Tuesday Watch

Late-Night Headlines
Bloomberg:
- Brazilian stocks may decline as much as 10% by the end of August as inflation accelerates and interest rates rise, according to Citigroup Inc.(C).
- State Street Corp.(STT), facing $3.43 billion in potential losses from investments in mortgage-backed securities, said it will sell $2.5 billion of common stock to boost capital.
- SEC Chairman Christopher Cox has chosen an attorney who led one of the agency’s biggest insider-trading probes and a former partner at Gibson, Dunn Crutcher as deputy heads of the enforcement group.
- Grain growers in Australia, the world's sixth-largest wheat exporter, are in a strong position to expand output and incomes if seasonal conditions improve, the nation's commodity forecaster said.
- Malaysia’s political volatility made its stocks least favored in Southeast Asia, Goldman Sachs said, recommending that investors also pare holdings in Thailand, Indonesia and the Philippines as growth and earnings slow. The countries are at risk of contagion from Vietnam’s economic upheaval that slashed its benchmark index 56% this year.

Wall Street Journal:
- General Motors(GM) is set to lay out a series of restructuring actions Tuesday at its annual shareholders meeting, but cutting the dividend will probably not be on the list.
- Some superdelegates may see no advantage in taking sides just yet, and some even say they may arrive at the August convention uncommitted.

MarketWatch.com:
- Investing for the oil price collapse (Part 1). The question is not if, but when prices will come down.
- Investing for the oil price collapse (Part 2). Winners and losers from the coming fall.
- The massive consumer exit out of gas-quaffing trucks and SUVs and into crossovers and cars is gathering momentum in the US, and with monthly vehicle sales tallies due Tuesday, not even Toyota is immune to the fallout.
- Dollar bull. You can’t talk about one currency in isolation. Headlines tell us that the dollar is down. Popular dollar bashing shows that crowd’s ignorance of Europe and Japan. A strong argument can be made that the euro is not a sustainable currency. “It is only a matter of time, probably less than three years, until the euro experiment meets its end,” said Avi Tiomkin, a currency expert and adviser to hedge funds.
- The $2 trillion hedge fund industry is worried that activist investors may be about to lose a useful tool in their battles with corporate management. Positions built in a company using equity swaps, a type of derivative that’s tied to stock prices, may face tougher disclosure requirements if a ruling by a judge in NY goes the way the hedge fund industry fears later this month.

CNBC.com:
- Video Conference Use Soars Along with Travel Costs.

Portfolio.com:
- Yang was ready to spark an employee walkout if Microsoft(MSFT) won its fight for Yahoo(YHOO), a lawsuit contends. Yahoo C.E.O. Jerry Yang mapped out a scorched-earth defense against Microsoft, essentially arranging to encourage all 14,000 Yahoo employees to quit if Microsoft succeeded in buying the company earlier this year, newly released court documents suggest.

USA Today.com:
- A federal judge has sentenced law firm co-founder Melvyn Weiss to 30 months in prison for his role in a lucrative lawsuit kickback scheme targeting some of the largest corporations in the nation.
- Ford(F) CEO says shift to small cars here to stay. The first four months of the year, sales of the smallest, least-expensive cars — typically the most fuel-efficient — exploded 33% in an overall market down about 8%.

cleantech:
- Europe speeds fuel cell, hydrogen production. According to an EU-funded project, scenario analyst indicates that hydrogen, if introduced with suitable policy measures, could reduce the total oil consumption by the road transport sector by 40% between now and 2050.

Reuters:
- Nasdaq OMX Group Inc said on Monday it has begun selling real-time share data to the websites of Google Inc's Google Finance, cable television network CNBC and News Corp's Wall Street Journal. Until now, Nasdaq has been providing quotes on a 15-minute delay.

Financial Times:
- Intel(INTC) has admitted to shortages of its latest Atom microprocessor as manufacturers scramble to complete in the “netbook” category.
- The Chicago Board Options Exchange, the US’s biggest options exchange, took a big step towards an IPO on Monday by striking a $ 1 billion settlement to end a long-running legal dispute with members of the Chicago Board of Trade.
- Big US corporations lifted their charitable giving last year by 5.6 per cent - to a median $26m - despite worsening economic conditions and a slowdown in earnings.

TimesOnline:
- A call for global agreement on preventing manipulation of the crude oil market is to be made by John Hutton, the Business Secretary, at a meeting of G8 energy ministers in Japan this weekend. Mr Hutton will propose the sharing of detailed data on oil trading, as well as oil stocks, production and consumption. The plan is designed to increase transparency in the oil market and decrease opportunities for speculation by cutting oil price volatility. As well as greater action on transparency, Mr Hutton is also expected to seek coordinated international action to encourage oil-producing countries to raise output to help to bring down fuel prices. He is also seeking to encourage G8 members to maximize their investments in domestic production. The CFTC's joint investigation is understood to be concentrating on several areas of potential abuse or manipulation. They include whether the operators of oil storage facilities, pipelines, cargo ships and terminals could issue false data about the supply of available oil and make trades to profit from the misunderstanding.

Daily Telegraph:
- British Airways Plc may ground planes as the price of oil continues to rise, and will examine flights on a “route-by-route basis,” citing CEO William Walsh.

Liberty Times:
- Taiwan’s car sales will probably fall this year to a level last seen 24 years ago, when the island first opened the market to imports, citing figures from the Taiwan Transportation Vehicle Manufacturers Association. Sales plunged almost 30% from a year earlier in May because of soaring fuel costs, citing the transportation ministry.

China Daily:
- China Issues Olympic Behavior Guide for Foreigners.
- China Southern Airlines will trim services on at least 21 international routes because of surging fuel costs. China Eastern Airlines is also considering similar cuts. Air China Ltd. plans to use Airbus SAS A330s on some routes instead of Boeing 747s to reduce capacity and costs. China Southern, Air China and China Eastern are the country’s three biggest carriers.

Inquirer.net:
- Philippine gasoline prices may increase by as much as 25 US cents a liter. Domestic gas prices have risen 12 times this year.

Late Buy/Sell Recommendations
Citigroup:
- Reiterated Buy on (NUE), raised estimates, boosted target to $90.

Night Trading
Asian Indices are -1.50% to -.75% on average.
S&P 500 futures unch.
NASDAQ 100 futures +.04%.

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

Earnings of Note
Company/EPS Estimate
- (LAYN)/.54
- (TOL)/-.90
- (BOBE)/.41
- (GES)/.46
- (CPRT)/.48
- (HOV)/-2.77
- (HGG)/.28

Upcoming Splits
- None of note

Economic Releases
10:00 am EST
- Factory Orders for April are estimated to fall .1% versus a 1.3% gain in March.

Afternoon:
- Total Vehicle Sales for May are estimated to rise to 14.6M versus 14.4M in April.

Other Potential Market Movers
- The weekly retail sales reports, (ALTR) mid-quarter update, (CNC) analyst meeting, (THC) analyst meeting, (ATAC) investor day, (GLRE) analyst meeting, (INFA) analyst meeting, Goldman Sachs Lodging/Gaming/Restaurant/Leisure Conference, JPMorgan Basics/Industrials Conference, UBS Healthcare Supply Chain Conference, Sidoti Emerging Growth Forum, RBC Energy Conference and Oppenheimer Communications/Technology Conference could also impact trading today.

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