Wednesday, March 10, 2004

Wednesday Watch

Earnings Announcements

None of note.

Economic Data
Trade Balance estimated at -$42.0B in January vs. -$42.5B in December.
Wholesale Inventories estimated up .4% in January vs. .5% in December.

Goldman Sachs is recommending positions in the Electronic Manufacturing Service stocks at current levels. Their favorites are SLR and CLS, saying they have 30%+ upside potential. GS believes that ORCL will meet estimates Thur. and may guide higher for March Q as they see growing evidence that larger deals are back in the pipeline. GS also said COF's managed data showed healthy improvements in both charge-offs and delinquencies and modest loan growth. Goldman thinks HAL represents good trading opportunity as the risk of material adverse impact from Iraq problems is remote. Finally, Goldman is reducing estimates on EP ahead of report on 3/11.

Late-Night News
The prices of H-beam steel used in construction have risen to a 17-year high in Japan on Chinese demand, Nihon Keizai reported. Fannie Mae, the biggest buyer of U.S. mortgages, paid a net $25.1B on derivative transactions in less than 4 years, most of which may represent losses that can't be recovered and may hurt future earnings, the Financial Times reported. Fannie Mae denies the report. Viacom Chairman Redstone indicated that the company might buy cable systems and that it will invest more money in creative businesses such as film and television, the Wall Street Journal reported. China's Industrial Production grew 17% from year ago levels, according to Mainland Marketing Research Co. Iraqis will have the lead role in bringing Saddam Hussein to trial, said a spokesman for the U.S.-led administration in Iraq. Carlyle Group is negotiating with a partner to buy a stake in China Pacific Life Insurance, the nation's third largest insurer, for $400M.

Late-Night Trading
Asian markets are down with the exception of China(+1.4%). Losses range from -1.0% to -1.5%.
S&P 500 indicated -.25%.
NASDAQ indicated -.35%.

BOTTOM LINE: Weakness in Asia will likely result in a weaker opening for U.S. shares. I expect a volatile day tomorrow. Either the major indies will drop on a clear technical break-down of the NASDAQ or hold in the morning leading to a short-covering rally later in the day. The Portfolio is 50% net long and I will look to trade as I get a better read on the market's short-term direction.

No comments: