April 12th 2011

(Earnings) Season Greetings!

Here we go again, into the earnings season for the second time this year. AA opened the season with
a better-than-expected net profit, but less-than-expected revenue. Meanwhile, commodities including
gold hit a new peak before tumbling down. US stock market however, was somewhat lackluster
throughout the Monday session.

Dow Jones Industrial Average gained a tiny one point or 0.01% to end at 12,381.11 while S&P 500
index retreated 3.71 points to 0.28%. NASDAQ Composite which is dominated by tech stocks,
slipped 8.91 points or 0.32% to finish the day at 2,771.51 after S&P downgraded the technology
sector.

Key commodities tumbled after rising earlier in the day with spot gold price settled at $1,462.28/oz.
down 0.7%, while the futures for June delivery ended at $1,468.10, down $6.00. Earlier, gold
touched $1,476.21, another record high. US light crude also declined, ending the day at $109.92
after touched $113.46 earlier. Brent crude also suffered similar fate, rising to hit $127.02 a barrel
before plunging to end down $2.67 to $123.62 a barrel. The decline in oil and gold was likely to be
prompted by Goldman Sachs warning its clients that commodity prices are reversing and that profit-
taking should be considered at the moment. A month ago, Goldman Sachs forecast gold to hit
$1,480/oz. three months after mid-March, $1,565/oz. over six months, $1,690/oz. over 12 months.
Apparently Goldy has prepared its clients to exit once the first target achieved.

IMF’s most recent forecast shows that US economy to grow 2.8% in 2011, lower than prior forecast of
3.0%. Meanwhile, global growth is expected at 4.4%, unchanged from previous forecast. Eurozone is
seen growing 1.6%, UK at 1.7%, Japan 1.4%, while China is seen expanding 9.6%, Brazil at 7.5%,
while Russia and India are seen growing at 4% and 10.4%, respectively. On oil price, IMF sees it at
$107.16 on average this year.

12.0%
2010
10.0% 2011
2012
8.0%

6.0%

4.0%

2.0%

0.0%
Global Advanced United Eurozone United Japan Emerging China India Russia Brazil
economies States Kingdom economies

1 .DJI 12,381.11 (+1.06 ● +0.01%) .SPX 1,324.46 (-3.71 ● -0.28%) .IXIC 2,771.51 (-8.91 ● -0.32%)
 April 12th 2011

Fed Watch
Fed Vice Chairman Janet Yellen said in a speech that Fed’s QE2 is still appropriate because
unemployment remains elevated, while longer-run inflation expectations remain well anchored while
current underlying inflation is somewhat low compared to the Fed’s informal target of 2%. She also
said that the rising commodity prices is likely to be temporary and that prices will stabilize “fairly
soon”. Thus, the effect of the surge in the commodities on CPI should diminish over coming months.

Corporate News
AA reported Q1 revenue at $5.96B, missing the average analysts’ estimate of $6.07B. Despite
AA booked net profit at 28c (ex-special items), better than the consensus of 27c, the market
showed no mercy and pummeled the aluminum producer to $17.21, down 56c or 3.15%. Including
special items, EPS was reduced by 1c to $27 or $8M. According to AA, outlook for 2011 remains
very positive as the company is well on track to meet targets supported by the global demand for
aluminum which remains seen at 12% growth rate. One of the targets would be to book free cash
flow in 2011. Obviously, the earnings at AA improved due to higher prices of aluminum. Higher
input costs due to Japanese earthquake however, could dent operating margin.
BA obtained a contract from the US Missile Defense Agency to work on Standard Missile-3 Block
IIB (SM-3 IIB). The 32-month contract worth $41.2 million.
CVX released its interim update on Q1 earnings. The oil giant expected Q1 2011 to be better
than Q4 2010, with upstream results improving between sequential quarters as crude oil prices
increase. Downstream, earnings are seen slightly lower though, reflecting reduced gains of on
asset sales. US production in January and February declined 6.5% from a year earlier to 686K
barrels per day, while internationally output is seen up 0.6% y/y.
GE bought tech assets from CSense Systems such as analytic software products and engineering
solutions. No financial details are disclosed.
At the International Strategy & Investment Retail Summit, HD cited that housing market remains
under pressure as some commodity headwinds such as lumber remain a concern.
HPQ had intended to buy Tibco Software weeks ago as CEO Leo Apotheker is expected to boost
the software division which at the moment counts for less than 3% of revenue.
INTC introduced “Oak Trail” which is now available and will be used starting from May
throughout the year. INTC will also introduce “Cedar Trail”, a next-gen, 32nm Intel Atom platform.
Oak Trail is 60% smaller and will be able to provide power all day long to touch-screen based
PCs. INTC also designed a handset to be using INTC chips instead of ARM processors. ZTE will be
manufacturing the design and the product will be sold in China.
MRK and Sun formed a JV to work on new generic drugs to be later sold in industrialized and
emerging markets.
Based on the March data from Experian Hitwise, MSFT now holds 30.01% of search engine
market share: 14.32% from Bing.com while 15.69% from Yahoo, which is powered by Bing. Bing

