STOCK MARKET WATCH, THURSDAY OCT 30....(#1)

[ozymandius]

Thursday October 30, 2003

COUNTING THE DAYS
DAYS REMAINING IN THE * REGIME 452
REICH-WING RUBBERSTAMP-Congress = DAY 346
DAYS SINCE DEMOCRACY DIED (12/12/00) 2 YEARS, 321 DAYS
WHERE'S OSAMA BIN-LADEN? 2 YEARS, 14 DAYS
WHERE'S SADDAM? WHERE ARE THE WMD'S? - DAY 221
DAYS SINCE ENRON COLLAPSE = 705
Number of Enron Execs in handcuffs = 17
ENRON EXECS CONVICTED = 1
Other Arrests of Execs = 53

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




AT THE CLOSING BELL ON October 29, 2003

Dow... 9,774.53 +26.22 (+0.27%)
Nasdaq... 1,936.56 +4.30 (+0.22%)
S&P 500.... 1,048.11 +1.32 (+0.13%)
10-Yr Bond... 4.28% +0.09 (+2.05%)
Gold future... 387.00 +3.60 (+0.94%)

DOW..........................NASDAQ.......................S&P

||


GOLD, EURO, YEN and Dollars


~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~
PIEHOLE ALERT

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

For information on protests and other actions Citizens For Legitimate Government

~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~

[ozymandius]

1. WrapUp by Jim Puplava

The Forgotten Few

At a time when the price of most stocks are soaring and valuations border on the ridiculous, very few bargains exist in the market. What drives the price of most equities these days is momentum. It has become a game of money chasing money. The Fed has done its job to keep hot air flowing into asset bubbles and keep them from deflating. If there is talk about deflation it is asset deflation they are referring to. Central bankers are most worried about the value of paper assets declining from junk bonds to small cap stocks, to stocks and bonds in general. Very little has been accomplished within the real economy.

Judging from the value of markets around the globe and especially here in the U.S., you can say that monetary policy has been effective in resurrecting old bubbles (stocks) and creating new ones to take their place (mortgages, bonds, and real estate). The NASDAQ is up nearly 45% this year and still has no earnings. The companies that are doing well this year are those companies that are either losing money, have no earnings, or are experiencing balance sheet problems. In a momentum driven market things such as real earnings, dividends, price-earnings ratios have no place. Investment decisions aren’t based on research, industry fundamentals, or sound investment principles. Instead, in a frothy speculative market such as we now have today what other investors are doing, what they are buying, and what the general mood of investors is becomes more important.

The Fundamentals

While the momentum crowd chases one sector after the next, rotating in and out of stocks like a roulette player changing from red to black, there is another story that is being ignored by investors and the market. What I’m referring to here is the fundamentals of the commodity markets and the companies that produce them. Today ConocoPhilips reported earnings of $1.3 billion this quarter. Profits were bolstered by higher energy prices. Thanks to a merger sales revenues rose from $14.7 billion to $26.5 billion this quarter. Profits from refining rose from $57 million to $485 million as refinery margins improved. Cost savings from the merger last year are now starting to pay off. Unprofitable assets have been jettisoned and debt has been paid down further increasing the profit picture going forward.

Today's Market

Back at the casino, stocks rose for the third straight day as Boeing, Northrop Grumman, ConocoPhilips, and Newmont Mining reported higher than expected profits. So far this quarter profits for 352 of the S&P 500 companies have risen 20.8 percent according to Thomson Financial. That is the fastest pace since the second quarter of 2000. Revenues have risen 7.5% this quarter. Trailing earnings for the past four quarters according to GAAP is $37.77. At today’s close of 1048.11 on the S&P 500, the Index is trading at 28 times earnings.

The U.S. may have lost its position as the world’s premier manufacturer of goods but it has gained in stature as the world’s largest producer of credit, asset bubbles and paper.

[JNelson6563]

2. Ah yes! The forgotten few.

Good morning Ozy and all marketeers!

Don't forget Palast's observation in The Best Democracy Money Can Buy, out of about $3.5 trillion in US stocks and bonds the top 1% own $2.9 trillion. Who's moving things here?

Northrop Grumman, I recall so well last earning season. CEO or some other big-wig from the company was all smiles. Talked about the mother lode of gubberment contracts comin' there way and more to come. There is one helluva safe bet at Casino Wall Street. Unfortunately I can't bring myself to invest in such stocks so I'll pass but anyone interested should have a good look. You can look for consistently good earnings there as long as the let's-kick-off-Armaggedon crowd holds the throne....

