STOCK MARKET WATCH, Wednesday 19 January

[ozymandius]

Wednesday January 19, 2005

COUNTING THE DAYS
DAYS REMAINING IN THE * REGIME 4 YEARS, 1 DAYS
DAYS SINCE DEMOCRACY DIED (12/12/00) 4 YEARS, 39 DAYS
WHERE'S OSAMA BIN-LADEN? 3 YEARS, 93 DAYS
DAYS SINCE ENRON COLLAPSE = 1154
Number of Enron Execs in handcuffs = 19
ENRON EXECS CONVICTED = 2
Other Arrests of Execs = 54

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U.S. FUTURES & MARKETS INDICATORS
NASDAQ FUTURES-----------------------------S&P FUTURES

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AT THE CLOSING BELL ON January 18, 2005

Dow... 10,628.79 +70.79 (+0.67%)
Nasdaq... 2,106.04 +18.13 (+0.87%)
S&P 500... 1,195.98 +11.46 (+0.97%)
10-Yr Bond... 4.20% -0.02 (-0.50%)
Gold future... 423.50 +0.50 (+0.12%)





GOLD, EURO, YEN, Dollars and Loonie

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PIEHOLE ALERT

Heads Up!
Preliminary info on appearances by Bush & Co. throughout the country. Details & links are added as they become available so check back. And if you know more, are organizing something, or would like to, contact [e-mail]

For information on protests and other actions Citizens For Legitimate Government

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[54anickel]

1. Morning Ozy! Have a great day!...

I was just debating whether or not to try and start the thread. Hope you're not running late for work. :hi:

[ozymandius]

3. Good morning 54anickel.

As fortune would have it - my first full week at work has been hobbled with a bad case of bronchitis. My wife has bronchitis too and our son has pneumonia. So I am sitting out a couple of days while the antibiotic does its work and the coughing settles down.

I'll still be scarce today while I recouperate.

I hope you're having a great week.

Ozy :hi:

[54anickel]

6. Wishing you all a fast recouperation! ...n/t

[RawMaterials]

7. Get well soon, but thanks for the great cartoon n/m

[ozymandius]

2. WrapUp by Ike Iossif

WHAT HAPPENED TO VOLATILITY?

In the past few years close to 8,000 hedge funds have started operations in the U.S. The impact on the financial markets of such a large number of funds with a mandate somewhat unconventional is little understood, and/or appreciated. A clear example of such impact can be seen in a real life example that took place week ago.

-cut-

First of all, raw put/call ratios are irrelevant. A large number of puts/calls are bought/sold not because of conviction with regard to the directional move of a stock/index, but because of the very lack of it!

Second, when everything is already pre-sold or pre-bought, there is very little urgency to sell/buy, which reduces volatility, and volatility premiums.

Third, the existence of this type of hedging strategies results in plenty of "uncompleted" break-outs or breakdowns. As soon as a stock/index appears to break-out or break-down, the hedge strategy kicks in, and the "break" gets negated. This has been much more prevalent in the indices, where funds can make multi-million dollar bets due to the available liquidity.

more...

http://www.financialsense.com/Market/wrapup.htm

[54anickel]

4. Found this article on SS posted by Mulethree in the Econ Forum. Thought

I would repost it here.

http://www.democraticunderground.com/discuss/duboard.php?az=view_all&address=114x13755


Social Security Isn’t Broken, So Why Does Greenspan Want to Fix It?

http://www.dollarsandsense.org/1104orr.html

Federal Reserve Chairman Alan Greenspan told Congress earlier this year that everyone knows there’s a Social Security crisis. That’s like saying "everyone knows the earth is flat."

Starting with a faulty premise guarantees reaching the wrong conclusion. The truth is there is no Social Security crisis, but there is a potential crisis in retirement income security and there may be a crisis in the future in U.S. financial markets. It’s this latter crisis that Greenspan actually is worried about.

snip>

Congress expected that private-sector pensions eventually would cover most workers. But pension coverage peaked at 40% in the 1960s. Since then, corporations have systematically dismantled pension systems. Today, only 16% of private-sector workers are covered by defined-benefit pensions. Rather than supplementing private pensions, Social Security has become the primary source of retirement income for almost two-thirds of retirees. Thus, Congress was forced to raise benefit levels in 1972.

What has happened to private-sector defined benefit pensions? They’ve been replaced with defined-contribution (DC) savings plans such as 401(k)s and 403(b)s. These plans provide some retirement income but offer no real protection from longevity risk. Once a retiree depletes the amount saved in the plan, that pension is gone.

In a generous DC plan, a firm might match the worker’s contribution up to 3% of his or her pay. With total contributions of 6%, average wage growth of 2% a year, and an average return on the investment portfolio of 5%, after 35 years of work, a retiree would exhaust the plan’s savings in just 8.5 years even if her annual spending is only half of her final salary. If she restricts spending to just one-third of the final salary, the savings can stretch to 14 years.

more...

[54anickel]

19. Demise of Defined Benefits: New Evidence

http://www.cfo.com/article.cfm/3575663/c_3575686?f=home_todayinfinance

One in five companies will consider providing defined contribution plans only, according to a recent study.

Stephen Taub, CFO.com
January 19, 2005

Even as the Bush Administration discusses strengthening the Pension Benefit Guaranty Corp., a growing number of companies are backing away from traditional defined benefit plans.

In a study by Hewitt Associates of nearly 200 large companies, 27 percent said they will consider amending their defined benefit plan to exclude new employees from participation, and 20 percent will consider providing defined contribution plans only.

"Concern over cost volatility and regulatory uncertainty are making pension plans less attractive to employers," said Lori Lucas, director of participant research at Hewitt. "If the environment doesn't improve, some employers may find their best course is to limit their future commitment to defined benefit plans. That leaves the 401(k) plan to fill the void — and it's up to employees to take ownership of their retirement planning."

The results of the Hewitt survey are consistent with a recent study by consultancy SEI Investments, which found that more than one-third of 100 CFOs at North American companies expect to close their plans to new entrants within the next year.

more...

[Tace]

5. Futures Commentary From Ino.com

The March S&P 500 index was slightly lower overnight due to light profit taking as it consolidates below the 20-day moving average crossing at 1197.40. Stochastics and the RSI are turning bullish signaling that a short-term low has likely been posted. Closes above the 20-day moving average crossing at 1197.40 are needed to confirm that a short-term low has been posted. Multiple closes below the 25% retracement level would open the door for a test of December's low crossing at 1175.70 then the November 22 reaction low at 1171. The March S&P 500 Index was down 1.10 pts. at 1194.60 as of 5:53 AM ET. Overnight action sets the stage for a steady to lower opening when the day session begins later this morning.

ino.com

[RawMaterials]

8. 8:37 EST Market update

http://finance.yahoo.com/mo

8:32AM: S&P futures vs fair value: -2.0. Nasdaq futures vs fair value: -3.0. Futures trade gets a slight boost following a better than expected batch of economic data, and now suggests a flat to slightly lower open for the indices... Dec CPI just checked in at -0.1% (consensus 0.0%) while core CPI came in at +0.2% (consensus +0.2%)... Weekly jobless claims fell 48K to 319K (consensus 345K)

8:00AM: S&P futures vs fair value: -2.9. Nasdaq futures vs fair value: -5.5. Futures market suggesting a lower open for the cash market as investors watch for further earnings reports and wait to get a read on the latest inflation data... Despite strong reports from IBM, MOT and YHOO last night, lower than expected results this morning from JPM and PFE has prompted hesitation on the part of buyers in pre-market trading...

