May 10th 2011

MSFT Calling Skype

The Dow Jones Industrial Average advanced 45.94 points or 0.36% to end Monday session at
12,684.68. S&P 500 Index settled at 1,346.29, adding 6.09 points or 0.45% higher, while NASDAQ
composite ended 0.55% higher at 2,843.25, up 15.69 points.

Commodities advanced for the second day in a row after suffering from a steep fall last Thursday.
Brent crude futures for June delivery ended at $115.90, up $6.77 a barrel. US light crude futures
also advanced, gaining $5.37 a barrel, sending it to settle at $102.55.

Gold continued to climb, with spot gold edged 0.9% higher to $1,508.09 an ounce. Gold futures for
June delivery ended at $1,503.20, up $11.60 or 0.8% higher. Monday’s rally followed Friday’s rally
of $10.20 an ounce after the rout on Thursday sent it to around $1,460s.

Goldman’s statement that commodities recovery in 2H11 is possible was one factor supporting the rise
in commodities, while S&P downgrade on Greece has provided a boost for gold, specifically.
Greece’s credit rating has been downgraded from B- to B by S&P as the plot thickens in Europe. Fitch
also said that it actively reviewing Greece for potential downgrade. No definitive statement from
Moody’s on a potential downgrade but at the moment Greece is rated at B1 at Moody’s while Fitch
has Greece at BB+.

Stocks with direct exposure to commodities climbed on Monday, such as AA (+2.22%), DD (+1.43%),
and CVX (+1.18%) while XOM advanced 0.59%. INTC however, was the worst performer of the day
as it lost 2.11%. Next to it was BAC which lost 1.06%.

MCD gained 0.78% following its April sales report which showed an increase of 6%. The increase in
sales was attributed to some price increases on several items on its menu as the fast food giant
struggles to offset the rising production cost. Sales in Europe were up 6.5%, while in Asia Pacific
Middle East and Africa (APMEA) sales were up 6.5%. In US the sales were up 4%. All the figures in
these three geographical areas beat the previous estimates: +5.1% in Europe; +2.7% in APMEA, and
+3.3% in US. Europe is MCD’s biggest market with contribution of 40% of total sales while US sales
represent 35% of total sales.

Elsewhere, HPQ launched its mobile broadband service called DataPass which enables users of HP
laptops with 3G capabilities to use the service. HPQ also rumored to be preparing for a launch of its
cloud service named Scalene, heading into a direct competition with AMZN in cloud computing
business. Meanwhile, CSCO is also planning to launch its cloud service, partnering with Xerox.

XOM is said to buy 25% of Indonesian stake in an Angolan project worth $3.5B. The deal is still at
the negotiation stage.

1 .DJI 12,684.68 (+45.94 ● +0.36%) .SPX 1,346.29 (+6.09 ● +0.45%) .IXIC 2,843.25 (+15.69 ● +0.55%)
 May 10th 2011

Global brand agency Millward Brown has released its list of top global brands. Number one spot
belongs to AAPL, replacing GOOG. IBM is at the third place, while MCD at fourth. At fifth place is
MSFT, replacing KO. At 7th is T, followed by Marlboro and the China Mobile. GE is at tenth place.

In most recent news on Tuesday, MSFT is said to be close to buying Skype for $8.5B including debt.
Both sides have declined comment, however. Goldman Sachs and JPM are said to be advising Skype.

Also, after seeing the futures contract on silver had its trading margin increased, investors are now
facing a larger margin needed to trade crude. CME Group hiked crude margins to $8,438 per
contract from $6,750. In mid-day Asia, crude for June delivery hovers at $100.46 a barrel, falling
$2.09 while Brent crude for June settlement hovers at $114.34 a barrel, meaning that the price
retreated $1.56 from Monday’s close.

While no significant economic data are set for release on Tuesday, after the market closes DIS will
report its earnings.

2 .DJI 12,684.68 (+45.94 ● +0.36%) .SPX 1,346.29 (+6.09 ● +0.45%) .IXIC 2,843.25 (+15.69 ● +0.55%)
 May 10th 2011

Stock Focus: Caterpillar, Inc.

CAT
Last Apr 9th Resistances 113.43 114.62 116.55 117.28 119.08
$111.66 1.20% Supports 108.39 107.66 107.22 105.56 102.16
WTD MTD Outlook
1.20% 3.25% POSITIVE
YTD 12-Month Price Tgt
19.22% 83.77% $117.28

CAT has recoiled from its low on Thursday when the commodities got hammered. Now, the stock is
seen rebuilding its strength again as it eyes on $117.28. EMAs are still on the rise, while the MACD is
just recently turning higher again albeit remains at negative. CAT has been a consistent performer
among the Dow 30, providing a yield of 83.77% for a 12-month span and 19.22% return so far
since the beginning of 2011. Dips towards $107.00s may present buying opportunities, but below
$102.16 could spell deep correction.

3 .DJI 12,684.68 (+45.94 ● +0.36%) .SPX 1,346.29 (+6.09 ● +0.45%) .IXIC 2,843.25 (+15.69 ● +0.55%)
 May 10th 2011

Price Performance - as of May 9th 2011

Code Last Dy WTD MTD YTD 12-Mos
AA 17.53 2.22% 2.22% 3.12% 13.91% 50.60%
AXP 50.19 -0.02% -0.02% 2.26% 16.94% 25.88%
BA 79.64 0.42% 0.42% -0.18% 22.03% 24.09%
BAC 12.18 -1.06% -1.06% -0.81% -8.70% -22.62%
CAT 111.66 1.20% 1.20% -3.25% 19.22% 83.77%
CSCO 17.60 0.23% 0.23% 0.46% -13.00% -24.01%
CVX 104.09 1.18% 1.18% -4.89% 14.07% 40.91%
DD 55.41 1.43% 1.43% -2.43% 11.09% 53.19%
DIS 43.10 0.09% 0.09% 0.00% 14.90% 28.96%
GE 20.07 0.30% 0.30% -1.86% 9.73% 22.75%
HD 36.96 -0.08% -0.08% -0.51% 5.42% 9.16%
HPQ 41.02 0.51% 0.51% 1.61% -2.57% -10.85%
IBM 169.10 0.12% 0.12% -0.87% 15.22% 35.00%
INTC 22.76 -2.11% -2.11% -1.68% 8.23% 6.26%
JNJ 65.63 0.55% 0.55% -0.14% 6.11% 12.57%
JPM 44.96 -0.18% -0.18% -1.47% 5.99% 13.59%
KFT 34.04 -0.12% -0.12% 1.34% 8.03% 19.02%
KO 66.95 0.07% 0.07% -0.76% 1.79% 30.25%
MCD 79.31 0.78% 0.78% 1.28% 3.32% 18.60%
MMM 95.99 0.41% 0.41% -1.26% 11.23% 21.03%
MRK 36.48 0.25% 0.25% 1.47% 1.22% 8.28%
MSFT 25.83 -0.15% -0.15% -0.35% -7.45% 0.12%
PFE 20.60 0.24% 0.24% -1.76% 17.65% 35.26%
PG 65.14 -0.20% -0.20% 0.37% 1.26% 6.63%
T 31.35 0.29% 0.29% 0.74% 6.71% 29.01%
TRV 63.39 -0.06% -0.06% 0.17% 13.79% 28.14%
UTX 89.52 0.35% 0.35% -0.07% 13.72% 32.86%
VZ 37.24 -0.11% -0.11% -1.43% 4.08% 35.32%
WMT 55.10 0.15% 0.15% 0.22% 2.17% 8.98%
XOM 83.18 0.59% 0.59% -5.46% 13.76% 37.58%

4 .DJI 12,684.68 (+45.94 ● +0.36%) .SPX 1,346.29 (+6.09 ● +0.45%) .IXIC 2,843.25 (+15.69 ● +0.55%)
 May 10th 2011

US Economic Calendar
Date Time Report Period Actual Forecast Previous
10-May 8:30 AM Import Price Index Apr 1.8% 2.7%
10-May 10:00 AM Wholesale inventories Mar 1.0% 1.0%
11-May 8:30 AM Trade deficit Mar -$46.5 bln -$45.8 bln
12-May 8:30 AM Jobless claims 7-May 445K 474K
12-May 8:30 AM Retail sales Apr 0.5% 0.4%
12-May 8:30 AM Retail sales ex-autos Apr 0.6% 0.8%
12-May 8:30 AM PPI Apr 0.8% 0.7%
12-May 8:30 AM Core PPI Apr 0.2% 0.3%
12-May 8:30 AM Inventories Mar 0.7% 0.5%
13-May 8:30 AM CPI Apr 0.4% 0.5%
13-May 8:30 AM Core CPI Apr 0.2% 0.1%
13-May 8:30 AM Consumer sentiment May 70.1 69.8

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.

5 .DJI 12,684.68 (+45.94 ● +0.36%) .SPX 1,346.29 (+6.09 ● +0.45%) .IXIC 2,843.25 (+15.69 ● +0.55%)