STOCK MARKET WATCH, Wednesday December 20

[ozymandius]

Wednesday December 20, 2006

COUNTING THE DAYS
DAYS REMAINING IN THE * REGIME 761 LONG DAYS
DAYS SINCE DEMOCRACY DIED (12/12/00) 2184 DAYS
WHERE'S OSAMA BIN-LADEN? 1890 DAYS
DAYS SINCE ENRON COLLAPSE = 1851
Number of Enron Execs in handcuffs = 19
ENRON EXECS CONVICTED = 7
Enron execs conveniently deceased = 3
Other Arrests of Execs = 54


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




AT THE CLOSING BELL WHEN BUSH TOOK OFFICE on January 22, 2001
Dow - 10,578.24
Nasdaq - 2,757.91
S&P 500 - 1,342.90
Oil - $27.69/bbl
Gold - $266.70/oz.

AT THE CLOSING BELL ON December 19, 2006

Dow... 12,471.32 +30.05 (+0.24%)
Nasdaq... 2,429.55 -6.02 (-0.25%)
S&P 500... 1,425.55 +3.07 (+0.22%)
Gold future... 625.40 +7.50 (+1.20%)
30-Year Bond 4.73% +0.02 (+0.36%)
10-Yr Bond... 4.60% +0.01 (+0.26%)






GOLD, EURO, YEN, Loonie and Silver


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. WrapUp by Chris Puplava

SECTOR VALUATION ANALYSIS

Sector valuation analysis was done using the Ford Equity Research Value Graphs looking at the valuation of the S&P 500 sectors over two different time periods using the price-to-earnings ratio (PE) over a one year and a three year period. The Ford Value Graphs use the high and low P/E extremes (for a stock or index) over a set time period multiplied by the 12-month operating earnings per share to come up with high and low valuation bands. The Ford Value Graphs help give an indication of whether or not a stock/index is undervalued or overvalued as well as giving a graphical illustration of the earnings trend for an index/stock.

Please note that the PE values used are biased in that they do not take into account a long history of PE values, and are simply the high and low values over a given period, which can either be above or below the historical average taken over decades of data. Below are the charts of the S&P 500 sectors.

-see charts-

The Markets

The stock market fell in early morning trading from the negative surprise in the November PPI report and the drop in the Thailand stock market after the Thai government announced controls on foreign investment. The markets rebounded with an attempt to rise above yesterday’s close before selling continued in the middle of the day driving the indices lower. The markets rallied later in late afternoon trading with the DJIA posting a gain of 30.05 points to close at 12,471.32. The S&P 500 finished in the green rising 3.07 points to close at 1425.55 with the NASDAQ down, falling 6.02 points to close at 2429.55.

Treasuries sold off today on the inflation surprise seen in the PPI with the 10-year note yield rising to 4.599%, up 1.2 basis points. The dollar index posted a loss on the day, falling 0.54 points to close at 83.46. Advancing issues represented 52% and 42% for the NYSE and NASDAQ respectively, with up volume representing 44% and 53% of total volume on the NYSE and NASDAQ.

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

[ozymandius]

2. Today's Report

10:30 AM Crude Inventories 12/15
Briefing Forecast NA
Market Expects NA
Prior -4295K

http://biz.yahoo.com/c/e.html

[UpInArms]

20. Crude Inventories blather

11:00 am : The indices extend their reach to the upside as oil prices briefly turn negative. After initially spiking to session highs above $64/bbl, following a much larger than expected drawdown in weekly crude supplies, oil prices have been somewhat choppy and recently slipped into the red to give investors an added boost of confidence. Crude for February delivery has fluctuated around the unchanged mark as participants also digest the first build in weekly distillate inventories in more than two months.DJ30 +19.26 NASDAQ +11.38 SP500 +2.89 NASDAQ Dec/Adv/Vol 956/1843/548 mln NYSE Dec/Adv/Vol 1003/2013/426 mln

[UpInArms]

3. daily dollar watch

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

Last trade 83.32 Change -0.13 (-0.16%)

Surprise Producer Inflation A Temporary Driver In US Markets

http://www.dailyfx.com/story/dailyfx_reports/cross_markets_data_reaction/Surprise_Producer_Inflation_A_Temporary_1166571501160.html

US Producer Price Index (NOV) (13:30 GMT; 08:30 EDT)
(Headline) (Core)
Actual: 0.9% 1.8%
Expected: -0.8% 0.9%
Previous: -1.6% 0.6%

How Did the Markets React?

