STOCK MARKET WATCH, Wednesday, October 19, 2011

[Pale Blue Dot]

Source: du

STOCK MARKET WATCH, Wednesday, October 19, 2011

AT THE CLOSING BELL ON October 18, 2011

Dow 11,577.05 +180.05 (+1.56%)
Nasdaq 2,657.43 +42.51 (+1.60%)
S&P 500 1,225.38 +24.52 (+2.00%)
10-Yr Bond... 2.21 +0.03 (+1.38%)
30-Year Bond 3.21 +0.03 (+0.91%)

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Market Conditions During Trading Hours

Euro, Yen, Loonie, Silver and Gold

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Bush Administration Officials Convicted = 2
Names: David Safavian, James Fondren
Dishonorable Mention: former House majority leader, Tom DeLay

Bush Administration Officials Charged = 1
Name(s): Richard Lopez Razo

Financial Sector Officials Convicted since 1/20/09 = 12

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This thread contains opinions and observations. Individuals may post their experiences, inferences and opinions on this thread. However, it should not be construed as advice. It is unethical (and probably illegal) for financial recommendations to be given here.

Read more: du

[Pale Blue Dot]

1. Today's Reports

Oct 19 07:00 MBA Mortgage Index 10/15 NA NA +1.3%
Oct 19 08:30 CPI Sep 0.3% 0.3% 0.4%
Oct 19 08:30 Core CPI Sep 0.2% 0.2% 0.2%
Oct 19 08:30 Housing Starts Sep 575k 595k 571K
Oct 19 08:30 Building Permits Sep 600k 610k 620K
Oct 19 10:30 Crude Inventories 10/15 NA NA 1.344M
Oct 19 14:00 Fed's Beige Book Oct

Read more: http://www.briefing.com/investor/calendars/economic/2011/10/17-21/#ixzz1bDv5h3cB

[Roland99]

17. Consumer prices rise 0.3% in September. (minus food, energy rise 0.1%)

good thing most people don't need food nor use energy!

[Roland99]

18. Consumer prices 3.9% higher over past 12 months

[Roland99]

19. Real average hourly wages drop 0.1% in September

[Roland99]

21. Sept. housing starts surge 15% to 17-month high

[Roland99]

22. Sept. building permits down 5% to 594,000

[Pale Blue Dot]

2. Oil hovers above $88 after US crude supplies drop

SINGAPORE – Oil prices hovered above $88 a barrel Wednesday in Asia after a report showed U.S. crude supplies unexpectedly fell last week, suggesting demand could be improving.

Benchmark crude for November delivery was down 22 cents at $88.12 a barrel at late afternoon Singapore time in electronic trading on the New York Mercantile Exchange. The contract rose $1.96 to settle at $88.34 in New York on Tuesday.

Brent crude for December delivery was up 40 cents at $111.55 a barrel on the ICE Futures Exchange in London.

The American Petroleum Institute said late Tuesday that crude inventories fell 3.1 million barrels last week while analysts surveyed by Platts, the energy information arm of McGraw-Hill Cos., had predicted an increase of 1.8 million barrels.

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

[Pale Blue Dot]

3. U.S. Stock Futures Fluctuate; Intel Gains While Apple Tumbles on Earnings

U.S. stock-index futures fluctuated between gains and losses as speculation that European policy makers will contain the region’s debt crisis offset earnings from Apple Inc. (AAPL) that missed estimates.

Intel Corp. (INTC) advanced 4.2 percent in pre-market trading after the world’s biggest chipmaker forecast fourth-quarter sales that exceeded some analysts’ projections. Apple, the maker of the iPad and iPhone, declined 5.2 percent.

Futures on the Standard & Poor’s 500 Index expiring in December rose less than 0.1 percent to 1,223.9 at 11:21 a.m. in London, after earlier sliding as much as 0.7 percent. Dow Jones Industrial Average futures climbed 17 points, or 0.2 percent, to 11,543.

