STOCK MARKET WATCH, Monday 28 June

[ozymandius]

Monday June 28, 2004

COUNTING THE DAYS
DAYS REMAINING IN THE * REGIME 210
DAYS SINCE DEMOCRACY DIED (12/12/00) 3 YEARS, 199 DAYS
WHERE'S OSAMA BIN-LADEN? 2 YEARS, 253 DAYS
WHERE ARE SADDAM'S WMD? - DAY 466
DAYS SINCE ENRON COLLAPSE = 949
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 25, 2004

Dow... 10,371.84 -71.97 (-0.69%)
Nasdaq... 2,025.47 +9.90 (+0.49%)
S&P 500... 1,134.43 -6.22 (-0.55%)
10-Yr Bond... 4.65% -0.00 (-0.02%)
Gold future... 403.20 -0.30 (-0.07%)


|||


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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[UpInArms]

1. daily dollar watch

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

Last trade 88.84 Change -0.04 (-0.01%)

http://www.fxstreet.com/nou/noticies/afx/noticia.asp?font=Reuters&pv_noticia=MTFH66248_2004-06-28_10-12-04_L28633229

European shares hit two-month highs; CS, KPN lead

LONDON, June 28 (Reuters) - European shares touched their highest levels in two months on Monday as bank Credit Suisse <CSGN.VX> rose, sliding crude oil eased fears about inflation and investors looked to a firmer start on Wall Street.

Telecom stocks were among the strongest gainers as KPN <KPN.AS> of the Netherlands gained on news of a share buy-back.

Irish drug maker Elan <ELN.I> jumped 9.5 percent to 21.2 euros on news the group and its U.S. partner Biogen Idec's <BIIB.O> multiple sclerosis drug Antegren had been designated for priority review by U.S. regulators.

A choppy first half was drawing to a close and is expected to be marked on Wednesday with the first U.S. interest-rate hike by the Federal Reserve in four years.

Earlier-than-expected handover of Iraqi sovereignty to an interim government appeared to have a muted impact on bourses.

"It's given the dollar a bit of a bounce but nothing of significance, and other markets have not budged at all," said Anais Faraj, a strategist at Nomura bank.

"Overall, people are more interested in whether it will lead to a moderation in terrorism," Faraj said.

...more...

http://www.fxstreet.com/nou/noticies/afx/noticia.asp?pv_noticia=1088414848-9e32d306-15619

Forex - Dollar steady ahead of Wednesday's FOMC meeting

LONDON (AFX) - The dollar was steady as investors remained on the sidelines ahead of this week's rate-setting meeting of the US Federal Reserve and Friday's closely-watched US jobs report for June

The market is awaiting the statement to Wednesday's expected quarter point rate hike from the Federal Open Market Committee to see how borrowing costs are likely to increase in the US over the coming few months from their current 46-year lows of 1.00 pct

Though expectations of a half-point hike have been reduced, the market will be looking closely at the Fed's accompanying statements for clues on future interest rate hikes

Some analysts think the dollar may come under some pressure if the Fed says it believes that the risks to growth and price stability are neutral, in line with the market's interest rate expectations

"This will leave the dollar without further support from interest rates," said Mike Carey, currency strategist at CALYON

The European Central Bank also meets this week and is widely tipped to maintain its neutral bias and its key refi rate at 2.00 pct

Michael Klawitter, senior currency strategist at WestLB, said the ECB meeting is likely to be a "non-event" for the markets. Elsewhere, news that the US has handed over power to the Iraqis failed to impact too heavily on the market's subdued tone

...more...

The futures are so bright, ya gotta wear shades!

Have a great day Marketeers!

[ozymandius]

2. Good morning Marketeers!

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

There is no WrapUp today. Go figure.

I will be scarce today as well. We are looking to move to a new place - so we are interviewing apartments. It really is quite amazing how prices have really come down dramatically since we last looked two years ago. Conversely, home prices have risen and plateaued with a few areas coming down to more reasonable levels. This is the basic idea - we are looking to save money. From my research, we can expect to save almost $200/month and have more room. Now that my shop is on the last two months of its lease - this means that we will save about $700/month. I cannot shrug at that.

While we still cannot afford to buy, an apartment makes so much sense on many levels. We used to live in a house shortly after our son was born. What a nightmare! The place was a money pit. The HVAC needed constant attention. The utilities ballooned to 3x our accustomed amount. There was a yard to mow and shrubbery to trim. I am convinced that grass in the yard is the biggest waste of resources. If given the option, Xeriscaping is the way to go.

The experience of that house (accompanied by my own experience growing up in a house where we shared chores) has sworn me off a house. Give me a condo or townhouse any day. An association fee is worth the convenience. So there you have it: we are settled on a form of communal living.

I will check back as time allows.

Have a wonderful day watching the Casino!

Ozy :hi:

[jamesinca]

4. good luck ozy

We are very different, I could not stand the apartment life. I have my pool and I am going out at three a.m. if I want to. None of this "closed at 10" business. LOL

Good luck, choose wisely.

[UpInArms]

3. pre-opening blather

briefing.com

8:31AM: S&P futures vs fair value: +9.7. Nasdaq futures vs fair value: +11.0. Futures trade actually falls off its highs following the much better than expected May Personal Income (at 0.6% versus the consensus of 0.5%) and Spending (at 1.0% versus the consensus of 0.8%) data... Despite the slight move, the cash market is still poised for a much higher start.

8:27AM: S&P futures vs fair value: +11.0. Nasdaq futures vs fair value: +12.5. Futures market still trading high ahead of the 8:30 ET release of the May Personal Income and Spending Reports... Consensus estimates are set at 0.5% and 0.8%, respectively.

8:02AM: S&P futures vs fair value: +11.6. Nasdaq futures vs fair value: +13.5. Futures indications pointing to a solidly higher open on the heels of strong gains in overseas trading... Tokyo's Nikkei ended +0.9% and Germany's DAX Index (the highest of all the European bourses) is currently up 1.5%... All of this comes following Friday's US session, where the indices turned sharply lower in late-day trading.

ino.com

The September NASDAQ 100 was higher overnight and has exceeded the contract high crossing at 1514. Stochastics and the RSI are bullish signaling that sideways to higher prices are possible near-term. Closes above 1514 would open the door for a larger-degree rally this summer. Closes below the 10-day moving average crossing at 1484.70 would signal that a short-term top has likely been posted. The September NASDAQ 100 was up 9.50 points at 1515 as of 6:38 AM ET. Overnight action sets the stage for a steady to firmer opening by the NASDAQ composite index later this morning.

The September S&P 500 index was higher overnight and is poised to test the contract high, which was posted in April crossing at 1147.10. Stochastics and the RSI are bullish signaling that sideways to higher prices are possible near-term. Closes below last Tuesday's low at 1123.50 would confirm that a short-term top has been posted. The September S&P 500 Index was up 8.60 pts. at 1143.80 as of 6:40 AM ET. Overnight action sets the stage for a steady to firmer opening when the day session begins later this morning.

and here's the dollar (to go with that corresponding dip you see on the charts above)

Last trade 88.60 Change -0.28 (-0.32%)

Last tick: 2004-06-28 08:13:59 ET
30-min delayed quote.

[54anickel]

5. Treasury Notes Fall After Personal Spending Increases in May

http://quote.bloomberg.com/apps/news?pid=10000103&sid=atAldUohr7Ok&refer=us

June 28 (Bloomberg) -- U.S. Treasury notes fell after a government report showed personal spending rose in May and a measure of inflation, which erodes the value of fixed-income payments, accelerated.

The 4 3/4 note due May 2014 fell 3/8, or $3.75 per $1,000 face amount, to 100 13/32 at 8:43 a.m. in New York, according to bond broker Cantor Fitzgerald LP. The yield rose 5 basis points, or 0.05 percentage point, to 4.70 percent.

``The Treasury market doesn't like inflation,'' said Scott Pedowitz, a bond strategist at Commerzbank Securities in New York, a unit of Commerzbank AG, Germany's third biggest bank by assets.

Personal spending rose 1 percent in May, the biggest increase since October 2001, the Commerce Department said. It also said the personal consumption expenditures price index rose 2.5 percent in May from a year ago, compared with a revised gain of 2 percent in April.

more...

[54anickel]

6. Global: Disequilibrium Economics

http://www.morganstanley.com/GEFdata/digests/20040628-mon.html#anchor0

Equilibrium is the anchor of macro analysis. It is tantamount to a condition of balance, or stability, that helps foster sustained economic growth. Yet equilibrium is largely a theoretical construct — very different from the disequilibria that depict actual conditions in the real world. The transition from disequilibrium to equilibrium has long been central to the policy and financial market debates. Ever-present shocks can be far more destabilizing for economies in disequilibrium than for those in equilibrium. Therein lies the key risk in today’s world.

For some time, I have maintained that the global economy is now in a fundamental state of disequilibrium. My argument rests largely on the extraordinary disparities between the world’s current account deficits (mainly in America) and surpluses (mainly in Asia). By our reckoning, the gap between these external imbalances — the difference between surpluses and deficits — now amounts to approximately 3% of GDP. By way of comparison, that’s about three times the size of the gap that prevailed as recently as 1991. To a large extent, these imbalances reflect the lopsided character of the US-centric global growth dynamic that has prevailed since 1995. Our estimates suggest that the United States accounted for fully 98% of the cumulative increase in dollar-based world GDP over the 1995 to 2002 period (at market exchange rates). External imbalances and lopsided global growth are the footprints of disequilibrium. And now such an unbalanced world must come to grips with two disruptions — a China slowdown and a normalization of Fed policy.

The Fed’s policy shift is the more immediate risk to contemplate — largely because the first step on the long road to normalization is now at hand. There are several aspects of the “Fed factor” to contemplate: For starters, the unusual stimulus of the US central bank has been the high-octane fuel that has fed the “carry trade” in a multitude of asset classes — from mortgage markets and credit derivatives to emerging market and high-yield debt. As the Fed acts to normalize its policy rate, the yield curve will eventually flatten and those trades will need to be unwound — an outcome which could prove quite destabilizing for fixed income markets, as well as the interest-rate-sensitive sectors of the economy they influence. The same is likely for the overly-indebted American consumer — arguably the greatest beneficiary of the carry trade (see my 4 June dispatch, “The Mother of All Carry Trades”). In an income-short climate, US households have benefited handsomely by extracting purchasing power from their largest asset holding — the home. And such equity withdrawal — which amounted to more than 5% of disposable personal income in 2003 — was facilitated by the sharp appreciation in property values that, itself, was very much a by-product of low interest rates. The coming normalization of Fed policy changes all that for an increasingly asset-dependent US economy (see my 21 June dispatch, “The Asset Economy”).

Nor should the impacts of the China slowdown be minimized. The Chinese economy could be vulnerable on two counts — the first being a downshift arising from the tightening measures that have already been implemented. Recent data on fixed investment, bank credit growth, and industrial output suggest the long awaited slowdown is now unfolding. Secondly, China could also be vulnerable to a slowing of the American consumer — long the principal driver of its external demand. The potential interplay between China’s domestic tightening campaign and an American-led weakening of its external demand only underscores the wildcard nature of the “China factor” insofar as the global economy and world financial markets are concerned. As I have stressed repeatedly, the global repercussions of the China slowdown cannot be minimized. China’s import explosion — a 40% increase in 2003, alone — has turned its economy into an engine of growth for Japan, Korea, Taiwan, and Germany. As China slows, these economies will also come under pressure.

more...

