STOCK MARKET WATCH, Tuesday 29 June

[ozymandius]

Tuesday June 29, 2004

COUNTING THE DAYS
DAYS REMAINING IN THE * REGIME 209
DAYS SINCE DEMOCRACY DIED (12/12/00) 3 YEARS, 200 DAYS
WHERE'S OSAMA BIN-LADEN? 2 YEARS, 254 DAYS
WHERE ARE SADDAM'S WMD? - DAY 467
DAYS SINCE ENRON COLLAPSE = 950
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 28, 2004

Dow... 10,357.09 -14.75 (-0.14%)
Nasdaq... 2,019.82 -5.65 (-0.28%)
S&P 500... 1,133.35 -1.08 (-0.10%)
10-Yr Bond... 4.74% +0.09 (+2.02%)
Gold future... 401.30 -1.90 (-0.47%)


|||


GOLD, EURO, YEN and Dollars

---

PIEHOLE ALERT

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

For information on protests and other actions Citizens For Legitimate Government

---

[ozymandius]

1. WrapUp by Jim Willie - A WALK PAST 1994 MEMORY LANE

-cut-
MEGATREND CHANGES SINCE 1994

As the bond market wrestles with the impact of higher interest rates, the public is again being nursefed the spoiled milk of faulty information. We hear of favorable comparisons to 1994, when a bond revolt delivered massive damage to Wall Street. The 1970 decade witnessed a massive bond bear market, marked by the Nixon Wage Price freeze aftermath, OPEC oil price quadruple, and intentional Fed reflation. The only reason we might avoid considerably higher interest rates in double quick fashion could be that slightly higher interest rates might indeed have an amplified damper effect to slow the US Economy. The economy shares its amplified dependence upon low interest rates with the financial markets. Stock indexes and sector indexes offer up plain evidence of reaction to higher rates, seen this spring. In the real economy, higher debt levels make continued spending more difficult.

-cut-

The 1994 year identified the initial stage of a powerful trend. Mega-trends were underway, with declining interest rates about to begin. Corporate borrowing costs were reduced, perhaps the largest factor behind the decade of supposed prosperity. The USDollar began a powerful bull market, in the absence of any credible or significant European currency. The US Economy fully exploited the rising US$, by sending manufacturing offshore to Asia. All manner of imported components, finished goods, and raw materials were kept low in price. The rising currency and falling commodity prices made for the second largest factor behind the 1990 decade of prosperity. Now, in the current climate, all mega-trends are in reverse. The US$ is in decline, so the endless list of imported goods cost more. Interest rates are on the rise, so all borrowing costs are higher. Profit margins are being squeezed, owing to production costs rising faster than end product prices. To claim the current situation is manageable compared to 1994, or no more dangerous, is a bold piece of inept, incompetent, and irresponsible analysis. The claim is a bald faced lie in a tough sales pitch climate.

-cut-

Our foreign obligations are growing out of control. US investments owned by foreign entities have grown, as a proportion of US GDP, from 18.5% in 1994 to 45% today. In ten years, as the financial sector has become a more dominant engine within the US Economy, foreigners have been led and seen fit to invest in the intangible assets, of financial variety. As a percentage of net foreign asset holdings, foreigners now own 68% in the form of financial assets, up from 47% in 1994. However, the rate of change has exploded in recent quarters. In an attempt to prevent the USDollar from descending to its proper value, foreign central banks in Asia have purchased US Treasurys on a grand scale which shows up in statistics which the USGovt cannot distort. Over the past decade, the US Economy has diminished as a place for foreigners to invest directly in businesses. Our cost structures have been inflated on a chronic basis. All the while, foreigners have pulled back in their direct investment in our country by almost half, from 52% to 30%. Is foreign dependence a virtuous sign, as officials claim? Europeans lost 20% on their Treasury Note investments in the last year. Will rising Asian currencys and rising US interest rates lead Asians to reduce their appetite for continued Treasury support? Will they hasten any diversification? Will they begin to sell outright, in order to satisfy credit demands for Asian regional growth? Or will it all backfire?

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

[UpInArms]

2. daily dollar watch

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

Last trade 88.85 Change +0.13 (+0.15%)

Since all the dollar articles are "waiting for Godot," I thought there were other more interesting pieces of news.

http://www.nytimes.com/2004/06/29/business/29board.html

Trying to Hand Out Life Jackets Over, Under and Around Politics

WASHINGTON, June 28 - From the moment Congress created it after the attacks of Sept. 11, 2001, the government board assigned to help bail out the ailing airline industry has found itself in a political caldron.

It has been courted by companies seeking assistance, besieged by their rivals that want to deny them help, and contacted with regularity by various lawmakers on both sides.

With its denial on Monday of a loan application from United Airlines, the Air Transportation Stabilization Board moves mainly from issuing financial assistance to monitoring its investments: the $1.56 billion in loan guarantees that it has already provided to six other airlines.

<snip>

The latest political storm over the board's decision making occurred earlier this month, when it voted to deny United's request for $1.6 billion in loan guarantees. One of the three members of the board voted to abstain from the decision, and a few moments after the denial was issued, the Treasury Department, which houses the board, announced that it would permit the airline to revise its application for the second time, even though no other airline had been granted such an opportunity.