At 8:30 ET, Dec CPI (consensus 0.0%) and core CPI (consensus +0.2%), weekly jobless claims (consensus 345K), Dec Housing Starts (consensus 1905K) and Building Permits (consensus 1985K) will be released

[54anickel]

9. Stocks Seen Down Amid Lackluster Earnings

http://biz.yahoo.com/rb/050119/markets_stocks_2.html

NEW YORK (Reuters) - Stock futures pointed to a lower market open on Wednesday, with a slew of earnings results failing to impress Wall Street and investors cautious ahead of economic data that will offer a peek into inflationary pressure.

JPMorgan Chase & Co. (NYSE:JPM - News), the No. 2 U.S. bank, said its fourth-quarter earnings fell, hurt by charges related to its merger with Bank One last year.

Dow component Pfizer Inc. (NYSE:PFE - News), the world's largest drug company, said fourth-quarter earnings rose. Excluding special items, Pfizer earned 58 cents a share, with analysts on average expecting 59 cents, according to Reuters Estimates.

snip>

"Not one of the big companies reporting this morning reported better earnings," said Todd Leone, head of listed trading at S.G. Cowen. Leone added that investors may be wary ahead of economic data due later this morning.

more, including today's expected reports....

[54anickel]

10. The Real Interest Rate Conundrum (Roach)

http://www.morganstanley.com/GEFdata/digests/20050118-tue.html#anchor0

Real, or inflation-adjusted, interest rates remain near rock-bottom levels. That’s true in most major segments of the world. It’s also true for short- and long-term maturities, alike. This condition is not sustainable. The days of abnormally low real interest rates could be coming to an end. As the world economy returns to trend, a normalization of real interest rates is both appropriate and likely. This poses major risk to financial markets, as well to asset-dependent real economies that have become hooked on low real interest rates.

The real interest rate conundrum is largely made in America. The Federal Reserve is the leading actor in this saga. Fearful of a Japanese-like post-bubble carnage, the Fed slashed its policy rate by 475 basis points in 2001 in the aftermath of the bursting of the US equity bubble. Another 75 bps of rate cuts were implemented in 2002 and 2003 as the US veered dangerously toward deflation. To varying degrees, other major central banks went along for the ride. The Bank of Japan augmented its zero interest policy with extraordinary efforts at quantitative easing. Even the inflation-phobic European Central Bank took its policy rate down to “zero” in real terms and allowed excess growth in Euroland M-3 that has been above the 4.5% reference zone for the past three and a half years. And the People’s Bank of China, operating with a pegged currency, took its cue from the Fed and followed with a major monetary stimulus of its own -- fostering M-2 growth that has averaged 16.5% since 2000.

In response, real interest rates have tumbled from the short to the long end of the maturity spectrum. Nowhere is this more evident than in the United States. When “deflated” by the headline CPI, the federal funds rate is still in negative territory by about 125 bps. Using the core CPI, which excludes food and energy, the real funds rate is basically “zero.” (Note: I have long objected to stripping out important, but volatile, items in order to get a clean read on any economic trend; in the comparisons that follow -- especially the international ones, for which core inflation data are not always available -- the headline construct is used). Based on either inflation metric, US monetary policy remains in its most accommodative position since the late 1970s; the real federal funds rate has been below its post-1985 2% norm for nearly four years and has been at the zero threshold or in negative territory for more than two years. A similar downside breakout is evident for long-term US real interest rates. Adjusted for inflation, the yield on 10-year Treasuries is currently a bit below 1% (4.20% nominal yield less the latest reading of 3.5% on headline CPI inflation). That reading essentially equals the lows hit in the spring of 2003 and remains more than 250 bps below the post-1985 norm.

Real interest rate trends elsewhere in the world essentially mirror those in the United States. Short rates in both Europe and Japan remain below the inflation rate -- underscoring the extraordinary degree of monetary policy stimulus that is still in place in both regions. Long rates remain equally depressed. That’s true in Europe, where yields for 10-year German bunds (3.5%) are only 100 bps above the pan-regional European inflation rate (2.5%) and about 300 bps below the post-1985 norm. Similarly, nominal yields on 10-year Japanese government bonds (1.4%) are only about 70 bps above the now-positive Japanese CPI (+0.7% in December 2004); while that’s above the negative readings that were hit in 1998, it remains well below the 2.5% post-1985 average. Elsewhere in the developed world, it’s basically the same story. The IMF’s composite measure of world real long-term interest rates -- including not only the US, Japan, and Germany but also the higher-yielding securities of France, Italy, the UK, and Canada -- is currently at a 20-year low of around 2%. Even in the developing world, spreads relative to Treasuries are at lows last seen in the pre-crisis period of 1997-98. The world’s real interest rate cycle is, indeed, in rarefied territory.

more...

[54anickel]

11. Market Action as Information (Hussman)

http://www.hussman.net/wmc/wmc050118.htm

snip>

In general, comfort is an expensive thing to purchase in the financial markets. Still, investors do it all the time. They seek comfort by liquidating stocks – even deeply undervalued ones – after the market has experienced a long period of weakness. They seek comfort by chasing stocks – even wildly overvalued ones – after the market has experienced a long period of strength. It is very uncomfortable to actually provide other investors the comfort they seek, by standing there bidding for stock in frightening, undervalued markets, and by selling into exuberant, overvalued markets. But it's that very willingness – to trade in a way that provides scarce, useful resources to others – that is the foundation of long-term gains.

Market action as information

Price movements have at least two components. One is tied to fundamental values, and the other is tied to investors' willingness to accept market risk at any given time. The problem is that we don't get to directly observe which one is making stock prices move.

For instance, a decline in price may by a signal that future fundamentals are likely to be poor, and the fundamental value of the stock has declined. On the other hand, it might be that the stock price has declined even though the outlook for future fundamentals hasn't changed, in which case the stock is now a better value. How can you tell which is happening?