[54anickel]

7. BIS Sees Interest Rates Rising as Economy Strengthens

http://quote.bloomberg.com/apps/news?pid=10000103&sid=aWHJSeDsoZP0&refer=us

June 28 (Bloomberg) -- The Bank for International Settlements, the bank that serves the world's central banks, said policy makers will have to start raising interest rates as a global economic recovery strengthens.

``As evidence accumulates that output is rising relative to capacity, macroeconomic policies will need to be tightened,'' BIS chairman Nout Wellink said in the text of a speech prepared for delivery in Basel, Switzerland. ``A key challenge will be to do this without putting what has been achieved at risk.''

Among the world's four biggest central banks, only the Bank of England has increased borrowing costs this year. The U.S. Federal Reserve has kept its main lending rate at 1 percent, the lowest since 1958, for a year. The Bank of Japan has a policy of zero interest rates and the European Central Bank earlier this month left its key rate at a six-decade low of 2 percent.

Central bank governors may be forced to revise their stance on increasing signs a global recovery is gaining momentum. The U.S. economy, the world's largest, will probably expand 4.6 percent this year and Japan is seen accelerating to 3.4 percent, the International Monetary Fund said in April. The euro region may grow 1.7 percent after last year's 0.4 percent, the IMF said.

more...

[UpInArms]

8. Inflation begins to disturb consumers

http://www.twincities.com/mld/twincities/business/9027383.htm?1c

HYATTSVILLE, Md. — Max Grace, part-time college student and full-time movie projectionist, can't keep up with inflation.

To cover his rising bills, he spends more time showing movies than hitting the books. His education is delayed. And his grades suffer, said Grace, 24.

"I have to pay a lot more money for everything, from rent to gas to groceries," the University of Maryland student said, packing his groceries into his beat-up 1985 Nissan pickup.

Grace's experience seems to be at odds with government inflation numbers, which indicate that prices remain low by historical standards. Consumer prices are up 3.1 percent over the past year, which means that an item, which cost $1 a year ago now, costs $1.03.

"Our general view is that inflationary pressures are not likely to be a serious concern in the period ahead," Federal Reserve Chairman Alan Greenspan told Congress this month.

<snip>

What matters to Greenspan, however, is different than what matters to consumers.

<snip>

The price of milk, for example, rose 14.5 percent last month, and already high gasoline prices climbed another 8.1 percent. A gallon of whole milk sold for $3.39 at the Giant market in Maryland and has topped $4 in some parts of the country.

...lots more...

[54anickel]

10. They (Fed) don't THINK so?!?! WTF kind of answer is that?

...Fed officials are more worried about whether prices will continue to rise that rapidly. They don't think so. Energy prices are showing signs of easing. Wage increases, which can fuel inflation, remain subdued.

Energy showing signs of easing - yeah until a couple more attacks or the Saudi gov't imploding - but I guess that's one of those "low probability events".

Wage increases remain subdued - yep that'll help folks to be able to afford inflation. The Feds have admitted themselves that the labor markets are going through "structural changes". We recently discussed all that here:

http://www.democraticunderground.com/discuss/duboard.php?az=show_topic&forum=102&topic_id=627668#627902

Wouldn't you think that with all that "structrual changing" going on that maybe the old rules of acting only on inflation in wages might also need to change?

Sheesh - commodities just keep going up, we are no longer the big producers with a corner on the market for raw materials. Those inputs to the costs of goods will be passed on just as the cost of labor is.

But they don't THINK so?!?!?!?!?

[54anickel]

19. THE CRUDE AWAKENING

The only shock about the surging price of oil these days is that Wall Street is shocked by it. If professional investors didn't see this one coming, they must have either been locked up in an Iraqi prison or in a coma. We certainly saw it coming.

For as much as we have talked about the impact of growing demand for petroleum from China, India and a cavalcade of SUV drivers in North America, the biggest reason for the bull market in oil is a shortage of supplies. From bottlenecks caused by aging refineries and a supertanker shortage to depleted production from non-OPEC producers, the price of crude is being pushed higher because of one simple fact: There isn't enough of it.

One of the biggest bottlenecks - one that can't be overcome quickly or easily - in the industry, is the lack of refining capacity in Canada and the United States. The U.S. Energy Department reports that refining capacity in the United States has grown by just 2.4% since 1977, while demand for gasoline has risen 27% during the same period.

And the cruel fact is that no major new oil refineries have been built in the United States or Canada since the early 1980s, and many of the ones that used to exist have been shut down. That's left the continent's existing refineries stretched to capacity, just as North American gasoline markets are heading into the heavy demand summer driving season. According to one estimate, U.S. refineries are running at about 97% capacity.

more...

[UpInArms]

9. Markets are Open at 9:33 EST

Dow 10,412.84 +41.00 (+0.40%)
Nasdaq 2,038.80 +13.33 (+0.66%)
S&P 500 1,140.05 +5.62 (+0.50%)
10-Yr Bond 4.693% +0.048

9:18AM: S&P futures vs fair value: +9.3. Nasdaq futures vs fair value: +10.5. Futures trade dips a bit, but continues to point to a sharp uptick at the beginning of trading.

9:02AM: S&P futures vs fair value: +9.7. Nasdaq futures vs fair value: +11.5. Expectations remain intact for a noticeably higher open as the futures trades retains the bulks of its gains... Today's move is largely a rebound off Friday's sharp sell-off, and speaks to the give and take the market has seen over the past couple of weeks... Conviction on the part of buyers and sellers should again be weak with few earnings reports out and no notable events on the calendar

[54anickel]

11. Central bankers weigh risks from China,inflation (Basel II - WTF)

http://biz.yahoo.com/rf/040627/economy_bis_1.html

snip>

In a major move to bolster the resilience of the financial system to shocks, the Group of 10 central bankers from the largest economies meeting on Saturday also approved a sweeping new bank capital accord, called Basel II.

