Thursday, June 03, 2004

Thursday Watch


None of note.

Economic Data
Final Non-farm Productivity reading for 1Q is estimated +3.7% versus +3.5% prior.
Final Unit Labor Costs for 1Q estimated +.4% versus +.5% prior.
Initial Jobless Claims for last week estimated at 335K versus 344K prior week.
Continuing Claims estimated at 2925K versus 2948K prior.
Factory Orders for April estimated -1.4% versus +4.3% in March.
ISM Non-Manufacturing for May estimated at 66.0 versus 68.4 in April.

Goldman Sachs reiterated Outperform on NFP, TRMS and ITT. Goldman reiterated Outperform on STN and IGT ahead of June 9th Gaming Conference in NYC, favorite is IGT.

Late-Night News
Asian indices are lower on concerns over Intel's mid-quarter update and another rise in oil prices. Viacom Entertainment said its Group Chairman Jonathan Dolgen resigned after a decade of leading Paramount Pictures, the Wall Street Journal reported. Serono SA, one of Europe's biggest biotechnology companies, may relocate its Swiss-based headquarters to the U.S. if industry conditions in Europe continue to worsen, the Wall Street Journal said. India will start work late this year to build a strategic oil reserve scheduled for completion by late 2007, the Asian Wall Street Journal reported. Japanese companies increased capital spending 10.2% in the first quarter from a year earlier, the fastest since 1997, as companies including Sharp invested rising earnings on expansion, Bloomberg reported. Crude oil futures are rising tonight as hedge funds and speculators bet increased production by OPEC will take several weeks to reach markets and ease concern about fuel shortages, Bloomberg said.

Late-Night Trading
Asian Indices -2.5% to unch. on average.
S&P 500 indicated -.44%.
NASDAQ indicated -.61%.

BOTTOM LINE: I expect U.S. stocks to open modestly lower on weakness in Asia and rising oil prices. I will decide whether or not to change the Portfolio's market exposure after evaluating the many economic reports and the market's reaction to them. While I do not have a position in Intel, I believe that fears over its mid-quarter update are overdone. It is unlikely the market will mount any serious rally ahead of Intel's comments, the jobs report and Bush's Rome trip. The Portfolio is 100% long heading into tomorrow.

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