STOCK MARKET WATCH, Monday June 4

[ozymandius]

Source: DU

Monday June 4, 2007

COUNTING THE DAYS
DAYS REMAINING IN THE * REGIME 595 LONG DAYS
DAYS SINCE DEMOCRACY DIED (12/12/00) 2343 DAYS
WHERE'S OSAMA BIN-LADEN? 2055 DAYS
DAYS SINCE ENRON COLLAPSE = 2016
Number of Enron Execs in handcuffs = 19
ENRON EXECS CONVICTED = 9
Enron execs conveniently deceased = 3
Other Arrests of Execs = 54

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

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AT THE CLOSING BELL 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 June 1, 2007

Dow... 13,668.11 +40.47 (+0.30%)
Nasdaq... 2,613.92 +9.40 (+0.36%)
S&P 500... 1,536.34 +5.72 (+0.37%)
Gold future... 676.90 +10.20 (+1.51%)
30-Year Bond 5.06% +0.05 (+1.02%)
10-Yr Bond... 4.96% +0.07 (+1.35%)






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

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Read more: DU

[ozymandius]

1. Today's Market WrapUp

The Cycle Turn and Trend Indicators
and a Look at Crude Oil and Gasoline
BY TIM W. WOOD

Earlier this past week I had intermediate-term sell signals on both crude oil and unleaded gasoline. Given that we are just now approaching the hurricane and summer driving seasons, I have to wonder if these signals are going to be brief, or if they are discounting the season ahead and if lower energy prices truly lie ahead.

-more parroting of Robert Rhea ahead-

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

[ozymandius]

2. Today's Report

10:00 AM Factory Orders Apr
Briefing Forecast 1.5%
Market Expects 0.6%
Prior 3.5%

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

[UpInArms]

9. US April Factory Orders in at a sucky 0.3%

01. U.S. April factory inventory-shipments ratio 1.24 vs. 1.25
10:00 AM ET, Jun 04, 2007 - 1 minute ago

02. U.S. April core capex orders revised up 2.1% vs. 1.2%
10:00 AM ET, Jun 04, 2007 - 1 minute ago

03. U.S. April nondurable shipments fall 0.2% on oil, coal
10:00 AM ET, Jun 04, 2007 - 1 minute ago

04. U.S. April durable-goods orders revised to 0.8% vs. 0.6%
10:00 AM ET, Jun 04, 2007 - 1 minute ago

05. U.S. April factory shipments rise 0.8%
10:00 AM ET, Jun 04, 2007 - 1 minute ago

06. U.S. April factory orders rise 0.3% vs. 0.8% expected
10:00 AM ET, Jun 04, 2007 - 1 minute ago

[ozymandius]

3. US crude futures dip, Brent rises

VIENNA, Austria - Benchmark oil prices for the American market retreated Monday after a Nigerian militant group announced a one-month cease-fire and a U.S. gasoline pipeline was restarted.

The developments — particularly news that Atlanta-based Colonial Pipelines had resumed pumping from Atlanta to North Carolina — eased supply concerns, at least in the U.S.

Light, sweet crude for July delivery fell 41 cents to $64.67 a barrel in electronic trading on the New York Mercantile Exchange by midday in Europe.

-cut-

Colonial Pipeline operates the world's largest pipeline for refined petroleum products. It spans some 5,350 miles (8,609 kilometers) between Texas and the New York Harbor.

A U.S. government report last week showed gasoline supplies grew by 1.3 million barrels in the week ended May 25, but investors remain concerned that inventories are not growing fast enough to meet demand. U.S. gasoline supplies are still more than 10 million barrels lower than at this time last year.

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

[ozymandius]

8. Dominion to sell gas assets for $6.5 billion

NEW YORK (Reuters) - Dominion Resources said on Monday that it would sell most of its gas and oil exploration and production operations to two different companies for about $6.5 billion as part of its plan to focus on its power business.

Loews Corp. , a conglomerate, will pay about $4.03 billion for Dominion's gas assets in the Permian Basin in Texas as well as properties in Michigan and Alabama, while XTO Energy Inc. , a natural gas producer, will pay about $2.5 billion for the operations in the Rocky Mountains, Gulf Coast, San Juan Basin and Louisiana.

The sale of these properties, which include 3.51 trillion cubic feet equivalent of proved natural gas and oil reserve as of December 31, is expected to close in August.

http://news.moneycentral.msn.com/provider/providerarticle.aspx?feed=OBR&Date=20070604&ID=6988604

[ozymandius]

4. 'Piggybacking' roils credit industry

Only a low credit score stood between Alipio Estruch and a mortgage to buy a $449,000 Spanish-style house in Weston, Fla., a few miles west of Fort Lauderdale.

Instead of spending several years repairing his credit rating, which he said was marred by two forgotten cell phone bills and identity theft, the 37-year-old real estate agent paid $1,800 to an Internet-based company to bump up his score almost overnight.

-cut-

Lenders are worried, however, that they're taking on greater default risks by unknowingly offering lower interest rates than they otherwise would to applicants who artificially boost their credit scores. Their trade group has complained to the Federal Trade Commission and is talking with the credit reporting bureaus in case the practice becomes more widespread.

Estruch paid $1,800 in December for three credit card spots, and by January, his FICO score jumped from 550 to 715. In mid-March, he closed on his four-bedroom beige stucco house after obtaining a 30-year fixed-rate mortgage from a unit of American Home Mortgage Investment Corp. It carried a 7.5 percent interest rate and required no down payment.

http://news.yahoo.com/s/ap/20070603/ap_on_bi_ge/cash_for_credit

[UpInArms]

5. dollar watch

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

Last trade 82.112 Change -0.186 (-0.23%)

Dollar - Going Nowhere Fast?

http://www.dailyfx.com/story/strategy_pieces/trade_or_fade/Dollar___Going_Nowhere_Fast__1180931597585.html

Last Friday’s close in the EUR/USD printed at 1.3445. This week after US GDP numbers, Personal Income and Spending reports and the ever popular NFP, the EURUSD ended at 1.3440. Talk about lots of heat and little light. The pair remains stuck in the mud as the economic data from both sides of the Atlantic offers few clear clues to the future forcing the currency markets to muddle along.

The NFP report was a perfect case in point as the headline news appeared to be stronger than forecast printing at 157K vs. 132K consensus, but the number prior was revised downward and the overall figures were tainted by yet another massive addition from the birth/death model which contributed 203K to the overall number. Over the past month the BLS model has added 520K to the headline figures greatly challenging the veracity of those estimates. This is particularly true given the observation from PIMCO that “Detailed data in the Bureau of Labor Statistics (BLS) Business Employment Dynamics (BED) release, which comes out with a two-quarter lag, show employment growth of only 19 thousand in 2006Q3, while the nonfarm payroll tally for that quarter was over 450 thousand. More recently, the BLS’s more timely Job Opening and Labor Turnover Survey (JOLTS) for April – last month! – showed job openings rose only 24 thousand, with this series essentially flat since last August. The JOLTS report also showed that new hires in March (this data subset is released with a one month lag) fell 29 thousand.” However, the questions about the NFP’s weren’t the sole issue for the dollar. On Friday the market also learned that personal income growth dropped to -0.1% - its lowest level in 18 months - while personal spending increased by 0.4%. The -0.5% spread hasn’t been that negative since last May and raised concerns that the US consumer is quickly running out of cashflow.

Nevertheless the problematic state of the US economy is unlikely to severely sabotage the greenback, as growth while moderate remains positive. Next week the US calendar is light with only the ISM and Trade data on the docket. The ISM Services survey could surprise the upside given the stringer reading in ISM Manufacturing and could provide a small boost for the dollar, but in general the price action is likely to be driven by other factors than the event risk of the US calendar.– BS

...more...