That announcement came after the Treasury Department, which also has a seat on its three-member panel, received calls about the application from House Speaker J. Dennis Hastert, Republican of Illinois - where United's owner, the UAL Corporation, is based - and from a senior White House official expressing concern over the situation.

...more...

http://quote.bloomberg.com/apps/news?pid=10000103&sid=azRIe7zWP3FQ&refer=news_index

Bonds Suffered Worst Quarter Since 1980 as U.S. Rate Rise Looms

June 29 (Bloomberg) -- The U.S. government bond market is headed for its biggest quarterly loss in 24 years as job growth accelerates and the rate of inflation rises.

``It was a rough quarter to be a bond investor because expectations on the economy, inflation and future interest rates changed 180 degrees,'' said Robert Gahagan, 45, who oversees $8.5 billion as head of taxable fixed income at American Century Investment Management Inc. in Mountain View, California.

The 10-year Treasury note's yield, which is used to set interest rates on home mortgages, started the quarter at 3.84 percent and at one point rose to 4.90 percent, the highest level since June 2002.

While debt-market indexes from Japan to Germany also declined during the past three months, U.S. Treasury bonds were the biggest losers after the economy created almost 700,000 jobs in March and April. Bonds also were buffeted by the growing perception that the Federal Reserve will raise the target for the overnight lending rate on loans between banks, known as federal funds, possibly as soon as tomorrow. The fed funds target has been 1 percent since June 2003, the lowest since July 1958.

Merrill Lynch & Co.'s U.S. Treasury Master Index fell 3.73 percent in the second quarter to date, its biggest quarterly decline since it lost 5.06 percent in the third quarter of 1980. The index includes 113 securities with a combined face value of $2.02 trillion.

The spurt in job creation in March, reported by the U.S. Labor Department on April 2, was a turning point.

...more...

http://www.miami.com/mld/miamiherald/business/national/9035776.htm?1c

Interest Rate Hikes to Pinch Credit Cards

NEW YORK - If you've been lulled into carrying large balances on your low-interest credit cards, prepare your wallet for a rude awakening.

At its meeting this week, the Federal Reserve is widely expected to raise interest rates by a quarter of a percentage point - the first of what is thought to be a series of gradual rate boosts.

While that's good news for fixed-income investors, who will soon benefit from higher income payments, it could soon spell the end of good times for borrowers.

That's because the cost of carrying credit-card debt will get more expensive as rates rise. Most credit cards are tied to the prime rate, which banks raise or lower in lockstep with the Fed's moves.

In a rising rate environment, experts say it's likely that more issuers will move to variable rates, since that structure is not only more profitable, but it also gives them the flexibility to protect their margins as their cost of funds increase.

For example, in its latest quarterly filing, MBNA Corp. said a 1 percentage point increase in interest rates in the next 12 months could reduce its projected net income by about $67 million.

...more...

Isn't it funny that when the rates go down, credit card interest never corelates to that - but when rates go up - oh boy, watch the Cheney out!

http://money.cnn.com/2004/06/28/news/fortune500/wash_mutual.reut/

Washington Mutual slashes forecast

NEW YORK (Reuters) - Washington Mutual Inc., the largest U.S. savings and loan, slashed its 2004 profit forecast after the bell Monday and said it expects to cut more jobs as rising long-term interest rates hurt its mortgage business.

The Seattle-based company, which is also one of the three largest U.S. mortgage lenders, now expects 2004 profit of between $3 and $3.60 per share, down from $4.21 last year, and said its mortgage business might lose money.

It previously forecast profit of about $4.35, spokesman Alan Gulick said. Analysts polled by Reuters Estimates, on average, forecast $4.05. The lowered profit forecast is the second from Washington Mutual in seven months.

...more...

http://www.dmnews.com/cgi-bin/artprevbot.cgi?article_id=29286

MCI Plans More Call Center Closures, Job Cuts

MCI will close two telemarketing call centers and cut workforces at two others in yet another job reduction for the telecommunications provider, according to wire reports.

A total of 2,000 jobs will be eliminated, an MCI spokesman told the Associated Press on Friday. MCI will close call centers in Colorado Springs, CO, and Wichita, KS, and reduce staff at its Greenville, SC, and Iowa City, IA, operations.

MCI did not return a call for comment from DM News yesterday. The MCI spokesman said call center operations have been affected by the national no-call list.

MCI has eliminated 14,000 jobs this year. In March, it said it would close three centers in Denver, Phoenix and Niles, OH, and reduce workforces at centers in Alpharetta, GA; Colorado Springs and Springfield, MO, cutting 4,000 jobs.

...more...

http://www.ciol.com/content/news/BPO/2004/104062901.asp

US outsourcing - big or small, friend or foe?

WASHINGTON: While the US economy is finally churning out jobs, years of anger over outsourcing have left a huge hangover: politicians are wrangling over it and workers still feel threatened by it, even though no one agrees on the numbers.

The latest furor over the shift of jobs to low- wage countries was sparked by a government report that found only 2.5 percent of first-quarter mass layoffs were caused by offshore outsourcing, suggesting national hand-wringing over the issue was overdone.