2 .DJI 12,381.11 (+1.06 ● +0.01%) .SPX 1,324.46 (-3.71 ● -0.28%) .IXIC 2,771.51 (-8.91 ● -0.32%)
 April 12th 2011

added 6%, while Yahoo added 5%. This consequently, sapped Google’s share as its share fell
3% from 66.69%.
PFE will start selling XIAPEX in UK.
PG raised quarterly dividend from $0.4818 to $0.525 per share on the common stock, a 9%
increase over prior quarterly dividend.
VZ, Deutsche Telekom and Verizon Wireless are rumored to be offering unlimited plans. T will
remove its Video Share service this year as the company is evaluating new platforms and ways to
develop the mobile calling feature.
WMT plans to return to its original concept: delivering low prices everyday on everything. This
would be achieved by increasing competitive checks, partnering even more closely with suppliers,
simplified guidelines and by implementing new training on associates. WMT also broadens
product assortment up to 8,500 items to provide its customers products and brands they want. As
for advertisement, the retail giant is launching new ad campaign to underline its low price
promise.

3 .DJI 12,381.11 (+1.06 ● +0.01%) .SPX 1,324.46 (-3.71 ● -0.28%) .IXIC 2,771.51 (-8.91 ● -0.32%)
 April 12th 2011

Stock Focus: Procter & Gamble Co.

PG
Last Apr 11th Resistances 62.70 63.30 64.20 65.25 66.95
$62.19 0.47% Supports 61.85 61.63 61.47 60.60 59.70
WTD MTD Outlook
0.47% 0.96%
NEUTRAL
YTD 12-Month
3.33% 0.05% PT SHORT btween 62.70-63.30, PT 61.47 risk > 63.30

Our last update near the end of February suggested that PG has been moving in a wide range
between $58.92 and $66.95. Since then the price has plunged to $59.70 and subsequently clawed
its way back up and just yesterday reached $62.50. Despite rising, the momentum seems to be
fading as we can see from the MACD and the EMAs barriers. Look to SHORT on upticks between
$62.70 to $63.30, aiming for $61.47 but beware should the price surges above $63.30 PG may
aim at the upper range at $66.95.

4 .DJI 12,381.11 (+1.06 ● +0.01%) .SPX 1,324.46 (-3.71 ● -0.28%) .IXIC 2,771.51 (-8.91 ● -0.32%)
 April 12th 2011

