Wednesday Watch

Late-Night Headlines
Bloomberg:
- Japan’s two biggest brokerages said the US dollar will rebound against the euro and yen by year-end as economic conditions in Europe and Japan deteriorate and US interest-rate cuts near an end. The European Central Bank will be forced to lower borrowing costs in the second half as growth in the region slows, according to Daiwa Securities SMBC Co. Yen buying isn’t “sustainable” because the Japanese economy will cool and interest rates abroad are more attractive, said Nomura Securities. The dollar will gain 8% to 110 yen this year and 9% to $1.45 per euro, said Takahide Nagasaki, senior currency stategist at the unit of Daiwa Securities Group.
- Intel Corp.(INTC) posted first-quarter profit that met analysts’ estimates and forecast sales that may top projections as demand holds up in the face of an economic slowdown in the US, sending the shares up 8%.
- Stacy Smith, CFO of Intel Corp.(INTC), sees core business strengthening in 2008. (video)
- Credit-default swaps worldwide expanded to cover $62.2 trillion debt in 2007 as investors rushed to protect against losses triggered by the collapse of the US subprime mortgage market.
- The cost to protect US corporate bonds from default fell to the lowest in a week amid optimism that banks and securities firms may have seen the worst of the global credit crisis. Contracts on the Markit CDX North America Investment Grade Index of 125 companies in the US and Canada The cost to protect Australian corporate bonds from default decreased credit default swaps show. The Markit iTraxx Australia Series 9 Index fell 9 basis points to 131.5 basis points. dropped 0.5 basis points to 121.5 basis points.

Wall Street Journal:
- Last year, hedge-fund manager John Paulson pocketed billions by betting the housing market would collapse, but in the Hamptons he’s just listed his three-acre retreat for $19.5 million, more than 50% above what he paid for it two years ago. The founder of Paulson & Co., managing roughly $32 billion, recently bought a 10.4-acre lakefront compound less than a mile away for $41.3 million. Last year, Mr. Paulson made as much as $3 billion to $4 billion for himself – thought to be a record one-year payday on Wall Street. This year the former Bear Stearns(BSC) investment banker bet against the financial sector and profited from weakening among banks, including Bear.
- Some of the Middle East’s biggest and flushest investors see today’s financial turmoil as a buying opportunity.

CNBC.com:
- Republican presidential hopeful John McCain on Tuesday called for a summer gas tax holiday for Americans wincing at high pump prices as part of a wide-ranging plan to help the ailing US economy.

BusinessWeek.com:
- China’s three sovereign wealth funds – China Investment Corp., National Social Security Fund and China-Africa Development Fund – are likely to outsource a combined $320 billion to foreign asset managers over the course of the next three years, according to a report by Z-Ben Advisors.

Forbes.com:
- The World’s Billionaire Women.

Portfolio.com:
- The 73 Biggest Brains in Business.

USA Today.com:
- Survey: Online banking satisfaction up.
- Ford(F) to build 30% more of its Focus small cars this year.
- Save it? Spend it? Pay debts? Our plans for tax rebate vary.
- Men arm themselves with anti-aging weapons.

Reuters:
- Deutsche Bank AG, Germany’s biggest lender, sold about $5 billion of loans financing leveraged buyouts to two private equity firms. The bank is likely to sell a similar amount in Europe. Deutsche Bank sold the loans at about 90 cents on the dollar.
- Critics blasted a Treasury Department call for the $1.8 trillion hedge fund industry to better police itself, saying voluntary guidelines did little to protect investors and regulate the pools of capital.
- Real estate agents are beginning to see signs of life among people looking for homes to buy around the United States. It’s too early to talk of a trend, but lower house prices and mortgage rates are bringing buyers out of hibernation.
- Britain’s prime minister Gordon Brown on Tuesday called on OPEC to boost production to counter rapidly rising prices. Demand in the US may be losing steam. US crude oil imports fell in February to the lowest level in a year. They declined by 486,000 barrels per day, or 4.9%, from the month before to 9.514 million bpd, the EIA said.

Financial Times:
- General Electric(GE) plans to invest up to $2 billion in acquisitions and other deals in China over the next three years as part of a strategy to double its revenues in the country.
- Merrill Lynch(MER) is in “preliminary” talks with Singapore’s Temasek that could result in the US bank becoming the latest Wall Street titan to receive a major cash injection from a sovereign wealth fund.