While supporters of outsourcing -- including employers who rely on cheaper foreign labor as one way to cut rising costs -- hailed the data as the first sensible word on an emotional issue, they braced for the backlash.

"That's not what people want to hear. What they want to hear is that it was all outsourcing," said Frank Vargo, vice president for international economic affairs at the National Association of Manufacturers.

The controversy over the loss of U.S. jobs to foreign workers has raged as the nation struggles to create jobs in the wake of the 2001 recession.

A May survey of 1,000 Americans conducted for the Employment Law Alliance, an independent network of labor attorneys, found 6 percent of workers had lost a job because work was sent offshore, while nearly 30 percent knew someone else who had. One in 10 felt their jobs were under threat.

Still, many don't see the pink slip coming.

"We thought our jobs are pretty secure here," said one high-tech worker at Dell Inc. in Austin, Texas, who was laid off about two weeks ago after he returned from vacation. Four others on his team of product testers were also sacked.

"They said the client side is being handled by our group in China, and the service side is going to be handled by testing in India," said the worker, who declined to be identified because he still hopes to find another job with the No. 1 computer maker.

...more...

Consumer Confidence report due out 10:00 EST -

Have a Great Day Marketeers!

[54anickel]

3. Dollar at risk as inflation deters Asian intervention

http://www.dailytimes.com.pk/print.asp?page=story_27-6-2004_pg5_20

SINGAPORE: The US dollar may be heading for a big fall, with analysts saying that rising inflation will force Asian central banks to cut the currency intervention that has been financing the massive US current account deficit.

“The price to pay for the type of intervention we saw last year...is typically that you get inflationary pressure,” said Jan Lambregts, Rabobank’s head of Asia-Pacific research.

“Last year that price did not have to be paid, but this time around, in an environment where inflationary pressure is on the rise, such intervention could really throw fuel on the fire.”

Last week’s record US current account deficit of $144.9 billion for the first quarter was a reminder to markets fixated on next week’s US Federal Reserve meeting that the United States still has a funding problem.

snip>

Since March, Japan has not intervened. Excluding China, which has not released figures yet, Asian central bank reserves rose by only $2 billion in the two months to May 31. Economists expect the intervention to strengthen again — and it certainly will not disappear entirely — but inflation should prevent Asia’s central banks from being such willing financiers of the US current account. —Reuters

more...

[UpInArms]

11. rather sobering assessment,

wouldn't you say?

The US dollar may be heading for a big fall

[54anickel]

13. You know the spin - we've been getting that Snowjob for so long now

A declining dollar value is good for the economy. It'll make our exports cheaper and imports more expensive. Just the shot in the arm our economy needs! Yada, yada, yada. Meanwhile the trade deficit continues to expand, even when we had that "big fall" back in Dec-Jan.

Meanwhile, the world is considering friggen stones as a replacement as the reserve currency - they'd be more valuable and less plentiful. :evilgrin:

[ozymandius]

19. Theorists in the Econ forum have been saying this for awhile.

This has been touted as something of an Internet rumor, propelled by theorists/rumorists like Junker in the Economic Issues forum. While I make no attempt to impugn the veracity of these statements - it does seem like the timing has been a bit off. Until now.

It does add credence to the speculation that the dollar is going to take a staggering hit following the last quarter's statements. Foreign banks have been financing tremendous amounts of U.S. debt. And for what? Rate increases from the Fed will impact the flow of dollars to countries whose manufacturing bases are supported by personal American debt levels. The Fed has been enabling this dynamic with cheap credit and a steady flow of cash. So doesn't it make sense that foreign banks would be reassessing our creditworthiness just at a time when our central bank is redefining its stance on interest rates?

[54anickel]

20. I admit that I have been guilty as one of the "Theorists" as well.

Stated a long time ago.....

I see zones,
I see glittery zones.
And the fiat bucks bones.
Amongst those lovely zones.
See zones, see zones.
See zones, see zones.

Who knows what will happen, but history is full of monetary changes. Has happened quite often. We've held the prestigious position of being the reserve currency for, what, some 60 odd years? Looks like we blew it. The change may take a year or a decade. Scary part of it is that historically, that type of change didn't happen without a major war.

[ozymandius]

24. From one "Theorist" to another -

I have expected this as well. I just didn't know how or when it would happen. If a dramatic decline in the dollar's intrinsic value occurs because of these developments, it would just make too much sense.

[54anickel]

4. Federal Reserve set to end economic era

http://www.theage.com.au/articles/2004/06/28/1088392597771.html

When members of the US Federal Reserve Board meet today in Washington, they may want to pause for a moment of silence. By the time the meeting ends tomorrow, they are all but certain to have laid to rest an economic era that has lasted almost 25 years.

Through three recessions, two long booms and one of the biggest bubbles in stockmarket history, interest rates have generally been falling since 1980. Their great decline - to a short-term rate of 1 per cent, down from 20 per cent at the peak - has helped change the economy's rules, making credit cards the centrepiece of American wallets and allowing millions of families to buy their first homes.

