60 % of respondents call themselves \u201cbullish\u201d (54 %) or \u201cvery bullish\u201d (13 %) about stock market\u2019s prospects through the end of 2009. 20 % are \u201cneutral\u201d and 13 % \u201cbearish\u201d. Bulls see the DJIA at 8,676, the S&P 500 at 906 and the Nasdaq at 1,684 at the end of 2009. Bears see them at 7,300, 756 and 1,444. Going forward (end of 2010), bulls see the DJIA at 9,488, the S&P 500 at 1,003 and the Nasdaq at 1841. Bears see them at 7,596, 782 and 1,476. More than 40 % of bulls predict the DJIA will reach or breach 10,000 by the middle of next year. Among reasons for this optimistic outlook is the mountain of cash on the sidelines, ready and able to fuel a continuation of the powerful rally that began on March 9th. A record $3.8trn is invested in money-market mutual funds, equal to 43 % of the stock market\u2019s $8.69trn capitalization as of March 31st. 89 % of the time when the liquidity reserve balance exceeded 10.8 % of total market capitalization; the market returned an average of 9.9 % per annum. Corporate earnings will start improving as soon as Q4 2009, with analysts predicting a \u201cV shape scenario\u201d and an increase of 140 % of earnings per share for the last quarter of this year\u2026Also high dividend yields and low returns on money-market funds could draw more investors into stocks. And equity valuations are at multiyear lows. The market\u2019s median capitalization weighted P/E is at 13.29 (S&P 500).

level by historical standards), in a move that is particularly noteworthy as this is usually one on the first indicators to improve ahead of a recovery. The index is supported by a 20 % rise in stock markets and signs that the economy is contracting at a much more moderate pace. There was a huge jump in the expectations index (from 30.2 to 49.5) while the current condition index rose more modestly (21.9 to 23.7). Confidence has now been above its trough for 2 months.

Funds rate target (which will be held in the 0.00/0.25 % range) and given the recent stagnation in the size of the monetary base and the patchy success in reducing borrowing costs, the Fed could announce plans for more long-term asset purchases, particularly Treasury securities. The Fed is already committed to buying $1,250bn of mortgage-backed securities (TALF), which is equivalent to 25 % of the $4,965bn outstanding stock of these securities. In contrast, the $300bn of Treasury securities the Fed has committed to buying is equivalent to only 4 % of the almost $7,000bn of Federal government debt held by the public. The Fed could also opt to widen the mix of long-term assets it is purchasing, only by taking more risk on to its balance sheet (Corporate bonds, privately issued ABS\u2026). Avoiding a deflationary spiral will probably require an even more aggressive policy of quantitative easing. But any widening of the monetary stimulus now increases the risk that inflation could eventually raise out of control if the Fed doesn\u2019t drain the excess liquidity quickly enough when economic conditions improve. Yesterday, the US 10-year Treasury rate went above 3.00 %...

slower annualized pace than in Q3 2008 (-4.0 % vs. -6.3 %?). The Q4 decline was principally due to a sharp fall in consumption, whereas the monthly spending figures indicate that consumption actually increased slightly in Q1. Households benefited from some boosts to income, such as the 5 % plus cost-of-living adjustment in social security benefits and higher tax rebates. Similarly, net trade was a drag in Q4, but likely provided a big boost to GDP in the latest figures. This reflects the fact that although the rates of decline for imports and exports are similar, in terms of levels, imports are much bigger than exports. The positive contribution from consumption and net external trade should be offset by the decrease in investment and inventories.

economists say it could affect the global GDP by -1.00 %) and the WSJ reported that in the wake of the \u201cstress tests\u201d, Bank of America (- 8.63 %) andCi tigroup (-5.86 %) may need to raise their capital levels by billions of dollar. Japanese markets are closed today for Showa Public Holiday, while other Asian markets were upbeat.

ArcelorMittal / royal Dutsch Shell / Sanofi-Aventis / SAP / Siemens / Bayer / Continental AG / Volkswagen / France Telecom / Geberit / Nordea Bk / Norsk Hydro / ST Micro (after US close) / General Dynamics / American Electric Power / Time Warner

AstraZeneca / BASF / BG group / B Sky B / Cap Gemini / Technip / Scor / Dassault Systemes / Lufhansa / Edison / Ferrovial / Novo Nordisk / Kellogg / Motorola / Safeway / Eastman Kodak / International Paper

Santander (\u20ac0,25737) / BASF (\u20ac1,95) / Beirsdorf (\u20ac0,70 + 0,20) / Carrefour (\u20ac1.08) / Deutsche Tel (\u20ac0.78) / Inditex (\u20ac0.55) / Lagardere (\u20ac1.30) / Schneider Electric (\u20ac3.45)

ArcelorMittal / royal Dutsch Shell / Sanofi-Aventis / SAP / Siemens / Bayer / Continental AG / Volkswagen / France Telecom / Geberit / Nordea Bk / Norsk Hydro / ST Micro (after US close) / General Dynamics / American Electric Power / Time Warner

BUY NESTLE / L OREAL / VIVENDI / PERNOD on reversal Head & Shoulder possibility & BUY ROCHE on island reversal possibility
BUY Cars ahead of RENAULT results today (1445 London time) & BUY OIL names as TOTAL / ENI / BP / ROYAL DUTCH to play the eco recovery
BUY DANONE / UNILEVER looking good & BUY KPN / AHOLD / GSZ on double bottom possibility

VERBUND A..........................RAISED TO BUY.................................................................................................................. BY MERRILL MUNICH RE..........................RAISED TO OVERWEIGHT FROM NEUTRAL................................................................ BY JPMORGAN YARA....................................RAISED TO BUY.................................................................................................................. BY MERRILL VESTAS................................RAISED TO NEUTRAL.......................................................................................................... BY MERRILL ANTENA 3............................RAISED TO NEUTRAL FROM SELL............................................................................................ BY UBS

SCHNEIDER ELECTRIC......CUT TO NEUTRAL FROM BUY........................................................................... BY GOLDMAN SACHS SANDVIK...............................CUT TO UNDERPERFORM.................................................................................................. BY MERRILL DEUTSCHE BANK................CUT TO FROM NEUTRAL....................................................................................... BY CREDIT SUISSE\u00b2 VESTAS................................CUT TO NEUTRAL FROM SELL.................................................................................................. BY UBS ABERTIS..............................CUT TO UNDERWEIGHT FROM NEUTRAL.............................................................................. BY HSBC