As always, context matters. Stock prices can never be analyzed properly without additional information to place their movements in context. For instance, if the price of a particular stock is plunging, but the overall market is also plunging, and all the other stocks in that industry are plunging, then we take the decline as a signal about what they share in common: overall economic conditions may be deteriorating, or investors may be broadly concerned about risk (those two possibilities could be further distinguished with additional information about the economy, valuations, credit spreads, and so forth). On the other hand, if the price of a particular stock is plunging, but the overall market and other stocks in the industry are holding up well, we take the decline as a negative signal about that specific company's prospects, or at least investor attitudes toward that specific company, and immediately look for information related to products, management and other factors idiosyncratic to that particular stock.

With the broad market, it is equally important to examine not only valuations but also market action. On the valuation front, knowing that the price/peak earnings multiple of the S&P 500 is 20.5 is already enough to anticipate that long-term returns (over the coming 7-10 years or more) are likely to be unsatisfactory. It is important to recognize that P/E multiples aren't just arbitrary objects, but are instead complex little mathematical beasts that have a long-term rate of return built into them, just as bond prices have a long-term yield to maturity built into them (for more on this, see Natural Consequences). This knowledge of valuations is a major advantage to investors who take the information seriously, because it provides an enormous amount of context in which to interpret shorter-term market action. As Charles Dow wrote a century ago, in one of the single most important observations in stock market history, “To know values is to comprehend the meaning of movements in the market.”

more...

[54anickel]

22. Survey shows greater aversion to risk

Global fund managers change views post Fed meeting

http://cbs.marketwatch.com/news/print_story.asp?print=1&guid={546780C8-185C-4A9B-B07C-9CE9DFF4035B}&siteid=mktw

snip>

A net 17 percent of managers surveyed for the January report said that they plan to lower the beta - or exposure to volatile stocks - in their equity portfolios over the next three months, compared to the 7 percent who said they were planning this move in the December survey. A higher beta generally correlates to a bullish view of markets, while a lower beta takes the opposite view.

The downward trend in risk taking appears to come after the fund managers changed their views on interest rates once the minutes from December's Federal Reserve meeting were released. Merrill surveys 319 fund managers who manage a total of $1.035 trillion in funds.

snip>

The fund manager consensus view on a neutral Fed Funds interest rate - or one that is neither restrictive nor stimulative - has risen to 3.4 percent for equity fund managers and to 3.5 percent for debt fund managers, from 3 percent six months ago, the survey showed.

"We need to be alert that when Fed rates tighten, low quality asset classes are at risk," said Bowers.

The asset classes that are most sensitive to higher rates and lower risk appetite - or the "four canaries in the mineshaft" - include emerging market equities, emerging market bonds, high-yield bonds and U.S. small cap stocks, Bowers said.

more...

[54anickel]

12. Wall Street's Biggest Bonuses Favor Oil Traders, Merger Bankers

http://www.bloomberg.com/apps/news?pid=10000103&sid=aKz4ciU7AJEY&refer=us

Jan. 19 (Bloomberg) -- Wall Street's biggest bonuses are going into the pockets of the oil traders and merger-and- acquisition bankers who fueled record profits at the largest U.S. securities firms in 2004.

Senior merger specialists are getting the heftiest raises. They may see 25 percent increases to an average of $900,000 in annual compensation after year-end bonuses are added to base salaries, says Alan Johnson, president of Johnson Associates, a New York-based compensation consulting firm.

Top traders of commodities such as oil and gas can expect increases of as much as 10 percent to $1.3 million or more.

``Every four or five years you have a new group of stars,'' says Johnson, 49. ``Once, you had equities. Then you had investment bankers. And now you have energy traders. Who would have ever thought it would be the commodities guys?''

The bonus season may mean a surge in localized spending on restaurant celebrations and such luxury items as cars, jewelry and fine wines.

more...

[54anickel]

13. Lookie at that spike in the futures chart. Must have been a recent

report coming out.

[54anickel]

14. Heh-heh - Big banner stating "No sign of inflation" at the CBS

Marketwatch site.

http://cbs.marketwatch.com/news/default.asp?siteid=mktw&dist=lnctab

CPI shows decline; housing starts rise; jobless claims fall


http://cbs.marketwatch.com/news/story.asp?column=Indications&siteid=mktw&dist=

Yahoo, Google higher in pre-open
Benign CPI bolster futures; Lucent shares down

By Emily Church, CBS.MarketWatch.com
Last Update: 8:38 AM ET Jan. 19, 2005

LONDON (CBS.MW) - U.S. stock futures pushed modestly higher Wednesday, taking comfort from data showing benign inflation in the U.S. in December as well as a stronger-than-expected housing market.

snip>


Consumer prices declined 0.1 percent in December - the 0.2 percent rise in the core rate met expectations. Housing starts were ahead of forecasts. Housing starts rebounded in December, rising at the fastest monthly rate in more than seven years after they declined sharply in the prior month, the Commerce Department said.

Risk appetite among fund managers is on the retreat after cautionary comments on inflation by Federal Reserve officials in the December meeting minutes, Merrill Lynch strategists concluded Tuesday after a monthly survey of global fund managers. See story

more...

[54anickel]

18. CPI posts biggest rise in 4 years

Biggest annual gain since 2000 is capped by surprise decline in December as energy prices retreated.

Can't see the forest for the trees?

NEW YORK (CNN/Money) - Consumer prices rose 3.3 percent last year, the biggest increase in four years, after a slight decline in December, the government said Wednesday.

snip>

The so-called core CPI, which excludes often volatile food and energy prices, rose 0.2 percent in the month, matching November's increase as well as economists' forecasts.

For the full year, core CPI posted a 2.2 percent increase, the Labor Department said in its report.

Core CPI is closely watched by economists and policy-makers at the Federal Reserve for signs of inflation. Minutes of the December Fed meeting showed members expressed concern about growing risks of a pickup in inflation.

Only three years since 1966 have seen a core CPI increase of less than 2.2 percent, but two of those years were 2002 and 2003, when core CPI was up 1.9 and 1.1 percent, respectively.

more...

[RawMaterials]

15. Wachovia to cut 4% of workforce

NEW YORK (Reuters) - Wachovia Corp., the No. 4 bank, said Wednesday it expects to cut 3,500 to 4,000 jobs, or roughly 4 percent of its workforce, by 2007 to help save up to $1 billion in costs.

Chief Executive Ken Thompson is trying to reduce the bank's expenses, which are high relative to those of many peers

http://money.cnn.com/2005/01/19/news/fortune500/wachovia_jobs.reut/index.htm

[RawMaterials]

16. Younger Americans going deeper into debt

http://www.bankrate.com/brm/news/debt/20050117a1.asp

Gen Xers yearn to carve a new direction for society. Unfortunately, the direction appears to be straight into debt. Americans between the ages of 25 and 34 now boast the second-highest rate of bankruptcy, just behind the 35-44 group. The average credit card debt for this group increased by 55 percent between 1992 and 2001, with the average young adult household now spending approximately 24 percent of its income on debt payments.

