Tuesday, March 29, 2005

Tuesday Watch

Late-Night Headlines
- American International Group's Maurice "Hank" Greenberg plans to step down as chairman two weeks after probes of potential earnings manipulation forced his resignation as CEO of the world's largest insurer.
- Japan's household spending fell more than expected in February and unemployment rose, suggesting the world's second-largest economy may not be able to rely on consumers to drive a recovery from recession.
- China Petroleum & Chemical Corp. which makes two-thirds of the nation's fuels, said 2004 profit rose 61% to a record on higher demand for gasoline, diesel and chemicals.
- Aluminum Corp. of China, the country's biggest producer of the metal, had a 42% increase in second-half profit after it raised prices of alumina, a semi-processed material it sells to other smelters.
- EQT Partners AB, a buyout firm backed by Sweden's Wallenberg family, and Goldman Sachs Group's private-equity arm agreed to buy Denmark's ISS A/S, the world's biggest cleaning company, for about $3.8 billion.
- Societe Generale SA said oil prices over $50 a barrel are restraining fuel demand from China.

Washington Post:
- Sony Corp. may have to stop US sales of PlayStation 2 video-game consoles if it loses an appeal to a court ruling stating that the company violated patents by Immersion Corp.
- Text messaging on cellular telephones has become a vehicle for free speech in Arab countries, particularly in the Persian Gulf.
- The federal government is one of the most welcoming employers in the US for senior citizens, and top officials remain in their jobs and powerful long after the typical age for private sector retirement.

Financial Times:
- Merrill Lynch plans to expand its private client business internationally.
- The value of global mergers and acquisitions activity fell 23% in the first quarter of 2005 to $513 billion, compared with $670 billion in the last quarter of 2004.

Commercial Times:
- Taiwan won't toughen its stand against China after the mainland legislature passed laws authorizing an invasion of the island if it declares independence.

Economic Times:
- Merck & Co. may set up a unit in India to sell patented products.

China Securities Journal:
- China's economic growth probably slowed to 8.8% in the first quarter on lower agricultural output and investment in factories, roads and other fixed assets.

Late Buy/Sell Recommendations
Goldman Sachs:
- Reiterated Outperform on MSFT and BSX.
- Reiterated Attractive view of Hospital sector.

Night Trading
Asian Indices are -1.50% to -1.0% on average.
S&P 500 indicated -.37%.
NASDAQ 100 indicated -.51%.

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
Rasmussen Consumer/Investor Daily Indices
CNBC Guest Schedule

Earnings of Note
Company/EPS Estimate

None of note

Economic Releases
10:00 EST:
- Consumer Confidence for March is estimated to fall to 103.0 versus a reading of 104.0 in February.

BOTTOM LINE: Asian indices are lower as commodity and exporter shares in the region continue to decline on worries over slowing global demand. I expect US equities to open modestly lower in the morning and to weaken throughout the day on worries over slowing global growth and the possibility the Fed will accelerate the pace of rate hikes. The Portfolio is market neutral heading into tomorrow.

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