Monday Watch

Weekend Headlines
Bloomberg:
- Nicolas Sarkozy claimed a mandate for change after his election as French president, pledging to unify the country as he began promoting a program of tax cuts, tougher prison sentences and tighter immigration rules. “The people of France have chosen to break with their ideas, habits and behavior of the past,” Sarkozy said. “I will restore the value of work, authority, morals, respect, and merit. I’ll restore national pride and national identity,” he said.
- Dow Jones’(DJ) owners and directors were sued by a shareholder seeking to compel acceptance of a $5 billion buyout offer by News Corp.(NWS/A) Chairman Rupert Murdoch.
- The number of US children hospitalized by a form of diabetes almost tripled from 1997-2003, largely because of obesity, according to a study.
- US Treasury 10-year notes gained last week, pushing their yields lower than those of two-year notes for the first time in four weeks, amid signs inflation is moderating.
- The US dollar rose last week against the euro as private reports showing resilience in US manufacturing and services industries reduced concern over a slowdown in the world’s largest economy.
- Berkshire Hathaway(BRK/A) shareholders voted by a 53-to-1 margin against an investor proposal calling on the firm to divest its $3.3 billion stake in PetroChina because it’s controlled by a company that does business in Sudan.
- The subprime mortgage crisis won’t be “any huge anchor” to the economy, though lenders and borrowers will have “plenty of misery,” Berkshire Hathaway Chairman Warren Buffett said.
- ``Spider-Man 3,'' starring Tobey Maguire, set a three-day box-office record at U.S. and Canadian theaters, taking in $148 million for Sony Corp.(SNE)
- Street Sense came from next-to-last to win the 133^rd Kentucky Derby before the third-largest crowd in race history.
- Berkshire Hathaway’s Warren Buffett usually laments that his company has more cash than investment opportunities. Yesterday he envisioned an acquisition so big that he’d have to sell some stocks to free up funds.
- People’s Bank of China Governor Zhou Xiaochuan said there’s room to raise commercial banks’ reserve requirements further after seven increases in 11 months failed to slow lending and inflation.
- Billionaire investor George Soros plans to start a foreign-affairs research institute in Europe Soros, who spent $27.5 million trying to defeat President Bush in the 2004 election, said the US can’t deal with global affairs on its own. Garton Ash, a professor of European Studies at Oxford University who is helping Soros with the plans, said that the new institute would concern itself with global inequality and climate change, similar to the US Council on Foreign Relations.
- Lakshman Achuthan, managing director at Economic Cycle Research Institute(ECRI), says US economy “growing healthy.”(video)

Wall Street Journal:
- The SEC and NY state attorney general’s office are investigating trading in shares and options of Dow Jones(DJ) prior to a $5 billion bid by News Corp.(NWS/A).
- US lawmakers are considering implementing a new standard for energy-efficient lighting that may result in the elimination of the common incandescent light bulb in 10 years.
- James Ottaway Jr., whose family controls 6.2% of Dow Jones Class B supervoting shares, opposes News Corp.’s(NWS/A) $5 billion bid for the company.
- Berkshire Hathaway’s(BRK/A) billionaire investor Warren Buffett said most low-cost index funds will beat hedge funds or hedge funds of funds over any 10-year period.

NY Times:
- Microsoft Corp.(MSFT) is talking with Yahoo!(YHOO) about a possible joint venture that focuses on a partnership of advertising networks or Internet units, a personal briefed on the talks said. A “creative partnership” is a possibility rather than an acquisition by Microsoft, the person said. An outright acquisition may face opposition by Yahoo! executives, who want to focus on the Internet and don’t want to become part of Microsoft.
- The character of Gordon Gekko, the manipulative suspender-wearing financier played by Michael Douglas in the film “Wall Street,” will be revived in a new movie.
- Anti-war groups that have banded together to form a coalition are seeking to pressure Democrats in Congress. The Americans Against Escalation in Iraq coalition may splinter if the Democratic leadership doesn’t stick with a deadline for US troops to leave Iraq. MoveOn.org’s leaders this week sent a letter to Democratic leaders warning them not to pass a bill that fails to impose any measures to end the war.
- Goldman Sachs(GS) and General Electric(GE) are among the companies that have developed products and divisions to capitalize on demand for investments that promote social and environmental values.
- Several leading liberal law professors contributed to a US appeal court decision in March to strike down a gun control law on Second Amendment grounds for the first time in the nation’s history.

Byte and Switch:
- Google(GOOG), which plans to build a major data center in Oklahoma this week, appears to be eyeing a location in Council Bluffs, Iowa, for another of its growing array of technology sites.

Forbes.com:
- Think chief executives get fat paychecks? People who manage piles of money do much better.

Bespoke Investment Group:
- The Bear Market in Analyst Sentiment. It appears as though the close the S&P 500 gets to its old highs, the less likely analysts are to embrace this bull market.

AP:
- President Bush declared a major disaster exists in Kansas after a powerful tornado nearly destroyed the town of Greensburg two days ago, leaving nine people dead.

Reuters:
- Carl Icahn said he may seek to fire Motorola Inc.(MOT) CEO Zander if he fails to improve results at the mobile-phone maker this year.

Financial Times:
- Reuters Group Plc appeared ready to recommend an offer from Thomson Corp.
- BT Group(BT) is planning to announce a $4 billion share buyback when it releases full-year results last this month.
- Berkshire Hathaway(BRK/A) CEO Buffett may select his successor as investment chief by giving as many as four managers up to $5 billion each and see how they perform.
- Blackstone Group’s proposed $60 billion IPO could be affected by a US Congress initiative to make private equity firms and hedge funds pay more tax.

London-based Times:
- Reuters Group Plc may be valued at as much as $17.5 billion in a takeover by Thomson Corp.

Banque de France:
- Financial Stability Review: Special Issue on Hedge Funds

Automobilwoche:
- DaimlerChrysler AG(DCX) is close to reaching a deal to sell the Chrysler division to Magna Intl., Canada’s largest auto-parts maker.

Commercial Times:
- Mediatek Inc. has received orders from Garmin Ltd.(GRMN) to supply navigation chips. Mediatek also outbid SiRF Technology Holdings(SIRF) to become the GPS chip supplier for Holux Technology, with shipments to begin this quarter.

Economic Daily News:
- AU Optronics Corp.(AUO) may post a profit in May as demand from customers “looks healthy,” citing company President Chen Hsuan-bin. The “prosperity” in the display panel market will probably continue through the end of the year, citing Chen.

Agencia Estado:
- JBS SA, the Brazilian meat producer that owns the Friboi meat brand, plans to make an offer to buy Swift & Co., the third-largest US beef and pork producer.

Saudi Press Agency:
- Saudi Aramco, the world’s largest state-owned energy company, will implement a five-year business plan that aims to meeting rising energy demand in the kingdom and abroad.

Kargozaraan:
- About 500 Iranian shops have started stocking clothes that conform with Islamic “decency” in exchange for tax cuts.

Weekend Recommendations
Barron's:
- Made positive comments on (DAL), (CNK), (RGC), (CKEC), (MDR) and (WLP).

Citigroup:
- Even amidst a housing slowdown, the consumer balance sheet remains strong. The perseverance of the consumer drove corporate profits and stock market gains in 1Q07. The outlook for the equity markets is bullish as implied earnings growth has risen above beginning of year levels and worries over possible declines in corporate profit margins have depressed valuations. Between year-end 2002 and year-end 2006, consumer net worth rose by $16.8 trillion. Of that increase, less than one-fifth came from increases in net real estate value.
- Reiterated Buy on (ADI), target raised to $44. Within the last week, signs of order pipelining, select semiconductor lead time increases and rush orders signal an analog semi upcycle is now forming. Other top analog picks include (ISIL), (ONNN) and (FCS).

Night Trading
Asian indices are +.50% to +.75% on average.
S&P 500 indicated -.05%.
NASDAQ 100 indicated +.03%.

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
Conference Calendar
Daily Stock Events
Macro Calls
Rasmussen Consumer/Investor Daily Indices
CNBC Guest Schedule

Earnings of Note
Company/Estimate
- (ACMR)/-.01
- (AMT)/.06
- (ANH)/.00
- (NILE)/.17
- (CENT)/.30
- (FLML)/-.31
- (FLR)/.86
- (FST)/.53
- (GTRC)/.49
- (JCOM)/.32
- (MDR)/.75
- (MCK)/.78
- (PGN)/.50
- (WYNN)/.55

Upcoming Splits
- (CIG) 3-for-2

Economic Releases
3:00 pm EST
- Consumer Credit for March is estimated to rise to $4.0 billion versus $3.0 billion in February.

Other Potential Market Movers
- Raymond James Canadian Oil Sands Conference

BOTTOM LINE: Asian indices are higher, boosted by technology and automaker shares in the region. I expect US stocks to open mixed and to rally into the afternoon finishing modestly higher. The Portfolio is 100% net long heading into the week.