Thursday Watch

Late-Night Headlines
Bloomberg:
- New Zealand’s central bank unexpectedly raised its benchmark interest rate to a record 8%, saying housing demand and consumer spending are fanning inflation.
- Brazil’s central bank lowered the benchmark lending rate by half a percentage point today, the biggest reduction this year, as a rally by the country’s currency holds inflation at an eight-year low.
- China, the world’s biggest consumer of copper, may have slashed imports of the metal by 50% last month as high prices deterred buyers, said traders and analysts, including Xue Feng at Maike Futures. Refined copper and alloy imports are expected to drop to between 50,000 and 100,000 metric tons in May, Li Rong, an analyst at Great Wall Futures Co., said by phone from Shanghai. This compares with April’s level of 192,069 tons. A slowdown in copper shipments to China may allow global stockpiles of the metal to rebuild and weigh on prices ahead of the traditionally weak summer demand period.

Wall Street Journal:
- Brian Tierney, who last year led an effort to purchase the Philadelphia Inquirer and Philadelphia Daily News for $515 million, is interested in bidding for Dow Jones(DJ)

Shanghai Securities News:
- China Three Gorges Project Corp. has invested more than $21 billion in the world’s largest hydro-electric dam project.

Late Buy/Sell Recommendations
Citigroup:
- US equity investors have become far more concerned this week, as 10-year treasury yields have approached 5%, fearing that valuations will begin to be in jeopardy of contracting. We add equity risk premium to bond yields, which provides a stronger correlation with P/Es than the traditional Fed Model. This approach is still signaling strong gains for stocks ahead. Admittedly, if the 10-year treasury yield increased to 5.5%(all else equal), this would not be a positive sign for equities, but this is not in our forecast. We believe that investors are still skeptical, and our Panic/Euphoria model is nowhere near Euphoric levels as in 1987 or the last 1990s. Indeed, this gauge is signaling a better than 90% probability of positive six-month forward gains for US stocks. Our six- and 12-month outlook continues to be upbeat, and we do not expect small pullbacks to change our longer-term outlook. Thus, we would be buyers during market weakness.’

Morgan Stanley:
- Reiterated Overweight on (GILD). The CDC’s new funding for HIV testing is a positive for Gilead Sciences(GILD) as it could: 1) Accelerate new patient diagnoses by nearly 30 to 40% and 2) Drive longer-term growth of the HIV market as success of this program could also accelerate the uptake of “opt-out” routine testing. We expect Gilead to be the key beneficiary of this market expansion as it is capturing 80% of new patient starts with Atripla.

Night Trading
Asian Indices are -.75% to unch. on average.
S&P 500 indicated +.16%.
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 Business/Economy Polling
CNBC Guest Schedule

Earnings of Note
Company/EPS Estimate
- (ALOG)/.31
- (CAE)/.92
- (FINL)/.07
- (FORR)/.14
- (JOSB)/.42
- (NSM)/.23
- (QSII)/.33
- (ZQK)/-.04
- (SFD)/.36
- (TBL)/.15
- (UTIW)/.16
- (VOL)/.41

Upcoming Splits
- (NGA) 3-for-2

Economic Releases
8:30 am EST
- Initial Jobless Claims for last week are estimated to rise to 312K versus 310K the prior week.
- Continuing Claims are estimated to rise to 2500K versus 2472K prior.

10:00 am EST
- Wholesale Inventories for April are estimated to rise .3% versus a .3% gain in March.

3:00 pm EST
- Consumer Credit for April is estimated to fall to $6.0B versus $13.5B in March.

Other Potential Market Movers
- The Fed’s Mishkin speaking, ICSC Chain Store Sales, EIA weekly natural gas inventory report, CSFB Engineering/Construction Conference, Bear Stearns Biotech Confab, CIBC Alternative Energy Conference, Citi Power/Gas/Utilities Conference, Keybanc Industrial/Automotive Conference, Piper Jaffray Consumer Conference, Stephens Investment Conference and Lehman Brothers Global Services Conference could also impact trading today.

BOTTOM LINE: Asian indices are lower, weighed down by automaker and commodity stocks in the region. I expect US equities to open modestly lower and to rally into the afternoon, finishing modestly higher. The Portfolio is 100% net long heading into the day.