CNBC's Domm: Today's Market Preview

U.S. stocks look ready to open slightly higher after yesterday's rally took the Dow to a record and the S&P to six year highs. CPI is reported this morning and the inflation measure could help set the tone. Lots of merger activity around the globe is helping lift world stock markets. European shares rose on the back of US gains and takeover activity. Japanese stocks were higher overnight, after the Tankan survey showed strong business confidence in the last quarter.

CHINA NEWS: Federal Chairman Ben Bernanke grabbed the spotlight in Beijing overnight not only with what he said but what he chose not to say. Bernanke said China's currency policies are an "incentive" to its exporters and act as a "distortion" that drives investment away from industries that would benefit China's consumers. What he dropped from his speech apparently was that the currency acts an "effective subsidy." Press reports this morning made much of the last minute revision in the speech made at the Chinese Academy of Social Sciences last night.

OIL SLICK? Stocks sidestepped a big move up in oil yesterday, ignoring the price rise that came as OPEC said it would cut production in 2007. Oil is moving higher again this morning.

MERGER MANIA: Japan Tobacco stepped out as a buyer for Gallaher and agreed to buy the UK company for $14.7 billion. The deal is the biggest cross border acquisition ever by a Japanese company, showing once more the urge to merge is a global game and has no bounds when it comes to possible buyers and targets.

In US merger activity, The Wall Street Journal today reports that Penn National , a smaller gambling company, made a mostly cash bid for Harrah's Entertainment , rivaling a competing offer from a private equity group. Our David Faber has been reporting on the bidding process, the two bids as well as a proposed recapitalization plan before the Harrah's board. The board met for two days in New York this week.

RAKING IT IN: The big pay day for Wall Street bosses and stars has been getting a lot of attention this week as the Wall Street firms, led by Goldman , reported eye popping results. The Wall Street Journal reports today on the big pay packages for Wall Street ceos. Our Charlie Gasparino reported on those $50 million plus incomes on "Power Lunch" earlier this week.

In other corporate news, Apple Computer's red hot stock could lose some of its shine this morning after the company said in a filing with the Securities and Exchange Commission that is is unable to file its 10K by the required deadline due to its review of its accounting on options. It also said it will restate historical financial statements.

All day long, we will look at whether the holiday cheer lifting stocks is sustainable into the New Year. Citigroup strategist Tobias Lefkowitz cast his vote yesterday, upping targets on the Dow and S&P. He moved his Dow forecast to 14,000 by year end 2007 from 12,750. He revised his 2007 S&P 500 outlook to 1600, from 1500.