Thursday Watch

Late-Night Headlines

Wall Street Journal:

- Moody's Investors Service(MCO) stripped several Aaa ratings from Berkshire Hathaway Inc.(BRK/A) and its insurance units, as losses pile up amid the severe declines in equity markets and the broader economy. The ratings firm, which itself is a minority-owned affiliate of Berkshire, knocked the investment company's long-term issuer rating down two notches to Aa2. In addition, the insurance financial strength ratings on the company's National Indemnity Co. unit and other major insurance units fell a notch to Aa1.

- With the U.S. now coming to the aid of life insurers, it is worth revisiting some of the remarks made last week by former Federal Reserve Governor William Poole. Poole stepped down from his post as head of the Federal Reserve Bank of St. Louis in March 2008. Below are excerpts of his remarks delivered to attendees of the Tulane University Corporate Law Institute in a talk titled “Exit Strategy from Too Big to Fail.”

- The U.S. steel industry filed an antidumping suit against China, covering $2.7 billion of imports, alleging that steelmakers there unfairly dumped specific types of tubular and pipe steel onto the U.S. market last year. The case, one of the biggest ever filed by the U.S. against China, is likely the beginning of a string of steel-dumping cases against China, say attorneys representing steel workers and manufacturers.

NY Times:

- For the last eight weeks, nearly 200 federal examiners have labored inside some of the nation’s biggest banks to determine how those institutions would hold up if the recession deepened. What they are discovering may come as a relief to both the financial industry and the public: the banking industry, broadly speaking, seems to be in better shape than many people think, officials involved in the examinations say.

- While acknowledging that the recession makes the political battle more difficult, President Obama plans to begin addressing the country’s immigration system this year, including looking for a path for illegal immigrants to become legal, a senior administration official said on Wednesday. Mr. Obama will frame the new effort — likely to rouse passions on all sides of the highly divisive issue — as “policy reform that controls immigration and makes it an orderly system,” said the official, Cecilia Muñoz, deputy assistant to the president and director of intergovernmental affairs in the White House. Mr. Obama plans to speak publicly about the issue in May, administration officials said, and over the summer he will convene working groups, including lawmakers from both parties and a range of immigration groups, to begin discussing possible legislation for as early as this fall. Some White House officials said that immigration would not take precedence over the health care and energy proposals that Mr. Obama has identified as priorities. But the timetable is consistent with pledges Mr. Obama made to Hispanic groups in last year’s campaign. He said then that comprehensive immigration legislation, including a plan to make legal status possible for an estimated 12 million illegal immigrants, would be a priority in his first year in office. Latino voters turned out strongly for Mr. Obama in the election.

Reuters:

- California Pizza Kitchen Inc (CPKI) raised its first-quarter outlook because of the effects of cost-cutting, sending the pizza chain's shares up as much as 8 percent. The company said it now expects a profit of 9 cents to 10 cents a share, up from its prior outlook for a profit of 3 cents to 5 cents a share.

Financial Times:
- As the recession dramatic­ally alters where and how Americans spend their money, there is an emerging consensus on the likely profile of the “new” US consumer who will emerge on the other side of the crisis. A Citigroup report, for example, argues that US consumers are shifting towards “conscientious consumption”, embracing a “thriftiness” focused on value and quality, not quantity.

Shanghai Securities News:

- Chinese industries face “great difficulty” even amid signs that the economy is improving, citing Ou Xinqian, vice minister of Industry and Information Technology.

Nikkei:

- North Korea may have transferred enriched uranium to Iran.

DigiTimes:

- Apple Inc.(AAPL) ordered 100 million flash-memory chips from Samsung Electronics Co. as part of its inventory builup for new consumer electronics in the second half of the year. Apple’s order for so-called 8-gigabit Nand flash chips has tightened supply for the semiconductor.

Late Buy/Sell Recommendations
Citigroup:

- Reiterated Buy on (SPLS), target $23..

Night Trading
Asian Indices are +.75% to +2.75% on average.
S&P 500 futures +.79%.
NASDAQ 100 futures +.71%.

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Company/EPS Estimate
- (PBY)/-.39

Economic Releases

8:30 am EST

- The Trade Deficit for February is estimated at -$36.0B versus -$36.0B in January.

- Initial Jobless Claims for last week are estimated to fall to 660K versus 669K the prior week.

- Continuing Claims are estimated to rise to 5800K versus 5728K prior.

- ICSC Chain Store Sales for March are estimated to fall .8% versus a .1% decline in February.

Upcoming Splits
- None of note

Other Potential Market Movers
- The Fed’s Stern speaking, the Fed’s Hoenig speaking, (LCAV) shareholders meeting and (AHS) shareholders meeting could also impact trading today.

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