STOCK MARKET WATCH, Tuesday 20 April

[ozymandius]

Tuesday April 20, 2004

COUNTING THE DAYS
DAYS REMAINING IN THE * REGIME 279
DAYS SINCE DEMOCRACY DIED (12/12/00) 3 YEARS, 130 DAYS
WHERE'S OSAMA BIN-LADEN? 2 YEARS, 183 DAYS
WHERE ARE SADDAM'S WMD? - DAY 397
DAYS SINCE ENRON COLLAPSE = 879
Number of Enron Execs in handcuffs = 18
Recent Acquisitions: Skilling
ENRON EXECS CONVICTED = 2
Other Arrests of Execs = 54

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




AT THE CLOSING BELL ON April 19, 2004

Dow... 10,437.85 -14.12 (-0.14%)
Nasdaq... 2,020.43 +24.69 (+1.24%)
S&P 500... 1,135.82 +1.21 (+0.11%)
10-Yr Bond... 4.37% +0.02 (+0.46%)
Gold future... 401.20 -0.40 (-0.10%)

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

||


GOLD, EURO, YEN and Dollars


~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~
PIEHOLE ALERT

Heads Up!
Preliminary info on appearances by Bush & Co. throughout the country. Details & links are added as they become available so check back. And if you know more, are organizing something, or would like to, contact [e-mail]

For information on protests and other actions Citizens For Legitimate Government

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

[ozymandius]

1. WrapUp by Jim Willie

Forecast: Japanese Yen Parity by Year End

The Japanese yen receives far too little attention, and has risen a trifling 10% in the last year. The euro stole most headline attention all last year, unrestrained. We Americans come mostly from European stock (my roots extend to Ireland, Germany, and England.) The European Union as a whole enjoys a trade surplus with the USA somewhat below the $90 billion annual surplus registered by the less populated Japan. Factor in the PacRim tigers such as Korea, Taiwan, Hong Kong, Thailand, and Singapore, and a trade surplus adds up to the $110-130 billion range. These figures account for nations whose currencies float. Now factor in China with another $130 billion, whose currency is fixed versus the USDollar. Asian total surpluses rack up over a quarter a trillion dollars annually.

One must conclude, given chronically large Asian surpluses, that currency exchange adjustments and their effects vis-à-vis Asia have been largely unaddressed. Asia is the next region to watch on the FOREX battleground. A Japanese surplus joins with a Chinese surplus to present colossal pressure for the USDollar to decline, despite large-scale Japanese capital investment in China. The yen is the pressure valve. Consequences to import prices threaten the American consumer, who has become accustomed to buying cheap Asian-made goods. Implications are ominous to central bankers across the Pacific Ocean, where 45% of US Treasurys are horded. Seasoned traders expect higher interest rates before long.

<cut>

ALL FOREX EYES TO THE EAST

Stage #1 of the breakout saw the Japanese yen advance in October from its bound range for several months. We saw a 10% move up from the 85-87 range to the mid to 93-95 range. Stage #2 will see the yen continue toward and beyond 100 parity after its current struggle to retrench. The fallout potential is vast but unrecognized. Asians build the majority of our imported finished and component products. Asians control the largest block of US Treasurys. Asians are the largest buyers of both our government bonds and agency (mortgage) debt. Volatility has returned to all three major currencies and the US Treasury market, a clear signal of earthquake tremors. Hapless US economists pay little heed. They continue to focus on Europe and its growing stagnation. They issue claims of a USDollar having fallen enough. The European Central Bank feels pressure to cut rates and force a lower euro, while the Bank of Japan supposedly remains in our hip pocket. Changes are coming from Asia, largely unnoticed.

<cut>

A double whammy could be in store. As Asia’s powerhouses gear down, we will be forced to adjust to higher import prices. Just when material prices, energy prices, health care prices, insurance prices, and food prices are on a sharp upswing, the US Economy must next adjust to higher import prices of finished and component products from Asia. However, wages and income will in all likelihood continue to decline as businesses react to cost pressures, by sending production offshore, by outsourcing services to Asia, by laying off workers, by cutting back operations, in a struggle to survive. Despite his conceited negligent claims, Chairman Greenspan did not overcome the effects of the stock bubble and bust. Unfortunately, it takes a little longer to work out the kinks when secular deflation unleashes powerful forces. He set us up for either a tight headlock in a liquidity trap or a vicious bond backlash, by creating even larger bond bubbles. Professional pundits and participants alike are transfixed by scarce oases of resuscitation, even as they dismiss growing evidence of dangerous debt and distortion.

