STOCK MARKET WATCH, Friday 30 July

[ozymandius]

Friday July 30, 2004

COUNTING THE DAYS
DAYS REMAINING IN THE * REGIME 174
DAYS UNTIL W* GETS HIS PINK SLIP 95
DAYS SINCE DEMOCRACY DIED (12/12/00) 3 YEARS, 231 DAYS
WHERE'S OSAMA BIN-LADEN? 2 YEARS, 285 DAYS
WHERE ARE SADDAM'S WMD? - DAY 498
DAYS SINCE ENRON COLLAPSE = 981
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 29, 2004

Dow... 10,129.24 +12.17 (+0.12%)
Nasdaq... 1,881.06 +22.80 (+1.23%)
S&P 500... 1,100.43 +5.01 (+0.46%)
10-Yr Bond... 4.58% -0.01 (-0.22%)
Gold future... 387.00 -2.00 (-0.51%)


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GOLD, EURO, YEN and Dollars

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PIEHOLE ALERT

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

For information on protests and other actions Citizens For Legitimate Government

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[ozymandius]

1. WrapUp by Martin Goldberg

STOCK MARKET INDICATING THE END OF THE HOUSING BOOM

Similar to the Nasdaq, in the face of rising prices and positive headlines galore for the housing sector in general and the homebuilders in particular, we may have seen the top in the housing sector. It seems as if everyone I know has a friend or relative that is involved with a current or recent real estate transaction. At my daughter’s summer swimming team practices and meets, I seem to hear a significant amount of buzz about the local real estate market. Is this a sign of a top? The forward thinking, but sometimes-manic stock market is shouting that the end of the housing boom is near. The intermediate term charts of the homebuilders indicate that practically all of the stocks are heading down. Note that with one exception, all of the charts have 200-day moving averages sloping downward. The fundamentalists are debating whether it’s a bubble or not; however, a technical view of the charts suggests that the best future for housing bulls would be a soft landing, and the worst case could be much worse. If those making the fundamental housing bear case are correct, there is nothing in the current stock charts to refute their case. Similarly, there is no evidence in the homebuilder charts to suggest that the new era housing bulls are right.

-cut-

The action of the DJ US Home Construction Index has traced a clear head-and-shoulders pattern, and now it sits at the neckline. If the neckline is decisively broken, classic technical analysis suggests that the index will go from about 555 to about 400, a drop of 28%. If the existing support just above 400 is broken, the index may go down to about 325 where there is technical support. There is likely to be several whipsaw rallies around the neckline to draw more suckers in; but the intermediate term trend is down and should not be ignored. While whether to short these stocks is a personal investing style decision, I will not be shy to suggest that intermediate long positions should be liquidated on good news and rallies. These seem to occur concurrent with bond market rallies that occur after debt auctions, and you may consult Mike Hartman’s articles as to why this occurs.

-cut-

It was interesting that yesterday, the QQQ shares traded more than 150 million shares, while the full Nasdaq index traded only 1.8 billion. The last time QQQ index shares traded that much was when the Nasdaq was in similar peril in May. What I suggested may have been happening in the article of a few months ago appears to be happening again!

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

[ozymandius]

2. Good morning all.

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

I'll be stepping away from the computer for awhile. I must get the boy to school. Then it's back to packing stuff, checking in occasionally.

Ozy :hi:

[54anickel]

3. The Unbearable Costs of Empire

Found this linked at 321gold.

http://www.businessweek.com/print/bwdaily/dnflash/jul2004/nf20040729_9971_db045.htm

Establishment types are trumpeting America's role as global police force. Too bad the U.S. just can't afford the job
Since September 11, 2001, the phrases "American empire" and "America as an imperial power" are being heard a lot more. But in contrast to the 1960s and 1970s, when such terms were brandished by an angry domestic anti-war movement or by developing nations in U.N. debates, the concept they represent has now at least partially entered the mainstream. However much it has incurred hostility throughout most of the world, including European and other countries usually allied with the U.S., the "new imperialism" has gained ground among the Establishment here.

The post-9/11 rationale is that America has terrorist enemies and rogue states that will do it serious harm -- maybe even with weapons of mass destruction -- if it doesn't police the world to stop them. "Being an imperial power is more than being the most powerful nation," writes Michael Ingatieff at Harvard's Kennedy Center. "It means enforcing such order as there is in the world and doing so in the American interest."

But what most analysts have missed –- whether or not they support the idea of an American empire -- is that the U.S. simply can't afford the role of global cop.

more...

[54anickel]

4. Low Volatility; the Lull Before the Storm

http://www.321gold.com/editorials/appel/appel073004.html

An increasing number of vocal onlookers believe that the Federal Reserve is determined to use any power within their means, to hold the system together until at least after the approaching presidential elections. Alan Greenspan and other Fed governors are talking up the economy, and are filling the airwaves with statements attesting to its increasing strength. Additionally, along with their likely market intervention, Fed and government officials are pulling all stops in their attempt to bolster the stock market with similar rosy forecasts. To this end, the Fed has flooded the banking system with liquidity. Witness the 11% increase in M3 alone during the past twelve weeks. Also, they grudgingly only raised the Federal Funds rate by 0.25% from its multi-decades low. If they truly believe their own indicators that inflation is beginning to appear, they should be aggressively increasing interest rates to ward off future price rises.

In contrast, there are others who feel that the Fed is acting in this fashion for another reason. They view the same data and opine that their true motive is to prevent a return to recession. The last thing that the Fed now needs is for stock prices to collapse! They fear that this would drive consumers into a state of withdrawal, and cause them to reduce their spending which is needed to sustain the economy. Further, the latter contingent points to something of which they believe the Fed is well aware. It is the lack of real, concrete data that the economy is indeed on the road to recovery. Yet, no matter what are the reasons for the Fed's present posture, and despite all of their efforts, it appears that recent evidence indicates that they are losing the battle to maintain a strong economy.

The past few months has seen an increasing flood of data that suggests that the economy is again slowing. Newly issued reports indicate that not only is the housing market beginning to weaken, with recent housing starts posting a year over year 8.5% decline, but retail sales are slowing, and capital spending is on the decline as companies instead repair their balance sheets by paying down their debt. Further, the stock market, which acts to foretell the future direction of our economy, is being inundated with negative data and signs indicating lower stock prices are potentially looming on the horizon.

All of the major stock market indices have now fallen below their respective 200 day moving averages! This has enormous significance because it forebodes the likely resumption of the full force of the Bear Market. Also, Lowry's buying power index completed and broke down from a head and shoulders top while their selling pressure index, after having posted a multi-year low, appears to have completed its bottom and has begun to move higher. A continued fall in buying power combined with what is likely the beginning of a sustained increase in selling pressure, has the potential to create havoc in the stock markets! To cap this off, following five consecutive weeks of decline, the Industrials again closed below the important psychological 10,000 level.

more...

[ozymandius]

11. The markets historically trend downward in October.

As the article suggests - the Fed appears to be losing its battle against a faltering economy. The Fed's actions may also be offset by the day trader.

My money guy at A.G. Edwards admitted that there is no sure thing in the securities markets these days. There are too many people playing short positions. Like a casino - anyone who appears to be winning over the short term eventually loses everything in the long term. This is just like casino gambling. The concept of "quitting while one is ahead" does not exist in the m.o. of the day trader.

My money guy says that the markets are designed for long-term trading. Whereas an investor may unload losing stocks and place bets on potential winners -- at the end of the year. This can be considered a long-term approach because a majority, or the entire bucket, of stocks is not cashed out. When you have day traders buying and dumping stocks almost daily, this wreaks havoc with investors involved in a long-term approach. It also puts pressure on companies to perform with deference to short positions.

I wonder if the "fixers" at the Fed enjoy their work?

[54anickel]

25. Wonderful, and I'm sure the numbers of these traders are growing daily,

Just check out the late night infomercials. See the latest out there is called "teach me to trade".

[54anickel]

5. Futures yada. What just hit the US$?

8:53AM: S&P futures vs fair value: -2.6. Nasdaq futures vs fair value: -3.0. Futures indications stabilize and settle around moderately below fair value... A decline in Q2 Advanced GDP, a climb in crude oil prices, and modest losses in Europe have acted as a drag on the pre-market.
8:33AM: S&P futures vs fair value: -2.7. Nasdaq futures vs fair value: -4.0. Futures trade drops some following the weaker than expected Q1 advanced GDP data... The figure came in at 3.0% versus the consensus of 3.7% and Q4 GDP final figure of 4.5%... As a result, the indices are set for a modestly lower open.

8:03AM: S&P futures vs fair value: -0.7. Nasdaq futures vs fair value: -2.5. Looks like a flat to slightly lower open for the indices as buyers have taken a breather following the 3 past three sessions of gains (for the Dow and S&P 500), the increase in oil prices to 21 year highs, and lackluster earnings reports from names like WDC last night.

INO

The September NASDAQ 100 was lower overnight as it consolidates some of Thursday's rally but remains above the 10-day moving average crossing at 1394.10. Multiple closes above this resistance level are needed to temper the bearish outlook in the market. Stochastics and the RSI are oversold and are turning neutral to bullish hinting that a low is in or is near. Closes below March's low crossing at 1373 would open the door for a possible test of weekly support crossing at 1346 later this summer. The September NASDAQ 100 was down 2.00 pt. at 1399.50 as of 6:54 AM ET. Overnight action sets the stage for a steady to weaker opening by the NASDAQ composite index later this morning.

The September S&P 500 index was lower overnight as it consolidates some of Thursday's short covering rally and is trading above the 75% retracement level of the May-June rally crossing at 1095.17. Stochastics and the RSI have turned bullish signaling that a low is in or is near. Multiple closes above the 10-day moving average crossing at 1095.12 are needed to temper the near-term bearish outlook in the market. If September extends this month's decline, May's low crossing at 1079.50 is the next downside target. The September S&P 500 Index was down 1.40 pts. at 1098.80 as of 6:56 AM ET. Overnight action sets the stage for a steady to weaker opening when the day session begins later this morning.

The buck: :shrug:
Last trade 89.53 Change -0.42 (-0.47%)

Settle 89.95 Settle Time 23:36

Open 89.85 Previous Close 89.95

High 89.99 Low 89.50

[54anickel]

6. Ewww, GDP reports came out

Edit to add

Dollar Drops Against Euro and Yen; GDP Falls Short of Forecasts

http://quote.bloomberg.com/apps/news?pid=10000103&sid=aJSAjz_EWCE0&refer=news_index

July 30 (Bloomberg) -- The dollar fell against the euro and yen in New York after a government report showed the U.S. economy grew less than expected in the second quarter.

Gross domestic product rose at a 3 percent annual rate in April to June, compared with a revised 4.5 percent in the previous three months. The median forecast of economists polled by Bloomberg News was for an expansion of 3.7 percent.

``This report definitely doesn't support the dollar,'' said Meg Browne, a currency strategist at HSBC Bank USA in New York. ``We might see some declines in the dollar but it probably won't breach the $1.2130 level'' per euro.

Against the euro, the dollar weakened to $1.2101 at 9:09 a.m. in New York from $1.2045 late yesterday, according to EBS, an electronic foreign-exchange dealing system. Versus the yen, the dollar fell to 111.34 from 111.97.


more...

[UpInArms]

7. daily dollar watch

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

Last trade 89.45 Change -0.50 (-0.56%)

Life is intervening this am - must run away - looks like a rough day ahead.

:hi:

[Maeve]

8. Here we go again--9:46

Dow 10,118.40 -10.84 (-0.11%)
Nasdaq 1,876.78 -4.28 (-0.23%)
S&P 500 1,099.49 -0.94 (-0.09%)
10-Yr Bond 4.520% -0.055

[54anickel]

9. Pointy little things again, aren't they? Here's the latest blather...

Oh no, more reports due. I'm sure they'll be good ones though.

9:40AM : Stocks start the day on the defensive, although losses are neither widespread nor pronounced... A combination of winning sessions the past 3 days (for the Dow and S&P 500), losses in Europe, a return in the price of crude oil to $43/bbl (21 year highs), and a disappointing Q2 Advanced GDP report have worked against the bulls this morning... The latter came in at 3%, below the consensus estimate of 3.7% and the Q1 figure of 4.5%, as consumer spending slowed to its weakest rate in 3 years...
The market will get two more economic reports at 9:45 and 10 ET today: the revision to July Consumer Sentiment (consensus of 96.2) and the July Chicago PMI Index (consensus of 60.0)... Both should help give the market more direction in the early going...

9:15AM : S&P futures vs fair value: -1.9. Nasdaq futures vs fair value: -0.5. Futures market improves some and now suggests just a slightly lower start for the cash market... The market will get two more economic reports at 9:45 ET and 10 ET today: the revision to July Consumer Sentiment and the July Chicago PMI Index... The consensus estimates are set at 96.2 and 60.0, respectively.

8:53AM : S&P futures vs fair value: -2.6. Nasdaq futures vs fair value: -3.0. Futures indications stabilize and settle around moderately below fair value... A decline in Q2 Advanced GDP, a climb in crude oil prices, and modest losses in Europe have acted as a drag on the pre-market.

8:33AM : S&P futures vs fair value: -2.7. Nasdaq futures vs fair value: -4.0. Futures trade drops some following the weaker than expected Q1 advanced GDP data... The figure came in at 3.0% versus the consensus of 3.7% and Q4 GDP final figure of 4.5%... As a result, the indices are set for a modestly lower open.

[Maeve]

10. You could put an eye out on those charts

Dow 10,126.95 -2.29 (-0.02%)
Nasdaq 1,882.03 +0.97 (+0.05%)
S&P 500 1,101.03 +0.60 (+0.05%)
10-Yr Bond 4.515% -0.060

[ze_dscherman]

12. US 2001 Slump May Not Have Been Recession at All

For your amusement:

WASHINGTON (Reuters) - Not only was the U.S. recession in 2001 the shallowest on record, it may not have been one at all -- at least in the classic sense of two straight quarterly declines, new government data show.

In annual revisions to U.S. gross domestic product numbers released on Friday that could fuel a politically charged debate, the Commerce Department rewrote the history of the recent downturn by revising away a decline in the second quarter of 2001.

The new figures, which reflect more complete source data, show economic activity peaked in the second quarter of 2001, not the fourth quarter of 2000.

Measured from the new peak, the economy shrank just 0.4 percent, keeping the recession as measured by GDP the mildest on record. The 1969-1970 recessionary period, in which the economy contracted 0.6 percent, comes in a close second.

Some more: http://news.reuters.com/newsArticle.jhtml?type=topNews&storyID=5828900

[54anickel]

21. Heh-heh, so does that mean the worst is yet to come?

:evilgrin:

Repeat it often enough and folks will believe it. Seems like a new spin now, first it was the fault of the Clenis, then the dates were fudged trying to say it started under the Clenis watch. Now, hey guess what, there never really was one at all.

Scary part is we all know what happened after that itty-bitty recession of 69-70.

[54anickel]

13. My time today is short, but I do look forward to getting up to date

this evening.

Have a great weekend everyone. :hi:

[ozymandius]

15. G'bye 54anickel!

Have a great weekend. See you back here Monday morning.

Ozy :hi:

[ozymandius]

14. Oil and instability bring gloom to CEOs

Chief executives are feeling their gloomiest in more than a year as surging oil prices, rising interest rates and international instability weigh on business confidence, a bankers' survey has found.

The deterioration was sharpest in Europe, where CEOs appear doubtful of the economic recovery, according to the quarterly survey of companies in the US, Europe and Japan by Goldman Sachs, the US investment bank.

The survey, published on Friday, is based on reports by bankers of chief executives' plans.

-cut-

The slump in confidence was largely a result of a steep decline in the outlook of European CEOs, which dropped from 75.9 to 51.8 points, perilously close to the 50 mark that divides those who think business conditions are improving from those who think they are worsening.

story

[54anickel]

23. Global oil production now flat out

http://www.energyinst.org.uk/index.cfm?PageID=948

By the time this is being read, currently available oil production capacity all around the world will be producing flat out. How sustainable this proves to be remains to be seen.

For many years now non-Opec production has been operated at capacity, leaving Opec to fine tune production in order to achieve its price objectives. In economic terms, because no company or country had the capacity to challenge Opec, they had no choice but to be price takers, maximising earnings by maximising production.

Opec's record production of 31.7mn b/d in 1977 wasn't exceeded until November 2003, since then it has never been under that level. It reached 32.2mn b/d in March, dropped back a little in April and May, and then in June reached 32.65mn b/d.

The utilisation of the final bits of readily available capacity in Saudi Arabia - in line with the 0.5mn b/d expansion in Opec quotas from August - means that early August production will exceed 33mn b/d. After that, the only incremental capacity is the, definitionally unsustainable, surge capacity and any new capacity that comes onstream. On p38 of the August issue Petroleum Review has tabulated the most up-to-date version of its megaprojects database. Although one or two projects have been added since it was last published (Petroleum Review, January 2004 - unfortunately now out of print). Most of the changes are project delays, most notably the Nigerian offshore Bonga, Erha and Agbami projects.

snip>

However, the most minimal concern must be the latest developments in Russia. The nerve twisting drama of Yukos and the tax demands has now taken a dramatic and deeply disturbing twist. It now appears that the tax authorities wish to remove the bulk of Yukos' production assets and so, we are told, sell them for a fraction of their worth. If this proves true, the hopes that Russia could be safely invested in, with law and regulation being fairly applied, are undermined. Investors with liquid assets will leave, those left will not be sure if they have paid good money for assets or liabilities. If the situation is not regularised very quickly - by Presidential intervention if necessary - then the outlook is very bleak indeed.

more...

[54anickel]

24. Crude ends at record on output concern

SAN FRANCISCO (CBS.MW) -- Crude-oil futures closed in fresh uncharted territory above $43 a barrel Friday, with the growing potential for disruptions to global production triggering a hefty gain of nearly $7 for the month.

Debt woes at Russia's Yukos, terrorist attacks, storms in the key oil and natural-gas producing region in the Gulf of Mexico, and an oil-workers strike in Norway helped fuel the output concern.

"It is fair to say that the crude-oil market is on high alert and is especially anxious heading into the weekend," said Todd Hultman, president of Dailyfutures.com, a commodity information provider.

But "if the market can avoid a major supply disruption, the U.S. should be able to survive the summer with prices not much higher than current levels," he said.

<snip; and here's Shrubs cue of course I'm one of those CTs that thinks this Yukos crap is sort of a set up :shrug:>

But until a "rational" or "logical resolution" to Yukos is found, there's no telling where oil prices are headed. In the short term, they can be headed much higher, also depending on a "toxic" cocktail of such factors as terrorism, he said.

[Maeve]

16. Bit of a wild ride today--11:31

Dow 10,125.18 -4.06 (-0.04%)
Nasdaq 1,891.44 +10.38 (+0.55%)
S&P 500 1,101.53 +1.10 (+0.10%)
10-Yr Bond 4.504% -0.071

11:00AM: Equities continue to trade in choppy fashion as - after setting session lows at the bottom of the last hour - the indices zoom to session highs at the top of this hour... The reversal has come about thanks to a strong advance in the semiconductor and biotech sectors... The latter has shown relative strength all morning following a better than expected Q2 (June) report from Gilead Sciences (GILD 65.03 +5.53)... An 18% increase in its leading drug, Viread, to record levels - particularly after showing a slight drop-off in 3Q03 - has been the source of the optimism...

[Maeve]

17. 1:48 downdate

Dow 10,091.26 -37.98 (-0.37%)
Nasdaq 1,886.54 +5.48 (+0.29%)
S&P 500 1,098.08 -2.35 (-0.21%)
10-Yr Bond 4.484% -0.091

[struggle4progress]

18. Iowa Electronic Markets: 2004 US Presidential Election WTA Market

2004 US Presidential Election Winner Takes All Market

[Maeve]

19. 3:03 numbers and blather

I hate formatting for mixed markets like this! :silly:

Dow 10,097.38 -31.86 (-0.31%)
Nasdaq 1,887.52 +6.46 (+0.34%)
S&P 500 1,098.63 -1.80 (-0.16%)
10-Yr Bond 4.479% -0.096

2:30PM: The pace of selling slows as the Dow and S&P 500 bounce off their worst levels... Gains in health care, technology, utility, and energy continue to be balanced against losses in consumer discretionary, consumer staple, financial, material, and telecom... The deadlock in sector leadership has led to a basic stalemate in overall trading... Volume totals have been extremely light as traders have headed out for the weekend... Thus, without much participation from institutional players, it has been difficult to sustain a pattern...
Most traders have been eager to take a break after the long week of earnings...

[Maeve]

20. And finally...

The market gods heard my cry and put everything back in black! (Okay, not the bonds, but...)
Dow 10,139.71 +10.47 (+0.10%)
Nasdaq 1,887.36 +6.30 (+0.33%)
S&P 500 1,101.72 +1.29 (+0.12%)
10-Yr Bond 4.475% -0.100


3:30PM: Major indices slip some going into the last half hour of trading... Today's news items have been of a mixed nature, with none of them serving to override the other factors... As such, investors have been content to sit tight and hold onto their positions (as demonstrated by the thin trading conditions)... Despite this weak session of trade, the Dow, Nasdaq, and S&P 500 are set to close moderately higher for the week - their first positive finish in five weeks...

[54anickel]

22. And the final closing blather, just a day full of contradictions

Close Dow +10.47 at 10139.71, S&P +1.29 at 1101.72, Nasdaq +6.30 at 1887.36: The stock market was stuck in low gear for most of the session, the indices unable to move higher - or lower - in a definitive fashion... The reason for this was (1) the large up move the market enjoyed mid-week (good enough for a positive weekly close for the Dow, Nasdaq, and S&P 500), and (2) the sheer number of news items that were of a contradictory nature... On one hand, July Consumer Sentiment was revised higher, to 96.7 (consensus of 96.2), and the July Chicago PMI Index increased to 64.7 (consensus of 60.0)...
On the other hand, however, Advanced Q2 GDP fell to 3.0% as opposed to 4.5% in Q1 and the consensus estimate of 3.0%... Investors were left feeling fairly unimpressed with the day's events and took an non-committal attitude towards shares... Brokerage, managed care, telecom, and transportation traded lower and kept the broader market close to the unchanged mark... The latter group took a hit on account of the more than 2% jump in the price of crude oil, to an all time high of $43.85/bbl...

Despite news yesterday that Russian authorities would let its largest exporter, OAO Yukos, continue to export oil, traders fretted over oil shortages caused by the surge in demand during the summer... For more insight into the Yukos matter, be sure to visit Briefing.com's Daily Sector Wrap... Technology and biotech were two standout areas to the plus side during the session ... Semiconductor got a boost from KLA-Tencor's (KLAC 41.30 +2.49) better than expected Q2 (June) report, and biotech found buying interest off Gilead Sciences (GILD 64.67 +5.17) upside Q2 (June) release... The bond market actually put together a solid run across the yield curve, owing to talk that expectations for strong growth (following the Q2 GDP report) will be pared down...SOX +1.3, NYSE Adv/Dec 1991/1244, Nasdaq Adv/Dec 1738/1336

[54anickel]

26. Laid-Off Workers Get Lower-Paying Jobs - Labor Dept.

Missed this one yesterday.....

http://www.reuters.com/newsArticle.jhtml?type=domesticNews&storyID=5832812

WASHINGTON (Reuters) - One in five Americans laid off from a long-term job in the last three years was still unemployed in January, and most who had found jobs were paid less than they were before, government data showed on Friday.

In a report that adds fuel to the debate over the quality of new jobs, the Labor Department said only 65 percent of the 5.3 million workers who were laid off from January 2001 to December 2003 were reemployed by January 2004.

Another 15 percent had left the labor force and were not counted as unemployed.

Of those who lost full-time wage and salary jobs and found new ones, 57 percent earned less than they had in the positions they lost -- the worst result in 10 years.

"About one-third experienced earnings losses of 20 percent or more," the department's Bureau of Labor Statistics said in the report.

more...