Monday, April 04, 2005

Monday Watch

Weekend Headlines
Bloomberg:
- Pope John Paul II, leader of the world's Roman Catholics for more than a quarter-century, died at the age of 84.
- OPEC will resume talks in the next seven days on boosting its oil-output quota by 500,000 barrels a day in May and will add another half million barrels to the quota in the third quarter.
- Wal-Mart Stores said March sales at US stores open at least year climbed about 4.2%, the biggest gain in 10 months, led by rising grocery purchases.
- French opposition to the European Union's new constitution increased again in the past week as voters become dissatisfied with the government's failure to create jobs. The unemployment rate in France recently reached 10.1%, almost double that of the US.
- Bank of China, the nation's second-biggest lender, said a Beijing loan manager was arrested in connection with a $77 million property-loan fraud, the latest in a series of scandals pointing to lax controls in the financial-services industry.
- US Treasury notes may extend their biggest weekly gain since August on speculation a slowdown in jobs growth will keep inflation in check.
- Oil prices, which gained on average the past seven quarters, may fall in the three months ending in June as US inventories rise and China's demand growth slows, a Bloomberg survey showed.

Wall Street Journal:
- The European Commission will consider emergency restrictions on Chinese imports amid a rise in Chinese textile exports.

Financial Times:
- The European Union's financial services commissioner, Charlie McCreevy, said the US should drop rules requiring foreign companies listed in New York to report under US as well as international standards.

NY Times:
- A group of Sunni Arab imams and religious scholars issued a statement yesterday urging fellow Sunni Arabs to join Iraq's army and police to help safeguard the nation.
- Drugmakers, including France's Sanofi-Aventis SA, are seeking to develop medications targeting obesity, a market that now represents $100 billion, or 5% of overall US health-care costs.
- Wal-Mart Stores will face criticism of its business practices from a coalition of about 50 labor, environmental and other groups in the first coordinated campaign against the world's largest retailer.
- Investors in AIG Inc. may face more shocks because of holdings the insurer's subsidiaries have in the parent company and each other.
- Budget airlines such as JetBlue Airways and Southwest Airlines are now focusing on transcontinental flights, driving down prices and turning them into a "big air-fare flea market."

LA Times:
- Lions Gate Entertainment Corp., a Canadian company whose films include "Fahrenheit 9/11" and "The Blair Witch Project," is considering a bid for Hit Entertainment Plc.

San Diego Union-Tribune:
- California Insurance Commissioner John Garamendi will hold hearings tomorrow in LA to investigate potential fraud among title insurers.

Seattle Times:
- Ports along the US West Coast are hiring dockworkers as container traffic from China increases.

Sunday Telegraph:
- Elan Corp. plans to cut costs by more than half to ensure the company's survival after new evidence last week linked its Tysabri multiple sclerosis drug to a usually fatal nerve disorder.

Sunday Times:
- Fortune Brands Inc. has hired CSFB to target acquisitions in the European drinks market.

Independent on Sunday:
- HSBC Holdings Plc, Europe's biggest bank by market value, is considering a $75 billion bid for Morgan Stanley.

London-based Times:
- Morgan Stanley's Zoe Cruz and Stephen Crawford may ask the securities firm's management to sign a letter of support for CEO Phil Purcell.

AFP:
- Syria will withdraw the last of its troops from Lebanon by the end of this month, complying with UN Security Council Resolution 1559.

Beijing News:
- Gome Electrical Appliances Holdings Ltd. will offer discounts on $232 million worth of flat-panel televisions, driving prices lower by 30%.

Beijing Antaike Information:
- Chinese copper smelters may raise their processing and refining fees again because of increasing supply of the raw material and higher copper prices.

Australian Financial Review:
- BHP Billiton is seeking to increase its iron ore prices by at least 100%.

Middle East Economic Digest:
- Saudi Arabia plans to tender out contracts to boost output at three offshore oilfields by 50% as it seeks to increase capacity to meet rising world demand.

Weekend Recommendations
Barron's:
- Had positive comments on RHHBY, PPP, UCL, TOT, STOSY, IRF, NFX, BRK/A and negative comments on MAXE, AMZN, MBI.

Goldman Sachs:
- Reiterated Outperform on WLP, MDT, TAP, KO, DIS, DELL, IBM, EMC and AET.
- Reiterated Attractive view of Metals sector, favorites are N, RIO, ABX, AL and FCX.

Night Trading
Asian indices are mostly lower, -.50% to unch. on average.
S&P 500 indicated +.02%.
NASDAQ 100 indicated +.14%.

Morning Preview
US AM Market Call
NASDAQ 100 Pre-Market Indicator/Heat Map
Pre-market Commentary
Before the Bell 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
None of note

Splits
FWRD 3-for-2
TIN 2-for-1

Economic Releases
None of note

BOTTOM LINE: Asian Indices are mostly lower on continuing worries that higher energy prices will further crimp growth in the region. I expect US stocks to open modestly lower in the morning as worries over higher energy prices and slowing global growth more than offset merger speculation. The Portfolio is Market Neutral heading into the week.

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