies Exxon, Shell Net $19 Billion, Fueling Calls for Profit Tax, Efforts to Boost Stockpiles variety of measures to ease the impact, Exxon Mobil Corp. and Royal Dutch Shell PLC, the world's No. 1 and No. 3 oil companies, weighed in with record third-quarter earnings that totaled almost $19 billion. Riding a wave of high prices for oil, gasoline and natural gas, Exxon reported third-quarter net income of $9.92 billion, up 75% from the year-ago period, on revenue of $100.72 billion. (Full Story) WSJ
• C: Heard on the Street... Bricks and Mortar Loom Larger for Citigroup Bank Appears to Broaden Its Plan To Expand Number of Branches, Addressing Weak Retail Presence Citigroup Inc. may be branching out in its pursuit of old-fashioned bank branches. For the past year, the nation's largest financial institution has placed a new emphasis on bank branches as it tries to plug a hole in its world-wide operations. Executives have regularly said the bank is targeting five key areas for growth: California, Texas, Illinois, Florida and the mid-Atlantic region. (Full Story) WSJ
• ZMH: Zimmer-ZMH believe shares near a bottom following 2006 outlook-OP@PIPR ZMH is now officially expecting 1% price declines in 2006 and overall revenue growth of 8%-9%. Earnings growth is still expected to be 17%-19%. The firm views the negative price guidance as a worst case scenario and believes multiple compression is limited.

Market Comments: GDP came in at +3.8% vs. +3.6% consensus. So much for the hurricane-induced slowdown. Of course, those estimates are still subject to revisions, but they look pretty strong at first blush.

The list of companies that have not met earnings estimates and seen their stocks get killed is growing. If you're long DECK, WEBX, IRF, MSTR, KLAC, etc., you're not too happy this morning. Retail stocks are bouncing back after yesterday's schellacking, while chip stocks are in the red so far. The market is up big at the open, and you know how I feel about strong opens. Let's just hope...

long C, XOM; short KLAC