Thursday, March 31, 2005

Thursday Watch

Late-Night Headlines
Bloomberg:
- Morgan Stanley and Goldman Sachs Group are among global companies plowing more than $7 billion into Japan as property prices recover from a 15-year slide.
- Morgan Stanley had its credit rating outlook cut to stable from positive by Standard & Poor's, which cited management concerns after the removal of key executives including President Stephan Newhouse.
- The US dollar is headed for its best quarter since 2001 in Asia on speculation US job creation will lay the ground for the Fed to raise interest rates in larger increments this year.
- Paul Wolfowitz, who today will be elected the 10th president of the World Bank, will continue to pursue his agenda of promoting democracy as head of the world's biggest development institution, friends and colleagues say.

Wall Street Journal:
- Brilliance China Automotive Holdings Ltd. will display its Zhonghua mid-size sedan to the Leipzig Auto Show this weekend, as it prepares to bring the car to Germany as early as September.
- An Iranian opposition group says the country has speeded up construction of a heavy-water nuclear reactor that could allow construction of a heavy-water nuclear reactor that could allow construction of weapons-grade fuel.

Washington Post:
- General Dynamics' Stryker armored vehicles, which were first deployed in Iraq in October 2003, have many defects and put troops at unanticipated risk from rocket-propelled grenades, citing a classified Army study.
- US Airways Group's plan to exit bankruptcy protection is running into complications in the form of rising fuel prices, operational problems, lower employee morale and an increase in customer complaints.

Financial Times:
- The International Monetary Fund said that selling a small portion of its gold reserves to help fund debt relief for poor nations would likely have little market impact.
- Microsoft Corp. should be made to ensure it complies with the European Commission order that it licenses sensitive information on the Windows operating system to rival companies.
- EchoStar Communications said it will move forward with plans to buy assets from Cablevision Systems even after Cablevision Chairman Dolan asked regulators to stop the sale.

Hindu Business Line:
-Indian steelmakers such as Tata Steel Ltd. will raise prices by as much as 8% starting tomorrow to cover soaring raw material costs.

Late Buy/Sell Recommendations
Goldman Sachs:
- Reiterated Attractive view of Energy sector, favorites are XOM, AHC, BBG, DVN, ECA, MUR, NFX, PXD, PCO, STR and SU.
- Reiterated Outperform on MSFT, CSCO and KSS.
- Reiterated Underperform on VTS.

Night Trading
Asian Indices are +.75% to +1.0% on average.
S&P 500 indicated +.01%.
NASDAQ 100 indicated unch.

Morning Preview
US AM Market Call
NASDAQ 100 Pre-Market Indicator/Heat Map
Pre-market Commentary
Before the Bell CNBC Video(bottom right)
Asian Indices
European Indices
Top 20 Business Stories
In Play
Bond Ticker
Analyst Actions
Macro Calls
Rasmussen Consumer/Investor Daily Indices
CNBC Guest Schedule

Earnings of Note
Company/EPS Estimate
FRE/1.51
GY/-.63
PH/1.11
RHAT/.06
TOY/1.09

Splits
HRS 2-for1
MCRI 2-for-1
BTU 2-for-1

Economic Releases
8:30 EST:
- Personal Income for February is estimated to rise .4% versus a 2.3% decline in January.
- Personal Spending for February is estimated to rise .5% versus an unchanged reading in January.
- The PCE Deflator for February is estimated to rise 2.3% versus a 2.2% rise in January.
- The PCE Core for February is estimated to rise 1.6% versus a 1.6% gain in January.
- Initial Jobless Claims for last week are estimated to fall to 320K versus 324K the prior week.
- Continuing Claims are estimated to fall to 2657K versus 2673K prior.

10:00 EST:
- The Help Wanted Index for February is estimated at 41 versus a reading of 41 in January.
- The Chicago Purchasing Manager Index for March is estimated to fall to 60.5 versus a reading of 62.7 in February.
- Factory Orders for February are estimated to rise .5% versus an increase of .2% in January.

BOTTOM LINE: Asian indices are higher, led by exporters, on optimism over US stock gains. I expect US equities to open mixed in the morning as higher energy prices offset lower long-term interest rates. However, stocks should move modestly higher later in the day on short-covering, bargain hunting, quarter-end window dressing and strength in the Technology sector. The Portfolio is 75% net long heading into tomorrow.

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