STOCK MARKET WATCH, Wednesday 1 March

[ozymandius]

Wednesday March 1, 2006

COUNTING THE DAYS
DAYS REMAINING IN THE * REGIME 1055 DAYS
DAYS SINCE DEMOCRACY DIED (12/12/00) 1896 DAYS
WHERE'S OSAMA BIN-LADEN? 1596 DAYS
DAYS SINCE ENRON COLLAPSE = 1557
Number of Enron Execs in handcuffs = 19
ENRON EXECS CONVICTED = 3
Other Arrests of Execs = 54


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




AT THE CLOSING BELL WHEN BUSH TOOK OFFICE on January 22, 2001
Dow - 10,578.24
Nasdaq - 2,757.91
S&P 500 - 1,342.90
Oil - $27.69/bbl
Gold - $266.70/oz.

AT THE CLOSING BELL ON February 28, 2006

Dow... 10,993.41 -104.14 (-0.94%)
Nasdaq... 2,281.39 -25.79 (-1.12%)
S&P 500... 1,280.66 -13.46 (-1.04%)
30-Year Bond 4.50% -0.04 (-0.92%)
10-Yr Bond... 4.55% -0.04 (-0.94%)
Gold future... 563.90 +6.90 (+1.22%)






GOLD, EURO, YEN, Dollars and Loonie


PIEHOLE ALERT

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

For information on protests and other actions Citizens For Legitimate Government

[ozymandius]

1. WrapUp by Ike Iossif - WEEKLY CHARTS

-cut past charts-

For the week of 2-27-06, the major indices experienced minor pullbacks after making contact with intermediate term channel resistance, which is rather normal. All in all, nothing changed since last week. Oil and bond yields are the areas where investors need to pay attention. The major indices may be able to hang around the top of their range for another 1-3 weeks, but make no mistake, without a retreat in oil prices/bond yields, the equity indices are going nowhere fast. For the near term, a close below 1280 by the SP500, and a close below 2250 by NASDAQ, would indicate that the bears have gained the upper hand and they can push the indices down to support (see table). Conversely, a close above 1300 by the SP500, and a close above 2300 by NASDAQ would indicate that the bulls are in control and they can drive the indices to the first upside targets.

more...

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

[ozymandius]

2. Today's Reports

Mar 1 12:00 AM Auto Sales Feb
Briefing Forecast 5.5M
Market Expects 5.6M
Prior 6.5M

Mar 1 12:00 AM Truck Sales Feb
Briefing Forecast 7.8M
Market Expects 7.7M
Prior 7.7M

Mar 1 8:30 AM Personal Income Jan
Briefing Forecast 0.6%
Market Expects 0.6%
Prior 0.4%

Mar 1 8:30 AM Personal Spending Jan
Briefing Forecast 1.1%
Market Expects 1.0%
Prior 0.9%

Mar 1 10:00 AM Construction Spending Jan
Briefing Forecast 0.7%
Market Expects 1.2%
Prior 1.0%

Mar 1 10:00 AM ISM Index Feb
Briefing Forecast 56.0
Market Expects 55.5
Prior 54.8

Mar 1 10:30 AM Crude Inventories 02/24
Briefing Forecast NA
Market Expects NA
Prior NA

[UpInArms]

13. 8:30 reports in: (GACK! Check out the Negative Savings Rate!)

8:30 AM ET 3/1/06 U.S. JAN. REAL DISPOSABLE INCOMES UP 0.1%

8:30 AM ET 3/1/06 U.S. JAN. SAVINGS RATE FALLS TO NEGATIVE 0.7%

8:30 AM ET 3/1/06 U.S. JAN. REAL CONSUMER SPENDING UP 0.4%

8:30 AM ET 3/1/06 U.S. CORE INFLATION UP 1.8% IN PAST 12 MONTHS, 2-YEAR LOW

8:30 AM ET 3/1/06 U.S. JAN. CORE PCE PRICE INDEX UP 0.2% AS EXPECTED

8:30 AM ET 3/1/06 U.S. JAN. CONSUMER SPENDING UP 0.9% VS. 1.0% EXPECTED

8:30 AM ET 3/1/06 U.S. JAN. PERSONAL INCOMES UP 0.7% VS. 0.7% EXPECTED

[UpInArms]

14. Inflation eats up most Jan. income gains

http://www.marketwatch.com/News/Story/Story.aspx?guid=%7BB48C4A7B%2D5AAD%2D42A5%2DB587%2DBD9DE63D5AB7%7D&dateid=38777%2E3542763773%2D862319442&siteid=mktw&dist=newsfinder

WASHINGTON (MarketWatch) -U.S. personal incomes rose 0.7% in January, but higher inflation eroded most of the gains, the Commerce Department reported Wednesday. Consumer inflation increased 0.5% in January on higher energy costs. Core inflation, which strips out food and energy costs to give a better view of underlying inflation pressures, increased 0.2%. Core inflation has risen 1.8% in the past 12 months, down from 1.9% in December and just below the 2% lid the Federal Reserve would like to keep on inflation. It's the lowest year-over-year core inflation since March 2004. Real disposable incomes - after inflation and after taxes - increased 0.1% in January, the weakest gain since August. Real disposable incomes are up 2.2% in the past 12 months. Real consumer spending - adjusted for inflation - increased 0.4% in January, the weakest since October.

Screw them and the "core inflation"! It's killing the people that are attempting to survive and the corporations can screw themselves into oblivion when there is no one left to buy their "uninflated" crap :grr:

[54anickel]

20. There is no inflation so stop saying that! Heh, I'll bet gold has a

mightly fine day today - at the cost of the buck. B-)

[AnneD]

27. Morning Marketeers,

:donut: I am so fortunate that I can pick up extra work ($) when ever I want. Inflation is very real and raising the interest rates will not have the dampening effect they hope will happen. It might slow down the refi loans and home sales a bit, but they are down already.

Other news: Bush goes to a war zone under heavy protection, which is more than what is offered to the troops. I think he is checking in with Karzi to make sure the natural gas pipeline is ok and to score some drugs...rah rah.

Bush visits India: Boy I could right a long post on this. India really has been neglected by the US at best and cursed at the worst. They are rolling out the red carpet for him as only they can. (Remind me to tell you the story of the royal loo some time). All they really want is R-E-S-P-E-C-T (to take it from Aretha). I personally think they will be better served to hold onto their wallets. The nice thing about India is they will listen politely but in the end, do what they damn well please. I think the point of the trip is aimed at China though. Touting India's democracy etc. Freedom's on the march 'cause it's already left the US...rah rah.

Happy Hunting and watch out for the bears.

[54anickel]

38. Bwa-hahaha Ain't that the truth....

"Freedom's on the march 'cause it's already left the US"

[ozymandius]

3. Oil steady as US fuel stocks look set to ebb

SINGAPORE (Reuters) - Oil inched up on Wednesday ahead of weekly U.S. inventory data expected to show flat or falling fuel supplies as spring refinery maintenance causes swollen stocks to ebb.

Anxiety over Iran's nuclear row with the West ahead of a key U.N. report next Monday and the continued shut-in of a fifth of Nigeria's output also supported prices above $60, a level likely to keep OPEC pumping at full throttle.

-cut-

U.S. crude stocks probably rose by 1.2 million barrels in the week ended February 24, keeping a robust surplus versus a year ago, a Reuters poll of analysts showed.

But gasoline inventories were seen steady and distillate stocks falling as refiners shut down for spring maintenance, which threatens to drain stocks in coming weeks.

more...

[UpInArms]

10. Chevron says no proof militant attack caused Nigeria pipeline rupture

http://www.marketwatch.com/News/Story/Story.aspx?guid=%7B4C0C1059%2D08F8%2D4B50%2D8C4E%2D41F4AB2B08DD%7D&dist=newsfinder&symbol=&siteid=mktw

LAGOS (MarketWatch) -- Chevron Corp. (CVX) said Wednesday that it is unlikely that a rupture on one of its Nigerian crude oil pipelines that led to a shut-in of 13,000 barrels a day was caused by a militant attack.

"We're currently investigating but there is no indication to that effect (that it was an attack). This is an underground pipeline," said Chevron spokesman Michael Barrett.

The U.S. oil major shut-in the production Tuesday. Two barrels of oil were spilled, Barrett said.

Nigerian newspaper Thisday reported Wednesday that a Chevron crude oil pipeline was attacked by militants, who have launched a series of assaults on oil facilities the past three months in the country's volatile Niger Delta, where nearly all of the country's oil is produced.

Wow! Only 2 barrels of oil were "spilled"!

[EuroObserver]

32. Japan crude stocks recovering, low gasoline eyed

TOKYO, March 1 (Reuters) - Japan's commercial crude oil stocks rose for a third-straight week, extending a recovery from their lowest in more than three decades, but gasoline remained below average levels, industry data showed on Wednesday.

With hefty kerosene supplies having covered peak winter demand and second-quarter refinery maintenance likely to give refiners time to rebuild crude supplies, oil traders are shifting their focus to concerns over low motor fuel stockpiles.

Commercial crude stocks rose 4.9 percent to 15.78 million kilolitres (99.25 million barrels) in the week to Feb. 25, narrowing their deficit versus a year ago to 14 percent, Petroleum Association of Japan (PAJ) data showed. Crude stocks have been recovering from the Feb. 4 week when they dropped to 13.96 million kl, the lowest since 1972. However, they still stand about 9 percent below the five-year end-February average of 17.35 million kl.

Supplies of kerosene for home heating nudged higher during the week to stand sharply above last year's levels, but gasoline inventories were mired in lower-than-normal levels. "We ended up building kerosene stocks to much higher levels than a year ago, while sales have tumbled recently after an unexpected jump over the last few months," said an official with a Japanese refiner. "People have started looking at tight gasoline supplies now."

TIGHT GASOLINE

Thin gasoline stocks have spurred speculation that Japan, the world's third-largest oil consumer, might boost imports of the auto fuel to meet summer demand after heavier-than-usual maintenance shutdowns in the April-June quarter. Stocks of gasoline rose just 1.7 percent on the week to stand at 2.23 million kl (14.03 million barrels), a deficit of 8.6 percent compared to this time last year. Stocks are also 4 percent below the five-year end-February average.

...more...

[EuroObserver]

48. Oil gains on signs of rise in US petrol demand

(FT) Crude oil futures rose on Wednesday on signs of a pick-up in US petrol demand, although this bullish signal was countered by another increase in US petrol and crude oil inventories.

The latest weekly report from the Energy Information Administration, the statistical arm of the US Department of Energy, showed US petrol demand was up 2.5 per cent in the past four weeks, compared with the same period a year ago.

The pick-up follows a halving of wholesale petrol prices in the past six months from their record peaks after Hurricane Katrina.

IPE Brent for April delivery added 46 cents to $62.22 a barrel in late afternoon London trade. The April West Texas Intermediate crude futures contract advanced 34 cents to $61.75 a barrel in early afternoon trade on the New York Mercantile Exchange.

In spite of the pick-up in petrol demand, April Nymex gasoline futures were less than half a cent higher at $1.5970 a gallon. US petrol inventories rose for the ninth consecutive week to 225.9m, their highest level since June 1999, while crude oil stockpiles rose 1.2m barrels to 328.3m barrels, at the upper end of the average range for this time of year.

...more...

[ozymandius]

4. NYSE Set for Radical Change

NEW YORK - The New York Stock Exchange is about to undergo a radical transformation — after 213 years as an independent, not-for-profit business, the NYSE will become a publicly traded company that must answer to a new set of owners: its shareholders.

The Securities and Exchange Commission's approval Monday of the Big Board's acquisition of electronic exchange Archipelago Holdings Inc., was one of the last requirements the NYSE had to meet before becoming a for-profit company. The deal, expected to close March 7, will mean a massive shift in the way business is done at the exchange, which has always had an air of exclusivity and collegiality — much like a country club where the sport is making money, not golf.

The NYSE's attitudes toward its former owners — the seat holders, or members of the exchange — must necessarily change from pleasing them to appeasing its shareholders, who will demand more profits from the Big Board.

-cut-

"So many things change for the NYSE when it goes public, and certainly one of those things is the relationship with the floor," said Richard Herr, an analyst with Keefe, Bruyette & Woods. "And they're going to look at the floor as a profit center."

more...

[ozymandius]

5. Costs Hang Over Construction Industry

NEW YORK - Jonathan Drill is paying more for steel and concrete for the offices and warehouses he builds, and his clients — and their tenants and customers — are facing higher bills as well.

Prices for construction materials, which also include lumber and plastics, have been climbing because of demand from overseas and higher energy prices. And construction companies that might have absorbed price increases in the past are now passing those costs along to their commercial and residential customers.

"This year our clients foot the bill, but last year when they (steel prices) skyrocketed we footed the major portion of the bill because we were under contract," said Drill, whose business is based in West Orange, N.J.

more...

[UpInArms]

6. daily dollar watch

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

Last trade 90.08 Change +0.07 (+0.08%)

Dollar Sells Off as Traders Fear Weak Data Means More to Come

http://www.dailyfx.com/story/dailyfx_reports/daily_fundamentals/7027_dollar_sells_off_as_traders_fear_weak_data.html

Broad dollar weakness was the overwhelming theme in the markets today as traders continue to come to the realization that the Federal Reserve is nearing the end of its tightening cycle. GDP was revised higher to 1.6 percent for the fourth quarter, which was right in line with expectations. Personal consumption growth was slightly weaker, but that was offset by higher inflation as suggested by the 3.3 percent rise in the GDP price deflator. The market barely budged on the higher number, since deep down, they were expecting a much more explosive upward revision. What traders did not expect however, were the dismal reports that followed at 10am EST. The Chicago purchasing managers index slipped down to 54.9 from 58.5, consumer confidence fell from 106.8 to 101.7 while existing home sales slowed from 6.75 million to 6.56 million. With such strong jobless claims figures over the past few weeks, the market was really positioned for good data this week. Now the fear is that the poor Chicago PMI number may be foreshadowing an equally dismal ISM number due for release tomorrow. Also, with confidence falling hard this month, it remains questionable as to whether tomorrow’s personal spending release can actually show improvements. Having started a busy week on a weaker footing, the market has been caught by surprise causing much of last week’s dollar bullishness to be erased. If the anti-dollar rally manages to continue for one more day, we could have the makings of a reversal in the EUR/USD and GBP/USD.