The agreement modernises capital rules to make bank lending and their balance sheets more sensitive to risk. G10 Chairman Jean-Claude Trichet said the accords, which now must be implemented at national level, would "improve the financial sector's ability to serve as a source of sustainable growth."

snip>

The inflationary push from higher oil prices and soaring commodity prices when global growth is accelerating also nagged at central bankers, who on Monday will release the annual report from the BIS, the central bank to the world's central bankers, assessing the health of the world economy and financial markets.

"We hope oil prices will go down," said Marion Jusko, governor of Slovakia's central bank.

Brazil's Meirelles said central bankers were weighing the disinflationary forces from cheap Chinese products flooding world markets against the risk of oil and growth-driven inflationary pressures.

"It is too early to know" which side of the inflation equation will win, he said.

more...

[54anickel]

12. Banks Report Widespread Challenges Remain in Their Basel II Preparations

Lot's of news if you Google on Basel II. How did I miss this little gem they've been working on.

http://biz.yahoo.com/prnews/040628/sfm009_1.html

LONDON, June 28 /PRNewswire-FirstCall/ -- Many of the world's largest banks see significant challenges remaining in their preparations to implement the Basel II Capital Accord, according to a global survey of banks sponsored by Accenture, Mercer Oliver Wyman and SAP.
Substantial numbers of banks surveyed remain uncertain over budgets, a lack of confidence in risk-management frameworks and economic capital systems, and insufficient progress in implementation of the credit-risk measurement tools required to meet the new regulation. Survey results indicate that U.S. and Asia-Pacific banks lag behind their European counterparts in several key areas of preparation for Basel II.

The survey of executives responsible for Basel II compliance at 97 of the world's 200 largest banks in April and May was designed to gauge how major banks worldwide are responding to the challenges of the Basel II Accord just before the announcement of final rules in late June. Basel II updates and expands 1988 capital rules for risk-management practices that align capital more closely with operational, credit and market risks for banks operating internationally.

Other major survey findings include:

more...

[54anickel]

13. Basel banking accord could herald cheaper home loans

http://news.independent.co.uk/business/news/story.jsp?story=535679

Cheaper mortgages could be on the way after central bank governors and regulators from the world's leading industrialised nations approved a new set of rules over the weekend to help prevent banking collapses.

The Basel II accord, as it is known, governs how much capital banking organisations must set aside to protect themselves against financial risks and sudden external shocks. The new rules are due to be phased in between the end of 2006 and 2007.

Banking experts said that one of the by-products of the new accord could be cheaper home loans because mortgage lending would be classed as lower risk under the Basel II framework and therefore lenders would be required to hold less capital in reserve.

snip>

Unlike the original Basel I accord, introduced in 1988, the new framework directly links capital to risk and so the more advanced a bank's approach to risk management, the lower will be its capital requirements. The new framework also gives banks greater incentives to be more transparent in their public reporting.

[54anickel]

14. Bankers doubt pace can be maintained (M&A)

http://news.ft.com/servlet/ContentServer?pagename=FT.com/StoryFT/FullStory&c=StoryFT&cid=1087373298809&p=1012571727304

Do the first-half figures for mergers and acquisitions activity paint a deceptive picture? Although the value of deals worldwide increased by 37 per cent - lifting M&A activity after a three-year downturn - many investment bankers are questioning whether the upswing will extend into the next six months. Confidence among chief executives, which surged at the beginning of the year, has started to wane, particularly in Europe, which has lagged behind the US in recent weeks.


snip>

"The uncertainty in equity markets over the past few months has slowed the pace of M&A announcements, and although we believe that investment banking's gradual recovery is likely to continue, the current uncertainty may affect near-term transaction volumes unless investor confidence improves," Mr Viniar said.

Another feature of the M&A environment in the first half has been that, thanks to low interest rates, companies are more willing to use cash rather than stock for acquisitions. Two of the largest deals - Cingular Wireless's $41bn acquisition of AT&T Wireless and Royal Bank of Scotland's $10.5bn offer for Charter One Financial of Ohio - were all-cash deals.

snip>

As investment banks wait for the market to settle, several - including Credit Suisse First Boston and Citigroup - have moved to re-create the specialist M&A departments that were disbanded in response to the downturn in activity. At the time, many M&A bankers were fired or moved into industry groups where they worked on equity and debt financing deals as well as mergers.

Meanwhile, the debate over whether M&A transactions create value has been rekindled.

more...

[54anickel]

15. Falling Prices Continue to Plague Japan's Economy

http://quote.bloomberg.com/apps/news?pid=10000039&refer=columnist_derosa&sid=acoWnKeZDOK0

June 27 (Bloomberg) -û Friday's bad news for Japan was that consumer prices are falling faster than anticipated. The good side to this is that the Bank of Japan won't be changing monetary policy anytime soon.

Meantime, investors are happy over Japan's economy showing convincing signs of real growth. Yet the BOJ's focus remains on deflation.

To that end, nationwide core consumer prices fell 0.3 percent in May, excluding fresh food, year over year, according to the government's statistics bureau. The prices fell only 0.1 percent in June from a year earlier in Tokyo.

The BOJ got serious about inflation in 2001 when it started to implement monetary policy by targeting the level of reserves it holds for commercial banks. Those reserves are sometimes called ``current account balances,'' though it has nothing to do with the balance of trade.


more on BoJ monetary policies....

[54anickel]

16. Europe to snub China on status of economy

http://news.ft.com/servlet/ContentServer?pagename=FT.com/StoryFT/FullStory&c=StoryFT&cid=1087373292651&p=1012571727088

The European Union will refuse to recognise China as a market economy, after an in-depth inquiry by Brussels found the Chinese economy suffering from too much state interference, weak rule of law and poor corporate governance.