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

[UpInArms]

2. daily dollar watch

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

Last trade 90.40 Change +0.60 (+0.67%)

related articles

http://www.fxstreet.com/nou/content/2115/content.asp?menu=market&dia=2042004

Dollar Recovers From 4-Day Slide

The dollar recovered three quarters of its 4-day slide against the euro, rising from an overnight low of 1.2070 to a session high of 1.1910. Its gains were broad based except against the yen as it struggles to overcome key resistance at the 109 level. The euro showed the most weakness, as traders positioned for a potential disappointment in Germany’s ZEW economic sentiment survey. Confidence fell sharply to 49.7 from 57.6, highlighting Germany’s weak recovery, but the euro had already priced in the damage. Today is Fed Chairman Greenspan’s testimony before the Senate Banking Committee, but markets will be more interested in tomorrow’s speech before the Joint Economic Committee.

...more...

http://www.fxstreet.com/nou/noticies/afx/noticia.asp?pv_noticia=1082450569-9e32d306-15387

Forex - Dollar holds steady ahead of key Greenspan testimony

LONDON (AFX) - The dollar held steady against leading European currencies but was a touch weaker against the yen as activity stayed quiet ahead of Fed chairman Alan Greenspan's testimony before the Senate Banking Committee later today

The pound and euro were under the key psychological figures of 1.80 usd and 1.20 usd respectively, while the dollar was just under the 108 yen level after hitting a four-week high of 109.27 yen last week

"The dollar will tumble if the Fed Chairman fails to paint a picture of robust economic growth and seems overly lacking in urgency to raise interest rates," said HBOS currency analyst Steve Pearson

Greenspan's speeches have been touted as the event of week especially after the recent string of robust US data which indicate a strengthening economy

Even if today's event proves somewhat lacklustre, there is still tomorrow's key appearance before the Joint Economic Committee for the market to contend with.

...more...

[54anickel]

3. Futures are looking bright this morning. All eyes are on earnings for

a change. Luckily the S&P and Nasdaq squeaked above those technicals. If I remember correctly, the 50-day moving average for the Dow was around 10,440?

8:30AM: S&P futures vs fair value: +2.7. Nasdaq futures vs fair value: +1.0. Futures indications continue to lift and point to a higher open for the cash market. The slightly favorable sentiment is being supported by a batch of better than expected earnings reports from the likes of MO, PFE, BSX, GM, ONE, CHKP, and COH, among others. There are no economic reports this morning, so earnings news will be front and center. Remember that the S&P 500 and the Nasdaq closed above their respective 50-day simple moving averages in yesterday's session, creating a somewhat favorable technical backdrop for today's action, particularly if the break can be sustained on higher volume in today's session.

[UpInArms]

4. Markets Will Soon Remember November

http://www.thestreet.com/_tscana/markets/aarontaskfree/10154869.html

The markets shrugged off Bob Woodward's new book "Plan of Attack" Monday, despite revelations that could potentially damage President Bush's re-election hopes. Crude futures fell only a fraction despite Woodward's assertion on "60 Minutes" of a pledge by the Saudis to lower oil prices dramatically before Election Day.

Equity trading also indicated that politics currently remain a distant second to concerns about Federal Reserve Chairman Alan Greenspan's two-day congressional testimony, beginning Tuesday. The cost of capital -- which is ultimately determined by monetary policy -- is arguably more important to financial markets than whoever resides at 1600 Pennsylvania Ave.

Nevertheless, uncertainty about the presidential election remains a crucial variable for traders and will probably assume greater significance in the coming months. "Once you get by the June 30 deadline , I think the market will start to focus more on upcoming elections," said Jeffrey Saut, chief equity strategist at Raymond James. "There's a lot of moving parts, and that's one reason the market has stalled."

In assessing the market's relatively sanguine view of political developments on Monday, two major possibilities emerged: One, the market sees that Bush is actually holding up pretty well despite myriad negatives. Two, market participants are largely ignoring the possibility of a victory by presumptive Democratic nominee John Kerry.

...more...

[54anickel]

14. Very interesting article - couple of more snippets

"Bush is actually holding up pretty poorly," said one former Clinton administration staffer, who requested anonymity. "If you believe the country is evenly divided, Bush doesn't appear to be getting incremental support his base."

However, "Kerry is doing nothing to take advantage" of Bush's vulnerability, the source said.

snip>..... A Kerry surge in the polls (or actual victory) "will give people an excuse to sell" if they presume higher capital gains and/or dividend taxes will ultimately result.

On the other hand, a Kerry victory may be a positive for equities, assuming he's able to keep his pledge to restore budget discipline, McManus said. "Fiscal balance might be better for the economy and put us on the road toward a slower growth rate of government debt. Stocks might sniff that out."

McManus also lamented the Bush administration's policy of "clear destruction of the dollar's strength," which, from a strategist's viewpoint, "raises questions about the value of a stream of income in the future."

snip>........ Or maybe, as Saut quipped, "it's a shame both can't lose."

[ozymandius]

5. Good morning folks!

:donut: :donut: :donut: :donut: :donut: :donut:
I miss being here more often. Events in my world have been swirling at a rapid pace with family sickness, efforts to find a job and strides to finish the current one. You are sorely missed. I look upon the days of old with great fondness when reading, posting and conversing were a regular occurrence.

Thank you for extending the time and effort that makes this thread a really enjoyable read at the end of the day.

all things good,

Ozymandius :hi:

[54anickel]

6. Discount Punch at the Never-Ending Party

http://www.gold-eagle.com/editorials_04/north041704.html

Four decades ago, the Chairman of the Federal Reserve System who held onto his job longer than any other Chairman, William McChesney Martin, described the FED's job: to take away the punchbowl just when the party gets rolling. It is clear that his successor, Alan Greenspan, does not see the FED's job in the same way. He sees it as supplying the punch at discount prices.

This report is on the price of punch, the supply of punch, and hangovers.

To understand this report, you need to be a good economist. To be a good economist, you need two imaginary parrots. One sits on your left shoulder and says, "supply and demand." The other sits on your right shoulder and shouts, "high bid wins." If you listen to both parrots and apply these truths to the problem you are dealing with, you are unlikely to make a major mistake.

You can spot a waffling free market economist when he ceases to listen to either of these parrots. A Communist economist never listens to either one. There are not many Communist economists these days. Most of them are named Kim. They are hoping to defect.

more...

[UpInArms]

7. Weather Pinches U.S. Chain Store Sales

http://www.reuters.com/newsArticle.jhtml?type=businessNews&storyID=4878866

NEW YORK (Reuters) - Stormy weather negatively affected sales at U.S. chain stores in the latest week, although home improvement items were in high demand, a weekly report said on Tuesday.

The pace of sales at major retailers rose by 4.8 percent on a year-over-year basis for the week ended April 17, down from the preceding week's 5.4 percent pace, said Redbook, an independent research company. Sales so far in April were down 2.2 percent compared with March.

...more...

Huh? Weather in the Midwest has been lovely and also in the West. What are they talking about?

[54anickel]

11. Wow, they'll look for any excuse for lower numbers these days.

[UpInArms]

8. markets at 10:37 EST

Dow 10,472.84 +34.99 (+0.34%)
Nasdaq 2,028.90 +8.47 (+0.42%)
S&P 500 1,138.45 +2.63 (+0.23%)
10-Yr Bond 4.405% +0.033

[UpInArms]

9. 'Greenspanticipation'Lifts Dlr Thru Key Resistance Lvls

http://www.fxstreet.com/nou/noticies/afx/noticia.asp?pv_noticia=200404200952MKTNEWS_MAINWIRE_CCF8_1798

NEW YORK, April 20 (MktNews) - Anticipation about higher U.S. interest rates led to a dollar rally against most of the other major currencies Tuesday morning, with dollar-Swiss breaking above key resistance at $1.3075 and the euro edging down towards key support at $1.1850, traders said.

Indeed ahead of the first of two testimonies by Federal Reserve Chairman Alan Greenspan, U.S. sentiment is decidedly positive, with the greenback posting sharp gains not only against the euro, but also sterling, the Canadian dollar, the Swiss franc etc..

Greenspan will testify in the afternoon at 2:30 p.m. EDT, about the condition of U.S. banking before the Senate Banking Committee and then will speak Wednesday about the U.S. economic outlook before the Joint Economic Committee of Congress.

While the Greenspan is more likely to offer clues about when the Fed may be raising rates in his testimony on Wednesday morning, questions about the economy could also be raised in the afternoon testimony, analysts reminded.

Foreign exchange economists at Brown Brothers Harriman, dubbed the tensions ahead of Greenspan's speech "Greenspan-ticipation."

"While we expect his big policy comments to be reserved for tomorrow's prepared testimony, today's Q&A session will almost certainly force him to comment on some economy-relevant topics, they added.

...more...

[54anickel]

13. HA ha ha ha ha! Seriously?

"An overwhelming majority expects the Federal Reserve to tighten monetary policy before the election in November - this is taken as a given," he explained.

Market players continued to be wary however, wary of a replay of 1994.

"At issue for many now is whether 2004 is a repeat of 1994, when in the face of Fed tightening, bonds, equities and the dollar all fell sharply," Chandler said.

[54anickel]

10. 10:38 numbers & blather

Dow 10,473.54 +35.69 (+0.34%)
Nasdaq 2,028.76 +8.33 (+0.41%)
S&P 500 1,138.32 +2.50 (+0.22%)
30-yr Bond 5.214% +0.011

NYSE Volume 350,425,000
Nasdaq Volume 486,819,000

10:30AM: Indices hold their gains in stable action...Dallas Fed President McTeer started the testimony before the Senate Banking Committee...Greenspan will be at 2:30 ET...advancers lead decliners by a solid margin, and the major indices are holding above their 50-day moving averages, so the technicals are supportive...the always important SOX semiconductor index (SOX 488.50 +1.47) also supportive...the dollar is stronger, and gold is back under $400 while oil prices are slightly lower...NYSE Adv/Dec 1667/1159, Nasdaq Adv/Dec 1752/950

10:00AM: Indices firm a bit and show resilience to small early bout of selling...volume is light...Greenspan testimony before Senate Banking Committee to start an 10:00 ET...autos, drugstores, computer storage sectors start out strong...

9:45AM: Indices open slightly higher, in line with futures indications...Dow 30 gets a boost from General Motors (GM 47.80 +1.65) after a strong earnings report, but Pfizer (PFE 37.11 -0.47) and Altria (MO 55.73 -0.72) are lower despite seemingly good reports...overall, the earnings reports were strong, with very few companies coming in below Wall Street expectations...bonds are a slight negative again today, with the 10-year yield up to 4.41%...

[54anickel]

12. Energy Wars!

http://www.gold-eagle.com/editorials_04/chapmand041604.html

That the International Energy Agency should cite China's growing thirst for oil as surpassing expectations and therefore a prime driver behind rising oil prices should not come as a big surprise. After all this is a country with one and quarter billion people and it is only in the past decade that many of them, particularly in the cities, are increasing their energy use. It is an economy that grew at 9% in 2003 and over the past decade China has often grown even faster. China has now become the world's second largest consumer of crude oil in the world although still far behind the United States who alone consumes 25% of the world's energy supplies.

But with growing demand comes growing concerns. China, who used to be a net exporter of oil, is now like the United States a net importer. So like the United States China now competes for global supply and also like the US has growing energy security concerns. As a result Chinese oil companies are flexing their muscles in securing supplies in the Middle East, Africa and South America. Often in securing supply contracts particularly with Middle Eastern sources it involves exchanges of weapons and technology.

That the world has crossed or nearing the crossing to the downside of conventional sources of energy particularly oil is not in dispute. Numerous studies have demonstrated with global demand increasing by at least 2-3% per year and depletion of current oil fields at an average of 3-5% per year that we will reach a point of crisis at some point in the future (known by some as the Hubbert Peak named after studies by M. King Hubbert in 1956). With no new major discoveries in years that point is estimated to come sometime after 2010. For natural gas that point is somewhat later between 2020 and 2030.

There are of course numerous additional sources of "unconventional" oil such as the Alberta tar sands, the shale fields of Venezuela, natural gas from coal, deep water oil and others. Studies show that reserves here dwarf current known reserves of conventional oil. But given that the cost of production is high and the resources are in difficult to get at places, environmentally sensitive areas and politically sensitive zones, considerably higher prices are required to tap into these large reserves. It is, though, estimated that these non-conventional sources could provide the equivalent of Saudi production by 2030.

more...

[54anickel]

15. Warnings to be ignored

http://www.economist.com/agenda/displayStory.cfm?story_id=2608977

snip>

Banks have played the yield curve for all they are worth, in the sure knowledge that the Fed will give ample warning before it alters short-term rates. Although commercial lending has dropped, banks’ holdings of government securities have grown, as have their investments in mortgage-backed securities, which have gone up by almost $100 billion, or a third, since last September. The market for interest-rate swaps is another favoured playground. Here, banks simply pay a low, short-term floating rate and receive a high, fixed one. Half the top 20 American banks get at least 10% of their profits from this spread, according to Mr Hendler; for J.P. Morgan Chase, it was an astonishing 33% last year.

The fear, of course, is that banks could lose heavily if long-term rates rise sharply, because the securities that they have bought already would fall in value (although, of course, they would be able to earn a decent spread on new ones). And many other investors have also taken full advantage of the steep yield curve, which might mean a decidedly nasty fall as they head for the exits at the same time.

Most economists put “fair value” of ten-year Treasuries at 5.5% or so. This would mean big losses on all those bonds and swaps positions that banks had taken out when rates were a lot lower and prices higher. It would, however, be mainly a valuation loss, and banks might avoid the worst of it by transferring positions to that part of their balance sheet that they do not have to mark to the market price. They would, however, be left with low-yielding assets at a time when the cost of their liabilities in the capital markets was rising. Of course, banks are not stupid: they know that the Fed will raise rates at some point. But the pressure on them to increase profits is so great that most of them have stayed put for as long as possible. All of this means, at the very least, lower profits on existing positions. And if short-term rates rise sharply, as they did in 1994, banks will be in trouble.

But the second risk that banks take—credit risk—is just as big a concern in a rising interest-rate environment. Credit costs have fallen sharply in recent years for consumers and companies alike, thanks to a buoyant economy and low rates. Mr Fanger argues that those costs are likely to remain low because the Fed will be raising rates at a time when the economy is humming along nicely. But given how high consumer and corporate debts are, and how low the price now charged to lend to riskier borrowers is, such a view seems overly sanguine. You may feel, however, that such warnings can be safely ignored.

[54anickel]

19. ANALYSIS-Bond market bets on modest Fed tightening

http://www.forbes.com/personalfinance/funds/newswire/2004/04/20/rtr1338359.html

NEW YORK (Reuters) - Financial markets are coming to terms with the possibility that the Federal Reserve could jack up borrowing costs as soon as this summer, but so far investors are taking a fairly sanguine view of how much tightening is in store.

The Fed faces a tricky task in keeping it that way, so avoiding the sort of bond debacle seen in 1994 when yields leapt over 2 percentage points in a matter of months, making mortgage and commercial borrowing much more expensive.

big snip>

"Once it starts, you will see people price in quite a lot of tightening and that's part of the equation for the Fed too.

"This notion of starting early and moving slowly is nice when you talk about the funds rate because the Fed controls the funds rate, but maybe it's not realistic when you talk about what markets will do."

He was referring to a recent suggestion by Fed Governor Donald Kohn that "patience" on rates could mean the Fed still raises rates, but raises them more slowly than in the past. That way, the Fed could still say it was being "patient" as it was lifting rates.

That could be a nuance too subtle for bond market investors to appreciate.

"They need to telegraph it. As long as people can get a sense of when it's coming and maybe the order of magnitude over the course of the year, the market's not going to have a pretty reaction to it, but I think that would minimize the fallout," said Wood.

[54anickel]

16. 12:16 update what happened?

