S&P 500 1,096.20 +.64%
NASDAQ 1,909.55 +.68%
Leading Sectors
Airlines +2.31%
Homebuilders +2.0%
Iron/Steel +1.99%
Lagging Sectors
Energy -.15%
Oil Service -.64%
Fashion -.70%
Other
Crude Oil 39.82 -2.40%
Natural Gas 6.31 -.22%
Gold 385.70 +1.90%
Base Metals 104.99 +2.39%
U.S. Dollar 90.50 +.58%
10-Yr. T-note Yield 4.75% +1.09%
VIX 18.20 -2.52%
Put/Call 1.19 -.83%
NYSE Arms .78 -55.93%
Market Movers
MRVL +8.5% after beating 1Q estimates.
WM +6.81% on rumors of acquisition by HSBC or Citigroup.
SRNA +15.6% after beating 1Q estimates and raising 2Q guidance.
IHI +12.29% after confirming rumors that it is evaluating strategic alternatives to increase shareholder value, including a possible sale or recapitalization of the company.
PD +4.8% after copper futures rose to a 2-week high on concern about possible disruptions at a Quebec refinery run by Noranda, Canada's largest mining co.
UTEK -11.2% after lowering 2Q guidance and widening 04 forecast.
CSGS -5.83% after announcing that its COO and President of Global Software Services are leaving.
Economic Data
None of note.
Recommendations
CIEN cut to Reduce at UBS, target $2.50. MWD raised to Sector Outperform at CIBC. KFT raised to Outperform at CSFB, target $34. QSFT rated Buy at Bank of America, target $16. ESV raised to Outperform at CSFB, target $35. GS rated Outperform at CSFB, target $36. RSE rated Overweight at Prudential. ENR cut to Underweight at Prudential. CNXT rated Overweight at Morgan Stanley. Goldman reiterated Outperform on AFL and MRVL. Goldman boosted Lodging sector to Attractive, favorites are MAR and HLT. Goldman raised HOT to Outperform. Goldman reiterated Underperform on CIEN, RKY and TLAB. Goldman still likes Gold sector, favorites are NEM and PDG. Citi SmithBarney raised TLAB to Buy, target $11. Citi reiterated Buy on AAP, target $50. Citi reiterated Buy on EEFT, target $26. Citi reiterated Sell on TSS, target $20.
Mid-day News
U.S. stocks are higher mid-day on falling energy prices and strength in cyclical shares. Pakistan would consider sending troops to aid Iraq once it is free from U.S. control, the Washington Times reported. Video footage of beatings, forced amputations and beheadings during the rein of Saddam Hussein were released this week to contrast the images with abuses by the American military, Bloomberg reported. U.S. Marines and Navy Seabees want to hire Iraqis to repair and renovate mosques, as a means of proving the war in Iraq isn't targeting the Islamic religion, the LA Times reported. Pimco's Robert Arnott said on CNBC that he is investing in REITs and short-term bonds. SBC Communications enlisted managers and hired retirees to field customer calls, fix broken lines and handle other vacant jobs as 100,00 workers began a four-day strike, Bloomberg reported. Saudi Arabia said it will propose that OPEC increase its oil-production quota by more than 2 million barrels a day, Bloomberg said. Florida, Michigan and Ohio, states that may have the closest contests in the presidential election, gained 52,600 jobs last month, Bloomberg reported. The benchmark 10-yr. T-note is headed for its biggest weekly gain since March after comments by Fed policy makers raised optimism the central bank will be able to contain inflation, Bloomberg said.
BOTTOM LINE: The Portfolio is having another good day today as a couple of my airline and Chinese ADRs are rising substantially. I have not traded today and the Portfolio is still 100% net long. I think U.S. stocks will trade neutral to higher into the afternoon on a continuing drop in oil prices. An unexpected rally in bonds this afternoon could lead to a more significant stock rally.
Friday, May 21, 2004
Thursday, May 20, 2004
Friday Watch
Earnings of Note
Company/Estimate
CPRT/.20
HLR/.09
QSII/.40
Splits
DHR 2-for-1
Economic Data
None of note.
Recommendations
Goldman Sachs reiterated Outperform on WAG, NKE, USB and DOW. Goldman reiterated Outperform on NUE, target $105. Goldman reiterated Underperform on NAV and PVH. CL may rise to $65 this year helped by renewed growth in North America, Business Week reported. Shares of SEPR are worth buying because the drug-maker may soon be a takeover target after the FDA approved its medication for sleep disorders, Business Week reported.
Late-Night News
Asian indices are higher on strength in technology shares after an industry report showed semiconductor-equipment orders more than doubled from a year ago. Fluor Corp., Parsons Corp., Washington Group International, Perini Corp. and Halliburton's KBR unit are being probed to ensure they are following U.S. laws and codes of ethics in Iraq, Business Week reported. The U.S. is investigating suspicious activity along the New York-Philadelphia-Washington rail link after people were seen carrying out suspected surveillance of commuter lines, ABC reported. Taiwan President Chen Shui-bian's inaugural speech was a "separatist roadmap" that showed his determination to press ahead with pro-independence policies, the government-owned China Daily said. Nextel lost the FCC's support for a plan to spend $1.36B to ensure that its cell-phone towers stop interfering with emergency signals, the Washington Post said. The U.S. CBO is reviewing the possible withdrawal of 75% of U.S. soldiers stationed in South Korea to reduce costs, as part of its efforts to narrow the budget deficit further, Bloomberg reported. The FBI warned law enforcement agencies to be on the watch for suicide bombers who may strike within the U.S., Time magazine reported in its on-line edition. Pay for investment bankers on average will increase 22% this year, the most since the stock market bubble burst in 2000, Bloomberg reported.
Late-Night Trading
Asian Indices unch. to +2.0% on average.
S&P 500 indicated -.08%.
NASDAQ indicated +.07%.
BOTTOM LINE: I expect U.S. stocks to open higher tomorrow morning on stabilizing energy prices, falling interest rates and strength in Asian technology shares. I will likely add market exposure on any significant early morning weakness. The Portfolio is 100% net long heading into tomorrow.
Company/Estimate
CPRT/.20
HLR/.09
QSII/.40
Splits
DHR 2-for-1
Economic Data
None of note.
Recommendations
Goldman Sachs reiterated Outperform on WAG, NKE, USB and DOW. Goldman reiterated Outperform on NUE, target $105. Goldman reiterated Underperform on NAV and PVH. CL may rise to $65 this year helped by renewed growth in North America, Business Week reported. Shares of SEPR are worth buying because the drug-maker may soon be a takeover target after the FDA approved its medication for sleep disorders, Business Week reported.
Late-Night News
Asian indices are higher on strength in technology shares after an industry report showed semiconductor-equipment orders more than doubled from a year ago. Fluor Corp., Parsons Corp., Washington Group International, Perini Corp. and Halliburton's KBR unit are being probed to ensure they are following U.S. laws and codes of ethics in Iraq, Business Week reported. The U.S. is investigating suspicious activity along the New York-Philadelphia-Washington rail link after people were seen carrying out suspected surveillance of commuter lines, ABC reported. Taiwan President Chen Shui-bian's inaugural speech was a "separatist roadmap" that showed his determination to press ahead with pro-independence policies, the government-owned China Daily said. Nextel lost the FCC's support for a plan to spend $1.36B to ensure that its cell-phone towers stop interfering with emergency signals, the Washington Post said. The U.S. CBO is reviewing the possible withdrawal of 75% of U.S. soldiers stationed in South Korea to reduce costs, as part of its efforts to narrow the budget deficit further, Bloomberg reported. The FBI warned law enforcement agencies to be on the watch for suicide bombers who may strike within the U.S., Time magazine reported in its on-line edition. Pay for investment bankers on average will increase 22% this year, the most since the stock market bubble burst in 2000, Bloomberg reported.
