STOCK MARKET WATCH, TUESDAY NOV 4...(#1)

[ozymandius]

Tuesday November 4, 2003

COUNTING THE DAYS
DAYS REMAINING IN THE * REGIME 447
REICH-WING RUBBERSTAMP-Congress = DAY 351
DAYS SINCE DEMOCRACY DIED (12/12/00) 2 YEARS, 326 DAYS
WHERE'S OSAMA BIN-LADEN? 2 YEARS, 19 DAYS
WHERE'S SADDAM? WHERE ARE THE WMD'S? - DAY 226
DAYS SINCE ENRON COLLAPSE = 710
Number of Enron Execs in handcuffs = 17
ENRON EXECS CONVICTED = 1
Other Arrests of Execs = 53

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




AT THE CLOSING BELL ON November 3, 2003

Dow... 9,858.46 +57.34 (+0.59%)
Nasdaq... 1,967.70 +35.49 (+1.84%)
S&P 500.... 1,059.02 +8.31 (+0.79%)
10-Yr Bond... 4.37% +0.07 (+1.56%)
Gold future... 377.10 -7.30 (-1.90%)

DOW..........................NASDAQ.......................S&P

||


GOLD, EURO, YEN and Dollars


~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~
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

~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~

[ozymandius]

1. SPECIAL EDITION WRAPUP

Fundamental Review
by Jim Puplava

Bullish sentiment has become ubiquitous. You’ll find it everywhere you look. It's on the cover of investment and business magazines. It makes the headlines of morning papers. Nightly news casts proclaim the obvious; markets are moving up and the good times have finally arrived. In Washington, politicians point to rising stock prices as verification of economic policy. On Wall Street, investors are told they can expect more of the same. Investors will find few dissenting voices today. The dominant sentiment regarding markets is all bullish. Most bears have gone into hibernation. If you can find a die-hard bear these days, it is rare find indeed.

The bulls have a plethora of reasons as to why this bull market has plenty of room left for advancement. The economy is growing rapidly at the best pace in nearly two decades. Corporate profits have improved with most companies beating estimates. Fed policy is accommodative and should remain so for the foreseeable future. Consumer spending has remained resilient in spite of job losses and mounting debt burdens. It is hard to find any negatives detractors from Wall Street’s bullish view of the markets. The main perceived headwinds to a sustainable recovery are household and corporate debt. Consumers are taking on a record amount of debt. Household debt has recently climbed to 110% of household income with savings at near record lows. The only worry is that consumers may be forced to retrench as the benefits of tax cuts and mortgage refinancing wane. A Fed report on consumer financial obligations shows that the ratio of obligations to income is close to an all-time high. Despite the high ratio of debt payments to income, the Fed report indicates there are very few signs of distress.

Less Bang for the Fed's Buck

Even more worrisome for the Fed is the fact that money velocity is contracting. Velocity measures how many times money turns over in an economy. Under our present fiat money system, the money supply can be increased without limit. There is nothing backing it, so government can increase the supply of money as much as it wants. The only limit to its expansion is the desire and demand for money. The corollaries of money supply and demand are quite simple. The more rapidly the quantity of money increases, the lower the demand for it tends to be. Conversely, the slower the rate of money growth, the higher tends to be the demand for it. From a Fed policy perspective, it is the velocity of money that becomes paramount to the success of Fed policy. If the Fed expands the supply of money and credit in the financial system, it wants to see that money turnover. If you get a check or loan, you usually will end up spending that money. In turn the money you spend with others is also re-spent. This additional money is spent and re-spent over and over again increasing the turnover of those dollars within the economy. The higher the velocity of money, the higher the turnover of dollars and the more effective Fed policy becomes. A higher money velocity means that the Fed is getting more bang for the buck and conversely the lower the velocity the less bang the Fed is getting through its monetary efforts.

Where We Are Today

This is exactly the point where we are presently. The rate of return on money is negligible. A saver today is earning a negative return on cash when inflation and taxes are factored in. With 1-year T-bills offering only 1.26% in return, a saver is earning less than the going rate of inflation. It gets even worse if you factor in federal taxes which are owed on the interest. As the graph of M-3 clearly shows, the supply of money has been expanded at ever increasing rates to keep the system supplied with money, to replace the destruction of credit that has been destroyed through default, and to prevent interest rates from rising. Yet recently, the supply of money has been contracting and the rate of change has fallen substantially. This reflects the slowdown in mortgage refinancing and the falloff from this summer's tax cuts, both of which helped to expand the money supply.

