Tuesday, May 11, 2004

Tuesday Watch

Earnings of Note
Company/Estimate
ANF/.30
CYD/.40
CSCO/.18
MAY/.15
OSIP/-1.03
SCMR/-.04

Splits
None of note.

Economic Data
Trade Balance for March estimated at -$43.0B versus -$42.1B in February.
Import Price Index for April estimated +.4% versus +.9% in March.

Recommendations
Goldman Sachs reiterated Outperform on MO, EXC and YHOO. GS reiterated Underperform on EDS and YBTVA.

Late-Night News
Asian indices are mixed as strength in Japan is being offset by weakness in Hong Kong. Tribesman in Pakistan's border region with Afghanistan plan to form a force of 1,800 militiamen to help hunt for suspected al-Qaeda leaders hiding in the area, the BBC reported. Chinese steel prices will continue to decline in the near term as the government's polices cool the economy and raw materials prices fall, the China Securities Journal reported. Prices of construction steel, including threaded steel rods, have fallen more than 17% from the beginning of March to $415/ton. The Senate Banking Committee will ask the SEC to investigate whether Citigroup, Merrill Lynch and other banks stuffed clients shares into mutual funds during the three-year stock market decline, Bloomberg reported.

Late-Night Trading
Asian Indices -.25% to +.50%.
S&P 500 indicated +.13%.
NASDAQ indicated +.18%.

BOTTOM LINE: The Portfolio is 50% net long heading into trading tomorrow. I will wait for signs that a significant rally has begun before adding additional market exposure. I expect this to occur at any time as the major U.S. indices are very oversold short-term. Bears will likely move to protect their recent gains heading into Cisco's earnings report after the close tomorrow.

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