STOCK MARKET WATCH, Friday October 12

[ozymandius]

Source: du

STOCK MARKET WATCH, Friday October 12, 2007

COUNTING THE DAYS
DAYS REMAINING IN THE * REGIME 466 LONG DAYS
DAYS SINCE DEMOCRACY DIED (12/12/00) 2471 DAYS
WHERE'S OSAMA BIN-LADEN? 2183 DAYS
DAYS SINCE ENRON COLLAPSE = 2144
Number of Enron Execs in handcuffs = 19
ENRON EXECS CONVICTED = 10
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 October 11, 2007

Dow... 14,015.12 -63.57 (-0.45%)
Nasdaq... 2,772.20 -39.41 (-1.40%)
S&P 500... 1,554.41 -8.06 (-0.52%)
Gold future... 756.70 +10.70 (+1.43%)
30-Year Bond 4.88% +0.02 (+0.41%)
10-Yr Bond... 4.66% +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

---

more Radical Fringe here


Read more: du

[ozymandius]

1. Market WrapUp

How High Can Shanghai Red-Chips Fly? - Chinese Red-Chips
BY GARY DORSCH

“There is a bubble growing. Investors should be concerned about the risks,” warned Cheng Siwei, the vice-chairman of the National People’s Congress in an interview with the Financial Times on January 31st. “But in a bull market, people will invest relatively irrationally. Every investor thinks they can win. But many will end up losing. But that is their risk and their choice,” warned Cheng.

Cheng’s attempt to talk down the high flying Shanghai red-chip market in late January by planting fear and doubt into traders’ minds suggested that Beijing would take official action, to cool speculation in the booming market after reaching the 3,000 level, and tripling from 1,060 a year earlier. In a knee-jerk reaction to Cheng’s remarks, the Shanghai red-chip index tumbled 500-points to the 2,500 level before it stabilized, and would then begin one of the greatest bull markets in history.

Last night, the Shanghai red-chip market hit a new all-time high of 5,913, up 118% so far this year, and up 55% from just three months ago. Shanghai red-chips have doubled since Cheng tried to put a lid on the market. Shanghai is arguably one of the greatest bull markets in history, and by most accounts, appears to be driven by China’s booming exports and trade surpluses, which are hauling in large amounts of money from overseas into the world’s fourth largest economy.

-cut-

The People's Bank of China (PBoC) prints massive amounts of yuan each day in exchange for the foreign currency flowing into the country. As a result, China’s M2 supply is 18% higher from a year ago. China’s bulging trade surplus has swelled the country’s foreign exchange reserves to $1.4 trillion, although a “small sum of hot money also sneaks into the financial system through various means,” the official Shanghai Securities News reported on Sept 30th.

-cut-

Once the yield on China’s 5-year T-note peaked at 3.95% in July, the Shanghai red-chip market became unleashed and soared 54% over the next three months. The powerful rise of Shanghai Red-chips was in defiance of predictions by former Federal Reserve chief “Easy” Al Greenspan, who said on May 23rd that the boom in Chinese stocks could not last soon after Shanghai red-chip index approached 4,000. “It is clearly unsustainable. There’s going to be a dramatic contraction at some point,” Greenspan declared. But three months later, Shanghai rallied to 5,913.

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

[ozymandius]

2. Today's Reports

8:30 AM Retail Sales Sep
Briefing Forecast 0.5%
Market Expects 0.2%
Prior 0.3%

8:30 AM Retail Sales ex-auto Sep
Briefing Forecast 0.6%
Market Expects 0.3%
Prior -0.4%

8:30 AM PPI Sep
Briefing Forecast 0.6%
Market Expects 0.5%
Prior -1.4%

8:30 AM Core PPI Sep
Briefing Forecast 0.2%
Market Expects 0.2%
Prior 0.2%

10:00 AM Business Inventories Aug
Briefing Forecast 0.2%
Market Expects 0.3%
Prior 0.5%

10:00 AM Mich Sentiment-Prel. Oct
Briefing Forecast 83.0
Market Expects 84.0
Prior 83.4

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

[UpInArms]

8. a boatload of reports showing "no inflation (except in energy)

01. U.S. core PPI up 2.0% in past year
8:30 AM ET, Oct 12, 2007 - 4 minutes ago

02. U.S. Sept. PPI up 4.4% in past year
8:30 AM ET, Oct 12, 2007 - 4 minutes ago

03. U.S. Sept. intermediate PPI up 0.4%
8:30 AM ET, Oct 12, 2007 - 4 minutes ago

04. U.S. Sept. crude goods PPI up 0.1%
8:30 AM ET, Oct 12, 2007 - 4 minutes ago

05. U.S. Sept. PPI energy prices up 4.1%
8:30 AM ET, Oct 12, 2007 - 4 minutes ago

06. U.S. Sept. headline PPI biggest gain since Feb.
8:30 AM ET, Oct 12, 2007 - 4 minutes ago

07. U.S. Sept. core PPI up 0.1% vs. 0.2% expected
8:30 AM ET, Oct 12, 2007 - 4 minutes ago

08. U.S. Sept. PPI up 1.1% vs. rise 0.4% expected
8:30 AM ET, Oct 12, 2007 - 4 minutes ago

09. U.S Sept. general merchandise store sales fall 0.1%
8:30 AM ET, Oct 12, 2007 - 4 minutes ago

10. U.S. retail sales up 5% in past year
8:30 AM ET, Oct 12, 2007 - 4 minutes ago

11. U.S. Sept. retail gasoline sales up 2%
8:30 AM ET, Oct 12, 2007 - 4 minutes ago

12. U.S. Sept. retail auto sales up 1.2%
8:30 AM ET, Oct 12, 2007 - 4 minutes ago

13. U.S. Sept. retail sales ex-autos up 0.4% as expected
8:30 AM ET, Oct 12, 2007 - 4 minutes ago

14. U.S. Sept. retail sales up 0.6% vs. 0.3% expected
8:30 AM ET, Oct 12, 2007 - 4 minutes ago

[Roland99]

37. "Core" shows no inflation. But where are people spending money? NON-Core!! (which is the real core)

Retail sales surprisingly strong, growing 0.6%
September gains driven by auto sales and higher gas prices
http://www.marketwatch.com/news/story/us-retail-sales-surprisingly-strong/story.aspx?guid=%7BFD42B14E%2D3751%2D4593%2DB1EA%2DC2094C86E81E%7D

U.S. retail sales increased more than expected in September, rising 0.6% on strong sales of gasoline, automobiles and food, the Commerce Department reported Friday.