Now those rules are about to change again. The Fed is poised to raise its benchmark rate by a quarter of a per cent - to 1.25 per cent, up from a 46-year low - and to continue the increases for months on end. Economists say that another 50 years could pass before rates again fall to current levels.

snip>

Fed officials' recent efforts to communicate their interest-rate policies publicly could minimise turmoil, by giving businesses, consumers and investors the time to react that they did not have a decade ago.

Still, said Ethan Harris, chief US economist at Lehman Brothers, "I think we're going to have some accidents along the way. It's inevitable."

[54anickel]

5. The inverse boom

http://www.prudentbear.com/archive_comm_article.asp?category=Guest+Commentary&content_idx=33684

Silicon Valley is experiencing some degree of recovery but, despite the headlines, it's not a boom. One interesting aspect is many business practices are the anti-thesis of 1999 -2000 while some are distressingly similar. For lack of a better term, Silicon Valley's 2004 condition is the "Inverse Boom."

It's no secret Silicon Valley aches for the good old days of 1999 -2000. NASDAQ 2,000 is touted as evidence of our return to glory. News reports are anxiously scanned for the next blurb to "prove" the local economy is back. Increasingly, the mantra is pre-IPO start-ups will lead us all to the new boom!

However, the prospects for small companies and IPOs to drive a new boom in the Silicon Valley economy are over-stated. For those outside the "golden inch" of IPO riches in this mile-wide/inch-deep "recovery," a comparison of Silicon Valley business practices from 1999 -2000 to those in 2004 show these are interesting times.

Characteristics of the "Inverse Boom" include:

more...

[54anickel]

6. Bank of America Tops J.P. Morgan in Leveraged Loans in 1st Half

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


June 29 (Bloomberg) -- Bank of America Corp. arranged the most high-risk, high-yield loans in the U.S. in the first half as its takeover of FleetBoston Financial Corp. helped the bank surpass J.P. Morgan Chase & Co.

Bank of America arranged 21.2 percent of so-called leveraged deals so far this year, up from 19.9 percent in the first half of 2003, according to data compiled by Bloomberg. Loans to companies without investment-grade credit ratings comprise a third of the U.S. market for syndicated lending this year, up from about a quarter in the year-earlier period.

Banks arranged $161.3 billion of U.S. leveraged loans, which are usually sold in pieces to money managers, in the first half - - 69 percent more than in January-June of last year, Bloomberg data show. With the addition of FleetBoston, Charlotte, North Carolina-based Bank of America has managed $34.3 billion of the loans, which produce fees as much as 10 times higher than those on investment-grade credits.

``Bank of America has a huge customer base -- bigger than anyone else's,'' said Thomas McCandless, a banking analyst with Deutsche Bank AG in New York. ``The whole world is their target, and they will go after deals both large and small.''

more...

[54anickel]

7. Rising rates mean end of easy ride

http://www.sfgate.com/cgi-bin/article.cgi?f=/c/a/2004/06/29/BUG8D7DJB01.DTL

Just before noon on Wednesday, the Federal Reserve will take down the "EZ Credit" sign that has been hanging in its window for more than three years and usher in a new era for savers, borrowers and investors.

At the end of its two-day meeting this week, the Fed is widely expected to raise its benchmark federal funds rate to 1.25 percent from 1 percent, a 46- year low.

The last time the Fed raised this key short-term rate was in March 2000, at the tail end of the Internet boom. Responding to the economic slump that began in late 2000, the Sept. 11 terrorist attacks and a painful series of corporate governance scandals, the Fed cut rates 13 times between January 2001 and May 2003, hoping to prevent the economy from skidding into deflation.

The depth and duration of the Fed's rate-cutting regime -- unprecedented in modern times -- encouraged Americans to borrow to buy homes, cars, six-burner ranges, second homes and plasma TVs. Their free-spending ways offset a nasty downturn in business investment and helped the nation skirt a serious recession.

much more...

[54anickel]

8. IMF says Russia running out of time to reform economy

http://story.news.yahoo.com/news?tmpl=story&cid=1518&ncid=1518&e=2&u=/afp/20040629/bs_afp/russia_imf_economy_growth_forecast_oil_040629094858

MOSCOW (AFP) - The International Monetary Fund (news - web sites) said that Russia was running out of time to transform its economy while state coffers were still stuffed with petrodollars.


The fund said after its latest mission to Russia that the economy here continued to blossom -- but that the long-term future at the moment looked rather bleak.

"The economic situation continues to improve and the short-term outlook is favorable," the IMF (news - web sites) report said on an optimistic note.

But it also noted that Russia's economy was benefitting from high oil prices and a "favorable external environment".

The IMF said: "Priority should, in the mission's view, be given to improving the investment climate and reducing the dependency on oil."

more...

[ozymandius]

16. curiously timed article

This comes on the heels of several reports concerning the limits of Russian oil. Some fields have peaked and are in decline. Petro-fans and Russian government agencies lead us to believe that the decline will ramp down as the supply ramped up over eighty years. It seems that the IMF is not buying that story.

[54anickel]

22. Yes it does seem rather "timely". It's always interesting to look into

who and what is the IMF, BIS, World Bank and the history of their coming into existence when they hit the news.

