Thursday, May 19, 2005

Thursday Watch

Late-Night Headlines
- US Airways Group and America West Holdings may announce a merger agreement this week.
- The US House of Representatives voted to replace the color-coded warning system used to alert the public to terrorist threats with a program that offers specific information about risks and suggested actions.
- Motorola may buy back as much as $4 billion, or about 10% of its shares, the company's first stock repurchase.
- Crude oil fell to the lowest in three months in NY after an Energy Department report showed US stockpiles rose four times faster than analysts expected.
- Investment in China's factories, roads and other fixed assets rose at a faster pace in April, adding to concerns that Premier Wen Jiabao will tighten lending curbs to cool expansion in Asia's second-largest economy.
- Hong Kong's decision to limit gains in its currency suggests China is moving closer to letting the yuan strengthen, said strategists.
- Goldman Sachs' Henry Paulson and Merrill Lynch's Kevan Watts urged China to cut state ownership of its companies and strengthen domestic brokers, to halt a stock market slide and develop the capital markets.

Wall Street Journal:
- L-3 Communications Holdings is in talks to buy defense contractor Titan Corp. in a possible effort to grow its Defense Department computer services business
- JP Morgan, the largest US credit-card issuer is to distribute million of new cards that can be waved or held in front of a special reader, in what is called a "contact-less" purchase.

NY Times:
- Iran is willing to suspend its nuclear development program while talks proceed with the European Union, although no incentives will induce the country to abandon its plans to enrich fuel.

Late Buy/Sell Recommendations
Goldman Sachs:
- Reiterated Outperform on CVD, KSS and AAP.

Night Trading
Asian Indices are +1.0% to +2.0% on average.
S&P 500 indicated -.01%.
NASDAQ 100 indicated +.07%.

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

MGM 2-for-1
MCO 2-for-1

Economic Releases
8:30 EST
- Initial Jobless Claims for last week are estimated to fall to 330K versus 340K the prior week.
- Continuing Claims are estimated to fall to 2583K versus 2598K prior.

10:00 EST
- Leading Indicators for April are estimated to fall .2% versus a .4% decline in March.

12:00 EST
- Philadelphia Fed. for May is estimated to fall to 17.3 versus a reading of 25.3 in April.

BOTTOM LINE: Asian indices are sharply higher on optimism over falling energy prices and decelerating US inflation. I expect US equities to open mixed. However, stocks may rise later in the day on declining energy prices, short-covering and more optimism. The Portfolio is 100% net long heading into the day.

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