STOCK MARKET WATCH, Friday 28 January

[RawMaterials]

[fertilizeonarbusto]

Oh, this should rock today after yesterday's sterling

growth report. *sarcasm off*

[RawMaterials]

2. P&G to Buy Gillette for $57 Billion

NEW YORK (Reuters) - Procter & Gamble Co. (PG.N: Quote, Profile, Research) on Friday said it would buy Gillette Co. (G.N: Quote, Profile, Research) for $57 billion in stock, uniting two iconic U.S. producers of household goods ranging from Pampers diapers to Duracell batteries.

The combined company would boast more than $60 billion in annual revenue, giving it increased leverage at stores ranging from discounters to grocers.

The deal values Gillette, best known for its razors, at $53.94 per share, an 18 percent premium to its Thursday closing stock price.

"That is a hell of a big deal and it gets people thinking that Unilever or others could go back on the acquisition trail," said one dealer in Paris, adding that Bic would be an obvious target. Colgate-Palmolive Co. (CL.N: Quote, Profile, Research) might eye Reckitt, traders said.

European Union antitrust chief Neelie Kroes said she expected to review the P&G-Gillette deal, which also need approval from U.S. regulators.

http://www.reuters.com/newsArticle.jhtml?type=businessNews&storyID=7466828

[RawMaterials]

3. U.S. 4th-Qtr Economic Growth Slows, Inflation Up

http://www.reuters.com/newsArticle.jhtml?type=businessNews&storyID=7467695

WASHINGTON (Reuters) - The U.S. economy grew at a weaker-than-expected 3.1 percent annual pace in the final quarter of 2004 year, its slowest since the beginning of 2003 as the country's trade performance deteriorated and inflation picked up, a government report on Friday showed.

The increase in fourth-quarter gross domestic product, or GDP, which measures total output within U.S. borders, was down from a 4 percent gain in the third quarter and was the weakest since a 1.9 percent pace in the first quarter of 2003.
It also was below Wall Street economists' forecasts for a 3.5 percent rate of fourth-quarter expansion.
snip..

The GDP report sent stock futures lower, since it implied a tougher prospect for profits, and the dollar weakened against the euro initially. Bond prices strengthened.

Inflation showed signs of picking up. A price index favored cited by Federal Reserve Chairman Alan Greenspan -- personal spending minus food and energy costs -- climbed at a 1.6 percent annual rate in the fourth quarter, nearly twice the 0.9 percent advance posted in the third quarter.
The Fed's policy-setting Federal Open Market Committee meets next week and is expected to announce on Wednesday that they are raising interest rates for a sixth time since June by a quarter percentage point.

[MARALE]

4. Thanks for starting this, I have a toon!

[RawMaterials]

6. I know its t=not formated right or anything

but i just had to do it, and i was debating about what to do for about 25 min thanks for the toon

[JNelson6563]

43. Thanks RM!!

PM me your e-mail addy and I'll send the format Ozy sent me some time ago.

So glad this got posted. I saw at around 9 it hadn't been but I had to go and this is the first I've checked in.

You rock! :toast:

Julie

[RawMaterials]

5. Blue Chips Open Flat, Nasdaq Higher

http://www.reuters.com/newsArticle.jhtml?type=businessNews&storyID=7467813

NEW YORK (Reuters) - U.S. blue chips opened flat on Friday, but the Nasdaq gained on earnings from Microsoft Corp. (MSFT.O: Quote, Profile, Research) late on Thursday that beat expectations.

The Dow Jones industrial average was up 7.91 points, or 0.08 percent, at 10,475.31. The Standard & Poor's 500 Index was up 0.80 of a point, or 0.07 percent, at 1,175.35. The technology-laced Nasdaq Composite Index was up 6.18 points, or 0.30 percent, at 2,053.33.

[RawMaterials]

7. Bush Ignores Reality of Social Security Funds: John M. Berry

Jan. 28 (Bloomberg) -- U.S. Treasury securities are widely regarded as the safest, most secure investments in the world, except, in the view of some people, when they are held by the Social Security trust funds.In a column last week I described as ``patently false'' claims by President George W. Bush that Social Security faces a crisis and that the program is ``flat broke, bankrupt.''

Bush repeated the bankruptcy assertion this week, ignoring the fact that at the end of December Social Security's Old Age and Survivors Insurance Fund, and the separate Disability Insurance Fund, held a combined $1.7 trillion worth of Treasury securities.
While the president may not choose to recognize the reality of the trust funds, their existence played a key role in his massive federal income tax cut passed in 2001.

Part of the rationale for that tax cut was that the government would run huge budget surpluses over the following 10 years, surpluses estimated to reach $5.6 trillion over the period 2002-11, according to the Congressional Budget Office. More than half of that total was projected to come from a surplus of $3.1 trillion in Social Security payroll tax revenue over expenses for the period.

snip..

`Simply IOUs'

Yes, just as one of the readers said, the assets held by the trust funds are ``simply IOUs from the government itself.'' One could say exactly the same thing about the securities owned by the public. Both sets of securities are legal obligations backed by the full faith and credit of the government.

And both sets pay interest. There is no free lunch for the government regarding Social Security money.

Each day when payroll tax money is received by the Treasury, it is invested in interest-bearing certificates of indebtedness. When Social Security needs money to pay benefits, it notifies Treasury of the amount needed, and the necessary certificates are cashed in.

snip..

Honor the Deal

Actually, that date is not nearly as important for Social Security as it is for the rest of the government. For one thing, the trust funds will be so large at that point that annual interest payments will keep the funds growing until sometime in the latter 2020s, according to the trustees' middle projection.

Whenever the annual Social Security surplus begins to decline, the government will have to start borrowing more money from the public to make up the difference. And whenever costs do exceed tax revenue, the government will have to borrow still more. In that regard, some of the critics of last week's column are correct.

Yet that is exactly what the architects of the 1983 plan that rescued Social Security intended to have happen. Otherwise, why seek to accumulate a big trust fund? Certainly not because a payroll tax is somehow a superior, economically more efficient way to raise revenue.
Over the past two decades, presidents and Congresses have relied on the payroll tax to supply revenue that otherwise would have had to come from other taxes, particularly income taxes. Bush certainly acted in that vein in 2001 and every year since.

It seems perfectly appropriate that when the payback time rolls around, that implicit deal should be honored.

http://quote.bloomberg.com/apps/news?pid=10000039&cid=berry&sid=aW9MJ9gZO8S8

[MARALE]

8. UPDATE 3-Maytag results miss views, hitting stock

http://www.reuters.com/financeNewsArticle.jhtml?type=marketsNews&storyID=7468104

The 2004 quarter included charges of 26 cents a share related to a restructuring and reserves tied to litigation over front-load washers.

Excluding charges, Wall Street analysts on average had been expecting profit of 17 cents a share.

Sales fell 8 percent to $1.16 billion.

Maytag, based in Newton, Iowa, cited higher steel and energy costs and lower sales of Hoover vacuums and vending equipment. Market share declined in both floor care and major appliances, the company said.

I find this interesting since I am from Iowa, They have had some bad years.

[loudsue]

9. The STOCK MARKET WATCH thread is already up... this is a dup...no?

n/t

[MARALE]

10. Accually, this one was started first n/t

[54anickel]

11. STOCK MARKET WATCH, Friday 28, January

Edit to add yesterday's closing numbers

Friday January 28, 2005

COUNTING THE DAYS
DAYS REMAINING IN THE * REGIME 3 YEARS, 357 DAYS
DAYS SINCE DEMOCRACY DIED (12/12/00) 4 YEARS, 48 DAYS
WHERE'S OSAMA BIN-LADEN? 3 YEARS, 102 DAYS
DAYS SINCE ENRON COLLAPSE = 1163
Number of Enron Execs in handcuffs = 19
ENRON EXECS CONVICTED = 2
Other Arrests of Execs = 54

---

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

---

AT THE CLOSING BELL ON January 27, 2005

Dow... 10,466.96 -0.44 (-0.00%)
Nasdaq... 2,049.18 +2.03 (+0.10%)
S&P 500... 1,174.33 -0.22 (-0.02%)
10-Yr Bond... 4.16% -0.05 (+1.14%)
Gold future... 429.10 +0.70 (+0.16%)





GOLD, EURO, YEN, Dollars and Loonie

---

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

---

[loudsue]

Thanks Marketeers!

Great toon!

Looks like we have 2 market watch threads today!

:kick::kick::kick::kick:

[54anickel]

Yeah, just found that out in a PM. Sorry bout that, I was a bit late

rising this morning. Logged on and found no SMW, so I check my e-mail to see if Ozy was having problems again. Seems while I was creating today's post, RawMaterials was posting as well. Guess we had that twins thing going today.

:hangover:

[54anickel]

Factories Humming but Rehiring Is Slow

http://story.news.yahoo.com/news?tmpl=story&cid=668&ncid=749&e=6&u=/ap/20050127/ap_on_bi_go_ec_fi/economy

WASHINGTON - Big-ticket orders to factories shot up almost 11 percent last year, the best performance in a decade and a promising sign for beleaguered manufacturers who have lost 2.9 million jobs since mid-2000.


But the rebound in orders, while translating into higher profits for manufacturing companies, was not spurring much rehiring of laid-off workers. Businesses are boosting production with smaller work forces, analysts say.


The 10.9 percent rise in orders for all of 2004 was helped by a 0.6 percent gain in December, which followed an even bigger 1.8 percent November increase as the year ended on a strong note.


"Manufacturing came back later in this expansion than it normally does. But last year, it looks like it finally came back," said David Wyss, chief economist at Standard & Poor's in New York.

snip>

But economists cautioned that the rebound in orders probably will not translate into a surge in hiring. Manufacturing employment's most recent peak occurred in July 2000. Since that time, 2.9 million manufacturing jobs — one in six — have disappeared as U.S. companies have been battered by increased competition from low-wage nations.

more...

[54anickel]

Saudis Shift Toward Letting OPEC Aim Higher (Hmmm)

http://www.nytimes.com/2005/01/28/business/worldbusiness/28oil.html?oref=login&oref=login

Over the last year, Saudi Arabia has quietly endorsed a shift in strategy that was once championed by only a handful of OPEC's more radical members, like Iran or Venezuela, who were pushing for prices higher than those of the last two decades.

Instead of enforcing what has been OPEC's official policy since March 2000 and defending prices of $22 to $28 a barrel, Saudi Arabia, the group's most powerful member, has acted to nudge the group's reference price closer to $40 a barrel. Along the way, OPEC has grown increasingly fond of high prices, with crude oil trading near last year's records.

While the century-old oil industry has been through a number of boom-and-bust cycles before, OPEC's strategy carries risks. For consuming nations, high oil prices could derail economic growth and plunge the world into lasting recession; for producers, it could mean lower demand for their commodity in the long run as consumers shift to alternative fuels or promote energy-conservation policies.

The shift by the Saudis adds to their uneasy relations with the United States. Based for more than half a century on cheap oil in exchange for security, those relations have not recovered from the aftermath of the terrorist attacks on Sept. 11, 2001.

more...

[54anickel]

22. Have to point this out - we've all been aware of the basket OPEC has

been using for pricing, but this is one of the first times I've seen it mentioned in a MSM article.

"OPEC's actions speak louder than their words," said Lawrence J. Goldstein, president of the PIRA Energy Group, an oil consultancy in New York. "It was not so long ago that Saudi Arabia mentioned $25 as a fair price. But they seem to have dramatically shifted their price to $35 a barrel. They won't admit it because that would have enormous political consequences."

Because transactions on the oil market are priced in dollars, the currency depreciation in the last two years has been one of OPEC's main concerns and a central argument in favor of higher oil prices.

In its last monthly report before Sunday's meeting, OPEC highlighted that issue again. The report said that the benchmark was worth $23.50 if adjusted for inflation and currency fluctuations. That would put it at the low end of OPEC's current price range.

"Their reference price is the OPEC basket and what that represents in terms of purchasing power for them," said Vera de Ladoucette, an analyst with Cambridge Energy Research Associates, an oil consultancy in Paris. "Their alarm bell is $35 for the basket."

[RawMaterials]

39. is this becasue it is getting priced in euros without

telling anyone

[durablend]

45. Gasoline closing in on $2.00 a gallon again.here

The wallet vacuum is on "full auto" now.

[54anickel]

50. A tisket, a tasket...

World reserve's gonna be a basket.
We had the world held by a string,
On the way to war, Shrub dropped it.

He dropped it, He dropped it.
On the way to war Shrub dropped it.

"The deficit's a minor thing"
That kinda talk's what caused it.

What caused it? What caused it?
Repukes will demand, "What caused it?"

Your vote that backed his empiring,
Your stupidity is what caused it.




I see zones.
I see currency zones,
And the fiat buck's bones
Amongst them lovely zones.

[belab13]

53. now that is one doozy of a ditty. Thanks for the laugh!

[54anickel]

55. Why thank you, and you are welcome. It's been a long time since I've

put together a little ditty for the Stock Market Watch thread. Thought I could sneak one in whilst it appeared no one was looking. :evilgrin: :hi:

[54anickel]

23. Heh-heh, look at the time and date stamp on this post - I'm stuck in

a time warp!!! Too bad it's just a couple years too early for the last oil crisis - or maybe not if they started planning in '69....spookie.

[54anickel]

12. Morning all, sorry it's late. Ozy is still having computer problems and

I was a bit late getting around this AM

[54anickel]

13. WrapUp by Martin Goldberg 01.27.2005

http://www.financialsense.com/Market/daily/thursday.htm

IPO Wheel Spins Fast Near Major Market Tops

Red Herring states in their 2004 Initial Public Offering (IPO) review, “Everybody loves a comeback story, and the IPO market’s 2004 victory was especially sweet – A total of 238 companies went public and raised $45.2 billion. The number of done deals almost equaled the total of those priced the previous three years, combined.” The 19 Internet IPOs averaged an opening day gain of 22%! It’s difficult to believe that the need for new companies is so great in the face of rather benign economic growth in the US. It’s also hard to imagine that the public speculator till is so much in need for capital when monetary policy is so lose and interest rates so low.

Yet in spite of my thoughts, IPOs are back! But it’s far from a “done deal” as to whether this is healthy for the economy or the stock market. If history is any guide, investors should be suspect of the rapidness of the turning of the IPO wheel because it turns fastest near major market tops. It should warrant concern that in 2004, the IPO market raised 72% of the amount of cash raised in 1999, the year in which arguably, the biggest stock market bubble of all time burst (the Nasdaq topped in March of 2000 while the broader market topped in 1999.) This should be viewed with a skeptical eye, because the late ‘90’s stock market top featured absurd IPO’s as by far, their most fraudulent component. The magnitude of the current IPO craze, which occurred only 5 years after the last one, suggests that there is another major stock market top coming soon after the last one. While timing this important top has been difficult, there is little doubt as to its existence.

I’ll cite the articulate words of John Brooks from The Go-Go Years: the Drama and Crashing of Wall Street’s Bullish 60’s (1973), referring to the IPO insanity of the late 1960’s (emphasis added by Martin in bold):

“If one fact is glaringly clear in the stock-market history, it is that a new-issues craze is always the last stage of a dangerous boom – a warning of impending disaster almost as infallible as Cheyne-Stokes breathing is a warning of impending death. But not so inexorable; if heads could be cooler and memories longer, investors both large and small, professional and amateur, might ward off danger by reading the signs, eschewing the new issues, and lightening their commitments generally. But investors, like other human beings, tragically repeat their mistakes; then the danger signs are plain, the lure of easy money blanks their memories and dissipates their calm. In 1929 the shooters were jerrybuilt investment trusts like Allegheny, Shenandoah, and United Corporation. In 1961 they were tiny scientific companies by little clutches of glittery-eyed young PhD’s, their company names ending in “-----onics”. In 1968-1969, what a promoter needed to launch a new stock, apart from a persuasive tongue and a resourceful accountant, was to have a “story”—an easily grasped concept, preferably related to some current national fad or preoccupation, that sounded as if it would lead to profits. Such stories, like most stories, were best told quickly and concisely, and best of all within the name of the company itself. Were the new government Medicare and Medicaid programs pouring millions into the care of elderly persons? A cunning investor could presumably get a piece of that action by buying stocks called Four Seasons Nursing Centers or United Convalescent Homes. Were people’s recreational expenditures soaring? Hardly coincidentally, there were what turned out be a stock called International Leisure. Was concern about the environment a popular passion of the moment? Why, look here – a stock called Responsive Environments! Was weight watching in the wind? One might grow rich while growing thin, perhaps, with Weight Watchers International. (!) Finally, it may be assumed that there were some investors who, so far as company names were concerned, didn’t want to be bothered with the suggestion of any particular product or service, and just wanted a stock whose name made it sound like a winner. For them, there was Performance Systems, Inc. not to mention Bonanza International. “

more...

[54anickel]

14. 10:04, Casino's open

Dow 10,454.99 -12.41 (-0.12%)
Nasdaq 2,046.37 -0.78 (-0.04%)
S&P 500 1,173.08 -1.47 (-0.13%)
10-yr Bond 4.159% -0.048
30-yr Bond 4.622% -0.05
NYSE Volume 205,996,000
Nasdaq Volume 322,483,000

10:00AM: The market, now trading in split fashion, struggles to gain traction following weaker than expected GDP data... While the Commerce Dept. showed 3.1% annual growth in advance Q4 GDP, less than the expected 3.5% growth rate, the data still suggest overall GDP growth in 2004 was the most robust since 1999 and still slightly above the 10-year trend...
The data, which was adversely affected by the steepest decline in exports in two years, reflect a slight slowdown from the average 3.9% growth during the first three quarters of the year, but the continued steady uptrend in consumer spending and strong business investment indicates sustainable growth at a 3-3.5% pace in 2005... The GDP deflator (inflation) rose at a modest 2.0% annual rate, basically in line with economist's forecast of 2.1%...NYSE Adv/Dec 1363/1143, Nasdaq Adv/Dec 1110/1195

9:40AM: Stocks open slightly higher as the market weighs a mixed batch of earnings reports with the year's largest merger announcement... Proctor & Gamble (PG 52.95 -2.37), which beat analysts' Q2 forecasts by $0.02 and guided Q3 & FY05 earnings in line with expectations last night, has announced plans to merge with Gilette (G 50.40 +4.72) in a $57 bln all-stock deal... The combined entity, which will cut roughly 6,000 jobs, will become the world's largest consumer product's company boasting nearly $61 bln in annual sales...