Dow 10,443.32 +5.47 (+0.05%)
Nasdaq 2,018.66 -1.77 (-0.09%)
S&P 500 1,133.86 -1.96 (-0.17%)
30-yr Bond 5.213% +0.010

12:00PM: The indices opened higher today on good earnings news...Dow 30 companies General Motors (GM 48.47 +2.32), Pfizer (PFE 37.06 -0.52), and Altria (MO 55.97 -0.48), all beat earnings estimates...there were a lot of other reports as well, which on balance were also quite good...however, it is still early in earnings season, and the market tone remains cautious...the 10-year note has dipped again today, highlighting interest rate concerns that have erased the early, small gains...
in addition, Fed Chairman Greenspan will be testifying before the Senate Banking Committee today at 2:30 ET, and before the Joint Economic Committee tomorrow at 10:00 ET...any hint that he might be leaning towards raising interest rates will catch attention...volume is light and the action lackluster...NYSE Adv/Dec 1467/1568, Nasdaq Adv/Dec 1632/1276

11:25AM: Stocks lose some of the early gains...the earnings news is clearly good, but the underlying concerns about interest rates persist...Dallas Fed President McTeer today suggested that even with rate hikes, Fed policy would still be accommodative...that is, even a 1/4% hike in the fed funds rate to 1 1/4% would retain a stimulative monetary policy...that is true for the economy, but the stock market is nervous about the longer term trend in rates...NYSE Adv/Dec 1543/1458, Nasdaq Adv/Dec 1717/1148

[54anickel]

17. Rally in non-oil commodities should stay-World Bank

http://www.forbes.com/markets/newswire/2004/04/19/rtr1336524.html

WASHINGTON (Reuters) - A rally in non-oil commodity prices should accelerate slightly in 2004 amid tight supplies and firm demand, the World Bank said in a report Monday.

It said prices should climb 10.4 percent this year, a notch higher than the 10 percent rise in 2003.

"Firming demand, relatively tight supplies, low stocks levels and continued weakness of the dollar are key supporting factors," the bank said in its 2004 Global Development Finance report.

It said metal prices should surge nearly 26 percent during the year -- double the increase of last year -- as markets move into a deficit due to declining stocks, earlier than expected supply cuts and growing demand.

more...

[54anickel]

18. Trail of lies turns up in Shell report

http://www.theage.com.au/articles/2004/04/20/1082395850393.html

Former executives at Royal Dutch/Shell lied about the true level of the company's oil and gas reserves for years, an internal report found yesterday.

The report, by US law firm Davis Polk and Wardwell, detailed a damaging series of emails and memos between sacked head of exploration Walter van de Vijver and former chief executive Sir Philip Watts.

In one, Mr van de Vijver said he was "sick and tired of lying" about the company's oil and gas reserves.

The report found Shell's committee of managing directors were made aware of problems with the reserves in 2002 but were not told the full extent of the difficulties.

They were told that the company hoped to "manage" the problem by "playing for time".

more...

[54anickel]

20. 1:25 update

Dow 10,454.03 +16.18 (+0.16%)
Nasdaq 2,018.07 -2.36 (-0.12%)
S&P 500 1,134.71 -1.11 (-0.10%)
30-yr Bond 5.205% +0.002

NYSE Volume 800,990,000
Nasdaq Volume 1,071,106,000

1:00PM: Lackluster action continues as the indices hold near unchanged...the Dow is up largely on the back of General Motors (GM 48.61 +2.46), as 16 Dow components are down, with AIG (AIG 74.35 -0.63) down the most...no other Dow stocks are moving more than $1...NYSE Adv/Dec 1481/1656, Nasdaq Adv/Dec 1621/1386

12:30PM: The major averages are vacillating near their respective session lows, as concerns over rising interest rates and accelerating inflation keep buyers in check... The influential semiconductor sector, which traded in positive territory earlier in the session, has slipped into the red, inciting selling pressure in the Nasdaq and the broader market... Currently, the SOX index is down 0.8%, with laggards of note including Maxim Integrated (MXIM 47.12 -1.02), KLA-Tencor (KLAC 49.21 -0.89), and Applied Materials (AMAT 20.62 -0.55)... NYSE Adv/Dec 1420/1675, Nasdaq Adv/Dec 1599/1394

[pjordan24]

21. Companies are showing good profits.....

but the market is just shaking them off.

[54anickel]

22. Greenspan: banks set for rising rates

http://money.cnn.com/2004/04/20/news/economy/greenspan.reut/?cnn=yes

WASHINGTON (Reuters) - Federal Reserve Chairman Alan Greenspan said Tuesday the U.S. banking system was strong and in good shape to handle higher interest rates and demand for credit.

