Tuesday Watch

Late-Night Headlines
Bloomberg:
- The Fed’s Fisher said he expects US economic growth to “pick up in future quarters” and that he is hopeful inflation will moderate.
- Japan’s machinery orders fell unexpectedly for a second month in March, highlighting concern among manufacturers.
- Bank of Communications Ltd. shares surged 86% on their first day of trading in Shanghai, riding a market rally that’s made Chinese stocks the world’s most expensive. The Shanghai-based company has a market capitalization of $67.7 billion based on today’s pricing.
- China Shenhua Energy Co., the nation’s largest coal producer, increased coal production 6.1% in April.
- Shanghai copper futures are falling by the 4% daily limit amid speculation that demand will slow in China, the world’s biggest consumer of the metal.

ABC News:
- Former House Speaker Newt Gingrich said he may seek the 2008 Republican presidential nomination.

American Banker:
- Ohio’s attorney general plans to sue mortgage lenders and Wall Street firms over subprime mortgage defaults on behalf of both borrowers and the Ohio Public Employees Retirement System.

Financial Times:
- Companies in the EU may face more impromptu checks of their employees’ documents as part of a crackdown on illegal immigration, citing proposals from EU Justice Commissioner Franco Frattini.

London-based Times:
- Dow Jones’(DJ) board has a fiduciary duty to hold talks with News Corp.(NWS/A) over its $5 billion bid for the media company, citing Institutional Shareholder Services.

Securities Times:
- China’s securities regulator has ordered the country’s fund management companies to not get involved in speculation of shares. Fund managers must be mindful of “liquidity risks” and are barred from owning more stocks than they’re capitalized for. Fund managers are banned from offering stock tips to relatives or friends.

Commercial Times:
- Qualcomm Inc.(QCOM) may order about 20% more from Taiwan Semiconductor Manufacturing and Advanced Semiconductor Engineering in the second half of the year over the first.

China Securities Journal:
- China’s securities watchdog issued draft regulations allowing mutual funds to manage private assets for the first time.

Late Buy/Sell Recommendations
Citigroup:
- Reiterated Buy on (MGA), target $100.

Morgan Stanley:
- The People’s Bank of China 1Q Monetary Policy Report flags the authorities’ concern about the risk of a generalized overheating. We sense that PBOC is preparing the market for further hikes of the base lending and deposit rates in the near-term. We forecast at least two additional rate hikes in the remainder of the year, with the next one likely to come as early as in a matter of weeks.

Night Trading
Asian Indices are -.50% to +.25% on average.
S&P 500 indicated -.14%.
NASDAQ 100 indicated -.18%.

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/EPS Estimate
- (AMAT)/.28
- (CPWR)/.16
- (FIG)/.26
- (FOSL)/.20
- (FRE)/1.14
- (HD)/.59
- (SGR)/.19
- (TDS)/.24
- (TJX)/.38
- (TSAI)/.31
- (WMT)/.68

Upcoming Splits
- None of note

Economic Releases
8:30 am EST
- The Consumer Price Index for April is estimated to rise .5% versus a .6% gain in March.
- The CPI Ex Food & Energy for April is estimated to rise .2% versus a .1% gain in March.
- Empire Manufacturing for May is estimated to rise to 8.0 versus a reading of 3.8 in April.

9:00 am EST
- Total Net TIC Flows for March are estimated to fall to $45.0 billion versus $94.5 billion in February.

1:00 pm EST
- The NAHB Housing Market Index for May is estimated at 33 versus 33 in April.

Other Potential Market Movers
- The Fed’s Lockhart speaking, Fed’s Bernanke speaking, Fed’s Minehan speaking, Fed’s Mishkin speaking, Fed’s Geithner speaking, Fed’s Hoenig speaking, weekly retail sales reports, IBD/TIPP Economic Optimism Index, UBS Alternative Energy Conference, CSFB Semi & Supply-Chain Summit, Merrill Lynch Global E&C/Infrastructure Conference, Oppenheimer Moving Beyond Voice Conference, UBS Global Financial Services Conference, Deutsche Bank Tech Conference, Morgan Stanley Communications Conference could also impact trading today.

BOTTOM LINE: Asian indices are lower, weighed down by commodity and technology stocks in the region. I expect US equities to open modestly lower and to rally into the afternoon, finishing modestly higher. The Portfolio is 75% net long heading into the day.