Price Performance - as of Apr 11th 2011

Code Last Dy WTD MTD YTD 12-Mos
AA 17.77 -0.84% -0.84% 0.62% 15.46% 32.32%
AXP 46.38 0.22% 0.22% 2.61% 8.06% 0.56%
BA 73.76 0.39% 0.39% -0.23% 13.02% 1.84%
BAC 13.49 0.07% 0.07% 1.20% 1.12% -24.34%
CAT 109.07 -0.68% -0.68% -2.05% 16.45% 60.19%
CSCO 17.47 -1.02% -1.02% 1.87% -13.64% -35.13%
CVX 107.78 -1.71% -1.71% 0.27% 18.12% 32.34%
DD 54.85 -0.99% -0.99% -0.22% 9.96% 37.68%
DIS 41.89 0.31% 0.31% -2.78% 11.68% 13.71%
GE 20.18 -0.05% -0.05% 0.65% 10.33% 7.00%
HD 37.60 0.37% 0.37% 1.46% 7.24% 6.73%
HPQ 41.05 0.86% 0.86% 0.20% -2.49% -21.01%
IBM 163.95 -0.06% -0.06% 0.54% 11.71% 27.09%
INTC 20.12 0.50% 0.50% -0.30% -4.33% -11.91%
JNJ 59.86 0.67% 0.67% 1.03% -3.22% -6.91%
JPM 46.86 0.04% 0.04% 1.65% 10.47% 10.05%
KFT 32.03 1.14% 1.14% 2.14% 1.65% 8.21%
KO 67.40 0.19% 0.19% 1.60% 2.48% 26.10%
MCD 76.25 0.28% 0.28% 0.21% -0.66% 8.02%
MMM 93.80 0.62% 0.62% 0.32% 8.69% 5.79%
MRK 33.59 -0.24% -0.24% 1.76% -6.80% -4.14%
MSFT 25.98 -0.35% -0.35% 2.32% -6.92% -14.93%
PFE 20.67 1.03% 1.03% 1.77% 18.05% 23.62%
PG 62.19 0.47% 0.47% 0.96% -3.33% 0.05%
T 30.66 -0.16% -0.16% 0.16% 4.36% 17.65%
TRV 60.42 1.41% 1.41% 1.58% 8.45% 19.08%
UTX 84.98 0.20% 0.20% 0.39% 7.95% 13.38%
VZ 37.85 0.34% 0.34% -1.79% 5.79% 30.97%
WMT 52.82 0.53% 0.53% 1.48% -2.06% -1.53%
XOM 85.16 -0.92% -0.92% 1.22% 16.47% 25.66%

5 .DJI 12,381.11 (+1.06 ● +0.01%) .SPX 1,324.46 (-3.71 ● -0.28%) .IXIC 2,771.51 (-8.91 ● -0.32%)
 April 12th 2011

Analysts' Upgrades & Downgrades

Ratings Price Target
Code House
Previous Current Previous Current
AXP Bernstein Market Perform Market Perform $52.00 $54.00
BAC Raymond James Strong Buy Strong Buy $24.00
IBM Canaccord Genuity Buy Hold - $180.00
INTC Standpoint Research Hold Buy - $24.00
JPM Raymond James Strong Buy Strong Buy $58.00
MCD* Deutsche Bank Buy Buy $89.00 $89.00
n Reiterate n Upgrade n Downgrade n Initiation
*2011 EPS revised up from $5.04 to $5.07
US Economic Calendar
Date Time Report Period Actual Forecast Previous
12-Apr 8:30 AM Trade balance Feb -$43.2B -$46.3B
12-Apr 8:30 AM Import prices Mar 2.0% 1.4%
12-Apr 2:00 PM Federal budget Mar n/a -$65B
13-Apr 8:30 AM Retail sales Mar 0.4% 1.0%
13-Apr 8:30 AM Retail sales ex-autos Mar 0.6% 0.7%
13-Apr 10:00 AM Inventories Feb 0.9% 0.9%
13-Apr 10:00 AM Job openings Feb n/a 2.8M
13-Apr 2:00 PM Beige book
14-Apr 8:30 AM Jobless claims 9-Apr 382K
14-Apr 8:30 AM Producer price index Mar 0.7% 1.6%
14-Apr 8:30 AM Core PPI Mar 0.2% 0.2%
15-Apr 8:30 AM Consumer price index Mar 0.4% 0.5%
15-Apr 8:30 AM Core CPI Mar 0.2% 0.2%
15-Apr 8:30 AM Empire state index Apr 17.0 17.5
15-Apr 9:15 AM Industrial production Mar 0.6% 0.0%
15-Apr 9:55 AM Consumer sentiment Apr n/a 67.5

Disclaimer: This report is provided for information purposes only. It is not an offer to sell or to buy any securities. This
report has been prepared based on sources believed to be reliable, but there is no assurance or guarantee regarding its
completeness and accuracy. The author accepts no responsibility or liability arising from any use of the report.

6 .DJI 12,381.11 (+1.06 ● +0.01%) .SPX 1,324.46 (-3.71 ● -0.28%) .IXIC 2,771.51 (-8.91 ● -0.32%)