Monday, May 29, 2006

Tuesday Watch

Weekend Headlines
- Wal-Mart Stores(WMT) said May same-store sales in the US rose about 2.3%, as higher gasoline and utility prices cut into customers’ paychecks.
- Advanced Micro Devices(AMD), Intel’s only competitor in personal computer microprocessors, will spend $2.5 billion to increase output from its two German plants.
- Richard Kinder, co-founder, chairman and CEO of Kinder Morgan(KMI), owner of 40,000 miles of pipelines in the US and Canada, is leading a group that has proposed to buy the company for $100 a shares or about $13.4 billion.
- Japanese stocks fell after government reports on industrial production and consumer spending pointed to slowing growth in the world’s second-largest economy.

Wall Street Journal:
- Donald Evans, former US commerce secretary, is the favorite to succeed John Snow as the nation’s treasury secretary.

NY Times:
- Some lawmakers say legal charges should be filed against media companies, including newspapers, for publishing classified information that harms national security.
- The US coal industry and utilities are moving ahead with plans to build power plants fueled by coal, which the US has sufficient supplies of for at least 200 years.
- The Internet Movie Database, an online guide to cinema and television, may boost its role in parent’s(AMZN) media retail as it develops a service to download movies and same them to DVDs.
- Senator John Kerry is still fighting to prove his military record is accurate almost two years after it was challenged during his failed 2004 presidential campaign.
- Iranian President Ahmadinejad seeks to consolidate power in the presidential office with full support from Iran’s highest authority, chief cleric Ali Khamenei, in a manner unseen in the 27-year history of the Islamic republic.
- Chicago may pass an ordinance requiring large retailers such as Wal-Mart Stores(WMT) and Home Depot(HD) to pay workers $10 an hour plus 43 an hour of benefits.
- Iran seems to be slowing its drive to enrich uranium, a sign it may be softening its position in the standoff over the country’s nuclear development or running into technical difficulties.

- When it comes to pure wealth creation – arguably the biggest motivation for the majority of hedge fund managers, times have never been better.

Denver Post:
- Qwest Communications(Q), AT&T(T), Sprint Nextel(S) and Verizon Communications(VZ) are bidding on a federal project called Networx worth $20 billion.

- Small-cap companies are expected to outpace big-caps by 4% to 5% this year on faster growth than their larger counterparts, citing Merrill Lynch’s Satya Pradhuman.

San Jose Mercury News:
- Cisco Systems(CSCO) and other computer network-equipment makers may benefit if Internet service providers split their services into tiers.

Focus Magazine:
- McDonald’s(MCD) CFO Paull said the Chinese market may eventually be able to support as many as 10,000 of its restaurants, more than 13 times the number it already has there.

Les Echos:
- SAP AG(SAP) CEO Henning Kagermann said in an interview that his company held preliminary merger talks with Microsoft Corp.(MSFT).

Sueddeutsche Zeitung:
- Biogen Idec(BIIB) can spend at least $2 billion in cash to grow in cancer and neurology markets.

Financial Times:
- Advertising spending on the Internet may surpass spending on ads in national newspapers this year.
- A World Bank report warns that recent stock market falls have increased investor nervousness about the fragility of emerging markets.

Weekend Recommendations
- Had positive comments on (PHG) and (IDT).
- Had negative comments on (SCI).

Morgan Stanley:
- Rated (FMCN) Overweight.

Night Trading
Asian indices are -.25% to +.25% on average.
S&P 500 indicated -.21%.
NASDAQ 100 indicated -.26%.

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

Earnings of Note
- (FRE)/1.39
- (MCDTA)/.04
- (REY)/.36
- (SMTC)/.18
- (SRZ)/.26

Upcoming Splits
- (NICE) 2-for-1
- (TLM) 3-for-1
- (HES) 3-for-1
- (CNX) 2-for-1
- (KEX) 2-for-1
- (MDR) 3-for-2
- (NUE) 2-for-1

Economic Releases
10:00 am EST
- Consumer Confidence for May is estimated to fall to 100.0 versus a reading of 109.6 in April.

BOTTOM LINE: Asian Indices are mostly lower, weighed down by cyclical shares in the region. I expect US stocks to open modestly lower and to rise into the afternoon, finishing mixed. The Portfolio is 100% net long heading into the week.

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