"All told, the available data, industry and supervisory judgments, and the long and successful experience of the U.S. commercial banking system in dealing with changing rates suggest that, in general, the industry is adequately managing its interest-rate exposure," Greenspan said in testimony prepared for delivery to the Senate Banking Committee.

"The (banking) industry appears to have been sufficiently mindful of interest-rate cycles and not to have exposed itself to undue risk," he added.

snip>

Greenspan said both the size and number of U.S. bank failures in recent years had been exceptionally small and regulators look for further improvement in the industry's asset quality this year.


Bit more here:
http://www.fxstreet.com/nou/noticies/afx/noticia.asp?pv_noticia=1082487198-9e32d306-42574

snip>
In testimony on bank regulation at the Senate Banking Committee, Greenspan said U.S. banks weathered the shocks of the past three years quite well, posting "high and often record quarterly earnings." Banks have made the most of the Fed's extremely low interest rates by providing all kinds of loans to consumers, especially mortgages. But as interest rates begin to move higher (over an unspecified time period), banks have adapted their portfolio of assets and business plans to benefit from higher rates, he said

snip>
Much of Greenspan's testimony was repetition of his well-known views on bank regulation. "The system remains strong and well positioned to meet customer needs for credit and other financial services," he said. "In general, the industry is adequately managing its interest rate exposure," Greenspan said. "Many banks indicate that they now either are interest-rate neutral or are positioned to benefit from rising rates." "Many banks seem to believe that as rates rise -- presumably along with greater economic growth -- they can increase lending rates more than they will need to increase rates on deposits." He said deposit insurance guarantees should not be increased as Congress moves to reform the finances of the insurance funds

[jamesinca]

26. Bush I supporters say Greenspan killed his re-election

by raising the interest rates. If he does it now, Bush II suppporters will cry about this also.

[54anickel]

23. 3:20 update

Dow 10,420.25 -17.60 (-0.17%)
Nasdaq 2,003.42 -17.01 (-0.84%)
S&P 500 1,130.29 -5.53 (-0.49%)
30-yr Bond 5.229% +0.026

NYSE Volume 1,161,706,000
Nasdaq Volume 1,527,267,000

3:00PM: Greenspan's testimony has had a negative impact on bonds and stocks...his comments involve how banks would handle a higher interest rate environment...the implication is that rates will be going higher, which shouldn't be any surprise, but has set off fears about just how much the Fed might raise rates...although it is hard to pinpoint any bearish statements, it is not hard to discern the underlying anxiety in the stock market...NYSE Adv/Dec 1421/1814, Nasdaq Adv/Dec 1494/1628

2:35PM: Greenspan comments hit the wires from the prepared testimony...they are all about banks...he says that the banking system remains strong and that banks are not subject to excessive risks from rising rates, but that some banks might get hurt...there is nothing about policy, which will have to wait until the question and answer portion, or tomorrow morning...NYSE Adv/Dec 1491/1725, Nasdaq Adv/Dec 1639/1458

2:00PM: The theme today seems to be: 78 earnings reports and nothing to trade on...that's the number of reports from yesterday after the close and this morning, but volume today is on pace for only 1.3 billion shares or so on the NYSE...Greenspan may stir things up a bit when his prepared testimony hits the wires in 30 minutes, but so far the action has been very tame as the indices hold near unchanged...NYSE Adv/Dec 1502/1662, Nasdaq Adv/Dec 1631/1419

[JNelson6563]

24. Was just on my way to update too!

HI 54 and everybody--

Well during the brief times I checked in on CNBC things were relatively cheerful. Imagine my surprise to check Yahoo at 3:23 to find:


Dow 10,413.57 -24.28 (-0.23%)
Nasdaq 2,003.65 -16.78 (-0.83%)
S&P 500 1,129.44 -6.38 (-0.56%)
10-Yr Bond 4.415% +0.043


Everybody sporting bruises. Fresh ones. Ouch.

I hope all's good in your world fellow Marketeers! Paly the casino wisely!

;-)

Julie

[54anickel]

25. How long can this selling on speculation of rate hikes go on? It's a long

way to November :evilgrin:

And to think last week the blather kept touting the idea of the rate hike being priced into the days decline.
Guess they're still pricing it in. :eyes:

[Maeve]

27. And the red ink only got deeper

Dow 10,314.50 -123.35 (-1.18%)
Nasdaq 1,978.64 -41.79 (-2.07%)
S&P 500 1,118.14 -17.68 (-1.56%)
10-Yr Bond 4.415% +0.043
NYSE Volume 1,484,557,000
Nasdaq Volume 1,884,607,000

[54anickel]

28. Zowie! And to think Greenspin speaks again tomorrow! n/t

[TahitiNut]

30. Did we see a little "plunge protection"?

Too little, too late. There's something more than Greenspan in this one, methinks.

[54anickel]

29. Closing & yada

Dow 10,314.50 -123.35 (-1.18%)
Nasdaq 1,978.63 -41.80 (-2.07%)
S&P 500 1,118.15 -17.67 (-1.56%)
30-yr Bond 5.229% +0.026

NYSE Volume 1,508,286,000
Nasdaq Volume 1,925,790,000

Close: Stocks went into a mild panic today over the prospect of higher interest rates...the underlying anxiety broke through in the afternoon when Federal Reserve Chairman Greenspan made what could easily have been interpreted as mild, even obvious, comments...he said that the financial system is well positioned to deal with higher interest rates...this doesn't mean that the Fed is going to raise rates soon or sharply, but the assumption that rates will move higher nevertheless raised fears among investors...
in what should have been another obvious statement, Greenspan said that deflation is not a threat to the economy...given all the talk lately about building inflationary pressures, this shouldn't have been a surprise to the market, but also reflects a greater risk that rates will move higher...the comments from Greenspan completely swamped the positive impact from yet another good set of earnings numbers this morning, including an impressive report from General Motors (GM 47.77 +1.62)...however, the negative impact of rising rates on valuation is greater than the benefit of rising earnings at this time...volume was again moderate...

there are a lot more earnings reports to come this week, but the 10-year yield, which backed up to 4.46%, might attract more attention...the focus is on interest rates...

[54anickel]

31. Fannie Mae postpones derivatives disclosures

Hmmm, missed this one

http://www.reuters.com/financeNewsArticle.jhtml?type=bondsNews&storyID=4869824

NEW YORK, April 19 (Reuters) - Fannie Mae delayed the release of closely watched balance sheet and derivatives disclosures on Monday, citing the difficulty of preparing the information and its desire to explain it more fully in an upcoming regulatory filing.

Fannie Mae (FNM.N: Quote, Profile, Research) said it will release information on losses from derivatives used to hedge swings in interest rates and the impact on stockholders' equity, among other disclosures, in its quarterly filing with securities regulators in about three weeks.

Fannie Mae previously had included some details of its derivative losses and total stockholders' equity in a report of "selected financial information" released each quarter, along with its earnings statement.

The future impact of most derivatives on earnings -- seen in a balance sheet line item known as "accumulated other comprehensive income," or AOCI -- has received a lot of attention recently from critics who charge the company has downplayed potentially big losses, either from bad bets or poor interest-rate hedging.

more...

[54anickel]

32. U.S. agency spreads end wider in nervous market

http://www.forbes.com/markets/newswire/2004/04/20/rtr1339243.html

NEW YORK, April 20 (Reuters) - U.S. agency spreads finished
a choppy session weaker on Tuesday as concerns over interest
rates and more talk on Government Sponsored Enterprises
resulted in a nervous market, traders said.

"We opened wider on some selling over concerns that Fannie
Mae needed an extension for its derivatives disclosure," said
one trader. "The market is feeling heavy in general."

Fannie Mae
(nyse: FNM - news - people) delayed the release of its closely
watched balance sheet and derivatives disclosures on Monday,
citing the difficulty of preparing the information and its
desire to explain it more fully in an upcoming regulatory
filing. It plans to release information on losses from
derivatives used to hedge swings in interest rates and the
impact on stockholders' equity, among other disclosures, in its
quarterly filing with securities regulators in about three
weeks.

Nervousness around the delay triggered agency spreads to
open a basis point wider at the open, traders said. The market
later improved after the selling dissipated, but spreads were
pushed back out in the afternoon to finish 1 to 1.5 basis
points wider after comments surfaced on the GSEs, traders
said.

more...