Weekend Headlines
Bloomberg:
- Venezuelan President Hugo Chavez put the nation’s most popular TV network off the air this weekend, accusing the broadcaster of “coup-mongering.”
- The US dollar reached the strongest level in six weeks against the euro and a three-month high versus the yen as reports suggested the US economy is gaining momentum.
- President Bush, in a Memorial Day weekend radio address, said the wars in Iraq and Afghanistan are aimed at promoting in those countries the freedom people enjoy in the US.
- Overseas stock exchanges including NYSE Euronext(NYX) and Nasdaq Stock Market(NDAQ) said they plan to open offices in China for the first time, amid efforts to woo Chinese companies to their bourses.
- Japan, a signatory to the Kyoto Protocol on climate change, wants the 21 Asia-Pacific Economic Cooperation members to adopt specific measures to cut energy consumption.
- Venezuela’s new state television channel TVes took control of the country’s most-watched network as protesters accused President Hugo Chavez of seeking to stamp out voices of opposition to his government.
- Venezuela’s streets echoed with sirens, horns and pot-banging late last night as thousands of supporters of Radio Caracas Television readied for a final day of protest hours before the independent TV network exits public airwaves.
- Avaya Inc.(AV) delayed a meeting with analysts scheduled for next week amid speculation the world’s largest maker of corporate phone equipment will be acquired.
- China’s CSI 300 Index rose about 4,000 for the first time, driven by a surge in new investors who are ignoring warnings of a bubble to enter a market that’s doubled this year.
- A tax-cut war is spreading across Europe as leaders of the continent’s biggest economies give up criticizing smaller neighbors for slashing business tax rates and decide to join them instead.
- Venezuela’s government urged a probe of Time Warner’s CNN and local television station Globovision for broadcasting “lies” and inciting violence against President Hugo Chavez.
- Japan’s jobless rate unexpectedly fell to a nine-year low and households increased spending for a fourth month in April, suggesting consumers will help extend the economy’s longest postwar expansion.
- Colorado and Utah have as much oil as Saudi Arabia, Iran, Iraq, Venezuela, Nigeria, Kuwait, Libya, Angola, Algeria, Indonesia, Qatar and the UAE combined. That’s not science fiction. Trapped in limestone up to 200 feet thick in the two Rocky Mountain states is enough so-called shale oil to rival OPEC and supply the US for one hundred years.
- Crude oil fell as much as 1.4% in NY after oil workers in Nigeria ended a two-day strike.
Wall Street Journal:
- Avaya Inc.(AV), the world’s largest maker of corporate phone equipment, is in talks with private equity firm Silver Lake Partners about a leveraged buyout.
- Tishman Speyer Properties LP and Lehman Brothers Holdings(LEH) are close to reaching an agreement to acquire Archstone-Smith Trust(ASN).
CNNMoney.com:
- The Top 25 fastest growing tech companies.
- The Top 25 greatest tech stock gainers.
NY Times:
- Amherst College, Harvard University and University of Virginia are among the two dozen elite US schools accepting students based on their low-income backgrounds as the universities diversify “economically.”
- Iraqis say a rapid American troop withdrawal would fuel more violence in the country, citing a survey and interviews with more than 40 Iraqi politicians and residents.
- Coca-Cola(KO) may look for more acquisitions like its agreement to buy Glaceau Vitaminwater to boost its non-carbonated offerings, citing CEO Isdell.
- Witnesses aren’t cooperating with Newark, NJ Mayor Cory Booker’s bid to cut the murder rate in the state’s largest city. Police officers say witnesses often refused to say who committed crimes, the result of public mistrust dating back to riots in 1967 and hip-hop artists railing against informants.
- 33% of NYC residents owned their own homes in 2005, an all-time high and up from 30.2% in 2000, citing an analysis of Census Bureau data.
- Google Inc.(GOOG), Yahoo! Inc.(YHOO), Microsoft Corp.(MSFT) and their technology rivals are using unconventional recruiting methods to lure workers as they compete for top job candidates.
- Will stocks suffer a multi-decade bear market as the baby-boom generation sells its shares to retirement? Some have predicted such an outcome, but a new study – which projects huge growth in 401k assets in future decades – paints a far more sanguine picture.
- Google’s(GOOG) $3.1 billion acquisition of online advertiser DoubleClick Inc.(DCLK) led the US FTC to top a preliminary antitrust probe into the purchase.
Washington Post:
- Ryan Crocker, US ambassador in Baghdad, will tell Iranian diplomats how the Islamic republic can help stabilize Iraq, both militarily and politically, during talks in Baghdad tomorrow.
Newsweek:
- US intelligence has identified a secret Iranian group called Department 9000 as the unit behind Tehran’s efforts to support Shiite insurgent cells in Iraq.
AP:
- To deal with high gas prices, 47% of the 1,000 Americans polled said they were considering buying a more fuel-efficient vehicle versus 39% last year, according to an AP-Ipsos poll.
- US military forces rescued 42 captured Iraqis from an al-Qaeda post near Baghdad today. Some of the group had been held for as longs as four months, including some who showed signs of torture.
Age:
- Rio Tinto Group(RTP) hired Deutsche Bank AG to advise it on a possible bid for aluminum producer Alcan Inc.(AL).
Reuters:
- Iran plans to develop new oil fields with neighboring Iraq, citing National Iranian Oil Co. Managing Director Gholam Hossein Nozari.
Financial Times:
- Japan’s ruling Liberal Democratic Party is preparing to allow casino gambling next year.
Sunday Telegraph:
- Coca-Cola Co.(KO) is in talks to buy the Highland Spring Ltd. bottled water company for as much as $992.3 million.
Sunday Times:
- The Dubai International Financial Centre may block Nasdaq Stock Market’s(NDAQ) acquisition of Sweden’s OMX AB by making its own bid.
BBC:
- World Bank President Paul Wolfowitz, who plans to resign June 30, says the media was a bigger factor in his decision to leave the lender than his standing among bank employees. The bank’s board agreed he hadn’t done anything unethical with regard to compensation for a bank worker who was his girlfriend.
Nikkei English News:
- Toshiba Corp. will start using Advanced Micro Devices(AMD) chips in some products to cut costs.
South China Morning Post:
- The Chinese Central government has asked local officials to stop offering tax and power incentives to energy-intensive industries.
Shanghai Securities News:
- China may have more than 100 million stock market accounts as of yesterday, as new investors stormed in to tap a record share rally. The value of shares in China surged more than 600% in the past two years to $2.4 trillion. So far this year, about 20.9 million accounts have been opened at brokerages, 400% more than the entire amount in 2006.
Xinhua News Agency:
- China won’t meet its energy efficiency targets if annual economic growth reaches 9% or higher, citing the deputy head of energy efficiency research at the nation’s top planning agency.
- Chinese university students shouldn’t be involved in stock trading, because they are unable to bear the losses should their investments turn sour, citing the Ministry of Education.
21st Century Business Herald:
- Yu Yongding, a former monetary policy adviser to China’s central bank, says the nation faces a “most urgent” problem of a “quite serious” stock market bubble. The government needs to curb share prices to make them drop gradually. Yu proposed raising stamp duty on share trading, cracking down on irregularities by brokers and increasing the supply of shares. Monetary policy alone can’t curb the asset bubble, because small interest rate increases won’t be enough to siphon money back into back accounts and raising rates too much risks hurting the economy, he said.
- China’s government may soon let citizens buy stocks overseas, broadening an investment program that currently only allows banks to invest abroad. Chinese brokerages and fund management companies may also be allowed to invest abroad as qualified domestic institutional investors.
Chosun Ilbo:
- North Korean dictator Kim Jong Il may be ill, citing a South Korean government official.
Emirates Today:
- Taxis in Dubai will be converted into more environmentally friendly “duel fuel” vehicles that will use electricity as well as gasoline.
Al-Ahram:
- Egypt is expected to produce eight metric tons of gold next year, one ton more than its entire production in the past 100 years, citing a government official. The increase is expected following new government regulations that encourage foreign companies to explore for gold.
Weekend Recommendations
Barron's:
- Made positive comments on (LWSN) and (ARC).
- Made negative comments on (JSDA).
Morgan Stanley:
- As China’s Shanghai A-share market continues to rise rapidly despite historically high valuations, fears of serious consequences from a potential burst of the stock market bubble have intensified greatly in recent weeks. However, on examination of household and corporate exposure to the stock market, we conclude that the negative wealth effect on consumption would be moderate and financing conditions for corporate investments would be unlikely to deteriorate significantly in the aftermath of such a burst. The potential impact on the banking sector is much more difficult to gauge, given the paucity of data. However, our stress test suggests that the impact on banks’ balance sheets would, while significant, likely be manageable. A major correction of the A-share market could well result in a significant contagion to global markets, as seen during February’s short-lived correction. However, to the extent that any such global sell-off were driven by concerns about a stock-market-correction-triggered-recession in China’s real economy, it would likely prove overdone, in our view. We think the risk of a much more serious impact from a potential stock market correction will heighten significantly if Chinese shares continue rising rapidly from current levels.
Night Trading
Asian indices are unch. to +.50% on average.
S&P 500 indicated +.03%.
NASDAQ 100 indicated +.09%.
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
Conference Calendar
Daily Stock Events
Macro Calls
Rasmussen Consumer/Investor Daily Indices
CNBC Guest Schedule
Earnings of Note
Company/Estimate
- (ALKS)/.02
- (BCSI)/.28
- (BMC)/.39
- (BAMM)/.12
- (BGP)/-.36
- (CWTR)/.09
- (DCI)/.46
- (PVH)/.86
- (SGR)/.18
- (STP)/.22
- (TSAI)/.31
- (PAY)/.37
Upcoming Splits
- (VSEA) 3-for-2
- (NRG) 2-for-1
- (SRCL) 2-for-1
- (GEO) 2-for-1
Economic Releases
- Consumer Confidence for May is estimated to rise to 105.0 from 104.0 in April
Other Potential Market Movers
- The Case-Shiller 1Q Home Price report and Merrill Lynch Small-cap Technology Healthcare Conference could also impact trading Tuesday.
BOTTOM LINE: Asian indices are higher, boosted by technology and financial shares in the region. I expect US stocks to open mixed and to rally into the afternoon finishing modestly higher. The Portfolio is 100% net long heading into the week.
