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Tonight’s Agenda

Japan Nuclear Crisis

Fed approves of bank dividends

Economic Data

Market Technicals

Market speculation

Nuclear Radiation Crisis in Japan

Nuclear Crisis in Japan has the Market on Edge Earthquake & Tsunami

Est. 8,000 people dead & 12,000 missing Est. $100-$200 billion in damage/repair One time incident (aside from after-shocks)

Nuclear Power Plants Damaged 6 reactors/spent fuel-rod pools, some

leaking radiation Reactors 150 miles north of Tokyo Situation still Unresolved….

Nuclear Situation Potential for catastrophe, could be as worse as Chernobyl

if situation not contained

Engineers, firefighters, and military working around the clock to prevent disaster

Fuel rods must be kept from over heating

Military using choppers to dump water on reactors in order to keep cool

Firefighters using water cannons on ground

Engineers trying to restore power to water pumps (very critical)

Nuclear Alert Level Raised

Airtime: Fri. March. 18 2011 | 1:15 PM ET

Lasting Effects? Japan is the 3rd

largest economy in the world

Nuclear situation could weaken economy long-term if not resolved

Japanese Economy: Export economy, major

world supplier of technology & autos

The Market’s Next Move

Airtime: Fri. Mar. 18 2011 | 12:08 PM ET

Word on the Street Investors cautious ahead of the weekend

Taking positions off, holding cash

Watching what’s going on in Japan & Middle East

Many think the Japan situation will improve

Some think Japan will have long term economic problems

Rebuilding Japan Stocks PKX (steel)

MTL (steel & coking coal)

XSRAF(copper, thermal coal, coking coal)

BHP (iron ore, copper, coking coal)

BTU (thermal coal)

VALE (iron ore)

OGZPY (nat gas)

CVX (nat gas & oil)

Last week’s economic data

1 week chart of S&P 500 Japan & Middle East Dictate the

Market

Fed Approves Bank Dividends & Share Buy-backs Signals U.S. banking

sector is healthy & stronger

All 19 of the largest banks tested passed

Banking system is profitable now

30% payout ratio limits

RBC’s Cassidy on Bank Dividend Increases

Airtime: Fri. Mar. 18 2011 | 1:36 PM ET

RBC's Outlook on Banks

RBC’s Cassidy’s Outlook on Banks Dramatic increase in dividends in next 3

years for banks

Dividends will increase as earnings increase (higher ratio)

A lot of M&A in banking sector in next 3-5 years

Both borrowers & lenders will have more confidence, take more risk

Notable Bank Dividend Hikes

Phrase of the week: “Even a banker can make money with an upper sloping yield curve”

Market Technicals

Is the Bull Market Broken?

Airtime: Thurs. Mar. 17 2011 | 4:27 PMET

Video Summary Beginning of a major correction?

Or just a normal healthy correction? (5%-7%)

Market Technician: 3 weeks down, 7% correction since Feb high of

1,343 in S&P 500

Corrections are healthy, keeps the bull market going

Says the financial sector will lead the way

Where’s the Market Headed?

1 year chart of S&P 500

What’s the Trade?Financials?

JPM, BAC, C, WFC, USB, PNC, BK, STT, BBT

Triple leveraged (3X) ETF’s? Bulls: FAS, EDC, TNA, ERX, DRN

Bears: FAZ, EDZ, TZA, ERY, DRV

P/E ratios & Forward Looking Earnings

P/E ratios is the price of the stock divided by annualized earnings Market often looks at projected future earnings of a company

Normal P/E ratios range from 10x-20x earnings

15x often considered fair value

Some sectors trade at different earnings multiples, like casino stocks (very high)

Stocks like AAPL, HAL, BHP, MTL, & BAC have upward trends in their projected future earnings, BUY!!!