STOCK MARKET WATCH, FRIDAY OCT 31....(#1)

[ozymandius]

Friday October 31, 2003

COUNTING THE DAYS
DAYS REMAINING IN THE * REGIME 451
REICH-WING RUBBERSTAMP-Congress = DAY 347
DAYS SINCE DEMOCRACY DIED (12/12/00) 2 YEARS, 322 DAYS
WHERE'S OSAMA BIN-LADEN? 2 YEARS, 15 DAYS
WHERE'S SADDAM? WHERE ARE THE WMD'S? - DAY 222
DAYS SINCE ENRON COLLAPSE = 706
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... 9,786.61 +12.08 (+0.12%)
Nasdaq... 1,932.69 -3.87 (-0.20%)
S&P 500.... 1,046.94 -1.17 (-0.11%)
10-Yr Bond... 4.34% +0.06 (+1.50%)
Gold future... 384.40 -2.60 (-0.67%)

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

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

[Maeve]

1. Wow, I get to say hello before you go!

:hi:

Happy-talk, ho! Dubya said in Columbus yesterday that the tax cuts are working while below the fold on the paper we see that the "economic recovery hasn't hit Ohio yet" and "Iraq contracts go to political donors", but hey, if it's bad, that's just a sign that reality is getting desperate! Meanwhile, there are riots in Baghdad and California continues to burn......

I've got a party to go to today, so I'll be gone a bit.

[ozymandius]

2. WrapUp by Martin Goldberg

"Restaurant Stocks Looking Stale"

Introduction – A Difficult Business

It’s difficult to make profits in the restaurant business. But, but over the last few years this reality seems to have been forgotten by the stock market. Recall these names of failed restaurants and/or failed restaurant stocks: Magic Pan, Seafood Shanty, Steak-n-Ale, Sizzler Steak House, Howard Johnson’s Ice Cream, Horn and Hardart, Denny’s, Lintons, Po Folks, Kenny Rogers, Boston Chicken, Roy Rogers, Brugger’s Bagels, Einstein Bagels, White Tower, Charlie’s Steak House, Gino’s Hamburgers, Burger Chef, Bains Deli, Bagel Nosh, Schlotzskys Deli, Hot Shoppes, Gino’s, The Chuck Wagon, etc. You get the point – all failed restaurant chains and/or failed restaurant stocks. The landscape is littered with them.

But this reality does not appear to be reflected in restaurant stocks’ prices. Restaurants are low margin, capital-intensive, and difficult businesses. This is evidenced by the lack of dividends in an otherwise mature sector. Although the business is difficult, the stocks trade at rich valuations that are more appropriate for fundamentally better businesses. I think this is why insiders are selling. In this article I will describe why I think that the easy money in the restaurant sector has already been made. First I will look at key fundamentals of these stocks. Then I will examine a chart of one of the former sector leaders, PF Chang’s China Bistro (PFCB), and describe why I feel that would be a good short sale based on technical analysis. (Disclosure: I have puts and am short PFCB).

Today's Market

Today’s Yahoo Headline: “Economy Grows at Best Pace Since 1984.” You people must be holding out on me! I asked on several occasions to send me your anecdotes of a growing economy or signs of a growing economy. But I didn’t get any such positive anecdotes except for real estate, mortgage, and retail related stories. The responses from a few weeks ago are posted (see link). Well, may be our site draws a bearish crowd. May be that is why there have been no such “growing economy” anecdotes. So let’s try this. If you have first hand knowledge of a growing economy, please send me anecdotes. (It doesn’t have to be fancy.) If you have no first hand knowledge, ask a friend (preferably someone who is bullish on the stock market), to send me their stories. Since our economy is growing at the “best pace since 1984,” it should be simple to find these stories! Thank you in advance.

Today (Bloomberg) – “The yen had its biggest decline in a week against the dollar after U.S. Treasury Secretary John Snow refrained from criticizing Japan's policy of selling its currency to protect exports.” In addition to boosting the dollar against the Japanese yen, the stronger dollar also seemed to take gold and silver prices down at about mid-day. I’ve found that the best time to increase or enter a precious metals position is after Snow or Greenspan say something. Usually 2 to 3 days after is optimal, but I expect that this optimal entry point duration will lessen as time goes on.

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

[Flaming Meaux]

12. Growing economy? In Upstate NY?

Surely you jest.

Anyway, Paul Krugman has a more realistic analysis of the 7.2%:

he Commerce Department announces very good growth during the previous quarter. Many observers declare the economy's troubles over. And the administration's supporters claim that the economy's turnaround validates its policies.

That's what happened 18 months ago, when a preliminary estimate put first-quarter 2002 growth at 5.8 percent. That was later revised down to 5.0. More important, growth in the next quarter slumped to 1.3 percent, and we now know that the economy wasn't really on the mend: after that brief spurt, the nation proceeded to lose another 600,000 jobs.

The same story unfolded in the third quarter of 2002, when growth rose to 4 percent, and the economy actually gained 200,000 jobs. But growth slipped back down to 1.4 percent, and job losses resumed.

My purpose is not to denigrate the impressive estimated 7.2 percent growth rate for the third quarter of 2003. It is, rather, to stress the obvious: we've had our hopes dashed in the past, and it remains to be seen whether this is just another one-hit wonder.

--more--

http://www.nytimes.com/2003/10/31/opinion/31KRUG.html?th

[JNelson6563]

3. Good Friday Mornin' Maeve and Ozy!

And all you marketeers!!

So, they're discovering that the restaurant business is a tough gig, eh? No kidding. My hubby is the GM of a Chili's. Tough gig is an understatement.

So Bush is crowing about his tax cuts stimulating the economy eh? Heh heh, be sure get quotes on this because when the smoke clears (you know the "smoke" part of smoke-and-mirrors) he's gonna try to run like hell from it.

Could be an interesting day. Seems only the simplest of the simple bought that 7.2 GDP nonsense so we look back to 3Q reports etc.

Must get child #2 off for the day, will check back in a bit. I hope all have a Fabulous and Fun Halloween.

Julie

[Maeve]

4. Krugman's column today

http://www.nytimes.com/2003/10/31/opinion/31KRUG.html

I thought the Marketeers would appreciate this paragraph:

The big question, of course, is jobs. Despite all that growth in the third quarter, the number of jobs actually fell. And new claims for unemployment insurance, a leading indicator for the job market, still show no sign of a hiring boom. (By the way, for the last month there's been a peculiar pattern: each week, headlines declare that new claims fell from the previous week; a week later, the past week's number is revised upward, and the apparent decline disappears.)

Now where have we seen that before? :think:

[ozymandius]

6. Yay! You are an astute genius Maeve!

Validation in the paper of record from the economist of record is a huge feather in your cap. How many times has this accounting trick been pointed out before in the mainstream press? Never, perhaps?

[Maeve]

13. No genius needed to see a pattern

The trick is to LOOK for it...and the talking heads don't want to bother most of the time. It means doing reeeesearrrrrchhhh....wah!

For what it's worth, Dubya is making some noises warning not to expect repeats of the stellar numbers. THAT is what we'll hear next quarter "No, if you remember, I WARNED you there was still a long slog ahead..."

[JNelson6563]

7. Damn good to see Maeve

We're not just wrappin' our heads tightly in foil on this thread, it's a glaring pattern. As I said in a thread on the economy in GD, there is good reason Gore said in a recent speech on "false impressions" that he mentioned he and Clinton gave "honest numbers". ;-) I love Al.

Julie

[mrsteve]

23. Actually, someone else around here also has used a device noted by Krugman

I think it was Maeve or Julie that has used the Coyote from the WB cartoons spinning his legs in the air before he falls as an apt visual for what will happen to the economy when the props that are holding it up fall away.

It's a great image, and Krugman also used it a couple of weeks ago in his column. I put the reference in the stock market thread that day, but it may have been so late in the day that everyone missed it.

Maybe Krugman is reading DU for his research, hmmm?

[ozymandius]

5. Good morning Maeve, Julie and Marketeers all!

I caught wind of the 7% increase in GDP. Well, immediately I thought defense (or offense) spending. But then, I wondered how the markets translate this revelation.

So today, I find this at Yahoo:

Stocks End Flat After GDP Rally Fizzles

NEW YORK (Reuters) - U.S. stocks ended near the unchanged mark in heavy trading on Thursday after a rally spurred by surprisingly strong growth in the U.S. economy subsided.

The major indexes fell back through the day as investors sold stocks at recent highs.

"This is testimony to the fact that this has been a trader's market," said Philip Dow, director of equity strategy at RBC Dain Rauscher, referring to short-term investors. "Take your profits on the good news."

it feels like the buying just fizzled

So what's up with that (I ask sarcastically)? Not enough money flowing into the markets to spur a sustainable rally? Has the equity market sunk to casino status after all?

[mrsteve]

24. Some analysts say that the good news was already "baked in"

On the radio last night I heard some analysts saying that the reason that stocks didn't go far up yesterday is that the gains for the economic recovery have already been taken by the market on speculation, and that further solid growth will be required before any more significant increases in the markets can take hold.

Seemed to make sense. Will try to find a link to a transcript today.

Of course, it could also just be a simple case of the old maxim "By on rumor, sell on fact". Till now, maybe some buyers considered the recovery a rumor, but yesterday's GDP fireworks might be construed as making the recovery a fact.

[ozymandius]

8. Market Watchers Expect Subdued Opening

NEW YORK - Market watchers see a subdued opening for U.S. stocks Friday as investors digest Thursday's whopping 7.2 percent third-quarter jump in the U.S. gross domestic product and await fresh data Friday from the Michigan sentiment reading and the Chicago October manufacturing survey.

<cut>
In U.S corporate news, Microsoft, desperate to capture a slice of the popular and ad-generating Web search business, approached high-flying search company Google within the last two months to discuss options, including the possibility of a takeover, the New York Times reports. Google indicated that it preferred an initial public offering, but the news demonstrates the enormous importance that Google represents as both a competitive threat to Microsoft and as Silicon Valley's latest hope for a new financial boom.

With allegations that now reach the executive ranks of mutual-fund companies, New York Attorney General Eliot Spitzer and the Securities and Exchange Commission (news - web sites) are pushing for a major overhaul of the $7 trillion industry. The likely result will be sweeping changes in the way funds operate. Spitzer is expected to outline his investigation's findings, as well as steps to curb abuses by mutual-fund companies, at a Senate hearing on Monday.

story

[ozymandius]

14. Wall Street set for soggy open ahead of data

The strength of the recovery will once again be uppermost in investors' minds on Friday with two economic reports likely to dictate the mood in the last session of the month.

Earnings will take a back seat but oil company Chevron Texeco and newspaper publisher Washington Post both release results.

Two reports from the National Association for Puchasing Management for the Chicago area and the University of Michigan's consumer sentiment survey will be the key drivers of activity on Friday.

Personal income and spending data is due for release before the opening bell...more

[dbt]

9. Good morning, Market Mavens!

It bears (all puns fully intended) pointing out again that this is one of the Top Two Most Important Threads every day on DU. (I forget what the other one is, but I'm sure it will come to me...)

:beer: all around for everyone who does the work every day (and you KNOW who you are!)

Reckon we'll see the Dow Jones head for the stratosphere today on the heels of yesterday's GDP news, right?

:evilgrin:
dbt

PS: Why is our Domestic Product Gross?

[ozymandius]

15. Thanks dbt!

It is always a real treat to hear such kind words about this collective effort.

Regarding our domestic product - I don't know anything about the "gross" domestic product. However, right now, I am working on marketing the "grossest domestic product". Details later.

[UpInArms]

10. daily dollar watch

and the tune for the day?

"We're in the money"!

So the Snow-job merely convinced others that manipulating the value of the dollar was actually okay?

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

Last trade 92.35 Change +0.14 (+0.15%)

here's a snip from the Daily Reckoning email (if you want this go to http://www.dailyreckoning.com/home.cfm?loc=/subsvcs.cfm&qs= and subscribe for the mailing list)


*** The risk of a weak dollar policy is that the dollar
might turn out to be weaker than expected. Americans cannot
really work their way out of debt, because they have too
few products to sell. Likewise, foreigners cannot work off
their net $3 trillion in U.S. dollar assets by spending
them on U.S.-made goods; there are not enough good products
they want to buy.


There was a time, before 1971, when a foreign government
with a large surplus of dollars could go to the Treasury in
Washington and exchange his dollar bills for gold. This had
the effect of limiting central bank reserves to what could
be covered by gold. But now, what can a foreigner with
extra dollars on his hands do with them? He can only
exchange them with other foreigners for other currencies.


Of course, the same may be said of stocks. A stock buyer
can only sell his stocks to other investors. But stocks
usually have some intrinsic value that puts a cushion under
price declines. Companies have factories, land, offices,
patents, technology, customers, stores, products. And, an
investor can look to a stream of profits that encourage him
to hold the stock, even if its price is falling.


But why would anyone want to hold onto a falling currency?
The real rate of return - after inflation - from holding
short-term dollar deposits is already near zero - or below.
If the currency were to fall just 10%... what foreigner
could resist selling at least a part of his stash?


But to whom would he sell? Only to other foreigners with
exactly the same worries. Which is why the dollar may not
merely float down... but drop like a tax collector tossed
out of a 20th floor window. In the wink of an eye... it
could lose 50% of its value.

[JNelson6563]

11. Just heard on radio

while transporting man-child, cello, back-pack and a couple hundred pounds of candy that personal spending fell .3% in September. Is it me or does this not fit nicely with stellar GDP #s?

DBT, I too have wondered why our domestic product is gross. <snarf> UpinArms, very interesting dollar watch stuff, as usual.

I love DU. :loveya: Goddess Bless this forum (and do what you can with GD haha).

Julie

[Maeve]

16. 9:43 and markets are happy

Dow 9,825.18 +38.57 (+0.39%)
Nasdaq 1,940.22 +7.53 (+0.39%)
S&P 500 1,051.49 +4.54 (+0.43%)
10-Yr Bond 4.314% -0.025

[JNelson6563]

17. I'd put it no higher than "content"

Nearly unchanged by 10:01:


Dow 9,823.79 +37.18 (+0.38%)
Nasdaq 1,939.05 +6.36 (+0.33%)
S&P 500 1,051.34 +4.39 (+0.42%)
10-Yr Bond 4.326% -0.013

Even the 10yr has lost a piece from the already small slice they gained....Think it's moving to Euros? Gold? You know, something of value?? At least more certain value....

Julie

[Maeve]

18. Not even "content" right now--10:35

Dow 9,793.13 +6.52 (+0.07%)
Nasdaq 1,929.18 -3.51 (-0.18%)
S&P 500 1,048.44 +1.50 (+0.14%)
10-Yr Bond 4.302% -0.037

[JNelson6563]

19. coming along

In discussion in GD came across article and posted it with some comments re: the Big GDP.

------Consumer spending slows in Sept
By Rex Nutting, CBS.MarketWatch.com
Last Update: 10:11 AM ET Oct. 31, 2003

WASHINGTON (CBS.MW) - The U.S. consumer ended the bang-up third quarter on a down note.

Real personal consumption expenditures, adjusted for inflation, fell 0.6 percent in September after rising an upwardly revised 0.8 percent in both July and August, the Commerce Department reported Friday.

The decline in spending was the largest in a year.

On Thursday, the department reported that consumer spending for all of the three-month period rose at a 6.6 percent annual rate, the best growth in 15 years.

Meanwhile, real disposable incomes (after taxes) fell 1.2 percent, the sharpest drop in two years, as effects of the summer's tax rebate checks and tax cuts were unwound. For the entire quarter, real disposable incomes rose at an annual rate of 7.2 percent.

<snip>

"The weakness in September does not bode well for the fourth quarter," said Scott Hoyt, an economist for Economy.com. "Early indications suggest that auto sales are falling again in October and chain store sales have been weak, so spending growth will be weak this month as well, again making strong quarterly growth difficult to achieve."

"We need more job growth to get wages increasing faster so consumers don't have to depend upon refinancings and tax checks for their money," said Joel Naroff, president of Naroff Economic Advisers.

Lots more interesting info and links here:

http://cbs.marketwatch.com/news/story.asp?siteid=mktw&dist=mktwsnap&guid=%7BE55C19B2-9422-4F68-B741-8C0FCB67BB9B%7D

Not only do the indispensable consumers get their $$ from tax bribes and refinancing their homes (often to the point of owing more than the home is worth--a recent, dangerous trend) but they have been the monkey in the wheel of this economy as it were. Both are limited, non-renewable resources and when they run out...well you can probably just run with it on your own imagining the dreadful possibilites.

There is no mystery where the "good" numbers came from. Unfortunately Jr can't just send out checks every quarter or so. Just another one-trick pony led out behind the barn and shot. The one-trick-pony stable is rapidly thinning....
---------------------------------------

Things are looking a bit better...10:53....nearly put my eye out on those charts!


Dow 9,817.49 +30.88 (+0.32%)
Nasdaq 1,947.85 +15.16 (+0.78%)
S&P 500 1,050.84 +3.89 (+0.37%)
10-Yr Bond 4.307% -0.032

Julie

[Zynx]

20. Did someone notice that really wierd NASDAQ blip?

It suddenly spiked and then subsided. Can someone find any story on that?

[Maeve]

21. That was weird

One big spike just before 11, then back--not finding anything about it yet.

[JNelson6563]

22. today's word: spikey

The charts begin to resemble porcupines. I'm not seeing any conviction today....a sort of manic thing going on...

The time is 12:34 and here's what it is:


Dow 9,806.00 +19.39 (+0.20%)
Nasdaq 1,933.07 +0.38 (+0.02%)
S&P 500 1,050.35 +3.40 (+0.32%)
10-Yr Bond 4.317% -0.022

*yawn*

Julie

[mrsteve]

25. 1:07 - not much to tell

Still spiking away.

Dow 9,808.75 +22.14 (+0.23%)
Nasdaq 1,931.66 -1.03 (-0.05%)
S&P 500 1,050.54 +3.60 (+0.34%)
10-Yr Bond 4.305% -0.034

[mrsteve]

26. Yahoo Finance is pretty bored too -

Yahoo Fi Updates:
"1:00PM: Stock market slips somewhat lower as buyers remain a rather unenthusiastic group... The light earnings calendar, along with the dearth of analyst commentary on leading industry names, has only compounded the malaise of the day... Next weeh, quarterly earnings releases will drop off from this week's fast pace, with the major reports being Cisco Systems (CSCO 20.91 +0.05) and Qualcomm (QCOM 47.58 -0.44) after the close on Wednesday... The economic calendar is actually fairly heavy, with the headlining report being the October employment report on Friday...
Investors will be looking to see if nonfarm payrolls grow for a second month in a row..."

Also, Yahoo Fi's Nasdaq graph is broken. Wonder what, it anything, that portends?

[mrsteve]

27. 2:25 - sliding sideways through the afternnon

Dow 9,809.35 +22.74 (+0.23%)
Nasdaq 1,934.30 +1.61 (+0.08%)
S&P 500 1,051.25 +4.30 (+0.41%)
10-Yr Bond 4.307% -0.032

Well, at least the Nasdaq moved a little above the red. Things are still spiky on the indexes, just smaller in magnitude.

[Maeve]

28. Final figures for the day

A mised bag of treats and tricks...

Dow 9,801.12 +14.51 (+0.15%)
Nasdaq 1,932.21 -0.48 (-0.02%)
S&P 500 1,050.69 +3.74 (+0.36%)
10-Yr Bond 4.301% -0.038

I said I wouldn't give up my bearish/pessimistic point of view until we got thru October without mishap. Okay, we did that. However, I still don't trust the economy nor the markets...still too many cooks in the books for my taste...so I'll continue to take it all with a grain of salt.
To use a different metaphor, the sun is shining and it's in the mid 70's, but my calendar says it's almost November and this IS Ohio. Weather won't last and neither will the happy-talk.

Y'all have a good weekend!