US Dollar: Strong Payrolls Not Enough to Offset Softer Inflation and Weak Income

http://www.dailyfx.com/story/dailyfx_reports/daily_fundamentals/US_Dollar__Strong_Payrolls_Not_1180734961410.html

Living up to its reputation, the non-farm payrolls report delivered some serious volatility to the foreign exchange markets. An intraday chart of the EUR/USD revealed rollercoaster like price action which illustrates the difficulty in trading the EUR/USD on non-farm payrolls day. Interestingly, the cleanest NFP reaction was actually in USD/JPY, which trended higher throughout the US trading session. Non-farm payrolls were strong, with corporations adding 157k jobs in the month of May. Manufacturing ISM also beat expectations, rising to 55.0 from 54.7. However this was not enough to negate the day’s disappointments. Personal income dropped for the first time since August 2005 while spending continued to rise. The spread between income and consumption is the widest since May 2006, indicating that consumers are digging deeper in their pockets to fund their purchases, which is never healthy. Evidence of housing market weakness continues to pour in with pending home sales dropping 3.2 percent in the month of April. Inflationary indicators were slightly softer with the PCE core deflator and prices paid falling short of expectations. The bottom line is that the Federal Reserve will continue to stand pat for the remainder of the year. Ten year bond yields rose to 4.95 percent, the highest since August 2006. With the stock market hitting another record high, the Fed will not want to risk creating a bubble by lowering interest rates prematurely. Steady rates benefits USD/JPY but has no immediate impact on the EUR/USD since traders of that pair are focused on next week’s ECB rate decision. The economic calendar is relatively light for the US, but the data that is due for release are important. We are expecting factory orders, service sector ISM, and the trade balance. Federal Reserve Chairman Ben Bernanke will also be speaking on the hot topic of housing and the economy.

...more...

[mojavekid]

12. Dollar drops before factory orders

http://www.marketwatch.com/news/story/dollar-broadly-lower-canadian-currency/story.aspx?guid=%7BF21F5EB9%2D557D%2D4110%2D98C5%2DD286F4EAE0C1%7D&siteid=yhoof

A nosedive on China's stock markets overnight had little impact on the yen and global financial markets. The Shanghai Composite Index slumped 8.3% on fears that authorities might take further measures to cool the red-hot stock market. The benchmark has lost more than 15% since last Tuesday's all-time record high of 4,335.96. See Asia markets.
"With limited data in North America, short-term technical readings a bit over-extended and good nearby support, further losses are likely to be limited today," said Marc Chandler, global head of currency strategy at Brown Brothers Harriman.

In early New York trading, the euro was at $1.3482, compared with $1.3441 late Friday. The dollar was quoted at 121.70 yen, compared with 122.05 yen.
The British pound stood at $1.9892 vs. $1.9819. The dollar changed hands at 1.2234 Swiss francs, compared with 1.2298 francs.

more...

[mojavekid]

15. Daily Pfennig 6/4/07: Loonies to Parity?

http://www.kitcocasey.com/displayArticle.php?id=1418

Friday's Jobs Jamboree was quite the "feel good story," eh? According to the Bureau of Labor Statistics (BLS) and the media, the U.S. economy generated another 157,000 new jobs in May, beating the experts' forecast for an increase of 134,000 jobs. April’s gain was revised to 80,000 from 88,000 and March’s increase was trimmed to 175,000 from 177,000. That jump in May looks pretty good, wouldn't you say?

But wait, what's this that I see? The BLS added 203K jobs with their birth/death model... So, without the "ghost jobs," the data would have shown a -46K loss of jobs... But would that have kept consumers spending? No... Would it have kept Consumer Confidence soaring? No... So, let's just create some jobs, and make everything peachy!

My friend, John Mauldin, talked about jobs in his weekly newsletter (www.2000wave.com) last Friday, and came up with this jewel that I thought played well with my theory that job creation isn't what it's made up to be... Here's John talking about job creation not being gangbusters like Fed Head Janet Yellen keeps telling everyone....