What This Means to the Markets

[ozymandius]

2. Good morning Marketeers! May I ask you a favor?

This is pretty much a rhetorical question. Near the end of Jim Puplava's column, I quote:

Lowry’s Investor Services believes the key to the markets this week will be to see if stocks retain their early morning gains at the end of each day. More of these rallies have taken on the shape of a rising flagpole, occurring suddenly and forcefully at the markets open and then lingering there the rest of the day. Nothing has been gradual.

Might I ask you to pay attention to this pattern? I listen to the hourly NPR updates while at work - but a poor method with which to track stock market fluctuations. I recall that there has been elevated futures levels before the markets open. (Julie, I recall you mentioning this several times.) This says to me that investors are not willing to wash the taste of BS out of their mouths - especially with the mutual fund scandal. Futures seem to be driving this train-wreck-in-waiting.

If there be any pattern to the casino atmosphere, this may be it. The unpredictability of Wall Street rhythm has even the floor traders flustered, according to articles I've read. Heavens help poor saps like me. Speaking of which...

I have a tiny portfolio in a Putnam fund. I may be giving my FA a call today. He will not look forward to it.

Have a great day!

[JNelson6563]

3. Anything for you Ozy

You bet I'll keep an eye on it. My good eye even! haha

Very, very interesting wrap-up. Like I said yesterday, it has the feel of being in a fine china shop (this "rally") but then when you pick up the merchandise to examine you find it is plastic! Something smelly about it.

More later, my virtuoso needs a ride to the bus. It's raining and she totes a couple thousand $$$ worth of violin with her. My investment. ;-)

Julie

[lfairban]

15. Not as worried about this scandal as the previous ones.

If you look at what they did in comparison to the accounting scandal, the high CEO salaries, or what happened at Tyco, outright theft, I am not sure that it will have the same negative impact on the investor.

We have a bunch of money in a 529 college savings plan, and the Putnam plan is the only one that is approved in Ohio for state income tax reduction. We have so far decided to leave it where it is. Putnam is promising to compensate investors for any losses, and they promise to be good from here on out. But we might change our minds tomorrow.

I don't think that the withdrawal of funds from some states pension plans will have the same negative impact on the fund value as if they had pulled the money from an individual stock. Putnam was handling about $272 billion before this all started.

[leftyandproud]

4. is the market really hitting 2 year highs??

if so, is it time to sell? My mom panic-sold everything she had and stuck it in a money market 6 months ago...she lost out on potential MASSIVE gains in her funds...now she wants to get back in...I'm telling her not to...that we are at a multi-year high and she needs to buy low sell high...problem is, she has nothing to sell! Does she stay put? Do I stay put with my IRA, or should I sell half of everything I have left?

[JNelson6563]

5. too pricey

I wouldn't jump in at this time, too expensive. The cheap stocks that are out there that show potential must be looked at closely.

The sure bets are very expensive.

I still think Gold looks attractive. Wait till the lows hit in stocks to buy again IMO.

Julie

[mrsteve]

17. I did the same thing about 6 months ago with most of my IRA

I hid mine into bond and money market funds. On the one hand, I feel a bit annouyed that I'm getting a 5% return, while missing a 20 - 30% return on my funds this year, but I'm still too paranoid about the underlying economic conditions to feel comfortable putting all my cash back into the market right now.

Plus, I'll agree with everyone else that the market is especially over priced right now, and it's a very bad time to buy. It's got to adjust soon, and at that point I might put a bit more back into stocks.

[JNelson6563]

6. TYCO posts loss

Reuters
Tyco Posts Loss on $1.2 Billion Charge
Tuesday November 4, 7:29 am ET


BOSTON (Reuters) - Tyco International Ltd. (NYSE:TYC - News) on Tuesday posted a quarterly loss on a $1.2 billion charge for restructuring and divestitures that include unloading its undersea cable network.
The Bermuda-based conglomerate is moving to pare operations that became bloated under its former management, now on trial for corruption, and it said it plans to exit more than 50 business lines.

Bermuda-based Tyco posted a net loss of $297.1 million, or 15 cents a share, compared with a net loss of $1.4 billion, or 72 cents a share, in the year-ago quarter.

http://biz.yahoo.com/rb/031104/manufacturing_tyco_earns_3.html

"Bermuda based". Well we know it ain't taxes to America that's costing it. Bastards.

Julie

[UpInArms]

7. daily dollar watch

are we going to study Newton today?

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

Last trade 93.50 Change -0.16 (-0.17%)

and some words

http://www.madison.com/captimes/opinion/editorial/60257.php

It is not our intent to alarm anyone, but we do hope that readers are aware of the latest pronouncement from Warren Buffett, the second-richest man in the world who is frequently referred to as "the most successful investor ever."

The corporate free trade agenda, says Buffett, has created a mess so serious that he is losing confidence in the stability of the U.S. dollar, and the economy it underpins. "I am crying wolf again and this time backing it with Berkshire Hathaway money," Buffett says of the assets of the investment conglomerate he created and controls. "Through the spring of 2002, I had lived nearly 72 years without purchasing a foreign currency. Since then Berkshire has made significant investments in -- and today holds -- several currencies."

Buffett says he is losing faith in the soundness of U.S. currency as an investment vehicle because the United States is running a huge trade deficit -- close to $500 billion, and rising rapidly -- that is causing income to flow out of the country at such a rapid rate that it will soon become unsustainable. In the November edition of Fortune magazine, Buffett warns that the rapidly mounting U.S. trade deficit could lead to a dramatic plunge in the value of the dollar and a host of additional economic consequences that could add up to disaster for American families.

...more...

[JNelson6563]

8. This is a great fear I've been harboring

Buffett says he is losing faith in the soundness of U.S. currency as an investment vehicle because the United States is running a huge trade deficit -- close to $500 billion, and rising rapidly -- that is causing income to flow out of the country at such a rapid rate that it will soon become unsustainable. In the November edition of Fortune magazine, Buffett warns that the rapidly mounting U.S. trade deficit could lead to a dramatic plunge in the value of the dollar and a host of additional economic consequences that could add up to disaster for American families.

I am sure many people have come into this thread and wondered at why we do not rejoice when the markets "rally". This sums it up so well. The thing that doesn't get mentioned really that plays into it in my mind is this: the longer we are able to fend off this pending disaster with smoke, mirrors and fake numbers, the worse it will be for the masses.

You know the gilded one percent will be alright so they see this as some sort of smash and grab but I see it as something much different, beng in the lowly 99% and all.

Thanks for posting this UpInArms and for the great updates. I hope all the info that gets posted in this thread daily helps folks to have another piece of the big (getting-uglier-by-the-day) picture.

Julie

[UpInArms]

10. you're welcome Julie -

(and all others)

I wish I knew what the future truly held for all of us in the 99% - I am not privy to the plan and don't have a crystal ball.

I do not see that the pattern of increase in market numbers based on lower expectations - I don't understand why the market rises on bad news and ignores good news (imho) and cannot understand why the market whores try to rally with words like "stocks are the best investment vehicle" (who truly benefits from talk like that?)

anyway, hope all have a great day :hi:

[JNelson6563]

9. Step right up! Casino open!!

10 minutes in and the cards do not currently favor:


Dow 9,836.75 -21.71 (-0.22%)
Nasdaq 1,960.85 -6.85 (-0.35%)
S&P 500 1,054.96 -4.05 (-0.38%)
10-Yr Bond 4.332% -0.036

But we here at the Street Casino urge you to put all your money on the table. You'll get rich. We promise. ;-)

Julie

[JNelson6563]

11. Update and blather

http://cbs.marketwatch.com/news/newsfinder/pulseone.asp?dateid=37929.4167939815-809414361&siteID=mktw&scid=0&doctype=806&

U.S. October layoffs surge 125%, Challenger says By Rex Nutting
WASHINGTON (CBS.MW) -- Layoff announcements from U.S. companies more than doubled in October to 171,874, the highest in a year, according to the monthly tally released Tuesday by outplacement firm Challenger Gray & Christmas. October is typically the largest month for layoff notices, as companies slash costs at the end of the fiscal year. The Challenger survey is not adjusted for seasonal factors. Layoff announcements had fallen for three months in a row before October's 125 percent increase. In October, the auto industry sacked 28,363 workers, followed by 21,169 in the retail sector. Telecommunications companies cut 21,030. So far in 2003, 1.04 million job reductions have been announced.

I will be looking for larger-than-usual revisions for the next several weeks. I've thought about it and have an idea on how to help our currently unemployed fellow DUers. We could start a pool. Take wagers on revisions. Proceeds go to the Help-'em-survive-Jr fund. It's time someone other that Team Bush benefits from the fake-numbers game we've all come to know so well.

Here's a little something for those who left the market and went the safe, secure world of mutual funds:

http://cbs.marketwatch.com/news/newsfinder/pulseone.asp?siteid=mktw&guid=%7BC52355A9-8E2A-428C-96BE-A959EC0652BC%7D&

SEC files fraud charges against Prudential workers (WB) By Leticia Williams
WASHINGTON (CBS.MW)-- Federal authorities charged five ex-brokers and a former manager of Prudential Securities with fraud Tuesday in connection with inappropriate trades in mutual fund shares. The Securities and Exchange Commission filed the civil charges against the individuals in a Boston federal district court. The complaint alleges that the brokers engaged in thousands of unlawful market-timing trades between 2001 and September 2003 under disguised identities. The SEC claimed that the branch manager also charged was aware of the illegal activity. Prudential Securities is owned by Wachovia Bank (WB) .

Lastly, here's where we are now-10:29:

Dow 9,841.12 -17.34 (-0.18%)
Nasdaq 1,964.13 -3.57 (-0.18%)
S&P 500 1,055.49 -3.52 (-0.33%)
10-Yr Bond 4.307% -0.061

After reading Buffet's comments above, posted by UpInArms, I take little comfort in today's inflow to Treasuries.

Julie

[UpInArms]

12. UPdate at 11:37

and I do mean up :shrug:


Dow 9,872.23 +13.77 (+0.14%)
Nasdaq 1,971.18 +3.48 (+0.18%)
S&P 500 1,057.98 -1.04 (-0.10%)
10-Yr Bond 4.324% -0.044

[JNelson6563]

14. I didn't get your telepathic message

I'll check before I post next time. :-)

Julie

[JNelson6563]

13. 11:37 and getting a bit better

Dow 9,873.42 +14.96 (+0.15%)
Nasdaq 1,971.38 +3.68 (+0.19%)
S&P 500 1,057.94 -1.07 (-0.10%)
10-Yr Bond 4.321% -0.047

Seems to be moving pretty gradually. Quiet day...in spite of war, endless scandals/indictments in the financial world and an idiot in the WH. :shrug:

Julie

[mrsteve]

16. 12:15 - Afternoon to all - I'm back from Jury Duty

Forgot I would be incommunicado all day yesterday doing my civic duty.

Looks like things are moderating today after a bit of an early drop.

Dow 9,857.57 -0.89 (-0.01%)
Nasdaq 1,965.58 -2.12 (-0.11%)
S&P 500 1,055.96 -3.05 (-0.29%)
10-Yr Bond 4.323% -0.045

[mrsteve]

18. Yahoo Finance Cheerleading

Gotta keep the lemmings in the game:

"11:55AM: The major averages started the session in negative territory as the sizeable gains accomplished over the last week and yesterday overshadowed the underlying longer-term fundamental appeal of stocks... Given the limited number of market-moving earnings reports and a dearth of economic news, profit-taking ensued at the open as traders capitalized on the indices' run to their new 52-week highs in yesterday's session... Nevertheless, selling was, for the most part, controlled and dips were used as buying opportunities...
Accordingly, the major averages have spent the morning lifting off their session lows, with the Dow and the Nasdaq reaching into positive territory... While the bulk of the sectors are only fractionally changed at this juncture, leaders to the upside include the internet, networking, semiconductor, biotech, financial, oil services, and gold groups... Currently in the red are the retail, drug, telecommunications, utility, and broker/dealer sectors... Overall, volatility has been quite low thus far, with the major averages basically running in place as the market awaits further economic data, and specifically Friday's Employment report, for trading direction..."

[JNelson6563]

19. Howdy Steve

12:42 and things are getting a bit dark:

Dow 9,841.94 -16.52 (-0.17%)
Nasdaq 1,959.75 -7.95 (-0.40%)
S&P 500 1,053.74 -5.28 (-0.50%)
10-Yr Bond 4.319% -0.049

So I gather you weren't on like Kobe's jury or something eh? ;-)

Julie

[mrsteve]

22. Nope - no Kobe here in Chicago

But at 25th and California on the South Side it's pretty boring sitting and doing nothing all day as an alternate juror.

I'm almost happy to be back at work. Well, almost. :eyes:

[mrsteve]

20. Love the Krugman column today in the NYTimes

This Cant Go On

(forgive the typo in the title - the DU software doesn't like apostophes in the link titles, I guess)

"The prime example I have hammered on in this column is, of course, the federal budget. Realistic budget projections say that current policies aren't remotely sustainable. For example, a month ago a joint report of the Committee for Economic Development (a business group), the bipartisan Concord Coalition and the Center on Budget and Policy Priorities concluded that under current policies, federal debt would rise by $5 trillion over the next decade. And then baby boomers will start collecting benefits, and our debt will really explode.

Such explosive growth in debt can't go on forever, and it won't. Yet our current leaders and their apologists insist that the problem will magically solve itself. Last year's deficit came in slightly below forecasts, and we've had one quarter of good economic growth — see, we'll grow out of the deficit!

But we won't, and there will eventually be a day of reckoning. As Bill Gross of Pimco, the giant bond manager, says, "Sooner, perhaps later, our Asian creditors will wake up and smell the coffee." (Yes, the federal budget and the value of the dollar now depend on huge purchases of Treasury bills by the governments of Japan and China.) When they do, he predicts "higher import costs, a cutback in spending on cheap foreign goods, rising inflation, perhaps chaotic financial markets, a lower standard of living." Something to look forward to."

"Magic Thinking" - the last resort of a dogmatist when faced with overwhelming evidence of the failure of their dogma. Aways loved that term.

[mrsteve]

21. 1:10 - rollercoastering around under water

Dow 9,844.38 -14.08 (-0.14%)
Nasdaq 1,958.52 -9.18 (-0.47%)
S&P 500 1,053.47 -5.54 (-0.52%)
10-Yr Bond 4.313% -0.055

But that's okay - it's "little more than a breather" from last week

more Yahoo Finance cheerleading:
"1:00PM: The market is little changed since the last update... Although the major averages are back in negative territory, losses remain only mild... Overall, today's session is little more than a breather from the sizeable run-up in the market over the last week... The market's advance has been supported by strong economic data, including the better than expected advance Q3 GDP reading of 7.2% reported last week and yesterday's ISM report at 57, both of which were telling of an expanding economy...
Despite the market's arguably over-extended near-term positioning, the longer-term potential for stocks remains favorable considering the mild inflation, historically-low interest rates, and the Fed's virtual promise to maintain its accommodative policy for a considerable period of time..."

[JNelson6563]

23. great Krugman column

haha I remember learning about magical thinking in Psych. How applicable!!

1:50 and here's where we are:

Dow 9,838.75 -19.71 (-0.20%)
Nasdaq 1,956.72 -10.98 (-0.56%)
S&P 500 1,052.98 -6.04 (-0.57%)
10-Yr Bond 4.317% -0.051


I think I see fingerprints on the DOW. They match those I have on record for the PPT. ;-)

Julie

[JNelson6563]

24. 2:42 lumbering upward clumsily

Dow 9,842.60 -15.86 (-0.16%)
Nasdaq 1,959.61 -8.09 (-0.41%)
S&P 500 1,053.63 -5.39 (-0.51%)
10-Yr Bond 4.307% -0.061


Still red though. Good to see 'em holding some gains in the 10yr.

Julie

[mrsteve]

25. 3:20 - only about a half hour left

And the lumbering rise is now a slow fall. Still under water, but within a few percent of the open price on all exchanges, thus no big movement for the day so far.

Dow 9,844.23 -14.23 (-0.14%)
Nasdaq 1,961.31 -6.39 (-0.32%)
S&P 500 1,053.93 -5.08 (-0.48%)
10-Yr Bond 4.305% -0.063

[mrsteve]

26. 4:00 - closing numbers

Sorry Ozy, no joy on your theory today. The markets opened down, and closed at almost the same level after a little light roller-coastering for the day.

Dow 9,838.83 -19.63 (-0.20%)
Nasdaq 1,957.97 -9.73 (-0.49%)
S&P 500 1,053.25 -5.77 (-0.54%)
10-Yr Bond 4.305% -0.063

See everyone here at the casino tomorrow.