Really want to worry? Take a peek at these findings from the "Generation Broke" report put out by social activist group Demos, using the Federal Reserve Board's survey of consumer finances:

# Adults between the ages of 18 and 24 saw an even sharper rise in credit card debt from 1992 to 2001 -- 104 percent to be precise.

# Among the youngest adult households with incomes below $50,000 (that's two-thirds of this demographic), nearly one in seven with credit card debt is in debt hardship.

# This youngest segment spends close to 30 percent of its income on debt payments, double the percentage spent on average in 1992.

It's hard to shock Judge John C. Ninfo II, chief judge of the U.S. Bankruptcy Court for the Western District of New York. He hears the stories behind the numbers: college students who run up the credit card bills each semester, then take out extra on their student loans to pay them off. They graduate with as much as $8,000 in debt from this shell game alone -- plus the last semester's financial flings. "Nobody warned me," is an everyday wail in his world.

Fed up with seeing the parade of youngsters filing in his jurisdiction, he launched an outreach program, Credit Abuse Resistance Education

Finger-pointing
Scare tactics don't impress experts such as Draut. Student loan debts have doubled to almost $20,000, she says. "When the car breaks down, there's no savings, so it goes on the credit card.

No wonder he's seen bankruptcies among the under-25 crowd soar 96 percent in the last 10 years.

Meanwhile, Manning says the real answer lies in a society that starts smelling the coffee. "It's essential Americans recognize the promise of unlimited resources is over. The government will not be there for this generation, so they need to start targeting their financial goals in five- and 10-year increments."

True reform, he believes, will happen only through an awareness-building, skill-building and behavioral-change approach. So far, he rates Americans as "barely at the awareness level." Yet he pooh-poohs most literacy programs' effectiveness because they lack a sense of urgency.


speaking from my personal experience this is right on I'm 25 graduated with 12000$ in CC debt(part of that was wedding expenses) 35000$ student loan debt and needed a car to get to work so since i couldn't afford to pay cash i got a brand new car with a low interest rate 1.9(surprised to say the car is worth more then i owe) now 2 years later the CC debt is gone and student loans are manageable, but i had to really live well below my means(now i really like being cheep and just paying cash its kind of fun to see how much you can save) but many other people out there my age are really hurting with debt. I was very fortunate to find a good job right after i graduated.

[54anickel]

17. Daily Dollar Watch (headed back down)

http://quotes.ino.com/chart/?s=NYBOT_DXY0&v=s

Last trade 83.06 Change -0.30 (-0.36%)

Settle 83.36 Settle Time 23:37

Open 83.40 Previous Close 83.36

High 83.50 Low 82.88

Last tick: 2005-01-19 09:17:30 ET
30-min delayed quote.

The March Dollar was lower overnight as it consolidates below the 25% retracement level of the May-December decline crossing at 83.71. Stochastics and the RSI are diverging but bullish signaling that sideways to higher prices are possible near-term. Closes above the 25% retracement level of the May-December decline crossing at 83.71 are needed to extend the short covering rebound off December's low. Closes below the 20-day moving average crossing at 82.18 would confirm that a short-term top has been posted while opening the door for a larger- degree decline into the last half of January. Overnight action sets the stage for a steady to weaker tone in early-day session trading.

The March Euro was higher overnight and is working on an inside day as it consolidates below the 10-day moving average crossing at 131.286. Stochastics and the RSI are oversold and bearish but are diverging, which is often a sign that a short-term low is near. Closes above last week's high crossing at 133.020 are needed to confirm that the correction off December's high has come to an end. If March extends this month's decline, the 38% retracement level of the April-December rally crossing at 129.550 is the next downside target. Overnight action sets the stage for a steady to firmer tone in early-day session trading.

The March British Pound was higher overnight due to short covering and is breaking out above the 10-day moving average crossing at 1.8676. Stochastics and the RSI are oversold, diverging and are turning neutral hinting that a short-term is in or is near. Closes above the 20-day moving average crossing at 1.8856 are needed to confirm that the correction off December's high has come to an end. If March extends this year's decline, the 50% retracement level crossing at 1.8292 is the next downside target. Overnight action sets the stage for a steady to firmer tone in early-day session trading.

The March Swiss Franc was higher overnight due to short covering and is breaking out above the 10-day moving average crossing at .8506. At the same time stochastics and the RSI are oversold, diverging and are turning neutral hinting that a short-term low might be near. Closes above last week's high crossing at .8627 are needed to confirm that a short- term low has been posted. If March extends its decline off December's high, the 50% retracement level of last year's rally crossing at .8276 is the next downside target. Overnight action sets the stage for a steady to firmer tone in early-day session trading.

The March Canadian Dollar was higher overnight due to short covering and is working on a possible inside day but remains below the 20-day moving average crossing at .8205 but above the 25% retracement level of the May-November rally crossing at .8174. Stochastics and the RSI are bearish signaling that sideways to lower prices are possible into the last half of January. Multiple closes below the 20-day moving average crossing at .8174 would signal that last Wednesday's high marked a double top with the late-December high. Overnight action sets the stage for a steady to firmer tone in early-day session trading.

The March Japanese Yen was slightly lower overnight as it extends Tuesday's decline. Stochastics and the RSI are overbought and turning neutral to bearish signaling that a short-term top might be in or is near. Closes below the 20-day moving average crossing at .9725 would signal that a double top with December's high has been posted. If March extends last week's rally, a test of December's high crossing at .9885 is the next upside target. Overnight action sets the stage for a steady to weaker tone in early-day session trading.


Dollar Loses Momentum After Rally

http://biz.yahoo.com/rb/050119/markets_forex_3.html

LONDON (Reuters) - The dollar backed off a two-month high against the euro and sterling on Wednesday, losing momentum after Tuesday's rally on the back of stronger than expected data on foreign capital flows to the United States.

The figures showed the U.S. was attracting more than enough foreign cash to fund its huge trade deficit but analysts said this was not enough to end worries about potential funding problems in the future.

These fears were a key driver behind the dollar's fall to record lows against the euro less than a month ago.

"The recent rise in the dollar fizzled out a little and as soon as people saw this, they jumped in to buy euros just in case we were going back up," said Ian Gunner, head of foreign exchange research at Mellon Bank in London.

Investors were also on guard ahead of U.S. consumer price data, due at 8:30 a.m. EST, waiting for clues on how fast U.S. interest rates will rise in the coming months and boost the dollar's yield appeal.

more...

[54anickel]

20. U.S. Jobless Claims Fell 48,000 Last Week to 319,000

http://www.bloomberg.com/apps/news?pid=10000103&sid=aqQaS24h2TVk&refer=us

snip>

The report, usually released each Thursday, was issued a day earlier because government offices will be closed tomorrow for the presidential inauguration. It covers the week ended Jan. 15, the same reference period used by the Labor Department when it surveys businesses to compile this month's payroll statistics. The employment report is due Feb. 4.

The four-week moving average of claims, a less-volatile indicator, fell to 341,000 from 344,000.

The number of people continuing to collect state jobless benefits rose to 2.694 million in the week that ended Jan. 8 from 2.647 million a week earlier.

snip back to the beginning and blowin' sunshine>

Jan. 19 (Bloomberg) -- The number of Americans filing initial unemployment claims fell more than forecast last week, reflecting an improving job market as the economy grows.

Initial jobless claims dropped by 48,000 during the week, the biggest decline in three years, to 319,000, the Labor Department said today in Washington. Claims averaged 343,000 per week last year, the lowest since 2000.

Consumer spending accelerated last month and manufacturers boosted production to meet growing demand, reports last week showed. Businesses may need to keep adding workers, lifting incomes, spending and the economy.

``You are going to get 150,000 to 200,000 jobs a month,'' said John Silvia, chief economist at Wachovia Corp. in Charlotte, North Carolina. ``You are in a very stable growth period for employment.''

more...

[54anickel]

21. 10:06 EST check-in

Dow 10,611.13 -17.66 (-0.17%)
Nasdaq 2,097.68 -8.36 (-0.40%)
S&P 500 1,193.35 -2.63 (-0.22%)
10-yr Bond 4.189% -0.006
30-yr Bond 4.669% -0.02
NYSE Volume 201,839,000
Nasdaq Volume 348,116,000

10:00AM: Equities remain on the defensive as selling remains widespread across most sectors... Technology has been weak across the board, with a 1.0% decline in networking pacing the way... Weakness in airline (-1.1%) has dragged transportation lower following disappointing quarterly results from Southwest Airlines (LUV 14.53 -0.47) and Northwest Airlines (NWAC 8.26 -0.15) while financial has also been under pressure despite encouraging earnings from most of the banks reporting this morning...
Retail, biotech and energy have also posted modest losses while interest-rate sensitive areas like homebuilding (+0.9%) and utility (+0.2%) have shown strength...NYSE Adv/Dec 1296/1302, Nasdaq Adv/Dec 1072/1403

9:40AM: Market opens with a tinge of caution despite getting a better than expected read on inflation data... December CPI coming in at -0.1% (consensus 0.0%), due in large part to a 1.8% decline in energy prices, has provided some rewarding comfort to the financial markets but it appears investors are still digesting some of this morning's mixed earnings results... Meanwhile, the more closely watched core CPI rate rose just 0.2%, in line with economists' expectations and gains over the last two months, also suggesting that inflation has not picked up as much as many feared...

Advances & Declines
NYSE Nasdaq
Advances 1331 (45%) 1052 (38%)
Declines 1391 (47%) 1500 (55%)
Unchanged 229 (7%) 160 (5%)

--------------------------------------------------------------------------------

Up Vol* 46 (42%) 97 (39%)
Down Vol* 61 (55%) 143 (57%)
Unch. Vol* 2 (1%) 7 (2%)

--------------------------------------------------------------------------------

New Hi's 73 48
New Lo's 2 6

[54anickel]

23. Danielle DiMartino Signs of trouble building

http://www.dallasnews.com/sharedcontent/dws/bus/columnists/all/stories/011905dnbusdimartino.953a4.html

snip>

"Investors have ignored that the opium of the consumer – the cash-out refinancing – has come to a crawl."

And it's not just refinancings, which have tumbled an impossible-to-ignore 83 percent since their peak in May 2003. The blasé attitude extends to housing, too.


Existing-home sales

"Investors dismissed the huge fall-off in housing starts in favor of a higher existing-home sales report," Mr. Kass said, referring to late December trading.

Existing-home sales reflect past activity; it's a lagging indicator. Housing starts, on the other hand, are a leading indicator. They fell about 13 percent in November, the sharpest decline in more than a decade. (December starts are out this morning.)

Other data show that the purchase index, tracked by the Mortgage Bankers Association, fell below 400 last week, for the first time since November 2003. (The latest weekly report is out today, also.)

Meanwhile, home equity loans seem to be running into a bit of trouble.

more...

[54anickel]

24. Oil-for-food probe nets first guilty plea

http://www.chron.com/cs/CDA/ssistory.mpl/business/2998855

WASHINGTON - In the first conviction stemming from the United Nations' oil-for-food scandal, an Iraqi-born U.S. businessman — with ties to three presidential administrations and Houston's Coastal Corp. — has admitted he secretly worked as an agent for Saddam Hussein.

Samir Vincent of Annandale, Va., pleaded guilty Tuesday to charges he lobbied former administration officials to lift sanctions against Iraq, while receiving instructions and payments from Saddam's government.

In return, Baghdad handed Vincent's company, Phoenix International, the rights to purchase 9 million barrels of Iraqi crude, Vincent and Justice Department officials said.

Vincent then reaped millions in profit by selling that crude to an unnamed American oil company.

"The Hussein regime corrupted the oil-for-food program, depriving the Iraqi people of food and medicine and undermining the international sanctions," U.S. Attorney General John Ashcroft said.

more...

[MARALE]

25. Why the housing bubble hasn't burst

http://money.cnn.com/2005/01/18/news/economy/housing_bubble/index.htm

snip>

But analysts generally agree that low mortgage rates and other factors have boosted the market over the last five years, through a recession, job losses and the Sept. 11 attacks.

Still, some cracks are starting to show.

...

Baker said his projections are that rates will rise by about 1 percentage point this year, which he warned would be enough to raise borrowing costs and start driving home prices lower on a national basis, as buyers can no longer use the cheap financing to buy more expensive homes.

<snip

[RawMaterials]

27. I liked this one...

"Normally when you talk about housing bubbles bursting, you're talking about a specific local market," said Baker. "But we've never had a nationwide run-up in home prices like this. I don't think it's realistic to think the decline won't also be national. I think a 15 percent nationwide decline is very plausible. In many bubble areas, could be looking at 20-25, maybe 30 percent declines

[MARALE]

29. Thanks

I liked it too, I like to donate to this post now that I know more. I love this post and am sure many lurkers love it too. It is very informative.

[MARALE]

26. Wachovia to cut 4% of workforce

No. 4 bank says it expects to slash 3,500 to 4,000 jobs by 2007 in move to save up to $1 billion.

snip>

Wachovia ended 2004 with about 96,000 employees. It discussed the expected cost savings on its Web site in a supplement to its quarterly earnings report. Earlier Wednesday, Wachovia said fourth-quarter profit rose 32 percent.

<snip

http://money.cnn.com/2005/01/19/news/fortune500/wachovia_jobs.reut/index.htm

[RawMaterials]

28. 12:00 EST Market Update

12:00PM : Stocks open lower and still trade in negative territory midday, despite a spate of stronger than expected economic data, as mixed earnings reports remain too disconcerting to attract buyers... Strong results from blue chips like IBM, MOT and GM have so far failed to offset weaker than expected earnings from PFE and JPM, as virtually every sector has been under pressure keeping market breadth bearish... Meanwhile, most economic reports this morning were good...