A surprise inflation reading is almost always reason for the US capital markets to be put in motion. This sentiment was true for today’s Producer Price Index data. The price gauge had already been written off by the fundamental cognoscenti who had said the consumer and import inflation reports had already set the tone for monetary policy and the dollar. However, it was this prevalent stance among traders and a sharp divergence from the data’s actual reads and the market’s expectations that sent the dollar, treasuries and equities on a sharp, short-lived correction. The initial reaction at 13:30 GMT was not hard to comprehend given the numbers in the report. Factory-level inflation was already looking at substantial corrections from October’s lows. Traders were not prepared though for a 2.0 percent jump in headline inflation for the month of November, a 32-year high. Offering initial skeptics reason to believe the strong return was not a one-off, the core measurement for the month followed up with its own 1.3 percent jump, the biggest since 1980. If this index was supported by similar moves in the CPI and IPI before it or even if it had come before the all-important consumer read, the initial drop in the EURUSD, T-note and S&P 500 index would have all carried through. As it happens though, a close review of the component groups revealed isolated pockets of inflation that ultimately did not put rate speculation sculpted by the CPI off track.

...more...

[ozymandius]

7. Good morning UIA and all.

:donut: :donut: :donut:

Good to see you back UpInArms. Today is a short day for me again. Breakfast for my son and work are calling me away.

Have a great day!

Ozy :hi:

[UpInArms]

8. Hiya Ozy!

Am not really "back" - just up early and with a few moments to myself before heading out the door.

Miss my days of reading all the news that was fit/or not to print.

Maybe after the 1st of the year I will have more time.

:grouphug:

:hi:

[ozymandius]

4. Oil prices rise before inventory report

LONDON - Oil prices rose Wednesday, extending their rise above $63 a barrel as traders awaited a weekly report that was expected to show a drop in U.S. oil inventories.

Light sweet crude for February delivery on the New York Mercantile Exchange gained 21 cents to $63.67 a barrel in electronic trading by afternoon in Europe.

Brent crude was up 41 cents at $63.22 on the ICE Futures exchange in London.

Prices had fallen Monday on expectations that warm winter weather in the United States would depress demand for home-heating fuels such as natural gas and heating oil. They rallied Tuesday, led by buying in gasoline futures and the expectation that the Organization of Petroleum Exporting Countries would cut output early next year.

http://news.yahoo.com/s/ap/oil_prices

[ozymandius]

5. Gas prices jump in California, U.S.

Retail gasoline prices rose nationwide and jumped substantially in California over the last week, the federal government said Monday, a partial reflection of crude oil prices that have stayed above $60 a barrel for the last three weeks.

Crude oil prices, meanwhile, continued to gyrate. After strong price increases last week, the cost of light, sweet crude for January delivery fell $1.22 in light trading Monday to $62.21 a barrel, as warmer weather and mild forecasts put a damper on demand projections for oil and byproducts such as heating oil, analysts said.

-cut-

In the retail market, the nationwide cost of self-serve regular increased 2.7 cents in the last seven days to an average of $2.32 a gallon Monday, according to a weekly survey by the federal Energy Department.

California took a bigger hit. Statewide, the average pump price leaped 5.7 cents to $2.561 a gallon, the highest average pump price in more than two months. The largest increases on the West Coast were in San Francisco, where the cost of regular shot up 8.3 cents in the last week to Monday's average of $2.577 a gallon — nearly 41 cents above prices a year earlier, and more than 25 cents higher than the current national average.

http://www.latimes.com/business/la-fi-gas19dec19,1,2134987.story?coll=la-headlines-business

[ozymandius]

6. Circuit City posts surprise loss

NEW YORK (Reuters) - Circuit City Stores Inc. (NYSE:CC - news) reported a surprise quarterly loss on Tuesday after it cut prices on hot electronics like flat-panel TVs and computers to lure customers during the holiday shopping season.