The findings, contained in a confidential report obtained by the Financial Times, deal a blow to the Chinese leadership, which has lobbied countries around the world to grant Beijing market economy status. Wen Jiabao, China's premier, made the issue a central part of his discussions during a visit to Brussels last month.

Formal recognition as a market economy is of paramount importance to China, because the status makes it much harder for other countries to impose anti-dumping penalties on Chinese exports.

China is already the target of the bulk of American and European anti-dumping measures, and is keen to bolster its defences against the penalties imposed by Washington and Brussels. In addition to the commercial value for Chinese manufacturers, Beijing has also pursued market economy status for its political symbolism. Acceptance by Brussels and Washington would, European officials say, be read as yet another sign that China is now on an equal footing with the big industrialised powers of the west.

more...

[54anickel]

17. THE BEST THING ABOUT MONEY (Bonner)

The Daily Reckoning PRESENTS : Lusting after wealth is not always becoming, not always rewarding, rarely flattering or dignified...grubbing for money might be fine for a modest nation working its way up in the world; is it worthy of a great nation on a roll?

http://www.gold-eagle.com/gold_digest_04/bonner062504.html

"It is strange, I mean the way things work out," said a guest at dinner last night. "It seems like a kind of madness wanders around the globe. While, here in Europe, we were trying to batter each others' brains out, you, in America, were smart. You were sitting back and taking orders. Now you're the ones who have gone mad."

Our guest had described the world of the 19th and 20th century - the days when the idea of an American empire was still repugnant and absurd. While wars, revolutions, pogroms, stormed over Europe - and much of the rest of the world - America kept to itself, reluctant to get involved. Attractive new ideas popped up all over Europe like poisonous mushrooms. But, for the most part, Americans kept their heads. Most went about their business - seeking happiness in their own private ways...trying to get rich. "The business of America is business," Calvin Coolidge explained.

Money isn't everything, we suddenly recalled. Lusting after wealth is not always becoming, not always rewarding, rarely flattering or dignified. There is something vulgar about the hustle a real business needs...like sweat-stains on a starched shirt or a cold cup of coffee and stubbed out cigarettes. A man who wants to make a real fortune usually has to grub for it; it's hard to be elegant or refined when you're scratching for cash or market share. But grubbing for money is still better than a lot of other things men do. What follows is a long, rambling reflection on what the lust for money is better than.

First, we pause to deliver a shocking update.

more...

[54anickel]

18. 10:44 numbers & BS Blather

Dow 10,449.34 +77.50 (+0.75%)
Nasdaq 2,034.89 +9.42 (+0.47%)
S&P 500 1,140.89 +6.46 (+0.57%)
10-yr Bond 4.705% +0.060
30-yr Bond 5.377% +0.042


10:30AM : The major indices continue to press higher, with large caps outperforming small and mid-caps, as the handover of power in Iraq has alleviated some of the Middle East risk premium...Not that anything significant has actually changed, the market is simply perceiving the action as one step closer to a stable, self governing Iraq...Crude prices fell -3.06% on the news in hopes that a ruling Iraqi government could ease tensions over America's presence and curb some of the recent terror attacks; and consequently ease supply concerns...
The Dow is being led higher by strength in Altria (MO, +5.48%) following Friday's ruling to allow a pretrial appeal aimed at blocking the Justice Department's $280 bln fraud claim...Other Dow leaders include American International Group (AIG, +0.75%) and General Electric (GE, +1.4%)...NYSE Adv/Dec 1776/1066, Nasdaq Adv/Dec 1559/1117

10:00AM : The broader averages are at the highs of the session, following this morning's gap higher, as the Dow spearheads the advance...The market is finding support from this morning's handover of sovereignty to Iraq and the better than expected personal income and spending data...The earning's calendar is empty today, with the exception of Sonic (SONC, +1.35%) after the bell...Retail giant Wal-Mart (WMT, -0.6%) was upgraded this morning by Fulcrum, but has yet to spark a buying interest in retail...

Leadership includes tobacco, steel, gold, casino & gaming and communication equipment while laggards include homebuilding and oil & gas...NYSE Adv/Dec 1701/904, Nasdaq Adv/Dec 1422/1097

9:45AM : As indicated by the futures market, the cash market opened sizably higher with the S&P leading the advance...The run higher came overnight as sovereignty was passed to Iraq 2 days earlier than anticipated in hopes of curbing the recent rashes of terrorism...This morning's upward surprises in personal income and spending gave the market some added support while jacking yields on the 10-year as high as 4.695%...Early leadership can be seen in tobacco and gold while laggards include oil & gas...

[UpInArms]

20. Rate-increase winners may contain a twist

http://www.mlive.com/newsflash/business/index.ssf?/newsflash/get_story.ssf?/cgi-free/getstory_ssf.cgi?f0053_BC_WSJ--AbreastoftheMark&&news&newsflash-financial

Sometimes the cup is half-full, sometimes half-empty. Rarely, however, is it entirely empty.

Few people are happy about the Federal Reserve rate increases that are expected to begin this week, the first such increases in four years, but lists of a few prospective winners already are circulating among investors.

Last year's stock rally was fueled heavily by the Fed's easy-money policy, including its 1 percent target rate for overnight loans between banks, which is a 46-year low. Hand-wringing over the rate increase has helped to keep stocks from going anywhere this year.

Last week, the Dow Jones Industrial Average fell 44.57 points to 10371.84, including a decline of 71.97 points, or 0.69 percent, on Friday. The Dow is down 82.08 points from where it began the year.

The problem now is identifying which stocks actually might benefit from a rate increase.

