Thursday Watch

Earnings Announcements
Company/Estimate
AES/-.02
Dox/.24
CELL/.34
EDS/.11
JNY/.32
LVLT/-.32
MXIM/.27
THQI/.77

Economic Data
Non-farm productivity estimated at 2.5% vs. 9.4% last Q.
Initial jobless claims estimated at 340K vs. 342K last week.
Continuing claims estimated at 3114K vs. 3131K last week.

After-Hours News
Progress made in containing Asian bird flu in China and Thailand.
Israeli police will question Sharon today in bribe investigation.
Toyota, which probably overtook Ford as the world's second-largest car-maker, said third-quarter profit rose 60% as it sold more Tundra pickup trucks and Sienna minivans in the US.
The continuing tightness is some components is causing CSCO to increase component stocking and inventory....suppliers are IDTI(23% of sales),AVNX(18%),PWER(16%),MERX(15%),PMCS(13%),TXCC(11%),BRCM(9%),JBL(24%),SLR(8%). This was one of the main problems with their quarter.
Asian markets are quiet...ranging from -.5% to +.5%.
S&P 500 indicated -.06%.
NASDAQ incdicated +.07%.

BOTTOM LINE: The recent rotation from all cyclicals and mainly tech, into consumer stocks is a result of Fed tightening fears, temporary slowdown in GDP, US dollar stabilization,anemic job growth and the strengthening of Kerry with anti-business rhetoric. Like I have said before, I don't think the Fed will tighten until employment strengthens considerably. I do think this will happen and most likely around 2nd/3rd quarter. Historically, cyclicals do well for another 6 months after the first tightening. I believe GDP is re-accelerating and will come in above 5% for the first quarter. The US dollar will likely move in a trading range for awhile. Our strengthening economy and improving trade deficit should counter budget deficit fears. I feel that most of Kerry's anti-business rhetoric is a result of fact that the other democratic candidates are pushing him into this stance. I expect him to win the nomination and tone down the anti-business rhetoric against President Bush. As mentioned earlier in the day, I am 10% net short and will look to cover a few of these tomorrow in anticipation of a good jobs report on Fri.