...more...

Tomorrow's Economic Releases: Dollar Data On Center Stage

http://www.dailyfx.com/story/calendar/key_events/7026_tomorrows_economic_releases_dollar_data_on_center.html

US ISM Manufacturing (FEB) (15:00 GMT; 10:00 EST)
Consensus: 55.5
Previous: 54.8

Outlook: US manufacturing is expected to assist higher employment and incomes in February to help facilitate the rebound in growth expected in the first quarter of the year. The Institute of Supply Manager’s index of manufacturing is expected to show the industry snapped its four months of consecutive declines with a rise in the measure to 55.5. Regional indicators have already cast their support for the national measure. Philadelphia-area manufacturing jumped to 15.4, the highest level since August, in February according to the Federal Reserve Bank of Philadelphia. New York’s Empire index provided a more reserved increase to 20.31 from 20.12 in December. It is also looking up for some of the component gauges, especially employment, prices paid and new orders. New order’s contraction in January will likely not be repeated in February as domestic consumers were relieved of higher energy costs for the period. For the same reason, prices paid should throttle back to conserve manufacturers’ profits. A turn for the better in employment is also expected given recent data. First-time claims for unemployment benefits held below 300,000 for the seventh consecutive week in the week ending February 25th, the longest such string since the middle June/July of 2000.

Previous: There was somewhat of a mixed feeling for the ISM manufacturing indicator in January. While the 54.8, less-than-expected read marked the fourth consecutive monthly decline; the manufacturing sector has posted growth (a read above 50) for 32 consecutive months. Over the previous month, contractions in new orders, hiring plans and a jump in the prices paid component narrowed the overall read lower. The hiring gauge fell to 51.3 in January from 53.6 the month before despite the biggest rise in employment for the period since November and the jobless rate falling to a four and a half year low 4.7 percent. Prices paid on the other hand received a sturdy boost to 65.0 as crude prices at near September highs heaped an expensive burden on profit margins. A drop in new orders however was tempered by a large increase in export orders as global consumers splurged on American produced goods on higher confidence. The exports gauge jumped from 54.3 in December to 58.5. The other highlight for the release was the decline in customers’ inventories. As clients run through their stores, the need for new orders in the coming months grows.


US Personal Income (JAN) (13:30 GMT; 08:30 EST)
Consensus: 0.6%
Previous: 0.4%

US Personal Spending (JAN) (13:30 GMT; 08:30 EST)
Consensus: 1.0%
Previous: 0.9%


Outlook: US shoppers are expected to have continued to relax their purse strings over the opening month of they year being well supported by higher income and roaring confidence. While average hourly earnings rose 0.4 percent for a second consecutive month in a row, total disposable income actually rose 0.6 percent. Incomes have been buttressed by demand. The available labor pool dwindled to 4.7 percent in January, the lowest it has been since July of 2001, as businesses boost their staff as well as other resources in a bid to increase capacity and meet burgeoning demand at home and abroad. This, taken along with continually falling gasoline prices, led American consumers’ level of confidence to hit a three and a half year high. A readiness to spend has already shown through in some data sets. Auto sales accelerated to a 17.6 million unit clip and retail sales surged 2.3 percent in January. If spending numbers post in line with expectations, it is likely to pique the interest of monetary policy officials. Inflation accelerated to a 4.0 percent annual pace in January. This is well beyond the Federal Reserve’s tolerance bank and is already likely to require action. However, if spending remains strong, expectations of waning domestic spending to be replaced by business investment could be premature and the hawkish regime may need to be held that much longer.

Previous: Consumers spending held stable through the end of the year according to a report revealing personal consumption rose 0.9 percent in the final month of the year, the largest monthly increase in five. Americans willingness to spend in December was encouraged by a rise in incomes that has already shown its colors in retail sales as well as those for autos. Auto sales slowed to a recent historical low 14.7 million unit annual pace in October, yet they have made some positive progress from then. Total vehicles sales posted a strong recovery by setting a 17.2 million pace in December. Similarly sales at retailers have kept to their increasing track with a 0.4 bump following November’s 0.9 percent rise. Continued redemption of gift cards from the holiday season is partially responsible for the rise. This increase in spending habits was made possible by a 0.4 percent rise in personal income. Disposable income was actually 5.4 percent higher from the same month a year before. Despite the strength in spending and income, a caution flag was thrown to the savings level. Americans spend nearly $42 billion beyond their means last year leading the rate of personal savings to drop to a 1933 low -0.5 percent. With the savings rate so low, there is potential for consumers to be hit particularly hard if a unforeseen economic slowdown were to take the market in the near future.

...more...

[UpInArms]

9. Opposition to BOJ policy move wanes, focus on JGBs

http://today.reuters.com/misc/PrinterFriendlyPopup.aspx?type=bondsNews&storyID=uri:2006-03-01T114147Z_01_T208668_RTRIDST_0_ECONOMY-JAPAN-BOJ-UPDATE-2.XML

TOKYO, March 1 (Reuters) - Opposition to a widely expected end to the Bank of Japan's ultra-easy monetary policy subsided on Wednesday as markets, media and even longtime BOJ critics focused on what the central bank should do when it makes a move.

One of the most vocal BOJ critics in the ruling Liberal Democratic Party (LDP), in an apparent softening of his stance, said a decision on when to change policy was up to the central bank as long as measures to ensure low government bond yields were in place.

"So long as there is a solid framework in place, it's up to the BOJ," Kozo Yamamoto, who heads an LDP committee on monetary policy and has in the past threatened to strip the BOJ of its independence, told Reuters.

The remarks follow a slew of comments by government officials that suggested they would tolerate a monetary policy change.

Growing expectation of an imminent end to the five-year-old "quantitative easing" policy has driven up Japanese government bond (JGB) yields over the past week, with two- and five-year yields back at levels before the BOJ introduced the policy of flooding the money market with excess funds in 2001.

...more...

[EuroObserver]

22. Tokyo stocks tumble on falls on Wall St., yen's rise

(Kyodo) Tokyo stocks tumbled across the board Wednesday, with sharp overnight falls in U.S. shares and the yen's rise against the U.S. dollar undermining sentiment.

The 225-issue Nikkei Stock Average lost 240.97 points, or 1.49 percent, to 15,964.46. The Tokyo Stock Price Index of all First Section issues on the Tokyo Stock Exchange fell 24.82 points, or 1.49 percent, to 1,635.60.

Investors sold shares after recent rises that have sent both the Nikkei and the TOPIX higher for the fourth straight trading day through Tuesday.

Export-oriented high-tech and automaker issues, including Sony and Toyota Motor, were heavily sold after the dollar briefly hit a one-month low in the mid-115 yen level Wednesday in Tokyo.

Foreign brokerages turned net sellers Wednesday for the first time in four trading days in pre-opening order placements, also pressuring the Tokyo market, brokers said.

"The market saw a series of negative factors," said Yumi Nishimura, manager of the equity planning and administration department at Daiwa Securities SMBC Co. She was referring to overnight falls on Wall Street, the yen's rise and foreign brokerages' net selling. But solid buying linked to a string of newly established domestic investment trusts helped limit some of the market's fall, she said.

Trading was light, with investors awaiting the release of Japan's consumer price index for January, due out Friday, for hints as to a potential shift in the Bank of Japan's monetary policy. Trading volume on the TSE's main section fell to 2,104.14 million shares from Tuesday's 2,269.78 million.

"With the CPI scheduled to come out the day after tomorrow, Japan's monetary policy is facing a major turning point," said Masayoshi Okamoto, equity strategist at Jujiya Securities Co.

...more...

(ed. to add red)

[EuroObserver]

25. Key 10-year Japanese gov't bond yield ends at 4-month high

(Kyodo) _ The yield on the benchmark 10-year Japanese government bond ended Wednesday at its highest level since early November on speculation over an imminent end to the Bank of Japan's ultra-loose monetary policy and caution ahead of Thursday's 10-year bond auction.

In interdealer trading, the yield on the No. 276 1.6 percent issue gained 0.020 percentage point from Tuesday's close to end the day at 1.600 percent.

The price of the key March futures contract for 10-year bonds fell 0.13 point to 135.86 on the Tokyo Stock Exchange, with the yield up 0.011 percentage point to 1.776 percent.

...source...

[UpInArms]

7. China to make gold trading easier

http://www.marketwatch.com/News/Story/Story.aspx?guid=%7BFA880441%2DBE40%2D4557%2DAC57%2D0960E9956BD5%7D&dist=newsfinder&symbol=&siteid=mktw

HONG KONG (MarketWatch) -- The Bank of China will slash the trading spread on gold trading by up to 20% for 13 weeks beginning next Monday and running until May 27, according to reports carried in the Shanghai Daily Wednesday.

The move is part of two reforms designed to make the buying and selling of gold easier and less expensive, the paper said, citing unnamed officials at the bank.

Starting later this year, the Bank of China will run a trial program allowing holders of U.S. dollar accounts to trade gold. China already allows investors to buy and sell gold through Chinese currency accounts, denominated in yuan,, though the sales are based on the dollar value of the metal on international markets.

Expanding trades to U.S. dollar accounts will help ward off foreign exchange risk, authorities were reported as saying by the paper.

The development comes as China faces growing pressure to allow the yuan to appreciate against the U.S. dollar.

U.S. Treasury Undersecretary Timothy Adams, who visited Beijing recently, repeated calls on Wednesday for China to let the yuan fluctuate more, however he stopped short of saying he would lobby others to label China a currency manipulator in a report due in April.

...more...

[UpInArms]

8. US home loan applications fall despite rate drop

http://today.reuters.com/investing/financeArticle.aspx?type=bondsNews&storyID=2006-03-01T120113Z_01_N01230362_RTRIDST_0_ECONOMY-MORTGAGES-UPDATE-1.XML

NEW YORK, March 1 (Reuters) - U.S. mortgage applications fell last week as lower interest rates failed to spur demand for loans to purchase homes, an industry trade group said on Wednesday.

The Mortgage Bankers Association said its seasonally adjusted index of mortgage application activity for the week ended Feb. 24 fell 1.2 percent to 571.5 from the previous week's 578.5.

The MBA's seasonally adjusted purchase mortgage index decreased 1.9 percent to 400.8 from the previous week's 408.7. The index, considered to be a timely gauge of U.S. home sales, was also below its year-ago level of 440.0.

Borrowing costs on 30-year fixed-rate mortgages, excluding fees, averaged 6.18 percent, down 0.04 percentage point from the previous week.

The 30-year fixed-rate mortgage, the industry benchmark, is substantially above its 2005 low of 5.47 percent in late June, but below its 2005 high of 6.33 percent reached in the week of Nov. 11.

...more...

[54anickel]

16. Forty years in the wilderness

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



Especially in the past decade, technological advances have resulted in increased efficiency and scale within the financial services industry. Innovation has brought about a multitude of new products, such as subprime loans and niche credit programs for immigrants. Such developments are representative of the market responses that have driven the financial services industry throughout the history of our country.

- Alan Greenspan, Community Affairs Research Conference, April 8, 2005


Maybe it's because they got more than their share of liberal arts majors – maybe even more than the restaurant business. Whatever the reason, you have to hand it to the mortgage industry for being so innovative. In fact, the mortgage industry is so clever that if the whole industry could be condensed down to one person, that individual would be so freakishly smart that he could travel from State Fair to State Fair, attracting thousands of onlookers and astounding them all with answers to the world’s most difficult questions.

The performance might go something like this:

snip>

Carnival Barker: But what if home prices continue to rise and even short term interest rates move higher? What if they move so high that new borrowers have a hard time making even an ARM payment? What do you do?

Mortgage Industry: (yawning) You let the borrower choose how much principal to pay each month. He can catch up on the payments later.

Carnival Barker: Brilliant again! You let the borrower assume that “things will get better eventually.” Just like Congressional budget writers and slot machine players!
Now ladies and gentlemen, I have one more question for the Mortgage Industry. One more question that’s tougher than all of the others combined. And that question is – what if regulators don’t let lenders make so many of those fancy ARM loans. Or worse, what if borrowers decide that they are too risky?

Mortgage Industry: My, that is a long question.

Carnival Barker: So, you have no answer?

Mortgage Industry: I just said it was a long question. But it’s also an easy one. You simply offer forty and fifty-year mortgages.

snip>

While 40 and 50-year mortgages have been getting a lot of attention since the Treasury resumed issuing 30-year bonds in early February, Fannie Mae has had a 40-year program since the middle of last year. That’s a big deal because, according to the American Banker, 40-year loans have been around since the ‘80s, but banks have had no place to sell them. With Fannie committed to the product, particularly after losing market share by avoiding the exotic ARM market, 40-year mortgages could become a lot more common.

more...

[UpInArms]

11. UK's FSA to fine hedge fund GLG, trader -source

http://today.reuters.com/misc/PrinterFriendlyPopup.aspx?type=bondsNews&storyID=uri:2006-03-01T130446Z_01_L01611128_RTRIDST_0_FINANCIAL-GLG-UPDATE-2.XML

LONDON, March 1 (Reuters) - Europe's largest hedge fund, GLG, and one of its former senior traders are set to be fined for charges related to market abuse and violating market conduct in their roles in a February 2003 convertible bond issue, a source familiar with the matter said on Wednesday.

The fines come as Britain's market watchdog, the Financial Services Authority, is more agressively going after market abuse by hedge funds, such as market distortion and inappropriate use of insider information.

The FSA's regulatory Decisions Committee is set to find Philippe Jabre guilty of market abuse and violating market conduct, according to the source.

GLG will be found responsible in its role as Jabre's employer for not properly monitoring him.

<snip>

Hedge fund managers said the FSA fine could damage the reputation of GLG, which was once in talks, according to sources familiar with the matter, on selling an equity stake to U.S. investment bank Lehman Brothers <LEH.N>.

...more...

[54anickel]

12. Time to Separate the Economy from Corporate Profits

http://www.prudentbear.com/archive_comm_article.asp?category=Guest+Commentary&content_idx=51913

For the better part of the last half decade economists and policy makers have struggled to understand the trajectories of US Dollars, GDP growth and corporate profits. For most, the struggle centers on how to paint a picture of health, rebound and strength all the time. These efforts have strained under huge and growing budget deficits, current account shortfall and consumer debt statistics. Skeptics focus on how to reconcile robust consumer spending, stellar corporate profits and decent GDP growth with a sense of foreboding from debt, trade imbalance and successive asset bubbles. Perhaps the US Macro economy, our currency and corporate profits do not affect each other as is traditionally believed.

Critique requires a brief sketch of recent developments. Real wages have gone nowhere in the last 5 years. Spending has surged. BLS data show that real average hourly earnings of production workers increased from $16.10 to $16.35 in the last 5 years. The most recent word form the Federal Reserve Survey of Consumer Finances shows declines in median family income 2001-2004. BEA personal consumption expenditure 2000-2005 reveals an increase of just over $2 trillion in the same period. With wages increasing at or below the rate of inflation, American consumers found the ability to increase consumption by a sum greater than China’s 2005 purchasing power parity GDP at official exchange rates.

Growth in corporate profits and GDP growth are similarly out of alignment. BEA data on corporate profits with inventory valuation and capital consumption between Q12000 and Q32005 shows an increase of $514 billion, or 66%. Unadjusted GDP increased by $3 trillion dollars over the same interval, or 32%. Profits are growing twice as fast as nominal GDP, which has profit growth averaged into its percentage change. Across the same interval the Federal Government racked up official budgets deficits of $903 billion.

Our 2000-2005 trade imbalance on goods and services sums to $2.99 trillion. Across 2004, the US Net International Investment Position went from -$1.5 Trillion to greater than -$2.5 trillion. The trade weighted value of the US Dollar has, across the entire 5 year period been volatile, but little changed in net terms. US real interest rates are and have been historically low. Personal debt has exploded from under 97% of disposable income to more than 115% in 2005. The official US savings rate remains negative for the better part of the last 8 months, having been near zero for years.

What does all the above tell us? US corporate profits have faired far better than the balance sheets of the Federal Government, international trade, consumers and overall economic growth. This is fueled by debt spending, asset bubbles, wealth redistribution, foreign earnings and borrowing galore. This is clearly unsustainable and will end badly. But if rising GDP, consumer spending and corporate profits are no longer reliable reflections of economic health, what has changed?

more...

[UpInArms]

15. Bush approval rating nearing Nixon's levels

http://www.chron.com/disp/story.mpl/nation/3692292.html

WASHINGTON - President Bush's job-approval rating fell to an all-time low — 34 percent — in a poll published Tuesday. That puts him not far above Richard Nixon's Watergate-era nadir and raises questions about how effectively he can govern in his remaining years in office.

The poll, conducted by CBS News between last Wednesday and Saturday, found that 59 percent of U.S. adults disapproved of Bush's job performance. His 34 percent approval rating was the lowest since he took office in 2001, eight points lower than in January.

The poll's margin of error was plus or minus 3 percentage points.

A toxic mix of messes has dragged Bush down, including his handling of Hurricane Katrina, the Harriet Miers Supreme Court nomination, violence in Iraq, and the port deal with a state-owned Arab company.

Bush's approval rating is far below those of three of the last four two-term presidents in February of their sixth year:

...more...

The good people of this country know that this sack of shit has destroyed everything for them. :grr:

[54anickel]

19. "A toxic mix of messes" Oh please!!! He's been an incompetent boob

from day one! Nothing but an empty shell of a tool used by Cheney and the PNAC gang, foisted upon us. First by the SC, then by Diebold. The 9-11 fear lenses are beginning to clear up and it's becoming obvious the emperor has no clothes or brains. As one DUer points out, it's time to give him 2 choices. Resignation or impeachment.

We can't let him reach for his ultimate power lever, Iran and WWIII.

[AnneD]

28. My fav approval stat..

is the African-American. At 3% approval with a +/- of 5%, well let's just say he better pray Condi, Blackwell, and Alan what's his name remain healthy.

[ozymandius]

33. Funny thing about these numbers Anne...

they are statistical "background noise" - like the audible hiss from a casette tape when there's nothing meaningful to be heard.

[AnneD]

36. Ohh

that explains the noise I was hearing when I listened to Bush speak at Coretta Scott Kings funeral. Thanks for the explaination Ozy. :evilgrin:

[Roland99]

42. I've seen a spate of B/C and W bumper sticks of late, though.

It's like the last gasp of a dying animal.

Although, on two of the vehicles, there were signs of attempts to remove the stickers.

[UpInArms]

17. NWA (Northwest Airlines) annual loss now biggest in its history - $2.6 B

http://www.freep.com/apps/pbcs.dll/article?AID=/20060301/BUSINESS05/603010374/1018

Northwest Airlines Inc., Detroit Metro Airport's largest carrier, lost a staggering $2.6 billion, or $29.36 a share, last year, the largest annual loss in the company's history, setting the stage for what could be another historic event today.

If Northwest can't reach deals with its pilot and flight attendant unions, a U.S. Bankruptcy Court judge in New York could decide today whether Northwest may trump the terms of its contracts for 14,000 pilots and flight attendants with lower wages, higher benefit costs and new work rules.

Both unions say such an action would send the airline's pilots and flight attendants on strike, which Northwest has said could force the nation's fourth-largest airline out of business.

Northwest's results "simply puts more weight on the importance of the judge's decision. It would be hard for any judge to sort of overlook a really bad financial performance when all the parties are looking to that judge to turn the course of the airline around," said Dan Petree, dean of the College of Business at Embry-Riddle Aeronautical University In Daytona Beach, Fla.

(check out that chart at the link!)

...more...

[UpInArms]

18. William Lyon Homes - markets slowing - orders and prices down 7%

8:33am 03/01/06 William Lyon Homes saw slowing in many markets - MarketWatch.com

8:32am 03/01/06 William Lyon Homes Q4 net new home orders down 7% - MarketWatch.com

8:33am 03/01/06 William Lyon Homes Q4 ave. home sales price down 7% - MarketWatch.com

8:31am 03/01/06 William Lyon Homes Q4 earns $10.11 vs. $8.58 - MarketWatch.com

8:32am 03/01/06 William Lyon Homes Q4 rev. $825.9M vs. $707.9M - MarketWatch.com

[UpInArms]

21. I hope everyone has a great day

as I am called by work and duties in the real world and must leave the comfort and confines of my chair :D

See you all tomorrow!

:hi:

[EuroObserver]

29. Have a nice day, UpInArms.

I'm also away from my desk most of today.

[AnneD]

30. AHHHHH

the siren's call $$$$$$$$$$$$. Rake it in.

[ozymandius]

31. Bye UIA!

Have a wonderful day with the mortals.

Ozy :hi:

[EuroObserver]

23. Europe regaining some ground

Swiss SMI up 0.89% at 7962.76 in Zurich 14:41:42 CET
Xetra Dax 30 up 0.4% at 5,820.87 in Frankfurt 13:47 CET
CAC 40 up 0.5% at 5,026.67 in Paris 13:38 CET
FTSE 100 up 0.5% at 5,819.8 in mid-session trade in London 12:00 GMT



Xetra Dax 30 opens up 0.4% at 5,818.38 in Frankfurt
CAC 40 opens up 0.2% at 5,012.06 in Paris
FTSE 100 opens flat at 5,789.2 in London


European shares steady after sharp fall, oils help
LONDON, March 1 (Reuters) - European stocks edged up on Wednesday, paring the previous session's sharp losses, as BP (BP.L: Quote, Profile, Research) and Royal Dutch Shell (RDSa.L: Quote, Profile, Research) tracked a rise in crude oil prices, but HBOS (HBOS.L: Quote, Profile, Research) dragged banks lower.
...

By 0825 GMT, the pan-European FTSEurofirst index <.FTEU3> of 300 leading shares was up 0.1 percent at 1,345.7 points, paring Tuesday's 1.4 percent slide which took the index to its lowest close in more than a week. "Most of the damage was done yesterday but there is no panic in the market. A lot of people are still playing the M&A story," said one trader. The index is off a 4-1/2-year high of 1,363.8 points struck on Monday, but still up about 6 percent so far this year.

Markets shrugged off a warning of slow growth from Google (GOOG.O: Quote, Profile, Research), which triggered a sell-off in U.S. and Asian shares. Shares in the Internet company fell as much as 13 percent before recovering to end down 7 percent.
...

Europe has economic data to monitor with the consumer in focus as UK January consumer credit data comes out at 0930 GMT and Eurozone January unemployment data are released at 1000 GMT. Eurozone February manufacturing PMI data is due at 0900 GMT. Investors are also looking out for data on U.S. manufacturing, construction spending, personal income and core inflation, with focus on core personal consumption expenditure data. ...more...

[EuroObserver]

26. European stocks fight back, dollar languishes

LONDON, March 1 (Reuters) - European stocks struggled back to their feet on Wednesday, halving hefty losses from the previous session, but worries over the health of the world's biggest economy kept the dollar under pressure.

The pan-European FTSEurofirst index <.FTEU3> was up 0.5 percent in mid-morning trade, with oil companies leading gainers as crude prices extended Tuesday's rally.

Euro zone manufacturing activity grew at its fastest pace in 19 months in February, providing some cheer and contrasting with data on Tuesday showing U.S. consumer confidence fell and manufacturing growth in the U.S. Midwest slowed in February.

But the dollar continued to drift lower against the euro and was mired near a one-month low against the yen. "There is a big hangover from soft U.S. data we had yesterday which worked in the direction of dollar weakness," said Daragh Maher, currency strategist at Calyon. The dollar was down 0.2 percent against the euro at $1.1940 <EUR=>. Against the yen, the dollar stood at 116.10 yen <JPY=>, having hit a one-month low below 115.45 yen <JPY=> in Asia.

...more...

[EuroObserver]

47. Lost ground largely reclaimed: better than 1% gains

Swiss SMI up 1.11% 7980.36 in Zurich
CAC 40 up 1.1% at 5,057.6 in closing Paris exchanges
Xetra Dax 30 up 1.2% at 5,866.6 in closing exchanges in Frankfurt
FTSE 100 closes up 0.9% at 5,844.1 in London

Bourses make strong gains as oils and pharmas shine
Europe’s bourses closed with firm gains on Tuesday, recovering from recent losses as strength returned to the oil and pharmaceutical sectors. The FTSE Eurofirst 300 closed 0.9 per cent higher at 1,355.9 having fallen 1.4 per cent on Tuesday, its biggest one day fall since October. The Xetra Dax in Frankfurt added 1.2 per cent to 5,866.6 and the CAC-40 in Paris gained 1.1 per cent to 5,057.6. London’s FTSE 100 rose 0.9 per cent to 5,844.1. Crude prices rose 42 cents to $61.83 a barrel, helping the oil sector to climb with Austria’s OMV up 3.1 per cent to €53.68. ENI, the Italian oil and gas producer, rose 0.6 per cent to €23.48 after beating expectations with €2.4bn adjusted fourth quarter net income, up from €2.2bn a year earlier. ...more...

Bid talk, oils and Vodafone inspire FTSE bounce
LONDON, March 1 (Reuters) - UK stocks surged above 5,800 points on Wednesday, repairing some of Tuesday's slide, as bid talk boosted industrial gases group BOC (BOC.L: Quote, Profile, Research) and mobile phone operator Vodafone (VOD.L: Quote, Profile, Research) rebounded from three-year lows. Big-hitting Vodafone and heavyweight oil stocks contributed much to the FTSE's gains, with the mobile phone giant recovering from weakness that followed its forecast on Monday of slowing revenue growth.

The FTSE 100 index closed 52.6 points, or 0.9 percent, higher at 5,844.1 points -- taking back some of the previous session's 84-point drop. That fall was the index's biggest one-day points loss since Oct. 19.

"Yesterday was a bit of a wobbly day and today's bounce is the right reaction to it," said Jim Wood-Smith, head of research at Christows Stockbrokers. "I have not seen anything in the corporate or economic numbers which signals the market is about to stop rising." Broadly well-received company results, share buybacks, rising dividends and sustained mergers and acquisitions activity have led many analysts to predict further gains for UK equities but Wood-Smith advised caution if the market were to rise too fast. "If we are over 6,000 at the end of the month that is probably most of the year's gains done. Our next move is deciding at what level we want to start taking some of the equity bet off and over 6,000 is a level at which we would want to be trimming." ...more...

[Tace]

24. MOGAMBO GURU: "We Are Getting To The Tyranny Part Right About Now"

Richard Daughty, the angriest guy in economics -- World News Trust

snip

-- In the "Up Close and Personal With The Mogambo" segment of today's show, I see that I got a lot of mail from people who think I was too insulting about Democrats and their idiotic "All you need is love and government funding" legal and fiscal philosophies. Most of them think that the Republicans are worse. I agree. And it pains me greatly to say that I think George W. Bush is the worst President that America has ever seen, and the whole Republican-majority Congress is about as bad, with the exception of Rep. Ron Paul of Texas, of course.

And, since I am ragging on my own Republican party because of the satanic horror that they have turned into, I am not a fan of Reagan's crackpot economics either, as he, too, merely went on a long spending spree, and financed it by replacing the necessary taxes with debt, which is such a lame-brain shallow trick that I am aghast and ashamed of him for doing it and the Republican party for aiding and abetting it, and for letting it be part of the permanent government fiscal landscape ever since.

In weak, partial defense of the Republicans (if that is even remotely possible), we are merely the ones currently holding the bag as the whole bloated, cancerous, mal-invested economy starts the inevitable decline that comes after a period of excess creation of money and credit by the banks. So they are merely doing what all governments have always done at the end of the long boom when the economy is on the verge of collapsing after such misshapen, inflationary growth; they borrow and they spend more than ever!

But we don't want to learn, and never will, apparently. It's like my wife bringing me a cup of coffee in the morning. She doesn't just call out sweetly to me, "Wake up darling!" and hand it to me. Oh, nooOOOOoo! Instead, she throws it in my face, and the scalding hot coffee wakes me up screaming, "Oww! You're supposed to hand it to me! HAND it to me, dammit!" and she goes, real innocent like, "Oh? I guess I forgot!"

http://worldnewstrust.org/modules/AMS/article.php?storyid=2482

[54anickel]

39. Speaking of Ron Paul -

The Port Security Controversy

http://www.house.gov/paul/tst/tst2006/tst022706.htm

snip>

But this is not a matter of one foreign company buying another and taking over existing operations in the United States. The Dubai company, DP World, is owned by the government of the United Arab Emirates. It is in essence an agent of a foreign government, which raises questions: Does DP World truly operate like any corporation, answering to a board of directors, serving shareholders, and working to boost profitability? Or does it serve the foreign policy and economic goals of the United Arab Emirates?

This is not a true free market transaction, but rather a marriage of multinational corporate and state interests. And surely the American people should have a say over foreign governments doing business here, especially when that business affects port security.

It's important to note the administration did not bother to consult with Congress or the state governors involved. The Treasury department approved the purchase with no congressional oversight whatsoever. While many applaud unchecked presidential authority when it comes to war in Iraq, wiretapping, and other national security matters, they now demand that Congress overturn a unilateral administration decision. The lesson learned is that everybody likes presidential power when they agree with how it’s used. When they don’t, they rediscover that the Constitution authorizes Congress to make policy after all.

There also is an important states’ rights issue involved in this controversy. Why are Treasury department bureaucrats in Washington making decisions about port security? Most American ports are owned by U.S. states, cities, or local port authorities, not the federal government. Do Treasury department personnel 1500 miles away really know what’s best for the ports of Galveston or Freeport?

more...

[Roland99]

43. Oh, he's just a Democrat trying to make political hay........oh wait!

;)

[ozymandius]

34. Markets open up as bargain hunters kick some tires.

9:51
Dow 11,026.79 +33.38 (+0.30%)
Nasdaq 2,289.85 +8.46 (+0.37%)
S&P 500 1,284.30 +3.64 (+0.28%)
10-Yr Bond 45.65 +0.18 (+0.40%)
NYSE Volume 209,613,000
Nasdaq Volume 242,592,000

09:40 am : As futures trade had foreshadowed, the stock market opened in positive territory. There is little market-moving news to account for the early bias, and it appears that investors are expecting some type of bargain hunting bounce. Reaffirmed full-year guidance from United Technologies (UTX) and several reassuring earnings reports have helped the market rebound after yesterday's Google-driven decline. The economic front will remain in focus, and today's features a relatively heavy dose of data. Personal income and spending data checked in close to expectations, and support the forecasts of a 4% or more Q1 GDP growth rate. The core PCE deflator, and inflation gauge watched by the Fed, was up 0.2%; the year-over-year gain was 1.8%, which is slightly below the upper end of the Fed's forecast range. That data is not likely to change rate hike expectations. The market awaits construction spending and manufacturing activity data, due out at 10:00 ET, and the Energy Department's inventory report, slated for 10:30 ET. DJ30 +37.70 NASDAQ +8.88 SP500 +3.84

9:12 am : S&P futures vs fair value: +2.0. Nasdaq futures vs fair value: +3.5.

[ret5hd]

35. U.S. dollar index back below 90

[ozymandius]

37. 10:49

Dow 11,035.36 +41.95 (+0.38%)
Nasdaq 2,297.11 +15.72 (+0.69%)
S&P 500 1,285.57 +4.91 (+0.38%)
10-Yr Bond 45.61 +0.14 (+0.31%)
NYSE Volume 577,806,000
Nasdaq Volume 614,929,000

10:00 am : Garnering support from eight of ten economic sectors, the indices hold their places above the unchanged mark. The Technology and Energy sectors, each up 0.8%, are the early leaders. Strength in application software, a result of Autodesk's (ADSK 40.69 +3.04) upside earnings results and guidance, and in semiconductors is driving the former sector. Cisco Systems (CSCO 20.67 +0.43), one of our suggested holdings for active investors, is also lending considerable support. With respect to Energy, crude's extended rebound is helping to spark some buying action. The rise is relatively modest, though, and oil is holding steady at about $61.70 (+0.5%) per barrel. The upcoming crude inventory report may help set more of a definitive tone within the energy market. Analysts anticipate a build in crude, unchanged gasoline, and a drawdown in distillate supplies. Separately, the February ISM Index checked in at a better than expected 56.7 (consensus 55.5). Construction spending rose a less than expected 0.2% (consensus +1.2%).DJ30 +37.62 NASDAQ +10.21 SP500 +4.10 NASDAQ Dec/Adv/Vol 922/1495/287.7 mln NYSE Dec/Adv/Vol 871/1747/177.9 mln

[ozymandius]

40. Silly me - and I thought economic sentiment was in the toilet.

12:41
Dow 11,056.17 +62.76 (+0.57%)
Nasdaq 2,306.47 +25.08 (+1.10%)
S&P 500 1,288.19 +7.53 (+0.59%)
10-Yr Bond 45.81 +0.34 (+0.75%)
NYSE Volume 1,152,122,000
Nasdaq Volume 1,134,502,000

12:30 pm : The market remains well above the flat line. The Treasury market, meanwhile, remains submerged. Despite its decline, and in spite of the yield curve's continued inversion, the Financial sector continues to attract buyers. The sector's recent performance, in light of interest rate uncertainty and the yield cure, is peculiar to say the least. Today, there are various pockets of strength within Financials. Goldman Sachs (GS 143.62 +2.33) is leading the outperforming brokerage group - which has gained more than 12% during the first two months of the year - and J.P. Morgan (JPM 41.80 +0.66) is leading banks. The thrifts and mortgage industry is also demonstrating relative strength. DJ30 +60.84 NASDAQ +24.50 SP500 +7.40 NASDAQ Dec/Adv/Vol 1033/1866/1.09 mln NYSE Dec/Adv/Vol 1017/2117/779.3 mln

12:00 pm : Going into the second half of the session, the equity market continues to rebound from yesterday's Google-induced drop. The economic front remains in focus, and investors today received a thick dose of data with which to contend.

The economic docket included personal income and spending data that rose relatively close to expectations, a better than expected read on the ISM Index, and lower than expected construction spending growth. The core PCE deflator, which was arguably the most important piece of data released today, was up an ambiguous 0.2%. The year-over-year gain was 1.8%, which is slightly below the upper end of the Fed's forecast range. In aggregate, the reports brought little surprise and do not affect our neutral market view and interest rate expectations. Responses to the data appear to have been muted within the stock and bond markets alike.

Bargain hunters have focused much of their attention on the Technology sector today (+1.6%). Semiconductors are a particular source of strength. Application software, following a better than expected profit report and upside guidance from Autodesk (ADSK 41.79 +4.14), is also strong. Buying across the tech board is broad-based, and gains in a number of bellwethers are supportive for the broader market. One of the brightest of them is Cisco Systems (CSCO 20.82 +0.58), one of our recommended holdings for active investors.

Energy (+1.2%) also contributes some spirited leadership. After announcing record fourth quarter revenues and upside earnings, driller Rowan Companies (RDC 41.66 +1.41) is a bright spot. The Energy Department released its latest inventory stats this morning. Crude and gasoline supplies rose slightly more than had been expected, and the drawdown in distillates matched analysts' forecast. Like the rest of today's data, the report brought no real surprise. Crude has held near the $61.50 per barrel mark - reflecting a rise that has sparked buying in energy stocks, while not intimidating the broader market.

Metals stocks are also attracting bargain hunters, and the Materials sector has advanced 1.1%. Telecom (+1.0%) extends its outperformance, and Industrials (+0.5%), Consumer Discretionary (+0.3%), Consumer Staples (+0.4%), and Financials (+0.3%) are also gaining. Healthcare (-0.2%) is on the other side of the column, but earnings-related strength in supplier Medco Health Solutions (MHS 58.85 +3.13) helps limit its decline. Utilities (0.6%) issues are also facing some selling pressure. At this point, those two sectors' losses are fully offset by the rest of the market's gains.
DJ30 +75.32 NASDAQ +26.57 SP500 +8.63 NASDAQ Dec/Adv/Vol 1036/1834/1.00 bln NYSE Dec/Adv/Vol 1006/2085/702.8 mln

[Roland99]

41. "in spite of the yield curve's continued inversion"

:crazy:

[Zynx]

45. Usually the yield curve stays inverted while the stock market takes

a while to realize what is about to happen. The yield curve inversion, assuming it lasts more than a few months, tends to lead other economic indicators by anywhere between 5 and 10 months. In 2000, for example, it took a while at around nine months.

[Roland99]

46. Thanks. I guess history is turning into a poor teacher.

Pity.

[Zynx]

50. Markets for some reason always blow off history.

Guess what, usually it isn't different. That goes both ways. Some people thought it was the end of the world in 2002, but history told us that such large declines in periods of relative, and I will emphasize relative, economic stability are unfounded and it was a great time to buy.

[Zynx]

44. My best stocks today come from a strange smattering of groups.

My weakest are my economic non-cyclicals(AMGN, PG, MDT) and my strongest are Staples, Texas Instruments, and Petrobras(Brazilian oil).

[EuroObserver]

49. Latin America to drive emerging markets growth

(FT) Leading analysts and investors speaking at the Emerging Markets Traders Association’s winter forum this week delivered an upbeat assessment of prospects for emerging markets this year.

Part of the enthusiasm stems from Latin America, where four governments announced buy-back deals in recent days that may result in more than $30bn of global sovereign bonds being removed from the market this year.

The risk spread of emerging market bonds, as measured by JPMorgan’s EMBI+ index, touched a new record low of 186 basis points over US Treasuries this week. “Demand is hugely outweighing supply when supply is shrinking,” said Kasper Bartholdy, head of fixed income research for emerging markets at Credit Suisse.

Several analysts argued that the wave of money flowing into emerging market investments was far from exhausted, despite the modest tightening of global liquidity. Tim Ash, a senior sovereign credit analyst at Bear Stearns, said: “Emerging markets seem to have become much more resilient to changes in US rates.”

There are also new sources of money from a wider pool of investors, heading into external debt, local currency and corporate bonds and equities. Joyce Chang, global head of currency, emerging markets and commodities research groups at JPMorgan, said: “We have never seen the inflows as diversified and as international as they are now.”

Among the driving factors are underfunded pension funds that are beginning to turn to the emerging markets for extra yield. Central banks, Japanese retail investors, and German insurance companies are among those showing increasing interest, speakers said. Jerome Booth, head of research at Ashmore Investment Management, said: “There is such a huge cushion of money waiting to come in. The thing that is going to matter is the behaviour .”

Possible risks do exist, among them: a slowdown in growth in the US; a serious change in the macro-economic outlook; higher-than-expected interest rate rises; a revaluation of the Chinese currency; geopolitical risk such as the potential impact of bird flu; or a credit default. Several speakers also pointed to recent signs of protectionist tendencies in the US and Europe that could slow globalisation. Walter Molano, head of research at BCP Securities, said that could sound the “death knell” for emerging markets.

...more...

[Roland99]

51. Closing: Oh Happy Days!

DJIA 11,053.50 +60.10
Nasdaq 2,314.64 +33.25
S&P 500 1,291.24 +10.58
Russell 2000 742.35 +11.71
CBOE Volatility 11.54 -0.80
30 Yr Bond 4.56 +0.06
10 Yr Bond 4.59 +0.04

[ozymandius]

52. In closing, everything's just great! Check the blather.

...except for the bond market...

Dow 11,053.53 +60.12 (+0.55%)
Nasdaq 2,314.64 +33.25 (+1.46%)
S&P 500 1,291.24 +10.58 (+0.83%)
10-Yr Bond 45.89 +0.42 (+0.92%)
NYSE Volume 2,275,455,000
Nasdaq Volume 2,238,538,000

4:20 pm : Buyers dominated the trading action, and helped correct a good part of Tuesday's Google-induced drop. The Nasdaq fully erased yesterday's loss, and the Dow and S&P significantly rebounded. The action showed that the broader market's reaction to comments from Google's management, which were assertions of the obvious, was overdone. Nonetheless, it reflected an underlying sense of nervousness and reflects our view that the market will continue to trade in a choppy fashion until the interest rate uncertainty is quelled.

Bargain hunters focused much of their attention on tech stocks (+2.0%), and buying there was broad-based. Today, the sector nearly doubled its year-to-date gain and led the broader market's advance. Surging semiconductors were a particularly strong source of support, and communication equipment issues also soared. Application software, following better than expected earnings results and guidance from Autodesk (ADSK 41.57 +3.92), was another strong pocket. Solid gains in a number of bellwethers were supportive. Two of the brightest were Hewlett-Packard (HPQ 34.01 +1.20) and Cisco Systems (CSCO 21.06 +0.82), the latter of which is one of our recommended holdings for active investors.

The Energy sector (+1.6%) also helped lift the broader market. Drillers fared especially well. Rowan Companies (RDC 41.25 +1.00) jumped after delivering record fourth quarter revenues and upside earnings, and Transocean (RIG 77.42 +3.24), another of our portfolio picks, climbed on news that it won a Chevron (CVX 57.21 +0.73) contract to build a deepwater drillship. On a related note, the Energy Department released its latest inventory stats this morning. Crude and gasoline supplies rose slightly more than had been expected, and the drawdown in distillates matched analysts' forecast. Like the rest of today's economic data, the report brought no real surprise. Crude continued to recover from Monday's plunge. Its advance was enough to draw buyers back to the Energy sector, but, at the same time, it was modest enough that the broader market was unperturbed.

Led by steel, metals stocks also advanced and helped take the Materials sector 1.1% higher. Telecom, the S&P's best performer year-to-date, continued its outperformance and rose 1.4%. Despite a weighty decline in General Motors (GM 19.92 -0.39), the Consumer Discretionary advanced 0.7%. The auto manufacturers reported February sales today, and GM and Ford (F 7.92 -0.02) both disappointed. DaimlerChrysler (DCX 56.48 +1.01), on the other hand, booked an unexpected gain. An earnings and guidance-related rise in Brown-Forman (BF-B 75.72 +5.36) supported Consumer Staples (+0.3%), and earnings-related strength in Medco Health Solutions (MHS 59.28 +3.56) helped Healthcare (+0.2%) recover. The Utilities sector (-0.4%) was the sole decliner, and its loss was fully offset by its nine counterparts.

It was another heavy day of economic data. The docket included personal income and spending data that rose relatively close to expectations, a better than expected read on the ISM Index, and lower than expected construction spending growth. The core PCE deflator, which was arguably the most important piece of data released today, was up an ambiguous 0.2%. The year-over-year gain was 1.8%, which is slightly below the upper end of the Fed's forecast range. In aggregate, the reports brought little surprise and do not affect our neutral market view or interest rate expectations.DJ30 +60.12 NASDAQ +33.25 SP500 +10.58 NASDAQ Dec/Adv/Vol 957/2109/2.20 bln NYSE Dec/Adv/Vol 952/2308/1.63 bln