Things are looking grim for Jr though eh? LOL! That rambling incoherent "press conference" he gave helped him a lot. NOT. Idiot. Well at least he didn't crash the markets (this time).

Preliminary GDP out today! UE #s too!! They are talking 6.1 for GDP and an increase in UE by 1,000 bring things up to 386,000. But, if you figure in the revision for last week (any bets?) it's likely we can pull off another "decrease". heh heh

A wait and see till some info comes out situation. Gold's looking good BTW. I think a boat-load of 2 yr. Treasury notes hit the block today too....

Will check back in a bit-
Julie

[ozymandius]

3. Good morning Julie.

I'm running late - just heading out the door. Have a wonderful day at the casino (and I mean that for all Marketeers).

Ozymandius

[Maeve]

4. Even when you're running late, you're gone before I'm up!

Yawn....
:donut::donut::donut::donut:
Salutations, Marketeers. Glad to see Puplava is posting again, having weathered the firestorm. Hope our California DUers are likewise out of harm's way. Oddly, Wall Street seems to be quiet on the fires--an area the size of a small state has burned and it doesn't affect the economy? What's up with THAT?

Thursday is Initial Claims Revision Day. Last week's figure was 386K and predictions for today are 385K. Hmmm...tougher to predict when it's that close. I'll say the revision will be within 2K of the new figures, so it stays "level".

Gotta get things ready for the little beggars tonight, coffin to carry around front and all that! We're giving out foaming bubble gum and peanut butter eyeballs; how about you? (I'm guessing Wall Street will be giving out nice numbers in the black today!)

[UpInArms]

5. daily dollar watch

and it is going to be an interesting currency day

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

Last trade 91.47 Change -0.39 (-0.42%)]/font color=red]

and here is a very interesting article

http://news.moneycentral.msn.com/breaking/breakingnewsarticle.asp?feed=OBR&Date=20031030&ID=3015568

Dollar Lower Ahead of Snow Testimony

LONDON (Reuters) - The dollar slid back toward recent three-year lows against the yen on Thursday with markets nervous U.S. Treasury Secretary John Snow would criticize Japan in a Senate testimony for trying to curb yen strength.

Snow testifies at 1500 GMT on exchange rate policy. Any explicit mention of Japan's recent yen selling/dollar buying forays would underscore concern Washington is looking for a weaker currency.

``Snow will be under pressure to comment on Japan's currency manipulation in the question and answer session even if he doesn't in the speech itself,'' said David Mann, foreign exchange strategist at Standard Chartered.

``The risk is the dollar could weaken on any such comments.''

<snip>

Japan has thrown more than 13.5 trillion yen at the currency markets so far this year, fearing a rise in the currency would jeopardize Japan's export-led recovery.

...more...

and gold is soaring at over $390 - do the currency and metal markets suspect bad news for the dollar?

[UpInArms]

20. Snow-job's comments

can be found here:

http://news.moneycentral.msn.com/breaking/breakingnewsarticle.asp?feed=OBR&Date=20031030&ID=3017841

He said the Bush administration ``is aggressively encouraging our major trading partners to adopt policies that promote flexible market-based exchange rates'' and noted he had traveled to Beijing last month to say so directly to Chinese officials.

<snip>

He repeated that a strong U.S. dollar ``is in the U.S. national interest,'' anticipating lawmakers would press him to say whether that remained U.S. policy.

Snow also said the Treasury was ``actively engaged'' with Japan -- which again intervened in foreign exchange markets overnight by selling yen to buy dollars -- on its exchange-rate policies.

The report said the Japanese government spent $59 billion in the first half of 2003, buying dollars to prevent the yen from appreciating in value and giving Japanese products a pricing edge in foreign markets.

[jamesinca]

6. Good morning all

A little speculation here. I read some time ago that the unemployment numbers were down because the number of temp jobs created by the Natl. Guard being called off to Iraq. I was seeing just the other day that the mortgage numbers were slowing down if not decreasing because of the climbing interest rates.

Will the temp jobs, created by the Natl. Guard departure, be entitled to unemployment when the Guard returns in Feb.- March? With the slow down in the home buying will this be a double whammy for the economy come late winter early spring? How do you all think the markets will react during the early winter in anticipation of this coming?

[JNelson6563]

7. GDP 7.2%!!! UE# 386,000

UE down about 5,000 from the revised 391,000.

Incredible.

Beatcha to the Buy window!

Julie

[mth44sc]

8. Down is up again

Recall the Oct 23 report which had a revised figure of 390,000 UE claims for the prior week. This weeks report revised last week to 391,000. So last weeks claims were actually UP 1000 and not down 4000 as first reported. The same happened in the prior week - when claims actually went UP 2000 once the revised figures were released - instead of down 4000 as was reported that week as well.

See

http://www.dol.gov/opa/media/press/eta/ui/eta2003552.htm

and

http://www.dol.gov/opa/media/press/eta/ui/eta2003569.htm

[Maeve]

10. Gasp...I was wrong!

Initial Claims actually WERE stable, so they revised up for a drop!

I've said it before and I'll say it again--no matter how hard I try, I can't get too cynical for the news.

[UpInArms]

9. here's a more indepth look at that GDP number

http://cbs.marketwatch.com/news/story.asp?guid=%7BA6AD0F97%2DB7A4%2D45DF%2D9532%2D942477B58903%7D&siteid=mktw

Fiscal and monetary stimulus peaked in the quarter. Tax rebate checks and lower tax withholding increased disposable incomes, while 40-low interest rates reduced borrowing costs and fueled cash-out refinancings, healthy increases in auto sales and record home sales.

The question now is how sustainable the growth is. Will job growth resume to give consumers more income to replace the boost from tax cuts and mortgage refinancings? Will capital spending keep expanding at a rapid rate? Will higher interest rates choke off the recovery? Will the weakening dollar reduce the large current account deficit and bring more production back to the United States?

Consumer spending surged ahead 6.6 percent, the best in more than five years. Led by strong auto sales, purchases of durable goods rose 26.9 percent, the best in 15 years. Spending on non-durable goods rose 7.9 percent, the best in 27 years. Spending on services increased 2.2 percent.

Consumers also increased their investments in residences by 20.4 percent, thanks to record low mortgage rates during the summer months that boosted housing starts by more than 30 percent.

...more...

[JNelson6563]

12. key word: sustainability

I suspect this may be a word avoided by the cheerleaders today. ;-)

Will be checking in occassionally but looks like a predictable day and am taking a bit of time for more pleasant, real world stuff here in my corner of the world. Only intermittents check-ins for me today.

Julie

[Imajika]

11. That is quite a big number...

I really looks to me, no matter what some of the pessimists say, that it has become quite clear the economy is rebounding in a big way.

GDP growth of 7.2% is a huge increase. There is just no way to deny that.

Further, most other economic indicators seem to point to a strong economic recovery.

Bush won't get much credit for it though until the labor market turns around. I live in the suburbs of DC and we have in my area, I think, the lowest unemployment rate in the nation coming in at 3.5% or so - but that is almost a full point better than most anywhere else and far lower than most regions.

If the labor market does improve in most of the rest of the country, as the overall economy gains strength, it is going to make it all that much harder to knock Bush off in 04'.

See what massive defense expenditures and radical tax cuts can do. It worked for Reagan, and it wouldn't surprise me if it works for Bush too. Nevermind the fact we are spending money we don't have. Ignore that massive budget deficit, move along, nothing to see here. Why worry, you can afford a bigger SUV and a cooler game console system now!

Imajika

[JNelson6563]

15. No denying what 7.2 is, big

but I am full of disagreement as to what this really means.Consumer debt is almost at the limit. Cannot be sustained. This is a blip.

One would think such numbers would have us looking at curbs by now, but wait! 9:47 and I do not yet see irrational exuberance, guess why....

Dow 9,808.08 +33.55 (+0.34%)
Nasdaq 1,949.55 +12.99 (+0.67%)
S&P 500 1,051.13 +3.03 (+0.29%)
10-Yr Bond 4.368% +0.093


Julie--who knows why

[Imajika]

16. Yes, I have heard this for years...

"Consumer debt is almost at the limit. Cannot be sustained."

...from the late 80's all the 90's I've heard this exact same thing. I don't buy that one anymore. We really have exactly zero idea how much consumer debt is really sustainable.

"One would think such numbers would have us looking at curbs by now, but wait! 9:47 and I do not yet see irrational exuberance, guess why"

Perhaps it is because these GDP numbers were fairly well anticipated by Wall Street and are already reflected in recent gains in the market?

"but I am full of disagreement as to what this really means."

You could be right, but I have a suspicion that a lot of folks here refuse to believe that the economy is indeed improving because it would mean they would have to accept the fact that it will be much harder to beat Bush.

I don't see any point in burying our heads in the sand. The economy is improving, but the labor market is not yet doing the same. If the strengthening economy lifts the labor market (which really is a lagging indicator of economic health), it will undoubtable help the Republicans. The fact that Bush is following Reagans strategy nearly policy for policy and word for word should not be lost on anyone. It did work for Ronald Reagan, and it could well work for Bush as well.

Imajika

[Maeve]

18. and some of us just believe too many of the numbers are cooked

Jim Puplava's columns/website show how much (CRAP ve GAAP, for example) and there is also the fact that the war in Iraq was responsible for a full half of the previous quarter's 3.3% rise (we don't know yet about the full components of this latest GDP).

I'd be glad to be proven wrong in my pessimism on the real state of the economy. But it will take more than one great report before I trust it.

[shrike]

21. Sorry, but this news makes no sense to me

I agree the economy is improving somewhat. But 7.2?? Nah. Something's up.

[Maeve]

13. So how high the markets today?

Yip yip yippee on Wall Street so it's off to the races and who wants to bet there will be no "bad" news reported today?

I'm going shopping; might as well join the fun. :eyes:

[Maeve]

14. Off to the races, indeed!

9:35
Dow 9,820.68 +46.15 (+0.47%)
Nasdaq 1,954.59 +18.03 (+0.93%)
S&P 500 1,052.61 +4.50 (+0.43%)
10-Yr Bond 4.357% +0.082

[Maeve]

17. 10 o'clock slippage with blather

Dow 9,783.27 +8.74 (+0.09%)
Nasdaq 1,941.11 +4.55 (+0.23%)
S&P 500 1,047.65 -0.46 (-0.04%)
10-Yr Bond 4.355% +0.080

10:00AM: The market is off its highs, with the blue-chip averages underperforming the Nasdaq on a relative basis... The bulk of the sectors are in the green, with one of the few exceptions being the gold and oils services sectors... The latter is weak on the heels of Exxon Mobil's (XOM 37.36 -0.45) worse than expected earnings report of $0.55, $0.07 below the Reuters Research consensus... Among the leaders to the upside are biotech, airline, and technology sectors, including internet, networking, semiconductor, and software groups...
Interestingly, the banking sector, which is influential in determining market action has slipped into the red after an upbeat start... This will make it difficult for the market to maintain convincing gains...
http://finance.yahoo.com/mo

[UpInArms]

19. running out of hot air - the markets begin to sink

Dow 9,762.98 -11.55 (-0.12%)
Nasdaq 1,933.39 -3.17 (-0.16%)
S&P 500 1,044.86 -3.25 (-0.31%)
10-Yr Bond 4.352% +0.077

[Maeve]

22. Some bounce in the ball yet

Dow 9,772.38 -2.15 (-0.02%)
Nasdaq 1,937.40 +0.84 (+0.04%)
S&P 500 1,046.16 -1.95 (-0.19%)
10-Yr Bond 4.352% +0.077

[mrsteve]

23. 12:25 - positive market, but somewhat muted enthusiasm

Afternoon to all marketeers - compared to this morning's start, things have moderated severely downward.

Dow 9,797.06 +22.53 (+0.23%)
Nasdaq 1,940.32 +3.76 (+0.19%)
S&P 500 1,047.79 -0.32 (-0.03%)
10-Yr Bond 4.378% +0.103

[mrsteve]

24. Yahoo Finance does quite a bit of cheerleading here

Yahoo Finance Updates:
"12:00PM: The market got off to a strong start, supported by a batch of economic reports, telling of an accelerating economy... Specifically, the advance Q3 GDP checked in at its highest level in almost 20 years, or 7.2% (consensus 6.0%) and benefited from a 6.6% increase in personal consumption and an 11.1% increase in investment spending... The Chain Deflator (at 1.7%) was a bit higher than the consensus of 1.4%, but the rate of inflation remains low... The Employment Cost Index grew 1.0% (consensus 0.9%), largely due to an increase in the cost of benefits...
The Initial Claims report checked in at 386K, for its third consecutive reading below the 400K level, indicative of payroll declines, and brought the 4-week average down to 389K from 394K last week... The strong economic reports incited a pop at market open and have been acting as a supporting factor through the morning...

Nevertheless, the sizeable gains ranging 1.9-3.8% for the major averages over the last three sessions, as well as the major averages' failure to clear their recent October highs (aka 52-week highs) incited some technically-driven selling and forced the major averages into negative territory within the first hour of trading... Since then, the major averages have been gradually improving their standing as the dips have been used as buying opportunities... The morning decline has not altered Briefing.com's view that the underlying fundamentals for stocks remain bullish... Winners of note include the software, semiconductor, biotech, and airline groups... Among the laggards of note are the oil & gas services, insurance, apparel & accessories, healthcare, consumer finance, and homebuilding groups..."

[JNelson6563]

25. Things are looking pretty rosey

Dow 9,825.05 +50.52 (+0.52%)
Nasdaq 1,948.14 +11.58 (+0.60%)
S&P 500 1,050.84 +2.73 (+0.26%)
10-Yr Bond 4.382% +0.107

1:05

Looks like a smack-down in Treasuries.

Julie

[mrsteve]

26. 1:30 - everyone back up to near session highs

Isn't it lovely what an hour can do?

Dow 9,818.23 +43.70 (+0.45%)
Nasdaq 1,944.87 +8.31 (+0.43%)
S&P 500 1,049.63 +1.52 (+0.14%)
10-Yr Bond 4.368% +0.093

Once again, it's a bad day to be a contrarian.

[Maeve]

27. 1:36...um...where did the love go?

Dow 9,805.64 +31.11 (+0.32%)
Nasdaq 1,943.38 +6.82 (+0.35%)
S&P 500 1,048.50 +0.39 (+0.04%)
10-Yr Bond 4.366% +0.091

Do NOT miss the newest TOON collection!

[newyorican]

28. Is it me...

or is the DJI and the S&P not tracking each other all that much? That always makes me wary.

[mrsteve]

30. Actually, they are not badly out of sync today -

Although the Nasdaq gains are not as high as they were near the start of the day's trading.

You are right, though - usually they stay in step fairly well. In the last couple of weeks, that has only be disconnected by days in which some tech firms release lower than expected (or hoped) earnings, which can make the Nasdaq drop inordinately while the Dow can keep rising. Or, some tech firm (like Intel) will release really good numbers and/or projections, and the Nasdaq will jump while the Dow rises more slowly or falls.

Thus, lately the Dow has made a pretty steady march up (or down for a couple of weeks) while the progress of the Nasdaq has been more choppy. You can see this at Yahoo Finance Updates by pulling up the charts for the Dow and the Nasdaq and comparing them for the last three months.

[Maeve]

31. When the DOW and S&P get out of sync

It's usually just that one company or sector of the DOW is seeing all the action. Remember, the S&P is a broader gauge of the market(and yeah, the DOW is out-performing today, so there is an imbalance somewhere).

[mrsteve]

34. Ha! misread your post....

Here I thought "Nasdaq vs Dow" and wrote and nice long erudation on that, when you wanted "Dow vs S&P." Guess I'd better stick to my day job, and not pontificate so much on markets that I know so little about. :eyes: :silly:

But you can also look at the charts for the S&P and you'll see it's also spikier than the Dow in general. You have a good point, in other words.

Guess I'll go back to engineering where I won't endanger anyone else's ideas. :evilgrin:

[mrsteve]

29. 2:35 - back up we go

Again, session highs on the Dow, near highs on the Nasdaq.

Dow 9,821.12 +46.59 (+0.48%)
Nasdaq 1,947.32 +10.76 (+0.56%)
S&P 500 1,050.43 +2.32 (+0.22%)
10-Yr Bond 4.344% +0.069

[Maeve]

32. Going into the final hour

Looks like the top of the day's trading kicks in a bit of quick profit-taking time, judging by the spikes.

Dow 9,808.53 +34.00 (+0.35%)
Nasdaq 1,943.06 +6.50 (+0.34%)
S&P 500 1,049.09 +0.98 (+0.09%)
10-Yr Bond 4.353% +0.078

[Maeve]

33. Profits are indeed being taken

Dow 9,788.09 +13.56 (+0.14%)
Nasdaq 1,938.72 +2.16 (+0.11%)
S&P 500 1,046.82 -1.29 (-0.12%)
10-Yr Bond 4.341% +0.066

[Maeve]

35. And taken again

Dow 9,780.98 +6.45 (+0.07%)
Nasdaq 1,930.64 -5.92 (-0.31%)
S&P 500 1,045.68 -2.43 (-0.23%)
10-Yr Bond 4.339% +0.064

[mrsteve]

36. Close - little uptick on the Dow and Nasdaq at the end

But still - quite a ride today - the Dow was flirting with 9900 at the high, but closed quite a bit lower.

Dow 9,786.61 +12.08 (+0.12%)
Nasdaq 1,932.69 -3.87 (-0.20%)
S&P 500 1,046.94 -1.16 (-0.11%)
10-Yr Bond 4.339% +0.064

See everyone back at the casino tomorrow.

[JNelson6563]

37. Holy Cannolli!!!

I haven't even gotten a peek for hours and what's this??? But such incredible numbers!! Way beyond anyone's expectations!!! Things just couldn't be better!!!

<snarf>

Me thinks such things are not so easily sold as before...

Julie