STOCK MARKET WATCH, Friday 9 July

[ozymandius]

Friday July 9, 2004

COUNTING THE DAYS
DAYS REMAINING IN THE * REGIME 199
DAYS SINCE DEMOCRACY DIED (12/12/00) 3 YEARS, 210 DAYS
WHERE'S OSAMA BIN-LADEN? 2 YEARS, 264 DAYS
WHERE ARE SADDAM'S WMD? - DAY 477
DAYS SINCE ENRON COLLAPSE = 960
Number of Enron Execs in handcuffs = 19
Recent Acquisitions:Ken Lay
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 July 8, 2004

Dow... 10,171.56 -68.73 (-0.67%)
Nasdaq... 1,935.32 -30.76 (-1.56%)
S&P 500... 1,109.11 -9.22 (-0.82%)
10-Yr Bond... 4.47% -0.00 (-0.04%)
Gold future... 408.20 +5.30 (+1.30%)


|||


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

---

[UpInArms]

1. daily dollar watch

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

Last trade 87.51 Change -0.03 (-0.03%)

http://www.economist.com/finance/displayStory.cfm?story_id=2908448

Keep an eye on it

After a buoyant start to the year, the dollar seems headed for a tumble

THERE was a time, not long ago, when economists and those who dabble in the foreign- exchange market could find scarcely a good thing to say about the dollar. Last year, John Snow, America's treasury secretary, even managed to transform his country's long- standing strong-dollar policy into a weak-dollar one. All this greatly irritated Europeans, especially; as the euro rose, international meetings of the great and the good were dominated by cross discussions about the beleaguered buck. Newspapers, including this one, were full of gloomy headlines suggesting that the greenback would, indeed should, fall farther.

So it did, for a while: by early January, the dollar was worth a quarter less, in trade- weighted terms, than it had been two years before. But when everyone is betting that a market will go one way, it often goes the other. By mid-May, the dollar had risen by 8%, bucked up, as it were, by the Bank of Japan, which bought ¥14.8 trillion ($138 billion) of foreign exchange in the first quarter, almost all of it dollars, in comfortably the largest-ever act of intervention by a central bank. Then, quietly, the dollar started to drop. By July 6th, it had fallen by 4.3% from its high. Not surprisingly, perhaps: the dollar's prospects look even worse now than they did last year.

The dollar's recent decline may seem puzzling, for it began while expectations were mounting that the Federal Reserve was about to put up interest rates. The decline has continued since those expectations were confirmed on June 30th. Rising interest rates, you might have thought, would halt any such decline.

That is true only up to a point. As the American economy brought forth jobs in the spring, and the markets started to expect that the Fed would increase rates sooner rather than later, the dollar was boosted. A prime reason was that traders who had previously borrowed greenbacks in order to exchange them for other, higher-yielding currencies now needed to buy them back in a hurry. Lately, however, softer economic data have sown the idea that the Fed might not have to raise rates so far and fast after all. That has done the dollar no favours in recent days.

<snip>

Economists fret about America's current-account deficit because it is a measure both of America's ability (or inability) to save and its attractiveness to foreign investors. The country's heady growth of recent years has relied on foreigners' willingness to invest there: Americans, in effect, spend other people's money. That need not matter when the sums are small, but it does when they are large and getting larger. Most economists believe that at some point the dollar will need to get cheaper, maybe much cheaper, to encourage foreigners to finance the deficit. That point may be at hand.



...more...

http://quote.bloomberg.com/apps/news?pid=10000087&sid=aHxGO0K6Bsq0&refer=top_world_news

Oil Rises to 5-Week High on Concern About Supply Disruptions

July 8 (Bloomberg) -- Crude oil climbed above $40 a barrel in New York for the first time in five weeks on concern about possible supply disruptions in Russia, Iraq, Nigeria and other exporting countries.

OAO Yukos Oil Co., Russia's biggest oil exporter, has said that output may fall because of a tax dispute. Oil shipments from Iraq and Nigeria have been disrupted during the past week. An Energy Department report showing that U.S. oil and petroleum product inventories rose last week failed to quell a 13 percent rally that began on June 30.

``Several major supply sources remain vulnerable due to terrorism or civil unrest, forcing everyone to pay up for what might become a precious commodity,'' said John Kilduff, senior vice president of energy risk management at Fimat USA Inc. in New York. ``The market is discounting the present supply reality in favor of the potential for continued supply disruptions.''

Crude oil for August delivery rose $1.25, or 3.2 percent, to settle at $40.33 a barrel on the New York Mercantile Exchange. Prices were 33 percent higher than a year earlier and down 5.1 percent from a record $42.45 a barrel on June 2. Futures reached $40.40 a barrel, the highest intraday price since June 3.

...more...

http://www.fxstreet.com/nou/noticies/afx/noticia.asp?font=Reuters&pv_noticia=MTFH84673_2004-07-09_11-54-56_L09535373

FOREX-Dlr weighed down by rate outlook, U.S. security concerns

LONDON, July 9 (Reuters) - The dollar struggled near a 3-1/2 month low versus the euro and a five-month low against the Swiss franc on Friday, weighed down by diminishing interest rate hike expectations and by security concerns in the United States.

Mixed U.S. economic data, disappointing corporate results and the Federal Reserve's insistence on a "measured" pace of future tightening have convinced many investors that they had been too aggressive on U.S. rate hike prospects.

The bearish mood has also forced the dollar to erase this week's gains versus the yen, which had been damaged earlier by market caution over the outcome of upper house elections in Japan this Sunday.

"Market sentiment towards the dollar is unfriendly," said Peter Fontaine, currency strategist at KBC in Brussels.

"Interest rates are an issue, also high oil prices. And this morning dollar/yen went down in Asia on security fears," he said.

The dollar hit lows around $1.2423 per euro <EUR=> on Friday but was trading steady on the day at $1.2388 at 1145 GMT. It was also up from lows versus the Swiss franc of around 1.2220 <CHF=>.

Little new U.S. economic data will be available on Friday but investors will be looking to the 1700 GMT speech by Kansas City Federal Reserve President Thomas Hoenig and the accelerating inflow of U.S. corporate earnings figures.

...more...

Have a Great Day Marketeers!

[54anickel]

4. UIA that 1st article has a lot of good points in it. I found this part

especially interesting:

The second piece of evidence comes from investors' behaviour. Some say that the deficit is not a problem, but simply reflects foreigners' boundless desire to invest in a vibrant economy. This may have been true once, but not any more. Net foreign direct investment (FDI) was negative, to the tune of $155 billion, in the past 12 months, says Goldman Sachs. This ought to be no surprise: in the first quarter returns on FDI in America were 5.5%, while those on FDI abroad were 11.7%.

In recent years, the current-account deficit has instead been financed by (less stable) portfolio flows into stocks and bonds. In the past year, three-quarters of such investment in America has gone into bonds. The biggest buyers have been Asian central banks, trying to keep their currencies from rising too swiftly against the dollar (or maintaining a fixed rate, in China) and parking the money in Treasuries.

[Rainbowreflect]

2. DAYS REMAINING IN THE * REGIME 199

I am so excited to see that # below 200.

[54anickel]

3. Thank You, 'Bubbles' Greenspan

http://www.prudentbear.com/archive_comm_article.asp?category=Guest+Commentary&content_idx=33899

snip>

His critics come from two directions. The first is the Wall Street crowd who thinks that he is behind the power curve on inflation. Typically, these folks are economists who work for the big brokerages and investment firms. They focus on US consumer and producer prices, and they use "econobabble" such as PPI, CPI, core CPI, YOY, GDP price deflator. However, fighting consumer inflation is fighting the last war. The battle reminds me of the French generals of the late 1930's who wanted to prevent static trench warfare with Germany. We in the US still ride the downtrend of consumer and producer inflation that began in the early 1980's. Back, back commodity lovers, I haven't bought 1000 kilograms of soy beans lately. Inflation is having its last post-1970's flare up before dipping below zero. Huge Indian and Chinese labor forces, excess industrial capacity in the northern hemisphere, weak international labor unions, and a series of global recessions that sap consumer purchasing power and idle factories everywhere will generate outright deflation. I don't care how much money the Federal Reserve can print--money in the broad sense will be destroyed faster than can be created, for a short while anyway. But that's another article. Bottom line, the US is producing many more macroeconomic statistics like 1990s deflationary Japan than quite a few analysts want to admit.

The second direction of Mr. Greenspan’s critics comes from the alternative economics crowd. Most of these folks do not work for a Wall Street firm or a traditional investment company elsewhere. I associate with this loosely allied federation via my writings. We are the folks that recognize that we are in the current bust period in global equities. This "secular bear market”, what I call the "Great Recession", began in 2000 and could easily last 15 years. Many of us criticize him for too low interest rates/too high money supply growth that helped cause, in order, the mid-90s emerging Asian equity bubble, late 90s tech stock bubble, the early 2000s global bond bubble, and the mid-2000s US real estate and global commodity bubbles. So vociferous are some of those critics, that they have called him "Bubbles" Greenspan. Their arguments, while having logical cause and effect, miss the point. They miss the point because these serial market bubbles are at the exact center of the reason he has helped me.

So what IS the point? The point is time. I have been given time to recover financially. Like millions of middle Americans, I have a 401k plan with my employer, plus a couple of IRAs from previous 401k accounts. My balances plummeted like everyone else's in 2000, 01, and especially 02. I added to my moderate growth stock mutual fund holdings in 01 and early 02. Recession over, so take the plunge, right? I got clobbered by the across the board declines in 2002 to the point where I did not open my quarterly statements. I did not want to unload the pie piece I had allocated to high quality bond funds. I had no idea how low the global market indexes could go. It wasn't until the middle of 2002 that I began to realize that not only had the boom in stocks starting in 1982 ended in March 2000, but also a long-term bust had begun. The previous boom years, after all, spanned 24 years from 1942 to 1966. In other words, a "secular bull market" in global equity indexes had ended. A "secular bear market" had begun two years earlier. I heard the timeout buzzer late and also earlier than expected.

I got caught with little cash left. I was along for the roller coaster ride. As Mr. Greenspan dropped short term interest rates to 1%, a "cyclical bull market" in US equities began in October 2002. There was a cause and effect, not a coincidence. While the Great Recession overpowers any one institution or man, one man can (and did) tweak the timeline. And timing is everything. Cyclical markets--lasting a few months or a few years--are one magnitude shorter than secular ones. Whether a misguided attempt at reflation, an "echo bubble", or a cyclical bull market given steroids, a label on the current stock market run is irrelevant to me. After a cyclical bear market that lasted two and a half years to October 2002, my retirement portfolio recovered nicely into 2003 and 2004. I have used this opportunity to sell mutual funds: technology, growth, index, international, and selected industry sectors. My 70/30 stock/fixed income asset allocation in early 2000 reversed. The cash portion has soared. I will sell more on rallies. Now being aware about the current secular bear, I can bide my time and pick my spots to buy treasury bond funds, inflation protected securities, oil funds, international bond funds, gold funds, or just sit on cash. I plan to reduce my principal risk in this way for another 5 to 15 years. After all, the previous two secular bear markets lasted 16 and 13 years. If I can endure all that time even with the same constant dollar value that I have now, I will be well positioned to take advantage of the secular bull market that will inevitably follow.

more...

[Wright Patman]

6. If this writer

couldn't call the beginning of the secular bear market, what makes him think he can call the end of it?

[54anickel]

36. Heh, I think Prudent Bear agrees with you. They already pulled the

link to the article from their home page and replaced it with another. Unfortunately, I can't get the guest commentary page to come up right now.

[UpInArms]

8. two things came to mind while I read this

1) the best laid plans often go awry

and

2) the road to hell is paved with good intentions

[54anickel]

16. Heh-heh, I think he'd have been better off writing the "other" article -

I don't care how much money the Federal Reserve can print--money in the broad sense will be destroyed faster than can be created, for a short while anyway. But that's another article. Bottom line, the US is producing many more macroeconomic statistics like 1990s deflationary Japan than quite a few analysts want to admit.

It's nice that he's thanking Bubbles for buying him some time, but how the heck does he think we got into this handbasket to begin with?

[54anickel]

5. Check out yesterday's RPs added to the Fed Temp Bank Reserves

The Desk has entered the market announcing: O/N RP - $9.000 billion
The Desk has entered the market announcing: 8-day RP - $3.500 billion
The Desk has entered the market announcing: 14-day RP - $11.000 billion
Fed's Daily Securities Lending Thu 07/08/04 - $0.936 billion

http://www.321gold.com/fed/temp_bank_res.html

[UpInArms]

7. pre-opening blather

briefing.com

8:53AM: S&P futures vs fair value: +5.9. Nasdaq futures vs fair value: +12.5. Futures market moves to its highs of the morning amid strong buying interest from traders... The rally in Asian trading, an upside Q2 (June) earnings report from GE, and a sense that the indices are due for a correction after tumbling to one month lows have brought buyers back to the table.

8:22AM: S&P futures vs fair value: +5.6. Nasdaq futures vs fair value: +11.0. Expectations remain intact for a higher open as the futures trade retains its gains... An up day in Asia today (Nikkei +0.9%) has helped set the stage for a rally, along with the fact that the equity market has traded off for most of this week.

8:02AM: S&P futures vs fair value: +6.3. Nasdaq futures vs fair value: +11.5. Futures indications pointing to a much higher start to the day despite a few warnings from tech companies (CA, STK) last night... Buyers have re-emerged largely because of the relative value opportunities created by the stock market's recent fall-off - the major indices finishing down 4 out of the 5 last sessions.

ino.com

The September NASDAQ 100 was higher overnight due to short covering as it consolidates above the 62% retracement level of the May- June rally crossing at 1434.57. Stochastics and the RSI are bearish signaling that sideways to lower prices are possible near-term. If September extends this week's decline, the 75% retracement level of the May-June rally crossing at 1414.51 is the next downside target. The September NASDAQ 100 was up 8.00 pts. at 1446.50 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 higher overnight due to short covering as it consolidates some of Thursday's decline, which closed below the 50% retracement level of the May-June rally crossing at 1112.70. If September extends this week's decline, the 62% retracement level crossing at 1104.86 is the next downside target. Stochastics and the RSI are bearish signaling that sideways to lower prices are possible near-term. The September S&P 500 Index was up 4.70 pts. at 1115.40 as of 6:50 AM ET. Overnight action sets the stage for a steady to firmer opening when the day session begins later this morning.

[54anickel]

11. Woo-hoo! Lookie at those futures. Bargains everywhere you look -

according to the blather.

Oh wait, INO seems to stating it's short covering and still bearish signals.

Nevermind. :evilgrin:

[UpInArms]

14. ino seems to give data and reasonably answers

questions regarding fluctuations without wearing that mini-skirt

[54anickel]

9. Market Nugget raises some good questions on the employment numbers

The St Louis Fed page he links to also has some great reports that don't seem to make the mainstream press.

http://www.marketnugget.com/pages/57/index.htm

Raise your hand if you were surprised by the employment numbers last Friday which came in at half the expected numbers. The Federal Reserve Bank of St. Louis maintains an excellent site on which one can find all kinds of interesting statistics. A review of the information on the web site clearly shows the employment picture is not improving. Here is a link to the site: St. Louis Fed: Economic Data - FRED II that you can bookmark. The web site offers a free service where you can sign up for notification when reports that interest you are updated.

While reviewing the regular reports that I receive each month, a question kept popping into my mind: if employment is picking up, why is it not showing in these reports? The Median Duration of Unemployment report shows that the median duration of unemployment has stagnated at 10.8 weeks, plus or minus less than one week, since April 2003. Further, the report shows that the trend in the last three months has been for the median duration of unemployment to be increasing, not decreasing as would be expected if the employment situation was improving. For the curious, the median number of weeks unemployed peaked at 11.1 in June 2002.

Another of the many reports I monitor is The Index of Help Wanted Advertising. This index also continues to scrape the lows, and remains at the multi-decade lows last seen in the mid-1960s. For comparison purposes the historical index levels were:

January 2000 the Index was 89,
January 2001 the index was 77,
January 2002 the index was 47,
January 2003 the index was 41,
January 2004 the index was 39

The most recent report has the index at a reading of 39.

Once again I ask: if the job market is improving why is this index not improving? I would expect the advertising of open positions to precede increased employment levels. That it doesn’t leads me to disbelieve one set of numbers, and my inclination is to disbelieve the headline employment numbers and to put more faith in the numbers published on the Federal Reserve web site and not widely announced.

more...

[UpInArms]

12. are you better off than you were four years ago?

January 2000 the Index was 89,
January 2001 the index was 77,
January 2002 the index was 47,
January 2003 the index was 41,
January 2004 the index was 39

[UpInArms]

10. U.S. May consumer credit rises $8.2 billion

http://www.fxstreet.com/nou/noticies/afx/noticia.asp?pv_noticia=1089314168-9e32d306-40039

WASHINGTON (AFX) -- U.S. consumer credit expanded by $8.2 billion, or a 4.9 percent annual rate, in May to a seasonally adjusted $2.03 trillion, the Federal Reserve said Thursday. Revolving credit, such as credit cards, rose by $1.6 billion or 2.6 percent. Nonrevolving credit, such as auto loans, rose by $6.6 billion or 6.2 percent. April's increase in credit was revised to $5.3 billion from $3.9 billion earlier. Economists polled by CBS MarketWatch had forecast an increase of $7.5 billion in May

[54anickel]

17. Just trying to be the good little consumers they are expected to be.

[Maeve]

13. Does anyone else get the feeling we're just treading water?

The markets are about where they were at the beginning of the year--they get up a bit, then fall back, up higher, fall further...and then there's the constant fear of SOMETHING about to happen--an attack, a major set-back militarily, a new war front, oil crisis, humanitarian disaster, economic crisis...

:hangover:

finding the "news" old and depressing anymore...

[midwayer]

39. More like hanging by a thread

The market is at a pivot point right here testing the 200 day moving average which has not been tested since May when it cracked it substantially.

Yesterdays close below the 200 DMA does not bode well. But we will see over the next few days and it may stay a little strange through here until optons expiration next Wed.

My gut says there is way too much uncertainty for it to go anywhere until 2nd quarter earnings start coming out for some guidance.

Otherwise the shorts may come out to play in the meantime as we really are hanging by a thread right here.

[UpInArms]

15. Markets are open at 9:35 EST

Dow 10,222.29 +50.73 (+0.50%)
Nasdaq 1,951.56 +16.24 (+0.84%)
S&P 500 1,114.66 +5.55 (+0.50%)
10-Yr Bond 4.478% +0.008

[UpInArms]

18. The price of greed

http://business.timesonline.co.uk/article/0,,9078-1173506,00.html

excerpt:

Mr Lay transformed Enron from a pedestrian Texan gas pipeline company into the 600lb gorilla of the world’s energy markets. In recognising that energy in its myriad forms could and should be traded like shares or pork bellies, he was a pioneer: this insight attracted billions of dollars of much-needed investment in outdated American utilities that were prompted to compete with each other. The market rewarded Mr Lay with a vast personal fortune and a business empire stretching from Houston to India and beyond.

American prosecutors have spent the past three years examining Mr Lay’s activities at Enron, though not his commercial conquests. In 2001 he resumed duties as chief executive after the abrupt resignation of Jeffrey Skilling, a pin-up boy of the “new era” economy. In the previous five years, Mr Skilling had orchestrated a dizzying upward spiral of supposed earnings. When reality intervened, Mr Lay was left at the helm as a $60 billion company went bankrupt within a year. The full extent of the implosion and of the corruption was hidden until the end by a brilliantly constructed network of shell companies, complex derivatives and non-sensical management speak.

Executives deflected questions about Enron’s mounting debts with baffling references to “timeshifting consumption”. One annual report said the firm built “wholesale businesses through the creation of networks involving selective asset ownership, contractual access to third-party assets and market-making activities”. In truth it promised soaring profits from trading energy rather than producing it; why be just another company when you could be “the ” market?

With hindsight it is clear that Enron behaved like a tightrope walker with no pole. It promised the inflated returns to which Wall Street had grown accustomed during the mid-to-late 1990s, when dot-com duds were priced ever higher on the basis of ludicrous forecasts and their founders’ bad haircuts. Enron claimed exemption from the rules of the “old economy”, and its executives expressed heartfelt sympathy for companies which did not “get” the new business model. Unlike those start-ups, Enron was dealing in energy, a commodity for which demand was not exploding and whose production was static. Only increasingly desperate fiddling could create the appearance of exponential growth.

...more...

[54anickel]

19. China Chip Tax Rebate End To Up Invest Confidence

How quickly they forget about the Intellectual Property Rights rules regarding patents in China. What was that quote yesterday? Here it is:

"We did grant the patent to Pfizer before, but that does not mean that we are really giving it to you,"

http://sg.biz.yahoo.com/040709/15/3llj8.html

SHANGHAI (Dow Jones)--China's agreement with the U.S. to phase out a preferential tax policy on locally designed and made computer chips is expected to boost investor confidence in the country's technology sector.

The negotiated agreement resolves the first complaint filed against China since the country joined the World Trade Organization more than three years ago.

Under pressure from the U.S., China agreed to phase out by April 2005 a value-added tax rebate aimed at encouraging the local design and production of semiconductors.

"This will enhance the confidence the world has in China," said Justin Zhao, a spokesman for the United States Information Technology Office in Beijing. "It creates a more predictable, transparent, and fair investment environment."

more...

[UpInArms]

20. Study recommends layoffs at Challenger (Space) Center

http://kvoa.com/Global/story.asp?S=2017502

Peoria-AP -- Hard times may be ahead for the troubled Challenger learning center.

A study is suggesting the Peoria-based center lay off half its full-time employees and use the savings to pay off debt.The Arizona Republic reports the Challenger Space Center is two and a-half (m) million dollars in the red.About half of the Challenger Center's debt is owed to the Peoria Unified School District.The debt accumulated over a four-year span.It consists of employee wages the district agreed to pay upfront with the understanding that the center would pay the money back in full at the end of each year.However, the center failed to do that.Other recommendations include adjusting program offerings and increasing fund-raising efforts to solve its financial problems.

...very short newsblurb...

[UpInArms]

21. Market Numbers and blather at 9:56 EST

Dow 10,229.52 +57.96 (+0.57%)
Nasdaq 1,954.12 +18.80 (+0.97%)
S&P 500 1,114.36 +5.25 (+0.47%)
10-Yr Bond 4.476% +0.006

9:45AM: A solidly bullish start to the day as buyers come out of the woodwork after several sessions of wide losses... The major indices are down 2.1-3.5% since the start of July as investors have been skittish over a number of quarterly warnings and a few earnings reports (namely Alcoa and Yahoo!) that did not live up to expectations... Last night, there was only one disappointing outlook of note (Computer Associates) and tellingly, stock of the company is up 3.3%... Sentiment has simply turned positive today, and buyers are willing to bid up stocks at the bottom of the range...

Wholesale Inventories report due at 10:00 EST

[UpInArms]

23. U.S. May wholesale inventories rise 1.2%

http://cbs.marketwatch.com/news/newsfinder/pulseone.asp?dateid=38177.4167592593-815827617&siteID=mktw&scid=0&doctype=806&property=&value=&categories=&

WASHINGTON (CBS.MW) - U.S. wholesalers' inventories increased 1.2 percent in May as sales slowed to a 0.5 percent gain, the Commerce Department estimated Friday. The inventory-to-sales ratio rose to 1.13 in May from a record low 1.12 in April. In April, inventories increased a revised 0.2 percent and sales increased 0.9 percent. In May, durable goods inventories increased 1.5 percent, the biggest increase in 4 1/ 2 years. Durable sales rose just 0.1 percent, boosting the inventory-to-sales ratio to 1.40 from 1.38 in April. Meanwhile, inventories of nondurable goods increased 0.6 percent and sales increased 0.9 percent, cutting the inventory-to-sales ratio to a record low 0.87.

[54anickel]

26. Market doesn't seem to bother with that report today -

From the 10:00 blather:

The only economic report of the morning - May Wholesale Inventories - was just released and came in at +1.2% (consensus of +0.5%)...
Thus far, the market has had little reaction, as the data reveal little about personal consumption...

[54anickel]

27. The Perfect Real Estate Storm Gathers More Wind

http://realtytimes.com/rtnews/rtapages/20040708_perfectstorm.htm

The Federal Reserve's decision to raise interest rates Wednesday might create as many problems as it solves, suggests Dr. Irwin Kellner, in his recent CBS Marketwatch column, "Between Scylla and Charybdis," Dr. Kellner makes the point that because job growth has been weak, so has personal income growth, with the result that many have borrowed at adjustable rates that can only rise with the Fed rates.

"Lots of this new debt is being used for everyday living expenses, the rest is being used to buy houses," writes Kellner. "Relatively speaking, more people own their own homes today than ever before. This surge in demand has pushed up housing prices much faster than household incomes. In turn this has generated concerns that there is a bubble in housing that will deflate as interest rates go up. Many people could wind up owing more than their house is worth."

Rates can't go up without jobs, says Kellner of the oxymoronic "jobless recovery."

And people who are paying more for their debts have less money to spend on houses, which could help put the housing market into the middle of a perfect real estate storm.

"The risks seem so obvious that it astounds me that more professionals in the real estate and banking sectors are not expressing worry in public," says Eric Janszen, managing director Osborn Capital LLC. "I know many who do privately, and I have friends that work for investment banks who tell me in confidence that they are very concerned about what they call the 'credit bubble.'"

more...

[54anickel]

22. Update 4: Officials: Yukos Shouldn't Affect Exports

Uh-huh, sort of like their handling of the banks wouldn't cause any issues. :eyes:

http://www.forbes.com/technology/ebusiness/feeds/ap/2004/07/09/ap1449374.html

The government's efforts to collect a $3.4 billion back tax claim from the Yukos oil company should not affect the nation's oil exports or interrupt the oil giant's ability to bring oil to market, Russian officials said Friday.

The two officials' comments appeared to support the view that the state is planning to carve up the company and redistribute its assets to new owners but not destroy a cash cow for the country.

Russian President Vladimir Putin has said the state is not interested in driving the company that produces a fifth of Russia's oil into bankruptcy, but the government has shown no inclination to reach a compromise, such as allowing Yukos to stagger its payments.

snip>

"If they do not want to fulfill the court ruling voluntarily, we will take tough and uncompromising measures to achieve it within our powers prescribed by the law," Belyakov was quoted.

But he added, "We won't interrupt the company's operations - at least we don't intend to."

more...

[54anickel]

24. Hot Start for Equity Funds in July

http://www.thestreet.com/_tsclsii/funds/funds/10170075.html

Investors seemingly started the second quarter with a bang as they plowed $2.9 billion into equity funds for the week ending July 7, but fund-tracking experts say automatic investing may have contributed to the spike in inflows.

According to TrimTabs, U.S. funds saw inflows of $2.5 billion, and international equity funds took in $400 million for the holiday-shortened week, totaling $2.9 billion, up from $2.3 billion the prior week. Rival fund-tracking firm AMG Data reported global equity fund inflows of $2.45 billion for the same period, with $1.86 billion going to U.S. stock funds.

"Recent equity inflows have likely been inflated by automatic investing at the beginning of the quarter," says Carl Wittnebert, TrimTabs director of research. "Fund investors do not buy when the market is falling."

The two tracking firms, however, were split on the direction of bond fund flows. TrimTans reported outflows of $300 million -- down from $1.3 billion the prior week -- while AMG said taxable bond funds reported net cash inflows of $956 million.

more...

Seems they may have created a self-sustaining beast as part of this "new economy".

[54anickel]

25. Joe Six-Pack's Reality Check

http://www.321gold.com/editorials/benson/benson070904.html

snip>

The Bureau of Labor Statistics ("BLS") tracks all kinds of useful data, freely available to anyone who wishes to look. A major data series that tracks the wages of most employees on payrolls for service and production jobs shows average weekly earnings (determined by the hourly wage rate and number of hours worked) are:

Weekly Earnings

June '03 June '04 %Change
$521.73 $524.37 0.5%

You'll notice that wages have hardly increased while the economy has boomed. With the year over year Consumer Price Index ("CPI") running at 3.1% as of May, and the escalating prices of gas, food, etc., Joe has been fortunate to receive extra cash from two short-term sources: Home loans and a Tax Refund.

First, banks remain extraordinarily generous in their mortgage lending policies. Even though cash out mortgage refinancing is slowing down, banks will continue to make home equity loans available (a variable rate is preferred, of course). Based on home equity lending in the first half of this year, it is estimated that $400 billion will be drawn on home equity lines of credit in 2004. A staggering number!

The chart below indicates the dollar amount (in billions) of tax refunds sent to individual taxpayers through June 2004:

Individual Tax Refunds
(in Billions of Dollars)
January - June 2004
J F M A M J
6 64 48.5 56.3 26 3


The economic consumption party since 2001 has been financed by three sources of cash: Increases in personal income; tax cuts; and, mortgage borrowing. Unfortunately, increases in personal income account for only one-third of the increased consumer spending.

What's clearly evident from the BLS data is that Joe's paycheck has not increased with inflation, but the paychecks of the Champagne and Chardonnay crowd has. You might ask "but a hundred billion of tax refund dollars floating around the country creates economic growth, right?" Wrong! For the remainder of 2004 and through 2005 when the tax refund checks have stopped coming, Joe, and millions like him, will once again be left alone with bills that are difficult to pay.

You don't need to be an economist to forecast that spending at Wal-Mart, GM, Ford, etc. would start looking weak in June. Indeed, with the tax rebates declining in May and the slowing in employment growth evidenced in June, this could easily be the start of a new trend....

more...

[54anickel]

28. Remember that old article I posted a while back that spoke of alternate

forms of currency that would begin floating around? I think the article was from back in the 90's and dealt with currency speculation.

I'll see if I can dig that one up, but I found this article interesting. http://www.gold-eagle.com/editorials_04/hommel070804.html

Seems NH has a bill out there for the state to transact in gold/silver with local businesses and citizens. The end of the article has a link to the NH bill site found here:http://www.goldmoneybill.org/

[54anickel]

29. Here's that original post -

http://www.democraticunderground.com/discuss/duboard.php?az=show_topic&forum=102&topic_id=627668#628019

Talk about a timely tie-in!
From the 97 article:

What is beginning to happen in the developed countries is a new phenomenon: an explosion of 'local currencies' - money that is not the national currency. We haven't seen this since the Great Depression when there were literally thousands of local currencies in the US and other countries affected by massive unemployment. By supporting the development of local money schemes, we may in fact create the groundwork for the next system. This could become one of the most powerful ways available to support citizen control.


Here's the original article:

http://www.twnside.org.sg/title/nar-cn.htm

[54anickel]

30. Mortgage rates fall after Fed nudges short-term rates

http://www.usatoday.com/money/economy/housing/2004-07-08-mortgage-rates_x.htm

WASHINGTON — Mortgage rates have come down. Even though the Federal Reserve pushed short-term interest rates higher June 30 for the first time since 2000, 30-year fixed-rate mortgage rates dipped near 6% the past week — the lowest since this spring, said mortgage giant Freddie Mac.
It was the third week of decline, after a run-up in anticipation of Fed action.

"This is good news for those who are still house-hunting, as lower rates mean more affordable housing," says Frank Nothaft, Freddie Mac chief economist.

The decline was largely a result of evidence that the economy might not be as strong as thought, Nothaft says, pointing to last week's June unemployment report, which was less robust than analysts had expected. That means inflation could remain in check. Nothaft expects total home sales this year to come in 2% above 2003's record.

Freddie Mac said the average rate for a 30-year, fixed-rate mortgage declined to 6.01% in the week ended Thursday, down from 6.21% the previous week.

more...

[KoKo]

44. Interest rates go up and mortgage rates go down? Hmmmm

wish that had happened back in the 80's when we had to buy a house.

:eyes: Actually most of what I read lately is so strange that I'm thinking all the "rules" were thrown out the window and there's a new rule book written by a mad hatter somewhere.

[54anickel]

31. Japanese Bonds Have First Weekly Decline in Three on Stocks

http://quote.bloomberg.com/apps/news?pid=10000101&sid=awQCVaasEhNE&refer=japan

July 9 (Bloomberg) -- Japanese 10-year bonds fell for a first week in three after the Topix index of stocks rose, halting its longest losing streak in more than 16 months.

An index of Japanese government debt due in 10 years and longer has handed investors a loss of 5.3 percent this year including reinvested interest. It is the worst performer among 150 global bond indexes compiled by the European Federation of Financial Analysts' Societies. The Topix has risen 8 percent this year on signs economic growth will quicken.

``Rebounding stocks are putting a damper on bonds,'' said Hidenori Suezawa, chief strategist at Daiwa Securities SMBC Co., one of the five largest buyers at government bond auctions. ``I'm bullish on the economic outlook, and yields are set to rise toward the end of the fiscal year'' on March 31.

The benchmark 1.8 percent bond due in June 2014 fell 0.422 to 99.957 as of 4:45 p.m. in Tokyo, according to Japan Bond Trading Co., the nation's largest debt broker. Its yield rose 5 basis points to 1.805 percent. For the week, yields rose by 1 basis point. A basis point is 0.01 percentage point and yields move inversely to prices.

Ten-year bond futures for September delivery fell 0.52 to 134.97 as of the 3 p.m. close at the Tokyo Stock Exchange and declined by 0.33 on the week.

more...

[54anickel]

32. 11:23 update

Dow 10,221.56 +50.00 (+0.49%)
Nasdaq 1,946.96 +11.64 (+0.60%)
S&P 500 1,112.95 +3.84 (+0.35%)
10-yr Bond 4.478% +0.008
30-yr Bond 5.226% +0.006

NYSE Volume 416,349,000
Nasdaq Volume 517,220,000

11:00AM: Equities dip a bit lower but remain implanted in positive territory... Sector leadership is still concentrated in the technology groups, and a few blue chip areas like homebuilding, drug, cyclical, and consumer staples... Not every industry group, however, has joined the uptick as telecom, utility, airline, and financial have lagged behind... The latter is particularly important in determining market direction as it accounts for over 20% of the S&P 500's market cap... The bulls will need to see a reversal in that group in order to steer the market higher...NYSE Adv/Dec 1555/1303, Nasdaq Adv/Dec 1571/1096

10:30AM: Major indices continue to trade near their highs under the guise of positive market internals... Up volume is leading down volume by a 2-to-1 margin at the NYSE and a 4-to-1 margin at the Nasdaq, and advancers are outpacing decliners at both exchanges... Within the Dow, 25 out of the 30 components are showing gains, with General Electric (GE 32.09 +0.39) near the top of the list... The latter turned in a better than expected Q2 (June) report - revenues grew 11% to $37.03 bln (consensus of $35.59 bln) and profits were flat at $0.38 (consensus of $0.37)...NYSE Adv/Dec 1468/1247, Nasdaq Adv/Dec 1556/984

10:00AM: Stock market backs off its opening gains, but stays comfortably above the unchanged mark thanks to a strong technology sector... Software, communication equipment, networking, disk drive, and semiconductor have all come roaring back after basically falling off a cliff in previous sessions... Their combined leadership (along with noticeable gains in biotech) has propelled the Nasdaq 0.9% higher versus +0.4% for the S&P 500...The only economic report of the morning - May Wholesale Inventories - was just released and came in at +1.2% (consensus of +0.5%)...
Thus far, the market has had little reaction, as the data reveal little about personal consumption... SOX +2.3, NYSE Adv/Dec 1752/761, Nasdaq Adv/Dec 1659/675


Advances & Declines
NYSE Nasdaq
Advances 1619 (52%) 1566 (53%)
Declines 1305 (42%) 1163 (39%)
Unchanged 172 (5%) 179 (6%)

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

Up Vol* 226 (61%) 357 (75%)
Down Vol* 135 (36%) 111 (23%)
Unch. Vol* 4 (1%) 7 (1%)

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

New Hi's 73 36
New Lo's 123 89

[UpInArms]

33. Treasury's Snow repeats US strong dollar mantra

http://www.reuters.com/financeNewsArticle.jhtml?type=bondsNews&storyID=5631551

MANCHESTER, N.H., July 9 (Reuters) - U.S. Treasury Secretary John Snow said on Friday the U.S. backs a strong dollar and feels that currency values are best determined in competitive markets.

Speaking to reporters after participating in a round-table meeting with local businessmen at a chocolate factory, Snow repeated his familiar support for a strong currency.

"We support a strong dollar, but a currency's value in exchange is best set in open, competitive currency markets," Snow said.

...more...

the comedy show rolls on....

[UpInArms]

34. U.S. Wholesale Inventories Rose 1.2% in May; Sales Up 0.5%

http://quote.bloomberg.com/apps/news?pid=10000006&sid=a62eJ2MMtdDY&refer=home

July 9 (Bloomberg) -- U.S. wholesale inventories rose 1.2 percent in May, more than forecast and the ninth straight increase, as companies kept more goods on hand to satisfy demand.

The increase reflected more imported autos, machinery and electrical equipment and brought the value of stocks to $305.5 billion after a 0.2 percent rise in April, the Commerce Department said in Washington. Sales increased 0.5 percent in May following a 0.9 percent rise.

Wholesalers had enough supply to last 1.13 months at the current sales pace after stockpiles dropped to a record low in April. The need to build inventories may contribute to economic growth for the rest of the year, according to Cary Leahey and other economists.

``Inventories are likely to be the upside surprise this year,'' said Leahey, a senior economist at Deutsche Securities Inc. in New York, before the report. ``There comes a point in time when businesses feel confident enough to rebuild inventories and that time has come.''

Economists had expected wholesale inventories to rise 0.5 percent, according to the median of 38 forecasts in a Bloomberg News survey. They had also expected sales to increase by 0.7 percent.

...more...

[54anickel]

35. 12:25 update

Dow 10,202.53 +30.97 (+0.30%)
Nasdaq 1,941.93 +6.61 (+0.34%)
S&P 500 1,111.45 +2.34 (+0.21%)
10-yr Bond 4.468% -0.002
30-yr Bond 5.219% -0.001

NYSE Volume 569,903,000
Nasdaq Volume 697,993,000

12:00PM: The market has taken a break from its downtrend over the past week, and headed higher under the auspices of a strong technology sector... Semiconductor, networking, computer hardware, software, networking, and disk drive have all uniformly advanced and spearheaded the market's recovery effort... Sector participation within the blue chips has also been solid as energy, cyclical, material, drug, and homebuilding have headed higher...
Today's reversal has more been the result of the oversold (from a near-term perspective) nature of the indices - the week's earnings news (aside from the software warnings) has not been that bad and expectations are high for the June reporting season... General Electric (GE 32.02 +0.32) turned in a better than expected Q2 (June) report and SAP AG (SAP 39.77 +1.81) raised its Q2 (June) numbers - putting to rest some concerns about software... Other positive developments this morning have included a +1.2% read on May Wholesale Inventories (consensus of +0.5%) and an impressive rally in Asia (Nikkei +0.9%)...NYSE Adv/Dec 1747/1239, Nasdaq Adv/Dec 1617/1175

[54anickel]

37. America’s Job-Quality Trap

http://www.morganstanley.com/GEFdata/digests/20040709-fri.html#anchor0

In many respects, the state of the US labor market has been the defining issue of the current macro debate. An unprecedented hiring shortfall has crimped the economy’s income generating capacity as never before. Lacking in organic growth of purchasing power, the American consumer has turned, instead, to riskier sources of support — namely, the combination of tax cuts and the debt-intensive extraction of home equity. The hope all along was that a standard cyclical recovery in job growth would finally kick in, thereby putting the US on a more solid recovery path. While there has been some improvement on the hiring front in recent months, the quality of such job creation has been decidedly subpar. Unless that changes, the risks to a sustainable economic recovery will only intensify.

Perspective is key in understanding the unique character of the current hiring cycle. For the first 27 months of this upturn, America was mired in the depths of the worst jobless recovery of the post-World War II era. Then, at long last, the magic seemed to be back. Hiring rebounded with a vengeance in March and April 2004, only to decelerate again in May and especially in June. Nevertheless, looking through the month-to-month volatility, fully 1.024 million jobs were added to total nonfarm payrolls over the past four months, the sharpest increase since early 2000. While that increment stands in contrast to the net loss of 594,000 jobs in the first 27 months of this recovery, it hardly breaks the mold of the weakest hiring cycle in modern history. Indeed, from the trough of the last recession in November 2001 through June 2004, private nonfarm payrolls have now risen a paltry 0.2%. This stands in sharp contrast to the nearly 7.5% increase recorded, on average, over the same 31-month interval of the six preceding recoveries.

Nor is there much reason to celebrate the quality of the jobs that have been created over the past four months. In scanning the detailed industry breakdown of this recent pick-up in job creation, the leading sources turn out to be restaurants, temporary hiring agencies, and building services. Collectively, these three groupings, which comprise only 9.7% of total nonfarm payrolls, accounted for fully 25% of the cumulative growth in overall hiring from February to June 2004. Moreover, hiring has accelerated in other industries at the low end of the job hierarchy — namely, clothing stores, couriers, hotels, grocery stores, trucking, hospitals, social work, business support, and personal and laundry services. Collectively, this latter group of industries, which makes up 12% of the nonfarm workforce, accounted for another 19% of the total growth in business payrolls over the past four months. Putting these segments together, low-end jobs accounted for about 44% of total hiring over the February to June interval, double their share in the workforce. Consequently, to the extent there has been any improvement on the job front over the past four months, the impetus has been concentrated at the low end of the quality spectrum.

That’s not to say there hasn’t been any improvement at the upper end of the US labor market. In the goods producing sector, construction has led the way, while manufacturing has continued to lag. Collectively, these two segments make up 16% of the total nonfarm workforce; over the past four months, they basically maintained their share by accounting for 17% of total job creation. Similarly, there have been signs of improvement in several of the higher-end professional services categories — namely legal, architecture and engineering, computer systems design, consulting, credit intermediation, the brokerage and securities industry, and private education. Collectively, this latter group of industries, which makes up another 8% of overall employment, accounted for about 12% of total job growth over the past four months. All in all, as seen from the standpoint of this industry-by-industry breakdown of the US job structure, there can be no mistaking the bifurcation of the improved hiring dynamic over the past four months: The contribution of lower-end jobs (44%) was about 50% greater than that of higher-end jobs (29%). In my view, that qualifies as a decidedly low-quality improvement in the US labor market.

more...

[54anickel]

38. The US economic condition

http://www.kitco.com/weekly/paulvaneeden/jul092004.html

snip>

To follow up on last week’s column I though it might be useful to look at specifics to see what is really happening in the US economy. For some time now I have been saying that the US economy is fragile and that it will not survive higher interest rates or a decline in foreign investment, both of which are unavoidable.

The market is already much less bullish than it was a year ago. The average P/E ratio of the S&P 500 Index is currently at 22, down from over 32 a year ago, despite the fact that earnings are up by 73%. It shows that the market does not believe the incredible increase in earnings is sustainable. If, in spite of a 73% increase in earnings, stocks were up only 14%, I’d hate to see what happens to those stock prices when earnings decline.

A survey of manufacturing activity in the Midwest, one of the largest industrial areas in the US, offered a somber assessment of conditions: prices are rising and demand is falling. The decline in demand means that manufacturers will not be able to pass the increase in costs on to consumers. Lower revenues (for manufactures) and higher costs are a combination that will be devastating to corporate earnings.

As mentioned last week, higher interest rates and the reversal of the wealth effect will reduce consumer appetite for durable goods. The government has now cut its estimate of durable goods orders for cars and appliances that are meant to last three years or more. Durable goods orders fell 3.7% in the first quarter. Demand for non-defense capital goods -- a key barometer of business spending -- dropped 3.5% in May.

Both Wal-Mart and Target have lowered their sales expectations for June and US automakers reported huge declines in June sales. It’s not just the absolute decline that is worrisome. Consumers seem to be opting for lower priced cars -- reflecting both the pressure of higher gasoline prices and, possibly, the end of the spending binge. It’s the wealth effect in reverse.

more...

[54anickel]

40. Bush to Miss Deadline for Budget Deficit Forecast

http://www.reuters.com/newsArticle.jhtml?jsessionid=55BVY5DMLTLFQCRBAEZSFFA?type=domesticNews&storyID=5632422

WASHINGTON (Reuters) - The White House will miss a July 15 deadline to release a new budget report expected to show improvement in the deficit ahead of next month's Republican political convention, officials said on Friday.

Administration officials denied the delay was politically motivated to give the White House budget office more time to incorporate better-than-expected tax revenue figures into their forecasts. They said they would release the new budget projections as soon as they are completed.

Release of the report could provide Bush with a political boost at the Republican convention, which opens Aug. 30, by allowing him to cite progress reining in record budget deficits.

Officials said the report is expected to show a smaller deficit this year than the White House initially forecast, despite extra Iraq war spending. They said the report will also show Bush is on track to cut the deficit in half over the next five years.

Officials said the White House Office of Management and Budget sought the extra time to update their budget forecasts in light of improving economic conditions.

"The fact is we're looking at all the numbers in this to make sure the report is as accurate as possible," an official said. "We're going to complete it as quickly as we can." :eyes:

more...

[54anickel]

41. 2:13 Running in place

Dow 10,201.13 +29.57 (+0.29%)
Nasdaq 1,941.09 +5.77 (+0.30%)
S&P 500 1,111.17 +2.06 (+0.19%)
10-yr Bond 4.460% -0.010
30-yr Bond 5.213% -0.007

1:30PM: Market continues to run in place in modestly higher territory... Despite today's move, the Dow, Nasdaq, and S&P 500 are still poised to close lower for the second week in a row... Terrorism jitters, interest rates concerns, labor market worries (as highlighted by June's weaker than expected nonfarm payrolls growth), and a handful of earnings warnings have kept buyers away... Briefing.com continues to believe such fears will keep the market range-bound over the summer, particularly as influential players remain on vacation...
We would expect a pick-up around late fall - when people return back to work and the winner of the presidential election becomes clear...NYSE Adv/Dec 1880/1208, Nasdaq Adv/Dec 1751/1156

1:00PM: Equities lift a bit higher but hold tight to the day's trading range as little news exists to propel the action... This will not be the case next week, though, as plenty will be going on in terms of earnings... Names like Johnson & Johnson (JNJ 55.07 +0.31), Merrill Lynch (MER51.09 +0.37), Intel (INTC 26.55 +0.33), Bank of America (BAC 83.97 +0.36), Citigroup (C 45.14 -0.03), PepsiCo (PEP 52.97 -0.21), UnitedHealth Group (UNH 60.00 -0.33), and IBM (IBM 83.77 +0.12) will be releasing their June quarter results and - in most cases - providing FY04 (Dec) guidance...

Standard & Poors continues to expect annual profit growth of 21% for the market... NYSE Adv/Dec 1718/1336, Nasdaq Adv/Dec 1692/1194

[UpInArms]

42. Market Numbers and blather at 2:19 EST

Dow 10,206.37 +34.81 (+0.34%)
Nasdaq 1,942.07 +6.75 (+0.35%)
S&P 500 1,111.39 +2.28 (+0.21%)
10-Yr Bond 4.460% -0.010

dollar feeling a bit puny

Last trade 87.40 Change -0.14 (-0.16%)

1:30PM: Market continues to run in place in modestly higher territory... Despite today's move, the Dow, Nasdaq, and S&P 500 are still poised to close lower for the second week in a row... Terrorism jitters, interest rates concerns, labor market worries (as highlighted by June's weaker than expected nonfarm payrolls growth), and a handful of earnings warnings have kept buyers away... Briefing.com continues to believe such fears will keep the market range-bound over the summer, particularly as influential players remain on vacation...

We would expect a pick-up around late fall - when people return back to work and the winner of the presidential election becomes clear...NYSE Adv/Dec 1880/1208, Nasdaq Adv/Dec 1751/1156

1:00PM: Equities lift a bit higher but hold tight to the day's trading range as little news exists to propel the action... This will not be the case next week, though, as plenty will be going on in terms of earnings... Names like Johnson & Johnson (JNJ 55.07 +0.31), Merrill Lynch (MER51.09 +0.37), Intel (INTC 26.55 +0.33), Bank of America (BAC 83.97 +0.36), Citigroup (C 45.14 -0.03), PepsiCo (PEP 52.97 -0.21), UnitedHealth Group (UNH 60.00 - 0.33), and IBM (IBM 83.77 +0.12) will be releasing their June quarter results and - in most cases - providing FY04 (Dec) guidance...

Standard & Poors continues to expect annual profit growth of 21% for the market... NYSE Adv/Dec 1718/1336, Nasdaq Adv/Dec 1692/1194

[UpInArms]

43. Market Numbers and blather at 3:00 EST

Dow 10,199.58 +28.02 (+0.28%)
Nasdaq 1,941.94 +6.62 (+0.34%)
S&P 500 1,111.56 +2.45 (+0.22%)
10-Yr Bond 4.462% -0.008

2:30PM: Haven't seen the most inspiring action today as the indices opened strong, and then spent the rest of the session trading below those levels.... While market internals have been positive, they have not been overly bullish - advancers just barely leading decliners at the NYSE and Nasdaq... Additionally, the ratio of new highs to new lows has not been in keeping with the uptrend in stocks - as 142 NYSE stocks are setting new lows, and only 106 stock are setting new highs... The Nasdaq is even worse - where the ratio of new highs to new lows is 45:110...

Conviction on the part of buyers, therefore, is fairly weak, and suggests today's move is more a bounce of weekly lows...NYSE Adv/Dec 1900/1243, Nasdaq Adv/Dec 1708/1263

2:00PM: Little change in the overall action as the indices trade near the mid-point of today's range... The breadth has been extremely narrow with the Dow, Nasdaq, and S&P 500 stuck within a range of 60, 19, and 6 points, respectively... Upside leadership remains confined to primarily the technology group, although industrials (thanks to GE's strong Q2 earnings report - please see Briefing.com's Earnings Briefing for more info on that) has also put together a solid move (+0.9%)...

Most of today's movers have been areas that have been beat down in prior sessions - like health care and consumer discretionary...NYSE Adv/Dec 1905/1214, Nasdaq Adv/Dec 1741/1200

[54anickel]

45. Closing, looks like everyone made a bit of bucks today

Dow 10,213.22 +41.66 (+0.41%)
Nasdaq 1,946.33 +11.01 (+0.57%)
S&P 500 1,112.81 +3.70 (+0.33%)
10-yr Bond 4.466% -0.004
30-yr Bond 5.216% -0.004

NYSE Volume 1,187,448,000
Nasdaq Volume 1,397,873,000

Close: Buyers found their way back to the market today as the past five sessions' losses (down 2.5-5.5% for the Dow, Nasdaq, and S&P 500) presented ample opportunity for bargain-hunting... Today's move higher, though, was not particularly robust as market internals barely favored the bulls and volume was weak...

A sense of apprehension still exists in the market - as indicated by the indices' inability to build upon their opening highs - but today investors were more willing to swallow disappointing guidance from players such as Storage Tech (STK 28.27 +3.02) and Computer Associates (CA 25.81 +1.27)... A raised Q2 (June) outlook from SAP AG (SAP 40.04 +2.08) and a better than expected Q2 (June) report from General Electric (GE 32.17 +0.47) helped buffer the news... Industrials (off of GE's report) were one of the strongest groups, along with auto... Technology, however, really stole the show with impressive gains from software, semiconductor, and disk drive... The combined strength of the latter sent the Nasdaq to a +0.6% close versus +0.3% for the S&P 500...

Nonetheless, the major indices still posted their second week of losses due to pronounced weakness seen Tuesday and Thursday...SOX +1.9, NYSE Adv/Dec 2018/1205, Nasdaq Adv/Dec 1762/1285

3:30PM : After re-testing their session lows around the top of the hour, the major indices bounce back and head towards the mid-point of the range... Semiconductor remains a stalwart for the market, boasting gains close to 2%... Software, disk drive, drug, transportation, oil service, retail, and industrials round out the list of top groups... The only areas that have failed to find buyers are telecom, utility, and financial today - the latter of which probably limited the extent of the stock market's gains...

On Monday, there are few reports of note before the open, but Novellus (NVLS 31.08 +1.38) will report after the close... First Albany has noted Novellus has the easiest sequential order comparison in the sector this quarter, and said it expects the company's orders to be at the high end of guidance ($380-390 mln)...SOX +1.9, NYSE Adv/Dec 1949/1245, Nasdaq Adv/Dec 1746/1253


Have a great weekend everyone :hi: