Friday, May 27, 2005

Friday Watch

Late-Night Headlines
- China is preparing to complain to the WTO that the European Union and the US are abusing trade protection measures by imposing caps on the nation's textile exports.
- The euro headed for a fifth losing week, the longest such streak since August 2000, on expectations a French referendum will reject the European Union constitution and delay regional integration.
- US Senate Democrats dealt at least a temporary setback to President Bush's bid to install John Bolton as ambassador to the UN by blocking a Republican effort to hold a final vote on Bolton's nomination.

Wall Street Journal:
- Caremark Rx is near an agreement to pay $100 million in a settlement with the US Justice Department involving patients' pharmacy benefits.

Business Week:
- Google's plan to scan in the complete texts of millions of books so they can be searched electronically is a violation of copyright laws, citing unidentified publishers and attorneys.
- China's Chery Automobile and Honda Motor are both betting that China's auto industry is shifting into becoming an export base for the rest of the world from serving only the local market.

NY Times:
- US schools are putting more effort into educating minority students after the No Child Left Behind law gave greater attention to the statistical gap between their performance and that of white students and required annual improvement.

Financial Times:
- Hedge funds and banks have lost about $1 billion because of credit-derivative price swings in the past three weeks, citing Goldman Sachs.

- Senators Joe Lieberman and Lamar Alexander co-sponsored a bill that would provide $1.3 billion in five years for Chinese language instruction in US schools.

Asian Wall Street Journal:
- Merrill Lynch will invest $300 million for a venture with Pequot Capital Management, a US hedge fund.

Late Buy/Sell Recommendations
Goldman Sachs:
- Reiterated Outperform on AIG, EBAY, YHOO and GOOG.

Business Week:
- Shares of Snap-On(SNA), the world's biggest maker of hand tools, storage units and diagnostic equipment for mechanics, may rise more than 30% as costs will fall under new CEO Jack Michaels.
- Shares of News Corp.(NWS) may rise as much as 50% within the next year as earnings from satellite unit Sky Italia and partially owned units DirectTV Group and British Sky Broadcasting will increase.

Night Trading
Asian Indices are to +% on average.
S&P 500 indicated +%.
NASDAQ 100 indicated -%.

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

Earnings of Note
Company/EPS Estimate

None of note

Economic Releases
8:30 EST
- Personal Income for April is estimated to rise .7% versus a .5% gain in March.
- Personal Spending for April is estimated to rise .8% versus a .6% increase in March.

9:45 EST
- Final Univ. of Mich. Consumer Confidence for May is estimated to rise to 86.0 versus a prior estimate of 85.3.

BOTTOM LINE: Asian indices are higher on gains in exporting shares in the region. I expect US equities to open modestly higher on strong personal income/spending data, a better-than-expected revision to consumer sentiment and short-covering. The Portfolio is 100% net long heading into the day.

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