The S&P 500 jumped 2 percent yesterday after the Guardian newspaper reported that Germany and France have agreed to boost the region’s rescue fund, the European Financial Stability Facility, to 2 trillion euros ($2.8 trillion) from 440 billion euros. German Finance Minister Wolfgang Schaeuble told lawmakers from the country’s governing Christian Democratic Union that the euro area may increase the EFSF to a maximum of 1 trillion euros through an insurance model, Financial Times Deutschland said today.

http://www.bloomberg.com/news/2011-10-19/u-s-stock-index-futures-erase-losses-s-p-500-contract-is-little-changed.html

[xchrom]

4. Hump Day!

:donut:

[xchrom]

5. europe: Economic recovery? Don't bank on it

http://www.guardian.co.uk/business/economics-blog/2011/oct/19/economic-recovery-bank-england-mpc-nervous



Be afraid. Be very afraid. That was the main message from the minutes of October's monetary policy committee meeting. Instead of putting their faith in the EU's embattled leaders to rescue the eurozone from imminent collapse at the Brussels summit this weekend, the Bank's policymakers are taking pre-emptive action.

They believe the worldwide erosion of optimism that began in the summer has already started to hit exports, and the renewed stresses in the banking system will only make things worse. Meanwhile, "the squeeze on households' real income and fiscal consolidation" – inflation and government cuts, in other words – will continue weighing down consumer spending.

As a result of all these factors, the MPC warns that economic growth is likely to be "close to zero" in the fourth quarter of the year: perilously close to the double-dip recession the government is desperate to avoid.

But if you believe, as Sir Mervyn King spelled out in his speech on Tuesday night, that the eurozone is facing a solvency crisis, instead of a short-term cashflow problem, nothing in the proposed "comprehensive package" of measures likely to be announced on Sunday will offer much comfort about the future. It won't tackle the fact that many banks and governments across the continent are burdened with debts they can't repay.

[xchrom]

8. Emergency exit? That'll be £250,000

http://www.guardian.co.uk/business/economics-blog/2011/oct/18/wolfson-prize-to-exit-euro

Even with rampant inflation, £250,000 is a lot of money, but it's up for grabs to the economist who can come up with the best way for a country to make an "orderly exit" from the euro.

The man stumping up the cash for this lavish new award, Lord Wolfson of Aspley Guise – otherwise known as Next boss, Simon Wolfson – clearly shares the markets' scepticism that Europe's leaders will come up with a long-term solution to the sovereign debt crisis at this Sunday's summit.

Neil O'Brien, director of the Policy Exchange thinktank, which will administer the Wolfson prize, said: "While there's been a lot of speculation about countries leaving the euro, there has been too little detailed research on the many complex questions this would raise."

[xchrom]

9. Greece strikes begin as euro deal nears - live

http://www.guardian.co.uk/business/blog/2011/oct/19/european-debt-crisis-shares-rally


A couple walk past a pile of rubbish today during a strike by municipal workers and garbage collectors in Athens. Greek unions began a 48-hour general strike today. Photograph: Yannis Behrakis/Reuters

12:00pm: As well as sending some words Jon Henley has some images from the protests in Thessaloniki.
Live blog - Greece flag

11.38am: As well as Helena Smith in Athens, Jon Henley is also reporting for The Guardian on the strikes in Greece. He is in Thessaloniki. He writes:

Greece's second largest city came to a standstill this morning as tens of thousands of protesters marched in bright sunshine along Thessaloniki's main street, Egnatia, to gather in central Aristotelous Square on the first day of a 48-hour general strike.

Small groups of hooded students sprayed anti-government slogans on shuttered shopfronts along the route, cheered by chanting protestors carrying banners, flares and - in one instance - a home-made gallows complete with hangman's noose. Discarded tracts littered the ground alongside growing mounds of rubbish uncollected for the past 10 days.

Private and public-sector unions, local authorities, public transport workers, bank employees, pharmacies, hospitals, air traffic controllers and taxi drivers were all on strike today, with many announcing their intention to continue for a second day tomorrow. Police were present in numbers, with groups of reinforcements waiting in side streets, but both the march and the rally appeared to pass off without violence.

[xchrom]

16. Papandreou Vows Further Austerity Amid Greek Strikes

http://www.bloomberg.com/news/2011-10-18/papandreou-presses-austerity-as-strikes-hold-greece-hostage-.html

Greek Prime Minister George Papandreou vowed to push through a further round of austerity measures and appealed to Europe to cut Greece’s debt load at a weekend summit as protesters clashed with police in Athens.

Riot police in white helmets used tear gas to hold back the demonstrators from the parliament building in the Greek capital as lawmakers debated the extra austerity demanded by Greece’s international creditors to keep aid flowing. The police said about 70,000 people gathered in Athens at the start of a 48-hour strike in one of the biggest protests yet against Papandreou’s program of public-sector job cuts, tax increases and extra reductions in pensions and wages.

“This week we are giving the battle of battles up to Sunday evening,” Finance Minister Evangelos Venizelos told lawmakers in comments broadcast live. “Without the measures, the 2011 budget won’t be met, nor in 2012.”

[Tansy_Gold]

23. The definition of insanity. . . . .. n/t

[xchrom]

25. i can't believe what we are watching w/ this guy. nt

[Demeter]

33. That's Far Too Cheap, IMO

It's worth at least twice that, and at a minimum wage rate, to boot.

[xchrom]

13. Sugar Shortages Extend Across Europe as Global Glut Expands: Commodities

http://www.bloomberg.com/news/2011-10-18/sugar-shortages-extend-across-europe-as-global-glut-expands-commodities.html

At a time when the world is facing its biggest sugar glut in at least four years, trade barriers mean the European Union is contending with a second consecutive annual shortage.

EU supply will fall 1.1 million tons short of demand in the 12 months ending in September, according to the Committee of European Sugar Users, whose members include Nestle SA (NESN), Unilever and Kraft Foods Inc. Global output will exceed usage by 5.32 million metric tons, Macquarie Group Ltd. predicts. As world sugar prices fell 22 percent in the past eight months, costs in the 27-nation bloc reached a two-year high.

The EU, once the second-biggest sugar exporter, spent about 5.2 billion euros ($7.1 billion) since 2006 to shrink the industry after the World Trade Organization ruled it was dumping subsidized supply on world markets. At the same time, the bloc failed to scrap import duties, leaving users with the choice of either paying about 60 percent more than in the international market or shunning purchase and shuttering production.

“We can’t buy sugar in the EU because there isn’t any,” said James Lambert, chief executive officer of Northallerton, England-based R&R Ice Cream Plc, Europe’s largest private-label producer. “Anything like fizzy drinks, ice cream and bakery products is going to rise dramatically.”

[Demeter]

34. That's beyond cruel

[xchrom]

14. Spain’s Rating Cut for Third Time Since 2010 by Moody’s Amid Debt Crisis

http://www.bloomberg.com/news/2011-10-18/spain-s-rating-cut-by-moody-s-for-third-time-since-june-2010.html

Spain’s credit rating was cut for the third time in 13 months by Moody’s Investors Service as Europe’s debt crisis threatens to engulf the nation.

Moody’s yesterday reduced its ranking to its fifth-highest investment grade, cutting it by two levels to A1 from Aa2, with the outlook remaining negative. Standard & Poor’s downgraded Spain on Oct. 14 to its fourth-highest investment grade, and Fitch Ratings cut it to the same level on Oct. 7, the day it also downgraded Italy.

“Moody’s is maintaining a negative outlook on Spain’s rating to reflect the downside risks from a potential further escalation of the euro-area crisis,” it said in a statement. The company cited the “continued vulnerability of Spain to market stress” that is driving up the cost of borrowing, as well as weaker growth prospects. Spanish bonds fell.

Spanish and Italian bonds are being pummeled as European leaders fail to convince investors they can contain the debt crisis and shore up banks to withstand the risk of a Greek default. German Chancellor Angela Merkel said yesterday that an Oct. 23 European Union summit will mark an “important step,” though not the final one in solving the sovereign debt crisis.

[xchrom]

15. Russian Retail Sales Surge Most in 3 Years

http://www.bloomberg.com/news/2011-10-19/russian-retail-sales-surge-most-in-3-years.html

Russian retail sales jumped the most since October 2008 last month as unemployment fell to a more than three-year low, showing consumer demand may help revive the stalling economy.

Sales rose 9.2 percent from a year earlier after a 7.8 percent gain in August, the Federal Statistics Service in Moscow said today in a statement. Real wages advanced 6.2 percent, the fastest this year. Economists forecast an 8.5 percent increase in retail sales and a 4.7 percent gain in wages, according to the median estimates of two Bloomberg surveys.

Inflation eased last month and won’t exceed 7 percent this year, the lowest rate since 1991, according to the central bank. That’s bolstering consumers even as exports suffer amid a weaker global economy and the euro region’s debt crisis. Consumers are boosting spending by taking out loans and tapping savings, according to Vladimir Tikhomirov, chief economist at Moscow- based Otkritie Capital.

“Demand is being supported by lending growth and as households reduce savings,” Tikhomirov, who forecast a 10.4 percent increase for retail sales, said by phone today before the release. “Disposable incomes and wages are also growing moderately.”

[xchrom]

20. A Trillion Euro Insurance Policy for the Common Currency

http://www.spiegel.de/international/europe/0,1518,792641,00.html

With just days to go before European Union leaders gather in Brussels for a summit aimed at finding a way out of the euro zone's ongoing debt crisis, an agreement appears to be taking shape. But renewed concerns about the state of France's fiscal health are creating fresh hurdles in the effort to save the common currency.

The Financial Times Deutschland reported on Tuesday evening that euro-zone leaders have come up with a plan to increase the impact of the European Financial Stability Facility (EFSF) over and above the €440 billion ($608 billion) lending capacity it currently has. The paper said the leveraged EFSF will be able to martial aid worth up to €1 trillion. A similar story in the British daily the Guardian indicated that the ceiling was to be even higher, as much as €2 trillion.

Rather than granting the EFSF a bank license, an initial idea to which there was widespread opposition, the backstop would become a kind of insurance fund providing first-loss guarantees to both public and private investors. Essentially, investors will be insured against the first 20 percent to 30 percent losses on their investments in state bonds. The move would allow the fund to stretch further than originally envisioned.

Such a leveraging of the EFSF has come to be seen as inevitable in recent weeks. Even as euro-zone parliaments were voting to expand the EFSF to its current size in September and October, a consensus had developed that, given the acceleration of the euro crisis this autumn, €440 billion would not be enough.

[xchrom]

6. Rise of the machines: America's jobs challenge

http://www.guardian.co.uk/business/feedarticle/9902763

WASHINGTON, Oct 19 (Reuters) - For decades, American workers and their machines advanced in tandem. As companies invested in technology, more workers were needed to operate machines.
That relationship is now looking unsteady.
Since 1999, business investment in equipment and software has surged 33 percent while the total number of people employed by private firms has changed little.
The gap between man and machine widened even further after the 2008-09 recession, helping explain why the United States is struggling to bring down an unemployment rate stuck above 9 percent.
The revolution in information technologies is taking a deeper and deeper hold in the U.S. economy.
Throughout history, technology revolutions have paved the way to forms of employment: Britain's 19th century industrial revolution threw artisans out of work but eventually created mass employment in factories.
But a decade-long drought in jobs in the United States is raising questions whether there is a fundamental shift in the structure of the labor market.
"Labor and capital are out of sync," said Tyler Cowen, an economist at George Mason University in Fairfax, Virginia. "It seems be a growing and strengthening trend... (and) suggests there is this longer-term structural change."

[AnneD]

40. Time for....

a sabot manuever.

[Demeter]

42. Time for people to get paid for the work they do that cannot be done by machines

and for more of that work to be done. this will of course necessitate a complete restructuring of job descriptions, wage scales, and high taxes on profits....

Still, if you've got an omelet, there's going to be broken eggs somewhere.

[Tace]

7. Global Systemic Crisis -- First Half Of 2012: Decimation Of The Western Banks (LEAP/E2020)

Oct. 16, 2011 (LEAP/E2020) -- Public announcement GEAB N°58 -- As anticipated by LEAP/E2020, the second half of 2011 is seeing the world continuing its unstoppable descent into global geopolitical dislocation characterized by the convergence of monetary, financial, economic, social, political and strategic crises.

After 2010 and early 2011 which has seen the myth of a recovery and exit from the crisis shattered, it's now uncertainty that dominates the States’ decision-making processes just like businesses and individuals, inevitably generating increasing apprehension for the future. The context singularly lends itself: social explosions, political paralysis and/or instability, return to the global recession, fear over banks, currency war, the disappearance of more than 10 trillion USD in ghost-assets in three months, widespread lasting and rising unemployment....

Besides, it’s this very unhealthy financial environment that will cause the "decimation (1) of Western banks" in the first half of 2012: with their profitability in freefall, balance sheets in disarray, with the disappearance of trillions of USD assets, with states increasingly pushing for strict regulation of their activities (2), even placing them under public supervision and increasingly hostile public opinion, now the scaffold has been erected and at least 10 percent of Western banks (3) will have to pass that way in the coming quarters.

(snip)

First half of 2012: Decimation of Western banks

In fact, it will be a triple decimation (5) culminating in the disappearance of 10 percent to 20 percent of Western banks over the next year:

-- A decimation of their staff.
-- A decimation of their profits.
-- And lastly, a decimation of the number of banks.

It will be accompanied, of course, by a drastic reduction in their role and importance in the global economy and directly affect banking institutions in other regions of the world and other financial operators (insurers, pension funds....

more

http://worldnewstrust.com/flatwire-global-systemic-crisis-first-half-of-2012-decimation-of-the-western-banks-leap/e2020.html

(Note: This item also appears as an OP in Editorials & Other Articles. To vote for this item to appear on the Greatest page, please vote here: http://www.democraticunderground.com/discuss/duboard.php?az=view_all&address=103x633104 Thanks

[Hotler]

28. I have no hope. I see no future. eom.

[Tansy_Gold]

29. Oh, c'mon.

I think the collapse of the banks would be, ultimately, a good thing. Not necessarily easy at first, but in the long term we have to get rid of these parasites.

[Hotler]

31. I agree with you, but

when this sore is lanced open it will be painful, nasty and ugly and there will be many years of darkness in this country and the world. By that time it will be to late for millions here and around the world.

[Demeter]

36. Only if We Have the Same Old Sit-on-their thumbs, collecting baksheesh Governments

If we have some innovative, equality-minded governments, we will have a well-regulated, utility banking system of well-ordered, law-abiding community banks.

Well, it COULD happen, if OWS prevails.

[CatholicEdHead]

37. What type of bug is that?

Yuck.

[Demeter]

39. Looks like a tick to me

Fully gorged. I had a Labrador who accumulated them...

[Tansy_Gold]

44. Yep, common dog tick, fully engorged

They can leave a nasty skin wound, can carry sometimes fatal diseases, and make a really gross mess when they pop.


You know, just like fully engorged banksters. :evilgrin:


TG

[Demeter]

35. He says that like it's a bad thing

I prefer to compare it to the annual discard of leaves in autumn.

[AnneD]

47. It is....

nasty little suckers.

[xchrom]

10. U.S. Needs Second Productivity Miracle in 15 Years

http://www.bloomberg.com/news/2011-10-18/second-miracle-in-15-years-needed-for-u-s-as-productivity-wanes.html

The world’s largest economy may need its second miracle in 15 years as waning productivity growth sets the stage for slower income gains, fewer job opportunities and larger federal deficits in the U.S.

Worker output per hour has fallen for two consecutive quarters, the first back-to-back decline since 2008, and Labor Department revisions show the measure remains below levels typical for this point in a recovery. Going forward, business efficiency will advance at only about half the 3.4 percent pace during the so-called productivity miracle of 1997 to 2003, according to economists at the Federal Reserve Bank of New York.

“This is not good news amid already dim prospects,” said James Kahn, chair of the economics department at New York’s Yeshiva University and a former central-bank economist who wrote about the deceleration on the New York Fed’s Liberty Street Economics blog. “An underlying trend of slow productivity growth has emerged, which means our baseline assumptions about economic growth may be a little too optimistic.”

[Demeter]

38. It's amazing how productive people would be if they got paid a living wage

ala Henry Ford.

[xchrom]

11. Cost of Living in the U.S. Likely Moderated

http://www.bloomberg.com/news/2011-10-19/cost-of-living-in-the-u-s-probably-moderated-in-september.html

The cost of living in the U.S. probably eased September, a sign inflation may moderate as Federal Reserve officials have forecast, economists said before a report today.

Consumer prices climbed 0.3 percent, the smallest gain in three months, according to the median forecast of 78 economists surveyed by Bloomberg News. Separate data may show homebuilding rebounded in September from the slowest pace since May.

Companies like clothing retailer Gap Inc. (GPS) and supermarket chain Safeway Inc. (SWY) have said they are limited in how much they can raise prices to recoup raw-materials costs as weak job and income gains squeeze consumers. With inflation less of a concern, Fed policy makers would have the flexibility to take additional steps should the world’s largest economy stumble.

“Inflation is around where the Fed would like it to be,” said Jim O’Sullivan, chief economist at MF Global Inc. in New York. “On the growth side, the recovery has been disappointing, and they’re worried it could falter.”

[xchrom]

12. De Beers Chief Says Diamond Prices May ‘Stick’

http://www.bloomberg.com/news/2011-10-18/de-beers-sees-diamond-prices-steadyng-after-rising-more-than-35-ceo-says.html

De Beers, supplier of about a third of the world’s rough diamonds, said prices of the gems may “stick” at current levels after demand from India and China spurred a rally of more than 35 percent this year.

Rising wealth in the two countries is enabling consumers to buy more diamond jewelry, compensating for slower growth in the U.S., the biggest retail-gem market. Demand from East Asia has caused a supply shortage, which pushed up prices this year, Chief Executive Officer Philippe Mellier said in an interview.

“We’re now reaching a new plateau from which prices are going to oscillate,” Mellier, 56, said by phone from London yesterday. “I am expecting this new level of pricing to stick.”

Rough-diamond prices advanced 49 percent in the first half, accelerating after two straight years of more than 30 percent growth as stagnant output failed to meet Asian demand, according to data from PolishedPrices.com. De Beers was among producers caught on the back foot after idling mines as the global economic crisis eroded gem sales.

[Roland99]

24. YAIER (Yet Another Inflated Earnings Report)

$1.12 Of Morgan Stanley's $1.14 Q3 EPS Comes From Benefit Of Spread Blow Out
http://www.zerohedge.com/news/112-morgan-stanleys-114-q3-eps-comes-benefit-spread-blow-out

[rdking647]

26. my best stock trade for the day

take it for what its worth but here it is..

buy AGNC,the mortgage REIT for 27.75
at the same time buy the december 26 puts and sell the 29 calls for .10c

AGNC pays an enormous dividend of $5.60 a share.. the december dividend announement should come just before expiration..

i expect the stock to rise to near the call strike price by expiration. this assumes no pre announcement of a dividend cut. if they cut the dividend the stock will fall but your protected below $26. i think the odds on this trade being good is 70-30..
ive been doing this type of trade with AGNC for a while and it has worked out over and over.. you end up giving up part of your dividend every quarter for protection but with a yield over 20% im willing to sacrifice some for more safety


disclosure

Im long a lot of AGNC and have a similar trade to the proposed one on

[Tansy_Gold]

30. Um. . . ..

From the OP's daily disclaimer --

It is unethical (and probably illegal) for financial recommendations to be given here.

[rdking647]

50. its not illegal

nor is it unethical especially if i disclose my investment

[DemReadingDU]

27. good toon: Mr Moneybags being taken down from his pedestal

[sarcasmo]

32. Waiting on that derivative bomb to explode.

[Tansy_Gold]

45. See post #44 above n/t

[Fuddnik]

46. Link?

[Tansy_Gold]

48. what, are you lazy or somethin'?

[Fuddnik]

49. No, crazy!

[RUMMYisFROSTED]

41. Wonderful.

"Holdin' our own! :woohoo:

[RUMMYisFROSTED]

43. "...ya know the nearer your destination the more you're slip-sliddin' away..."