[UpInArms]

9. the crystal ball gazers are hard at work

U.S. June Consumer Confidence Seen Rising to 95, Survey Shows

http://quote.bloomberg.com/apps/news?pid=10000103&refer=us&sid=a5ZE3mJkhAek

June 29 (Bloomberg) -- Consumer confidence in the U.S. economy probably rose in June to the second- highest level this year, spurred by job growth and a decline in gasoline prices, according to a survey of economists.

The Conference Board's sentiment gauge may rise to 95 this month, the highest since January, compared with 93.2 in May, according to the median forecast of 62 economists surveyed by Bloomberg News. The index averaged 103 during the record expansion from 1991-2001.

``Households are responding to the rapid gains in hiring rather than increasing violence in Iraq,'' said Steven Wood, chief economist at Insight Economics LLC in Danville, California.

The economy has added 1.2 million jobs this year, and economists forecast another quarter million were added this month, boosting incomes and providing a base for more spending. Federal Reserve policy makers today begin a two-day meeting and on Wednesday are forecast to raise their target interest rate a quarter point to 1.25 percent amid a rise in the economy and some acceleration of inflation.

The New York-based Conference Board's index is due at 10 a.m. Washington time. The report is based on a mail survey of 5,000 households. Estimates in the survey for this month's index ranged from 91.5 to 99.3. The Conference Board surveys 5,000 households about general economic conditions, their employment prospects, and their spending plans.

The improved economy has helped companies that specialize in consumer goods. Beaverton, Oregon-based Nike Inc., the world's biggest maker of athletic footwear, on Thursday said earnings surged 24 percent for its fourth quarter ended May 31, beating analysts' forecasts. Orders for Nike's clothes and footwear rose 10 percent in the U.S.

...more spin at link...

but wait! Target misses target!

http://www.reuters.com/newsArticle.jhtml?type=businessNews&storyID=5540834

Target: June Sales Well Below Forecast

CHICAGO (Reuters) - Target Corp. (TGT.N: Quote, Profile, Research) said that June sales would be weaker than expected, echoing comments from rival Wal-Mart Stores Inc. (WMT.N: Quote, Profile, Research) , which lowered its forecast amid poor Father's Day demand and uncooperative weather.

On a recorded message updated Monday afternoon, the second-largest U.S. discount retailer said sales at its namesake Target stores and the slower-growing department stores would be "well below plan" for June.

The Minneapolis-based retailer had forecast a 5 percent to 7 percent increase in June sales at its Target stores open at least a year. For the total corporation, including the Marshall Field's and Mervyn's chains, the retailer expected the same-store sales increase to be slightly below that of the discount stores.

At the discount stores, the strongest categories included pharmacy items and consumables such as food. The weakest areas were electronics, shoes and children's clothes.

Wal-Mart on Monday slashed its June same-store sales forecast, blaming weaker-than-expected Father's Day sales and cool weather that curbed demand for summer merchandise.

...a bit more...

[54anickel]

10. Where's The Bull?

http://www.gold-eagle.com/editorials_04/rostenko062804.html

Stocks were a mixed bag last week as the S&P 500 closed barely changed once again, the Dow slipped a bit and the Nasdaq finished out on a strong note. The Dollar Index fell while gold busted out to over $400 again. Crude oil has become decidedly less interesting in the absence of new record highs, leaving yours truly with far less to get hysterical about.

Despite all the bullish propaganda the market continues to struggle with gains. Sure, we saw a decent rally off the May lows but we're about to complete our fourth consecutive month of no new gains. The March mini-bull market high in the S&P 500 remains unchallenged and last week's action didn't do much to inspire faith that it will be breached.

The S&P 500's new 2-month high failed to take out the April high, the first major line of resistance ahead of the 1163 rally high posted in March. That leaves us with the 4-month pattern of progressively lower lows and lower highs firmly intact.

Of course, it wouldn't take much to change all that. The short-term uptrend also remains intact and there's no terribly compelling reason to believe that it has run its course. However, last week's action was hardly encouraging. The S&P probed into new multi-month high territory but the new highs were soon rejected with last Thursday's reversal session which saw substantial, high volume follow-through last Friday.

Swift rejections of bullish developments do not bode well for markets, particularly markets that are supposed to be bulls. New highs should usher in new enthusiastic buying, not aggressive selling. With the mini-bull high within relatively easy striking distance, a bull might expect a test to be "in the bag".

It could still happen, of course, but if it doesn't, we'll be witnessing quite a bearish unfolding....

more...

[54anickel]

12. Comment on the Early Handover of Sovereignty

http://www.forexnews.com/ai/default.asp?f=A20040628A.mgn

The dollar is losing the earlier gains effected by the earlier than expected restoration of Iraqi power. Since the decision was aimed at symbolizing a greater sense of control from the new Iraqi government, it augurs well for stability in the region and hence, the dollar and stocks. Nonetheless, this decision seems to be symbolic at best, and unlikely to reverse the surging wave of violence.

"Measured" FOMC Statement to Help US Stocks, Weigh on Dollar

We expect the Fed to raise rates by 25 bps and maintain its balanced assessment on inflation while sticking to the script of “measured” tightening policy, implying a 25-bp rate hike in August and September. Such gradual tightening shall benefit US stocks and gold, but weigh on the dollar. The dollar could begin to lose ground in the next 2 days based on the same rationale of moderate tightening and looming rate hikes from the Eurozone.

The other rationale for a negative dollar assessment stems from the likely possibility that this week’s handover of sovereignty to Iraq would not reduce the current violence because the transfer does not imply the immediate withdrawal of US troops—a factor which is widely cited as attributed to the discontent of militants in the region and surging attacks. This has been especially underlined by militants’ threats to execute the 3 Turkish hostages by the handover date in the event that Turkey does not withdraw its troops from Iraq.

[54anickel]

14. The invisible K-Economy

http://star-techcentral.com/tech/story.asp?file=/2004/6/29/corpit/8304594&sec=corpit

THE Knowledge Economy has been characterised by many different names.

It has been referred to as “the information society,” “the new economy,” and “the creative economy.” Every name emphasises one of the characteristics or manifestations of the K-Economy.

One characteristic that we have missed out is “invisible.” Another way of referring to the K-Economy could be “The Invisible Economy.” This is because it reflects one characteristic of the K-Economy which Malaysian workers and managers might be unaware of: The K-Economy has been operating globally for many years now, albeit in unseen ways. It is therefore important that we are conscious of the “unseen” knowledge forces that are driving our companies and country.

The rules and practices that determine success in the industrial economy of the 20th century need rewriting in an interconnected world where resources such as know-how are more critical than other economic resources. Recent thinking and developments offer guidance on developing appropriate organisational strategies to succeed in the new millennium.

Growing interest

Many management writers have for several years highlighted the role of knowledge or intellectual capital in business. The value of high-tech companies, such as software and biotechnology companies, is not in physical assets as measured by accountants, but in intangibles such as knowledge and patents.

more...

[ozymandius]

15. Casino's open for bidness

9:39
Dow 10,352.67 -4.42 (-0.04%)
Nasdaq 2,023.72 +3.90 (+0.19%)
S&P 500 1,132.63 -0.72 (-0.06%)
10-Yr Bond 4.739% +0.000

[UpInArms]

17. Markets are open at 9:42 EST

Dow 10,354.73 -2.36 (-0.02%)
Nasdaq 2,023.04 +3.22 (+0.16%)
S&P 500 1,132.55 -0.80 (-0.07%)
10-Yr Bond 4.741% +0.002

and some pre-market blather

briefing.com

9:12AM: S&P futures vs fair value: -0.6. Nasdaq futures vs fair value: +1.5. Little change in pre-market trading, signaling a relatively unchanged opening for the cash market... Treasuries are similarly lackluster this morning - bonds showing the slightest of gains at this juncture.

8:57AM: S&P futures vs fair value: -0.8. Nasdaq futures vs fair value: -0.5. Futures market slips off its earlier highs and now indicates a mixed open for the indices... A lack of true upside catalysts this morning has undercut the buying drive, along with the dearth of earnings and economic news... The only economic report of the day is due out at 10 ET: June Consumer Confidence.

8:25AM: S&P futures vs fair value: +0.5. Nasdaq futures vs fair value: +1.0. Futures indications continue to point to a positive start for the cash market... Yesterday's 3.5% drop in the price of crude oil, to $36.24/bbl (a two month low) has contributed to the upward bias.

8:00AM: S&P futures vs fair value: +1.2. Nasdaq futures vs fair value: +2.0. Shaping up to be a slightly higher open as the futures indication possess a positive tone... The steady drift lower in yesterday's regular session has paved the way for some buying in the early action - as buyers and sellers have exhibited a give-and-take relationship over the past few weeks... Tomorrow's FOMC meeting continues to linger over trading activity.

ino.com

The September NASDAQ 100 was lower overnight due to light short covering as it consolidates some of Monday's loss, which marked a potential key reversal down. While a steady to higher close is possible today, stochastics and the RSI are overbought, diverging and have turned bearish signaling that a double top with April's high appears to be forming. Closes below the 10-day moving average crossing at 1484.35 would signal that a double top has likely been posted. The September NASDAQ 100 was up 4.50 points at 1498 as of 6:48 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 slightly higher overnight due to short covering as it consolidates some of Monday's loss but remains below initial support marked by the 10-day moving average crossing at 1134.78. Stochastics and the RSI are diverging and have turned bearish signaling that a double top with April's high might be forming. Closes below last Tuesday's low at 1123.50 would confirm that a top has been posted. The September S&P 500 Index was up 0.60 pts. at 1132.40 as of 6:51 AM ET. Overnight action sets the stage for a steady to firmer opening when the day session begins later this morning.

[UpInArms]

18. Treasuries Slide as Inflation Indicator Exceeds Expectations

http://www.nytimes.com/2004/06/29/business/29bonds.html

Treasury prices slid yesterday after an inflation measure closely watched by Federal Reserve policy makers proved more robust than analysts had envisioned, leading to a sell-off that later took on a life of its own.

Investors worry that a continued evidence of a spike in consumer prices could prompt the Federal Reserve to abandon its vow to raise interest rates at a measured pace, forcing it to tighten monetary policy more aggressively.

The core price index of the consumer spending report rose 0.2 percent in May, or double the 0.1 percent gain that many had anticipated. The core index excludes the prices of food and energy.

Inflation is the enemy of bond investors, because it eats away at the steady returns of fixed-income securities. With the job market apparently on the mend, price fluctuations have gained even greater prominence, because they are viewed as the most important factor in any future Fed action.

Still, some economists cautioned that the frenzy over price increases overstated the risk of a pervasive or damaging burst of inflation.

"Although core inflation has doubled since December 2003, it remains comfortably within the F.O.M.C.'s presumptive 1 percent to 2 percent target range," said Steven Wood, chief economist at Insight Economics, referring to the Federal Open Market Committee. "Moreover, it is still at one of its lowest levels of the past 40 years."

...more...

[Maeve]

21. Consumers confident? Absolutely giddy!

http://cbs.marketwatch.com/news/newsfinder/pulseone.asp?dateid=38167.4174652778-815597956&siteID=mktw&scid=0&doctype=806&

U.S. consumer confidence at 2-year high By Rex Nutting
WASHINGTON (CBS.MW) - U.S. consumer confidence improved sharply in June to the highest level in two years, the Conference Board said Tuesday. The board's consumer confidence index rose to 101.9 in June from 93.1 in May. Economists surveyed by CBS MarketWatch were looking for a much smaller gain to about 95. The present situation index jumped to 104.8 from 90.5 in May, also the highest in two years. The expectations index rose to 100.0 from 94.8. The view of the current economy improved considerably. The percentage of consumers who say the economy is good rose to 25.6 percent from 22.2 percent. The job outlook also improved, with the percentage saying jobs are hard to get falling to 26.5 percent from 30.3 percent.

[54anickel]

23. I'm telling ya, they are spikin' the cola with something!

[UpInArms]

25. here's some more of the Koolaid for you

http://quote.bloomberg.com/apps/news?pid=10000006&sid=awypsBBbKt1M&refer=home

U.S. June Consumer Confidence Index Rises to 2-Year High

June 29 (Bloomberg) -- Confidence in the U.S. economy rose this month to the highest level in two years, spurred by job growth and a decline in gasoline prices, a private survey found.

``Some of the concerns about Iraq and terrorism have taken a back seat to the good news on the economy and employment,'' said John Shin, an economist at Lehman Brothers Inc. in New York, before the report.

The New York-based Conference Board's consumer confidence index increased to 101.9 this month, from a revised 93.1 in May. The figure exceeded the highest estimate in a Bloomberg News survey. Assessments of both current and future conditions rose.

The percentage that saw jobs as hard to get declined to the lowest since September 2002. The economy has added 1.2 million jobs so far in 2004 and economists forecast another quarter- million were added this month, boosting incomes and providing thrust for spending and the economy. Federal Reserve policy makers meet later today and are predicted to raise their benchmark interest rate tomorrow by a quarter-point to 1.25 percent to keep inflation from accelerating.

<snip>

Higher consumer confidence and an improving economy may help President George W. Bush in his re-election bid against Democratic candidate John Kerry, a Massachusetts senator. The men are in a statistical tie, according to the latest CBS News/New York Times poll. Concern about terrorist attacks and the conflict in Iraq helped keep Bush's approval ratings near a low for his presidency, according to the poll.

...more...

Gosh! I was just out there with the masses in a retail venue and I certainly didn't see that "optimism" :shrug:

[ozymandius]

26. The job outlook also improved...

That's a easy one. Looking at the job classifieds this morning, either I could work from home making $45/hour doing data entry after buying the "training manual". Or I could work in some nebulous capacity for the gubbermint.

[UpInArms]

27. If Fed lifts rates, world weighs how to respond

http://www.iht.com/bin/print.php?file=527141.html

FRANKFURT When the Federal Reserve lifts interest rates from their lowest levels in four decades - a decision expected late Wednesday - the news will flash through trading floors and finance ministries in Europe and Asia with the same drama as in the United States.

Given the traditional influence of American monetary policy on the rest of the world, the question facing central bankers from Frankfurt and London to Tokyo and Beijing will be how to respond.

The answer, perhaps surprisingly, is that most will do nothing - at least nothing in the short run.

With some central banks, like the Bank of England, having already tightened their policies, and others, like the European Central Bank, disinclined to do so for now, the Federal Reserve seems less like a trailblazer than a slow mover addressing, at long last, its own problems.

"The Fed is still the cornerstone," said Norbert Walter, the chief economist of Deutsche Bank, who views the expected U.S. rate increase as overdue. "But you don't always need to follow the cornerstone."

For many central bankers, the Fed's long-awaited campaign to wean Americans off a diet of easy money will ease pressures on them that stemmed from the historically low rates in the United States.

For Europe, for example, a gradual closing of the gap in rates between the United States and the 12-nation euro zone could weaken the euro relative to the dollar, as higher rates for dollar deposits attract investors.

...more...

[ozymandius]

28. Have a great day folks!

The day's agenda is full and we're just getting started at this late hour. Have a wonderful time at the Casino.

Ozy :hi:

[54anickel]

29. 11:15 update and I'm off as well

Dow 10,387.03 +29.94 (+0.29%)
Nasdaq 2,030.28 +10.46 (+0.52%)
S&P 500 1,134.92 +1.57 (+0.14%)
10-yr Bond 4.722% -0.017
30-yr Bond 5.398% -0.016

NYSE Volume 432,717,000
Nasdaq Volume 554,602,000

11:00AM: Upside move stalls...in the Dow, only 6 stocks are down, while 24 are up...the advance-decline line is also fairly strong, particularly in the Nasdaq...and the Russell 2000 small cap index (RUT 587.10 +3.00) is outperforming all the major averages...there is widespread, modest, strength so far today...NYSE Adv/Dec 1641/1260, Nasdaq Adv/Dec 1784/946

10:30AM: The Consumer Confidence Index, as measured by the Conference Board and reported at 10:00 ET, jumped sharply in June to 101.9 from 93.1 in May...the expectations index rose to 100.0 from 94.8 while the present conditions portion of the index surged to 104.8 from 90.5 in May...this probably reflects the sharply improved labor market conditions...further increases in the index are likely in the months ahead as the strength in the economy becomes more broadly recognized...this has provided a modest lift to stocks...NYSE Adv/Dec 1574/1216, Nasdaq Adv/Dec 1825/773

10:00AM: Indices show some early firmness, but it is widely expected that the market will be sluggish ahead of the Fed announcement tomorrow...a contrary view might be that means some volatility is likely...the semiconductor index, which often leads the market is up (SOX 473.63 +3.16), but the banking index is down a bit, hurt by an earnings warning by Washington Mutual (WM 38.30 -3.01) that implied higher mortgage rates will hurt financial industry profits...

9:45AM: Indices open near flat despite positive futures indication...slight nervousness over Fed policy announcement tomorrow hangs over the market...US light crude oil prices fell $1.31 yesterday to $36.24 and is below $36 this morning...bonds are flat...


Advances & Declines
NYSE Nasdaq
Advances 1557 (49%) 1811 (61%)
Declines 1415 (44%) 971 (32%)
Unchanged 190 (6%) 162 (5%)

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

Up Vol* 199 (52%) 345 (69%)
Down Vol* 165 (43%) 147 (29%)
Unch. Vol* 12 (3%) 7 (1%)

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

New Hi's 69 72
New Lo's 14 12

[Maeve]

30. Market at 12:17

Dow 10,420.51 +63.42 (+0.61%)
Nasdaq 2,032.32 +12.50 (+0.62%)
S&P 500 1,137.21 +3.86 (+0.34%)
10-Yr Bond 4.710% -0.029

12:00PM: Stocks opened slightly higher this morning on a bounce from yesterday's late sell-off...the indices have held their gains amidst mixed news...on the negative side, Target (TGT 42.05 -1.99) followed up on Wal-Mart's comments about weak June same-store sales with a similar comment...Washington Mutual (WM 38.85 -2.46) warned of lower than expected profits due to lower mortgage fees...on the positive side, oil prices are slightly lower even after US light crude dropped $1.31 yesterday...
also, the June Consumer Confidence Index surged to 101.9 from 93.1 in May reflecting broader recognition of the strong economy...the focus is still on the Fed policy announcement tomorrow, however, and volume is light...retail is weak, while techs are broadly firmer with the SOX semiconductor index up 1.74%...breadth is good, as advancers lead decliners by a large margin...bonds are near flat...

[Maeve]

31. 3:04 and still humming right along

Dow 10,420.58 +63.49 (+0.61%)
Nasdaq 2,033.13 +13.31 (+0.66%)
S&P 500 1,136.94 +3.59 (+0.32%)
10-Yr Bond 4.699% -0.040

2:30PM: Volume on the NYSE today is heading towards about 1.3 billion shares again...the average for May was 1.50 billion, and for the year it has been 1.53 billion through May...June will be the slowest month of the year, averaging about 1.3 billion...the dropoff began about May 20...NYSE Adv/Dec 1686/1544, Nasdaq Adv/Dec 1773/1250
2:00PM: Further to the commodity price downtrend, gold is off about $8 today to $393...the gold stock index (XAU 84.35 -1.66) reflects the move...

[Maeve]

32. Final with blather

Dow 10,413.43 +56.34 (+0.54%)
Nasdaq 2,034.93 +15.11 (+0.75%)
S&P 500 1,136.23 +2.88 (+0.25%)
10-Yr Bond 4.695% -0.044

Close: It was a quiet but good day for the stock market...the indices opened near unchanged, fighting off some bad corporate news...Target (TGT ) announced that same-store sales would be below expectations...this added to concerns in the retail sector that started yesterday when Wal-Mart lowered its guidance for June same-store sales...the retail sector was hit hard...mortgage related stocks were down after Washington Mutual (WM ) warned of lower than expected profits due to rising mortgage rates...
the market got a boost, however, from a big jump in the June Consumer Confidence Index to 101.9 from 93.1 in May...the strong economy and improved job market are starting to become widely recognized...further weakness in oil prices helped as well, as the August light crude contract dropped $0.58 to $35.66, building on the $1.31 drop on Monday...volume was again light as just 1.37 billion shares traded on the NYSE...now, it is on to the much anticipated Fed policy announcement tomorrow afternoon...