In the past, the Federal Reserve has tended to raise rates in order to control inflation as corporate earnings begin to take off. So normally, the stocks that do best as the Fed begins to raise rates are those of companies whose earnings are rising the fastest -- lately, technology companies, suppliers of basic materials, industrial-equipment makers and the like.

But that calculus might not work this time. "The stocks that have done well during past rate increases might not do the best this time," warns Richard Bernstein, chief U.S. investment strategist at New York brokerage firm Merrill Lynch.

This time, the Fed was so worried about deflation and recession that it delayed raising rates until corporate earnings had been rising sharply for a year. Quarterly earnings no longer are rising as fast as at the end of last year, when they peaked at a 28 percent year-over-year rate, according to Thomson First Call, which tracks earnings. That was the sharpest pace of gains since 1993.

<snip>

"What doesn't work well in such circumstances is technology, followed by materials," Mr. Bernstein says. Indeed, he says, those two sectors have been the weakest so far this year. He says he prefers makers of basic consumer products such as food and drink, health-care stocks and utilities, all of which typically do well in a slowing economy.

...more...

[UpInArms]

21. Further Gas Price Declines Unlikely

http://abcnews.go.com/wire/Business/ap20040628_674.html

LOS ANGELES June 28, 2004 — Though gas prices have dropped back under $2 a gallon, travelers may not get any more breaks as vacation season heats up, an industry analyst said.

Fears of terrorism and sabotage in Iraq and Saudi Arabia could offset OPEC's decision to increase oil production in July, said Trilby Lundberg, who publishes the semimonthly Lundberg Survey of U.S. gas stations.

The weighted national average price for all three grades of gasoline fell to $1.97 per gallon on Friday, 6.6 cents lower than two weeks earlier, after rising more than 59 cents between mid-December and June, Lundberg said.

The biggest-selling gas, self-serve regular, averaged $1.94 a gallon.

Lundberg said Sunday that the decline which followed another drop two weeks ago was partly due to moderating oil prices and the completion of U.S. refinery maintenance projects.

...more...

[54anickel]

22. China tops US in investment table

http://news.bbc.co.uk/1/hi/business/3846439.stm

China overtook the US as the biggest recipient of foreign direct investment in 2003, the Organisation of Economic Co-operation and Development has found.
China's success was part of "the biggest net flow to developing countries and emerging markets on record", the OECD said.

Overall, last year was a quiet one for foreign direct investment (FDI) activity due to a weak world economy.

FDI in OECD countries, including China, slumped 28% to $384bn (£210bn) in 2003.

"The weak global economic recovery, security worries and a preference on the part of many firms to consolidate acquisitions rather than make new ones," were behind the drop in investment within the OECD, the report said.

more...

[54anickel]

23. What Keeps Greenspan Up At Night

http://biz.yahoo.com/bizwk/040625/b3890001mz001_1.html

As the Federal Reserve gets set to raise interest rates for the first time in four years, Chairman Alan Greenspan is sounding pretty confident. In testimony before the Senate Banking Committee on June 15, Greenspan said the U.S. looks to be on track for a lengthy economic upturn. "The economy is growing in a solid fashion," he said. "Inflationary pressures are not likely to be a serious concern in the period ahead."
Greenspan's best-case scenario is clear. He'll likely start off with a quarter-percentage-point increase in the federal funds rate, to 1 1/4%, at the Fed's June 29-30 meeting, then follow that up with as many bite-size, easily digestible hikes as needed. His aim is to gently wean the economy and the financial markets off their dependence on cheap money without either quashing the recovery or allowing inflation to reignite.

Still, the task ahead is a lot trickier than it looks. For one, the Fed cannot be sure if the recent surge in inflation is an isolated event or a return to the bad old days of rising prices. High unemployment rates suggest that there's still plenty of slack in the labor market, but a few more months of strong job growth could begin to eat that up. And the continued increase in home prices -- up 7.3% over the past year -- is making it harder to dismiss the possibility of a housing bubble that could burst and cause widespread damage if interest rates rise too sharply.

Then there are the biggest imponderables, productivity and terrorism. On the economic side, productivity is the key variable determining how fast the economy can grow. Yet no one has any idea whether today's heady productivity growth -- averaging 4.5% since the beginning of 2001, close to the highest on record for a three-year stretch -- can be sustained, or how far it may drop.

Uncertainty Factor

more...

[54anickel]

24. THE NATION'S HOUSING: New twists will make equity access easier

http://www.freep.com/realestate/renews/harney27_20040627.htm

Remember when your home was simply your castle? That was nearly two decades ago, before Congress changed the federal tax code to make home equity your built-in bank vault -- the new centerpiece of millions of Americans' financial affairs.

An astounding one out of three homeowning households now has some form of tax-deductible home equity access account, up from one out of five just a few years ago and barely one out of 20 in the 1980s, according to banking industry estimates. Last year nearly $350 billion of new home equity lines were opened, plus $90 billion in fixed-term home equity loans.

Now a new wave of home equity products is about to flood the real estate market. They're designed to take the pain -- and most of the fees -- out of creating, maintaining and drawing down home equity credit lines.

Bank of America is preparing a national rollout this summer of what it calls the "equity maximizer." The program charges no origination fees, title insurance premiums, appraisal fees, local government transfer taxes or recording costs. There are no annual charges to maintain the line, no prepayment penalties if you close it before a specific time period, no fees when you don't draw on it.

more...

[54anickel]

25. Profit-hungry banks take on "tenuous" risks - BIS

http://biz.yahoo.com/rf/040628/economy_bis_financial_1.html

BASEL, Switzerland, June 28 (Reuters) - Banks worldwide may be taking on risks they will regret later if an economic upturn proves short-lived, the Bank for International Settlements (BIS) said on Monday.


