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[TTHQ Staff]

Todd Market Forecast Stock Market Update for the close on Friday 05/06/05
Available Mon- Friday after 6:00 p.m. Eastern, 3:00 Pacific.

DOW + 5 on 150 net declines

NASDAQ COMP. + 6 150 net advances

STOCK MARKET ANALYSIS:

The market started out nicely higher as a response to the much higher than expected non farm payrolls for April. Not only that, but March's figure was revised upward. Then some investors began to grouse that more people working may mean that the Fed will raise rates more than previously expected and stocks sold off.

Of course, we think that this is ridiculous. More people working means more consumer spending and more profits and no, it does not mean inflation. We can prove that to anyone who will listen. But on days like this, the market doesn't care about profits. It only cares if the Fed will raise short term rates by a quarter of a percent. Silly.

Speaking of profits, it appears that the latest quarterly earnings will rise 12%. This would be the 12th quarter in a row with double digit earnings gains. We don't think that this has been reflected in stock prices, but with so much excess liquidity (money) on the sidelines, we think that, at some point, it will. We are looking for considerably higher prices from current levels to the end of the year.


NEWS AND FUNDAMENTALS:


In addition to the non farm payrolls, hourly wages rose 0.3%. The consensus was for a rise of 0.2%. The average workweek was 33.9, higher than the expected 33.7.

On the stock front, G.E. will restate past earnings to reflect better results and reaffirmed the 2005 outlook, but could only gain a fraction. Intel guided higher, but could only rise 1%. McAfee, Cox Radio and Fluor beat estimates and gained 16%, 6% and 9%. Pixar, Leather Factory and Weight watchers came strong on earnings and jumped 5%, 8% and 9%. Monster Worldwide rose 7% on the jobs report.

On the negative side, Bank of New York dropped 2% on a downgrade by Merrill Lynch. Clorox lost 1% on a downgrade by Prudential. H&R Block sank 2% after guiding lower. Revlon lost 11% on a greater than expected loss. Startek and Watson Pharmaceuticals gave up 19% and 2% on earnings.

BOTTOM LINE:

Our S&P and NASDAQ intermediate term systems are back on a buy signal as of the close on Thursday, April 21, 2005. Mutual fund investors are 100% invested in a growth fund or S&P 500 Index fund of their choice.

SPY and QQQQ traders are on the sidelines.

For new subscribers, the QQQQ and SPY are exchange traded funds or Spiders.

The former mimics the Nasdaq 100 and the latter mimics the S&P 500. ---- Additionally, an m.i.t. order means "market if touched" It means that your order becomes a market order if the price is touched.

OTHER MARKETS

We are on a buy signal for bonds.

We are on a buy for the dollar and a sell for the Euro.

We are on a sell signal for gold.

We remain long term positive on all major world markets, including those of the U.S., Britain, Canada, Germany, France and Japan.


STEVE TODD
A SHORT BIOGRAPHY

Editor and publisher of the Todd Market Forecast, a monthly stock market newsletter with an included nightly hotline. Steve Todd has a degree in history with a minor in mathematics. This should be a good combination for stock market analysis.

Steve has published articles on the economy and stock market in the following publications: Barron’s, Stock Market Magazine, Futures Magazine, The National Educator, and others.

His stock market commentary is heard on the following stations: CNBC, Bloomberg, CNNfn, Associated Press Radio, Business Radio Network, CKNW in Vancouver, British Columbia, KFWB, Los Angeles and ROBTV in Toronto, Ontario.

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