Today's Headlines

Bloomberg:
- Goldman Sachs Group(GS) CEO Lloyd Blankfein said the credit crisis that’s forced almost $250 billion in losses and writedowns at the world’s biggest finance companies may be approaching an end.
- Markit Group Ltd. has bought UK NTC Economics, becoming the owner of the purchasing managers index series for the manufacturing and retail industries.
- Crude oil fell in NY on signs that high prices and a slowing economy will curb US fuel consumption.
- Republican presidential candidate John McCain offered a plan to help homeowners shed burdensome mortgages.
- The Bank of England cut the benchmark interest rate for the third time since December as higher credit costs and the worst housing slump in 16 years threatened to push the economy into a recession.
- Wal-Mart(WMT), the world’s largest retailer, said March sales rose .7% and increased its forecast for first-quarter profit after price cuts spurred demand for groceries, drugs and flat-panel televisions.
- Bernanke Says Fed to Review Guidance on Bank Capital, Liquidity.

Wall Street Journal:
- Stock picker Charles Jobson has sailed through past bear-market tempests, quietly amassing $2.4 billion in assets and reinvesting millions of dollars in personal profit into his Boston hedge funds. The recent stock-market turbulence has turned out to be the test of his career. His biggest funds, called Prism, which started the quarter with assets of more than $2 billion, had losses of 24% to 29% last quarter.
- British Prime Minister Gordon Brown will be on the growing list of world leaders absent at the opening ceremony of the Beijing Olympics.

CNBC:
- Mohamed El-Erian, co-chief executive officer of PIMCO, told CNBC that the Fed would like to halt reductions in its target rate for overnight loans between banks at 2%.

NY Post:
- As banks big and small continue to reel from the pain of the credit crunch, private-equity firms are circling with an eye toward taking advantage of the financial sector’s pain and gobbling up assets on the cheap.
- A Republican presidential ticket of John McCain and Secretary of State Condoleezza Rice would beat a Democratic ticket of Hillary Rodham Clinton and Barack Obama – in either combination – in heavily “blue” New York, a surprising poll showed yesterday.

MarketWatch:
- White House to allow FHA to insure more mortgages.

Washington Post:
- President Bush is expected to announce today a reduction in Army combat tours to 12 months from the current 15 months, citing officials.

Economist:
- The comeback of private equity. Private equity funds grow 32% in 2008. Are private-equity firms calling the end of the credit crunch?
- Danger ahead for the mighty euro. Euro-zone economies face external woes and internal tensions.

Financial Times:
- Banks are introducing contracts allowing them to protect against hedge funds and other counterparties failing to pay what they owe. The so-called contingent credit-default swaps will be offered within the next three months with the approval of the International Swaps and Derivatives Association. The contracts can be used to protect, or lock in, mark-to-market gains on the value of derivative trades, as well as protect dealers against counterparty risk.

International Herald Tribune:
- JPMorgan(JPM) is still bringing Bear Stearns into its fold, but that is not stopping JPMorgan from looking for more deals, according to analysts and investors.
- Forecast is grim for hedge funds in Asia.

Dagens Industri:
- Volvo AB forecasts the North American market won’t deteriorate from today’s levels, citing CEO Leif Johansson. Johansson also told shareholders at the company’s annual general meeting yesterday that the company will see continued strong growth this year and increased profitability. Gothenburg, Sweden-based Volvo is the world’s second-largest truckmaker.

Arab news:
- Real estate prices in Riyadh, Saudi Arabia have increased by 40-90% in recent months.

Bear Radar

Style Underperformer:

Large-cap Value +.12%

Sector Underperformers:

Gold (-.63%), Papers (-.57%) and I-Banks (-.49%)

Stocks Falling on Unusual Volume:

VMED, PTRY, FMCN, XRAY, TWB and RAH

Stocks With Unusual Put Option Activity:

1) DAL 2) OTEX 3) WFT 4) VIP 5) FAST

US Exports Graph

(click on image to enlarge)

BOTTOM LINE: US Exports rose to $151.36 billion in February, which is another record. US exports have soared 96.4% since September 2001, which is an annualized equivalent rate of 11.1%. Unless overseas economies slow substantially, the current US slowdown should remain mild by historic standards.

Trade Deficit Widens, US Exports Hit Another Record High, Initial Jobless Claims Plunge

- The Trade Deficit for February widened to -$62.3 billion versus estimates of -$57.5 billion and -$59.0 billion in January.

- Initial Jobless Claims for this week fell to 357K versus estimates of 383K and 410K the prior week.

- Continuing Claims came in at 2940K versus estimates of 2935K and 2937K prior.

BOTTOM LINE: The US trade deficit unexpectedly widened in February, reflecting a jump in purchases of imported automobiles and industrial machinery, Bloomberg reported. The 3.1% gain in imports was the largest in almost a year. The petroleum deficit fell for the first time in 8 months as a decline in demand more than offset record prices. The trade gap with China shrank to the lowest level since March 2007 as imports from the nation shrank 7.8%. American exports rose 2% to another new record of $151.4 billion. I expect the trade deficit to shrink in March.

The number of Americans filing first-time claims for unemployment insurance last week fell the most since September 2005, Bloomberg reported. The four-week moving average rose to 378,250. The unemployment rate among those eligible for benefits, which tracks the US unemployment rate, held steady at a historically low 2.2%. Last week's jump in claims was mostly related to the Good Friday holiday. Initial jobless claims remain at levels not normally indicative of economic contraction and should begin trending lower later this quarter. The US Dollar Index is rising .14% and the 10-year yield is rising 4 basis points on today’s reports. Fed fund futures now imply a 56.0% chance for a 25 basis point cut at the upcoming April 30^th meeting and a 44.0% chance for a 50 basis point cut. I still believe a 50 basis point cut is very unlikely at this point.

Bull Radar

Style Outperformer:

Small-cap Growth (+1.22%)

Sector Outperformers:

Biotech (+4.18%), Retail (+2.96%) and Semis (+2.54%)

Stocks Rising on Unusual Volume:

MLNM, POWI, AMGN, NSM, DDS, STO, BLX, ENDP, APOG, FCSX, IMCL, ROST, SYNA, FTEK, ONXX, HNSN, BMRN, ZUMZ, AMAG, ALXN, VRTX, SMTC, TAC, CCJ, CBK, XBI, PBE and IGW

Stocks With Unusual Call Option Activity:

1) MLNM 2) CCJ 3) WFT 4) SWN 5) MDCO

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