Banks worldwide emerged in surprisingly robust shape last year from a brutal economic downturn but have now taken risky bets in their search for profits, said the BIS, the central bank to the world's central banks, in its annual review.

"The main concern is whether the financial sector, having escaped the slowdown relatively unscathed, might be moving ahead of the business cycle," said the report, a closely-watched platform for central bank worries worldwide.

"Some institutions may have undertaken investments premised on tenuous assumptions regarding the outlook for growth and the level of interest rates," the report said.

more...

[54anickel]

26. 1:42 update

Dow 10,436.43 +64.59 (+0.62%)
Nasdaq 2,034.37 +8.90 (+0.44%)
S&P 500 1,140.48 +6.05 (+0.53%)
10-yr Bond 4.713% +0.068
30-yr Bond 5.389% +0.054

1:30PM: The past 30 minutes hasn't produced too much change in the broader averages as the market channels sideways, but at the high end of today's range...Wal-Mart's (WMT, +0.82%) upgrade this morning is helping retail stocks catch a bid while Pepsico's (PEP, +0.67%) downgrade has done little to spur selling in beverage retail...There really isn't that much going on in the market today as eyes focus on the much anticipated FOMC meeting tomorrow...Tobacco stocks continue to lead the market higher following Friday's decision to allow a pretrial hearing on the Justice Department's $280 bln fraud claim...
Post secondary education, footwear, airlines, insurance, steel and drug retail remain strong while oil & gas, gold, computer storage, homebuilding and healthcare lag behind...NYSE Adv/Dec 1887/1297, Nasdaq Adv/Dec 1626/1392

1:00PM: Range-bound trading has taken over as the markets hold near the high end of today's range...Treasuries are holding just off their worst levels of the day, keeping yields on the 10-year above 4.710%...Energy prices are maintaining earlier losses with crude oil down -3.73% and unleaded gasoline -5.19%, helping to alleviate some variable costs for airlines...In addition, bankrupt United Airline's loan proposal was rejected for the final time, lessening the potential for competition from competing airlines, giving the industry overall strength...NYSE Adv/Dec 1835/1313, Nasdaq Adv/Dec 1578/1420

12:30PM: The market continues to channel sideways as volume starts to taper off...Not much has changed in the past 30 minutes...The broader averages are staring to creep back to the session highs, but large price moves would come as a surprise in the face of tomorrow's FOMC meeting and the corresponding decision on Wednesday...

[54anickel]

27. Shell Survives Shareholder Rebellion

http://www.reuters.com/newsArticle.jhtml?type=businessNews&storyID=5532330

THE HAGUE/LONDON (Reuters) - Embattled oil giant Royal Dutch/Shell survived a shareholder rebellion on Monday, but not before almost 40 percent of its Dutch stock was voted against key resolutions at the annual general meeting.

Investors gathered in The Hague were asked to agree that Royal Dutch managing directors and its supervisory board "be discharged of responsibility in respect of their management for the year 2003." Usually such a vote would be carried almost unanimously, but Monday's vote saw only 60 percent in favor. Shareholders at a twin meeting in London also showed their disapproval of the disastrous year of reserves downgrades and high-level executive firings. Almost 10 percent of Shell stock was voted against approving executive pay for the year.

The meetings came two months late because of the turmoil caused by the shock news in January that Shell had overbooked its oil and gas reserves by more than 20 percent.

By March it had emerged the reserves problem had been kept secret for months. Three top executives have since been fired, and a series of regulatory probes and lawsuits against the firm on behalf of shareholders and pension holders are under way.

The vote that caused a rebellion in The Hague is usually a formality for Dutch firms. Rebel investors used their votes to embarrass the directors, but they also feared that the resolution could weaken their case in class action lawsuits.

more...

[54anickel]

28. Iraq may not kick-start markets

http://money.cnn.com/2004/06/28/markets/iraq_effect/

NEW YORK (CNN/Money) - After being mired in a trading range for weeks, U.S. stock markets cheered the transfer of sovereignty in Iraq on Monday. But few analysts were willing to declare that happy days were here again for the market.

Early Monday, two days ahead of schedule, the U.S.-led Coalition Provisional Authority in Iraq transferred power to an interim Iraqi government. Stock market futures jumped on the news, and then stocks rose too.

"It is too soon to know how the situation in Iraq will unfold in the coming months, and the extent to which the new government can indeed control the country," Abby Joseph Cohen, chair of Goldman Sachs' investment policy committee, wrote in a note to clients Monday morning. "But, for the present, investors seem relieved that the direction is not toward an increased level of U.S. involvement."

snip>

The results of the long-awaited Federal Reserve policy meeting, which ends on Wednesday, may not give the markets much of a lasting pop. Few analysts, if any, doubt the Fed will give a modest boost to its target for a key short-term interest rate, and it will likely seek to keep raising rates, but at a slow pace, for months to come. But hardly anyone on Wall Street sees this as the recipe for a dramatic rally.

In fact, some analysts believe that there will be no immediate catalyst for a market rally, but that the prospect for the U.S. economy and corporate earnings will keep stocks churning steadily upward.

"We're looking at the headline news, but the market is being supported by the girders of the economy, a basic, strong foundation," said Ram Kolluri, chief investment strategist at GlobalValue Investors in Princeton, N.J. "I don't expect a dramatic rally from here, but we are very much on track for a high-single-digit, low-double-digit total return for the year."

