STOCK MARKET WATCH, Thursday 3 June

[ozymandius]

Thursday June 3, 2004

COUNTING THE DAYS
DAYS REMAINING IN THE * REGIME 235
DAYS SINCE DEMOCRACY DIED (12/12/00) 3 YEARS, 174 DAYS
WHERE'S OSAMA BIN-LADEN? 2 YEARS, 227 DAYS
WHERE ARE SADDAM'S WMD? - DAY 441
DAYS SINCE ENRON COLLAPSE = 924
Number of Enron Execs in handcuffs = 18
Recent Acquisitions: Jeff Skilling
ENRON EXECS CONVICTED = 2
Other Arrests of Execs = 54

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

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AT THE CLOSING BELL ON June 3, 2004

Dow... 10,262.97 +60.32 (+0.59%)
Nasdaq... 1,988.98 -1.79 (-0.09%)
S&P 500... 1,124.99 +3.79 (+0.34%)
10-Yr Bond... 4.73% +0.03 (+0.55%)
Gold future... 392.50 -3.00 (-0.76%)


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GOLD, EURO, YEN and Dollars

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PIEHOLE ALERT

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

For information on protests and other actions Citizens For Legitimate Government

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[ozymandius]

1. WrapUp by Mike Hartman

Actions Speak Louder Than Words

As I wade through analysts newsletters, internet articles and headlines hot off the press, it seems to me the market noise is at a fever pitch. Market fundamentals don’t seem to have any significance, traditional technical indicators are being distorted by insiders “painting the tape,” and Richard Russell comments in all his years watching the markets he has never seen them so confused. I will attempt to go through some of the issues and cut through some of the garbage being spewed forth from the Wall Street spin machine.

All Eyes on the Employment Report

Bond traders have been clearing the decks to get out of the way from a bigger than expected jobs report coming on Friday. The anticipated number is for job creation of 200,000 for May, but do you really think the booming number of new jobs is causing inflation? You are led to believe jobs are causing higher interest rates and ramping inflation from the Bloomberg article titled, “U.S. Treasury Notes Decline; Job Growth May Stoke Inflation.” Since they have already booked an inordinate number of part-time jobs and played statistical magic to remove the cliché, “A jobless recovery,” I can only wonder what they will come up with next. Maybe I’m being too cynical, but I still hear a lot more stories from friends and acquaintances in search of a job rather than stories about people jumping on the payroll.

Hindsight Thoughts

I’ve received a few emails from unhappy investors that took short positions on stocks and implied they lost money because I said I bought some short positions. I was very clear with my disclaimer by stating I was not giving investment advise because I couldn’t possibly know the particular financials of each investor and even more specifically that shorting stocks was not for everybody. To refrain from giving any specifics, I’ll use the S&P 500 as my example. I put on the first positions in early May when the index was around 1,200. Based on insider selling, weak internals (mainly breadth) and technical weakness, my second entry came in mid-May after the index fell below 1,100. The SPX remained below 1,100 for eleven days until last Tuesday when the market caught fire for no apparent reason.

Some suggested there was overt intervention, but I would like to suggest that it was nothing more than a brief short-squeeze to get some traders out of their positions. Obviously if an investor had too large a short position using too much leverage, they got hurt in the squeeze…that was the intended outcome. I still believe we are in a topping pattern that screams of institutional distribution. Market makers wanting to short stocks would rather have you out of their way so they can take your positions prior to the decline. Most all of the upside movement in the last month has happened in three or four days, hardly anything to write home about, but enough to give the big boys more time for distribution. These markets are not kind and trading is not for everyone. I still believe the risk reward relationship favors a move down, but timing is tricky at best. It’s probably a good idea to heed Dan’s advice and just get out of the way for whatever we’re going to get on Friday. When probabilities are roughly the same as a coin-toss, sitting on the sidelines is not a bad place. The bigger problem with being on the sidelines is exercising patience until the right opportunity presents itself.

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

[Maeve]

2. Initial Claims Day

And my last day of "freedom"--school's out after today and the kids will be home!<sigh> I love 'em, but they are more work when they're here all day long....

Back to business...last week's figure was 344K, expected to drop to 335-337K (although there is talk of an increase in layoffs lately that may show in this stat).
Overall, it does look as if the economy has reached a point where this is no longer a major report for taking the pulse of the country. That's good, but the patient isn't back to full health. Stable, but guarded, IMHO....

[Maeve]

6. Here's the numbers

Weekly fell 6,000 to 339K (means they upped last week's to 345K) and the 4-week average rose to 341K (expected). We're still seeing a weaker job market than one would expect in a "recovery", so good luck to all the new graduates heading into the marketplace.

Continuing jobless claims rose 65K to 3.003 million

[Frodo]

8. Interesting take.

This number didn't get reliably below 340k until late 1996. I could have sworn we were in a "recovery" well before then?

[Maeve]

9. This is not the only number

The job creation numbers are lower than an economy this size needs, especially given the net loss we've suffered under this misadministration.

Go argue with Claims show weaker job market if you want.

[Frodo]

10. They seem to have it about right.

I don't see any point in arguing with them.

Claims at the current level around 340,000 are consistent with steady but not spectacular job growth of around 150,000 to 200,000 a month, economists say.

In the first four months of the year, the economy has created on average of 217,000 jobs a month.

I also agree with your "The job creation numbers are lower than an economy this size needs" (emphasis added)

[ozymandius]

3. Good morning Marketeers.

:donut: :donut: :donut: :donut: :donut: :donut:

As the past two days may have been some indication - I will not be around much today. My wife's parents are coming into town. Preparations are being made at the moment.

Perhaps next week will give me more time to participate in the thread, maybe alleviate the feeling that I am spamming the message board. :)

all things good,

Ozy :hi:

[Maeve]

4. My in-laws are coming in today, too!

Gotta see if I can shovel out the livingroom... :hi:

[ozymandius]

5. 'Tis the season.

Good to see you Maeve. Best of luck in shoveling the home. Our humble commode needed a few days head start.

[UpInArms]

7. daily dollar watch

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

Last trade 88.97 Change +0.13 (+0.15%)

http://www.fxstreet.com/nou/content/2025/content.asp?menu=market&dia=362004

U.S. FOREX SUMMARY

The U.S. dollar headed towards a recent two-month low against the euro and three-month low versus the Swiss franc on Wednesday as markets prepared for potential damage to the United States' economy from higher fuel costs.

Investors have been selling the dollar since late May after world oil prices soared to their highest levels in two decades, triggering concerns U.S. consumer spending and business investment could slow down and delay interest rate hikes.

While Europe and Asia may also be hurt by high energy costs, many investors saw currencies such as the euro and the Swiss franc as good defensive bets. These currencies are typically less sensitive to global growth cycles.

Earlier on Wednesday, oil rose above $42 a barrel to 21-year highs on fears of potential supply disruptions in Saudi Arabia after deadly attacks by Islamic militants last week. Dealers said the market would be carefully watching the outcome of an Organization of Petroleum Exporting Countries meeting on Thursday, at which the cartel is expected to consider an increase in production quotas that could ease rising prices.

With the exact impact of high oil prices on the global economy and, eventually, on currency markets uncertain, investors are hungry for any clues about economic performance in the U.S. and the outlook for crude costs.

For now, any delays in the widely expected Fed rate hikes would maintain the less attractive yield on dollar deposits, discouraging dollar buyers. Markets also await U.S. employment data due later in the week that could determine the near- term outlook for U.S. interest rates.

...more...

http://www.fxstreet.com/nou/content/106750/content.asp?menu=market&dia=362004

Dollar View - Lower is Back

Lower is back. And it happened ahead of the all important (for the Fed and markets if not me) May employment report (read change in payrolls). As euro/ dollar broke above 1.22 last week, prices spoke volumes about market psychology and the return of the structural story/theme that led the dollar lower through February of this year. Okay few are mentioning the US current account deficit when describing why the dollar is lower. Indeed, most are citing rising oil prices slowing the US economy, reducing the need for the Fed tighten, when explaining why the dollar is weak. And more recently the weakness in the yen has been attributed to oil prices. A few thinking about the second order question recognize this oil "shock" is not specifically a US problem but a problem for all major oil importing nations and economies.
Surely if the euro were to weaken more markedly the collective explanation would be oil. At best the oil story is chasing price.

How about a new way to think about oil and FX? Higher oil prices for countries running large external imbalances bumps up the import bill and worsens the balance of payments (need more foreign capital inflow). So from BoP basis, all else being equal, higher oil prices should pose greater downside risks to currencies of countries running large external imbalances.
But this is surely something that is seen over months and years and not days or weeks.

And I am mentioning basic macroeconomic theory, much as theory notes rising rates relative to the rest of the world, all else being equal, should attract more foreign capital and see the currency appreciate. Is this not why in part the dollar rallied from April...after strong March jobs and subsequent shift in the Fed's FOMC statement language (dropping considerable period). Moreover, markets are forward looking and discount changes in monetary policy in advance of the actual policy shifts. The short end of the yield curve has discounted over 100 basis points of tightening the rest of the year. It is in the dollar level. And we know the reality of FX markets, beyond a tendency toward randomness at times, that interest rate hikes do not always yield a stronger currency...recent monetary history is littered with examples of currency crises when higher rates yielded more selling. And in the case of the Fed's 300 bps in rate hikes from February of 1993 to February of 1994, the dollar was largely lower. One could argue that in recent years monetary policy tightening tends to support a currency through the initial moves/signals of higher rates, and then ceases to support the currency (is quickly discounted and other factors dominate).

But at the end of the day why is less important than what is, and what is is the dollar is weakening and market participants will find reasons to justify selling dollars. Oil today, terrorism tomorrow (even terrorist strikes in Europe as Madrid proved, albeit on a small scale), weak May payrolls the day after tomorrow. My point is the market is ready to sell dollars. It is not short, on balance. It is selling dollars with less than spectacular fundamentals stories in Europe and Japan. It is selling dollars in a global economic environment where near unprecedented monetary accommodation is slowly being removed. It is selling dollars when the US productivity story is still quite remarkable (high growth rates, if coming down). And just maybe the collective pool of world savers has had enough of US assets and is less eager to load up on more as is necessitated by low US savings.

...more worth reading...

http://www.just-style.com/news_detail.asp?art=34158

USA: Neiman Marcus Quarterly Earnings Jump 67%

Department store retailer Neiman

Marcus Group Inc has posted a 67 per cent jump in earnings to $68.8 million for the latest quarter, up from $41.1m in the same period a year earlier.

The Texas-based company also reported improved revenue of $877.6m for the quarter to May 1, up from $722.9m in the year-ago period.

Same-store sales, meanwhile, rose 8.5 per cent during the three- month period.

...more...

It's MaeveDay! Curious to see where the numbers go today :)

Good to see you Maeve :hi: and Ozy, I do understand the in-law visit thing - just experienced it myself a week or so ago. Hope you do well - I just never seem to pass the "test" for clean! My credo of "a life not lived is worse than a house not cleaned" is not appreciated :D

Have a Great Day Marketeers!

[Maeve]

11. And they're off!

Dow 10,243.81 -19.16 (-0.19%)
Nasdaq 1,981.20 -7.78 (-0.39%)
S&P 500 1,122.41 -2.58 (-0.23%)
10-Yr Bond 4.740% +0.010

[Maeve]

12. Tossing this in about productivity

Q1 productivity revised up to 3.8%

noting this from the middle of the story...

"The revisions show that labor captured a much larger share of the benefits of higher productivity in the past two quarters than previously assumed. But the figures don't change the larger view that most of the benefits over the past several years have accrued to business owners, not workers.

As a result, inflationary pressures have been reduced, profits have soared and wages have stagnated. The pendulum had swung so far in favor of owners that even Federal Reserve Chairman Alan Greenspan expressed concern."

[Sven77]

13. Federal Reserve increases money supply by unprecedented $155 billion

CRISIS - Federal Reserve increases money supply by unprecedented $155 billion in one month .. Safe Haven

What do they know that we don't?

http://www.safehaven.com/article-1597.htm

from http://www.timnews.com/

[UpInArms]

17. it is a curious thing -

I read that article last night and agree with much of what the writer says -

So why are we "monetarizing our debt" (buying bonds)?

[JNelson6563]

14. 10:57 update

Dow 10,228.27 -34.70 (-0.34%)
Nasdaq 1,973.85 -15.13 (-0.76%)
S&P 500 1,120.60 -4.39 (-0.39%)
10-Yr Bond 4.741% +0.011


How will Tenet's resignation play into the markets?

Julie

[UpInArms]

15. Market Numbers and blather at 12:01 EST

Dow 10,268.23 +5.26 (+0.05%)
Nasdaq 1,978.42 -10.56 (-0.53%)
S&P 500 1,123.65 -1.34 (-0.12%)
10-Yr Bond 4.718% -0.012

11:30AM: Off their respective session lows, the major averages continue to trade in negative territory, although the losses for the blue-chip averages are only mild... The retailing sector is notable as it has advanced well off its earlier lows and is currently down only 0.2%, as indicated by the S5RETL index...

The group came under sell-the-news pressure despite generally better than expected same store sales results, which included Wal-Mart (WMT 56.69 +0.34) reporting May comps of 5.9% (consensus 4.8%), Nordstrom (JWN 40.79 -0.59) reporting comps of 9.4% (consensus 6.0%), and JC Penney (JCP 35.44 -0.60) reporting comps of 9.1% (consensus 4.0%) - please sea Same Store Sales Calendar available to Briefing.com's Platinum subscribers for more details... Note that the S5RETL index has been outperforming the broader market, gaining roughly 9.5% since the middle of May versus 3.8% for the S&P 500...NYSE Adv/Dec 937/2052, Nasdaq Adv/Dec 794/2014

11:00AM: Volatile trade over the past half an hour, as the market continues to evaluate OPEC's decision to increase crude oil supplies by 2 mln barrels a day... For now, although off their respective session lows, the major averages remain in negative territory... The semiconductor sector is lower by 2.0%, as indicated by the SOX index... Note that the semiconductor sector was also a laggard in yesterday's session, contributing to the Nasdaq's relative underperformance of its blue-chip counterparts...

Intel (INTC 27.52 -0.49) is among the issues driving the group lower ahead of its mid-quarter update after the market closes today... INTC has been in a downtrend for most of this week, as some analysts predict that the company may reduce the high end of its sales forecast as PC demand slows...

[Maeve]

16. Noon numbers and natterings

Dow 10,268.15 +5.18 (+0.05%)
Nasdaq 1,978.42 -10.56 (-0.53%)
S&P 500 1,123.65 -1.34 (-0.12%)
10-Yr Bond 4.718% -0.012

12:00PM: After spending much of the morning vacillating near their respective session lows, the major averages have found a bid over the past half an hour, which has catapulted the Dow into positive territory and the S&P 500 to within a short reach of the unchanged line... The Nasdaq continues to underperform its blue-chip counterparts on a relative basis due to the lagging computer hardware and semiconductor groups...
The latter is under pressure ahead of Intel's (INTC 27.58 -0.43) mid-quarter update scheduled for after the market closes today, where the company may reduce the high end of its sales forecast... Oil continues to be a driving factor in determining trade direction... To that effect, the market traded to its session lows as OPEC announced its decision to increase output by 2 mln barrels, with another possible 500K increase in August, which was deemed disappointing versus expectations, leading to an increase in the price of crude oil to as much as $40.85/bbl... Nevertheless, as the market re-evaluated OPEC's decision, the price of crude oil dropped to $39.90 - down $0.06 currently - leading to a rebound in the broader market...

While the price of crude oil has been on the front-burner of late, this morning's generally better than expected same store sales results exhibited that record gasoline prices have had little effect on consumer spending, even with the tougher comparisons that retailers are starting to anniversary...
http://finance.yahoo.com/mo

[UpInArms]

18. to my simul-posting "triplet"!

[Maeve]

19. Well, I don't know about you and 54anickel

But I haven't been blonde since I was about 8! Several other colors, but not blonde...:D

Dow 10,268.94 +5.97 (+0.06%)
Nasdaq 1,979.31 -9.67 (-0.49%)
S&P 500 1,123.80 -1.19 (-0.11%)
10-Yr Bond 4.706% -0.024

[UpInArms]

20. blonde? me neither - but I was going for the bods :)

here's for the un-identical parts of us then:



and for the beauty in each of us:

[Maeve]

21. I won't argue with the bods

But that blond mouse has a dangerous look in its eyes!

[UpInArms]

22. Zowie! Do we look good or what!

Here are the numbers at 2:19 EST

Dow 10,236.79 -26.18 (-0.26%)
Nasdaq 1,972.74 -16.24 (-0.82%)
S&P 500 1,120.93 -4.06 (-0.36%)
10-Yr Bond 4.721% -0.009

2:00PM: The major averages have drifted slightly lower over the past half an hour, with the Dow pulling back below the unchanged line... At least some of participants' unwillingness to bid stocks higher is tied to uncertainties tied to tomorrow's Employment report... The consensus estimate calls for Non- Farm Payrolls of 225K in May on the heels last month's increase of 288K... However, economists' estimates range from a low of 144K to as much as 300K... Overall, the market is looking for a strong report...

For more on what to expect from tomorrow's Employment report, please read the Looking Ahead column...NYSE Adv/Dec 1105/2053, Nasdaq Adv/Dec 988/1989

1:30PM: Mostly sideways in the last half an hour, as the major averages continue to trade along their respective session highs... Despite the market's advance, leadership to the upside remains difficult to come by, although groups in the green include the defensive drug, healthcare, and consumer staple sectors... The retailing sector also continues to trade in positive territory on the heels of this morning's strong same store sales results... Among the laggards of note are the semiconductor, biotech, materials, and airlines sectors...

Despite today's drop in crude oil prices, the airline sector is down 1.6%, as indicated by the XAL index... Remember that the group rallied strongly in yesterday's session, advancing over 5% in anticipation of OPEC's quota increase...NYSE Adv/Dec 1161/1998, Nasdaq Adv/Dec 1028/1921

[UpInArms]

23. Market Numbers and blather at 3:14 EST

Dow 10,236.64 -26.33 (-0.26%)
Nasdaq 1,972.27 -16.71 (-0.84%)
S&P 500 1,120.90 -4.09 (-0.36%)
10-Yr Bond 4.712% -0.018

3:00PM: The major averages are sticking near their respective session lows... Participants are nervous ahead of tomorrow's Employment report, which is expected to be quite strong, with some observers looking for a number north of 300K, with upward revisions to prior readings... As discussed in the Looking Ahead column, a strong payrolls number would more than likely stoke the argument that the FOMC can't afford to move in measured increments of just 25 basis points...

To that effect, federal funds futures are currently pricing in 100% probability of a 25 basis point hike at the June meeting and a 50% possibility of a 50 basis point hike...NYSE Adv/Dec 992/2228, Nasdaq Adv/Dec 2134/HASH(0x8818258)

2:30PM: Unable to move higher, the major averages have slipped to fresh session lows... The Nasdaq continues to underpeform its blue-chip counterparts on a relative basis and is spearheading the decline, with the semiconductor, networking, hardware, and disk drive sectors leading the way lower... Volume maintains its unimpressive levels seen over the past two session, which is telling of participants' lack of conviction to the market... Breadth figures are unfavorable with decliners leading advancers by a 2-to-1 margin and down volume outpacing up volume by a 5-to-2 margin on the NYSE and Nasdaq...

The ratio of new 52-week highs to new lows remains lackluster, with 50 and 47 new highs on the NYSE and Nasdaq, respectively, juxtaposed with 14 and 31 new lows...NYSE Adv/Dec 1031/2153, Nasdaq Adv/Dec 944/2056

[UpInArms]

24. and now at 3:46 EST

Dow 10,215.14 -47.83 (-0.47%)
Nasdaq 1,966.23 -22.75 (-1.14%)
S&P 500 1,118.80 -6.19 (-0.55%)
10-Yr Bond 4.712% -0.018

3:30PM: With half an hour of trade remaining, the major averages remain in negative territory and within only a short reach of their respective session lows... Although there were numerous stock-friendly developments in today's session, including strong same store sales results and declining price of crude oil, the market has ultimately given into its fears regarding a sooner than anticipated (and, possibly a greater than anticipated) rate hike ahead of tomorrow's Employment report...

As a reminder, the consensus estimate is for a gain of 225K in Non-Farm Payrolls, although many participants are looking for a higher than anticipated reading... Tonight, the market will be attuned to Intel's (INTC 57.57 -0.44) mid-quarter update, while the Earnings Calendar is relatively uneventful until next week...NYSE Adv/Dec 1049/2187, Nasdaq Adv/Dec 942/2128

[UpInArms]

25. Closing Numbers and blather

Dow 10,195.91 -67.06 (-0.65%)
Nasdaq 1,960.26 -28.72 (-1.44%)
S&P 500 1,116.64 -8.35 (-0.74%)
10-Yr Bond 4.712% -0.018

Close: It was a choppy session, with the major averages trading in ranges of roughly 88, 9, and 23 points for the Dow, S&P 500, and Nasdaq, respectively... There were a lot of developments to keep track of, and stocks spent the bulk of the day searching for direction... To that effect, after opening in negative territory, the major averages were able to pare their losses in a noticeable fashion due to the declining price of crude oil and strong same store sales reports...

With respect to crude oil, OPEC announced that it was increasing supply quotas by 2 mln barrels a day, with an additional increase of 500K in August... While the market was originally disappointed with the extent of the announced production increases and the price of crude oil rose to as much as $40.85/bbl, it eventually started dropping, closing down 1.9%, or $0.74, at $39.22/bbl... May same store sales results were solid, with Wal-Mart (WMT 56.77 -0.42), for one, posting comps of 5.9% (consensus 4.8%)...

With the retailing sector having outperformed the broader market since the middle of May, however, participants couldn't place their finger on what to do with the group, which ended up selling on the news, then advancing into positive territory, but only to close back in the red... Confusing participants further was anticipation ahead of tomorrow's Employment report... While the consensus is for a Non-Farm Payrolls reading of 225K, economists' estimates range from 144K to 300K, with many observers looking for a number north of 300K with upward revisions to prior readings...