STOCK MARKET WATCH, Wednesday May 31

[ozymandius]

Source: DU

Wednesday May 31, 2007

COUNTING THE DAYS
DAYS REMAINING IN THE * REGIME 599 LONG DAYS
DAYS SINCE DEMOCRACY DIED (12/12/00) 2339 DAYS
WHERE'S OSAMA BIN-LADEN? 2051 DAYS
DAYS SINCE ENRON COLLAPSE = 2012
Number of Enron Execs in handcuffs = 19
ENRON EXECS CONVICTED = 9
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 May 30, 2007

Dow... 13,633.08 +111.74 (+0.83%)
Nasdaq... 2,592.59 +20.53 (+0.80%)
S&P 500... 1,530.23 +12.12 (+0.80%)
Gold future... 659.30 -4.10 (-0.62%)
30-Year Bond 5.01% -0.00 (-0.08%)
10-Yr Bond... 4.88% -0.00 (-0.08%)






GOLD, EURO, YEN, Loonie and Silver

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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

---

Read more: DU

[ozymandius]

1. Today's Market WrapUp

The US Syndrome
BY PAUL NOLTE

The China Syndrome – a movie from 1979 describing the conditions in a nuclear power plant that if the core melts down (as was the fear), it would go clear through the Earth to China. If made today, it may have to be renamed the US Syndrome, for if the Chinese economy melts down, it will wind up in our lap. Once again, the Chinese government instituted policies that are meant to slow their fast growing economy. However, unlike the meltdown at the end of February and again last month, this was met with more of a yawn in the US markets than frantic selling that met the first rate increase in late February. Investors have been “taught” via the various declines beginning with the one ending in July 2006, that buying the dips is profitable and the right thing to do in this bull market. However, while this bull market may yet have further to rise, the foundation of the markets are being eroded slowly – putting investors' profits at risk and the risk of yet another “meltdown” more real with each passing day.

The economic numbers continue to deteriorate – even if consumer sentiment remains buoyant. The housing figures remain poor, judging by the release of the MBA refinance index. Both new purchases and refinance activity were well below expectations, with the refinance activity near a new low for the year. This should come as little surprise, given the dual dynamic of lower overall housing prices and higher interest rates (with the 10 year bond touching 4.9% - also near the highest this year). We will get the equivalent of the Super Bowl for economists on Friday (via a month beginning on Friday) with the ISM manufacturing data, employment, spending and income. This should go a long way to setting the stage for further market gains or the beginning of a summer correction. Let’s look at what may be reported. First, the employment situation: after months of corrections and adjustments, a rolling 12 month average of non-farm payroll gains has turned lower after peaking in March 2006 at the lowest level since the late ‘50’s. This follows the largest losses since the recession of 1981-82. Given that May 2006 non farm payroll gains were only 103,000 – anything above that number will bump the averages higher a bit, however gains then averaged 183,000 for the summer months – even in the face of a slowdown in the housing sector. So while employment may provide a good read this month, it may be only a temporary respite as the hot summer begins to unfold.

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

[UpInArms]

2. dollar watch

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

Last trade 82.323 Change -0.120 (-0.15%)

US Dollar: Record Close for US Stocks Limit Losses in Carry Trades

http://www.dailyfx.com/story/bio1/US_Dollar__Record_Close_for_1180564316010.html

Not only did US stocks not react to the 6.5 percent drop in Chinese shares, but the Dow Jones Industrial Average hit a new record high on both a closing and intraday basis. Having started the day down 60 points, today’s move is nothing short of impressive. The risk appetite of US stock traders is voracious as they completely shrug off the losses in Shanghai. Currency traders on the other hand were more cautious and less optimistic. Most of the carry trades with the exception of AUD/JPY and NZD/JPY are still down on the day despite some intraday recovery, raising the question of which market is right. This may perhaps be more of a question of long term versus short term as the move in US stocks signals a potentially strong recovery in Chinese stocks tonight. The problem is that if the Chinese market does not continue to fall and instead recovers its losses to hit another record high like it did back in February, the Chinese government will become extremely agitated. Their only response will be to do more rather than less to cool the bubble which will eventually hit carry as well as the US stock market. In the short term however Chinese traders will be delighted by this rally. Economic data however was not as supportive with both the ADP employment survey and Hudson employment index falling short of expectations. The market is looking for 135k jobs to have been added to US payrolls this month with the estimates ranging from 224k to 45k. These numbers already include any revisions by analysts in reaction to today’s 97k ADP reading. The softer leading indicators for payrolls do suggest the possibility of weak job growth, but we believe that there is still a decent chance that we could see more than 150k job growth. The last time the 4 week moving average for jobless claims were as low as they were in May was in February 2006. At that time, US corporations added 300k jobs to their payrolls, a 100k more than the previous month. We will cover payrolls more tomorrow, since we are expecting revisions to first quarter GDP, the Monster.com employment index, Chicago PMI, jobless claims and construction spending in the next 24 hours. The big market mover tomorrow should be GDP. The market is current looking for a downward revision to growth which if true, would take some steam out of the stock market and dollar rally. The minutes from the FOMC meeting released today triggered the move higher in the Dow even though there were no surprises. The bottom line is that FOMC still intends to keep rates unchanged until the end of the year and the futures curve reflects that.

...more...

Dollar A Little Firmer As China's Troubles Shrugged Off, FOMC Minutes Approach

http://www.dailyfx.com/story/currency/eur_news/Dollar_A_Little_Firmer_As_1180545499748.html

Fundamental risk for the dollar keeps growing as NFPs Friday approaches. Before the concentrated dose of economic data hits the wires at the end of the week though, traders will have to wade through this afternoon’s FOMC minutes and tomorrow’s notable calendar highlights.

By mid-session in the US, the dollar had added some distance to Tuesday’s retracement. EURUSD slowly pulled up to 1.34 support that has held up the floor on price action for nearly a week. Speeding up its own greenback move, GBPUSD dropped nearly 100 points from overnight highs to stall just around 1.9730. The bid tone didn’t resonate too loudly in USDCHF as the pair ranged between 1.2240 and 1.2280. Finally, the Japanese yen looks like it may buckle to the dollar’s resiliency. USDJPY made a swing just short of the 122.80 key resistance level before making a shallow swing down to 122.40 to relieve some of the pressure from the pair.

Though the US had more than its fair share of event risk penciled into today’s docket, traders the world over were already preoccupied. The market was eagerly awaiting the open of capital markets in China to see how investors would react to the government’s decision to triple the stamp tax on stocks to 0.3 percent. The Chinese markets certainly saw fireworks after incorporating the new policy. The Shanghai SE Composite dropped 6.5 percent, the most in three months. However, the fear didn’t spread beyond the superpower’s boarders. Equities markets across the rest of Asia and in Europe produced only moderate declines while the carry trade went virtually unscathed. This was exactly the opposite situation to the ripple effect on February 27th when the Chinese government announced it would crack down on personal loans that were being used for speculation in the stock market. In the wake of that statement, risky investments the world over plunged. This time around though, there was a clear disconnect. While it is difficult to pin point the specific reason why the sell off didn’t span the world, there are a few factors to take into account. First of all, volatility the world over is extremely low and big traders who have leveraged themselves into risky assets to produce respectable returns will be skeptical about falling for another China-led selloff. Also, market participants and analysts have become accustomed to China’s efforts to curb speculation and growth in its stock market. And, compared to previous efforts, the raise in the stamp tax is a pittance. Though the reaction has been quiet so far, the threat of follow through in China or an exogenous accelerant could quickly change the scene; so the market will remain vigilant and perhaps jittery.

Turning the focus back on the US calendar, there were a few indicators and events to take note of – especially with many of the majors hovering just below dollar-based resistance. In the morning, the markets were responding to housing and employment data. The weekly MBA report revealed a 7.3 percent drop in mortgage applications for the week ending May 25th. The drop was the biggest in four months and was brought on by lending rates that have recently reached seven month highs. Guiding NFP speculation, the ADP private payrolls figure for May has lowered expectations for an upside surprise. Crossing the wires at 97,000, well below the 120,000 expected, the indicator tarnished the impressive drop in initial jobless claims and pick up in the employment component of yesterday’s consumer sentiment survey. Altogether though, these indicators had limited influence on price action. Traders are holding off on their big trades until after the FOMC minutes from the May 9th meeting. In the brief statement that followed the decision, the only substantial change to the boiler plate text was a mention that ‘growth slowed in the first part of this year.’

...more...

[54anickel]

6. Your first article makes yesterday seem like a well orchestrated move or sumptin

It couldn't have been, dare I say it...market manipulation? Nah, they're just messing with trader heads.


...if the Chinese market does not continue to fall and instead recovers its losses to hit another record high like it did back in February, the Chinese government will become extremely agitated. Their only response will be to do more rather than less to cool the bubble which will eventually hit carry as well as the US stock market.

[mojavekid]

14. Daily Pfennig 5/31/07: Hy Minsky on a Thursday!

http://www.kitcocasey.com/displayArticle.php?id=1412

Longtime readers know how much I like to quote a former Nobel Prize-winning economist that used to give me one-on-one lessons in economics... Hy Minsky... The reason I'm bringing up Hy Minsky today is another colleague and longtime friend of mine that used to work with me at Mark Twain Bank, Ed Bonawitz, reminded me of something Hy Minsky taught us years ago regarding the central banks' appetite for overseas investments, or as I was talking yesterday, about how foreign central banks now had 80% of Treasuries in the 3- to 10-year maturity range... Here's Ed, on Hy Minsky...

"Hy Minsky helped me understand why these central banks will eat until they burst with this illustration. Now picture Professor Minsky, with those eyebrows that looked liked hedgerows about eight inches from your face saying, 'These central banks are like a convicted man on the gallows faced with the dilemma of which fate is worse, the ever-tightening noose of U.S. Treasury debt in their coffers or the sudden release of demand for their products, that trapdoor their all standing on.' They all choose the slow strangulation for they are politicians at heart, and their job is to not create a panic and snap the neck of their economies."

OK... On to what happened yesterday....

Yesterday morning as I was signing off and heading out the door, I mentioned that the Chinese had tripled their transaction tax to stem the inflows of foreign investment money... This news sent shock waves through the stock markets, and, for a little while, had the Emerging Markets on their heels; it even slipped over to the runaway train called the U.S. stock market... But that didn't last long.

more...

[ozymandius]

3. Today's Reports-a-plenty

8:30 AM GDP-Prel. Q1
Briefing Forecast 0.7%
Market Expects 0.8%
Prior 1.3%

8:30 AM Chain Deflator-Prel. Q1
Briefing Forecast 4.0%
Market Expects 4.0%
Prior 4.0%

8:30 AM Initial Claims 05/26
Briefing Forecast 315K
Market Expects 315K
Prior 311K

9:45 AM Chicago PMI May
Briefing Forecast 54.5
Market Expects 54.0
Prior 52.9

10:00 AM Construction Spending Apr
Briefing Forecast -0.2%
Market Expects 0.1%
Prior 0.2%

10:00 AM Help-Wanted Index Apr
Briefing Forecast NA
Market Expects 31
Prior 30

10:30 AM Crude Inventories 05/25
Briefing Forecast NA
Market Expects NA
Prior 1969K

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

[UpInArms]

5. 8:30 reports:

08. U.S. 4-week avg. continuing jobless claims fall to 2.50 mln
8:30 AM ET, May 31, 2007 - 14 minutes ago

09. U.S. 1Q capital spending up 2% vs. 1.9% previously
8:30 AM ET, May 31, 2007 - 14 minutes ago

10. U.S. 4-week avg. initial jobless claims up 1,000 to 304,500
8:30 AM ET, May 31, 2007 - 14 minutes ago

11. U.S. 1Q consumer spending up 4.4% vs. 3.8% previously
8:30 AM ET, May 31, 2007 - 14 minutes ago

12. U.S. continuing jobless claims fall 52,000 to 2.47 mln
8:30 AM ET, May 31, 2007 - 14 minutes ago

13. GDP revisions reflect weaker inventories, trade
8:30 AM ET, May 31, 2007 - 14 minutes ago

14. U.S. initial jobless claims fall 4,000 to 310,000
8:30 AM ET, May 31, 2007 - 14 minutes ago

15. U.S. 1Q final sales unrevised at 1.6%
8:30 AM ET, May 31, 2007 - 14 minutes ago

16. U.S. 1Q before-tax corporate profits up 6.3% year on year
8:30 AM ET, May 31, 2007 - 14 minutes ago

17. U.S. 1Q core inflation unrevised at 2.2% year on year
8:30 AM ET, May 31, 2007 - 14 minutes ago

18. U.S. first-quarter growth weakest since late 2002
8:30 AM ET, May 31, 2007 - 14 minutes ago

19. U.S. 1Q GDP revised down to 0.6% annualized from 1.3%
8:30 AM ET, May 31, 2007 - 14 minutes ago

[54anickel]

10. Economy has worst growth since 2002

http://news.yahoo.com/s/ap/20070531/ap_on_bi_go_ec_fi/economy_14

WASHINGTON - The economy nearly stalled in the first quarter with growth slowing to a pace of just 0.6 percent. That was the worst three-month showing in over four years.

The new reading on the gross domestic product, released by the Commerce Department Thursday, showed that economic growth in the January-to-April quarter was much weaker. Government statisticians slashed by more than half their first estimate of a 1.3 percent growth rate for the quarter.

The main culprits for the downgrade: the bloated trade deficit and businesses cutting investment in supplies of the goods they hold in inventories.

For nearly a year, the economy has been enduring a stretch of subpar economic growth due mostly to a sharp housing slump. That in turn has made some businesses act more cautiously in their spending and investing.

The economy's 0.6 percent growth rate in the opening quarter of this year marked a big loss of momentum from the 2.5 percent pace logged in the final quarter of last year.

Federal Reserve Chairman Ben Bernanke doesn't believe the economy will slide into recession this year, nor do Bush administration officials. But ex Fed chief Alan Greenspan has put the odds at one in three. :eyes: Still the bookie

more...

[Roland99]

18. Good thing the housing slump hasn't affected the overall economy!!!

:eyes:

[Ghost Dog]

24. US economic growth slows to 0.6%

http://mwprices.ft.com/custom/ft2-com/html-story.asp?pulse=true&siteid=ft&dist=ft&guid=%7B3087fd21%2D6507%2D44f8%2Dba81%2D3e2fd63569b1%7D

US economic growth slowed to 0.6 per cent last quarter in the worst performance for the economy in four years, according to the latest government estimates. The pace of expansion slowed dramatically from a rate of 2.5 per cent the previous quarter as the Commerce Department on Thursday cut its initial estimate of 1.3 per cent growth in the first quarter by more than half. The anaemic performance was worse than economists expected but is likely to be viewed by the Federal Reserve as a prelude to a broad-based recovery. The Fed said in minutes published on Wednesday that it expected a moderate pickup in growth in coming quarters. However, the central bank warned that the 18-month long housing slump could drag out. There were some positive signs for the economy in the latest report, as consumer spending remained strong with estimates of personal consumption upgraded to 4.4 per cent growth rate. Business investment was also revised up modestly with an overall a 2.9 per cent rate, lifted by increased spending on computer equipment and software. Key factors behind the cut in the growth estimate were the widening trade deficit and a reduction in business inventories. The trade gap widened as imports increased more strongly than initially estimated, with a gain of 5.7 per cent, up from 2.3 per cent, while exports fell by 0.6 per cent.

:silly:

[Demeter]

31. Less Than Half of the Estimate!

Talk about pulling numbers out of a.....hat.

[mojavekid]

36. OR, you could use these numbers here;

Compliments of John Williams at Shadow Government Statistics

http://www.shadowstats.com/cgi-bin/sgs/data

[Demeter]

37. Thank YOU!

Very useful link with numbers that match reality! What have we come to, so ersatz Soviet Union?

[mojavekid]

16. Bloomberg: U.S. Economy Grew at a 0.6% Pace, Four-Year Low (Update2)

http://www.bloomberg.com/apps/news?pid=20601087&sid=afKNPaLB1sw4&refer=home

May 31 (Bloomberg) -- The U.S. economy grew last quarter at a 0.6 percent annual rate, the weakest in more than four years, as housing slumped, the trade deficit widened and businesses reduced inventories.

The gain in gross domestic product was weaker than the median forecast by economists and compares with a 1.3 percent pace initially estimated last month, according to revised figures from the Commerce Department today in Washington.

Last quarter may prove to be the low point for the economy because recent reports showed that business spending has improved and leaner stockpiles have prompted factories to lift production, economists said. Such an outcome would bear out forecasts by Federal Reserve policy makers, who this month reiterated that growth will pick up for the rest of this year and into next.

more...

[ozymandius]

4. Oil prices fall before U.S. supply data

Oil prices fell Thursday ahead of the release of a U.S. government report expected to show that U.S. crude and gasoline supplies rose last week.

News that a number of U.S. refineries which suffered unplanned glitches earlier this month were returning to full, or at least partial, production added to pressure on prices.

Light, sweet crude for July delivery dropped 34 cents to $63.15 a barrel on the New York Mercantile Exchange by afternoon in Europe. July Brent crude lost 12 cents to $67.72 a barrel on the ICE Futures exchange in London.

-cut-

The U.S. Energy Department's weekly inventory report — due later Thursday — is forecast to show domestic gasoline stocks rose 1 million barrels for the week ended May 25, according to a Dow Jones Newswires poll of analysts.

Crude oil inventories were expected to climb about 300,000 barrels, and distillate stocks were predicted to rise about 500,000 barrels, according to the poll.

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

[mojavekid]

32. MSNBC: Ethanol boom may fuel shortage of tequila

http://www.msnbc.msn.com/id/18926019/

MEXICO CITY - Mexican farmers are setting ablaze fields of blue agave, the cactus-like plant used to make the fiery spirit tequila, and resowing the land with corn as soaring U.S. ethanol demand pushes up prices.

The switch to corn will contribute to an expected scarcity of agave in coming years, with officials predicting that farmers will plant between 25 percent and 35 percent less agave this year to turn the land over to corn.

"Those growers are going after what pays best now," said Ismael Vicente Ramirez, head of agriculture at Mexico's Tequila Regulatory Council.

more...

[PassingFair]

7. Today be Thursday, yes?

I'm confused enough as it is!

:crazy:

[ozymandius]

9. It do be Thursday.

Haste makes waste as some say.

:dunce:

[ozymandius]

8. Wachovia to buy A.G. Edwards for $6.8 billion

NEW YORK (Reuters) - Wachovia Corp. (NYSE:WB - news) on Thursday said it would buy A.G. Edwards Inc. (NYSE:AGE - news) for about $6.8 billion in cash and stock to create the second-largest retail brokerage in the United States.

The deal calls for the exchange of 0.9844 shares of Wachovia common stock and $35.80 in cash for each A.G. Edwards share. The deal represents a 16 percent premium to A.G. Edwards' closing share price on Wednesday.

Wachovia Corp., the fourth-largest U.S. bank, will combine A.G. Edwards with its brokerage business, Wachovia Securities, pushing the company deeper into metropolitan areas.

-cut-

The Charlotte, North Carolina-based company said it expects the transaction to close in the fourth quarter of 2007, to add to earnings in the first full year following the closing and provide an internal rate of return of 24 percent.

http://news.yahoo.com/s/nm/20070531/bs_nm/agedwards_wachovia_dc

[ozymandius]

11. Markets are open for bidness.

The bowl is only getting bigger.

9:44
Dow 13,670.87 Up 37.79 (0.28%)
Nasdaq 2,606.73 Up 14.14 (0.55%)
S&P 500 1,535.40 Up 5.17 (0.34%)
10-Yr Bond 4.87% Down 0.008
NYSE Volume 179,960,000
Nasdaq Volume 199,938,000

09:15 am : S&P futures vs fair value: +3.3. Nasdaq futures vs fair value: +5.8.

09:00 am : S&P futures vs fair value: +3.4. Nasdaq futures vs fair value: +5.5. Still shaping up to be a higher start for stocks as both the S&P 500 and Nasdaq 100 futures trade above fair value. While we continue to believe that optimism is overdone, and that risks are being overly discounted, there's no denying that the liquidity factor behind gains that have several indices at historic highs continues to keep an underlying bid in this market.

08:35 am : S&P futures vs fair value: +3.6. Nasdaq futures vs fair value: +6.0. As expected, Q1 GDP was revised lower. The preliminary read checked in at 0.6% (consensus 0.8%), down from an advance read of 1.3%. The chain deflator -- a key inflation measure -- held steady at 4.0% (consensus 4.0%). Initial claims unexpectedly fell 4K to 310K (consensus 315K).

[AnneD]

12. Morning Marketeers.....

:donut: and lurkers. I worked 7 days straight and put in a 60 hour week. I took a deserved 3 days off. Of course I used the time to catch up on the house hold duties. So much for days off. Now it looks like they may need me for Summer School Nurse duties. I said if they can come up with the money, I'll do it. If not-I'll be off to make more money elsewhere. I have not been hurting for work lately-I can tell the shortage is starting to hit.

Interesting how the market is running lately. Messing with folks heads for sure. I mean really-when you have to dig back several weeks for the good news to prop up the market (the notes from the fed meeting).

Well, hope all of you are enjoying the start of summer. We are anticipating the start of the hurricane season tomorrow. I'd advise you folks to start saving to fill up your tanks cause it it's about to get crazy.



Happy hunting and watch out for the bears.

[TrogL]

13. Loonie Watch

Highlights

Current:



30-day and 90-day vs.greenback:



30-day vs. Euro, Yen, UK Pound and Swiss Franc




Currency Comparison: http://members.shaw.ca/trogl/looniewatch.html

Detailed analysis: http://quotes.ino.com/exchanges/?r=CME_CD

Up-to-the-minute graph: http://quotes.ino.com/chart/?s=CME_CD.Y%24%24&v=s&w=5&t=l&a=1

Historical values http://www.x-rates.com/d/USD/CAD/data30.html

2007-04-30 Monday, April 30 0.903506 USD
2007-05-01 Tuesday, May 1 0.901876 USD
2007-05-02 Wednesday, May 2 0.901957 USD
2007-05-03 Thursday, May 3 0.903424 USD
2007-05-04 Friday, May 4 0.903424 USD
2007-05-07 Monday, May 7 0.907112 USD
2007-05-08 Tuesday, May 8 0.905141 USD
2007-05-09 Wednesday, May 9 0.903914 USD
2007-05-10 Thursday, May 10 0.903098 USD
2007-05-11 Friday, May 11 0.897989 USD
2007-05-14 Monday, May 14 0.903587 USD
2007-05-15 Tuesday, May 15 0.911079 USD
2007-05-16 Wednesday, May 16 0.906783 USD
2007-05-17 Thursday, May 17 0.911079 USD
2007-05-18 Friday, May 18 0.918864 USD
2007-05-21 Monday, May 21 0.921319 USD
2007-05-22 Tuesday, May 22 0.921319 USD (?)
2007-05-23 Wednesday, May 23 0.924556 USD
2007-05-24 Thursday, May 24 0.922424 USD
2007-05-25 Friday, May 25 0.926441 USD
2007-05-28 Monday, May 28 0.926441 USD (?)
2007-05-29 Tuesday, May 29 0.932923 USD
2007-05-30 Wednesday, May 30 0.929973 USD


Current values

Loonie:

Last trade 0.9358 Change +0.0038 (+0.41%)
Previous Close 0.9321 Open 0.9356
Low 0.9343 High 0.9382


Other combinations:

AS.M07 AUSTRALIAN $/CANADIAN $ Jun (NYBOT) 0.88195 +0.0000375
AU.M07 AUSTRALIAN $/US$ Jun (NYBOT) 0.82195 -0.00115
EC.M07 EURO FX Jun (CME) 1.3475 +0.0038
RA.M07 EURO/AUSTRALIAN $ Jun (NYBOT) 1.6455 +0.0036
RP.M07.E EURO/BRITISH POUND Jun (CME) 0.68015 -0.00015
HY.M07 CANADIAN $/JAPANESE YEN Jun (NYBOT) 113.000 +0.1
GB.M07 EURO/BRITISH POUND Jun (NYBOT) 0.68010 +0.00015
EP.M07 EURO/CANADIAN $ Jun (NYBOT) 1.4551 +0.0022
RY.M07.E EURO/JAPANESE YEN Jun (CME) 163.58 +0.58
EJ.M07 EURO/JAPANESE YEN Jun (NYBOT) 163.54 +0.64
EU.M07 EURO/US$ (LARGE) Jun (NYBOT) 1.34345 -0.00260


Blather (from http://quotes.ino.com/exchanges/?r=CME_CD)

The June Canadian Dollar was higher overnight as it extends this spring's rally. Stochastics and the RSI are overbought but remain neutral signaling that sideways to higher prices are possible near-term. If June extends the rally off February's low, weekly resistance crossing at .9475 is the next upside target. Closes below the 20-day moving average crossing at .9161 would confirm that a top has been posted. Overnight action sets the stage for a higher opening in early-day session trading.

Analysis

OK, this is getting ridiculous.

For months on end I couldn't be bothered posting Loonie Watch because either it was too horrible to contemplate or too boring to be bothered. Now I've posted it something like 11 days out of the last twelve (I was busy one day).

It's the same deal as most of this week. One graph tells me it's going up like a rocket, another says it peaked a couple of hours ago and it's sitting doing nothing. That's probably a result of overnight foreign trading driving the price up in a rash of (unreasonable?) exhuberance, then saner (or more paranoid) heads prevailing onshore.

The Alberta government has announced basically "if you don't have a job and a place to stay lined up, don't bother moving here" which needs to be expanded out to "if you don't have a job lined up that pays enough to afford Alberta's outrageous rents and don't want to spend two years sleeping on somebody's moldy couch in the basement..."

The housing bubble appears to have burst, at least locally. Last night's TV news spent 10 minutes with some woman who had just bought a new house, expecting people lined up into the street to buy her old one (which last month wouldn't have been an unreasonable expectation) and now she's stuck with both of them. You may remember I had begged my next door neighbour to sell, now, quickly so she'd take advantage of the bubble. Oh, well. Too late.

[Spazito]

26. I was skeptical of one expert who said the Loonie could hit par

with the US dollar by September of this year but, given the way it is moving, I am wondering if my skepticism (or at least much of it) is warranted.

BTW, thanks for posting this, I do read your Loonie posts even though I don't usually comment.

[TrogL]

40. They're still saying it

http://today.reuters.com/misc/PrinterFriendlyPopup.aspx?type=bondsNews&storyID=2007-06-01T124535Z_01_N01297629_RTRIDST_0_CANADA-DOLLAR-CIBC.XML

[mojavekid]

15. Bloomberg: Gold, Silver Futures Climb on Demand for Dollar Alternative

http://www.bloomberg.com/apps/news?pid=20601012&sid=aDAO.YeegizM&refer=commodities

May 31 (Bloomberg) -- Gold and silver prices rose in New York as a decline in the value of the dollar against the euro boosted the appeal of precious metals as alternative investments.

Gold generally moves in the opposite direction of the dollar, which dropped against the euro after a government report showed the U.S. economy grew last quarter at the weakest in more than four years. Before today, gold had gained 3.3 percent this year as the euro climbed 1.8 percent against the dollar.

``The renewed weakness in the dollar could encourage some buying of gold overseas,'' said Stephen Platt, commodity analyst at Archer Financial Services Inc. in Chicago.

more...

[mojavekid]

17. Bloomberg: India's Economy Grows at Fastest Pace in Two Decades (Update5)

http://www.bloomberg.com/apps/news?pid=20601068&sid=aIDBNk_D1iR4&refer=economy

May 31 (Bloomberg) -- India's economy grew at the fastest pace in almost 20 years as companies lifted production to meet surging consumer demand.

South Asia's largest economy expanded 9.4 percent in the year ended March 31, the biggest gain since 1989 and more than the government's initial estimate of 9.2 percent, the Central Statistical Organisation said in New Delhi today.

General Motors Corp., Tata Steel Ltd. and other companies are increasing output in India at the quickest pace in a decade to meet soaring demand from a middle class that's swelled to the size of the U.S. population.

snip..

``We should be prepared for a soft landing,'' said Navneet Munot, who helps manage the equivalent of more than $4 billion at Birla Sun Life Asset Management Co. in Mumbai. ``The economy should expand at about 8 percent or more.''

India's economy grew 9.1 percent in the three months to March 31, according to today's report, averaging a quarterly pace of 8.8 percent in the past two years compared with 5.7 percent in the 1990s. That's stoked demand for manufactured and farm goods and pushed inflation to a two-year high in January.

more...

[Roland99]

19. 12:15pm - Markets love a SLOW economy!!

Dow 13,659.58 26.50
Nasdaq 2,604.42 11.83
S&P 500 1,532.65 2.42
10 YR 4.91% 0.03
Oil $63.60 $0.11
Gold $665.30 $6.00

[Ghost Dog]

20. Asian Stocks Rise to Record on Fed's U.S. Outlook; China Gains

http://www.bloomberg.com/apps/news?pid=20601080&sid=ajR2aUHwzGz8&refer=asia

May 31 (Bloomberg) --Asian stocks rallied to a record after the U.S. Federal Reserve predicted growth will pick up in the world's biggest economy.

Sony Corp. and Samsung Electronics Co. paced gains among exporters. China's CSI 300 Index rebounded after a slide yesterday that wiped out $161 billion of market value.

``The U.S. economy is posing less of a risk to markets than before,'' said Kim Woo Sik, who manages $210 million at SH Asset Management Co. in Seoul. ``China's fall yesterday wasn't because of fundamental problems with its economy, so the impact is pretty much contained within its borders.''

The Morgan Stanley Capital International Asia-Pacific Index rose 1.3 percent to 150.30 at 7:01 p.m. in Tokyo, recovering from a 0.5 percent drop yesterday. The measure has gained 2.8 percent this month, set for a record close.

The CSI 300 added 1.1 percent after slumping in morning trade. The index tumbled 6.8 percent yesterday after authorities tripled the tax on securities transactions to cool a boom in share trading. Japan's Nikkei 225 Stock Average advanced 1.6 percent to 17,875.75, its highest since Feb. 27.

Hyundai Heavy Industries Co. led South Korea's Kospi index 2.3 percent higher on booming ship orders. Only Taiwan's Taiex closed lower among the region's benchmarks. Markets in Singapore, Thailand and Sri Lanka are shut for public holidays.

/... :shrug:

[Ghost Dog]

21. India's Economy Grows at Fastest Pace in Two Decades

http://www.bloomberg.com/apps/news?pid=20601080&sid=aIDBNk_D1iR4&refer=asia

May 31 (Bloomberg) -- India's economy grew at the fastest pace in almost 20 years as companies lifted production to meet surging consumer demand.

South Asia's largest economy expanded 9.4 percent in the year ended March 31, the biggest gain since 1989 and more than the government's initial estimate of 9.2 percent, the Central Statistical Organisation said in New Delhi today.

General Motors Corp., Tata Steel Ltd. and other companies are increasing output in India at the quickest pace in a decade to meet soaring demand from a middle class that's swelled to the size of the U.S. population. Economic growth may start to slow after central bank Governor Yaga Venugopal Reddy raised interest rates to a five-year high to curb inflation.

``We should be prepared for a soft landing,'' said Navneet Munot, who helps manage the equivalent of more than $4 billion at Birla Sun Life Asset Management Co. in Mumbai. ``The economy should expand at about 8 percent or more.''

India's economy grew 9.1 percent in the three months to March 31, according to today's report, averaging a quarterly pace of 8.8 percent in the past two years compared with 5.7 percent in the 1990s. That's stoked demand for manufactured and farm goods and pushed inflation to a two-year high in January.

``Soft landing no longer means we are back to the days of 5 or 6 percent growth,'' Munot said.

Stocks Gain

India's Sensitive index gained 0.9 percent to 14544.46 on the Bombay Stock Exchange. The yield on the 10-year government bond dropped 3 basis points, or 0.03 percentage point, to 8.075 percent. The rupee climbed the most in more than two weeks, rounding off three months of gains. It rose 0.6 percent today to 40.62 as of 5 p.m. in Mumbai.

The Reserve Bank of India raised its key rate seven times in the past 1 1/2 years to tame price gains and loan growth. That's discouraging borrowers and has helped ease inflation to an eight-month low of 5.27 percent in the second week of May.

/...

[Ghost Dog]

22. Utilities help drive European stocks to 6½-year peaks

http://mwprices.ft.com/custom/ft2-com/html-story.asp?pulse=true&siteid=ft&dist=ft&guid=%7B31ef65f6%2D6b74%2D4b46%2Daf31%2Dbf7468b150f0%7D

Utilities and technology stocks drove European equity markets higher on Thursday as cash returns and stakebuilding lifted the speculative appeal of both sectors. Tthe FTSE Eurofirst 300 closed up 0.7 per cent to1,610.7, Frankfurt’s Xetra Dax climbed 1.5 per cent to 7,883.0, the CAC 40 in Paris added 0.5 per cent to 6,104.4 and London’s FTSE 100 rose 0.3 per cent to 6,621.4. Eon, the German utility, rose 4.1 per cent to €122.2 after announcing plans for a €7bn share buyback.

/..

[Ghost Dog]

23. London higher as broker upgrade helps resource stocks

http://mwprices.ft.com/custom/ft2-com/html-story.asp?pulse=true&siteid=ft&dist=ft&guid=%7B13c2c5a3%2Dade6%2D4af8%2D9a18%2D697d98ab0df4%7D

London equities gained on Thursday thanks to a rally in the mining sector and a strong rise for Johnson Matthey. The FTSE 100 index was 19 points higher at 6,621.4 while the mid-cap FTSE 250 rose 87 points to 12,111.1. Johnson Matthey closed up 3.7 per cent at £16.28, after Citigroup raised its recommendation on the platinum specialist from ‘hold’ to ‘buy’. Mining stocks were also higher, helped by a rebound in Chinese equities, higher metals price and an upbeat analyst presentation last night by Cynthia Carroll, the chief executive of Anglo American. Ms Carroll was upbeat on the prospect for metals prices in the next five years. Anglo America shares rose 4.3 per cent to £30.39.

[Ghost Dog]

25. US Fed. Govt. Liability $516,348 per U.S. household

http://www.usatoday.com/printedition/news/20070529/1a_lede29.art.htm

The federal government recorded a $1.3 trillion loss last year — far more than the official $248 billion deficit — when corporate-style accounting standards are used, a USA TODAY analysis shows.

The loss reflects a continued deterioration in the finances of Social Security and government retirement programs for civil servants and military personnel. The loss — equal to $11,434 per household — is more than Americans paid in income taxes in 2006.

"We're on an unsustainable path and doing a great disservice to future generations," says Chris Chocola, a former Republican member of Congress from Indiana and corporate chief executive who is pushing for more accurate federal accounting.

Modern accounting requires that corporations, state governments and local governments count expenses immediately when a transaction occurs, even if the payment will be made later.

The federal government does not follow the rule, so promises for Social Security and Medicare don't show up when the government reports its financial condition.

Bottom line: Taxpayers are now on the hook for a record $59.1 trillion in liabilities, a 2.3% increase from 2006. That amount is equal to $516,348 for every U.S. household. By comparison, U.S. households owe an average of $112,043 for mortgages, car loans, credit cards and all other debt combined.

/...

[mojavekid]

27. The Mogambo Guru: Forced to Eat Higher Food Prices

http://www.safehaven.com/article-7667.htm

"Up to now, the price inflation was the 'fun' kind, as it went into stocks, bonds, housing...Now inflation is showing up in the "not fun" category, namely food and stuff you have to buy just to stay alive."

My fingers shake uncontrollably as I type, and my left eye is twitching from the stress, but I heroically soldier on, valiantly trying to keep my rising panic under control, mostly by "accidentally" mixing up my medications to go heavy on the ones that seem to turn my brain to kind of a tranquil goo, especially when taken with tasty alcoholic beverages. Which is dangerous as hell and really stupid, I know, but it is the only thing that seems to work, given the extreme economic circumstances in which we inextricably find ourselves.

My mounting anxiety is not, as is usually the case, because Total Fed Credit was up or down, although it was up a little last week, rising $2.2 billion. And always on the lookout for something to get snotty and hysterical about, I will happily note that this was less than half as much as the $4.7 billion in U.S. government and agency debt that foreign central banks bought up and conveniently stored at the Fed, also last week.

No, what I am in a panic about is that from the Financial Times we read the terrible news that "Retail food prices are heading for their biggest annual increase in as much as 30 years, raising fears that the world faces an unprecedented period of food price inflation. Few countries have not felt the impact of food price rises. In the US, prices have risen by 6.7 per cent, seasonally adjusted, since the beginning of this year, compared to 2.1 per cent for all of 2006, according to the Bureau of Labor Statistics."

Plenty more...

[mojavekid]

28. TDR: Economic "Boom" Proves False as Median U.S. Wage Falls 12.5%

http://www.dailyreckoning.com.au/median-us-wage-falls/2007/05/31/

You want to know something important, dear reader? Something that really matters? Well, read on…

We’ve been saying that the boom is a fraud. It is a speculative boom, not an economic boom. It lifts up asset prices and makes rich people think they are richer than ever. But it doesn’t increase real economic output - at least, not in the United States of America - or make average people any better off.

Of course, the leftists have been saying this for years. But who cares what they say. Even when they do spot a real problem, they invariably come up with a solution – more government meddling - that makes it worse.

Still, this is something they’re not wrong about.

An item from yesterday’s news:

According to data from the Pew Charitable Trust’s Economic Mobility project, a generation ago, American men in their 30s had median annual incomes of about US$40,000. Today, men of the same age, make about US$35,000 a year, adjusted for inflation. That’s a 12.5% drop over the last 30 years.

more...

[mojavekid]

30. TDR: Housing Crash Deepens as Australian Capital reserve Collapses

http://www.dailyreckoning.com.au/housing-crisis/2007/05/30/

“Housing dream vanishing,” reads a headline on-line. “Housing affordability has fallen to its lowest level ever recorded by a key industry measure of the market, set up 23 years ago.” The average monthly payment on a first-home mortgage is around AU$2,387. This adds up to about 30% of net income for the first-time home buyer. Affordability has declined for four straight quarters.

What’s the solution to the housing crisis? Is it more credit? This would just drive prices up. Is it more land? There seem to be plenty of properties to rent. They just don’t happen to be in areas where people want to live. That’s the trouble with a boom. The visible signs of wealth inflate expectations for everyone. The reality is that house prices will have to fall to become more affordable, or new buyers will have to live outside the red-hot city centres and capital cities.

Unfortunately, the trouble in the property sector isn’t confined to new homes. Following in the footsteps of Fincorp and Westpoint, property investment company Australian Capital Reserve (ACR) is on the verge of collapse. More than AU$300 million dollars could be wiped out. This money was raised largely from small investors over the last seven years. Investors were promised higher interest rates on the firm’s unsecured property developments.

more...

[Demeter]

33. This Is A Surprise?

Add in all those with zero income, and things start to look serious!

[mojavekid]

29. Bloomberg: Looming Crash Prompts Jump in Distressed Debt Hiring (Update1)

http://www.bloomberg.com/apps/news?pid=20601103&sid=as4IgwxvySmQ&refer=us

May 30 (Bloomberg) -- The biggest winners from the global buyout boom are hiring distressed-debt bankers in Europe at the fastest pace in five years.

Goldman Sachs Group Inc., the world's most profitable securities firm, hired Andrew Wilkinson, the lawyer who advised creditors in the bankruptcies of Eurotunnel Plc and Parmalat Finanziaria SpA, to help lead its restructuring business in London. Morgan Stanley, the third most-active merger adviser this year behind Citigroup Inc. and Goldman, added seven bankers in the past year, boosting its group to 61. Blackstone Group LP, poised to become the world's largest publicly traded buyout firm, is starting a corporate restructuring group in Europe.

``When the turn does come, it will be unlike anything we have ever seen before,'' said Iain Burnett, 43, managing director of Morgan Stanley's special situations unit in London. ``The scale of it could be considerable because of the size of some of these leveraged deals,'' said Burnett, who began his career in London a month before the October 1987 stock market crash.

more...

[DemReadingDU]

35. Guess the crash isn't today, markets up again

[brooklynite]

34. Any thoughts on why Apple's doing so well?

As the President of the Mac User Group in NYC I should have a better understanding of this, but I have to admit I'm baffled as to why its up nearly $10 since last week (currently over $120). Are copy-protection free music and YouTube videos that big a market pusher?

[ozymandius]

39. maybe the debut of the iPhone

I've read that this Apple product can run circles around the competition.

[ozymandius]

38. closing shop for Thursday (I mean Thursday)

Dow 13,627.64 Down 5.44 (0.04%)
Nasdaq 2,604.52 Up 11.93 (0.46%)
S&P 500 1,530.62 Up 0.39 (0.03%)
10-Yr Bond 4.89% Up 0.012
NYSE Volume 3,335,533,000
Nasdaq Volume 2,472,484,000

4:20 pm : So much for investors fretting about the old adage, "sell in May and go away." Blue-chip stocks may have ended today's session in lackluster fashion, but sellers this May were few and far between.

The Dow, S&P 500 and Nasdaq finished mixed Thursday, but closed out a seasonally weak month with respective gains of 4.3%, 3.3%, and 3.1%.

Before the bell, investors embraced another round of supportive M&A news. The day's biggest deal involved Wachovia (WB 54.21 -0.34) saying it will acquire A.G. Edwards (AGE 88.12 +10.97) for $6.8 bln in cash and stock.

The offer represented a 16% premium to A.G. Edwards' Wednesday's closing price and will create the nation's second-largest retail brokerage. As one might expect, the news raised speculation of more industry consolidation and gave brokerage stocks a sizable boost.

That wasn't enough to lift the rest of the rate-sensitive Financials sector, however, as banks and REITs were pressured by bond yields hitting multi-month highs across the yield curve. The absence of leadership in the S&P 500's most heavily-weighted sector prevented modest gains from the likes of Technology and Industrials from playing a more influential role in today's follow-through attempt.

Separately, a much stronger than expected rise in Chicago PMI overshadowed the U.S. economy's weakest GDP growth in more than four years, which was reported to be up just 0.6% in the revised first quarter reading.

The dated GDP report left bond traders more concerned about a potential rebound in manufacturing further diminishing hopes of a Fed rate cut anytime soon. The yield on the 10-year note now stands at 4.89%, the highest level since last August. DJ30 -5.44 NASDAQ +11.88 SP500 +0.39 NASDAQ Dec/Adv/Vol 1260/1823/2.35 bln NYSE Dec/Adv/Vol 1380/1878/1.52 bln