Dec CPI came in down 0.1% (consensus 0.0%), due to falling energy prices, while the core rate rose 0.2% for the third consecutive month, showing that inflation remains well contained... Weekly jobless claims fell 49K to 319K (consensus 345K), indicating that the broader trend in claims is near 335K, consistent with nonfarm payroll gains of 175-200K... Housing Starts jumping 11% to 2.0 mln (consensus 1.91 mln), coupled with better than expected building permits of 2.0 mln (consensus 1.99 mln), has shown that the overall trend in housing remains flat... However, broad-based weakness has kept technology underwater all morning, with disk drive, networking and hardware all posting losses in excess of 1.0%...

Airline (-2.2%), in the wake of poor results from NWAC and LUV, has pressured transportation while financial, despite solid earnings from WB, MEL and SFAC, has also traded lower... Retail, materials and health care have also fallen while homebuilding, utility and energy have gained ground... Separately, many investors may be waiting to sift through the Fed's Beige Book, which comes out later today (14:00 ET), since the release of the Dec 14 FOMC minutes (just two weeks ago) renewed worries of inflation and raised concerns about risk taking in the market... The 10-year note is off 5 ticks to yield 4.20%...NYSE Adv/Dec 1531/1594, Nasdaq Adv/Dec 1129/1756

11:30AM : Little changed since the last update as buyers remain a reluctant bunch... Meanwhile, a larger than expected decline of 49K in weekly jobless claims, to 319K versus forecasts of 345K, was reported earlier... New claims for unemployment, which came out a day early due to tomorrow's presidential inauguration, had come in above 355K in each of the last two weeks, but the data were somewhat distorted by strong seasonal factors...

A drop in claims to very low levels continues to suggest that the trend remains close to 335K per week, which existed prior to the holiday period, and consistent with gains of 175-200K in monthly non-farm payroll data...NYSE Adv/Dec 1506/1561, Nasdaq Adv/Dec 1092/1758

11:00AM : Stocks remain under pressure as the market averages continue to languish near their lows of the session... Bucking the negative sentiment, however, has been homebuilding (+1.0%) following an 11% jump in December Housing Starts to a much stronger than expected 2.021 mln annual rate, which has pushed most homebuilders to new 52-week highs... Building Permits have also checked in above expectations, but were down to a 2.021 mln annual rate, while weekly mortgage applications rose 16.2% and 30-year rates fell to 5.64%...

More importantly, this morning's data have been more suggestive of a leveling off period for the housing industry as opposed to an anticipated downtrend following a recent dip in housing starts due to some temporary factors...NYSE Adv/Dec 1414/1565, Nasdaq Adv/Dec 1062/1721

http://biz.yahoo.com/mu/update.html

[54anickel]

30. 12:22 numbers to go with that -

Dow 10,579.20 -49.59 (-0.47%)
Nasdaq 2,087.05 -18.99 (-0.90%)
S&P 500 1,189.56 -6.42 (-0.54%)
10-yr Bond 4.206% +0.011
30-yr Bond 4.695% +0.006
NYSE Volume 694,783,000
Nasdaq Volume 1,055,905,000

Advances & Declines
NYSE Nasdaq
Advances 1507 (44%) 1047 (33%)
Declines 1669 (49%) 1877 (60%)
Unchanged 181 (5%) 164 (5%)

--------------------------------------------------------------------------------

Up Vol* 230 (35%) 265 (26%)
Down Vol* 404 (62%) 741 (73%)
Unch. Vol* 12 (1%) 6 (0%)

--------------------------------------------------------------------------------

New Hi's 125 66
New Lo's 7 13


And a quick check on the buck shows it's rebounding nicely:

Last trade 83.38 Change +0.02 (+0.02%)

Settle 83.36 Settle Time 23:37

Open 83.40 Previous Close 83.36

High 83.50 Low 82.88

[54anickel]

31. Bernanke-US immigration rules threat to productivity

http://www.reuters.com/financeNewsArticle.jhtml?type=bondsNews&storyID=7370001

NEW YORK, Jan 19 (Reuters) - Tightened U.S. immigration policies since the Sept. 11, 2001, terror attacks threaten America's ability to keep boosting productivity, Federal Reserve Governor Ben Bernanke said On Wednesday.

A relatively open immigration policy earlier had paid big dividends for the United States, Bernanke said in response to questions after addressing the Council on Foreign Relations.

"I think a very important part of the productivity gains in the past decade were associated with our open immigration policy," Bernanke said. "If we don't allow, if we don't make provision for bright people, whether they be graduate students or professional people to come...that's a loss to our society and a loss to our potential productivity." :eyes: I thought it was technology that gave us those great productivity increases - so said Greenspin anyway.

snip>

He acknowledged that big U.S. trade deficits, which he said represented a drain on aggregate U.S. demand because they stem from swelling imports, were a problem.

"For our growth (this year) to be what we hope it will be, that is, above trend, maybe 3-1/2 percent or even better, we need for the trade balance to be no worse of a drag than it has been recently," Bernanke said.

more...

[fedsron2us]

40. There is absolutely no evidence to support Bernanke's claim

The work force whether indigineous or immigrant has virtually no impact on productivity. On the contrary cheap labor tends to discourage technical innovation and automation. The only thing it solves is the 'servant' problem for the rich.

[54anickel]

32. Quick toon before I run for the day - have a good one!

[mojavekid]

33. "Ha Ha!"

Thanks, I needed that!

[RawMaterials]

34. 155 EST Market Update

1:30PM : Selling remains the name of the game as both stocks and bonds continue to lose ground... Treasuries, which initially shrugged off this morning's positive economic data and traded higher until around 10:00 ET, remain under pressure despite light volumes, keeping the benchmark 10-year note off 3 ticks to yield 4.19%... But comments from Fed Governor Bernanke that suggested inflation risks were "not any greater today than they were six months ago" has spurred some profit taking, as traders await the release of the Fed's Beige Book (out at 14:00 ET)...

The market will be looking closely for details regarding the FOMC policy meeting (Feb 2) and clues about further Fed tightening...NYSE Adv/Dec 1593/1641, Nasdaq Adv/Dec 1144/1837

1:00PM : The broader averages bounce off their lows but continue to sport losses... Bothered by higher fuel costs, airline (-2.1%) stocks have paced the list of laggards today after posting poor results... Shares of Northwest Airlines (NWAC 8.06 -0.35) have been hammered after it posted a Q4 loss of $420 mln, compared to a $363 mln profit a year ago, while AMR Corp (AMR 8.79 -0.08), which reported a narrower than expected Q4 loss, has also traded lower...

Despite being among best protected air carriers against rising oil prices, Southwest Airlines (LUV 14.41 -0.59) has also fallen after missing analysts' expectations with a 15% decline in net profits... Trading lower in sympathy have been competitors DAL and CAL, which report Q4 results tomorrow, and JBLU... DJTA -0.4, NYSE Adv/Dec 1525/1685, Nasdaq Adv/Dec 1091/1889

[RawMaterials]

35. More update blather

2:00PM : Sector leadership remains to the downside as blue chips continue to trail their Nasdaq counterparts... On the Dow, 21 of the 30 components have traded lower, with Pfizer (PFE 24.88 -0.42) pacing the way after missing analysts' expectations by a penny... Also weak has been Verizon Communications (VZ 37.28 -0.40), after Morgan Stanley cut its rating on the telecom provider, while AA, IBM, INTC and MSFT have all lost more than 1.0%...

Meanwhile, SBC Communications (SBC 25.01 +0.13), which was upgraded to Overweight from Equal Weight at Morgan Stanley, has caught a bid while McDonald's (MCD 31.83 +0.23), which announced a 9.5% increase in Q4 sales, has also traded higher...NYSE Adv/Dec 1591/1672, Nasdaq Adv/Dec 1196/1827

[spotbird]

36. What's up with the dollar?

Any thoughts anyone?

[RawMaterials]

38. I think someone's trying to prop it up for the shor term n/m

[spotbird]

39. Who could do such a thing?

How could they do it, and why?

[RawMaterials]

41. the Federal reserve could decided to buy

up currencies to keep other country's Central banks from freaking out about our debt levels and thus not selling (dumping) there dollars out into the markets. The IMF and the world banks can pretty much control and do what ever they want with any countries economy.

[fedsron2us]

44. It held its technical support levels

of $1.95 to the pound sterling and $1.35 against the euro before rebounding. It did look oversold against these currencies so this is not altogether surprising. The dollar still looks weak against the yen. The fundamental problems of the US trade gap with Asia, budget deficit etc mean that any reprieve is likely to be temporary. When the next devaluation takes place is anyones guess. It could be tomorrow or it might not happen for another 6-12 months. In many ways the fate of the dollar lies in the hands of people in Beijing not Washington. I very much doubt whether even the most canny of currency traders know what long term plans have been laid by the Chinese.

[RawMaterials]

37. Fannie slides amid more reform talk

Dividends cut to boost capital also weighs on shares

Late Tuesday, the troubled mortgage behemoth (FNM: news, chart, profile) said it would cut its dividend in half, to 26 cents from 52 cents a share, in an effort to shore up capital. Fannie's stock plunged Wednesday on the news and was last trading down almost 4 percent to $67.01.

Then Sen. Richard Shelby, R-Ala., who chairs the Senate Banking Committee, said Wednesday that the climate for strengthening Fannie's regulator is getting better. Shelby told reporters he hasn't counted votes, but that the atmosphere has "improved very much."

Fannie's stock dropped 12 percent following a Sept. 22 regulator's report about Fannie misrepresenting its earnings. The SEC later agreed with that report, paving the way for the ousting of the company's chief officers.

Meanwhile, as Sen. Shelby's committee prepares to hold hearings about a new regulator for Fannie and Freddie, at least one analyst is predicting lawmakers will give reform a thorough try or none at all.

"I don't think anybody in Washington wants to do this more than once," Dunn said. "Look at how much of a headache it's been so far."

http://www.marketwatch.com/news/story.asp?guid=%7BB29CC0EB%2D0BE0%2D4291%2DA600%2D09D95E8BB3F4%7D&siteid=yhoo

[DoBotherMe]

42. Closing numbers and blather

Dow 10,539.97 -88.82 (-0.84%)
Nasdaq 2,073.59 -32.45 (-1.54%)
S&P 500 1,184.63 -11.35 (-0.95%)
10-Yr Bond 41.87 -0.08 (-0.19%)
NYSE Volume 1,497,165,000
Nasdaq Volume 2,208,647,000

Close: Little enthusiasm on the part of buyers, despite better than expected economic data, as investors remained more concerned about the overall pace of earnings growth following mixed quarterly results than to extend yesterday's strong gains... There were just too many earnings disappointments from the likes of PFE, JPM, AMD, NWAC and LUV (to name a few) to embrace better than expected results from leaders like IBM, GM, MOT, STX, WB and YHOO...
The bulk of sector leadership was negative and market internals were bearish as not even a 1.7% decline in crude oil prices ($47.55/bbl -$0.83)and solid economic reports provided enough upside momentum to thwart a correction in equities... Meanwhile, investors were reminded that the worst inflation fears were overdone as December CPI was down 0.1% (consensus 0.0%), due to falling energy prices, and the more critical core rate checked in at 0.2% for the third straight month, in line with forecasts...
An indication that the broader trend in weekly jobless benefits remains near 335K, consistent with nonfarm payroll gains of 175-200K, was also seen when initial claims for unemployment of 319K (consensus 34K) recorded its largest decline (-43K) in claims since Sept 2001... Evidence that the overall trend in housing remains flat, another bullish signal erased by the bears, was witnessed when housing starts jumped 11% to 2.0 mln (consensus 1.91 mln) and building permits came in at 2.0 mln (consensus 1.99 mln)... Technology was hardest hit on the day, with losses in every major sub-sector exceeding 1.0% and the tech-heavy Nasdaq losing 1.5%... Airline (-3.2%), following poor Q4 results due in large part to higher fuel costs, was also lower as were financial, health care, retail, energy, materials and consumer staples...

[54anickel]

45. Bit more of the blather - look who was doing "well", intra-day anyway

The only areas that showed strength intra-day were interest-rate sensitive groups like homebuilding, utility and REITs, but intensified selling interest in late trading left the housing group as the only major sector standing in positive territory... Separately, the Fed Beige Book cited continued economic expansion, well-contained inflation, strong manufacturing activity and a firming labor market, but as a lagging indicator providing little surprise to today's strong economic data, the report was largely ignored...:eyes:

Treasuries ended the session near mid-range, with the benchmark 10-year note finishing unchanged to yield 4.18%, while the dollar surged to its best levels against the euro (1.2989) since pre-Thanksgiving trade; the yen (102.89) clung to recent highs...DJTA -1.0, DJUA -0.2, DOT -1.6, Nasdaq 100 -1.8, Russell 2000 -1.2, SOX -2.1, S&P Midcap 400 -0.9, XOI -0.4, NYSE Adv/Dec 1267/2094, Nasdaq Adv/Dec 947/2173

Treasuries are still going nowhere. The Fed will have to continue raising rates at a "measured" pace or risk inverted yields. Greenspin & Company continue to try and jawbone looking for that Goldilocks balance of growth, contained inflation, blah, blah, blah.

[RawMaterials]

43. 432 est Market UPdate

Close: Little enthusiasm on the part of buyers, despite better than expected economic data, as investors remained more concerned about the overall pace of earnings growth following mixed quarterly results than to extend yesterday's strong gains... There were just too many earnings disappointments from the likes of PFE, JPM, AMD, NWAC and LUV (to name a few) to embrace better than expected results from leaders like IBM, GM, MOT, STX, WB and YHOO...

The bulk of sector leadership was negative and market internals were bearish as not even a 1.7% decline in crude oil prices ($47.55/bbl -$0.83)and solid economic reports provided enough upside momentum to thwart a correction in equities... Meanwhile, investors were reminded that the worst inflation fears were overdone as December CPI was down 0.1% (consensus 0.0%), due to falling energy prices, and the more critical core rate checked in at 0.2% for the third straight month, in line with forecasts...

An indication that the broader trend in weekly jobless benefits remains near 335K, consistent with nonfarm payroll gains of 175-200K, was also seen when initial claims for unemployment of 319K (consensus 34K) recorded its largest decline (-43K) in claims since Sept 2001... Evidence that the overall trend in housing remains flat, another bullish signal erased by the bears, was witnessed when housing starts jumped 11% to 2.0 mln (consensus 1.91 mln) and building permits came in at 2.0 mln (consensus 1.99 mln)... Technology was hardest hit on the day, with losses in every major sub-sector exceeding 1.0% and the tech-heavy Nasdaq losing 1.5%... Airline (-3.2%), following poor Q4 results due in large part to higher fuel costs, was also lower as were financial, health care, retail, energy, materials and consumer staples...

[54anickel]

46. Beige Book Report

http://www.federalreserve.gov/fomc/beigebook/2005/20050119/default.htm

Reports from the twelve Federal Reserve districts indicated that economic activity continued to expand from late November through early January. Eleven districts characterized activity as expanding with Atlanta, New York, and Richmond noting that the pace of activity had quickened since their last reports. The Cleveland District was less upbeat, characterizing economic activity in that district as mixed.

Consumer spending was generally higher since the last Beige Book and a number of districts reported that retail sales during the holidays were above year-ago levels. While the pace of spending was sluggish in a number of districts at the beginning of the period, it picked up appreciably by late December. Adding to the strength in household spending was an increase in tourism in several districts. Most districts reported that manufacturing activity firmed and many districts said that businesses planned to increase capital spending in 2005. Although several reports noted some slowing in residential real estate and construction activity, real estate markets remained generally strong. In the financial sector, lending activity was mixed, as modestly higher commercial and industrial lending was tempered by slower residential mortgage lending. Several districts noted that agricultural conditions were favorable and that activity in the energy sector remained strong. Labor markets firmed in a number of districts, but wage pressures generally remained modest. Several districts reported higher prices for building materials and manufacturing inputs, but most reported steady or only slightly higher overall price levels.

Consumer Spending and Tourism
Consumer spending increased in most districts since the last Beige Book report, with only Cleveland, Dallas, and New York reporting that sales were mixed. Boston, Chicago, Dallas, New York, Richmond, and San Francisco said that retail sales were slow in early December but picked up the pace from Christmas through the end of the year. Sales of luxury goods were strong in the Kansas City, Philadelphia, and San Francisco districts, while retailers in the Atlanta, Chicago, and Kansas City districts reported that electronics and jewelry sold well during the holiday season. Boston, Richmond, and San Francisco reported higher sales of building supplies, and Boston, Chicago, and St. Louis noted stronger sales of apparel. Gift cards sold briskly according to the Chicago, Kansas City, Minneapolis, and New York reports. Post-holiday retail inventories were at satisfactory levels in the Kansas City, New York, Philadelphia, and San Francisco districts.

Automobile sales were mixed. Atlanta, Chicago, Cleveland, and Kansas City noted higher sales, but St. Louis and Dallas said new car sales slowed. Atlanta, Philadelphia, and San Francisco noted that sales of foreign cars outperformed domestic makes. Dealers in the Chicago, Dallas, and Philadelphia districts reported that automobile dealers' inventories remained above desired levels.

lots more yada...

[54anickel]

47. Venezuela Debt Rating Cut to Selective Default by S&P

http://www.bloomberg.com/apps/news?pid=10000086&sid=aEEJnrVAfNwI&refer=latin_america

Jan. 18 (Bloomberg) -- Venezuela's long-term foreign currency debt rating was cut by Standard & Poor's to selective default after the country missed payments on oil-indexed obligations linked to some of the country's other bonds.

S&P lowered the rating from B, according to a statement from the New York-based ratings company. The nation's most-traded bond due 2027 closed down 1.5 cents on the dollar to 101.6 cents, pushing up the yield to 9.08 percent.

State-owned oil company Petroleos de Venezuela SA hasn't released the official price of oil necessary to calculate the bond payment, the Finance Ministry said in a statement on its Web site. S&P calculated the payment at $35 million and said it was due on Oct. 15.

``Petroloes de Venezuela will make its best effort to solve this situation as soon as possible,'' the ministry said in the statement. ``As soon as the total of the obligation is known, Venezuela will make the payments.'' The ministry said it will also pay past-due interest on the bonds.

snip>

Petroleos de Venezuela fired more than half of its staff in 2003 to break a strike aimed at forcing President Hugo Chavez from office. The firings decimated the company's financial and accounting departments. The company has yet to release results for 2003 or 2004.

more...

[54anickel]

48. Goldman Sachs Negotiating Joint Venture With Brazilian Investment Bank, So

Goldman Sachs Negotiating Joint Venture With Brazilian Investment Bank, Source Says


http://biz.yahoo.com/ap/050118/brazil_goldman_sachs_2.html

SAO PAULO, Brazil (AP) -- Goldman Sachs Group Inc. is negotiating with a major Brazilian investment bank to create a joint venture aimed at tapping into opportunities in South America's largest economy, a source familiar with the discussions said Tuesday.

Rio de Janeiro-based Banco Pactual SA ended talks some time ago with other financial institutions in favor of a proposed partnership with Goldman Sachs, said the source, who would speak only on condition of anonymity. The talks, however, have not yet generated a firm agreement, the source said.

Sao Paulo's Valor Economico, a Brazilian business newspaper, reported Tuesday that the two banks would create an investment bank called Goldman Sachs Pactual worth about $2 billion. Goldman Sachs and Banco Pactual both declined comment in the report.

Valor, which first reported the negotiations, said the deal could be announced within several weeks and would involve swapping shares. Goldman Sachs would end up owning more than 40 percent of the new company but less than a controlling stake.

snip>

Brazil's investment banking climate has improved substantially over the last two years in tandem with the rebounding economy. Investors were spooked by the election of Luiz Inacio Lula da Silva to the presidency in 2002, but Brazil's first leftist leader surprised experts by sticking to market-friendly orthodox monetary policy in a bid to put the country on a path toward slow, sustainable growth.

The country's economy rebounded 5 percent last year after a near-recession in 2003, and 2005 growth is expected at 3.5 percent. Last year also saw a wave of IPOS for news shares in Brazilian companies in a spurt of dealmaking unheard of in recent memory, with predictions of more to come.

more...