Thursday, March 03, 2005

Thursday Watch

Late-Night News
Asian indices are mostly higher, led by energy-related stocks in the region. China's central bank plans to start a nationwide system that collects and supplies credit information on individuals, as part of efforts to improve risk management in the nation's financial industry, China Business News reported. Ocean carriers expect more congestion and delays at the ports of Los Angeles and Long Beach, California, this year, the Financial Times reported. Makers of flat-panel displays used in televisions and computers may face losses until mid-2006 on excess capacity, the Commercial Times reported. Lebanon's opposition lawmakers called for a withdrawal of Syrian forces before they will hold talks with President Emile Lahoud on forming a new government, Fox News reported. China may boost military spending by 12.6% this year as the nation's top lawmakers prepare to legitimize the use of force to reunify with Taiwan, AFP reported. Michigan Governor Jennifer Granholm is pushing to allow Toyota to expand a technical center to create jobs and help the state become less reliant on domestic automakers, the NY Times said. Fannie Mae, the biggest buyer of US mortgages, may have to recognize as much as $2.8 billion in extra losses on its financial derivatives portfolio because of new accounting problems cited by its regulator, the Wall Street Journal reported. Enron Corp. has tentatively agreed to settle lawsuits over employee pension-fund claims for $356.2 million in bankruptcy court, Bloomberg reported. South Korean business confidence had its biggest jump in more than a decade last month, surging to a three-year high amid signs consumer spending is picking up, Bloomberg said. Shares of Deutsche Telekom AG, Europe's largest telephone company, may gain after its fourth quarter profit beat analysts' estimates, helped by asset sales and higher revenue from Internet and mobile-phone services, Bloomberg reported. JFE Holdings and Nippon Steel, Japan's two biggest steelmakers, raised full-year profit forecasts after they increased prices amid a surge in demand form China for steel used to make cars, trucks and household appliances, Bloomberg reported.

Late Recommendations
- Goldman Sachs: Said on March 8, voters in Miami-Dade and Broward Counties, Florida will decide whether their respective counties will allow slot machines at racetracks and Jai Alai facilities. A passing vote would likely boost earning at IGT(+.06), AGI(+.03) and WMS(+.18). Reiterated Outperform on DNA.

Night Trading
Asian Indices are -.25% to +.50% on average.
S&P 500 indicated -.02%.
NASDAQ 100 indicated -.07%.

Morning Preview
US AM Market Call
NASDAQ 100 Pre-Market Indicator/Heat Map
Pre-market Commentary
Before the Bell CNBC Video(bottom right)
Asian Indices
European Indices
Top 20 Business Stories
In Play
Bond Ticker
Analyst Actions
Macro Calls
CNBC Guest Schedule

Earnings of Note
Company/Estimate
DLM/.24
CMOS/-.16
KOSP/1.03
ONXX/-.43
SHFL/.15
SONS/.02
SPW/.83
TTWO/1.09
WWCA/.33
WTW/.32

Splits
None of note.

Economic Data
- Final 4Q Non-farm Productivity is estimated to rise 1.5% versus a prior estimate of a .8% gain.
- Final 4Q Unit Labor Costs are estimated to rise 1.8% versus a prior estimate of a 2.3% increase.
- Initial Jobless Claims for last week are estimated to fall to 310K versus 312K the prior week.
- Continuing Claims are estimated to rise to 2658K versus 2650K prior.
- ISM Non-Manufacturing for February is estimated to rise to 60.0 versus a reading of 59.2 in January.

BOTTOM LINE: I expect US equities to open mixed-to-weaker and then head higher later in the day on short-covering ahead of Friday's employment report. Considering the Dow and S&P 500 are very near cycle highs, skepticism is unusually elevated in a number of indicators I follow. This makes me more confident in a near-term breakout to the upside. However, an unexpected upward revision to 4Q unit labor costs would likely send long-term term rates higher and stocks lower tomorrow. The Portfolio is 100% net long heading into tomorrow.

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