"And new research by both Ray Stone of Stone and McCarthy and Sheryl King of Merrill Lynch suggest this is indeed the case. Please refer directly to their research for the exhaustive details, but the bottom line is simple. Detailed data in the Bureau of Labor Statistics (BLS) Business Employment Dynamics (BED) release, which comes out with a two-quarter lag, show employment growth of only 19 thousand in 2006Q3, while the nonfarm payroll tally for that quarter was over 450 thousand. More recently, the BLS's more timely Job Opening and Labor Turnover Survey (JOLTS) for April - last month! - showed job openings rose only 24 thousand, with this series essentially flat since last August. The JOLTS report also showed that new hires in March (this data subset is released with a one-month lag) fell 29 thousand."

more...

[ozymandius]

6. bidness being dealt

9:51
Dow 13,646.82 Down 21.29 (0.16%)
Nasdaq 2,613.39 Down 0.53 (0.02%)
S&P 500 1,535.31 Down 1.03 (0.07%)
10-Yr Bond 4.939% Down 0.017
NYSE Volume 142,156,000
Nasdaq Volume 174,030,000

09:40 am : As expected, stocks open on a downbeat note as a lack of overwhelming evidence to sustain gains that closed several indices at historic highs on Friday invites some early profit taking. There is some Monday-morning M&A activity; but none of today's announcements resemble the blockbuster deals that the market has grown accustomed to of late.

Also, this year's second biggest sell-off (-8.3%) on the Shanghai Composite is giving the bears an added excuse to question U.S. valuations. However, the realization that the Chinese stock market has reached bubble-like levels is more a place for speculators than investors is not having a far-reaching effect, as evidenced by the Nikkei 225 and the Hang Seng Index actually finishing higher and early losses being modest at best. DJ30 -35.12 NASDAQ -3.88 SP500 -2.07 NASDAQ Vol 78 mln NYSE Vol 42 mln

[ozymandius]

7. Toyota Posts 14% U.S. Sales Gain, Outsells Ford Again

June 1 (Bloomberg) -- Toyota Motor Corp., Japan's biggest automaker, boosted U.S. sales 14 percent in May, outselling Ford Motor Co. in its home market for the third time in seven months.

The increase moved Toyota a step closer to passing Ford to become the No. 2 seller of vehicles in the U.S. Ford failed to stem plunging truck sales while cutting back on low-margin car sales to rental companies. General Motors Corp., the biggest U.S. automaker, had a surprise 9.6 percent rise.

-cut-

Gains by every major automaker except Ford lifted total U.S. industry sales 5 percent, to a 2007 high of 1.56 million cars and light trucks, according to data compiled by Bloomberg. Asian automakers boosted their share of the market by 1.2 points, to 41.4 percent.

DaimlerChrysler AG, which last month agreed to sell the U.S. Chrysler unit after nine years of ownership, posted its second consecutive monthly advance. The Chrysler Group was up 4.3 percent, helped by a redesigned Jeep Wrangler and the new Dodge Nitro.

http://www.bloomberg.com/apps/news?pid=20601087&sid=aD2yeqKBwlLc&refer=home

[ozymandius]

10. China stocks plunge 8% amid policy fears

China's stock market fell more than 8 per cent on Monday despite government reassurances, extending last week's big losses after the government increased the trading tax to cool market frenzy.

The benchmark Shanghai Composite Index fell 8.26 per cent to 3,670.4 points after a volatile day in which turnover was only around half the record highs reached last week.

The fall is the largest since February 28, when a Chinese share price plunge was blamed for spooking markets from New York to Mumbai, but appeared to have very little effect on other Asian markets.

-cut-

In an apparent attempt by the government to restore confidence, front-page editorials in official financial newspapers on Monday assured investors the market's medium- and long-term outlook remained positive, and that the tax increase was merely aimed at speculators.

http://news.yahoo.com/s/ft/20070604/bs_ft/fto060420070807558701

[specimenfred1984]

17. Shows how criminal our markets are, suddenly China doesn't matter at all!

and several brokerages came out with upgrades on Wal-Mart stock today, LMFAO!

[ozymandius]

11. Stocks open lower after China stock drop

NEW YORK - Wall Street retreated mildly Monday as U.S. investors assessed a sharp decline in Chinese stock prices and awaited more economic data.

The benchmark Shanghai Composite Index plummeted 8.3 percent, its biggest one-day drop since the Feb. 27 plunge that set off a brief global market selloff. The Chinese government has been trying to cool the country's market boom, causing the stock index to fall 15 percent since a record high last Tuesday.

However, the effect of the stock drop in China was minor compared to the selling wave triggered in February. Major European stock gauges declined a fraction of a percent, while stocks in Australia, South Korea and the Philippines rose to record highs, Tokyo's Nikkei 225 index edged up 0.08 percent and Hong Kong's benchmark index rose 0.6 percent.

http://news.yahoo.com/s/ap/20070604/ap_on_bi_st_ma_re/wall_street

[mojavekid]

13. NYT: The Long Life Span of a Housing Downturn

http://www.nytimes.com/2007/06/02/business/02charts.html?_r=2&ref=business&oref=slogin&oref=slogin

WHAT happens when the American housing industry enters a downturn? It can last a long time.

The Federal Reserve Board this week indicated that it did not expect a quick reversal of the industry’s woes. “Most participants agreed,” said minutes of the Fed’s Open Market Committee meeting in early May, that “the correction of the housing sector was likely to continue to weigh heavily on economic activity through most of this year — somewhat longer than previously expected.”

There are few economic trends harder to measure than home prices, given that every home is unique, and a house in one area can cost far more than an identical one in another location. All such measures show the market has weakened, but some do not yet show a broad national decline.

One measure that does is the Standard & Poor’s/Case-Shiller home price index, which measures house prices by comparing the price of a house with what it sold for before. Its composite of 10 major geographic areas shows that in March prices were, on average, down 1.9 percent from a year earlier, and 3 percent from the peak reached last June.

As the accompanying chart shows, that index also hit a peak in October 1989, and went into a decline that lasted a long time. It was not until January 1998 — 99 months later — that the index climbed above the 1989 peak.

more...

[mojavekid]

14. Bloomberg: Fed Faces Pressure to Raise Rates, Options Show (Update1)

http://www.bloomberg.com/apps/news?pid=20601103&sid=avIYhj2Cj8kE&refer=us

June 4 (Bloomberg) -- In the options market where the savviest investors take apart conventional wisdom, the Federal Reserve is facing growing pressure to consider raising interest rates as soon as December.

Options on Federal Fund futures at the Chicago Board of Trade indicate a 41 percent chance the central bank will lift its target rate for overnight loans between banks to 5.5 percent from the current 5.25 percent, according to data compiled by Bloomberg. A month ago, they showed no expectations for an increase.

While the economy expanded at the slowest pace in more than four years in the first quarter, inflation remains at the top of the Fed's comfort zone, business activity has rebounded, the jobless rate is near the lowest in six years and stock indexes are setting record highs. Just three months ago, options traders speculated the weakest housing market in 16 years would force the central bank to cut interest rates to 4.5 percent by January.

more...

[TrogL]

16. 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

2007-05-04 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
2007-05-31 Thursday, May 31 0.934492 USD
2007-06-01 Friday, June 1 0.943218 USD
2007-06-04 Monday, June 4 0.945269 USD


Current values

Loonie:

Last trade 0.9451 Change +0.0029 (+0.31%)

Settle Time 15:10 Open 0.9458

Previous Close 0.9425 High 0.9467

Low 0.9448


Last trade 0.9451 Change +0.0029 (+0.67%)
Previous Close 0.9425 Open 0.9458
Low 0.9448 High 0.9467


Other combinations:

AS.M07 AUSTRALIAN $/CANADIAN $ Jun (NYBOT) 0.8334 -0.000105
AU.M07 AUSTRALIAN $/US$ Jun (NYBOT) 0.83250 +0.00485
RA.M07 EURO/AUSTRALIAN $ Jun (NYBOT) 1.61535 +0.0113-
HY.M07 CANADIAN $/JAPANESE YEN Jun (NYBOT) 112.455 +0.795
GB.M07 EURO/BRITISH POUND Jun (NYBOT) 0.6780 -0.0008
EP.M07 EURO/CANADIAN $ Jun (NYBOT) 1.4245 -0.00026
EJ.M07 EURO/JAPANESE YEN Jun (NYBOT) 162.550 -1.145
EU.M07 EURO/US$ (LARGE) Jun (NYBOT) 1.34475 -0.00145


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

The June Canadian Dollar was higher overnight as it extends this spring's rally and tested weekly resistance crossing at .9475. 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 .9525 is the next upside target. Closes below the 20-day moving average crossing at .9190 would confirm that a top has been posted. Overnight action sets the stage for a higher opening in early-day session trading.

Analysis

OK. I'm exhausted and it's only Monday. I feel like I'm living in a different universe. Not so long ago people were worried when the loonie left $0.75US. Now it's pushing par and not a whimper in sight (other than me being all paranoid on Friday).

[TrogL]

18. More blather

from http://www.kitcocasey.com/displayArticle.php?id=1418

"Its latest surge was fuelled by Prime Minister Stephen Harper's suggestion the government could live with the strong currency, even if manufacturers can't, and a prediction by a major bank that the loonie is heading toward parity with the U.S. dollar.

"That parity will be reached by the end of the year, Jeff Rubin, CIBC's chief economist, said in the bank's forecast."

It then went on to tell us that... "Between red-hot commodity and energy markets and huge capital inflows associated with an avalanche of merger and acquisition deals, the Canadian currency has plenty of octane left to take a concerted run toward parity against the greenback and hold it into at least the first quarter of 2008," Rubin said.

[TrogL]

19. Same guy, previous days

http://www.kitcocasey.com/displayArticle.php?id=1414

The currencies were range trading again yesterday, so no real big shakes... The Canadian dollar/loonie continues to keep the pressure on the greenback, though... Yesterday, we had Canadian 1st QTR GDP print, and it surprised on the upside! Here's the skinny...

Canada’s economy rallied back in early 2007, growing at a 3.7% annualized pace, the fastest in a year and a half and slightly stronger than expectations for a 3.6% print. Domestic demand growth was solid, running at 3.2%. Any time you see that "strong/solid Domestic Demand," you know you have a potential for inflation and rate hikes... I told a Canadian radio guy the other day that all these rate hikes that I tallied up for the Bank of Canada into next year could be the fire that the loonie needs to get to par with the greenback... But don't think the Canadian gov't won't fight that move every step of the way!

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

I spent yesterday at a love fest with the Canadian dollar/ loonie... And once you start, you just can't stop! Yesterday, Canada’s current account surplus widened in the first quarter to $6.5 billion from an upwardly revised $4.6 billion in Q4 (originally reported as $3.0 billion). The overall improvement largely reflected the merchandise trade balance rising $2.1 billion. This resulted from exports surging $4.5 billion, and guess where this came from? Give up? Energy products!

http://www.kitcocasey.com/displayArticle.php?id=1410

The Bank of Canada (BOC) issued a very hawkish statement yesterday that really lit a fire under the already strong loonie. The BOC really surprised me in that they hadn't been very hawkish, leaving rates unchanged for almost a year now... I think that weak-kneed stance is going to get them in deep water with regards to fighting inflation. With the economy’s above-trend growth rate suggesting the economy was operating in a deeper state of excess demand, producing the risk of upward pressure on inflation... It makes sense to come clean now...

Canada’s core inflation rate rose to 2.5% in April and, while likely to edge down a bit in May, will remain above the bank’s 2% target in 2007. Therefore I now expect the BOC to begin to raise rates again this year, maybe even as soon as next month... I expect rates to rise 75 BPS this year... So... That's 25 BPS in three meetings till the end of the year... And if that doesn't do the trick, papa's going to buy you a bigger inflation stick!

Yes, don't be surprised to see rates continue to go higher in 2008! This is all good for the loonie... And with it trading now around .9340... It's already in uncharted waters. So, there's obviously no problem with it going further in those uncharted waters!

So... The Belle of the Ball in 2006, before the BOC decided that they had raised rates high enough (and I said at that time they were making a mistake), is back in the saddle again...

[Capn Sunshine]

20. well, so much for my devious plan to buy Vancouver real estate

Made so much sense when the exchange rate was .75- and once again, we learn a lesson I regularly find myself teaching others regarding the economy:
you always think the way things are today is how they will stay. The exchange rate with Canada was .75 for so long, it seemed that it would stay that way for our lifetimes.

Now, it looks as if they might inverse.

Well, this will help Real estate in Detroit.

[ozymandius]

21. at the close... the world burns and Wall Street fiddles a happy tune

Dow 13,676.32 Up 8.21 (0.06%)
Nasdaq 2,618.29 Up 4.37 (0.17%)
S&P 500 1,539.18 Up 2.84 (0.18%)
10-Yr Bond 4.929% Down 0.027
NYSE Volume 2,741,478,000
Nasdaq Volume 1,978,948,000

4:20 pm : With the Dow and S&P 500 finishing a holiday-shortened week in record territory, it wasn't surprising to see another sell-off in China create some nervousness in early trading. The market's bullish momentum resurfaced late in the day, though, and once again, the major indices ticked higher, albeit in modest fashion.

Overnight, the Shanghai Composite plunged 8.3%, its biggest one-day decline since the 8.8% drubbing in late February that caused widespread panic. However, the recognition that the China sell-off was a localized affair, and a drop in market rates closer to home, proved to be mitigating factors for investors.

After climbing 10 basis points last week as expectations of a Fed easing continued to fade, the yield on the 10-year note fell four basis points Monday. The rate-sensitive Financials sector, which had been noticeably weak early in the session, managed to pare its loss to a 0.1% decline and provided a spark for the afternoon rebound effort.

Of the five sectors closing higher, Energy paced the way. It gained 1.3% in sympathy with oil prices which jumped 1.6% on top of Friday's 1.7% surge.

Technology was also an influential leader to the upside. Apple (AAPL 121.33 +2.93) was a notable source of sector support (+2.5%) after it confirmed June 29 will be the launch date for its highly anticipated iPhone.

The sector's best performer, though, was Solectron (SLR 3.88 +0.51). Shares soared 15% after rival Flextronics (FLEX 11.54 -0.16) said it will acquire SLR for $3.6 bln. Avaya (AV 16.74 +0.66) surged 4% following reports that TPG and Silver Lake Partners are nearing a deal to buy it for roughly $7.8 bln.

The Industrials sector also contributed to the S&P 500 finishing in record territory for a fourth straight day after Dow component General Electric (GE 37.80 +0.35) was mentioned favorably in Barron's. Consumer Staples closed slightly lower, but an upgrade-induced 3.4% rally in the sector's third most influential constituent -- Wal-Mart (WMT 51.14 +1.67) -- helped the Dow log its 27th record close this year. BTK -0.7% DJ30 +8.21 DJTA -0.7% DJUA -0.2% DOT +0.2% NASDAQ +4.37 NQ100 +0.3% R2K +0.2% SOX +0.1% SP400 +0.5% SP500 +2.84 XOI +1.3% NASDAQ Dec/Adv/Vol 1473/1592/1.89 bln NYSE Dec/Adv/Vol 1405/1886/1.27 bln