Excluding vehicles, monthly sales increased a seasonally adjusted 0.4%, as expected. Excluding both vehicles and gasoline, sales increased 0.2%, the government said. Read the full government report.

"The increase in car and truck sales will add to growth, but the rest of retail sales seems to have been flat on the month in real terms," after adjusting for inflation, said Robert Brusca, chief economist for FAO Economics.

Sales were weak at the mall but proved healthier for consumer durable goods, food and drugs.

So, drops in prices from the likes of GM and Ford to spur lagging sales plus the usual new-year model and previous-year model blowouts means things are great? :wtf:

Food and energy prices are increasing at near double-digit rates and that's the real core of the typical family's expenses beyond basic shelter but let's not worry about that....

[UpInArms]

34. US early Oct consumer sentiment edges lower-U.Mich @ 82 (below concensus of 84)

http://www.reuters.com/article/bondsNews/idUSN1235863220071012

NEW YORK, Oct 12 (Reuters) - U.S. consumer sentiment fell slightly in early October to its lowest in more than a year as uncertainty grew about the extent of the housing slump, a survey released on Friday showed.

The Reuters/University of Michigan Surveys of Consumers said its early October figure on consumer sentiment was 82.0, below the median forecast of 84.0 and the final September reading of 83.4, for the lowest reading since August 2006.

One in three households reported in early October that their personal financial situation had worsened, a view that has remained largely unchanged during the past six months.

<snip>

The survey's gauge of current consumer conditions rose to 98.2 in early October from 97.9 in September but it was almost 10 points lower than the final reading for October 2006.

Consumer expectations fell to 71.6 from 74.1 in September, about 13 points below the final reading for October 2006.

...more...

[UpInArms]

35. U.S. Aug. inventories up 0.1%; sales fall 0.4%

03. U.S. Aug. retail inventories rise 0.5%
10:00 AM ET, Oct 12, 2007 - 15 minutes ago

04. U.S. Aug. inventories up 0.1%; sales fall 0.4%
10:00 AM ET, Oct 12, 2007 - 15 minutes ago

05. U.S. Aug. inventory-sales ratio rises to 1.27 vs. 1.26
10:00 AM ET, Oct 12, 2007 - 15 minutes ago

[ozymandius]

3. Oil prices dip, hold above $83

BANGKOK, Thailand - Oil prices dipped Friday in Asia after an unexpected decline in U.S. crude oil inventories pushed crude futures back above $83 a barrel.

Prices were also supported overnight by an International Energy Agency report concluding oil inventories held by the world's largest industrialized countries have fallen below a five-year average, and by concerns that clashes between Turkish forces and Kurdish rebels could affect Iraqi oil supplies.

-cut-

The weekly inventory report from the U.S. Energy Department's Energy Information Administration said crude supplies fell 1.7 million barrels in the week ended Oct. 5. Analysts surveyed by Dow Jones Newswires on average had expected oil inventories to rise 1 million barrels.

-cut-

Inventories of gasoline rose 1.7 million barrels last week, countering analyst expectations that they would fall 300,000 barrels. Distillate inventories, which include heating oil and diesel fuel, fell 600,000 barrels, in line with expectations.

Despite the increases, supplies of gasoline and heating oil remain low despite last week's increase, analysts said.

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

[UpInArms]

39. Oil ends at front-month record high; broke $84 earlier

http://www.marketwatch.com/news/story/crude-futures-finish-record-8369/story.aspx?guid=%7B862F8682%2DEE4E%2D442C%2DAB0B%2D26A58E36E853%7D&siteid=bnb

SAN FRANCISCO (MarketWatch) -- Crude-oil futures finished at a new record high Friday, after earlier touching a new intraday trading record high, as supply concerns and bullish U.S. economic data boosted demand. November crude added 61 cents to settle at $83.69 a barrel, surpassing the old front-month closing high of $83.32 set on Sept. 20. Earlier Friday, oil also surpassed the old intraday high also set on that day, rising as high as $84.05.

[ozymandius]

4. Stocks fall back on inflation worries

NEW YORK - Stocks retreated from lofty heights Thursday after a European Central Bank official pointed to rising price risks and a major Wall Street bank lowered its sales expectations for Chinese Internet company Baidu.com.

The news caused traders to take profits, particularly in the technology sector, from big gains made earlier in the session. The Dow Jones industrial average and the Standard & Poor's 500 index fell from record levels that had been reached after Wal-Mart Stores Inc. lifted its profit forecast.

The market turned in the afternoon after ECB governing council member Axel Weber said rising inflation in the euro zone may require additional policy action, according to Dow Jones Newswires. The comments appeared to raise concerns on Wall Street that European growth could slow and that in the United States, inflation could prevent the Federal Reserve from making another rate cut.

-cut-

Spiking gold and oil prices heightened some investors' worries about inflation. Light, sweet crude rose $1.78 to $83.08 a barrel on the New York Mercantile Exchange after the government reported an unexpected drop in crude oil inventories and a surprise increase in refinery activity.

At this point, the market is split on whether the Fed will lower rates.

http://news.yahoo.com/s/ap/20071011/ap_on_bi_st_ma_re/wall_street

[ozymandius]

5. CEO says Wal-Mart needs low-cost imports

ROGERS, Ark. - Chief Executive Lee Scott defended Wal-Mart's reliance on low-cost imports Thursday against what he called emerging economic nationalism. Scott told a retailing conference he would like to stock more American-made goods but that Wal-Mart's business model is based on offering the lowest price for consumers who cannot afford to spend more.

Scott was answering a question from an audience member who wanted to know if Wal-Mart would buy more U.S.-made products to reduce the greenhouse gas emissions of global transport and to bring manufacturing jobs back from places like China.

"Right now, the way it works, our model is `We sell for less.' If we put products out there and we have to sell them for more because our competitors are sourcing more efficiently and more effectively for the same quality of product, our model doesn't work. We cannot be at a price disadvantage," Scott said.

-cut-

Wal-Mart Stores Inc., which imported $18 billion in goods from China in 2004, has been a lightening rod for critics who say overseas buying by retailers has cost U.S. manufacturing jobs. Wal-Mart has said it finds the lowest prices for its customers and creates jobs at its stores.

Scott said Wal-Mart is willing to pay as much as 5 percent to 10 percent more than a foreign-source price for some products made in America, but that many goods will never be made here again because the economy has become global.

http://news.yahoo.com/s/ap/20071012/ap_on_bi_ge/wal_mart_imports

[Rydz777]

7. Wal-Mart is the most hypocritical entity on the face of the earth. nt

[UpInArms]

10. US retail giant Wal-Mart eyeing Malaysia: official

http://news.yahoo.com/s/afp/20071012/bs_afp/malaysiausretailwalmart

KUALA LUMPUR (AFP) - The US retail giant Wal-Mart is keen to open stores in Malaysia, a junior minister said Friday, amid a government drive to lure investment and boost economic growth.

"Wal-Mart has shown interest," deputy trade minister S. Veerasingam told AFP, but he declined to elaborate further amid reports the company had formally applied to enter the Malaysian market.

He added that German company Metro, one of Europe's largest retailers, had applied for permission to set up operations.

Another official said the entry of foreign retail giants would create jobs. "It will not only provide more jobs locally but will make the retail market more competitive besides injecting foreign investments in the country," consumer affairs minister Shafie Apdal told the New Straits Times.

He said foreign retailers were keen to invest in Malaysia due to the strong purchasing power of local consumers.

Malaysia has restricted the entry and expansion of supermarkets over recent years to protect smaller local businesses.

...more...

[ozymandius]

6. Good morning Marketeers.

:donut: :donut: :donut:

I must dash out early again. More young'uns require teaching. I'll check back this afternoon.

Have fun!

Ozy :hi:

[AnneD]

24. Morning Marketeers....

:donut: and lurkers. It will be a day full of appointments and boring meetings for me. I'll post a few nuggets. Theworst meeting....hands down the district Nurses' meeting. The one I can't wait to go to .....the Union Steward meeting at the Cadillac Bar after work.:toast:

Happy hunting and watch out for the bears.

[UpInArms]

9. dollar watch

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

Last trade 78.276 Change +0.138 (+0.18%)

Paulson says strong dollar in U.S. interest

http://news.yahoo.com/s/nm/20071011/bs_nm/usa_economy_paulson_dollar_dc

WASHINGTON (Reuters) - Treasury Secretary Henry Paulson said on Thursday he backs a strong dollar, reaffirming long-standing policy and addressing concerns in Europe that a soaring euro may undermine economies there.

"A strong dollar is in our nation's interest and the currency values should be set in a competitive marketplace based upon underlying economic fundamentals," Paulson told Reuters as he left a meeting with President George W. Bush.

The comment came ahead of an October 19 meeting of finance ministers and central bankers of the Group of Seven major industrial nations, where currencies will be a priority topic.

The dollar hit a lifetime low against the euro last week and has also recently plumbed record lows against a basket of major currencies (.DXY).

European policy-makers have worried a stronger euro will dampen growth in Europe by making its exports more expensive, and some had urged Washington to reaffirm its long-standing view on the benefits of a strong dollar.

...more...

the commentary site is down this morning - so we had to make do with the WH talking points :shrug:

[Ghost Dog]

29. Dollar Heads for Weekly Drop Against Euro on Rate Differential

http://www.bloomberg.com/apps/news?pid=20601014&sid=aVdVaNnW7kDc&refer=funds

Oct. 12 (Bloomberg) -- The dollar headed for a weekly decline against the euro on speculation the Federal Reserve will cut interest rates to bolster economic growth, while the European Central Bank stays on hold, reducing the attractiveness of U.S. fixed-income assets.

The dollar fell to within a cent of an all-time low against the single currency before a U.S. retail sales report that may show the housing slowdown is weighing on consumer demand. The euro also headed for a fifth week of gains against the yen after ECB policy maker Axel Weber said late yesterday borrowing costs may need to be raised to a ``restrictive'' level to combat inflation.

``The U.S. economy is weakening and the Fed is going to cut rates by the end of October, and we assume another rate cut by the end of the year,'' said Hans Guenter Redeker, head of currency strategy at BNP Paribas SA in London and the most accurate foreign-exchange forecaster in the third quarter in a Bloomberg survey. ``Rate differentials are still driving the market.''

The dollar traded at $1.4176 per euro at 11:22 a.m. in London from $1.4196 in New York yesterday, a decline of 0.3 percent this week. The U.S. currency fell to $1.4283 on Oct. 1, the lowest since the European currency's debut in January 1999. It will fall to $1.46 by the end of the year, said Redeker.

There may be an ``additional need'' to raise interest rates, given the ``expected acceleration in euro-region inflation,'' Weber, who also heads Germany's Bundesbank, said in the text of a speech in Munich.

/...

[Ghost Dog]

30. Dollar Rises Versus Yen After Retail Sales Exceed Forecasts

http://www.bloomberg.com/apps/news?pid=20601083&sid=aYwkwz9z8AOY&refer=currency

Oct. 12 (Bloomberg) -- The dollar rose for a third straight day against the yen after a government report showed growth in retail sales exceeded forecasts, reducing concern the U.S. economy will head into a recession.

The yen declined against 15 of 16 most-actively traded currencies as the data encouraged buying higher-yielding assets funded by money borrowed in Japan.

``Retail sales data is signaling U.S. growth is holding up,'' said Alan Ruskin, head of international currency strategy in North America at RBS Greenwich Capital Markets Inc. in Greenwich, Connecticut. ``This is the piece of data that makes people feel more comfortable to put on risky trades.''

The dollar rose 0.2 percent to 117.56 yen at 9:33 a.m. in New York, from 117.28 yesterday. The U.S. currency gained 0.2 percent to $1.4175 per euro, from $1.4196. The yen lost 0.1 percent to 166.66 per euro. The European currency set a record high of $1.4283 on Oct. 1 and an all-time high of 168.99 yen on July 23.

For the week, the dollar has declined 0.3 percent against the euro. The yen has dropped 0.5 percent against the U.S. currency and 0.8 percent versus the euro over the same period. Investors borrow at Japan's 0.5 percent interest rate to buy riskier assets elsewhere, in a practice known as the carry trade. The Bank of Japan kept borrowing costs unchanged yesterday.

[Ghost Dog]

31. Euro Reversal in the Making?

http://www.dailyfx.com/story/dailyfx_reports/daily_technicals/~Euro_Reversal_in_the_Making__1192192271828.html

• Euro Reversal in the Making?
• Japanese Yen Weakeness Persists
• British Pound Turns Negative
• Swiss Franc Range Narrows
• Canadian Dollar Bear Flags Galore
• Australian Dollar Price Look Tired
• New Zealand Dollar Uptrend Remains



/charts, brief analysis...

[UpInArms]

11. Economy slowing but fundamentals strong: Kimmitt (brother to "change the channel" Kimmitt)

http://news.yahoo.com/s/nm/20071012/bs_nm/usa_kimmitt_dc

BRUSSELS (Reuters) - The U.S. economy is slowing but its fundamentals are strong, Deputy Treasury Secretary Robert Kimmitt said on Friday.

Kimmitt, speaking to reporters, also reiterated the U.S. Treasury's position that foreign exchange rates should be set by the market, based on economic fundamentals.

On Thursday, Treasury Secretary Henry Paulson told Reuters he backed a strong dollar and that currency rates should be set by markets.

here's his brother:

The Marines and coalition officials say they doubt many civilians have been killed in Fallujah and promise that their rules of engagement limit civilian casualties. "My solution is change the channel," Brig. Gen. Mark Kimmitt said earlier this week, after being asked about TV images of dead Iraqi civilians.

"The stations that are showing Americans intentionally killing women and children are not legitimate news sources, that is propaganda, and that is lies."

[UpInArms]

14. Treasury's Kimmitt slams investment protectionism

http://www.reuters.com/article/bondsNews/idUSL1249445920071012?sp=true

BRUSSELS, Oct 12 (Reuters) - Attempts to fend off foreign investment are as big a problem as trade protectionism, U.S. Deputy Treasury Secretary Robert Kimmitt said on Friday.

The free flow of capital across national borders is essential, Kimmitt told reporters in Brussels.

"If you take a look at the world economy, it operates best ... on the free flow of capital across borders based on open investment policies," Kimmitt said.

Moves by state-backed funds from China, Russia and the Middle East to snap up companies in the United States and Europe have raised concerns among politicians in America and the EU.

"I think we need to spend more time talking about investment and the free flow of capital across borders, not least because investment flows swamp trade flows," Kimmitt added.

"Rising investment protectionism is as much a challenge to the world economy as is trade protectionism," he said.

...more...

[antigop]

27. So do we get free flow of labor too? Can American workers go over to India for jobs? China? n/t

[Odin2005]

15. When they use the phraise "but fundamentally strong" It's obvious they're lying.

Herbert Hoover used exactly the same "economy is fundamentally strong" talking points. It's all about trying to fool people by appealing to a notion of some non-existent "essential" thing independent of actual economic numbers.

[UpInArms]

12. Countrywide Sept. mortgage fundings drop

http://news.yahoo.com/s/ap/20071012/ap_on_bi_ge/countrywide_mortgages

NEW YORK - Countrywide Financial Corp. said Thursday its mortgage fundings for September fell 44 percent from the same period a year ago, and the mortgage lender is now facing a potential federal investigation over the timing of stock sales by its chief executive.

Countrywide, the nation's largest mortgage lender, said total mortgage fundings last month fell to $21.2 billion from $38.1 billion a year ago.

The steep decline in volume comes as the Calabasas, Calif.-based company makes a shift to originate traditional, conforming loans instead of more risky, nontraditional loans like subprime mortgages. Countrywide previously packaged the majority of its loans as securities and sold them to investors in the secondary market.

During the past few months, rising delinquency and default rates have caused demand for these securities to all but dry up, especially subprime loans. The collapse of the secondary market, coupled with the deteriorating housing market, has led to a steep drop in mortgage origination volume nationwide.

Housing foreclosures nearly doubled last month, according to real estate information firm RealtyTrac Inc. A total of 223,538 foreclosure filings were reported in September, up from 112,210 during September 2006.

...more...

[UpInArms]

13. RPT-Sovereign wealth funds to quadruple by 2011-M.Lynch

http://www.reuters.com/article/bondsNews/idUSL1253625620071012?sp=true

LONDON, Oct 12 (Reuters) - The size of government-owned investment vehicles is expected to quadruple to $7.9 trillion by 2011, Merrill Lynch said in a report issued on Friday that highlighted the growth of sovereign wealth funds.

State-owned fund vehicles are not new. Kuwait, the United Arab Emirates and even Alaska got into the game more than 30 years ago, setting up rainy day funds for times of low oil prices. But huge export revenues and lofty energy prices have since swelled official savings to unprecedented levels.

"Under reasonable assumptions we think they (SWFs) will grow by $1.2 trillion a year to reach $7.9 trillion by 2011, from $1.9 trillion currently," economists at Merrill said.

"We expect the share of SWFs in riskier global assets to double or triple by 2011, with net inflows of $3.1-$6 trillion," it said in a report titled, "The overflowing bathtub, the running tap and SWFs."

This should support riskier assets relative to safer assets and put upward pressure on bond yields but it is unclear whether pressure on riskier assets would rise per se, Merrill said.

In recent years, some of the world's biggest economies, notably China and oil-exporting nations such as Russia and those in the Middle East, have built up massive currency coffers.

...more...

[UpInArms]

38. Sovereign wealth funds to weigh on dollar -Merrill

http://www.reuters.com/article/bondsNews/idUSN1222563020071012?sp=true

NEW YORK, Oct 12 (Reuters) - State-sponsored investment funds, the offspring of rising oil prices and surging central bank reserves, will likely grow to $7.9 trillion by 2011 and weigh on the U.S. dollar, Merrill Lynch said in a report released on Friday.

These sovereign wealth funds, as they are called in investment circles, will have a ripple effect on global financial markets as they shift from relatively safe investments such as U.S. Treasuries and pour up to $6 trillion into stocks and non-government debt.

<snip>

Total reserves have been growing at an annual rate of $600 billion a year over the last five years, the report said. Last year alone, reserves grew by $941 billion, with China the main contributor followed by Russia, Brazil and India.

Meanwhile, the long-term decline in the dollar, the stability of the global economy and impact of aging populations have all fueled the need for higher returns on official reserves.

Merrill Lynch estimates that as central bank reserve accumulation slowly tapers off, sovereign wealth fund assets should grow from between $2 trillion and $5 trillion to $7.9 trillion by 2011.

Two of the biggest effects of this wave of money will be an increase in higher-risk investments into equities and non-government bonds, and a further decline in the U.S. dollar.

...more...

[Ghost Dog]

16. Asian Stocks Fall on Speculation China to Raise Interest Rates

http://www.bloomberg.com/apps/news?pid=20601080&sid=axIUS.CZq0NE&refer=asia

Oct. 12 (Bloomberg) -- Asian stocks fell on speculation China will raise interest rates as soon as today to cool the economy, and after Sony Corp.'s mobile-phone unit reported its first profit decline in two years.

Sony had the biggest drop in more than a month after its venture with Sweden's Ericsson AB said third-quarter profit fell 10 percent. Key indexes in China and Hong Kong declined from records as China reported a $23.9 billion trade surplus for September that may fan inflation, forcing the central bank to raise borrowing costs.

``There's this fear that any measure to slow the growth in China will affect the rest of the region,'' said Ivan Tham, who helps oversee $4 billion at City of London Investment Management Co. in Singapore.

...

The Morgan Stanley Capital International Asia Pacific Index lost 1 percent to 168.17 at 6:31 p.m. in Tokyo, the most since Sept. 18. Nine of the measure's 10 industry groups fell. China's CSI 300 Index dropped 0.4 percent, while Hong Kong's Hang Seng Index slumped 1 percent from a high yesterday.

Japan's Nikkei 225 Stock Average lost 0.7 percent, and South Korea's Kospi index dropped 1.6 percent. Most of Asia's key indexes fell from yesterday's records. Bourses in Indonesia and the Philippines were closed today for holidays.

/...

[Ghost Dog]

17. China's Stock Index Falls Most in a Month

http://www.bloomberg.com/apps/news?pid=20601089&sid=auY9bXPAa.I0&refer=china

Oct. 12 (Bloomberg) -- China's stocks fell the most in a month on speculation the central bank will raise borrowing costs for the sixth time this year to curb inflation and cool economic growth. China Vanke Co. led the drop among developers and lenders.

``Rates are likely to rise again because of a higher inflation rate,'' said Yao Maogong, head trader at Shanghai Securities Co. in the city. ``Economic data to be released next week may also show growth isn't slowing.''

China, the world's fastest-growing major economy, reported a trade surplus that rose 56 percent in September to $23.9 billion, the country's customs bureau said today, adding pressure for higher borrowing costs to help prevent inflows of export cash from stoking inflation. The surplus beat the $21.6 billion median estimate of economists in a Bloomberg News survey.

The CSI 300 Index, which tracks yuan-denominated A shares listed on China's two exchanges, fell 150.20, or 2.6 percent, to 5,609.88 as of 1:50 p.m. local time. The decline was the biggest since Sept. 11.

/...

[Ghost Dog]

18. HK shares fall after record rally, PetroChina surges

http://yahoo.reuters.com/news/articlehybrid.aspx?storyID=urn:newsml:reuters.com:20071012:MTFH34534_2007-10-12_04-47-02_HKG368497&type=comktNews&rpc=44

HONG KONG, Oct 12 (Reuters) - Hong Kong stocks fell 2.1 percent on massive volume on Friday as Wall Street losses prompted investors to cash in a day after the market rallied to records, with China Mobile (0941.HK: Quote, Profile , Research) leading blue chips lower.

Caution before next week's 17th Communist Party Congress also led investors to book profits. China plays dropped 2.7 percent as China Shenhua (1088.HK: Quote, Profile , Research) and other coal issues slid in active trade following their double-digit advances a day earlier.

But a record high in heavyweight PetroChina Co Ltd (0857.HK: Quote, Profile , Research) cushioned their losses as investors believe Warren Buffett's Hathaway Inc (BRKa.N: Quote, Profile , Research)(BRKb.N: Quote, Profile , Research) has now sold his entire stake in China's top oil producer, effectively removing an overhang on the stock.

Nickel minerXinjiang Xinxin Mining Industry Co Ltd (3833.HK: Quote, Profile , Research) settled the morning at HK$13.96, more than double its HK$6.50 IPO price.

"It's excellent," said Castor Pang, strategist at SHK Financial. "Investors are still optimistic about resource prices, especially metal."

The benchmark Hang Seng Index <.HSI> had fallen 618.21 points to 28,514.81 by lunch on mainboard turnover of HK$121.9 billion (US$15.5 billion), putting it on track to trump the record turnover seen last week.

/...

[Ghost Dog]

19. Taiwan stocks close down over 2 pct as techs drop

http://yahoo.reuters.com/news/articlehybrid.aspx?storyID=urn:newsml:reuters.com:20071012:MTFH35639_2007-10-12_06-09-35_TP203851&type=comktNews&rpc=44

TAIPEI, Oct 12 (Reuters) - Taiwan stocks ended down 2.07 percent on Friday at their lowest in nearly two weeks, as tech shares including blue-chips TSMC (2330.TW: Quote, Profile , Research) and UMC (2303.TW: Quote, Profile , Research) fell in line with losses on Wall Street and in China.

The main TAIEX share index <.TWII> ended 201.20 points lower at 9,496.47, sliding from a two-month closing high hit on Monday, with the electronics subindex <.TELI> down 2.33 percent.

A total of T$153.3 billion ($4.7 billion) in shares changed hands, lower than T$157 billion the previous day.

"The market was pulled down deeper after Chinese stocks dropped, and it's a sign that the overheated mainland bubble could be bursting," said Beyond Asset Management managing director Michael On, who manages $60 million.

/...

[Ghost Dog]

20. Indian shares hit record, then drop

http://yahoo.reuters.com/news/articlehybrid.aspx?storyID=urn:newsml:reuters.com:20071012:MTFH36177_2007-10-12_06-39-32_BOM230122&type=comktNews&rpc=44

MUMBAI, Oct 12 (Reuters) - Indian shares stretched to their 16th record high in 17 sessions in choppy trade on Friday, powered by gains in index heavyweight Reliance Industries (RELI.BO: Quote, Profile , Research), but there was wariness after the recent rapid rise.

The market fell almost 1 percent in early trade, then rebounded to set a record high after the prime minister said he hoped to avoid early elections and complete a full five-year term, before falling again.

Top private firm Reliance Industries was up 3 percent at 2,709 rupees as Chairman Mukesh Ambani began addressing a shareholders' meeting where he is expected to talk about plans for its refining, exploration and production, and retail businesses.

The share price of Reliance, whose market value is nearing $100 billion, has more than doubled this year.

At 11:05 a.m. (0535 GMT), the benchmark 30-share BSE index <.BSESN> was down 0.57 percent, or 107.42 points, at 18,706.65, after hitting an all-time high of 18,844.62 and with 21 components losing. At its peak, the index had gained more than 20 percent in the 16 sessions since U.S. interest rates were cut on Sept. 18, and had risen by more than third since Aug. 21, when it ended at a three-month closing low.

/...

[Ghost Dog]

21. Nikkei down 0.7 pct as technology shares drag

http://yahoo.reuters.com/news/articlehybrid.aspx?storyID=urn:newsml:reuters.com:20071012:MTFH35670_2007-10-12_06-11-47_TKB002891&type=comktNews&rpc=44

TOKYO, Oct 12 (Reuters) - The Nikkei slid 0.7 percent on Friday, dragged lower by high-tech stocks such as Tokyo Electron (8035.T: Quote, NEWS , Research) on a brokerage downgrade and after China's Baidu.com Inc (BIDU.O: Quote, Profile , Research) tumbled on the tech-heavy U.S. Nasdaq.

Shares of Fast Retailing (9983.T: Quote, NEWS , Research) dropped after its profit fell more than expected, while Sony Corp (6758.T: Quote, NEWS , Research) lost ground after its mobile phone joint venture with Ericsson (ERICb.ST: Quote, Profile , Research) posted a year-on-year fall in pretax profit for July-September.

Banks such as Mizuho Financial Group Inc (8411.T: Quote, NEWS , Research) also weighed on the market after Lehman Brothers lowered its target prices for these issues.

The benchmark Nikkei <.N225> was down 127.81 points to finish at 17,331.17. On Thursday, it had the highest finish since July 26 at 17,458.98.

The TOPIX index <.TOPX> shed 1.1 percent or 18.04 points to end at 1,659.48. It logged its highest close since Aug. 9 at 1,677.52 the previous session.

/...

[Ghost Dog]

25. Europe gains amid banking bid talk

http://mwprices.ft.com/custom/ft2-com/html-story.asp?pulse=true&siteid=ft&dist=ft&guid=%7B7b6d90a5%2D87bf%2D41bd%2Da3df%2D1ba2544a795e%7D

European stocks continued their rally on Friday led by gains among telecoms stocks and bid speculation in the banking sector. In mid-morning trade the FTSE Eurofirst 300 rose 0.7 per cent to 1587.55 while Germany’s Xetra Dax gained 0.5 per cent at 7991.81 but in Paris, the CAC 40 lost 1.2 per cent at 5794.31. Rumours continued to swirl around Germany’s Commerzbank which rose by 2.8 per cent to €31.46 on speculation of a possible deal with Italian rival Intesa SanPaolo, off 1.3 per cent at 5.445, following Thursday’s talk of a bid by Societe Generale, down 2.5 per cent at €120.61. Spanish telecommunications giant Telefonica rose 5.0 per cent to €21.70 extending Thursday’s gains after Citigroup upgraded its recommendation from “hold” to “buy” and raised its target price from €19 to €26.50. Meanwhile, EADS gained back ground it lost earlier this week, rising 3.2 per cent to €23.90 after JP Morgan raised its target price on the Frech aerospace group from €26 to €28, saying the recent pick-up in orders is likely to prompt a change in sentiment. Two days ago, Airbus announced a total of 141 orders for September, higher than the total of 132 booked by rival Boeing. noted JP Morgan. UCB fell 3.5 per cent to €39.26 after Deutsche Bank downgraded the Belgian pharmaceutical company from ”buy” to “hold” on concerns European regulators may not recommend approval of the company’s key new drug Cimzia, a treatment for Crohn’s disease.

[UpInArms]

22. 9:42 EST and all is sanguine

Dow 14,039.10 23.98 (0.17%)
Nasdaq 2,785.30 13.10 (0.47%)
S&P 500 1,556.89 2.48 (0.16%)
10-Yr Bond 4.693% 0.034

NYSE Volume 129,798,343.75
Nasdaq Volume 189,449,593.75

09:25 am : S&P futures vs. fair value: +1.0. Nasdaq futures vs. fair value: +11.5.

09:00 am : S&P futures vs fair value: +1.7. Nasdaq futures vs fair value: +10.2. Futures continue to point to a positive opening following the positive economic data.

08:33 am : S&P futures vs fair value: +0.6. Nasdaq futures vs fair value: +5.5. Futures get a boost after a few economic releases. Just reported, retail sales for September rose 0.6% and core PPI rose 0.1%. Briefing.com expected retail sales to rise 0.5% and core PPI to rise 0.2%.

08:15 am : S&P futures vs fair value: +1.3. Nasdaq futures vs fair value: +11.5.

08:00 am : S&P futures vs fair value: -3.2. Nasdaq futures vs fair value: -0.5. Futures are pointing to a slightly lower open. General Electric (GE) reported earnings that were in-line with expectations. There is also news that Oracle (ORCL) has made an offer to acquire BEA Systems (BEAS). The NY Times reported that there is a big shake up going on at Citigroup (C).

[UpInArms]

23. Fed pumping action: Fed does 3-day repo to add temporary rserves

http://www.reuters.com/article/bondsNews/idUSN1222485020071012

NEW YORK, Oct 12 (Reuters) - The U.S. Federal Reserve said on Friday it added temporary reserves to the banking system through 3-day repurchase agreements.

Federal funds last traded in the market at 4.813 percent, above the Fed's target rate of 4.75 percent.

[UpInArms]

32. Fed adds $7.5 bln in reserves via 3-day repo

http://www.reuters.com/article/bondsNews/idUSN1220834820071012

NEW YORK, Oct 12 (Reuters) - The U.S. Federal Reserve said on Friday it added $7.5 billion in temporary reserves to the banking system through 3-day repurchase agreements.

Federal funds last traded in the market at 4.813 percent, the same as before the operation but still above the Fed's target rate of 4.75 percent.

The Fed said collateral accepted in the operation was $200 million in Treasuries, $3.128 billion in agency debt and $4.172 billion in mortgage-backed securities.

[AnneD]

26. Stores stuck with glut of fall merchandise

NEW YORK — With disappointing September sales behind them, the nation's retailers are now left with a big mess: piles of cashmere sweaters, coats and other heavy fall items that have been languishing on their shelves because of the steamy weather.

For many merchants who need to quickly mark down fall leftovers to make room for holiday goods, the bloated inventories are a big profit problem.

<snip out the part where they blame the weather:eyes:>

Retailers have been struggling with a sales slowdown for most of the year as shoppers have been squeezed by higher gas and food bills and by the depreciating value of their homes. Financial market volatility has also spooked shoppers.
<snip out the part where they are cheerleading:eyes:>


The good news is that the job market has held up fairly well despite widening housing and credit problems. Job security is a key factor in consumers' willingness to spend. On Thursday, the Labor Department said the number of newly laid off workers filing claims for unemployment benefits fell by 12,000 last week to 308,000.

<left in the jokes:spray: >

http://www.chron.com/disp/story.mpl/business/5207838.html

:bounce: the closest I could come to cheerleading icon. So go out there and buy, buy, buy.

[AnneD]

28. Smithfield struggles to replace workers

TAR HEEL, N.C. — Last November, immigration officials began a crackdown at Smithfield Foods' giant slaughterhouse here, eventually arresting 21 illegal immigrants at the plant and rousting others from their trailers in the middle of the night.

More than 1,100 Hispanic workers have left the 5,200-employee hog-butchering plant, the world's largest, since then, leaving it struggling to find, train and keep replacements.

Across the country, the federal effort to flush out illegal immigrants is having major effects on workers and employers alike. Some companies have reluctantly raised wages to attract new workers after raids at their plants. After several hundred immigrant employees at its plant in Stillmore, Ga., were arrested, Crider Poultry began recruiting workers from Minnesota, hiring men from a nearby homeless mission and providing free van transportation to many workers.

So far, Smithfield has largely replaced the Hispanics with American workers, who often leave poorly paid jobs for higher wages at the plant here. But the turnover rate for new workers — many find the work grueling and the smell awful — is twice what it was when Hispanics dominated the work force.

Making Smithfield's recruiting challenge even harder is the fact that many local residents have worked there before and soured on the experience. As a result, Smithfield often looks far afield for new employees.


http://www.chron.com/disp/story.mpl/business/5207863.html

:nopity: I remember back when they had a meat packers union and there was no shortage of workers wanting to get a job at the plants. You made enough to support your family. Too bad about the labor shortage folks. Hope ICE raids knock some sense back in ya.

[AnneD]

33. A new front in student loan inquiry

ALBANY, N.Y. — The state of New York has subpoenaed 33 companies and lenders who market education loans directly to college students in a widening of his investigation of deceptive tactics in the industry.

After launching a probe of college-sponsored lending, state Attorney General Andrew Cuomo said Thursday he is now investigating independent lenders and marketers who solicit business from students and families, often implying they are part of the federal government or affiliated with a college.

"This is a new front," he said.

A pitch made by telephone, broadcast ads, online ads, mail and direct sales can "sound like it's coming from the federal government.

"It will look like it's coming from the federal government, and it's, we believe, a deceptive practice. And it's a very big industry."

<snip>

http://www.chron.com/disp/story.mpl/business/5207657.html

I am glad to see NY bust these snake oil salesmen that are preying on students and their families. I can't shred those letters fast enough.:grr:

[UpInArms]

36. 10:16 EST Chasm between Wall Street and Main Street Widens

Dow 14,062.02 46.90 (0.33%)
Nasdaq 2,794.94 22.74 (0.82%)
S&P 500 1,559.38 4.97 (0.32%)
10-Yr Bond 4.683% 0.024

NYSE Volume 335,145,375
Nasdaq Volume 439,131,125

10:00 am : The major indices currently have modest gains. The Nasdaq Composite is outperforming the other indices, but it also had the largest losses yesterday.

The telecom (+0.8%) and utilities (+0.6%) sectors are currently providing leadership. The industrial (-0.7%) and financial (-0.1%) sectors are the main laggards.

Separately, crude oil futures are up 0.1% to $83.16.DJ30 +19.19 NASDAQ +16.67 SP500 +2.45

09:45 am : For now, selling bias has eased thanks to a couple of better than expected economic reports.

September retail sales rose 0.6%, which is stronger than the expected gain of 0.2%. The trend in retail sales is moderate, but the lack of any indication of a pullback by the consumer is good news.

Even better news comes from the PPI data. Core inflation at the producer level rose just 0.1% in September, compared to the expected increase of 0.2%. This pushes the year-over-year increase down to just 2.0%.

Retail sales is only a subset of total consumer spending and gets more attention than it deserves. And PPI is not as important as the CPI data to be released Tuesday. Nevertheless, these two releases are good news for the financial markets as they show no signs of building inflationary pressures or a consumer pullback. DJ30 +4.80 NASDAQ +6.17 SP500 -0.07

[ozymandius]

40. Time to put a fork in this wad of joy.

Dow 14,093.08 Up 77.96 (0.56%)
Nasdaq 2,805.68 Up 33.48 (1.21%)
S&P 500 1,561.80 Up 7.39 (0.48%)]
10-Yr Bond 4.687% Up 0.028
NYSE Volume 2,791,933,500
Nasdaq Volume 1,971,043,625

4:25 pm : The stock market didn't spend much time licking its wounds from Thursday's sudden stock price slashing. Instead it got right back on a winning track, aided by some reassuring economic data, M&A activity, and good earnings news.

One of the top headlines of the day, and arguably the most influential catalyst for Friday's gains, was the news that Oracle (ORCL 22.44, -0.02) made a $6.7 billion, or $17 per share, all-cash offer to acquire BEA Systems (BEAS 18.82, +5.20).

The strategic purpose of Oracle's bid is clear, as it comes just days after rival SAP (SAP 55.85, +1.04) made a bid to acquire Business Objects (BOBJ 58.76, -0.46). For participants, though, any takeover activity rates as good news since it reflects an improvement in market conditions from the trying days of mid-summer when the credit market locked up and stock prices were sliding.

In response to the Oracle news, the tech sector (+1.1%) resumed its leadership position and carried the broader market higher along with the materials (+1.0%) and energy (+0.8%) sectors. The latter caught a nice bid as crude futures hit a record high of $84.05 during the session on geopolitical concerns that were rooted in chatter that Turkey may soon invade northern Iraq.

Per usual, the jump in oil prices didn't slow the stock market much. A late-day burst of buying interest that followed reports Dow Chemical (DOW 46.50, +1.71) may be on the verge of a big deal enabled the Dow to reclaim all of Thursday's losses and the Nasdaq and S&P to recoup nearly the entirety of what they had given back.

There was a bullish bias, however, throughout Friday's session even though volume was again on the light side at the NYSE. A stronger than expected retail sales report for September helped set the tone.

Prior to the open, the Dept. of Commerce reported that retail sales rose 0.6% in September (consensus +0.2%) and 0.4% excluding autos (consensus +0.3%). The data shot down consumer-led recession concerns and were accompanied by a benign inflation reading at the producer level. Specifically, core-PPI, which excludes food and energy, rose just 0.1% in September and led to a dip in the year-over-year rate to 2.0% from 2.2%.

Stocks pressed higher in the early-going on the economic data and Oracle's news, as well as a positive third quarter earnings pre-announcement from Dow component McDonald's (MCD 57.02, +0.77), which said it expects to post a profit of $0.83 per share from continuing operations versus the current consensus estimate of $0.77.

The gain in McDonald's offset the loss in General Electric (GE 41.03, -0.57). GE reported an in-line profit of $0.50 per share for its third quarter and reaffirmed its full-year outlook. Some concerns about margin erosion for its infrastructure business and the recognition that GE had made a big move ahead of the report sparked some profit-taking interest.

Neither the weakness in GE nor a lagging financial sector (-0.04%), which got clipped after Deutsche Securities downgraded Citigroup (C 47.87, -0.45) to Sell from Buy, were enough to keep the market down. In fact, the S&P recorded a weekly gain for the fifth consecutive week.

The coming week brings a barrage of earnings reports from many leading companies. 13 Dow components are due to report their results; meanwhile the heavily-weighted financial and technology sectors dominate the earnings calendar. DJ30 +77.96 NASDAQ +33.48 SP500 +7.39 NASDAQ Dec/Adv/Vol 1115/1840/2.01 bln NYSE Dec/Adv/Vol 1247/1979/1.10 bln