Company/Estimate
ARO/.09
CIEN/-.07
ELBO/.09
GPS/.32
MRVL/.32
JWN/.43
PETM/.21
Splits
SFCC 3-for-2
Economic Data
Initial Jobless Claims for last week estimated at 325K versus 331K the prior week.
Continuing Claims estimated at 2950K versus 2974K prior.
Leading Indicators for April estimated +.2% versus +.3% in March.
Philadelphia Fed. for May estimated at 31.0 versus 32.5 in April.
Recommendations
Goldman Sachs reiterated Outperform on TPX, BIIB, IP, DTC, ABK, PETC and SPP.
Late-Night News
Asian indices are lower on concerns over the political situation in Taiwan and rising energy prices. Hynix Semiconductor of South Korea plans to double shipments of so-called NAND flash memory chips to 2 million units a month by the end of June, Digitimes reported. China's coal shortages have left some power plants with sufficient inventories to keep them running for a day and forced others to shut down, the China Daily reported. HSBC Holdings, Europe's largest bank by market value, may consider buying a U.S. deposit and savings bank to boost its presence in the U.S., the Financial Times said. President Bush reiterated that the U.S.-led coalition would complete a full transfer of sovereignty in Iraq by June 30, Bloomberg reported. OPEC may as soon as this weekend approve Saudi Arabia's plan to boost oil output quotas because of concerns that near record-high prices will slow economic growth, Bloomberg said. Taiwan President Chen Shui-bian said he will press ahead with constitutional revisions without mentioning his plan to put the changes to a public vote, a referendum China has denounced as a ruse to declare independence, Bloomberg reported.
Late-Night Trading
Asian Indices -1.75% to -.25% on average.
S&P 500 indicated -.15%.
NASDAQ indicated -.36%.
BOTTOM LINE: U.S. stocks will likely fall tomorrow morning on weakness in Asia and higher energy prices. Oil would have to reach $78/bbl. on an inflation-adjusted basis to equal levels seen during the Iran hostage crisis in the early 80's. The price of oil has barely risen over the last 23 years while other goods and services have risen continuously. The U.S. CPI is expected to rise just 2.2% this year, below its 84-year average of 3.0%. Worldwide inflation is projected to rise at its slowest pace ever this year. According to GlobalInsight.com, a well-repected economic consultant, $40/bbl. oil for the next 2 years would only shave .3% off of GDP growth each year. Under this scenario, the U.S. CPI would rise 2.1% next year and 1.9% in 06, still well below the 84-year average.
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