Thursday, May 01, 2008

Thursday Watch

Late-Night Headlines
- Treasury Secretary Henry Paulson said the credit crisis probably is more than half over and retained his forecast for the US economy to keep growing.
- Orange juice, the worst-performing commodity this year, dropped another 3.9% as the dollar gained against the euro and rain was expected to help the harvest in Brazil, the biggest citrus grower. Orange juice futures are now down 17% so far this year.
- American Airlines(AMR) and British Airways Plc are in talks to broaden their Oneworld alliance to add Continental Airlines(CAL) and seek antitrust immunity to set prices and schedules.
- Former Fed officials William Poole and Susan Bies said today it wouldn’t be wise for policy makers to cut the benchmark US interest rate below the current 2 percent.
- The man accused of running the Emperors Club VIP, a prostitution ring at the center of a probe tied to the resignation of NY Governor Eliot Spitzer, is nearing a deal to plead guilty.
- High-yield bonds in the US and Europe are headed for the biggest monthly rally since April 2003.

Wall Street Journal:
- Intel Corp.(INTC) says it is scrambling to meet early demand for a forthcoming line of low-end microprocessor chips.
- The number of children infected with a deadly virus in eastern China has increased by nearly 700 in the past two days. The virus has killed 20 children since it was discovered last month.
- Microsoft(MSFT) board fails to reach decision on next step. Options for its Yahoo(YHOO) bid included simply walking away.
- Text of Federal Open Market Committee’s decision.
- Recession? What Recession? Before you declare a recession, as many economic pundits have, shouldn’t the economy, well, actually recess a bit – if only for a quarter?

NY Times:
- NY Times/CBS News poll: Among Hillary Clinton supporters in the Democratic primary, just 49% say they would feel satisfied if Mr. Obama wins, while 50% would be dissatisfied. Nearly 25% of Clinton supporters say they would be very dissatisfied.
- How Google(GOOG) Fuels Its Idea Factory.
- Medical Advances – Through Your iPhone? Researchers are beginning to understand how mobile phones can cut costs, help solve rural health-care problems, and even reduce medical errors.

Boston Herald:
- Obama official: Pro-Clinton group a ‘Swift Boat wannabe’ Barack Obama’s presidential campaign wants federal regulators to investigate fellow Democrats who are backing Hillary Rodham Clinton’s candidacy., taking intraparty discord to a new level of confrontation.

- The Federal Reserve’s action on Wednesday was the latest in an interest-rate-cutting drive over eight months that’s helped lower the yields that many adjustable-rate mortgages are tied to. Thanks to the Fed’s cuts, the rates to which those ARMs have been resetting have sometimes saved homeowners hundreds of dollars a month.
- Farmers say don’t blame ethanol for food prices. Industry spokesman calls linking the two ‘manufactured hysteria.’ Poor weather conditions and a falling dollar should share blame for rising prices, but the ethanol industry said the biggest driver has been increasing fuel costs. Despite a vigorous defense by farmers and ethanol firms, there were signs in both parties and both chambers that Washington’s love affair with ethanol may have just been a fling. Options under consideration include suspending the tariff on imported ethanol, which would allow US firms to import Brazilian ethanol at much lower costs. Brazilian ethanol is made from sugar and costs about a third as much to produce as the corn-based version.

- Game console prices may be cut: Activision CEO
Google Inc's(GOOG) top priority this year is to make money off its YouTube video-sharing site, Chief Executive Eric Schmidt said in a TV interview that sent Google's shares up 4.7 percent.

Financial Times:
- Fed hints at pause as rates cut to 2%. The suggestion of a pause came by way of the Fed dropping its explicit focus on the “downside risks” to growth. It also dropped a pledge to act “in a timely manner” and highlighted the “substantial easing” of monetary policy that has already taken place.
- The falling dollar has helped Atlanta, GA to emerge as a particularly desirable location in which to hold conferences and training sessions. The city has burst into the Economist Intelligence Unit’s list of top ten global destinations for business travel, occupying 6th position. Three other US cities make the list. Here is the top ten:

The Scotsman:
- As an economist who has made the study of “happiness” one of his academic interests, David Blanchflower’s warning of the danger of Britain plunging into recession are not likely to produce nationwide joy and delight.

Late Buy/Sell Recommendations

- Reiterated Buy on (LEH), target $65.
- Reiterated Buy on (CSCO), target $27.
- Reiterated Buy on (OMTR), target $30.
- Reiterated Buy on (AKAM), target $42.

- Reiterated Outperform on (FSLR), raised target to $330.

Night Trading
Asian Indices are -.50% to unch. on average.
S&P 500 futures +.04%.
NASDAQ 100 futures +.13%.

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
Rasmussen Business/Economy Polling
CNBC Guest Schedule

Earnings of Note
Company/EPS Estimate
- (NBL)/1.67
- (RDC)/.86
- (PTEN)/.50
- (CVS)/.55
- (WMB)/.51
- (TYC)/.58
- (EXPE)/.22
- (CLX)/.75
- (CMCSA)/.19
- (XOM)/2.13
- (CAH)/1.01
- (ASF).48
- (WYN)/.35
- (NMX)/.82
- (D)/.89
- (TBL)/.18
- (MRO)/.82
- (BKC)/.27
- (CI)/.96
- (EK)/-.04
- (HOLX)/.36
- (FAF)/.14
- (APA)/3.02
- (CEPH)/.98
- (MNST)/.21
- (N)/-.02
- (MET)/1.48
- (JAVA)/.19
- (DRIV)/.48
- (ADP)/.75
- (ACS)/.87
- (CHK)/.93
- (WYNN)/.68
- (DLB)/.42
- (QLGC)/.26
- (GMCR)/.20
- (NNDS)/.58
- (MORN)/.43

Upcoming Splits
- None of note

Economic Releases
8:30 am EST

- Personal Income for March is estimated to rise .4% versus a .5% gain in February.
- Personal Spending for March is estimated to rise .2% versus a .1% gain in February.
- The PCE Core for March is estimated to rise .1% versus a .1% gain in February.
- Initial Jobless Claims for this week are estimated to rise to 365K versus 342K the prior week.
- Continuing Claims are estimated to rise to 2950K versus 2934K prior.

10:00 am EST
- ISM Manufacturing for April is estimated at 48.0 versus 48.6 in March.
- ISM Prices Paid for April is estimated at 83.5 versus 83.5 in March.
- Construction Spending for March is estimated to fall .7% versus a .3% decline in March.

- Total Vehicle Sales for April are estimated at 15.0M versus 15.1M in March.

Other Potential Market Movers
- The (ADBE) analyst meeting, weekly EIA natural gas inventory report, Challenger Job Cuts report and Morgan Stanley Global Healthcare Conference could also impact trading today.

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

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