The No. 2 U.S. consumer electronics chain, whose results came a week after larger rival Best Buy Co. Inc. (NYSE:BBY - news) posted disappointing earnings, also cut its fiscal-year outlook.

"It's much worse than expected," said Sanford C. Bernstein & Co. analyst Colin McGranahan of the results.

"The gross margin situation is very concerning."

http://news.yahoo.com/s/nm/20061219/bs_nm/circuitcity_results_dc_4

[UpInArms]

9. Gack! More from your link

"The pace of the decline in flat panel television prices accelerated during the quarter as manufacturers and retailers competed aggressively for market share, and prices fell to unanticipated levels," Philip Schoonover, Circuit City chairman, president and chief executive, said in a statement.

The rate of price declines for medium and large LCD TVs was 50 percent more than Circuit City had forecast, while the rate of plasma TV price declines was three times more than expected, Schoonover said on a conference call.

Circuit City could not sell enough TVs to offset price drops, he said.

The company said its gross profit margin declined 192 basis points from a year earlier due to a falling margins for TVs, personal computers and entertainment software.

and now I really do have to leave :(

have a great day everyone!

:hi:

[Systematic Chaos]

10. I've never been partial to Shirk'em Shitty.

My only experience in one of their stores was when a number of years back I wanted a good CD car stereo. Best Buy had a sweet Pioneer model for $300. I went to Shirk'em Shitty and they had the previous years' model of the same system for $50 more. Since then I've never been back. Oh, and I've heard a lot of horror stories about their commissioned salespeople, too.

[Roland99]

12. But the economy is on fire! We're all making out like bandits!

[HereSince1628]

11. AirTran and Midwest Express dueling over take-over with full page ads.

Last week, MidWest Express, headquartered in Milwaukee, shunned a buyout offer from AirTran. AirTran responded with a full page ad guised as an open letter to shareholders in the Milwaukee Journal. Today's MJ has full page adds from both companies publically arguing their positions.

(I personally think that for Milwaukeans the greatest fear is not the loss of budget shopping fights to NYC, but that a take over by AirTran would mean the end to the complementary warm chocolate chip cookies provided by M.E.)

[mojavekid]

13. Mogombo Guru - Just Before Christmas I'm as Good as I Can Be

http://www.kitco.com/ind/Daughty/dec202006.html

Things economic are not making any sense at all anymore, and so I naturally deduced that is because I have committed another accidental "medication error", either by taking too many of these pills or too few of those, and the only smart thing to do was start over with a handful of each, and wash the whole thing down with some bourbon to get things really moving. I'm sorry to report that it didn't help; things are still strange, only more blurred. And kind of spinning around, too.

But still weird, as, for instance, foreign central banks bought up a cool $17.7 billion in US government and agency debt last week, and stuffed it into their account at the Fed. Nice piece of change!

snip...

The new Producer Price Index came out, and sure enough, plenty of inflation, as the PPI was up 2 percent last month, the biggest monthly rise since (so they say) November 1974. In typical government response, George L. sent the news that on page six of the report we read that the BLS must "feel our pain", and they are going to, again, re-jigger inflation calculations of the PPI by removing those pesky items that go up in price, but include more of those prices that don't, so everybody will feel better.

In actual government-ese, "The Bureau of Labor Statistics will soon update the value weights used to calculate Producer Price Indexes to more accurately reflect recent production and marketing patterns. The new weights, which will be introduced in February 2007 with the release of January 2007 index data, will be based on shipment values from the year 2002. All indexes will be affected by this weight update, including all the industry net output indexes, as well as those calculated for traditional commodity groupings." Hahaha!

So trust me when I say that if inflation is raging,

more...

[mojavekid]

14. Global systemic crisis in 2007 - Financial sector

Global systemic crisis in 2007 - Financial sector: « Another bubble » close to bursting
- Public announcement GEAB N°10 (December 16, 2006) -


Finance is one of the four sectors identified by LEAP/E2020 in the December issue of their confidential letter (the GlobalEurope Anticipation Bulletin N°10) as likely to be severely affected by the development of the global systemic crisis in 2007 (1). The other three sectors are: international trade, exchange rates, and energy.

A large number of events - whose importance began to appear clearly at the end of 2006 - is about to thrust the world's financial sector into a process of deep crisis: depreciation of US dollar-denominated assets, monetisation of US debt, fast degradation of US banks' and of some EU banks' balance-sheets, low level of banks' reserves, fast depreciation of housing loans (2) and recession of the US economy.

snip..

The monetisation of the US debt (anticipated in February 2006 by LEAP/E2020 (5)) directly affects the balance sheets of the big international financial players, with some effects that should become more obvious in 2007.

In the United States, a growing number of financial institutions is beginning to announce that the bursting of the real-estate bubble and the increasing amount of default on housing loan repayments has started to impact on banks' (6) and loaning institutions' results. For instance, due to the market's fast degradation, the US government non longer even tries to look into Fanny Mae's and Freddy Mac's accounts, the two giant quasi-government financial institutions who together weigh more than half of the US mortgage market (7). Thus Fanny Mae has not presented any quarterly or yearly report since 2004 and must ask for an exemption in order to remain listed on the New York Stock Exchange (8) and continue to increase its market share. Less than a month ago, Kevin M. Warsh, governor of the New York Federal Reserve, warned against risks of systemic crisis for the US loan mortgage market due to Fanny Mae and Freddy Mac accounting practices (9). Those risks are likely to cross US boarders since foreign investors, namely Asian, who walked away from US Treasury Bonds, have started a few months ago to buy Fanny Mae and Freddy Mac stocks.

more...


http://www.leap2020.eu/GEAB-N-10-is-available!-Global-systemic-crisis-in-2007-Financial-sector-Another-bubble-close-to-bursting_a317.html

[Ghost Dog]

16. Ah. Very interesting. Thankyou mojavekid. n/t

[Roland99]

17. We could soon be seeing the sum of all fears

all it needs is a trigger.

*cough*attack*cough*Iran*cough*

[mojavekid]

15. Jim Willie - THE EURO-YEN CROSSFIRE

http://www.financialsense.com/fsu/editorials/willie/2006/1219.html

The real currency story in recent months is the euro-yen cross, and not so much the euro-dollar headline breakout. In Japanese yen terms, the euro is on a tear. Aiding the euro is significant Asian diversification away from the USDollar by their central banks. The Arabs also are diversifying, as much into the pound sterling as the euro. They are experiencing massive anxiety attacks as Iraq disintegrates. Hence, on a combined basis a giant long-term euro breakout has been in progress, having begun in early summer. This euro uptrend has actually lasted 18 months, and began at the key date of July 2005. That date has been cited numerous times in the Hat Trick Letter, when King Abdullah took the Saudi throne, and when the Chinese announced a major shift in the yuan currency program to permit its rise. Both events shook the financial world.

All changed after July 2005, heralding a new dawn. That time frame marked the beginning of the recent powerful stage in gold, which led to the May climax at 730, and the silver climax at 15. Give much credit to Barrick Gold, which covered a substantial block of their mind numbing underwater gold hedge book. On at least four occasions in the past year, my scribbles have cited this key July 2005 month, when in my opinion the earth as we knew it shifted on its axis. The USDollar has been on the defensive ever since Asia and the Arab world shifted emphasis to the EuroBond. No evidence suggests the uptrend is on the verge of interruption. The upper boundary of the euro ratio to the yen is under pressure, perhaps submitting to a mild correction. Both the 20-week moving average and the 50-week moving average are rising notably. When Asians and Arabs decide to change their strategy, that constitutes an earthquake, since the two are central pillars to capital supply, credit supply, and oil supply to the United States. Earthquakes will continue for years to come!

snip..

The global banking system has completed the early preliminary stage to transform into a shared world currency reserve structure. It is surely early. Given the extraordinary fundamental imbalances for the USEconomy (testimony in a current account deficit at 6.8% of GDP), given the significant dependence of the USEconomy (for energy, commodities, finished products, credit, and capital), given the mounting hostility of suppliers (namely Russia, Iran, at times China), sharing the world currency mantle with barbarian euro vagabonds will not go down without a fight. The interwoven nature of a dominant USDollar and a powerful military is never discusses openly, but valid in argument. A military ingredient to USDollar defense is as likely as a boxer resorting to punches to defend his home during a raid on his vegetable garden.

more...

[UpInArms]

18. coming back to sweep the floor see what's in the trash

Dow 12,463.87 7.45 (0.06%)
Nasdaq 2,427.61 1.94 (0.08%)
S&P 500 1,423.53 2.02 (0.14%)
10-Yr Bond 4.595% 0.004

NYSE Volume 2,388,064,000
Nasdaq Volume 1,820,937,000

Stocks stumbled out of the gate and closed in similar fashion as investors found little in the way of specific market-moving news items to maintain even the smallest of market gains. With the Dow closing at another new record high yesterday and hitting an all-time intraday high today, investors exhibited a sense of caution in the face of higher oil prices and mixed earnings news.

Although not a Dow component, a barometer of the economy that is FedEx (FDX 111.85 -2.15) issuing a Q3 profit outlook below Wall Street's forecasts brought the growth prospects of some fellow blue-chip names into question. The stock opened down 3.4% and took a toll on transportation stocks, especially rival UPS (UPS 74.77 -0.98), that were already under pressure as oil prices approached $64/bbl. Crude for February delivery closed at $63.72/bbl following a much larger than expected drawdown in weekly crude supplies.

The inability of Energy stocks to take notice and extend yesterday's recovery efforts removed some notable leadership in one of the largest contributors to earnings growth on the S&P 500. Energy paced the way lower among the day's seven losing sectors (-1.2%) as a 4.4% sell-off in natural gas futures (inventories are at record levels) sparked another round of profit taking.

On a positive note, Ericsson (ERIC 40.58 -0.04) announcing plans to acquire Redback Networks (RBAK 25.66 +4.49) for $2.1 bln, an 18% premium to Tuesday's close, temporarily put to rest valuation concerns and the sustainability of such a strong second half performance for tech. Hewlett-Packard (HPQ 41.34 +0.91) surging 2.3% to a multi-year high, after Banc of America Securities affirmed its Buy rating on HPQ as a top pick, also provided notable sector support. That is, until fellow Dow component Intel (INTC 20.60 -0.06) relinquished all of its 1.4% intraday advance and Internet stocks (e.g. GOOG -1.2%, YHOO -3.1%) sold off into the close. DJ30 -7.45 DJTA -1.1% DJUA -0.5% DOT -0.3% NASDAQ -1.94 NQ100 -0.4% R2K +0.5% SOX +0.7% SP400 +0.1% SP500 -2.02 XOI -1.1% NASDAQ Dec/Adv/Vol 1353/1709/1.77 bln NYSE Dec/Adv/Vol 1425/1858/1.32 bln

3:30 pm : Little changed since the last update as the indices continue to vacillate in roughly the same ranges. The market's holding pattern has been further evidenced in the A/D line, as advancers on the NYSE still hold an 18-to-13 edge over decliners while those on the Nasdaq maintain a narrower 17-to-13 margin. On a positive note for the bulls, today's worst performing sectors -- Energy, Materials, Utilities and Telecom -- are also the four least influential areas on the S&P 500, combining for a total weighting of 19%. The Financials sector, which now paces the way higher among the five sectors holding onto gains going into the close, carries a 22% weighting on the S&P 500. DJ30 +1.76 NASDAQ +1.28 SP500 -1.01 NASDAQ Dec/Adv/Vol 1327/1726/1.52 bln NYSE Dec/Adv/Vol 1385/1864/1.21 bln

3:00 pm : Stocks are still struggling to find much traction as investors are awarded few catalysts to push the major averages convincingly in either direction. The Russell 2000, however, continues to show its buoyancy despite the absence of tech leadership and in the face of higher oil prices. Today's 0.5% advance, easily outpacing flat performances from its blue-cap brethren, leaves the small-cap index just 1.5% off its all-time closing high of 797.42 (Dec. 5). DJ30 +1.92 NASDAQ +0.16 SP500 -1.02 NASDAQ Dec/Adv/Vol 1300/1709/1.38 bln NYSE Dec/Adv/Vol 1391/1874/1.09 bln

2:30 pm : The major indices bounce off recent lows, but market gains that are modest at best provide little conviction on the part of buyers. Technology climbing back into the green offers some reassurance behind recent recovery efforts; but it remains to be seen if the tech-heavy Nasdaq will be able to break through key resistance near the 2439 level and revisit session highs (2443).DJ30 +12.09 NASDAQ +2.62 SP500 +0.12 NASDAQ Dec/Adv/Vol 1301/1693/1.29 bln NYSE Dec/Adv/Vol 1360/1873/1.0 bln

2:00 pm : As presaged in the previous comment, the tech sector slipping into the red within the last 30 minutes has taken a toll on stocks, contributing to all three major averages failing to stay in positive territory. While the Dow has since clawed its way back above the flat line, it too turned negative in sympathy with reversals in tech components IBM (IBM 95.82 -0.18) and Intel (INTC 20.61 -0.04). The latter was up as much as 1.4% earlier. DJ30 +2.32 NASDAQ -0.62 SOX +0.5% SP500 -0.92 NASDAQ Dec/Adv/Vol 1309/1683/1.20 bln NYSE Dec/Adv/Vol 1391/1832/928 mln

[UpInArms]

19. US home loan demand slumps as refinancing plunges

http://today.reuters.com/misc/PrinterFriendlyPopup.aspx?type=bondsNews&storyID=2006-12-20T153843Z_01_N20355779_RTRIDST_0_USA-MORTGAGES-MBA-UPDATE-2.XML

NEW YORK, Dec 20 (Reuters) - U.S. mortgage applications slumped last week, pulled down by a plunge in demand for home refinancing loans, as interest rates climbed from recent lows, an industry trade group said on Wednesday.

The Mortgage Bankers Association said its seasonally adjusted index of mortgage application activity <USMGM=ECI>, which includes both refinancing and purchasing loans, for the week ended Dec. 15 tumbled 10.2 percent to 647.6 from the previous week's 721.2, which was its highest level in over a year.

Douglas Duncan, MBA chief economist, said the indexes tend to be volatile but higher interest rates played a large role in the drop in demand.

"You did see a little bit of a (interest) rate reversal last week," he said. "The people right now who are taking out loans are real opportunists."

He said subprime mortgage holders are particularly rate sensitive and "jump in" whenever rates fall, as they did earlier this month when rates hit a recent low. Classified as riskier borrowers, subprime mortgage holders pay higher mortgage rates.

...more...

[mojavekid]

21. Prudent Squirrel - USD - '07 A FINAL YEAR?

http://www.financialsense.com/fsu/editorials/laird/2006/1220.html

This article is going to discuss the growing world discontent with the USD. Previously, although the US fiscal and trade deficits were in danger territory, the US trade partners were willing to continue to accumulate USD foreign reserves as they sold masses of everything under the Sun to the US.

They benefited from massive economic growth, and let the USD hot money circulate in their economies as washed hot money (hot money comes in as USD and then is changed into local currency or lent out in local currency – this causes lending and asset bubbles locally, creating a seeming endless prosperity bubble until that comes to the inevitable end and they have massive inflation or asset bubble collapses). Ultimately this hot money issue will decide the USD fate anyway, but there are sinister looking issues, particularly with China, that may cause a USD crisis in 07.

snip..

Last week, there were meetings between Treasury Secretary Paulson and Fed Chair Bernanke, and other ‘A’ team US trade and banking representatives with China. This meeting resulted in a number of internet rumors and some verifiable comments that China is not giving in to US demands for a revalued Yuan/RMB. That is causing the US congress to get very mad, there are trade sanctions coming in 07. The Chinese evidently threatened to dump the USD – they have about a $trillion. Then a very interesting development – the Mid East oil nations stated they will be severely harmed by a collapsing USD if China dumps it. They threatened to embargo oil to China should they dump the USD. All of this shows how high the stakes are going into 07 for the USD – and how serious this USD situation is now. I think we can say, the USD situation is now at a crisis stage.

more...