Other companies in focus include MER, GS and UBS as all three investment banks could bring in a total of $90 mln in fees related to the merger...


{b]And the pre-opening blather
9:15AM: S&P futures vs fair value: -0.2. Nasdaq futures vs fair value: +3.5. Cash market still poised for a relatively flat to modestly higher open as futures indications stall at current levels...

Some notable ratings changes include upgrades on LMT and YELL, to Buy from Hold, from Smith Barney and Deutsche Bank, respectively, while Bear Stearns has upgraded both IBM and AZN to Outperform from Peer Perform... Baird has downgraded SANM to Underperform from Neutral while JP Morgan has downgraded STM to Neutral from Overweight

9:00AM : S&P futures vs fair value: flat. Nasdaq futures vs fair value: +4.0. Still shaping up to be a flat to slightly higher open for the cash market following mixed quarterly results... Beating analysts' forecasts have been ADM, CVX and TRB while HON has matched Q4 expectations but raised its FY05 EPS outlook... MCD, despite posting strong profits, has missed expectations by a penny while MYG, HAL and APC have also turned in results shy of consensus estimates

8:33AM : S&P futures vs fair value: -0.4. Nasdaq futures vs fair value: +2.0. Futures trade pulls back a bit following weaker than expected GDP data, but bounces back somewhat, still indicating a flat to modestly higher open for the indices... Advance Q4 GDP has checked in at 3.1% (consensus +3.5%) while the Chain Deflator came in at 2.0% (consensus +2.1%)... Q4 Employment Cost Index of +0.7% basically matched expectations of +0.8%

8:01AM : S&P futures vs fair value: flat. Nasdaq futures vs fair value: +2.0. Futures market suggesting a flat to slightly higher open for the cash market as investors digest more earnings, M&A activity and await economic data... Microsoft (MSFT) has beaten Q2 expectations by $0.02 and guided Q3 forecasts higher while P&G (PG) has agreed to buy Gilette (G) for $57 bln in stock, but growing uncertainty related to this weekend's Iraqi elections has left early action rather subdued...

At 8:30 ET, advance Q4 GDP (consensus +3.5%) and Chain Deflator (consensus +2.1%) data will be released as will the Q4 Employment Cost Index (consensus +0.8%)

6:30AM : S&P futures vs fair value: -0.1. Nasdaq futures vs fair value: +2.5.

6:30AM : FTSE...4844.00...-9.40...-0.2%. DAX...4226.54...+10.13...+0.2%.

6:30AM : Nikkei...11320.58...-20.73...-0.2%. Hang Seng...13650.06...+21.15...+0.2%.

[54anickel]

15. U.S. Treasuries Rise After Economy Grows Less Than Forecast

http://www.bloomberg.com/apps/news?pid=10000103&sid=aRN5df5EaikU&refer=us

Jan. 28 (Bloomberg) -- U.S. 10-year Treasury notes rose the most in two weeks after a government report showed the economy expanded at a slower-than-expected pace in the fourth quarter.

Evidence of restrained growth may cause investors to pare their forecasts for how much the Federal Reserve will raise its interest-rate target this year.

``The Fed will take its foot off the brake'' on signs of fading growth, Kevin Logan, senior market economist at Dresdner Kleinwort Wasserstein in New York, said before the report. The firm is one of the 22 primary government securities dealers, which trade with the Fed's New York branch.

The benchmark 4 1/4 percent note due November 2014 gained 7/16, or $4.38 per $1,000 face amount, to 100 21/32 as of 9 a.m. in New York, according to bond broker Cantor Fitzgerald LP. The yield fell 5 basis points to 4.17 percent, the biggest drop since Jan. 13. A basis point is 0.01 percentage point. The two-year note's yield fell 3 basis points to 3.25 percent.

Gross domestic product expanded at a 3.1 percent annual pace from October to December, the Commerce Department said. The rate is slower than the 4 percent pace in the third quarter and compares with the 3.5 percent median forecast of 82 economists in a Bloomberg News survey.

more...

[54anickel]

1. Fourth quarter GDP report: GDP rose 3.1% - BEA

http://www.bea.doc.gov/bea/newsrel/gdpnewsrelease.htm

Real gross domestic product -- the output of goods and services produced by labor and property located in the United States -- increased at an annual rate of 3.1 percent in the fourth quarter of 2004, according to advance estimates released by the Bureau of Economic Analysis. In the third quarter, real GDP increased 4.0 percent.

The Bureau emphasized that the fourth-quarter "advance" estimates are based on source data that are incomplete or subject to further revision by the source agency (see the box on page 3). The fourth-
quarter "preliminary" estimates, based on more comprehensive data, will be released on February 25, 2005.

The major contributors to the increase in real GDP in the fourth quarter were personal consumption expenditures (PCE), equipment and software, private inventory investment, and government spending. The contributions of these components were partly offset by a negative
contribution from exports. Imports, which are a subtraction in the calculation of GDP, increased.

The deceleration in real GDP growth in the fourth quarter primarily reflected a downturn in exports of goods an acceleration in imports of goods, and a deceleration in PCE for durable goods that were partly offset by an upturn in private inventory investment.

more...

[Goldeneye]

16. First time I've looked at this since the innauguration.

COUNTING THE DAYS
DAYS REMAINING IN THE * REGIME 3 YEARS, 357 DAYS
DAYS SINCE DEMOCRACY DIED (12/12/00) 4 YEARS, 48 DAYS

Just had to shake my head....

[54anickel]

18. Heh, I was happy when I was able to change 4 years to 3 years

[RawMaterials]

17. U.S. 4th-Qtr Economic Growth Slows, Inflation Up

http://www.reuters.com/newsArticle.jhtml?type=businessNews&storyID=7467695

WASHINGTON (Reuters) - The U.S. economy grew at a weaker-than-expected 3.1 percent annual pace in the final quarter of 2004 year, its slowest since the beginning of 2003 as the country's trade performance deteriorated and inflation picked up, a government report on Friday showed.

The increase in fourth-quarter gross domestic product, or GDP, which measures total output within U.S. borders, was down from a 4 percent gain in the third quarter and was the weakest since a 1.9 percent pace in the first quarter of 2003.
It also was below Wall Street economists' forecasts for a 3.5 percent rate of fourth-quarter expansion.
snip..

The GDP report sent stock futures lower, since it implied a tougher prospect for profits, and the dollar weakened against the euro initially. Bond prices strengthened.

Inflation showed signs of picking up. A price index favored cited by Federal Reserve Chairman Alan Greenspan -- personal spending minus food and energy costs -- climbed at a 1.6 percent annual rate in the fourth quarter, nearly twice the 0.9 percent advance posted in the third quarter.
The Fed's policy-setting Federal Open Market Committee meets next week and is expected to announce on Wednesday that they are raising interest rates for a sixth time since June by a quarter percentage point.

[RawMaterials]

19. Bush Ignores Reality of Social Security Funds: John M. Berry

Jan. 28 (Bloomberg) -- U.S. Treasury securities are widely regarded as the safest, most secure investments in the world, except, in the view of some people, when they are held by the Social Security trust funds.In a column last week I described as ``patently false'' claims by President George W. Bush that Social Security faces a crisis and that the program is ``flat broke, bankrupt.''

Bush repeated the bankruptcy assertion this week, ignoring the fact that at the end of December Social Security's Old Age and Survivors Insurance Fund, and the separate Disability Insurance Fund, held a combined $1.7 trillion worth of Treasury securities.
While the president may not choose to recognize the reality of the trust funds, their existence played a key role in his massive federal income tax cut passed in 2001.

Part of the rationale for that tax cut was that the government would run huge budget surpluses over the following 10 years, surpluses estimated to reach $5.6 trillion over the period 2002-11, according to the Congressional Budget Office. More than half of that total was projected to come from a surplus of $3.1 trillion in Social Security payroll tax revenue over expenses for the period.

snip..

`Simply IOUs'

Yes, just as one of the readers said, the assets held by the trust funds are ``simply IOUs from the government itself.'' One could say exactly the same thing about the securities owned by the public. Both sets of securities are legal obligations backed by the full faith and credit of the government.

And both sets pay interest. There is no free lunch for the government regarding Social Security money.

Each day when payroll tax money is received by the Treasury, it is invested in interest-bearing certificates of indebtedness. When Social Security needs money to pay benefits, it notifies Treasury of the amount needed, and the necessary certificates are cashed in.

snip..

Honor the Deal

Actually, that date is not nearly as important for Social Security as it is for the rest of the government. For one thing, the trust funds will be so large at that point that annual interest payments will keep the funds growing until sometime in the latter 2020s, according to the trustees' middle projection.

Whenever the annual Social Security surplus begins to decline, the government will have to start borrowing more money from the public to make up the difference. And whenever costs do exceed tax revenue, the government will have to borrow still more. In that regard, some of the critics of last week's column are correct.

Yet that is exactly what the architects of the 1983 plan that rescued Social Security intended to have happen. Otherwise, why seek to accumulate a big trust fund? Certainly not because a payroll tax is somehow a superior, economically more efficient way to raise revenue.
Over the past two decades, presidents and Congresses have relied on the payroll tax to supply revenue that otherwise would have had to come from other taxes, particularly income taxes. Bush certainly acted in that vein in 2001 and every year since.

It seems perfectly appropriate that when the payback time rolls around, that implicit deal should be honored.

http://quote.bloomberg.com/apps/news?pid=10000039&cid=berry&sid=aW9MJ9gZO8S8

[RawMaterials]

20. P&G to Buy Gillette for $57 Billion

NEW YORK (Reuters) - Procter & Gamble Co. (PG.N: Quote, Profile, Research) on Friday said it would buy Gillette Co. (G.N: Quote, Profile, Research) for $57 billion in stock, uniting two iconic U.S. producers of household goods ranging from Pampers diapers to Duracell batteries.

The combined company would boast more than $60 billion in annual revenue, giving it increased leverage at stores ranging from discounters to grocers.

The deal values Gillette, best known for its razors, at $53.94 per share, an 18 percent premium to its Thursday closing stock price.

"That is a hell of a big deal and it gets people thinking that Unilever or others could go back on the acquisition trail," said one dealer in Paris, adding that Bic would be an obvious target. Colgate-Palmolive Co. (CL.N: Quote, Profile, Research) might eye Reckitt, traders said.

European Union antitrust chief Neelie Kroes said she expected to review the P&G-Gillette deal, which also need approval from U.S. regulators.

http://www.reuters.com/newsArticle.jhtml?type=businessNews&storyID=7466828

[54anickel]

52. About that sudden change in today's toon....

Ann Telnaes, always on top of the game -

http://www.democraticunderground.com/discuss/duboard.php?az=view_all&address=102x1191511

[RawMaterials]

21. 10:54 AM EST Market Update and Blather

Dow 10,451.15 -16.25 (-0.16%)
Nasdaq 2,045.92 -1.23 (-0.06%)
S&P 500 1,172.69 -1.86 (-0.16%)
10-Yr Bond 41.55 -0.52 (-1.24%)
NYSE Volume 436,552,000
Nasdaq Volume 589,479,000

10:30AM: Choppy trading leaves the indices bouncing around the flat line as the bulk of sector leadership remains negative... Energy (-1.1%) has fallen, following a 2.0% decline in crude oil prices ($48.00/bbl -$0.84) and disappointing Q4 earnings from HAL, while consumer staples has traded lower on the heels of the proposed PG/G merger... Computer hardware, biotech, networking, utility, transportation and retail have also been weak...

Computer storage (+1.2%) has shown the most strength, following strong Q4 results from SanDisk (SNDK 24.79 +2.54), while brokerage, homebuilding and health care have posted modest gains... NYSE Adv/Dec 1227/1549, Nasdaq Adv/Dec 1076/1446

10:00AM: The market, now trading in split fashion, struggles to gain traction following weaker than expected GDP data... While the Commerce Dept. showed 3.1% annual growth in advance Q4 GDP, less than the expected 3.5% growth rate, the data still suggest overall GDP growth in 2004 was the most robust since 1999 and still slightly above the 10-year trend...

The data, which was adversely affected by the steepest decline in exports in two years, reflect a slight slowdown from the average 3.9% growth during the first three quarters of the year, but the continued steady uptrend in consumer spending and strong business investment indicates sustainable growth at a 3-3.5% pace in 2005... The GDP deflator (inflation) rose at a modest 2.0% annual rate, basically in line with economist's forecast of 2.1%...NYSE Adv/Dec 1363/1143, Nasdaq Adv/Dec 1110/1195

9:40AM: Stocks open slightly higher as the market weighs a mixed batch of earnings reports with the year's largest merger announcement...

[54anickel]

24. Watching America: Will It Listen to Foreigners, or Do as It Pleases?

http://www.nytimes.com/2005/01/28/business/worldbusiness/28norris.html?adxnnl=1&adxnnlx=1106928021-jUolw6zvCzbdQaTSfJr6LQ

snip>

The twin American deficits figured into concerns that the United States would do as it pleases regardless of the possible impact on the world economy. "I don't see the budget deficit being dealt with," said Jacob Frenkel, the former head of Israel's central bank and now a vice chairman of the American International Group, a large insurance company. "I am concerned with the U.S. current-account deficit, not because it cannot be dealt with but because of the way it is not being dealt with."

snip>

Some Americans are listening. William H. Donaldson, the chairman of the S.E.C., gave a speech in London this week that dealt with some of the concerns, indicating the commission may delay enforcing rules against foreign companies that trade in the United States and may make it easier for foreign companies already registered in the United States to withdraw.

The rule that has both American and foreign companies complaining is Section 404, which requires extensive reviews of internal controls in companies to assure they are effective - and says outside auditors must certify the controls. "It was an enormous, expensive exercise," Mr. Vasella said in an interview. "It raised the question, for my employees, 'Is the trust broken?' because you control everything." Novartis has complied with the rule.

The chief executive of PricewaterhouseCoopers, Samuel A. DiPiazza Jr., estimated that 10 percent of large American companies would fail to comply this year, either because they could not complete the work on time or because material problems were found.

A survey of 1,324 chief executives by his firm found that bosses around the world were less confident they could comply with rules outside their home countries. Mr. Vasella said chief executives of several smaller European countries told him they might try to leave the American market. He said he asked them if they would do so because they had something to hide, or because of the expense.

more...

[54anickel]

25. If China Shuns Dollar, Look Out U.S. Bonds:

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

Jan. 28 (Bloomberg) -- Malaysia isn't a place traders look for clues about the U.S. dollar, yet Asia's No. 10 economy may be offering some ominous ones.

They can be found in a recent report on international reserve holdings at Bank Negara Malaysia, the nation's central bank. It states that Malaysia made a $2.1 billion ``revaluation gain'' in 2004, ``arising mainly from the depreciation of the U.S. dollar against the major currencies.''

Central banks are always reticent to detail their holdings, but one can't help but wonder if Malaysia is buying an increasingly amount of euros -- or even yen -- these days. Its central bank sure didn't make that kind of cash holding the dollar, the currency to which its own, the ringgit, is pegged.

The plot thickens when you consider how such a shift away from the dollar would jibe not only with comments from top Malaysian officials, but trends throughout Asia.

more...

[54anickel]

26. Moody's Cuts Merck Debt Rating

http://www.thestreet.com/_tsclsii/stocks/biotech/10205891.html

Merck (MRK:NYSE - news - research) received another negative vote from a credit-rating firm Thursday after Moody's Investors Service knocked down by one notch the company's senior unsecured notes.

Approximately $4.9 billion in debt will be affected by Moody's decision to cut the rating to Aa2 from Aa3. The rating outlook is negative.

In recent months, the three major credit-rating agencies -- Moody's, Standard & Poor's, and Fitch -- have cut Merck's ratings, which once were highest rated. In November, Moody's cut Merck's rating to Aa2 from the top-rated Aaa.

Moody's cut the rating Thursday because it believes Merck's free cash flow "will likely erode over the next several years at a time when the company faces uncertain but potentially very high legal exposures related to Vioxx." Merck withdrew the arthritis drug from the market on Sept. 30. The potential legal liability is a source of intense study and speculation among equity analysts and credit-rating firms.

more...

[54anickel]

27. Chinese airlines to purchase of 60 Boeing jetliners

http://www.chron.com/cs/CDA/ssistory.mpl/business/3013389

BEIJING — Six Chinese airlines signed a deal today to buy 60 of Boeing Co.'s new B7E7 jetliners for a combined $7.3 billion, one of the carriers announced.

It was the biggest single aircraft purchase to date by Chinese airlines and gives Boeing a boost in its competition with European rival Airbus Industrie for business in China.

The first of the so-called super-efficient jetliners will be delivered in 2008, Xiamen Airlines Co. said in a statement.

The other carriers are Air China, China Southern Airlines, China Eastern Airlines Co., Shanghai Airlines Co. and Hainan Airlines Co., the statement said.

[54anickel]

28. THEY KEPT 2 SETS OF BOOKS (Ebbers/Worldcom)

http://www.nypost.com/business/38942.htm

snip>

David Myers, the WorldCom controller until asked to resign in 2002, said Ebbers apologized to him in 2000 after Myers was first ordered to fraudulently lower the company's expenses.

"I'm sorry you were asked to do what you were asked to do," Myers said from the stand, paraphrasing Ebbers' comments. "It's something that you should not have been put in that position to do."

Ebbers, who made the comment to Myers in a hallway of WorldCom's Clinton, Miss., headquarters, then promised the controller "that we would never have to do that again."

The testimony, on the third day of the blockbuster trial, was the first time Ebbers was linked directly to the fraud.

more...

[54anickel]

29. Dollar Watch

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

Last trade 83.66 Change +0.23 (+0.28%)

Settle 83.43 Settle Time 23:35

Open 83.51 Previous Close 83.43

High 83.83 Low 83.25


The March Dollar was slightly higher overnight as it consolidates below the 10-day moving average crossing at 83.51. Stochastics and the RSI are bearish signaling that a short-term top is in or is near. Closes below the 20-day moving average crossing at 83.05 would confirm that a short- term top has been posted while opening the door for a larger-degree decline. Multiple closes above the 25% retracement level of the May- December decline crossing at 83.71 are needed to extend the short covering rebound off December's low. Overnight action sets the stage for a steady to firmer tone in early-day session trading.

The March Euro was slightly lower overnight as it consolidates some of Wednesday's rally but remains above the 38% retracement level of the April-December rally crossing at 129.550. Stochastics and the RSI are bullish signaling that a short-term low might be in or near. However, closes above the 20-day moving average crossing at 131.228 are needed to confirm that a short-term low has been posted. If March renews this month's decline, the 50% retracement level of the April-December rally crossing at 127.290 is the next downside target. Overnight action sets the stage for a steady to weaker tone in early-day session trading.

snip>

The March Canadian Dollar was lower overnight and is working on a possible inside day as it extends this week's decline. Stochastics and the RSI remain bearish signaling that sideways to lower prices are possible near-term. If March extends this week's decline, the reaction low crossing at.8018 is the next downside target. From a broad perspective March needs to close above .8369 or below .8018 to confirm a breakout of this winter's trading range. Overnight action sets the stage for a steady to weaker tone in early-day session trading.

The March Japanese Yen was lower overnight and is working on a possible inside day as it consolidates some of Wednesday's rally. Stochastics and the RSI are neutral to bearish signaling that sideways to lower prices are possible near-term. Closes below the 25% retracement level of last year's rally crossing at .9629 would open the door for a possible test of this month's low crossing at .9549 later this winter. Closes above Tuesday's high crossing at .9773 would temper the near- term bearish outlook in the market. Overnight action sets the stage for a steady to weaker tone in early-day session trading.


Europe gold stuck in ranges, eyes US data, dollar

LONDON, Jan 28 (Reuters) - Gold sat tight in a narrow band on Friday as the market struggled to crack resistance at $428 per ounce, but currency moves and the Iraqi elections were expected to spark volatility in coming sessions, dealers said.

Support for bullion could arrive later as the dollar may feel pressure after U.S. GDP data is released. Safe haven purchases could also be on the cards, with investors alert to any escalation of violence around the Sunday elections.

snip>

"The market is looking very quiet so far -- tracking what the euro does -- I think most people are waiting for the U.S. data before deciding on any major moves," one dealer said.

snip>

Major currencies stuck to tight ranges as investors waited to see how Group of Seven and key emerging nations meetings next week would pressure China and other Asian countries to let their currencies rise.

more...

Currencies Quiet Ahead of GDP

No major change in FX as traders await this morning’s advanced release of the US GDP report, expected to show the economy to have grown by about 3.5% in Q4 from 4.0% in Q3. Not only the report represents a backward looking picture of the economy, but also an incomplete one since reports such as the trade figures for December have yet to be released. Nonetheless, the initial estimate should have a market impact, especially if the figure comes under 3.1% or at least at 4.0%. Markets will also scrutinize personal consumption expenditure and whether it would surpass the 5.1% jump seen in Q3. The drag from exports could also be a major negative considering the $60 bln record trade in November, which could erode as much as 2.0% from the GDP.

The ECI is expected to show little indication of any notable rise in employment costs that are deemed. Wages & salaries should remain well contained, up 0.7-0.8% and benefits up around 1.0%-1.1%.

US Treasuries are up (yields are down) for the first time in 4 sessions with the yield at 4.19% ahead of the GDP figure which is expected to come in lower than in Q3.

Euro hovers ahead of GDP

Little transpired in the EURUSD rate as traders await the US GDP figures, which although backward looking and incomplete, will still be viewed with sufficient importance since they give the first estimate of overall 2004 growth in the US.

more...

[54anickel]

41. Germany Urges U.S. to Reduce Deficit

http://www.forbes.com/business/feeds/ap/2005/01/28/ap1790253.html

Another call for the United States to reduce its deficit and halt the dollar's drop came Friday, even as a top bank official said financial markets were putting too much focus on the currency's decline.

Germany's Economic and Labor Minister Wolfgang Clement reiterated cries for the Bush administration to reduce the deficit and halt the dollar decline that has slowed his country's export-driven economy.

"The U.S. must develop a policy on reducing their deficit," he said during the World Economic Forum, adding that Japan and China should adopt more flexible policies toward the dollar as well.

The United States' ballooning trade and budget deficits have been blamed for the dollar's recent decline against the euro and the yen - a situation some observers believe the U.S. government is content with because it makes U.S. exports cheaper.

more...

[54anickel]

42. Yuan revaluation a double-edged sword for US dollar

http://biz.thestar.com.my/news/story.asp?file=/2005/1/28/business/10014446&sec=business

NEW YORK: The US dollar would likely fall steeply against the yen but slip more modestly against the euro in the event of a revaluation of the Chinese yuan, currency analysts say.

“The dollar would stand to decline more against Asian currencies than against European currencies because there has been a tremendous amount of depreciation against the euro, which has borne the brunt” of the dollar’s three-year fall, said Mark Kiesel, portfolio manager at California-based bond fund PIMCO.

snip>

If China revalued, “the dollar would lose most against the yen and least against the euro. It is just mainly a shift of the dollar weakness burden,” said Tim Mazanec, senior currency strategist at Investors Bank & Trust in Boston. “The dollar would lose about 5% against the yen ... and against the euro it would probably be choppy trade, with plus or minus 1.5% either way, in a more minor type of move,” he said, adding that the dollar would react similarly against pound sterling and the Swiss franc.

Traders fear that Japan may return to its practice of selling yen against the dollar following any yuan revaluation. In the 15 months to last March, Japan sold yen to finance the purchase of an unprecedented 35 trillion yen worth of dollars to curb the yen strength.

While the yen and other Asian currencies would gain between 3% and 5%, depending on the magnitude of the yuan's revaluation, “you would see the yen outperform the euro, so the euro would lag on that action,” said Putnam Investment’s Upadhyaya. – Reuters

more...

[MARALE]

30. U.S. stocks slip on weak McDonald's results, Iraq elections

http://www.reuters.com/financeMarketReportArticle.jhtml?type=usMktRpt

SNIP>
U.S. stocks slipped on Friday weighed down by McDonald's Corp. (MCD.N: Quote, Profile, Research) , which reported disappointing results, while security concerns surrounding the Iraq elections on Sunday also loomed over the market.

Also in the spotlight were Procter & Gamble Co. (PG.N: Quote, Profile, Research) and Gillette Co. (G.N: Quote, Profile, Research) . P&G said it would buy Gillette for about $57 billion in stock to form a consumer products powerhouse. Gillette rose 12 percent to $51.20, while P&G shares slid 2.6 percent to $53.87, dragging down the Dow.

McDonald's dropped 2 percent to $31.48 after the world's largest restaurant company reported quarterly profit below analyst expectations.

Sanmina-SCI Corp. (SANM.O: Quote, Profile, Research) fell 17 percent to $6.09, weighing on the Nasdaq. The contract electronics manufacturer posted a higher quarterly profit, but said sales were at the low end of expectations because of pricing pressure and a sluggish business climate. <SNIP

[54anickel]

31. The Bull Market is Dead! Long Live the Bull Market! (in China)

Interesting pic in this article.

http://www.bullnotbull.com/temp/over.html

snip>

Since those shocking lows in October 2002, the world seems to have returned to a certain sense of normalcy for most people, albeit a different, numb kind of normal. Once again we have to work for a living. No more day trading, CNBC, or retiring on stock options. And if the stock market has failed to register the 20% + annual gains of the last few years of the twentieth century, it has also managed to avert more of the surprising declines that characterized the opening of the twenty first. War is a reality. Thankfully, there have been no more terrorist attacks at home, and we've all gotten used to ignoring the false terror alarms put out by the new Ministry of Homeland Security. Likewise, we've gotten used to being searched, prodded and poked when we travel by air, though we grumble under our breaths at the inconvenience of it all (but only under our breaths - this is a different America). Even the market managed to score some decent gains again. The start of the war in Iraq in spring of 2003 marked the end of the declines, at least temporarily. The Dow regained most of its former glory (91% of it), and is still hanging in above 10,000. And if the SPX and NASDAQ did not do quite as well in absolute terms, they did manage spectacular rallies from their all time lows that would make any bull proud (see Table).

snip>

3. Turn and face the strange changes

A friend and colleague of mine who is a professor of Venture Capital and Entrepreneurship at National Chiao Tung University here in Taiwan emphasizes over and over to his graduate students that big changes create big opportunities. From his perspective, the dot.com boom and bust was necessary, and served its purpose; 10 years after the debut of Windows 95, the world is a different place thanks to new information communications technologies (ICT) that have emerged. They were invented during the boom; now their full potential is finally being put to use around the world. While only a small number of the bubble-era companies survived the bust, the outlines of the colossal changes that they are creating can already be seen taking shape.

As Americans, we tend to think that we are at the center of the universe and always will be, and the insular, corporate controlled media does nothing to dissuade this idea. But the world is a big place, and big changes are in the air. Just take one whiff of the howling winds, and I dare say that you can smell the changes, rolling in like a storm. You may be able to ignore them for a little while longer, but nothing can stop them. While the Corporate press keeps the American public entertained with politics and war, it smugly pooh-poohs China's growth as a bubble. But the optimism that hangs in the Asian air is as palpable as the pollution that clouds its skies. Shanghai is a city on the move and people in the daily course of their lives walk so fast down the streets of the city that they are running! America may still be the best place for ideas, but Asia has emerged as the best place to finance, produce and realize them.

As an American living in China for the past year (to be specific, the Republic of China on Taiwan), the world is starting to look a little different to me. There is no doubt that America is an empire and it still exercises its economic and cultural might (more on this in the future). But in China, a baby giant has been born, and he is hungry and he is growing. There is a new game in town, and it is played by international rules. Open your eyes - the bull market is dead! Come learn the new game or risk being left behind. Change creates opportunity. Long live the bull market!

more...

[54anickel]

32. 12:07 and OUCH!

Dow 10,411.17 -56.23 (-0.54%)
Nasdaq 2,031.39 -15.76 (-0.77%)
S&P 500 1,168.55 -6.00 (-0.51%)
10-yr Bond 4.132% -0.075
30-yr Bond 4.599% -0.073
NYSE Volume 731,341,000
Nasdaq Volume 999,058,000


11:30AM: A renewed wave of selling pushes the indices to their worst levels of the session... Buyers appear hesitant to hold stocks heading into a weekend filled with uncertainty regarding the risk of turmoil surrounding the Iraqi elections... Evidently, concerns of violence as well as worries about pipeline disruptions pushing crude oil prices higher, continues to weigh on sentiment... OPEC's upcoming output decision in Vienna could also become a contributing factor next week... NYSE Adv/Dec 1343/1671, Nasdaq Adv/Dec 989/1752
11:00AM: Equities remain on the defensive as selling interest intensifies in blue chips... On the Dow, shares of MCD (-1.8%) have been under pressure, despite posting strong same-store sales and higher margins, after it missed Q4 earnings by a penny, while PG (-2.5%) , HPQ (-1.3%) and BA (-0.9%) have also been weak... MSFT (+1.2%), however, has surged after it more than doubled Q2 profits, beating expectations by $0.02 due to stronger demand for PCs and video games, and guided Q3 earnings above consensus... CAT (+1.6%), IBM (+1.3%), JNJ (+0.7%) and INTC (+0.7%) have also shown relative strength...NYSE Adv/Dec 1475/1436, Nasdaq Adv/Dec 1264/1385


Advances & Declines
NYSE Nasdaq
Advances 1169 (35%) 955 (31%)
Declines 1917 (58%) 1880 (62%)
Unchanged 173 (5%) 152 (5%)

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

Up Vol* 190 (28%) 243 (25%)
Down Vol* 473 (70%) 697 (73%)
Unch. Vol* 11 (1%) 9 (0%)

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

New Hi's 77 48
New Lo's 15 31

[54anickel]

34. Getting close to key technicals. Good time to look back at this weeks

charts from Iossif.

http://www.financialsense.com/Market/iossif/2005/0125.html

snip>

DJIA: If the 10500-10380 zone can't provide support, it will go back down to 10000. However, if support continues to hold, the odds favor that it will go back up to re-test resistance at its most recent highs. (When price can't take out support, it re-tests resistance, and, vice-versa.)

snip>

SP500: If the 1168-1165 zone can't provide support, it will go back down to 1150. However, if support continues to hold, the odds favor that it will go back up to re-test resistance at its most recent highs. (When price can't take out support, it re-tests resistance, and, vice-versa.)

snip>

NASDAQ: If the 2070-2050 zone can't provide support, it will go back down to 2000. However, if support continues to hold, the odds favor that it will go back up to re-test resistance at its most recent highs.

more...

[54anickel]

37. Here's what McHugh had to say on Tues for this week's analysis as well

http://futures.fxstreet.com/Futures/content/100480/content.asp?menu=review&dia=2512005

snip>

This week the Dow Jones Industrial Average hit a new closing low for 2005, down for the third week in a row, down 165 points after rising 70 points on Tuesday. This is about as we expected as our Short-term TII indicator was positive 29.00 last Friday, but with the caveat that "a weak up move is probable." That we got. And brief too. The rally from Thursday January 13th's low capped an a-up, b-down, c-up minor rally on the first of our four possible Fibonacci turn dates identified for this week. Tuesday's top came on the 1,259th trading day from January 14th, 2000's all-time high in the DJIA. Thus January 18th, 2005 becomes the phi mate of December 14th, 2001's minor low (which came the 482nd trading day from January 14th, 2000). The ratio of 482/1,259 = .382. Once again another Fibonacci phi mate date marks a turn in the DJIA. Since 1/14/2000, there have been no exceptions. The DJIA plummeted 236 points from this latest phi turn date, closing below its December 2004 low, which is Bearish. Today's close in the DJIA wipes out all the gains of 2004, thus validating our perpetually negative Intermediateterm TII readings over the past year. Technical Analysis works.

snip>

This week the Short-term Technical Indicator Index comes in at negative (25.50), indicating a sideways to declining move is probable. This indicator is a useful predictor of equity market moves over the next two weeks, both as to direction and to a lesser extent strength of move. For example, readings near zero indicate narrow sideways moves are probable. Readings closer to +/-100 indicate with a higher degree of confidence that an impulsive move up or down is likely over the short run. Market conditions can change on a dime, or the Plunge Protection Team can come in and temporarily stop market slides, so it may be unwise to trade off this weekly measured indicator.

The Intermediate-term Technical Indicator Index is useful for monitoring what's over the horizon - over the next twelve weeks. It serves as an early warning system for unforeseen trend changes of considerable magnitude. This week the Intermediate-term TII comes in at negative (21.83).

more...

[54anickel]

33. The Motorcycle Diary (Andy Xie on China)

http://www.morganstanley.com/GEFdata/digests/20050127-thu.html#anchor1

The global economy has stumbled into a growth model based on the United States’ consumption and China’s investment. These two sources of demand resemble the two wheels of a motorcycle that is pulling the rest of the world along. The wealth disparity between emerging and OECD countries has pushed the global economy on to such a growth path on consumption based on wealth in OECD countries and investment based on export income in emerging economies. This model is, in our view, likely to persist until the wealth gap between OECD and emerging economies has narrowed sufficiently.

Inflation is not a problem, as the demand in OECD countries automatically creates supply in emerging economies. It is, however, very prone to asset bubbles, because excess money creation does not lead to inflation, and the surplus liquidity finds a home in asset markets. For example, the world has experienced a massive liquidity bubble since the Asian Financial Crisis of 1997–98.

The global economy is now suspended inside a liquidity bubble, I believe. A significant adjustment is inevitable. Some US officials blame China’s currency peg as the culprit. I believe that the main cause is that the US inflated the liquidity bubble to avoid adjustment after the tech burst in 2000. The world needs a US recession, in my view. A Chinese revaluation will not be significant enough to solve the world’s problem.

The ‘motorcycle’ growth model may be unusual but can last for another decade or two. What has occurred is that the excessive liquidity from the US Federal Reserve since 2000 has overheated the system. It needs to pause and cool down. A US recession would serve the purpose. The global economy will be back to the same system afterwards.

The Missing Recession

more...

[54anickel]

35. Another 6.250 Billion weekend repo, another record set in the debt

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

http://www.brillig.com/debt_clock/

The Outstanding Public Debt as of 28 Jan 2005 at 05:32:52 PM GMT is:

[54anickel]

36. 12:43, sellers returning from lunch a bit early?

Dow 10,394.99 -72.41 (-0.69%)
Nasdaq 2,027.48 -19.67 (-0.96%)
S&P 500 1,166.86 -7.69 (-0.65%)
10-yr Bond 4.138% -0.069
30-yr Bond 4.606% -0.066
NYSE Volume 847,871,000
Nasdaq Volume 1,118,983,000


12:30PM : Little change since the last update as market internals still hold a bearish bias... Decliners on the NYSE hold an 18 to 11 advantage over advancers while declining issues on the Nasdaq hold an 18 to 10 edge over advancing issues... The ratio of up to down volume reflects a similar lead at both the Big Board and the Composite, where down volumes continue to hold a commanding lead...
The Nasdaq, which failed to hold key support at 2036 about an hour ago, continues to hover just above a secondary support level (2028), while the Dow, which is not much higher than where it ended last week (10393), also continues to linger around its secondary support level (10400)... NYSE Adv/Dec 1247/1862, Nasdaq Adv/Dec 1016/1840

12:05PM : Market bounces off its lows but remains under pressure midday as encouraging M&A activity and cheaper oil can't counter mixed earnings results, weak GDP growth and concerns related to Sunday's Iraqi elections... While Proctor & Gamble's (PG 53.70 -1.62) plans to buy Gillette (G 51.13 +5.45) for $57 bln helped keep a lid on selling interest and renewed enthusiasm about a strengthening economy early on, there have been far too many negative catalysts to sustain buying interest...

MSFT, PG, ADM, CVX and TRB beat expectations but MCD, MYG, HAL and APC missed forecasts as advance Q4 GDP checked in 3.1%, less than the expected 3.5% growth rate, with a steep decline in exports reflecting a modest slowdown from the average 3.9% growth during the first three quarters of the year... Not even a 3.0% sell off in crude oil prices ($47.35/bbl -$1.49), ahead of OPEC's upcoming meeting to mull over output quotas, has attracted buyers... Technology has been weak across the board, with disk drive as the only exception posting modest gains... Energy (-0.9%) has also fallen along with biotech, utility, financial, health care, transportation and retail...

Homebuilding has found strength in lower bond yields while airline and brokerage have also traded slightly higher...Treasuries have also continued to climb following the weaker than expected read on Q4 real GDP growth, helping the benchmark 10-year note surge to its highest levels of the morning, up 22 ticks to yield 4.13%... The dollar has also attracted buyers against both the euro (1.3020) and the yen (103.49) ahead of next week's G7 meeting...NYSE Adv/Dec 1164/1908, Nasdaq Adv/Dec 945/1872

Advances & Declines
NYSE Nasdaq
Advances 1255 (37%) 1051 (34%)
Declines 1888 (57%) 1826 (60%)
Unchanged 161 (4%) 162 (5%)

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

Up Vol* 236 (29%) 291 (27%)
Down Vol* 549 (69%) 771 (71%)
Unch. Vol* 10 (1%) 11 (1%)

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

New Hi's 79 53
New Lo's 15 32

[54anickel]

38. U.S. pension reform a potential bonanza for bonds

http://www.reuters.com/financeNewsArticle.jhtml?type=bondsNews&storyID=7439274

NEW YORK, Jan 26 (Reuters) - Government proposals for tougher rules on U.S. defined-benefit pension plans, if enacted, could prove a multibillion dollar bonanza for bond markets at the expense of equities.

Analysts say the reforms would give corporate and state pension managers an incentive to better match assets to liabilities by reducing riskier stock holdings and buying safer longer-term fixed-income debt, particularly Treasuries.

The amounts involved are potentially huge, given corporate pension plans have assets of around $1.5 trillion and state and local plans around $2.5 trillion.

"Shifts by the two groups could perhaps move $650 billion or more out of equities into fixed-income assets, and could also entail a major move to increase fixed-income duration," said Richard Berner, chief U.S. economist at Morgan Stanley.

The mere thought of such flows has already helped drag 30-year Treasury yields to their lowest levels since mid-2003, keeping mortgage rates and corporate borrowing costs down in the process.

more...

[54anickel]

40. 1:38 Numbers. Is that the shadow of the PPT had I see? Or just a tight

wrestling match between bulls and bears. Hmmm, low volumes, market breadth definitely on the bears side, yet clinging to those important technical numbers mentioned in the blather. :shrug:

Dow 10,401.35 -66.05 (-0.63%)
Nasdaq 2,028.70 -18.45 (-0.90%)
S&P 500 1,167.90 -6.65 (-0.57%)
10-yr Bond 41.38 -0.69 (-1.64%)
30-yr Bond 46.02 -0.70 (-1.50%)
NYSE Volume 996,600,000
Nasdaq Volume 1,286,993,000


1:30PM : More of the same as stocks continue to sport hefty losses... Contributing to the broad-based weakness could arguably be frustration on the part of buyers regarding little follow through despite a resurgence in M&A activity, as today's $57 bln merger between Proctor & Gamble (PG 53.85 -1.47) and Gillette (G 51.29 +5.61) comes just one day after SBC Communications (SBC 23.50 -0.17) planned $15 bln acquisition of former parent AT&T (T 19.54 +0.06)... Reports suggest that last month was the busiest December in about four years, with more than $300 bln in total worldwide deals...NYSE Adv/Dec 1226/1966, Nasdaq Adv/Dec 1013/1911

1:00PM : Indices continue to languish near their lows of the session as sellers remain an active bunch... Electronics manufacturing services (-4.0%) has led the list of laggards after Sanmina-SCI (SANM 6.24 -1.18) was downgraded to Underperform at Baird and to Neutral at CSFB following weaker-than-expected Q1 results and lowered Q2 revenue guidance... Even though issues, like slowing demand and depressed margins in SANM's components business, appear to be company specific, competitors CLS (-3.8%), FLEX (-3.3%), JBL (-1.7%) and SLR (-1.4%) have also sold off in sympathy...NYSE Adv/Dec 1301/1854, Nasdaq Adv/Dec 1023/1865

12:30PM : Little change since the last update as market internals still hold a bearish bias... Decliners on the NYSE hold an 18 to 11 advantage over advancers while declining issues on the Nasdaq hold an 18 to 10 edge over advancing issues... The ratio of up to down volume reflects a similar lead at both the Big Board and the Composite, where down volumes continue to hold a commanding lead...

The Nasdaq, which failed to hold key support at 2036 about an hour ago, continues to hover just above a secondary support level (2028), while the Dow, which is not much higher than where it ended last week (10393), also continues to linger around its secondary support level (10400)... NYSE Adv/Dec 1247/1862, Nasdaq Adv/Dec 1016/1840

And why are they not mentioning the S&P in this mini-analysis?

[54anickel]

44. 2:45 numbers and yada

then I'm stepping out of the game.

Dow 10,402.89 -64.51 (-0.62%)
Nasdaq 2,029.53 -17.62 (-0.86%)
S&P 500 1,168.65 -5.90 (-0.50%)
10-yr Bond 4.135% -0.072
30-yr Bond 4.6% -0.072
NYSE Volume 1,213,278,000
Nasdaq Volume 1,549,490,000

2:30PM : Sellers show some resolve as the major indices fall to new session lows... The Dow, S&P and Nasdaq which have all recently failed to hold support at key technical levels have, however, shown a bit of resilience, bouncing off those lows and farther from last week's disappointing closing levels... Notable movers to the downside, following disappointing earnings guidance, have included ACET (-20.5%), OSTK (-20.5%), SANM (-16.6%), OSIS (-13.8%), FDRY (-8.3%), FLE (-3.3%), CBM (-3.1%) and PGL (-1.8%)...NYSE Adv/Dec 1251/1976, Nasdaq Adv/Dec 974/1995

2:00PM : Stocks continue to back off their lows but buying interest remains scarce across the board... Treasuries, however, remain near their highs of the session after the Commerce Dept. showed in its first GDP report a weaker than expected 3.1% in Q4 GDP growth, pushing the 10-year note up 15 ticks to yield 4.16%... While the momentum in the economy remains strong, traders do not feel it's as strong as what was witnessed in early 2004, sentiment that has since extended early gains in the benchmark 10-year, which is now up 22 ticks to yield 4.13%...NYSE Adv/Dec 1265/1940, Nasdaq Adv/Dec 1014/1923

1:30PM : More of the same as stocks continue to sport hefty losses... Contributing to the broad-based weakness could arguably be frustration on the part of buyers regarding little follow through despite a resurgence in M&A activity, as today's $57 bln merger between Proctor & Gamble (PG 53.85 -1.47) and Gillette (G 51.29 +5.61) comes just one day after SBC Communications (SBC 23.50 -0.17) planned $15 bln acquisition of former parent AT&T (T 19.54 +0.06)... Reports suggest that last month was the busiest December in about four years, with more than $300 bln in total worldwide deals...NYSE Adv/Dec 1226/1966, Nasdaq Adv/Dec 1013/1911

Have a great weekend! Adios! :hi:

[RawMaterials]

46. 3:45 EST Market Update and Blather

Dow 10,428.53 -38.87 (-0.37%)
Nasdaq 2,036.12 -11.03 (-0.54%)
S&P 500 1,171.39 -3.16 (-0.27%)
10-Yr Bond 41.38 -0.69 (-1.64%)
NYSE Volume 1,467,105,000
Nasdaq Volume 1,855,629,000

(still above key support levels)

3:30PM: Not much action in the last half hour of trading as the major averages continue to drift sideways into the close... With regards to Monday, quarterly earnings will again remain a focal point, as 12 S&P constituents - from the likes of XOM, K, SYY, VC and WYE - report results before the bell while 7 blue chips are expected to post earnings after the close... In economic news, Dec Personal Income (consensus +0.4%) and Spending (consensus +0.8%) will be released at 8:30 ET while Jan Chicago PMI (consensus 59.8) and Dec New Home Sales (consensus 1200K) will be out at 10:00 ET...NYSE Adv/Dec 1339/1932, Nasdaq Adv/Dec 1043/1955

3:00PM: Bearish bias remains firmly intact heading into the last hour of trading as stocks continue to chalk up losses... Outside of equities, crude oil futures have also plummeted, losing 3.5% on the day to a more than one-week low... The commodity, which had closed in on the psychologically important $50/bbl level yesterday, has fallen $1.71 to $47.13/bbl as traders expect OPEC to leave output unchanged at this Sunday's meeting in Vienna and not readdress production cuts until the next summit meeting in March...

Forecasts calling for warmer weather in the Northeast next week have also contributed to selling pressure... NYSE Adv/Dec 1321/1935, Nasdaq Adv/Dec 1046/1935

2:30PM: Sellers show some resolve as the major indices fall to new session lows... The Dow, S&P and Nasdaq which have all recently failed to hold support at key technical levels have, however, shown a bit of resilience, bouncing off those lows and farther from last week's disappointing closing levels...

http://finance.yahoo.com/mo

[DoBotherMe]

47. Closing numbers and blather

Dow 10,426.69 -40.71 (-0.39%)
Nasdaq 2,035.61 -11.54 (-0.56%)
S&P 500 1,171.22 -3.33 (-0.28%)
10-Yr Bond 41.38 -0.69 (-1.64%)
NYSE Volume 1,587,627,000
Nasdaq Volume 2,021,757,000

Close: Stocks were under pressure most of the session and closed in negative territory, despite noteworthy M&A news and a sell off in oil, as mixed earnings reports, disappointing GDP figures and worries related to Iraqi elections fueled broad-based weakness... If not for last-minute, futures-related buying, the major indices may have posted weekly declines for the fourth consecutive week...
While Proctor & Gamble's (PG 53.85 -1.47) $57 bln all-stock bid to buy Gillette (G 51.29 +5.61) fueled modest market gains at the open, little follow through on the part of buyers, despite a resurgence in M&A activity (i.e. SBC - AT&T merger), only added to the frustration... MSFT, PG, ADM, CVX and TRB were just a few companies to have their better than expected quarterly results offset by disappointments from blue chips like MCD, MYG, HAL and APC while a weaker than expected advance Q4 GDP read of 3.1% (consensus 3.5%), due in large part to a steep decline in exports, also weighed on equities...

Investors were also reluctant hesitant to hold stocks heading into a weekend filled with uncertainty regarding the risk of violence and pipeline disruptions related to Sunday's Iraqi elections... Not even a 3.0% sell off in crude oil prices ($47.35/bbl -$1.49), ahead of OPEC's upcoming meeting to mull over output quotas, has attracted buyers... News late in the day that the U.S. Court of Appeals found Merck's (MRK) patent claims for Fosamax to be invalid also added to the overall negative sentiment... Electronics manufacturing services (-2.9%) led the charge lower after Sanmina-SCI (SANM 6.24 -1.18) was downgraded by multiple brokers following weaker-than-expected Q1 results and lowered Q2 revenue guidance...
Energy (-1.0%) was also weak on the heels of disappointing Q4 earnings from Halliburton (HAL 41.51 -2.00) and a 3.4% decline in crude oil prices ($47.18 /bbl -$1.66)... The commodity, which had flirted with the psychologically critical $50/bbl level yesterday, sold off as traders expected OPEC to leave output unchanged at this Sunday's meeting in Vienna... Technology was under pressure across the board, as modest gains in disk drive (+0.7%), after strong Q4 results from SanDisk (SNDK 24.79 +2.54), failed to offset weakness in software (-1.2%) and semiconductor (-1.0%)...

Health care, financial, retail and transportation, excluding a 1.3% gain in airline, were also weak while brokerage, utility and materials posted modest gains and homebuilding (+0.8%) halved yesterday's losses (-1.6%) as bond yields fell to their lowest levels of the week... That said, treasuries closed near their highs of the session following the Commerce Dept.'s weak Q4 GDP figure, lifting the benchmark 10-year note up 15 ticks to yield 4.16%... Today's rally closed the 10-year up 20 ticks to yield 4.13%, but the benchmark treasury closed nearly unchanged on the week as yields bounced around between 4.12% and 4.38%...

Other economic news included the Q4 employment cost index, which rose a smaller 0.7% (consensus +0.8%), the weakest overall rise since Q2 1999...NYSE Adv/Dec 1532/1774, Nasdaq Adv/Dec 1263/1793

[RawMaterials]

48. some blather

U.S. stocks close lower as Iraq and Merck pressure

NEW YORK, Jan 28 (Reuters) - U.S. stocks ended lower on Friday, pressured by a sharp drop in shares of Merck & Co. Inc. (MRK.N: Quote, Profile, Research) , a weaker-than-expected reading on economic growth and worries ahead of the Iraq election.

Based on the latest available data, the Dow Jones industrial average fell 40.20 points, or 0.38 percent, to close at 10,427.20. The Standard & Poor's 500 index slipped 3.19 points, or 0.27 percent, to finish at 1,171.36. The Nasdaq Composite Index dropped 11.32 points, or 0.55 percent, to end at 2,035.83.

For the week, the Dow ended up 0.32 percent, the S&P 500 finished up 0.29 percent, and the Nasdaq closed up 0.08 percent.
© Reuters 2005. All Rights Reserved.

http://www.reuters.com/financeMarketReportArticle.jhtml?type=usMktRpt

[RawMaterials]

49. little more

BRIEFING.COM

Stocks were under pressure most of the session and closed in negative territory, despite noteworthy M&A news and a sell off in oil, as mixed earnings reports, disappointing GDP figures and worries related to Iraqi elections fueled broad-based weakness... If not for last-minute, futures-related buying, the major indices may have posted weekly declines for the fourth consecutive week... While Proctor&Gamble's (PG 53.85 -1.47) $57 bln all-stock bid to buy Gillette (G 51.29 +5.61) fueled modest market gains at the open, little follow through on the part of buyers, despite a resurgence in M&A activity (i.e. SBC - AT&T merger), only added to the frustration... MSFT, PG, ADM, CVX and TRB were just a few companies to have their better than expected quarterly results offset by disappointments from blue chips like MCD, MYG, HAL and APC while a weaker than expected advance Q4 GDP read of 3.1% (consensus 3.5%), due in large part to a steep decline in exports, also weighed on equities... Investors were also reluctant hesitant to hold stocks heading into a weekend filled with uncertainty regarding the risk of violence and pipeline disruptions related to Sunday's Iraqi elections... Not even a 3.0% sell off in crude oil prices ($47.35/bbl -$1.49), ahead of OPEC's upcoming meeting to mull over output quotas, has attracted buyers... News late in the day that the U.S. Court of Appeals found Merck's (MRK) patent claims for Fosamax to be invalid also added to the overall negative sentiment... Electronics manufacturing services (-2.9%) led the charge lower after Sanmina-SCI (SANM 6.24 -1.18) was downgraded by multiple brokers following weaker-than-expected Q1 results and lowered Q2 revenue guidance... Energy (-1.0%) was also weak on the heels of disappointing Q4 earnings from Halliburton (HAL 41.51 -2.00) and a 3.4% decline in crude oil prices ($47.18 /bbl -$1.66)... The commodity, which had flirted with the psychologically critical $50/bbl level yesterday, sold off as traders expected OPEC to leave output unchanged at this Sunday's meeting in Vienna... Technology was under pressure across the board, as modest gains in disk drive (+0.7%), after strong Q4 results from SanDisk (SNDK 24.79 +2.54), failed to offset weakness in software (-1.2%) and semiconductor (-1.0%)... Health care, financial, retail and transportation, excluding a 1.3% gain in airline, were also weak while brokerage, utility and materials posted modest gains and homebuilding (+0.8%) halved yesterday's losses (-1.6%) as bond yields fell to their lowest levels of the week... That said, treasuries closed near their highs of the session following the Commerce Dept.'s weak Q4 GDP figure, lifting the benchmark 10-year note up 15 ticks to yield 4.16%... Today's rally closed the 10-year up 20 ticks to yield 4.13%, but the benchmark treasury closed nearly unchanged on the week as yields bounced around between 4.12% and 4.38%... Other economic news included the Q4 employment cost index, which rose a smaller 0.7% (consensus +0.8%), the weakest overall rise since Q2 1999... NYSE Adv/Dec 1532/1774...Nasdaq Adv/Dec 1263/1793

[54anickel]

51. Uh,

Ain't that the same as the closing?

[RawMaterials]

54. It got posted before the closing numbers

post was edited, no big deal