Late-Night Trading
Asian Indices unch. to +2.0% on average.
S&P 500 indicated -.08%.
NASDAQ indicated +.07%.
BOTTOM LINE: I expect U.S. stocks to open higher tomorrow morning on stabilizing energy prices, falling interest rates and strength in Asian technology shares. I will likely add market exposure on any significant early morning weakness. The Portfolio is 100% net long heading into tomorrow.
Thursday Close
S&P 500 1,089.19 +.05%
NASDAQ 1,896.59 -.08%
Leading Sectors
Airlines +2.78%
Broadcasting +.77%
Defense +.66%
Lagging Sectors
Restaurants -1.08%
Networking -1.22%
Disk Drives -1.64%
Other
Crude Oil 40.61 -.47%
Natural Gas 6.31 -.22%
Gold 379.50 +.26%
Base Metals 102.54 -.13%
U.S. Dollar 90.93 +.44%
10-Yr. T-note Yield 4.70% -1.49%
VIX 18.67 -1.37%
Put/Call 1.20 +50.00%
NYSE Arms 1.77 +63.89%
After-hours Movers
MRVL +2.94% after beating 1Q estimates.
SRNA +14.72% after beating 1Q estimates and raising 2Q guidance.
JWN +4.08% after beating 1Q estimates and raising 2Q guidance.
Recommendations
BEC and GPRO rated new Buys by UBS.
After-hours News
U.S. stocks finished nearly unchanged Thursday after economic reports gave conflicting messages and interest rates dropped. After the close, the Financial Times said the U.S. may have to import an average of 10.4 million barrels of oil a day throughout the summer to avoid dipping into its reserves. Federal Reserve Bank of Dallas President McTeer told CNBC that a "bad inflation report" is the only thing that could "legitimately" prompt a Fed meeting before June 29. Bonds rallied today after Fed Governor Bernanke said inflation "appears likely to remain in the zone of price stability" this year and into 05, Bloomberg reported. Draining the U.S. Strategic Petroleum Reserve to lower energy prices in the short-term would encourage terrorists who might be trying to disrupt energy supplies and the economy, President Bush told CNBC. The contest between President Bush and Senator Kerry may push spending for the presidential and congressional election campaigns to a record $3 billion this year, Bloomberg reported. Nordstrom said profits soared 140% and sales at stores open more than a year rose 13%, the most in more than a decade, Bloomberg reported.
BOTTOM LINE: The Portfolio had a good day today and I took profits in a couple of tech longs and homebuilding shorts and added a few airline and paper longs, leaving the Portfolio with 100% net long market exposure. One of my new longs is GP and I am keeping a $32.50 stop-loss on the position. With interest rates falling, oil stabilizing and the Put/Call ratio and ARMs index soaring, I expect U.S. stocks to make another rally attempt in the next couple of days.
NASDAQ 1,896.59 -.08%
Leading Sectors
Airlines +2.78%
Broadcasting +.77%
Defense +.66%
Lagging Sectors
Restaurants -1.08%
Networking -1.22%
Disk Drives -1.64%
Other
Crude Oil 40.61 -.47%
Natural Gas 6.31 -.22%
Gold 379.50 +.26%
Base Metals 102.54 -.13%
U.S. Dollar 90.93 +.44%
10-Yr. T-note Yield 4.70% -1.49%
VIX 18.67 -1.37%
Put/Call 1.20 +50.00%
NYSE Arms 1.77 +63.89%
After-hours Movers
MRVL +2.94% after beating 1Q estimates.
SRNA +14.72% after beating 1Q estimates and raising 2Q guidance.
JWN +4.08% after beating 1Q estimates and raising 2Q guidance.
Recommendations
BEC and GPRO rated new Buys by UBS.
After-hours News
U.S. stocks finished nearly unchanged Thursday after economic reports gave conflicting messages and interest rates dropped. After the close, the Financial Times said the U.S. may have to import an average of 10.4 million barrels of oil a day throughout the summer to avoid dipping into its reserves. Federal Reserve Bank of Dallas President McTeer told CNBC that a "bad inflation report" is the only thing that could "legitimately" prompt a Fed meeting before June 29. Bonds rallied today after Fed Governor Bernanke said inflation "appears likely to remain in the zone of price stability" this year and into 05, Bloomberg reported. Draining the U.S. Strategic Petroleum Reserve to lower energy prices in the short-term would encourage terrorists who might be trying to disrupt energy supplies and the economy, President Bush told CNBC. The contest between President Bush and Senator Kerry may push spending for the presidential and congressional election campaigns to a record $3 billion this year, Bloomberg reported. Nordstrom said profits soared 140% and sales at stores open more than a year rose 13%, the most in more than a decade, Bloomberg reported.
BOTTOM LINE: The Portfolio had a good day today and I took profits in a couple of tech longs and homebuilding shorts and added a few airline and paper longs, leaving the Portfolio with 100% net long market exposure. One of my new longs is GP and I am keeping a $32.50 stop-loss on the position. With interest rates falling, oil stabilizing and the Put/Call ratio and ARMs index soaring, I expect U.S. stocks to make another rally attempt in the next couple of days.
Mid-day Update
S&P 500 1,090.41 +.15%
NASDAQ 1,900.66 +.12%
Leading Sectors
Airlines +1.55%
Broadcasting +.94%
Banks +.67%
Lagging Sectors
Restaurants -1.04%
Networking -1.05%
Disk Drives -1.33%
Other
Crude Oil 41.12 -.92%
Natural Gas 6.36 -1.39%
Gold 378.70 -1.12%
Base Metals 102.54 -.13%
U.S. Dollar 91.13 +.66%
10-Yr. T-note Yield 4.73% -.96%
VIX 18.81 -.53%
Put/Call 1.27 +58.75%
NYSE Arms 1.60 +48.15%
Market Movers
AFCI +11.40% after announcing TLAB would acquire it for $1.9B.
INTU -8.11% after beating 3Q estimates and lowering 4Q and 05 forecast.
NAV -16.17% after missing 2Q and lowering 3Q guidance.
PHRM +49.2% after the FDA approved its Vidaza drug for treating a cancer-like bone-marrow illness.
NILE +32.2% on strong demand for its IPO.
SNPS +8.1% after beating 2Q estimates and raising 3Q guidance.
PETM +5.98% after beating 1Q estimates and raising 2Q/04 forecast.
CUNO +6.83% after beating 2Q estimates and raising 04 forecast.
BBOX -14.04% after missing 4Q estimates.
SFCC -12.62% after Jeffries downgrade to Hold.
Economic Data
Initial Jobless Claims for May came in at 345K versus expectations of 328K and 333K prior week.
Continuing Claims came in at 2943K versus 2956K estimate and 2966K prior.
Leading Indicators for April rose .1% versus expectations of .2% and .8% in March.
Philadelphia Fed. for May came in at 23.8 versus a 30.5 estimate and 32.5 in April.
Recommendations
THC rated Buy at Oppenheimer, target $17. JCP raised to Overweight at Morgan Stanley, target $42. PX raised to Buy at Bank of America, target $42. WMI rated Outperform at CSFB, target $36. DAL raised to Overweight at Lehman, target $10. QCOM raised to Overweight by Prudential, target $75. Goldman Sachs said AVP is top pick in household products/personal care universe. Goldman reiterated Outperform on SYMC. Citi SmithBarney said to Buy SSCC, GP and WY. Citi also said to Buy MAS, target $36. Citi reiterated Sell on BA, target $36. Citi said to Buy UNH ahead of conference next week, target $86. Citi reiterated Buy on GE, target $36.
Mid-day News
U.S. stocks are hovering near the flat-line today on conflicting signals from recent economic reports. Best Buy, Sears and CompUSA are offering consumers in-home installation and repair services in an effort to boost loyalty, the Wall Street Journal reported. The company overseeing aid for the United Nations' scandal-plagued oil-for-food program in Iraq failed to staff important checkpoints and couldn't account for "massive discrepancies" between reported and actual aid shipments, the Washington Times reported, citing an internal UN audit. Verizon said it will install its fiber-optic network in only 7 towns in Bergen County, NJ, instead of 34, after a state ruling limited the amount it could charge competitors that lease its local phone lines, the Star-Ledger of Newark, NJ, reported. U.S. TV executives are curtailing reruns and scheduling more reality shows to compete with cable and win young adult viewers, the LA Times reported. The median sale price of a home in LA county rose 28% in April, to $387,000, the LA Times reported. Verizon, privacy advocates and some members of Congress fear that the new Cellular Telecommunications and Internet Association's directory could make users vulnerable to telemarketers and e-mail spammers, the LA Times reported. Manmohan Singh, India's prime minister designate, promised a business-friendly government, Bloomberg reported. Above normal heat will prevail from the U.S. plains to the Pacific Coast and along much of the Eastern Seaboard during the summer, a government forecaster said. Comcast agreed to offer Microsoft's video-on-demand software to its customers, Bloomberg said. The Department of Homeland Security ordered Amtrak and operators of commuter trains to boost security against terrorism by increasing inspections and the use of bomb-sniffing dogs, Bloomberg reported. The Philadelphia Fed index of factory employment surged to a 31-year high and prices paid by manufacturers rose, fueling speculation the Fed will hike rates next month, Bloomberg said.
BOTTOM LINE: The Portfolio is having a good day today as my tech and Chinese ADR longs are rising and retail shorts are falling. I have not traded today and the Portfolio is still 75% net long. I expect U.S. stocks to rise modestly into the afternoon as the Put/Call ratio and ARMs index are soaring, interest rates are dropping and oil is lower.
NASDAQ 1,900.66 +.12%
Leading Sectors
Airlines +1.55%
Broadcasting +.94%
Banks +.67%
Lagging Sectors
Restaurants -1.04%
Networking -1.05%
Disk Drives -1.33%
Other
Crude Oil 41.12 -.92%
Natural Gas 6.36 -1.39%
Gold 378.70 -1.12%
Base Metals 102.54 -.13%
U.S. Dollar 91.13 +.66%
10-Yr. T-note Yield 4.73% -.96%
VIX 18.81 -.53%
Put/Call 1.27 +58.75%
NYSE Arms 1.60 +48.15%
Market Movers
AFCI +11.40% after announcing TLAB would acquire it for $1.9B.
INTU -8.11% after beating 3Q estimates and lowering 4Q and 05 forecast.
NAV -16.17% after missing 2Q and lowering 3Q guidance.
PHRM +49.2% after the FDA approved its Vidaza drug for treating a cancer-like bone-marrow illness.
NILE +32.2% on strong demand for its IPO.
SNPS +8.1% after beating 2Q estimates and raising 3Q guidance.
PETM +5.98% after beating 1Q estimates and raising 2Q/04 forecast.
CUNO +6.83% after beating 2Q estimates and raising 04 forecast.
BBOX -14.04% after missing 4Q estimates.
SFCC -12.62% after Jeffries downgrade to Hold.
Economic Data
Initial Jobless Claims for May came in at 345K versus expectations of 328K and 333K prior week.
Continuing Claims came in at 2943K versus 2956K estimate and 2966K prior.
Leading Indicators for April rose .1% versus expectations of .2% and .8% in March.
Philadelphia Fed. for May came in at 23.8 versus a 30.5 estimate and 32.5 in April.
Recommendations
THC rated Buy at Oppenheimer, target $17. JCP raised to Overweight at Morgan Stanley, target $42. PX raised to Buy at Bank of America, target $42. WMI rated Outperform at CSFB, target $36. DAL raised to Overweight at Lehman, target $10. QCOM raised to Overweight by Prudential, target $75. Goldman Sachs said AVP is top pick in household products/personal care universe. Goldman reiterated Outperform on SYMC. Citi SmithBarney said to Buy SSCC, GP and WY. Citi also said to Buy MAS, target $36. Citi reiterated Sell on BA, target $36. Citi said to Buy UNH ahead of conference next week, target $86. Citi reiterated Buy on GE, target $36.
Mid-day News
U.S. stocks are hovering near the flat-line today on conflicting signals from recent economic reports. Best Buy, Sears and CompUSA are offering consumers in-home installation and repair services in an effort to boost loyalty, the Wall Street Journal reported. The company overseeing aid for the United Nations' scandal-plagued oil-for-food program in Iraq failed to staff important checkpoints and couldn't account for "massive discrepancies" between reported and actual aid shipments, the Washington Times reported, citing an internal UN audit. Verizon said it will install its fiber-optic network in only 7 towns in Bergen County, NJ, instead of 34, after a state ruling limited the amount it could charge competitors that lease its local phone lines, the Star-Ledger of Newark, NJ, reported. U.S. TV executives are curtailing reruns and scheduling more reality shows to compete with cable and win young adult viewers, the LA Times reported. The median sale price of a home in LA county rose 28% in April, to $387,000, the LA Times reported. Verizon, privacy advocates and some members of Congress fear that the new Cellular Telecommunications and Internet Association's directory could make users vulnerable to telemarketers and e-mail spammers, the LA Times reported. Manmohan Singh, India's prime minister designate, promised a business-friendly government, Bloomberg reported. Above normal heat will prevail from the U.S. plains to the Pacific Coast and along much of the Eastern Seaboard during the summer, a government forecaster said. Comcast agreed to offer Microsoft's video-on-demand software to its customers, Bloomberg said. The Department of Homeland Security ordered Amtrak and operators of commuter trains to boost security against terrorism by increasing inspections and the use of bomb-sniffing dogs, Bloomberg reported. The Philadelphia Fed index of factory employment surged to a 31-year high and prices paid by manufacturers rose, fueling speculation the Fed will hike rates next month, Bloomberg said.
BOTTOM LINE: The Portfolio is having a good day today as my tech and Chinese ADR longs are rising and retail shorts are falling. I have not traded today and the Portfolio is still 75% net long. I expect U.S. stocks to rise modestly into the afternoon as the Put/Call ratio and ARMs index are soaring, interest rates are dropping and oil is lower.
***Special Report***
Please read this recent report by GlobalInsight entitled "What if Oil Prices Stay at $40?", by Nigel Gault.
Thursday Watch
Earnings of Note
Company/Estimate
ARO/.09
CIEN/-.07
ELBO/.09
GPS/.32
MRVL/.32
JWN/.43
PETM/.21
Splits
SFCC 3-for-2
Economic Data
Initial Jobless Claims for last week estimated at 325K versus 331K the prior week.
Continuing Claims estimated at 2950K versus 2974K prior.
Leading Indicators for April estimated +.2% versus +.3% in March.
Philadelphia Fed. for May estimated at 31.0 versus 32.5 in April.
Recommendations
Goldman Sachs reiterated Outperform on TPX, BIIB, IP, DTC, ABK, PETC and SPP.
Late-Night News
Asian indices are lower on concerns over the political situation in Taiwan and rising energy prices. Hynix Semiconductor of South Korea plans to double shipments of so-called NAND flash memory chips to 2 million units a month by the end of June, Digitimes reported. China's coal shortages have left some power plants with sufficient inventories to keep them running for a day and forced others to shut down, the China Daily reported. HSBC Holdings, Europe's largest bank by market value, may consider buying a U.S. deposit and savings bank to boost its presence in the U.S., the Financial Times said. President Bush reiterated that the U.S.-led coalition would complete a full transfer of sovereignty in Iraq by June 30, Bloomberg reported. OPEC may as soon as this weekend approve Saudi Arabia's plan to boost oil output quotas because of concerns that near record-high prices will slow economic growth, Bloomberg said. Taiwan President Chen Shui-bian said he will press ahead with constitutional revisions without mentioning his plan to put the changes to a public vote, a referendum China has denounced as a ruse to declare independence, Bloomberg reported.
Late-Night Trading
Asian Indices -1.75% to -.25% on average.
S&P 500 indicated -.15%.
NASDAQ indicated -.36%.
BOTTOM LINE: U.S. stocks will likely fall tomorrow morning on weakness in Asia and higher energy prices. Oil would have to reach $78/bbl. on an inflation-adjusted basis to equal levels seen during the Iran hostage crisis in the early 80's. The price of oil has barely risen over the last 23 years while other goods and services have risen continuously. The U.S. CPI is expected to rise just 2.2% this year, below its 84-year average of 3.0%. Worldwide inflation is projected to rise at its slowest pace ever this year. According to GlobalInsight.com, a well-repected economic consultant, $40/bbl. oil for the next 2 years would only shave .3% off of GDP growth each year. Under this scenario, the U.S. CPI would rise 2.1% next year and 1.9% in 06, still well below the 84-year average.
Company/Estimate
ARO/.09
CIEN/-.07
ELBO/.09
GPS/.32
MRVL/.32
JWN/.43
PETM/.21
Splits
SFCC 3-for-2
Economic Data
Initial Jobless Claims for last week estimated at 325K versus 331K the prior week.
Continuing Claims estimated at 2950K versus 2974K prior.
Leading Indicators for April estimated +.2% versus +.3% in March.
Philadelphia Fed. for May estimated at 31.0 versus 32.5 in April.
Recommendations
Goldman Sachs reiterated Outperform on TPX, BIIB, IP, DTC, ABK, PETC and SPP.
Late-Night News
Asian indices are lower on concerns over the political situation in Taiwan and rising energy prices. Hynix Semiconductor of South Korea plans to double shipments of so-called NAND flash memory chips to 2 million units a month by the end of June, Digitimes reported. China's coal shortages have left some power plants with sufficient inventories to keep them running for a day and forced others to shut down, the China Daily reported. HSBC Holdings, Europe's largest bank by market value, may consider buying a U.S. deposit and savings bank to boost its presence in the U.S., the Financial Times said. President Bush reiterated that the U.S.-led coalition would complete a full transfer of sovereignty in Iraq by June 30, Bloomberg reported. OPEC may as soon as this weekend approve Saudi Arabia's plan to boost oil output quotas because of concerns that near record-high prices will slow economic growth, Bloomberg said. Taiwan President Chen Shui-bian said he will press ahead with constitutional revisions without mentioning his plan to put the changes to a public vote, a referendum China has denounced as a ruse to declare independence, Bloomberg reported.
Late-Night Trading
Asian Indices -1.75% to -.25% on average.
S&P 500 indicated -.15%.
NASDAQ indicated -.36%.
BOTTOM LINE: U.S. stocks will likely fall tomorrow morning on weakness in Asia and higher energy prices. Oil would have to reach $78/bbl. on an inflation-adjusted basis to equal levels seen during the Iran hostage crisis in the early 80's. The price of oil has barely risen over the last 23 years while other goods and services have risen continuously. The U.S. CPI is expected to rise just 2.2% this year, below its 84-year average of 3.0%. Worldwide inflation is projected to rise at its slowest pace ever this year. According to GlobalInsight.com, a well-repected economic consultant, $40/bbl. oil for the next 2 years would only shave .3% off of GDP growth each year. Under this scenario, the U.S. CPI would rise 2.1% next year and 1.9% in 06, still well below the 84-year average.
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