TimesOnline:
- Britain’s first hydrogen fuel station will open tomorrow in the first stage of a technology revolution offering drivers the prospect of pollution-free motoring.

International Herald Tribune:
- Hedge fund professionals saw their pay climb 50% in 2007 despite the pain from the credit crunch and the increase in market volatility, a report from Alpha Magazine showed on Monday. The survey of more than 800 people at nearly 600 firms found the chief executives of single-manager fund firms took home average compensation of $3.8 million last year. “Some managers have profited enormously from the collapse of the US subprime mortgage market,” the magazine said.

Late Buy/Sell Recommendations
Citigroup:
- Maintained Buy on (INTC), target $26. Reported revenues above consensus, EPS inline. Guided revenue above, EPS above. 2Q08 gross margin guidance well above consensus. 2008 gross margin maintained at 57% versus consensus of 56%. Inventories -2.9%(normal seasonal inventory increase is 6%-8%). We find “little to shake a stick at” in Intel’s earnings. Most surprising is Intel’s gross margin guidance. We are impressed by Intel’s inventory management. Intel’s revenue guidance, at the low-end of seasonality but above consensus is “Goldilocks” like, assuaging concerns about the end-environment dramatically worsening.
- Reiterated Buy on (POZN), target raised to $19.

Piper Jaffray:
- Rated (ACTL) Buy, target $20.

Night Trading
Asian Indices are +.50% to +1.25% on average.
S&P 500 futures +.54%.
NASDAQ 100 futures +1.22%.

Morning Preview
US AM Market Call
NASDAQ 100 Pre-Market Indicator/Heat Map
Pre-market Commentary
Pre-market Stock Quote/Chart
Before the Bell CNBC Video(bottom right)
Global Commentary
WSJ Intl Markets Performance
Commodity Movers
Top 25 Stories
Top 20 Business Stories
Today in IBD
In Play
Bond Ticker
Economic Preview/Calendar
Daily Stock Events
Upgrades/Downgrades
Rasmussen Business/Economy Polling
CNBC Guest Schedule

Earnings of Note
Company/EPS Estimate
- (KO)/.63
- (ABT)/.62
- (PJC)/.16
- (WWW)/.43
- (BLK)/2.00
- (JPM)/.68
- (ITW)/.76
- (STJ)/.51
- (WFC)/.57
- (GILD)/.50
- (ALTR)/.26
- (IBM)/1.45
- (SLM)/.40
- (ISIL)/.30
- (LEG)/.24
- (AMR)/-1.27
- (TMK)/1.43
- (KMP)/.52
- (JCI)/.47
- (EBAY)/.39
- (VMI)/1.00

Upcoming Splits
- None of note

Economic Releases
8:30 am EST
- The Consumer Price Index for March is estimated to rise .3% versus unch. in February.
- The CPI Ex Food & Energy for March is estimated to rise .2% versus unch. in February.
- Housing Starts for March are estimated to fall to 1010K versus 1065K in February.
- Building Permits for March are estimated to fall to 970K versus 984K in February.

9:15 am EST
- Industrial Production for March is estimated to fall .1% versus a .5% decline in February.
- Capacity Utilization for March is estimated to fall to 80.3% versus 80.4% in February.

10:30 am EST
- Bloomberg consensus estimates call for a weekly crude oil build of 1,800,000 barrels versus a -3,148,000 barrel decline the prior week. Gasoline supplies are estimated to fall by -1,800,000 barrels versus a -3,442,000 barrel decline the prior week. Distillate supplies are expected to fall by -1,650,000 barrels versus a -3,693,000 barrel decline the prior week. Finally, Refinery Utilization is expected to rise by .73% versus a .67% rise the prior week.

2:00 pm EST
- Fed’s Beige Book

Other Potential Market Movers
- The Fed’s Yellen speaking, Fed’s Plosser speaking, Fed’s Mishkin speaking, weekly MBA Mortgage Applications report and SunTrust Robinson Humphrey Institutional Conference could also impact trading today.

BOTTOM LINE: Asian indices are mostly higher, boosted by technology and commodity stocks in the region. I expect US equities to open modestly higher and to maintain gains into the afternoon. The Portfolio is 100% net long heading into the day.