[54anickel]

29. 2:34 and someone pulled the plug again

Dow 10,386.59 +14.75 (+0.14%)
Nasdaq 2,023.15 -2.32 (-0.11%)
S&P 500 1,135.73 +1.30 (+0.11%)
10-yr Bond 4.745% +0.100
30-yr Bond 5.415% +0.080

NYSE Volume 938,049,000
Nasdaq Volume 1,126,325,000


2:30PM: The market has turned over to set new afternoon lows while attempting to close the morning's opening gap higher...The blue chip averages are still positive, but are looking very weak at this point...Small and mid-caps have already turned negative, with the Russell 2000 down -0.45% and the SOX, currently -1.37%, leading the Nasdaq into negative territory for the first time today...What we are seeing in equities is simply the market displaying its lack of conviction...
The outcome of tomorrow's FOMC meeting is on everyone's minds and today's run higher was simply an overreaction of news that should have already been priced in (the turnover of power in Iraq)...We are just bouncing off technical levels to keep traders busy...Energy prices remain weak as crude oil and unleaded gas hold near the session lows following the transfer of sovereignty in Iraq this morning...NYSE Adv/Dec 1797/1437, Nasdaq Adv/Dec 1448/1620

2:00PM: The broader averages are starting to break down, with the Dow setting new afternoon lows, as the market continues to lack conviction...Tomorrow's economic front offers only June consumer confidence data at 10 ET while the blackout period continues for the Fed until the official policy release at 2:15 ET on Wednesday...Until then the market will continue to price in a 25 bp move and will pay particularly close attention to the verbiage in the official policy statement looking to time further hikes...

For the past year, the overnight lending rate has been held at a 46-year low of 1% and the time for "accommodation" has past...Briefing.com expects the fed funds rate to be increased to 2% by year end coupled with mild inflationary concerns...Tomorrow's consumer confidence is expected to come in line with expectations at 95.0, up from May's 93.2 reading...NYSE Adv/Dec 1880/1321, Nasdaq Adv/Dec 1604/1451

[54anickel]

30. 3:30 update

Dow 10,353.54 -18.30 (-0.18%)
Nasdaq 2,018.81 -6.66 (-0.33%)
S&P 500 1,132.91 -1.52 (-0.13%)
10-yr Bond 4.739% +0.094
30-yr Bond 5.414% +0.079

NYSE Volume 1,143,321,000
Nasdaq Volume 1,365,032,000

3:00PM: All of the major averages have turned negative as technical trading pulls the market lower...Weakness in semiconductors, currently down -1.89%, is pulling the Nasdaq to its lowest levels since last Tuesday, while the S&P falls to Wednesday's levels...The reversal in trend today is in line with the recent end-of-day swings seen over the past few weeks...The fact that the reversal took place without any fundamental shift really typifies technical trading due to a lack of conviction...

Treasuries are just off their worst levels of the session as 10-year yields tagged 4.749% before closing at 4.741%...Tomorrow's consumer confidence data will likely spark similar range-bound trading patterns as the market preps for Wednesday's FOMC meeting...In addition, The ECB will announce its decision on overnight lending rates on Thursday while Friday offers non-farm payroll data...NYSE Adv/Dec 1627/1608, Nasdaq Adv/Dec 1345/1734

Advances & Declines
NYSE Nasdaq
Advances 1478 (43%) 1382 (42%)
Declines 1774 (52%) 1730 (53%)
Unchanged 158 (4%) 127 (3%)

----------------------------------------------------------------------

Up Vol* 417 (38%) 466 (35%)
Down Vol* 639 (59%) 819 (62%)
Unch. Vol* 19 (1%) 29 (2%)

----------------------------------------------------------------------

New Hi's 162 113
New Lo's 26 39

[54anickel]

31. U.S. stocks forfeit gains in late trades

http://biz.yahoo.com/cbsm-top/040628/c32f79eddf8cdc5235ed7c56ac38fdf8_1.html

NEW YORK (CBS.MW) -- U.S. stocks reversed course and dropped Monday with Wall Street unable to sustain its initial euphoria following the transference of sovereignty to the interim Iraq government two days earlier than expected.

A sell-off in shares of General Motors following press reports that the company said demand for its automobiles has slowed of late, as well as deteriorating market internals underscored the marginal losses. Dow Jones quoted a senior GM executive as saying vehicle sales for June will come in below expectations while attending a conference in Europe.

snip>

A 1 percent increase in U.S. consumer spending in May received a welcome reception from investors early but, as the session wore on, the looming meeting of the Federal Reserve's open market committee, which begins Tuesday, weighed on sentiment.

"The Fed will be raising rates regardless of the economy because they want to normalize the Fed funds, not slow down the economy," said Peter Boockvar, equity strategist at Miller Tabak. "It makes for a difficult environment for stocks."

The early transference of power removes one of the major events on investors' minds this week. See full story on handover. Wall Street is now bracing for Federal Reserve's decision on interest rates on Wednesday afternoon, and for Friday's June jobs report.

more...

[54anickel]

32. Closing

Dow 10,357.09 -14.75 (-0.14%)
Nasdaq 2,019.82 -5.65 (-0.28%)
S&P 500 1,133.52 -0.91 (-0.08%)
10-yr Bond 4.739% +0.094
30-yr Bond 5.414% +0.079

NYSE Volume 1,354,631,000
Nasdaq Volume 1,602,106,000

3:30PM: The Nasdaq is spearheading the afternoon declines, shedding -0.38%, as weakness in semiconductors and financials weigh on the market...An Earnings warning from Wal-Mart (WMT, -0.25%) this morning, along with an upgrade by Fulcrum, had shares bouncing around all day to finish at the session lows, underpinning an overall weakness in retail...

Leadership today is coming from tobacco, agricultural, footwear, hotels, chemical manufacturing, post secondary education and life insurance while weakness can be seen in oil & gas, homebuilding, gold, computer storage, autos, semiconductors, computer hardware and coal...Despite the end-of-day sell-off, new 52 high/lows are an impressive 6-to-1 on the NYSE and 3-to-1 on the Nasdaq while the AD line turns negative...NYSE Adv/Dec 1491/1771, Nasdaq Adv/Dec 1365/1751

Have a great night! :hi: