STOCK MARKET WATCH, Thursday 3 February

[ozymandius]

Thursday February 3, 2005

COUNTING THE DAYS
DAYS REMAINING IN THE * REGIME 3 YEARS, 351 DAYS
DAYS SINCE DEMOCRACY DIED (12/12/00) 4 YEARS, 54 DAYS
WHERE'S OSAMA BIN-LADEN? 3 YEARS, 108 DAYS
DAYS SINCE ENRON COLLAPSE = 1169
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 February 2, 2005

Dow... 10,596.79 +44.85 (+0.43%)
Nasdaq... 2,075.06 +6.36 (+0.31%)
S&P 500... 1,193.19 +3.78 (+0.32%)
10-Yr Bond... 4.14% +0.00 (+0.10%)
Gold future... 423.00 +0.10 (+0.02%)





GOLD, EURO, YEN, Dollars and Loonie

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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

---

[54anickel]

1. Morning Ozy. Nice toon again today.

Wonder what effect the SOTU will have on the markets. Futures are a bit down, I see gold is way down so I'm guessing the buck might be headed up again. Wonder if the Senate "threatening" China has anything to do with it? Off to find out...

Have a great day. :hi:

[ozymandius]

21. Good morning 54anickel and everyone.

I just arrived at work with eager anticipation of what fallout might occur from forty minutes of piehole spillage.

:donut: :donut: :donut:

Ozy :hi:

[54anickel]

24. Fixing self-made problems (Heh, love that title!)

In the State of the Union speech, President Bush takes aim at fixable problems that he helped create

http://www.oregonlive.com/editorials/oregonian/index.ssf?/base/editorial/1107435394112970.xml

B y his proposals, if not exactly by the words he used Wednesday, President Bush told Americans something most of them already know: The state of the Union could be better.

The president laid out some of his agenda to address two of our most pressing concerns -- the war in Iraq and the future of the Social Security system without really acknowledging that both of them are, by and large, problems of our own creation.

In Iraq, of course, the president launched a war that now everyone knows was based on false strategic premises. Everyone knows, too -- or should know -- that the administration miscalculated as to the military situation in Iraq. It also failed to correctly assess the forces in Iraqi society that would come into play after the destruction of Saddam Hussein's regime.

Those failures do not relieve the United States of the responsibility for building a new society in Iraq that is capable of serving the aspirations of the Iraqi people.

snip>

The president's proposal for diverting some Social Security taxes into voluntary personal investment accounts relies too heavily on rosy economic scenarios and fiscal practices that have the nation facing deficits as far into the future as anyone can reasonably see.

more...

[54anickel]

2. Dollar Watch

Last trade 83.67 Change +0.15 (+0.18%)

Settle 83.52 Settle Time 23:37

Open 83.65 Previous Close 83.52

High 83.73 Low 83.52


The March Dollar was slightly higher overnight in subdued trading as it consolidates below the 25% retracement level of the May-December decline crossing at 83.71. Stochastics and the RSI are neutral to bearish signaling that sideways to lower prices are possible near-term. Closes below the 20-day moving average crossing at 83.38 would confirm that a short-term top has been posted while opening the door for a larger- degree decline during February. Multiple closes above the 25% retracement level of the May-December decline crossing at 83.71 are needed to extend the short covering rally 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 below the 10-day moving average crossing at 130.442 and above the 38% retracement level of the April-December rally crossing at 129.563. Stochastics and the RSI are bullish signaling that sideways to higher prices are possible near-term. Multiple closes above the reaction high crossing at 131.320 are needed to confirm that a short-term low has been posted and would open the door for a test of broken support crossing at 132.095. If March renews January'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 slightly lower overnight as it consolidates below the 10-day moving average crossing at .8097. Stochastics and the RSI are oversold and are turning bullish signaling that a low is in or is near. If March extends January's decline, the 38% retracement level of the May-November rally crossing at .7988 is the next downside target. From a broad perspective March needs to close above .8369 or below .7988 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 challenging support marked by the 25% retracement level of last year's rally crossing at .9629. Stochastics and the RSI remain 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 January's low crossing at .9549 later this winter. Closes above the reaction 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.


Dollar Rises Against Yen, Steady Vs. Euro
http://biz.yahoo.com/rb/050203/markets_forex_3.html

LONDON (Reuters) - The dollar rose against the yen but held steady versus the euro on Thursday as investors waited for U.S. jobs data and a Group of Seven meeting this week, following a widely-expected U.S. interest rate rise.

snip>

Investors are reluctant to make big positions ahead of Friday's release of key U.S. jobs data and the meeting of G7 rich nations and emerging economies on Friday and Saturday.

"The Fed's statement was the same as the last one...they are just content to keep raising interest rates," said Ian Gunner, head of foreign exchange research at Mellon Bank in London.

"Payrolls will be important because more and more people are talking about the cyclical backdrop for the dollar. There is still a bias for dollar strength and we are still in a downward correction in euro/dollar."

snip>

A speech on the current account on Friday by Fed chairman Alan Greenspan is one focus as President Bush offered no details about his plans to cut the budget deficit in his State of the Union address on Wednesday.

"There is a lot of downside risks for the dollar ahead of the weekend and Greenspan's speech," said Todd Elmer, foreign exchange strategist at Barclays.

snip>

China has resisted international pressure to revalue the yuan but pledged it would reform its financial market before making any changes to the FX policy.

"With the G7 looking more and more likely to be a non-event, I'd say the most important factor for the market will be the jobs data," said Ko Haruki, head of institutional forex sales at HSBC in Tokyo.

more...


China blasts threatened US deadline on yuan as wrong way to handle issue
http://www.channelnewsasia.com/stories/afp_asiapacific_business/view/130647/1/.html

BEIJING : China said a threatened US bill giving it six months to revalue its currency, the yuan, would be the wrong way to handle the sensitive issue.

"We believe this is not a way to resolve differences," foreign ministry spokesman Kong Quan told a regular briefing.

"Every country's economic and financial policy are implemented and established based on the country's specific situation," he said.

A least a dozen US senators are said to have agreed to co-sponsor the bill which would give China "a window of 180 days" to revalue the yuan or face a 27.5 percent tariff on all Chinese manufactured goods entering the United States.

It is expected to be introduced into the US Senate as early as Friday.

A ranking state-employed economist said the government was unlikely to be intimidated by such a move.

more...


China Won't Be Swayed on Yuan by U.S. Bill, Economist Says

http://www.bloomberg.com/apps/news?pid=10000087&sid=avcgxLiZD9dA&refer=top_world_news

Feb. 3 (Bloomberg) -- China won't be swayed into changing its currency policy by proposed U.S. legislation that would impose tariffs on the nation's exports unless the yuan is allowed to appreciate, a Chinese government economist said.

``This kind of bill comes up every year and will keep being raised in the future,'' said Zhu Baoliang, chief economist at the State Information Center, a research group under China's top economic planning agency. ``I don't think Chinese government officials will change their stance'' on the currency.

China's central bank declined to comment on the bill, sponsored by 12 U.S. senators, which would impose tariffs of 27.5 percent unless controls on the yuan are relaxed within six months. Chinese officials, under pressure from the U.S. and other countries to ease the yuan's decade-old peg to the dollar, will discuss the exchange rate at a Group of Seven nations meeting in London this weekend.

``I don't think the proposed legislation put forward by a few senators representing certain interest groups will find support from the majority of Congress and certainly not from the Bush administration,'' said Jun Ma, an economist at Deutsche Bank AG in Hong Kong. ``China will retaliate if trade sanctions are imposed.''

U.S. lawmakers, manufacturers and unions say the yuan's fixed exchange rate artificially depresses the currency, holding down the value of Chinese exports and stoking U.S. job losses. The U.S. trade deficit with China reached a record $148 billion in the first 11 months of last year.

more...

[54anickel]

25. U.S. Dollar Down Against Euro Despit

http://www.forbes.com/business/commerce/feeds/ap/2005/02/03/ap1802148.html

The U.S. dollar was incrementally down Thursday against the euro, which was trading slightly higher than US$1.30, despite U.S. President George W. Bush's pledge to halve the budget deficit by 2009.

snip>

In his State of the Union address Wednesday, Bush said his upcoming budget "stays on track to cut the deficit in half by 2009."

European leaders have worried that the weak dollar will hurt the euro-zone's export-driven economic recovery, making European goods more expensive overseas or cutting into manufacturers' profits. It has the opposite effect on U.S. exports, however, making them less expensive, and many believe that the Bush administration has been tacitly allowing the dollar to slip despite outwardly professing a strong dollar policy.

The U.S. Federal Reserve's decision to increase short-term interest rates Wednesday failed to bolster the dollar, and traders were looking ahead to the European Central Bank's interest rate decision later Thursday.

more...

[54anickel]

43. Dollar Up After ECB Leaves Rates Steady

http://biz.yahoo.com/rb/050203/markets_forex_6.html

NEW YORK (Reuters) - The dollar rose on Thursday after the European Central Bank left its key interest rate unchanged, placing the market's focus on the trans-Atlantic interest rate differential that favors dollar-denominated over euro-denominated assets.

The dollar pared some gains after a report showed the Institute for Supply Management's non-manufacturing index slipped in January, but analysts say investors are mainly focused on U.S. jobs data for January set for release Friday and what that indicates for future U.S. interest rates.

As expected, the Federal Reserve raised its Fed funds rate by a quarter percentage point to 2.5 percent on Wednesday and its statement after the decision cemented expectations of gradual tightening in the future. In contrast to the Fed, the European Central Bank left its key interest rate steady at 2 percent, as expected.

ECB President Jean-Claude Trichet said at a press conference after the decision that a key inflation gauge, the harmonized consumer price index, was expected to fall below 2 percent in 2005 without adverse shocks, prompting investors to assume the spread between U.S. and European rates will only widen in the near term.

"The ECB is not expected to be doing anything on rates for some time to come, and Trichet is just reinforcing that," said Jeremy Fand, senior proprietary trader with WestLB in New York. "For foreign exchange traders that is just reminding them of interest rate differentials every time the Fed raises rates and the ECB does nothing and that should be dollar bullish."

more...

[TrogL]

56. Is anybody else confused?

The U.S. dollar was incrementally down Thursday

...

The dollar rose on Thursday

[54anickel]

59. It's in the timing of the article release. The 2nd article was after the

news on interest rates in the EU.

[RawMaterials]

3. Room to move Fed still has a ways to go before rates hit 'neutral' point

The Fed upped its target Wednesday for the overnight rate banks charge each other by a quarter point to 2.5 percent. That continued a well-telegraphed course of quarter-percent hikes begun in June, when the rate languished at a near half-century low of 1 percent.

Economists and bond-market strategists agree Fed Chairman Alan Greenspan still has some latitude with rate-setting, since 3.5 percent is the accepted "neutral zone" for short-term U.S. interest rates. At that point, the Fed has flexibility to cut rates if the economy slows, but wouldn't be undercutting business growth

snip...

"At 3.5 percent, it would mean the Federal Reserve is putting some teeth into the Federal funds rate," Johnson added. "It's likely to impact borrowing and spending."

"The 3.5 percent number is probably a good one; that's where the market expects the Fed to land," added Jim Peterson, a vice president at the Schwab Center for Investment Research. "That's probably where they will land as long as short-term inflation doesn't really take off."

snip..

"One thing Greenspan has done that the market really likes is signal well in advance what his intentions are," Peterson said.

"As long as he's following the status quo, I wouldn't expect markets to do anything," he said. "If and when he deviates from the plan, that's when you're going to see some volatility. Surprises move markets -- not when things happen as expected."

"The Fed says what it wants to do and does what it says," said Dan Shackelford, co-manager of the T. Rowe Price New Income fund (PRCIX: news, chart, profile) . "I don't think the Fed is at any tipping point as far as accelerating the tightening or changing their game plan. That's probably comforting to the market."

Added Shackelford: "If you were to devise a strategy where the fewest number of people get hurt, this is probably it - a gradual increase that doesn't disrupt many bond portfolios."








http://cbs.marketwatch.com/news/story.asp?guid=%7B08665457-05F1-451D-8D5D-D98A744F9CC5%7D&siteid=google&dist=google

[54anickel]

4. Are Commodity Prices Headed for Switch to Euros?

http://quote.bloomberg.com/apps/news?pid=10000039&refer=columnist_lynn&sid=amM.MX_vhlmE

As the dollar stays weak on foreign-exchange markets, with little sign of a sustained recovery, there is speculation that at some point commodity prices will drop the U.S. currency. If that happens, it would herald a wider realignment of the global financial system -- and would indicate that the dollar's reign as the world's reserve currency was coming to a close.

It is too early to conclude the dollar is finished. Yet the challenge is real and growing. The world may well be set for a period during which the dollar and the euro compete for reserve status -- hardly a promising situation for global stability.

The dollar is being shunned for obvious reasons. The trade deficit grew to a record $609 billion last year, and George W. Bush's administration expects the budget shortfall to reach a record $427 billion in the year ending in September. The New York Board of Trade's Dollar Index, which measures the dollar against a basket of six currencies, has dropped 18 percent since the end of 2001.

There are three key responses to the changing status of the dollar in the global financial system. Central banks may shift their reserves out of dollars. The Asian currencies could end their pegs to the U.S. currency. And lastly, we could witness a breakdown in the pricing of commodities in dollars.

snip>

``It is crucial to the dollar's dominant role as a reserve currency that dollar pricing of oil should continue,'' noted Stephen Lewis, economist at Monument Securities Ltd. in London, in a recent analysis of the currency.

Is there a realistic chance of oil or any other major commodity switching its pricing into euros?

more...

[Maeve]

5. Trying to get back into things a bit

Looking over the past year's markets--a lot of sound and fury, signifying....we're about where we were last year at this time. I sudiously avoided watching the BS-OTU speech last night (we'll see plenty of clips on the news, and I like to limit suffering when I can, especially my own), but I know the lies about Social Security continue.

[54anickel]

9. Maeve!!! Good to see you again. It's MAEVE DAY!

:bounce: :hug:

I couldn't watch the little SOB either. Could hear "hubby" screaming at the TV in the other room though.

[ozymandius]

23. All hail Maeve, Queen of Connacht!

It's good to see you again. How's that book of folk tales progressing? I wish to buy a copy.

[Maeve]

26. I'm sending some of the last illustrations to my editor right now

In another window, as I type this...
I hope to have it done by St Patrick's Day and ready to sell, thank you for asking. It's actually original tales based on Irish folk motifs and I'll put you on my list of folks to notify when it's ready! (Anyone else interested, PM me, please)

I've got a funeral to go to later, so I won't be around a lot, but I really do want to get back into the swing of things.

[54anickel]

29. That's great Maeve - I'll be PMin' ya to get my reserved copy. Sorry

to hear about the funeral.

Glad to hear you'll be coming back to the SMW again though. We've missed you! :grouphug:

[RawMaterials]

6. U.S. Stock-Index Futures Fall on Growth Concern; Amazon Drops

Feb. 3 (Bloomberg) -- U.S. stock-index futures fell before a government report that may show productivity increased last quarter at the slowest pace in two years. Amazon.com Inc. slid in Europe after quarterly profit rose less than analysts estimated.
snip..

Amazon.com lost $5.67 to $36.21 in Germany. The world's largest Internet retailer said fourth-quarter profit excluding some items was 35 cents a share, less than the 40-cent average estimate of 21 analysts in a Thomson Financial survey.

``Amazon is very sensitive to the economy and consumer spending,'' said Jacques Porta, a fund manager at Ofivalmo Patrimoine in Paris, which manages the equivalent of $167.5 million in stocks. He doesn't have Amazon shares.

snip..

Productivity, Jobs Growth

The Labor Department may report that productivity rose at an annual rate of 1.5 percent, based on the median estimate in a Bloomberg News survey. That would be the smallest since the last three months of 2002. It may also report that first-time claims for state unemployment benefits probably increased by 5,000 last week to 330,000, according top the median of economist forecasts. That would be a level of claims consistent with an improving labor market, economists said.

The reports on worker productivity and jobless claims are scheduled for release at 8:30 a.m. in Washington.

U.S. shares advanced for a third day yesterday after the Federal Reserve raised the benchmark U.S. interest rate a quarter- point to 2.5 percent and restated a plan to make future increases at a ``measured'' pace to keep inflation in check.






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

[54anickel]

7. U.S. Takes Over Three US Air Pension Plans (small blurb)

http://www.latimes.com/business/la-fi-rup3.9feb03,1,4632270.story?coll=la-headlines-business

The federal Pension Benefit Guaranty Corp. formally assumed responsibility for three pension plans terminated by US Airways Group Inc. that provide benefits to more than 51,000 workers and retirees.

The PBGC estimates the cost of administering the canceled plans will be $2.3 billion. That is in addition to a $726-million claim in 2003 when US Airways terminated the pension plan for its pilots

[RawMaterials]

8. Oil Falls to 3-Week Low After U.S. Gasoline Stockpiles Increase

Feb. 3 (Bloomberg) -- Crude oil futures fell to a three-week low after a report showed U.S. gasoline supplies unexpectedly jumped last week and forecasts of mild weather eased concerns that winter heating supplies would fall short of demand.

Gasoline inventories rose for the 10th week in 11, and on Jan. 28 were 5 percent higher than a year earlier, according to a U.S. Energy Department report yesterday. Temperatures in the northeast and much of the central U.S. will be above normal in the first half of February, the National Weather Service said.

snip..

Supplies

Crude-oil stockpiles fell 324,000 barrels to 295.3 million, leaving supplies 12 percent higher than a year earlier, the report showed. The U.S. added 1 million barrels of crude oil to the Strategic Petroleum Reserve. Oil in the reserve isn't included in the inventory total.

``The U.S. weekly data follows the pattern of recent weeks, with heating oil inventories continuing their descent,'' Kevin Norrish, an analyst at Barclays Capital in London, said in a report. ``The level of total U.S. oil demand is showing a robust 1.6 percent year-on-year increase in January, despite the mild weather in the first half of the month.''

snip..

OPEC Production

The Organization of Petroleum Exporting Countries, which pumps more than a third of the world's oil, scrapped its price band of $22-$28 established in 2000 at its meeting on Jan. 30 and agreed to review it at its March 16 meeting in Isfahan, Iran. It will also decide on output for the second quarter, when heating demand typically wanes in the Northern Hemisphere.

OPEC may boost output in the second quarter as prices rise and demand increases from last year, Sheikh Ahmad Fahd al-Ahmad al-Sabah, the group's president, said on Jan. 30.

Production by OPEC countries fell for a third month in January, according to a Bloomberg survey. Daily production by all 11 OPEC members fell 1.2 percent to an average of 29.44 million barrels, according to the survey of oil companies, producers and analysts.

``The fundamentals are still very, very tight,'' said Sam Dale, an analyst at Energy Intelligence Group. ``There is a concern about what OPEC is going to do. They have proved that they are going to keep the market on its toes.''





http://www.bloomberg.com/apps/news?pid=10000086&sid=akLrOAYG_c4o&refer=latin_america

[54anickel]

10. 'Zero intelligence' trading closely mimics stock market

Heh-heh :evilgrin:

http://www.newscientist.com/article.ns?id=dn6948

A model that assumes stock market traders have zero intelligence has been found to mimic the behaviour of the London Stock Exchange very closely.

However, the surprising result does not mean traders are actually just buying and selling at random, say researchers. Instead, it suggests that the movement of markets depend less on the strategic behaviour of traders and more on the structure and constraints of the trading system itself.

The research, led by J Doyne Farmer and his colleagues at the Santa Fe Institute, New Mexico, US, say the finding could be used to identify ways to lower volatility in the stock markets and reduce transaction costs, both of which would benefit small investors and perhaps bigger investors too.

A spokesperson for the London Stock Exchange says: "It's an interesting bit of work that mirrors things we're looking at ourselves."

Most models of financial markets start with the assumption that traders act rationally and have access to all the information they need. The models are then tweaked to take into account that these assumptions are not always entirely true.

more...

[RawMaterials]

11. Will Central Banks Ever Say No to America?

Americans suffering from an immediate gratification fix should really monitor their decisions when they are restless. When feeling restless, they may decide to sell their house and buy a bigger, more expensive one. Then, they could easily take some cash out – or simply a draw-down on their home equity loan - and go shopping until they drop! Foreign goods fly off the shelves at patriotic stores like Wal-Mart, sending more dollars to China for goods we have imported. These dollars get stuffed into government securities – in the United States and elsewhere – where they wait to get spent.
How much of this is actually going on?
But wait, there’s more! The United States government is running federal deficits of over $400 billion a year, and we’re not alone. As reported by the Financial Times, JP Morgan Chase estimates that global government bond supply will be $2,320 billion, up two-thirds from 2001!

Federal Reserve Holdings of Treasury and Agency Securities
($Billions)

1/9/2003 1/12/2005 Increase

For United States $693 $781 $88

Custody for foreign central banks $859 $1,351 $492

Dollars created “from thin air” $1,552 $2,132 $580



All Central Bank Holdings of Foreign Assets (all currencies)

Central Bank “thin air” money $2,400 $3,400 $1,000



It works something like this: Central banks create new money by buying something. The central banks almost always buy their own government debt, or debt of another country, theoretically printing money out of thin air (for a central bank to have a ‘reserve’ it must buy the debt of some other country). Foreign central banks own $280 billion worth of securities issued by United States’ government agencies – go Fannie Mae!

..more..

http://www.prudentbear.com/archive_comm_article.asp?category=Guest+Commentary&content_idx=40007

[54anickel]

13. Saw that one out there, was posted here last week - worth repeating

with the pressure being put on China again - though I think they are only jaw-boning...careful what you wish for.

[54anickel]

12. Things Change (another inverted yields speculator)

http://www.cwscapital.com/pubs/qupdates/050130/change.html

snip>

It is hard to make money following conventional wisdom. One year ago, the consensus was for the 10-year Treasury security to yield 5.10% by the end of 2004. So where did it end the year? 4.25%, 17% lower than anticipated. What is the forecast for next year? According to a Wall Street Journal (1/3/05) poll of 56 economists it is 5.10% again with only 4 of 56 believing it will end 2005 at 4.50% or lower. To add more fuel to the consensus fire, the Bond Market Association’s annual poll also resulted in a 5.10% prediction for the end of 2005. The participants probably socialize together in the same New York City clubs.

I have a real aversion to consensus forecasts, particularly when it comes to interest rates. Nevertheless, we all need to place our bets and this requires some view of the future. My view is somewhat shaped by what most people think will happen and betting on the opposite. The ultimate purpose of this article is to let you know our latest thinking regarding interest rates and how this will impact our properties in 2005 because an increasing percentage of our debt is variable rate. For what it’s worth, our 2004 budgets anticipated that the Federal Reserve would raise interest rates four times in 2005 for a total of a 1.00% increase by the end of the year. While we were off in that the Fed raised rates five times for a total increase of 1.25%, it started its rate increase cycle later than projected such that our debt service came in below budget. So what is ahead in 2005?

According to the Wall Street Journal poll, the consensus estimate is for the Federal Funds rate to increase from 2.25% to 3.60% by the end of 2005. So what do I think? I will start by giving you some very logical reasons for this to take place based on commercial paper rates, a good proxy for Fed-influenced, short-term interest rates. They are as follows:
* Alan Greenspan has been uncomfortable with the "emergency" rates of our post-September 11 world. In August 2001 commercial paper averaged 3.54% so I think he would feel more comfortable if they were closer to this level.
* In this cycle commercial paper rates peaked at 6.53% (June 2000) and reached a low of 0.99% (Jan.-March 2004). The average of these two is 3.76%. One occurred at the height of the internet/dot com/telecom boom and the other while the economy was quite weak. In the last three years, over $3 trillion of additional debt has been created in the U.S. economy, which I believe makes it more difficult to hit the previous mid-point.
* Median inflation as reported by the Cleveland Fed is running at a rate of approximately 2.33% over the last twelve months. For over thirty years the average premium of short-term rates over the median inflation rate has been approximately 1.33%, bringing the target to 3.66%.
* Between 2/1/62 and 8/31/01 the 10-year Treasury security has yielded on average 128% more than the 3-month Treasury bill. The 10-year Treasury as of this writing is 4.20%, which implies a more normal T-Bill yield of 3.28%, a good approximation for commercial paper rates as well.

If you were to do a simple average of these four data points, then it would come out to 3.56%, dangerously close to the consensus of 3.60%. Because the logic is so elegant and the results so in synch with the economists’ view of the world, and that it’s probably more prudent to be conservative regarding our interest rate assumptions, we are budgeting our variable rate loans based on five interest rate hikes such that the Federal Funds rate is 3.50% by the end of the year....

big snip of charts and data>

Finally, I am uncomfortable being too close to the consensus regarding my projection for short-term interest rates. Here is where I differ from the consensus by a wide margin. The most accurate predictor of a recession is an inverted yield curve in which short-term rates are higher than long-term ones. The United Kingdom is already facing this as its 3-month interest rates are 4.72% and 10-year rates are 4.55%. I foresee the United States having an inverted yield curve by the end of the year if the Fed continues down its rapid tightening path. How will this present itself ? Short-term interest rates going to 3.50% and the 10-year Treasury security’s yield dropping to less than 3.50%, far below the consensus estimate of 5.10%. So there’s my call. Then again, things change.

more...

[54anickel]

14. The Fraud of Fractional Banking (Mogambo warning)

http://www.kitco.com/ind/Daughty/feb022005.html

The heavy lifting this week was done by the banks, which soaked up $26 billion in government debt (!), and a little help from foreign central banks, which absorbed $3.8 billion of US debt themselves. The Treasury, always ready to spend us into the poorhouse, sold oodles of fresh US debt last week, bringing us up to, as of today, $7.627 trillion in debt.

Rubbing my eyes in disbelief, corporate bonds again went up in price and down in yield, to another new record! This was at the exact same time as fresh evidence of rising inflationary pressures is spooking me out, as the Gross Domestic Price Deflator bumped up to 2%, and the Employment Cost Index also went up.

Total Fed Credit, that mystical place which is the Fount From Which Magical Money Appears As If By Magic Which Is Then Compounded By The Banks Via The Fraud of Fractional Banking (FFWMMAAIBMWITCBTBVTFOFB ) is actually not expanding at it's usual, out-of-control clip. Whether or not this is the start of something big or is just a random wiggle in the chart, I don't know. But if it IS a change, then look out below! As usual, and you technically-oriented people have already noticed, it again coincides exactly with the performance of the stock market this month.

I recently read somewhere, by some moron, that the reserves at the banks still constitute about 10% of liabilities. Hahahaha! In 1997, liabilities in the banks were about $2.5 trillion, and reserves were $45 billion. Today, liabilities are $4.7 trillion, and reserves are $43 billion! Hahahaha! Liabilities almost doubled, and reserves actually went down! Hahahaha! Central banking at its finest!

more...

[54anickel]

15. Productivity Rises, Extends 3-Year Streak (However...)

http://biz.yahoo.com/ap/050203/economy_6.html

Productivity Rises 4.1 Percent in 2004, Capping Best Three-Year Period in a Half Century


WASHINGTON (AP) -- The productivity of American workers, the critical component for rising living standards, increased by 4.1 percent in 2004, capping a remarkable three-year period in which worker efficiency climbed at the fastest pace in a half century.

However, the Labor Department reported Thursday that productivity for the final three months of the year was up at an annual rate of just 0.8 percent, which was the slowest quarterly increase in almost three years.

snip>

Productivity, the amount of output produced for each hour of work, is the key factor in boosting living standards because it allows companies to pay their workers more based on their increased efficiency without having to resort to raising the price of their products, which would increase inflation.

Productivity rose by 4.4 percent in both 2003 and 2004. When combined with the 4.1 percent increase last year, the 4.3 percent average gain for those three years was the strongest burst in productivity since 1948 to 1951.

However, the downside of that increased efficiency is that companies, by getting more output from their existing work force, are able to avoid hiring new workers.

more...

[54anickel]

30. Treasuries Fall After Productivity Grew Less Than Forecast

http://www.bloomberg.com/apps/news?pid=10000103&sid=aDyRyloR2gxI&refer=us

Feb. 3 (Bloomberg) -- U.S. Treasury notes fell after government reports showed productivity grew less than forecast and labor costs increased the most since 2002.

A slowdown in productivity implies rising labor costs, raising the threat of inflation, according to the central bankers. The Federal Reserve yesterday raised its target rate for overnight loans between banks by a quarter percentage point for a sixth time since June, to 2.5 percent, and said the rate can rise at a ``measured'' pace.

Bonds are ``priced for moderation, not for a significant pick-up in unit labor costs or a more aggressive Fed,'' said Richard Gilhooly, senior bond strategist at BNP Paribas Securities Corp. in New York. ``The Fed's real concern about inflation is not oil prices or a bit of pass-through, it's unit labor costs and productivity. If that gives up they have to tighten much more.''

snip>

Ten-year yields may test the upper end of their range of around 4.35 percent in next two to three weeks, said Gilhooly. BNP is one of the 22 primary dealers of U.S. government securities that trade with the Fed's New York branch.

``Bond yields at these levels don't look like they're going to offer very attractive returns,'' said Jonathan Lee, a fixed- income analyst in London at Barclays Capital, said before the reports. Barclays is also a primary dealer.

more...

[54anickel]

16. Falling Spreads Bear Dollar Reality

http://www.forexnews.com/AI/default.asp

snip>

Confirm payroll creation above the 150-70K over a 2-3 month range and a PCE core price figure above 1.6% would raise chances of the Fed’s dropping the “measured” directive and pave the way for more aggressive tightening. Until then, the Fed has no reason hastily step up its pace of tightening, especially at a time when the record trade deficit’s drag on GDP is at its largest in 7 years.

Rate Hikes, Yield Curve and the Dollar

We have already established in previous notes that interest rate hikes could not alone be the driver of the dollar. The 300-bps tightening from February 1994 to June 1995 led to a 5.1% drop in the dollar’s trade weighted average mainly because of the Clinton’s administration quasi-trade war with Japan. The Clinton Administration espoused a policy of benign neglect similar to the current one. When then Treasury Secretary Lloyd Bentsen was asked whether he preferred a weak a dollar he replied he wanted: “a strong yen”. Times are similar today. The Fed’s is rate hikes are doing little for the dollar because the White House is sticking with is benign neglect for the dollar. Though more discreet than Sec Bentsen, Snow and company are pushing for a de-facto weakening of the dollar by urging for a revaluation of Asian currencies (which would drag the dollar against the currencies of emerging Asia).

Yield differentials between 2 and 10 year treasuries are also worthy of consideration for currency traders. The past 6 rate hikes have lifted 2-year yields to a 3-year high of 3.32%, while maintaining 10-year yields near their 2-year daily average of 4.14%. The 2-year note’s daily average over the same period stands at 2.04%, well below its current rate of 3.32%. This has resulted into an 18-month decline in the spread between the two yields (10 year – 2 year) reaching 0.8%, the lowest since May 2001. The chart below shows dollar to fall under pressure during periods of tightening spreads and generally low interest rates. Unlike a falling yield spread where both rates are rising or falling closely together, today’s falling spread between long and short term rates is caused by directionless long yields (courtesy of Asian purchases of US treasuries, benign inflation outlook and possibly benign growth outlook) and rising short yields (courtesy of the Fed’s tightening which is a normalization of monetary policy).

Indeed, the last bear market in the dollar was in 1994-1995 when falling spreads and low long-term yields prevailed. As long as long yields shun the Feds tightening, the message of the market remains the following: Fed’s current tightening aims at normalizing monetary policy instead of containing an overheating economy, in which case currency markets give no growth reward to the dollar.

more...

[54anickel]

17. Today's reports:

8:30 AM Initial Claims Actual: 316K Expected: 330K Prior 325K
8:30 AM Productivity-Prel Q4 Actual: 0.8% Expected: 1.8% Prior: 1.8%
10:00 AM Factory Orders Dec Actual: - Expected: 0.6% Prior: 1.2%
10:00 AM ISM Services Jan Actual: - Expected: 61.0 Prior: 63.9

[Maeve]

19. Okay--Initail Claims good, Productivity bad

Better than expected, worse than expected to be more accurate...that seems pretty par for this economy--everything mixed.

[54anickel]

20. Heh-heh, but ya gotta love the spin they put on those productivity

numbers!!!

[54anickel]

45. ISM services index falls to 59.2% for January

http://www.fxstreet.com/nou/noticies/afx/noticia.asp?pv_noticia=1107447452-c00e0f08-41262

WASHINGTON (AFX) -- Nonmanufacturing sectors of the U.S. economy expanded last month at the slowest pace since September, the Institute for Supply Management reported Thursday. The ISM nonmanufacturing index for January sank to a reading of 59.2 percent from 63.9 percent in December. The fall was larger than expected and put the index at its lowest reading since last September. Economists had been looking for a pullback to 61.5 percent, according to a survey conducted by MarketWatch. "Although the ISM nonmanufacturing index fell by almost five points in January, the level of the index nonetheless remains consistent with solid growth," said economists at Bear Stearns

Ralph Kauffman, head of the ISM non-manufacturing survey, said it was too early to say the decline in the ISM service sector was the start of a downward trend

Kauffman said the most troubling aspect of the January report was a sharp drop in order backlogs, which fell to 48.0 percent from 56.5 in December. This marked the first time in 21 months that backlogs had been below the 50 percent level

New orders fell to 60.5 percent in January from 61.3 percent in December. The employment index fell to 52.2 percent from 55.0 percent. This is the lowest level since July

Economists said the weakness was disturbing only one day before the January unemployment report is released, but the decline was not dramatic enough for anyone to slash their forecast for payroll growth. The consensus forecast is for nonfarm payroll to expand by 189,000 jobs in January

more...

[54anickel]

46. December factory orders disappoint (BUT)

But November's number is revised upward, and growth for the year is highest since 1992.

http://money.cnn.com/2005/02/03/news/economy/factory_orders.reut/

WASHINGTON (Reuters) - U.S. factory orders rose a smaller-than-expected 0.3 percent in December, as orders for transportation equipment reversed a hefty gain the preceding month, a government report showed Thursday.

Orders rose to a record $379.09 billion in December from $378.05 billion in November, the Commerce Department said. November's 1.4 percent rise was an upward revision from an originally reported 1.2 percent.

snip>

Transportation orders, the largest single component in factory business, fell 2.1 percent after an upwardly revised 9.4 percent surge in November.

Nondefense aircraft and parts orders plummeted 16.8 percent after an upwardly revised 64.7 percent surge the previous month. Defense aircraft and parts orders weakened 31.8 percent after a 3.7 percent drop in November.

more...

[54anickel]

18. Futures charts don't look too happy at the moment...n/t

[RawMaterials]

22. Pre Open Market Update

9:00AM: S&P futures vs fair value: -4.1. Nasdaq futures vs fair value: -9.5. Current indications still suggest the cash market is likely to start the session on a lower note as investors look to consolidate three-days of gains... Meanwhile, Wal-Mart (WMT) has reported Jan comps of 2.5%, in line with its preannouncement, and guided Feb comps up 2-4%, as the majority of retailers have so far turned in relatively solid same store sales...

Telecom stocks should remain a focal point after reports suggest that both Verizon Communications (VZ) and Qwest Communications (Q) are in talks to acquire MCI Inc. (MCIP) for roughly $6.3 bln while Boeing (BA) seeks to settle an ethics probe for as much as $700 mln

8:32AM: S&P futures vs fair value: -2.8. Nasdaq futures vs fair value: -7.5. Futures trade holds relatively steady following economic data, still indicating a slightly lower open for the indices... Initial claims fell 9K to 316K (consensus 330K) while a preliminary Q4 productivity figure came in at +0.8% (consensus 1.8%)

8:00AM: S&P futures vs fair value: -2.6. Nasdaq futures vs fair value: -5.5. Futures market suggesting a lower open for the cash market as traders await Jan comps from major retailers and economic data... A Q4 earnings miss from Amazon (AMZN) has contributed to some of the early weakness, somewhat overshadowing better than expected earnings from blue chips like PEP, RTN, CMCSA and WHR... Weekly jobless claims (consensus 330K) and a preliminary read on Q4 Productivity (consensus +1.8%) will be released at 8:30 ET

6:20AM: S&P futures vs fair value: -4.0. Nasdaq futures vs fair value: -7.5.

6:20AM: FTSE...4909.10...-7.10...-0.1%. DAX...4292.41...-3.90...-0.1%.

6:20AM: Nikkei...11389.35.

[ozymandius]

27. Today's WrapUp by Mike Hartman (Fed news)

Markets on Hold for Fed Announcement

Observing the markets today has been akin to watching water slowly come to a boil or spending the afternoon watching grass grow. Market participants are sitting on their hands as we await the interest rate decision and accompanying policy statement from the Federal Reserve, and later tonight we get the State of the Union address from President Bush. Markets are calmly expecting a 25 basis point increase from the Fed and will look to the statement for any change of rhetoric signaling the Fed’s intent for future increases. Economic and financial analysts are looking forward to the President’s speech tonight in hopes he will unveil some of the detail behind his proposal to overhaul Social Security. To date there has been a great deal of generalities with Social Security reform, but very little on the detailed implementation of the proposed changes. Analysts want to see the specifics so they can put a pencil to the financial impact throughout the economy.

Stocks, bonds and currencies are all trading with very little volatility. The Dow Industrials dipped eight points at the open, was higher by 44 points about two-and-a-half hours into the session, and has been treading water in a sideways chop since then. Five, ten and thirty-year treasury debt have been lower for most of the session, but down by only a tenth of a percentage point. The U.S. dollar traded lower at the open, but it didn’t last for very long as buying came in to push the dollar slightly into positive territory. The dollar index is just hovering one-fourth of one-percent higher, with all the major currencies lower by the same fractional amount. The age-old currencies of gold and silver have been held in check, especially since the weak GDP report on Friday. The dollar should have tanked with precious metals rising, but you won’t see much change until we get through the Fed-speak today, State of the Union address tonight, and the G-7 meeting this weekend in Switzerland.

-cut-

In the near-term, shortening the maturity of our national debt brings down our cost of interest payments, but for the long-term this is not good. It is the same as the government taking out a variable rate loan when they should be locking-in historically low rates for the longer-term. This tells me there is no real intent to pay back the previously borrowed money…just keep re-financing the debt. Based on Jim’s statement above, this should all come to a head in the next two years, but probably sooner than later as the quarterly refundings promise to grow much larger as each quarter passes. Hopefully we can get past all of the huge debt problems we have in this country. My biggest concern is simply that we will not come to a peaceful resolution with our foreign creditors. A non-peaceful resolution will start with currency wars, then trade wars, and finally to military conflict. The international conflicts we face today are not getting any easier, especially as we compete internationally for available energy reserves. At the same time, we depend on the international financial community to loan us $2 billion a day to keep things afloat.

more...

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

[54anickel]

28. GACK!

snip>

Today the Treasury said they will sell $51 billion in securities in its quarterly refunding auctions next week with $22 billion of two-year notes on Tuesday, $15 billion of five-year notes on Wednesday and $14 billion of 10-year notes on Thursday. They will use $11.44 billion to pay back maturing or called debt and the balance of nearly $40 billion is new cash for the government to spend. This is the way all of the quarterly auctions work. Each quarter we have to borrow enough money to pay back the money we previously borrowed plus finance the current deficits. I read a rather shocking statement in Jim Puplava’s WrapUp from Monday when he said, “Close to 70% of all federal debt matures by the first quarter of 2007.” WOW!!! That means we will have to borrow two-thirds of our current debt outstanding, plus the current federal deficits, plus the additional costs to finance the war in Iraq and Afghanistan…all in the next two years. We will truly need some extra help from our foreign friends in the next two years to pull this one off! It sure makes one wonder why the government stopped issuing 30-year bonds back in October 2001. We have been re-financing 30-year debt with two, five, and ten-year debt.

:wow: WOW INDEED!

Will be interesting to see how those auctions go next week....

[54anickel]

31. A Mega-Deal with Job Cuts to Match

http://www.cfo.com/article.cfm/3622960/c_3623461?f=home_todayinfinance

snip>

San Antonio-based SBC currently employs 163,000 people, according to wire services; AT&T, headquartered in Bedminster, New Jersey, employs 47,000. The newly announced cuts would eliminate about 6 percent of the 210,000 positions at the combined company.

About 5,100 job cuts will probably come from management of the long-distance and local networks, according to the Associated Press, and 5,100 positions would be pared from sales, order provisioning, billing inquiry, and other forms of customer support. Another 2,600 or so jobs would be eliminated from administrative areas such as human resources, regulatory operations, and lobbying operations.

These reductions are in addition to 12,000 positions — 7,000 at SBC and 5,000 at AT&T — that the two companies had planned to eliminate before the merger was announced.

Meanwhile, Procter & Gamble, which is buying Gillette Co. for $57 billion, expects to cut 6,000 jobs, or 4 percent of the combined workforce of about 140,000.

more...

[54anickel]

32. Fed's Increase Is Case of Perfect Transparency (interesting part on labor)

http://quote.bloomberg.com/apps/news?pid=10000039&refer=columnist_berry&sid=ayaG9AmsPiHg

snip>

The amount of slack can't be measured directly, he said, so it has to be inferred from statistics such as the unemployment rate, and even the amount of slack associated with a given rate may differ at specific times. And when the labor market ``behaves atypically, as in many respects it has behaved over the past three years,'' it's tough to interpret the data.

One anomaly has been the failure of labor force participation to rebound after its decline during and after the 2001 recession. The participation rate averaged 66 percent last year and was at that level in December. It had peaked at 67.3 percent in the first third of 2000, a drop representing nearly 2 million workers.

It's not clear, Ferguson said, whether that decline is structural or a temporary.

snip>
On Jan. 28, the Labor Department said its employment cost index, the broadest measure of changes in employers' labor costs, rose 0.7 percent in private industries in the September-December period. Except for a 0.6 percent increase in the third quarter of 2002, that was the smallest increase since early 1999. For all of last year, compensation costs in private industry rose 3.8 percent, compared with 4 percent in 2003.

snip>

``I think there is quite a bit of slack,'' Bies said. Because many companies can readily access production capacity in other countries, ``we've got an undefined capacity that we didn't have in the past,'' she said.

``If cost pressures get too extreme, the option is out there to source beyond our shores,'' Bies said.

more...

[54anickel]

33. 10:14 numbers and yada

Dow 10,569.01 -27.78 (-0.26%)
Nasdaq 2,061.71 -13.35 (-0.64%)
S&P 500 1,188.81 -4.38 (-0.37%)
10-yr Bond 4.177% +0.04
30-yr Bond 4.604% +0.02
NYSE Volume 242,887,000
Nasdaq Volume 382,556,000


10:00AM: Equities remain on the defensive as the bulk of sector leadership remains negative... Virtually every sector has succumbed to early selling pressure with losses in technology pacing the way due to weakness in semiconductor, networking and software... Materials, utility, homebuilding, financial and energy have also shown relative weakness... Telecom services, however, in the wake further industry consolidation, and retail, following a better than expected batch of January comps, have clung to modest gains...NYSE Adv/Dec 920/1642, Nasdaq Adv/Dec 934/1530

9:40AM: Stocks open lower, in line with futures indications, as buyers find few catalysts to extend three consecutive upbeat sessions... Mixed earnings reports and economic data, despite respectable Jan same store sales figures, have been enough to lure sellers from the sidelines... Amazon's (AMZN 35.26 -6.62) Q4 earnings miss, despite beating revenue forecasts and giving upbeat Q1 and FY05 revenue guidance, has had the biggest negative influence on early sentiment...

Investors are also awaiting more economic data, as Jan ISM Services (consensus 61.0) and Dec Factory Orders (consensus +0.6%) will be out at 10:00 ET...

[54anickel]

34. Participants Would Forfeit Part of Accounts' Profits

http://www.democraticunderground.com/discuss/duboard.php?az=show_topic&forum=102&topic_id=1208429#

Under the White House Social Security plan, workers who opt to divert some of their payroll taxes into individual accounts would ultimately get to keep only the investment returns that exceed the rate of return that the money would have accrued in the traditional system.

The mechanism, detailed by a senior administration official before President Bush's State of the Union address, would hold down the cost of Bush's plan to introduce personal accounts to the Social Security system. But it could come as a surprise to lawmakers and voters who have thought of these accounts as akin to an individual retirement account or a 401(k) that they could use fully upon retirement.

"You'll be able to pass along the money that accumulates in your personal account, if you wish, to your children . . . or grandchildren," Bush said last night. "And best of all, the money in the account is yours, and the government can never take it away."

snip>

If a worker sets aside $1,000 a year for 40 years, and earns 4 percent annually on investments, the account would grow to $99,800 in today's dollars, but the government would keep $78,700 -- or about 80 percent of the account. The remainder, $21,100, would be the worker's.

more...

http://www.washingtonpost.com/wp-dyn/articles/A59136-2005Feb2.html

[54anickel]

58. Goo,d lord, they've completely changed the story - nothing like making

it even more confusing. Guess the WH wasted no time getting all over the Post for this one.

http://www.democraticunderground.com/discuss/duboard.php?az=view_all&address=102x1209192



http://www.washingtonpost.com/wp-dyn/articles/A59136-2005Feb2.html

[54anickel]

35. Massachusetts Probing Gillette Payouts

http://www.cfo.com/article.cfm/3623405/c_3623461?f=home_todayinfinance

Massachusetts Probing Gillette Payouts

Chairman and CEO James Kilts will earn more than $153 million if the deal goes through; state regulators have requested all documentation ''evidencing the approval of the Gillette board of directors'' of the proposed merger agreement.

Stephen Taub, CFO.com
February 03, 2005

Two things are almost certain to follow a blockbuster merger or acquisition: Thousands of employees will lose their jobs, and top executives at the target company will receive hefty change-in-control payments.

Case in point: Proctor & Gamble Co.'s recently announced $57 billion acquisition of Gillette Co. According to The Wall Street Journal, Gillette chairman and chief executive officer James Kilts will earn more than $153 million if the deal goes through, including gains on his stock options and stock rights, an estimated $23.9 million payment from P&G, and a change-in control payment of $12.6 million.

The folks at the Massachusetts Securities Division are not amused, given that about 4,000 of the Boston-based company's 29,000 workers are employed in that state. Commonwealth Secretary William Galvin's office has fired off a letter to Gillette, asking for "copies of any records, minutes, reports or other documentation evidencing the approval of the Gillette board of directors" of the proposed merger agreement, according to MarketWatch.

snip>

The Massachusetts official is also insisting on detailed information regarding the number of jobs that could be cut when the merger is completed. According to published reports, P&G expects to cut 6,000 jobs, or 4 percent of the combined company's workforce of about 140,000.

more...

[54anickel]

36. Qwest in Talks to Buy MCI -- WSJ

http://www.reuters.com/newsArticle.jhtml?jsessionid=131MLVWYSP51MCRBAELCFEY?type=businessNews&storyID=7524202

NEW YORK (Reuters) - MCI Inc.. and Qwest Communications International Inc. are in talks that could lead to a merger, the Wall Street Journal reported on Thursday.
The newspaper said Qwest, which has been in on-and-off talks with MCI for months, is offering about $6.3 billion to acquire MCI.

The discussions have heated up in recent days, and the two companies have reached the point of discussing hard details like price and structure, the article said. Yet the talks remain highly fluid and could break down, the newspaper said, citing people close to the situation.

snip>

According to the article, what could easily derail Qwest's designs would be a bid by Verizon Communications A spokesman for Verizon said it is the company's policy not to comment on rumors or speculation regarding mergers and acquisitions.

[54anickel]

37. Shell cuts oil and gas reserves by a further 10%

http://news.ft.com/cms/s/90da7990-75bc-11d9-8833-00000e2511c8.html

snip>

The Anglo-Dutch oil group also warned that it had only replaced between 15 and 25 per cent of the oil it pulled from the ground in 2004. Rivals such as BP and ExxonMobil have reserve replacement ratios of more than 100 per cent.

The news overshadowed a record year of profits at the company because of high oil prices.

Investors were warned about further cuts to Shell's reserves in October, but the scale of the downard revision and its reserves replacement figure provide further bad news for the company as it struggles to rebuild its reputation. :eyes:

snip>

The fact that it only replaced 15-25 per cent of the oil it pulled from the ground last year in effect means the company is shrinking.

However, it did offer some relief to shareholders on Thursday when it said it would take advantage of the cash bonanza from record crude oil prices by buying back $3bn-$5bn of its shares this year. Shell generated $33bn of cash last year. It will also pay at least $10bn to shareholders from dividends in 2005, subject to exchange rates. This compares to $7.2bn in 2004.

more...

[54anickel]

38. Bond Ratings: Another M&A Casualty?

http://www.cfo.com/article.cfm/3623414/c_3623461?f=home_todayinfinance

Credit-rating agencies frequently downgrade the paper of M&A participants shortly after a mega-deal is announced, either because the buyer takes on debt or pays a hefty price that dilutes earnings and cash flow.

Stephen Taub, CFO.com
February 03, 2005

"Redundant" employees aren't the only people who dislike mega-mergers; bond investors aren't too thrilled, either.

Last year Moody's Investor Service revised ratings downward 106 times on $139 billion of investment-grade debt and preferred securities related to mergers and acquisitions, according to Dow Jones. Just 33 of those downgrades affected $76 billion of debt and securities, added the wire service, citing Moody's chief economist John Lonski. "On balance, there has been a weakening in credit worth," Lonski told Dow Jones.

"Your 'A' credit may not be an 'A' when you wake up in the morning," added Rohit Sethi, a research director at Aladdin Capital Management LLC, according to the wire service.

more...

[54anickel]

39. WorldCom's $54M settlement collapses

New York State comptroller says agreement fell apart after a judge barred a key portion of the deal.

http://money.cnn.com/2005/02/02/news/midcaps/worldcom.reut/index.htm

WASHINGTON (Reuters) - A $54 million settlement by 10 former directors of WorldCom Inc. in an investor class-action lawsuit collapsed on Wednesday after a federal judge barred a key portion of the deal.

New York State Comptroller Alan Hevesi, who acts as lead plaintiff in the case, said the ruling by U.S. District Judge Denise Cote could have reduced possible awards against other defendants, including investment banks.

In her ruling released Wednesday, the judge threw out a part of the settlement that adjusted the directors' liability based on their personal finances. The directors had been set to contribute $18 million to the settlement out of their own pockets in addition to $36 million from insurance.

more...

[54anickel]

40. Higher Interest Rates and Slower Earnings Growth

http://www.prudentbear.com/midweekanalysis.asp

The Federal Reserve increased its target rate by 25 basis points to 2.5%. This was the sixth consecutive increase. The Fed only omitted the word “earlier” in its description of rising oil prices, otherwise the language of the release was exactly the same. With the FOMC meeting being a non-event for most investors, the last week of earnings season was the focus of the week. After last week, just over half of the S&P 500 had reported fourth quarter earnings. Growth estimates for the fourth quarter jumped to 18%, from 16.5% the prior week. Unfortunately, estimates for the current quarter dropped again. Earnings growth for the first quarter of 2005 for the S&P 500 is expected to be 6.6%, down from 7.3% last week and 7.6% at the beginning of the year.

The steel companies achieved tremendous operating leverage during 2004 as the price of steel more than doubled. This continued during the fourth quarter. At US Steel, sales jumped 51% in the fourth quarter and EPS was $3.55 compared to a loss of $0.26 per share last year. AK Steel reported that revenue increased 36%. Higher prices drove most of the increases, which were up 31% compared to last year, volume increased 4%. The company expects prices to increase another 8% from the fourth quarter to the first quarter 2005. It also reversed a $0.31 per share loss last year to a $0.68 gain. Steel companies remain optimistic and expect demand and prices to remain at current levels. While it should be expected for the steel companies to be optimistic, most of their customers do not see much relief from the high prices either. Eaton said, “We don’t anticipate we’re going to see significant metals cost retrenchment during 2005. The strong production requirements in each of our end markets, the continued strong demand, are tending to put a demand floor underneath the demand for metals, and frankly, for oil as well.” Caterpillar echoed similar comments, “As we enter 2005, we are not anticipating significant steel price declines until the second half of the year at the earliest. We expect our costs for the first half of 2005 will appear substantially higher than costs in the first half of 2004 because the comparison will contain the relatively low steel cost experienced at that time.”

snip>

Along with the ISM survey that reported an improved labor market, the latest job-cut report from Challenger, Gray & Christmas said there were 92,350 announced job cuts in January. This was the lowest number of layoffs since August and the lowest number of layoffs announced in January since 2000. Additionally, there were announcements to hire almost 30,000 workers, up from 21,262 in December.

After earnings, the big focus for the week is Friday’s nonfarm payroll report. Economists currently expect nonfarm payrolls to increase by 200,000. There has been quite a bit of anecdotal evidence showing the labor market continued to improve in January and it appears that the economy is expanding and an increase in payrolls should not be a surprise. There is also evidence that the labor market is tighter than the current data reveal. This along with the pricing pressure throughout the manufacturing will either pressure margins or lead to higher inflation. It is doubtful that the economy will be able to continue to expand without inflation pressure or margin compression. This will happen at the same time as earnings growth slows and should have a negative impact on earnings multiples.

more...

SHOULD have a negative impact on earnings multiples, then again there's that tax-break luring corps to repatriate their bucks and more and more stock buy back announcements with all the excess cash floating in their coffers. Will be interesting...:shrug:

[54anickel]

41. ALL SIGNS POINT TO BUBBLE (Last article at The Daily Reckoning)

Heh, some of the stories on the way down the page are interesting - people drawing on their home equity for SuperBowl tickets? :crazy:

http://www.dailyreckoning.com/Issues/current/020205.html

Historically, consumer price inflation has, indeed, been the regular key feature of credit excess. But this pattern began to change drastically in the course of the 1980s. For the first time, protracted, exceptionally sharp increases in stock and real estate prices occurred in various countries, while price increases for goods and services remained moderate.

At first, there was little inclination to see in soaring asset prices a feature of inflation, even though all countries concerned showed a simultaneous surge in money and credit growth. It irritated many experts that this monetary explosion did not show in higher prices for goods and labor, as it had done in past booms. In the late 1980s, Japan had double-digit money, credit growth and soaring asset prices, yet virtually stable consumer and producer prices.

For years, this strange coincidence of soaring asset inflation and simultaneous moderate consumer price inflation was hailed as a sign of economic health and dynamism. It has long been one of Mr. Greenspan's favorite arguments that this unusual coincidence proved the existence of a "new paradigm" economy.

snip>

But to repeat, the pivotal hallmark of a "bubble economy" is that the ballooning asset prices are widely used as collateral for a general consumer borrowing and spending binge. In the United States, mortgage borrowing by households during the first half of the 1990s increased by an annual average of $168 billion. This accelerated in the decade's second half to $296.9 billion. But after 2000, it virtually exploded to an average annual growth rate of $615 billion.

It is undisputed that the greater part of the escalating mortgage borrowing in the United States was for purposes other than house purchases. In short, it boosted consumption as a share of GDP at the expense of business investment and the trade balance. That is, it radically changed the U.S. economy's pattern of growth - actually an unsustainable pattern of growth.

more...

[54anickel]

42. High noon numbers Single color...red

Dow 10,566.48 -30.31 (-0.29%)
Nasdaq 2,052.92 -22.14 (-1.07%)
S&P 500 1,187.56 -5.63 (-0.47%)
10-yr Bond 4.173% +0.03
30-yr Bond 4.592% +0.01
NYSE Volume 652,618,000
Nasdaq Volume 918,714,000

11:30AM : Little change since the last update as a firmly bearish bias remains intact... Decliners on both the NYSE and the Nasdaq hold a more than 2 to 1 margin over advancers while the ratio of down to up volume also reflects a similar lead at both the Big Board and the Composite, as down volumes convincingly outpace up volumes... Meanwhile, both the Dow and S&P have failed to hold support at key levels of 10575 and 1189, respectively, while the Nasdaq has recently fallen through a secondary support level (2056), as technology paces the way to the downside...NYSE Adv/Dec 1011/2010, Nasdaq Adv/Dec 887/1937

11:00AM : Indices continue to languish near their lows of the session as buying interest remains scarce across the board... Bucking the bearish trend, however, has been telecom services (+0.4%)... The sector has been in focus following a spate of M&A activity, with reports today suggesting that Qwest Communications (Q 4.26 +0.06) is in talks to acquire MCI Inc. (MCIP 20.16 +0.48) for roughly $6.3 bln, as is Verizon Communications (VZ 36.05 +0.17)... Shares of SBC Communications (SBC 24.56 +0.17), which just recently confirmed (Jan 27) talks to acquire AT&T (T 19.57 -0.03), have also climbed...

Sprint (FON 24.24 -0.24), which is merging with Nextel (NXTL 29.28 -0.20) in a $35 bln deal, has also made headlines after nearly quadrupling profits and reaffirming its FY05 outlook, but shares have fallen since Q4 results missed analysts' forecasts by a penny...NYSE Adv/Dec 1081/1858, Nasdaq Adv/Dec 925/1832

10:30AM : Market continues to head lower as investors sift through mixed economic data... The January ISM services index fell 4.7 points to a strong 59.2% (consensus 61.0) as all of the survey's components (outside inventory sentiment) showed declines but still stood at relatively strong levels... Dec factory orders rose just 0.3% (consensus +0.6%), as the revision of 1.1% to durable goods orders nearly doubled what was initially reported, but were met by a surprise 0.6% decline in nondurable goods...

Earlier, Q4 productivity rose only 0.8% (consensus +1.8%), growing at the slowest rate in nearly four years, but not necessarily suggesting a change in productivity trends while weekly jobless claims fell 9K to 316K (consensus 330K), marking the third straight week below 324K...NYSE Adv/Dec 1012/1820, Nasdaq Adv/Dec 931/1700



Advances & Declines
NYSE Nasdaq
Advances 1133 (34%) 972 (32%)
Declines 1964 (60%) 1890 (62%)
Unchanged 175 (5%) 159 (5%)

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

Up Vol* 189 (31%) 212 (24%)
Down Vol* 400 (67%) 645 (74%)
Unch. Vol* 6 (1%) 7 (0%)

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

New Hi's 141 80
New Lo's 16 30


And the buck:
Last trade 84.01 Change +0.49 (+0.59%)

Settle 83.52 Settle Time 23:37

Open 83.65 Previous Close 83.52

High 84.11 Low 83.52

[ozymandius]

47. From our good friend Atrios - on a privatized SS system

Indeed
Jesse says:

If Peter Orzag's calculations are correct in this New York Times article, in the first 20 years of privatization, it would cost $4.5 trillion dollars to shore up a system projected to run a $3.4 trillion deficit over 75 years. Bush wants to commit the government to an unnecessary extra $1.1 trillion of spending that will still result in my benefits getting cut when I retire.

That's about right. Well, not entirely -- what they want to do is put this in motion and then a few years from now scream "crisis" again and cut benefits further. But, yes, as is being proposed, Jesse is correct -- we want to borrow an extra trillion so that we can cut everyone's benefits by 40%.

-cut-

Plan 2
The benefit offset which woke our intrepid Post reporter up isn't new. It was a feature of "Plan 2," the previously floated plan which has essentially been the basis of the whispered Bush plan. It's that feature which left some of us scratching our heads awhile back, as we couldn't actually comprehend that the expected total benefits of the magical plan 2 were as bad as the study said. I was in an email exchange with a couple of people trying to figure out if they just screwed up the table. But, they didn't. As CBO described it:

CSSS Plan 2 would introduce IAs by:
Allowing workers to divert 4 percentage points of their payroll taxes, up to $1,000, to a personal account, which would belong to covered workers;

Disbursing the principal and interest in those accounts--in the form of annuities that would supplement Social Security benefits--to workers at retirement or to their heirs if they died before retirement; and

Reducing the traditional benefit by the annuitized value of a notional (or theoretical) account, equivalent to the diverted payroll taxes accrued at the Treasury interest rate minus 1 percentage point.

Participation in IAs would be voluntary, but there is an unambiguous incentive for individuals to participate. In this analysis, CBO assumes 100 percent participation.
CSSS Plan 2 would lower benefits relative to current law by changing the computation of benefits from wage indexing to price indexing starting in 2011. CSSS Plan 2 would partially offset the benefit reduction resulting from price indexing by:

The point in bold is the key point. There isn't necessarily a one for one match here. It's not clear whether the plan itself or the scoring of it reduces benefits "by the annuitized value of a notional" instead of your actual account, but much of the impact is the same.

more...

http://atrios.blogspot.com/2005_01_30_atrios_archive.html#110744426872923439

[54anickel]

48. Good grief! That table is an eye-opener. Sheesh, maybe I'll just

stick with the Ziplock bag strategy. :eyes:

Edit to add:

Ewww, I really like the link on that page to The Rude Pundit Gives Them A History Lesson

[MARALE]

44. U.S. Retailers' January Sales Rise More Than Expected

Sales at U.S. retailers rose 3.7 percent, beating analysts' estimates, led by strong results at luxury retailers including Nordstrom Inc. and specialty stores such as American Eagle Outfitters Inc.

The gain at stores open at least a year was higher than its 3 percent forecast, the New York-based International Council of Shopping Centers said today. Wal-Mart Stores Inc., the world's largest retailer, said sales at U.S. stores increased 2.5 percent from a year earlier.

Sales at Nordstrom climbed 8.8 percent and American Eagle Outfitters, which caters to teens, gained 22 percent. Blizzards in eastern and midwestern states kept shoppers home and a 6.7 percent rise in gasoline prices crimped spending.

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

[realFedUp]

49. probably from redemption of Christmas gift cards

I heard somewhere that that's when the
store actually records a sale, not when
the gift card is bought.

[54anickel]

51. Jan. Retail Sales Up on Holiday Clearance (& gift cards)

Good call!

http://biz.yahoo.com/rb/050203/retail_sales_4.html

NEW YORK (Reuters) - Clearance sales and spring merchandise helped teen and upscale U.S. retailers post better-than-expected sales in January, but harsh winter weather in the Northeast and Midwest late in the month tempered gains at companies including Wal-Mart.

snip>

"The 'sale' signs were up," said Kurt Barnard, president of Barnard's Retail Consulting Group. "January is always a clearance month, and there's no question that consumers responded."

Gift card redemptions also helped boost sales, Barnard said. Such cards have become an increasingly popular as holiday gifts, but stores record them as sales only when they are redeemed.

Overall, same-store sales rose 3.3 percent, beating average expectations for a 2.6 percent rise, according to Retail Metrics LLC.

Sales at discounters, however, were more tame. Wal-Mart Stores Inc. (NYSE:WMT - News), the world's largest retailer, reported that sales at U.S. stores open at least a year rose about 2.5 percent in January.

more...

[realFedUp]

50. dupe

[54anickel]

52. 1:25 numbers and yada

Dow 10,559.55 -37.24 (-0.35%)
Nasdaq 2,051.38 -23.68 (-1.14%)
S&P 500 1,186.65 -6.54 (-0.55%)
10-yr Bond 4.169% +0.03
30-yr Bond 4.589% +0.01
NYSE Volume 889,913,000
Nasdaq Volume 1,200,843,000

1:00PM : Sellers show some resolve as the widespread negative tone continues to weigh on equities... Retail, however, has inched back into positive territory after the International Council of Shopping Centers showed that Jan same store sales results rose 3.7% (consensus 3.0%), the best showing in three months... Retailers catering to teens (i.e. ANF, AEOS and HOTT) came in the strongest showing 13.3% year over year growth while discounters (i.e. WMT, TGT, JCP and S) grew comps an average of 3.3% over last year...
Comps from specialty retailers (i.e. DG, FDO and MIK), despite weakness from price clubs like COST and BJ, rose 1.7% while department stores (i.e. JWN and MAY) turned in a modest 0.6% increase...NYSE Adv/Dec 1198/1968, Nasdaq Adv/Dec 991/1965

12:30PM : More of the same as the indices continue to chalk up losses... One bright spot, however, has been homebuilding (+0.6%)... The sector has found modest buying interest in a down market following strong Q4 earnings from Standard Pacific (SPF 72.10 +4.70). which beat forecasts handily by $0.44 and guided Q1 EPS above consensus...

Trading higher in sympathy have been DHI (+1.6%), KBH (+1.4%), HOV (+1.3%) and MDC (+1.5%) while Pulte Homes (PHM 67.48 -0.77), despite issuing FY05 guidance above estimates and also beating forecasts, has sold off following a Market Underperform rating at Avondale citing concerns about the industry's long land positions...NYSE Adv/Dec 1160/1995, Nasdaq Adv/Dec 961/1960

12:00PM : Stocks still under pressure midday as mixed earnings, Jan retail sales comps and economic data prompt broad-based profit taking... Most influential to the downside has been Amazon (AMZN 34.80 -7.08) after it missed Q4 earnings forecasts by $0.05... Even though more than half (12) of today's 22 S&P components out with results, from the likes of PEP, CMCSA, RTN, HOT and WHR, beat forecasts, missed expectations from 7 others, such as FON, MYL and IP, have cast a shadow over almost anything positive, as a negative sentiment has remained intact and kept virtually every sector under pressure...

Technology has led the list, with losses most prevalent in semiconductor and networking, while materials, utility, financial, health care and retail, despite decent Jan same store sales figures, have also been weak... A continued slide in crude oil futures ($46.15/bbl -$0.54), which initially helped lift airlines (-1.4%) has also kept energy slightly underwater... Homebuilding (+0.5%), however, has climbed while modest buying interest in telecom services has been spurred by increasing M&A activity in the space...

In economic news, the January ISM services index fell 4.7 points to a strong 59.2 (consensus 61.0), as any reading above 50 still suggests growth, while Dec factory orders rose just 0.3% (consensus +0.6%)... Q4 productivity rose just 0.8% (consensus +1.8%), compared to a revised 1.6% rate in Q3, while initial jobless claims fell 9K to 316K (consensus 330K), marking the third straight week below 324K... Treasuries, which had fallen slightly in overnight trading, fell even further following this morning's mixed economic reports, as the 10-year note remains off 7 ticks yielding 4.16%...NYSE Adv/Dec 1133/1964, Nasdaq Adv/Dec 972/1890

Gotta run! :hi:

[MARALE]

53. Market Update 2:30

http://finance.yahoo.com/mo


2:30PM: Sector leadership remains to the downside but only a few areas have posted notable moves... Weakness in networking (-2.9%), despite consolidation by telecommunications carriers potentially spurring M&A activity within the space, has paced the list of technology laggards after Alcatel (ALA 12.39 -1.86) missed analysts' Q4 profit estimates... Financial, health care, and transportation have also been influential leaders to the downside, overshadowing relative strength in energy and retail...

A smaller group making a notable move has been health care distributors (+1.8%) after JP Morgan upgraded both McKesson Corp. (MCK 36.46 +0.54) and Cardinal Health (CAH 59.86 +1.31) to Overweight from Neutral citing potential margin expansion... MCK beat expectations last week by $0.05 while CAH is expected to report earnings of $0.77 tomorrow morning...NYSE Adv/Dec 1381/1874, Nasdaq Adv/Dec 1130/1877

2:00PM: Stocks improve somewhat but continue to trade in negative territory... Treasuries continue to recover slowly from their lows, after productivity reports disappointed and weekly jobless claims improved earlier this morning, as the 10-year note is off 5 ticks to yield 4.15%... The dollar, which had slipped ahead of the data despite the Fed's widely expected tightening and President Bush's promise to cut the budget deficit in half by 2009, has since surged against both the euro (1.2965) and yen (104.57) after the ECB left rates unchanged at a six-decade low of 2%...

The possible inflation signal generated from the fall in the non-farm productivity figure has also helped strengthen the greenback...

[RawMaterials]

54. Market Update and Blather

Dow 10,573.59 -23.20 (-0.22%)
Nasdaq 2,054.36 -20.70 (-1.00%)
S&P 500 1,187.70 -5.49 (-0.46%)
10-Yr Bond 41.63 +0.23 (+0.56%)
NYSE Volume 1,272,343,000
Nasdaq Volume 1,642,388,000




3:00PM: Major indices continue to drift sideways at depressed levels heading into the last hour of trading... One sector sure to finish lower on the day is gold, now that gold futures have closed near four-month lows, down $4.50 (-1.1%) to close at $418.50 an ounce after the dollar strengthened against major currencies... Both the PHLX Gold and Silver Index (XAU -1.6%) and CBOE Gold Index (GOX -1.9%) have been very weak all day, with notable laggards including KGC (-4.2%), BGO (-2.1%), AU (-2.0%), AAUK (-1.9%) and PDG (-1.3%)...NYSE Adv/Dec 1342/1915, Nasdaq Adv/Dec 1085/1937

2:30PM: Sector leadership remains to the downside but only a few areas have posted notable moves... Weakness in networking (-2.9%), despite consolidation by telecommunications carriers potentially spurring M&A activity within the space, has paced the list of technology laggards after Alcatel (ALA 12.39 -1.86) missed analysts' Q4 profit estimates... Financial, health care, and transportation have also been influential leaders to the downside, overshadowing relative strength in energy and retail...

A smaller group making a notable move has been health care distributors (+1.8%) after JP Morgan upgraded both McKesson Corp. (MCK 36.46 +0.54) and Cardinal Health (CAH 59.86 +1.31) to Overweight from Neutral citing potential margin expansion... MCK beat Q3 (Dec) expectations last week by $0.05 while CAH is expected to report Q2 (Dec) earnings of $0.77 tomorrow morning...NYSE Adv/Dec 1381/1874, Nasdaq Adv/Dec 1130/1877


http://finance.yahoo.com/mo

[RawMaterials]

55. Data Holds Job-Growth Hope,Inflation Fear

By Tim Ahmann

WASHINGTON (Reuters) - The pace of U.S. worker productivity growth slowed at the end of 2004 and claims for jobless aid dipped last week, according to reports raising both job-growth hopes and inflation concerns.

Separate reports on Thursday tempered the optimism as growth in the huge U.S. services sector cooled a bit last month while factory orders rose a mere 0.3 percent in December.

Financial markets will look closely at January employment data from the Labor Department on Friday for further clues on the labor market. Economists look for a healthy 190,000 gain in nonfarm jobs but Thursday's strong numbers had bond traders nervous the report could prove more robust than forecast.

Prices for U.S. government bonds slipped in the wake of the data and stock prices fell, while the dollar moved higher.

Wall Street had looked for jobless claims to rise to 330,000 and had forecast productivity growth to slow only a touch.

snip..

Economists said it was normal for productivity to slow as an economy moved away from a recovery phase, and that it was also natural for interest rates to move higher as well.

The Federal Reserve on Wednesday raised overnight lending rates by a quarter-percentage point for the sixth straight time, taking them to 2.5 percent. It said a "measured pace" of rate hikes should suffice to keep inflation at bay.

CLAIMS SHOW RECOVERY

Economists said the report on jobless claims suggested the pace of job growth could well quicken.

A four-week moving average of initial claims, which smooths weekly volatility to provide a better sense of underlying trends, fell by 10,250 to 331

http://www.reuters.com/newsArticle.jhtml;jsessionid=DBZ4Q5N2YNCLQCRBAELCFEY?type=businessNews&storyID=7530513

[RawMaterials]

57. Closing numbers and blather

Dow 10,593.10 -3.69 (-0.03%)
Nasdaq 2,057.64 -17.42 (-0.84%)
S&P 500 1,189.89 -3.30 (-0.28%)
10-Yr Bond 41.63 +0.23 (+0.56%)
NYSE Volume 1,554,246,000
Nasdaq Volume 1,948,245,000


Close: The market reversed course, failing to extend three straight days of gains, after mixed earnings reports and economic news became catalysts for widespread consolidation... Amazon (AMZN 35.59 -6.29), despite beating revenue forecasts and providing upbeat Q1 and FY05 revenue guidance, set the underlying negative tone after it missed analysts' Q4 forecasts by $0.05...

The bearish bias worsened, keeping virtually every sector in negative territory all day, after earnings misses from 7 S&P components (i.e. FON, IP and MYL) eclipsed better than expected earnings from 12 others (i.e. AN, CMCSA, HOT, PEP, RTN and WHR) in the wake of mixed economic reports... The Jan ISM services index came in worse than expected, falling 4.7 points to 59.2 (consensus 61.0), down from 63.9 in December, but still showed growth as any reading above 50 suggests expansion... Q4 productivity rose just 0.8% (consensus +1.8%), compared to a revised 1.6% rate in Q3, which caused unit labor costs (a key inflation gauge) to rise, while Dec factory orders rose just 0.3% (consensus +0.6%), but were not considered very noteworthy...

Initial jobless claims fell 9K to 316K (consensus 330K), marking the third straight week below 324K, but while the data had no implications for the Jan non-farm payroll release tomorrow, the trend in claims remained consistent with solid monthly payroll gains of 175-200K... Retail (+0.3%) was a focal point all day as the more than 50 retailers reporting January same store sales posted the best showing in three months according to the ICSC, which showed Jan comps rose 3.7% (consensus 3.0%)...