STOCK MARKET WATCH, Wednesday 9 June

[ozymandius]

Wednesday June 9, 2004

COUNTING THE DAYS
DAYS REMAINING IN THE * REGIME 229
DAYS SINCE DEMOCRACY DIED (12/12/00) 3 YEARS, 180 DAYS
WHERE'S OSAMA BIN-LADEN? 2 YEARS, 233 DAYS
WHERE ARE SADDAM'S WMD? - DAY 447
DAYS SINCE ENRON COLLAPSE = 930
Number of Enron Execs in handcuffs = 18
Recent Acquisitions: Jeff Skilling
ENRON EXECS CONVICTED = 2
Other Arrests of Execs = 54

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

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AT THE CLOSING BELL ON June 8, 2004

Dow... 10,432.52 +41.44 (+0.40%)
Nasdaq... 2,023.53 +2.91 (+0.14%)
S&P 500... 1,142.18 +1.76 (+0.15%)
10-Yr Bond... 4.77% +0.01 (+0.13%)
Gold future... 391.80 -2.70 (-0.68%)


|||


GOLD, EURO, YEN and Dollars

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PIEHOLE ALERT

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

For information on protests and other actions Citizens For Legitimate Government

---

[ozymandius]

1. WrapUp by Ike Iossif

PATTERN RECOGNITION ANALYSIS

Sometimes when a market is undergoing a "character” transformation due to the size and number of changes that are taking place simultaneously, we end up with lots of extreme and conflicting readings. In that case we select those indices, which have chart patterns that historically have provided us with recognizable and reliable outcome scenarios and we build our short-term expectations and strategy based upon them.

At the moment it is quite clear that between January and now the markets have been engaged either in an orderly sideways consolidation process, from which they will break out to the upside OR to the downside.

The high put/call ratio, the COT numbers showing commercial traders net long, and the new record number for NYSE member net buy/sell strongly suggest an upside breakout.

Conversely, the high volatility ratios, the low volume, the high number of stocks below their 200 MA despite the recent advance, the McClellan Oscillator rallying 700 points, the SP500 only gaining 4.1%, the number of new lows exceeding new highs, and "good news" greeted with sell orders, strongly suggest an imminent breakdown.

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

[ozymandius]

5. Bull hesitation seen

NEW YORK (CNN/Money) - U.S. stocks looked to open lower Wednesday as investors didn't appear quite ready to reaffirm the bullishness in the first half of the trading week.

-cut-

Oil continued to ease from the record highs reached last week. U.S. crude futures fell 36 cents to $36.92 a barrel in electronic trading, while Brent oil futures slipped 17 cents to $34.88 a barrel in London. Gold was lower.

Weakness in tech issues helped send Asian-Pacific stocks lower; Tokyo's Nikkei index lost 0.6 percent. European markets were flat to higher in morning trade. (Check the latest on world markets)

http://money.cnn.com/2004/06/09/markets/stockswatch/index.htm

[54anickel]

12. Another article discussing the high Put/Call Ratio with a different take

Put/Call Ratio Soaring

http://www.gold-eagle.com/gold_digest_04/hamilton060404.html

In just the past couple weeks, an extremely intriguing anomaly has arisen in the US stock markets. The famous Put/Call Ratio 21-day moving average has soared above 1.00 for the first time in at least a decade! This odd development is vexing bulls and bears alike.

The Put/Call Ratio, or PCR, is a powerful technical trading indicator that monitors the stock and stock-index bets that speculators are making at any given time. Speculators who expect individual stocks or the indices to fall in the months ahead buy put options, derivatives bets which increase in value when prices decline. Speculators who expect rising prices buy call options, which promise hefty payouts on higher prices.

The PCR quantifies the ratio of the daily trading volume in these two opposing bets, granting speculators valuable insights into what the majority happens to be expecting. When the PCR is above 1.00, as today, it literally means that the daily trading volume on puts is higher than calls. Translated into pure sentiment terms, it indicates that the majority probably expects lower prices in the months ahead. And since we humans are naturally bullish, a PCR above 1.00 is an extraordinarily rare event.

Today’s high PCR anomaly is difficult to interpret, as I will outline in this essay. Both bullish and bearish cases can be built around this surreal development, and the contrarian slant on this is complex as well. While I certainly wish there was an easy bullet-proof interpretation of this odd event, its sudden appearance today within the context of current market conditions is a puzzling mystery.

more...

[54anickel]

2. "Leveraged to the hilt"

http://www.globeandmail.com/servlet/story/RTGAM.20040608.wcibc0608/BNStory/Business/

Low interest rates have left U.S. consumers “leveraged to the hilt,” and even modest hikes could have a surprisingly swift effect on the broader economy, CIBC World Markets said Tuesday.

snip>

On a monthly basis, debt obligations now eat up about 18 per cent of the average household's monthly income.

That's just under the recent record, according to CIBC, and nearly 10 percentage points below where debt obligations were in 1994 when the Federal Reserve kicked off that tightening cycle.

“At that time, the combination of far better pre-hike job growth, and a drought in housing and autos during the earlier recession, meant that there was ample room for Americans to continue to borrow even as rates rose,” CIBC economists Benjamin Tal and Avery Shenfeld said in the report.

“The last time the Fed launched a tightening cycle when existing debt burdens were high was in 1987, a policy that had to be temporarily reversed when the stock market crashed later in the year.”

more...

[ozymandius]

3. European Stocks Gain as Oil Falls

PARIS (Reuters) - A fresh retreat in oil prices helped European shares extend six sessions of gains by midday on Wednesday, boosting fuel-hungry airlines such as British Airways , but miners capped gains after cautious broker notes.

-cut-

"We are hearing the first stories of inventory build in China, a market where just six weeks ago producers were saying they could sell all they could produce," CSFB analysts said, stoking new concern over crucial Chinese demand.

RECEDING OIL WORRIES

U.S. light crude futures fell as low as $36.75 a barrel, some 13 percent below last week's two-decade high of $42.45, as expectations that U.S. government data, due later in the day, would show oil stocks expanded last week and ease worries of a summer crunch in the world's biggest energy consumer.

"With oil prices softening, the (equity market) rebound should continue and break the downward cycle," said Mike Lenhoff, chief strategist at Brewin Dolphin Securities.

more...

[54anickel]

4. Home Loan Applications Fall in Week

http://biz.yahoo.com/rb/040609/economy_mortgages_2.html

NEW YORK (Reuters) - U.S. applications for loans to buy homes and refinance mortgages fell amid a modest rise in mortgage rates last week, a trade group said on Wednesday.
The Mortgage Bankers Association said on Wednesday its measure of demand for loans to buy homes, the purchase index, fell 6.0 percent to 432.2 in the week ended June 4.

The MBA's refinancing index, a gauge of requests for mortgage loan refinancings, fell by 13.9 percent to 1,363.2 from 1,583.6 in the prior week.

snip>

While the volume of applications for loans to buy homes has fallen in the latest week, they remain at a high level and are not expected to drop off as dramatically as refinancings.

"The purchase applications should remain strong. Signs of gains in family income are good. That should offset higher rates," Frank Nothaft, chief economist at Freddie Mac, said on Tuesday before the release of the data.

Huh? :shrug: Another disconnect between Wall and Main Street?

[54anickel]

6. Got Oil? Now, Try to Find Tankers to Carry It

http://www.nytimes.com/2004/06/09/business/09tankers.html

ONDON, June 8 - Now that OPEC has agreed to raise its crude oil production quotas in hopes of taming high and jittery oil prices, industry experts are growing more concerned about both the capacity and the security of oil tankers, the next link in the supply chain.

The world's tanker fleet is already stretched thin by robust demand for oil, by looming deadlines for the phase-out of single-hull tankers for safety and environmental reasons, and by lengthening backlogs at the shipyards where new tankers are built. It is far from clear, experts say, whether the existing fleet can handle the new production that Saudi Arabia and others have promised in coming months.

"There is just barely enough shipping capacity at these high production levels," said Jeffrey Goetz, head of marine projects and consulting at Poten & Partners, a New York-based energy and ocean transport broker.

Charter rates for tankers, which can be even more volatile than oil prices, have been driven up in recent weeks by the tight market. Shipping costs may now add $3 a barrel to the price of oil delivered to the United States from the Middle East, up from about $2 earlier this year, analysts said.

Rates are likely to rise even further if Saudi Arabia steps up its production as much as Saudi officials say it could - by 1 million barrels a day, to about 10 million. Experts say much of that new oil may back up in storage tanks in Saudi Arabia waiting for scarce tanker space.

Tanker security is also a growing issue...

more...

[UpInArms]

7. daily dollar watch

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

Last trade 88.93 Change +0.42 (+0.47%)

http://www.fxstreet.com/nou/noticies/afx/noticia.asp?pv_noticia=1086766230-9e32d306-11591

Forex - US dollar falls below 109 level vs yen in Singapore afternoon trade

SINGAPORE (AFX-ASIA) - The dollar fell below the 109 level against the yen in Singapore afternoon trade as investors continued to accumulate the Japanese unit amid growing optimism that Japan's economy will be able to sustain its growth going forward, dealers said

They said the outlook for the Japanese economy was strengthened by the announcement earlier today that the Japanese economy grew 1.5 pct in real terms in January-March from the previous quarter, faster than the 1.4 pct rise initially estimated

The faster-than-expected Japanese economic growth was due to an increase in private sector inventories despite a downward revision in private sector capital investment, Japan's Cabinet Office said

Dealers said comments from US Federal Reserve chairman Alan Greenspan overnight in London are also contributing to the dollar's weakness

Greenspan, in a speech before the International Monetary Conference in London, said the Fed's interest rate hikes are likely to be measured, but the central bank is ready to do what is needed to fight inflation

"Greenspan's comments did not change the bearish sentiment on the dollar. Investors have already priced in a 25 basis points hike this month," a currency analyst with a European research house said

"The yen's strength is also dragging the dollar... The yen is getting a lot of support given that the Japanese economy is finally on the mend," he added

While investors are not ruling out a possible intervention by Japanese authorities when the yen hits the 105 levels, the analyst said he suspects the Japanese authorities' future intervention to weaken the yen will likely be less aggressive

"The Ministry of Finance and Bank of Japan are likely to be more tolerant of a stronger yen with the improving economy," he said.

...more...

http://www.fxstreet.com/nou/noticies/afx/noticia.asp?pv_noticia=1086780578-9e32d306-21595

Forex - Pound firms against euro ahead of BoE rate decision tomorrow

LONDON (AFX) - The pound firmed further against the euro as expectations of another interest rate hike by the Bank of England tomorrow mounted in the wake of strong manufacturing data for April

UK manufacturers saw output bounce back strongly in April, with production rising at its fastest rate since August 2002, official figures showed today

The office of National Statistics said manufacturing output in April rose by 0.9 pct from the previous month, against an unrevised 0.3 pct decline in March, and expectations of a 0.5 pct increase. Analysts said the manufacturing data will make it more likely that the BoE's rate-setting Monetary Policy Committee will raise its key repo rate another quarter point to 4.50 pct

"All in all, we think the positive effect of the rise in manufacturing production should dominate and we would look for further pressure on the euro ahead of tomorrow's MPC rate announcement," said Kristjan Kasikov, currency strategist at Credit Agricole Indosuez

Meanwhile, the dollar was firm as the markets begin to price in the possibility of an "aggressive" half-point rate hike on June 30 from the US Federal Reserve. The July Fed Funds contract is now rating the chances of a 50 basis point hike at 12 pct, up from nearly zero previously. Comments yesterday from Fed chairman Alan Greenspan prompted the change in sentiment

"The dollar has managed to hold on to gains against most currencies since the comments yesterday by Greenspan, which raised questions over the pace of monetary tightening," Bank of Tokyo-Mitsubishi economist Derek Halpenny said.

...more...

[54anickel]

8. Electricity costs expected to rise (Ya think?)

http://www.usatoday.com/money/industries/energy/2004-06-08-electricty-costs_x.htm

WASHINGTON — Gasoline prices aren't the only energy cost rising.
Retail electricity prices for the air conditioning season in June, July and August are expected to average 9.5 cents per kilowatt-hour, up 3.5% from 2003, according to data released Tuesday by the Energy Department.

The prices are expected to peak this month and slowly decline in July and August.

Although there is expected to be enough electricity, regional shortages aren't out of the question. The head of the Federal Energy Regulatory Commission has warned Californians they might have blackouts this summer, reminiscent of 2001.

The good news is the increase in electricity prices will be smaller than last summer's 4.9% gain. The bad news is the rise in prices comes as consumers pay more for all forms of energy, including a 37% jump in the cost to fill up their gas tanks from a year ago.

more...

[54anickel]

9. Iraq: The Tab Keeps Mounting

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

“In the lead-up to the Iraq war and its later conduct, I saw, at a minimum, true dereliction, negligence, and irresponsibility; at worst, lying, incompetence, and corruption. False rationales, presented as a justification; a flawed strategy; lack of planning; the unnecessary alienation of our allies; the underestimation of the task; the unnecessary distraction from real threats; and the unbearable strain dumped on our overstretched military.”
– retired Marine General Anthony Zinni

snip>

Thus far, the sovereignty issue has been focused mainly on the question of who will control the actions of what troops -- Iraqi or American -- in the coming months. But American advisers will be stationed in every Iraqi “ministry”; the new government will evidently be capable neither of passing, nor abrogating laws or regulations laid down by the occupying power. More fundamentally, if the US truly plans to restore full sovereignty to the Iraqi government, then why are 14 permanent US military bases being built right now? What are the economic costs of such engagement?

According to the Congressional Budget Office, the war and occupation in Iraq by 140,000 U.S. troops now costs close to $5 billion per month, or $60 billion a year. In spite of its oil reserves, Iraq is no Germany or Japan, happily in a position to subsidize the US defense presence in the country.

Which means the burden is ultimately borne by the American taxpayer, already digging substantially more into his/her wallet as a consequence of soaring energy prices. Thus far the war has cost American taxpayers $186 billion in direct military expenses. The President has recently asked for another $425 billion in defense appropriations for the 2005 Pentagon budget, plus another $75 billion for Iraq, $25 billion for the development of new generations of nuclear weapons, and untold billion for such things as military pensions and veterans' health care. Not included in these figures are the multibillions in secret amounts spent on the CIA and other intelligence activities, not to speak of other Department of Defense “black budget” activities kept out of the appropriations process.

Where is all this money going to come from? Why is the US government putting all this money on the tab for future generations to deal with?

snip>

Despite last week’s efforts by OPEC to talk down the market by agreeing to raise its output targets by 2m barrels a day (or 8.5 per cent), the biggest such increase in 6 years, this amount has been deemed insufficient by most oil analysts to offset prevailing tight supply. Bearing in mind that most OPEC nations are already substantially exceeding official quota limits, this invariably has placed the burden for increased production in the hands of the Saudis. That they did not agree to a widely anticipated 2.5 million bpd increase might imply that the Saudis too are reaching the limits of their productive capacity, hardly something that bodes well for an economy like the US, still addicted to cheap oil

snip>

This therefore brings us back to Iraq because whatever the true supply/demand figures, they do not fully reflect the cost extracting Iraqi oil today. As political commentator John Laughland has noted:

“Consider that with Iraqi exports in the neighbourhood of $2 million barrels a day, the cost of an Iraqi barrel of crude is somewhere north of $200 a barrel when you factor in the daily cost of the war to get control of it. And that is just the purely military costs. It says nothing about the price of rebuilding that country’s oil infrastructure, or the cost of years of no-fly-zone ‘enforcement.’ It factors in none of the human costs and not just to the Iraqis. American servicemen are fed a diet of methamphetamines, ‘rummies’ as the troops call them, in a combat environment in which the danger of long term health damage from depleted uranium ammunition is more dangerous than the Iraqis with AK47s and RPGs. It strikes us that even the owner of the Texas Rangers baseball team and the fabled loss-making Harken Energy could do the maths on this problem.”

more...

[ozymandius]

10. Futures are looking shaky.

So is my attendance here today. Life is starting early this morning so I will try to check back in this afternoon.

Have a wonderful day at the Casino, all.

Ozy :hi:

[UpInArms]

11. Ax falls on Gary, layoffs of city workers begin

http://www.post-trib.com/cgi-bin/pto-story/news/z1/06-09-04_z1_news_10.html

GARY— The mood is glum around City Hall as rumors circulated about cuts of several department heads and mid-level administrators.

City workers said as many as a half-dozen administrative personnel were given pink slips Tuesday, a week after Mayor Scott King’s announcement of wide- ranging cuts intended to trim as many as 180 jobs from the city payroll and eliminate six city departments.

<snip>

During his press conference last week, King announced plans to lay off 40 percent of the city’s non-public safety workers as part of a plan to reduce the 2003 budget by $5.5 million in an effort to reduce property taxes.

King said six city departments would close. So far he has named the Economic Development, Consumer Affairs and Emergency Referral departments. Together, the departments add up to about 14 jobs and $700,000.

King announced that he would eliminate 115 jobs paid for from the general fund, 59 jobs in the Parks Department and six Genesis Center posts.

...more...

[UpInArms]

13. futures blather

9:15AM: S&P futures vs fair value: -2.8. Nasdaq futures vs fair value: -8.5. With the futures market trading around its best levels of the morning, the cash market remains set for a lower open.

9:00AM: S&P futures vs fair value: - 2.8. Nasdaq futures vs fair value: -8.5. The stage remains set for a lower open in the cash market, with technology sectors looking to underperform the broader market. Oil shoul garner plenty of attention in the midst of the expected Department of Energy report and oil strikes in Nigeria.

8:30AM: S&P futures vs fair value: -3.3. Nasdaq futures vs fair value: -9.5. Futures indications continue to trade below fair value, pointing to a slightly lower open in the cash market. There are no economic reports in the pre-open, although the Wholesale Inventories report will be released at 10ET. It's a relatively quiet morning on the research and corporate fronts.

8:00AM: S&P futures vs fair value: -3.2. Nasdaq futures vs fair value: -8.5. The futures market is lower this morning on the heels of the gains accomplished over the past two days and in the midst of mixed trade in overseas markets. Former President Reagan's state funeral in Washington DC, as well as news that subway and commuter train passengers in Boston will be randomly stopped starting in July to have their bags searched and identifications checked, have focused the market's attention on potential terrorism concerns.

[UpInArms]

14. Market Numbers at 9:35 EST

Dow 10,401.94 -30.58 (-0.29%)
Nasdaq 2,013.88 -9.65 (-0.48%)
S&P 500 1,138.26 -3.92 (-0.34%)
10-Yr Bond 4.791% +0.020

[54anickel]

15. Yoo hoo! Mogambo! We got money in here!

http://www.321gold.com/editorials/daughty/daughty060904.html

Richard Daughty
...the angriest guy in economics
The Mogambo Guru
June 9, 2004

It was a record-setting week in Economics World, as the Federal Reserve increased Federal Credit to a new record of $749.6 billion. A new record! And Foreign Holdings at the Fed are going parabolic, now up another $10.6 billion last week, to $1.220 trillion. Another new record!

The Treasury itself took us to, and by this time I am sure that you are as tired as I am climbing up on that podium to accept yet another gold medal, another new record in ridiculous, bankrupting debt, this time to the eye-popping sum of $7.21 trillion.....

snip>

Jay Taylor: "While our own monetary measures may be growing at a reasonably modest pace, globally it is exploding. For example, according to my stats, M-3 over the past 52 weeks has grown by about 4.5% to 9,244 billion (or 9.244 trillion). By comparison, Global U.S. Dollar Liquidity has been on a tear. This measure of global liquidity, which is comprised of a monetary base plus foreign bank holdings of U.S. dollars, has risen over the past 52 weeks at an astounding rate of 20.39%! Clearly what has been happening is that the central banks have been printing their own currency and then buying our dollars (mostly U.S. Treasuries) in a 1930s-like beggar-thy-neighbor currency devaluation scheme."

snip>

But perhaps you will listen to Martin Goldberg of FSO, who noticed that "But at the very moment when it appeared as if the Nasdaq was in severe technical peril, an apparent large buyer of the QQQ index stepped in and saved the day. As is usually the case when a head and shoulders neckline is whipsawed, this was followed by a sharp and tradable rally. Is there a defensible 'conspiracy theory' affecting recent market action?"

You bet! The entire economic world is now tied to stock prices, and everybody's retirement is tied to stock prices, and the revenues from most layers of government are tied to stock prices, and people borrowed against their houses to buy stocks, and how the entire economy of the USA depends on financing things. And yet you think that the most corrupt and reckless and lying government, the one currently holding sway in the United States, is going to let the market go down without trying to intervene, when it forcefully and constantly intervenes in every other aspect of your entire life? Hahaha!

more ranting....

[KoKo]

25. OMG....two Mogambo's in two days? I might not make it through this one..

but I can't resist the guy...

[54anickel]

16. Dollar Faces Slog Ahead

http://www.forexnews.com/ai/default.asp?f=A20040608A.mgn

The dollar fell across the broad in May in line with our forecast, but its decline against the yen was much more modest than we had predicted. Looking ahead for June, we think the dollar’s Fed hike-based gains have been largely played out, and that the currency shall remain pressured into the middle of July.

EURUSD: Cyclical Uptrend to Rejoin Secular Move

The euro looks to be resuming its bounce after touching off the $1.1759 low in late April, and should extend this rising leg towards the $1.2540 level by end of this month. In our May forecast, we stated: “While the Fed's tightening may be sufficiently "gradual" for the stock market, it may not be perceived to be so by the bond market when inflation measures are overwhelming pointing to the upside”. Accordingly, a June rate hike has become largely priced since the May FOMC meeting. In fact, 1 day before the May FOMC decision, we predicted and recommended that:“…the Fed should use this week's meeting as a stepping-stone towards a 25-bp rate hike in June. Failure to raise rates in June shall induce risks of being behind the curve in the face of a potentially strong labor report”. See Testing the Fed’s Patience 5/3/2004. That stepping stone had been achieved via the shift in the Fed’s inflation stance and the improving employment data. Currency traders have already rewarded the dollar in anticipation of an early summer tightening. With a June tightening firmly cemented in the market for nearly 4 weeks, currency markets will now require fresh data evidence to cement expectations for an August tightening in order for the dollar to gain fresh momentum.

Nonetheless, firming expectations for a Fed rate hike may not be sufficient in boosting the dollar partly due to the risk that further tightening might crimp an increasingly oil-taxed and fiscal stimulus-waning consumer sector. The other reason to our forecast for further dollar retreat is the increased awareness of inflationary pressures in the ECB. In its last policy meeting, the ECB noted: “stronger private consumption and buoyant exports” and cautioned that the “…recent upward trend calls for particular vigilance”. This combination of improved growth and rising price pressures should engage traders in assessing chances for a September ECB rate hike, thereby maintaining buying support for the single currency. The escalating guessing game for an ECB hike shall be similar to the earlier rate hike speculation fuelling the dollar in mid April. And as long as oil remains little impacted by OPEC’s supply increases, the inflationary impact should be more positive for the euro--courtesy of the ECB’s inflation goal--, rather than for the US dollar--courtesy of the oil laden record breaking trade deficit.

The main risk to this euro scenario is the possibility of aggressive Fed tightening. Thus, if markets begin to anticipate a 50-bp rate hike in June and a 25-bp in August, then the dollar could recapture its rate hike luster.

Technically, having established a convincing bounce off its $1.1759 lows, the euro is half way through its retracement of the 1.2926-1.1759 drop, enroute to the 1.26 figure by month-end. The resistance to beat should occur at 1.2475-80, which is the 61.8% retracement of the said move. Yet we feel the currency will likely gain fresh momentum in the last week of the month when the Fed delivers its much expected tightening, inducing a likely buy-the rumor-sell the fact reaction in the US dollar.

[54anickel]

17. Treasury Notes Fall Before Inflation Reports and Debt Auctions

http://quote.bloomberg.com/apps/news?pid=10000103&sid=aAQv6WeQ4Ww0&refer=us

June 9 (Bloomberg) -- U.S. Treasury notes fell before government reports this week and next forecast to show more evidence of inflation, which may lead the Federal Reserve to boost its benchmark interest rate faster than anticipated.

Fed Chairman Alan Greenspan said yesterday the central bank's commitment to a ``measured'' pace of interest-rate increases from the current 1 percent rate is conditional. Investors are demanding higher yields, which move inversely to bond prices, to compensate for the risk of rising Fed rates.

``The market has shifted its focus from the payroll numbers to inflation,'' said Gerald Lucas, chief Treasury and agency strategist in New York at Banc of America Securities, which is one of the 23 primary dealers of U.S. government securities that trade with the Fed's New York branch. The pace of inflation ``will determine how aggressive the Fed can be.''

snip>

Treasuries also dropped before the Treasury Department's auctions of five-year and 10-year notes. The government will sell $15 billion of five-year notes today and $10 billion of 10-year notes tomorrow. The five-year note to be sold was yielding 4 percent in pre-auction trading. Auction results are released shortly after 1 p.m., New York time.

`Going Down'

``Why do you need to buy five-year notes today if you think rates are going to be higher a month or so down the road? That's an instant loss,'' said George Adell, director of research at Philadelphia-based brokerage Starboard Capital Markets.

snip>

Debt Auctions

Demand for Treasuries from foreign central banks at the auctions may drop as Japan, the largest overseas holder of Treasuries, refrained from selling its currency for a second month.

The Bank of Japan, which sold record amounts in the first quarter, did not sell yen between March 16 and May 27, according to data from the Ministry of Finance. Japan has piled some of the dollar proceeds from yen sales into U.S. debt.

``The BOJ hasn't bought dollars in almost two months, so foreigners won't be big buyers,'' Starboard's Adell said. ``That leaves it to domestic buyers, and investors here are cautious because everybody expects rates to go higher.''

Indirect bids, a category that includes purchases from overseas central banks, made up 34.6 percent of total bids accepted at the last auction of five year notes on May 12, compared with 41.4 percent at the prior auction.

more...

[54anickel]

18. Investment is too good to be true (sad scam)

http://www.sacbee.com/content/news/story/9588771p-10512385c.html

The investment couldn't miss. Put $80,000 in an offshore bank and watch the money grow.

At first, it seemed as if Jim and Phyllis Miller were smart to follow a friend's financial advice. Five months after making the plunge, the Citrus Heights couple received an interest check for $5,000, far more than their old IRA would have returned.

Then the checks stopped. The retirement money disappeared. The Millers, authorities say, were victims of a multimillion-dollar scam.

A federal grand jury in Portland, Ore., indicted five people in January for allegedly defrauding 4,000 U.S. and Canadian citizens out of more than $200 million by persuading them to invest in banks, said Beth Anne Steele, spokeswoman for the Portland FBI office.

more...

[54anickel]

19. Lots of Wiggle Room in Jobs Data

http://www.thestreet.com/markets/rebeccabyrne/10165129.html

Are the payroll data overstating job growth in the U.S.?

Some pundits say the numbers are.

Over the past three months, the government's establishment survey has shown that 947,000 jobs have been created -- the most since March to May 2000. The gains, along with signs of rising inflation, have helped to boost the odds for a quarter-point interest rate hike by the Fed in June.

But some economists say the payroll numbers don't reflect reality, and they cite the Bureau of Labor Statistics' own words to bolster their case.

On its Web site, the BLS says its methodology to compute payroll data is "likely to have some difficulty producing reliable estimates at economic turning points or during periods when there are sudden changes in trend."

The main complaint about the payroll data centers around the birth/death model used by the BLS to estimate the growth of new businesses. The government samples about 400,000 individual worksites to compile the payroll data, but the numbers are adjusted each month to account for employment growth generated by new business formations.

Because there is a lag between an establishment opening for business and its appearance on the sample, the BLS uses a model to estimate this growth. The model is relatively new, having been phased in over recent years and only fully implemented in June 2003. The birth/death method replaced the BLS' "bias adjustment" model, which was considered less accurate.

more...

[bain_sidhe]

22. Interesting detail here...

Note, the establishment survey is the one that uses the "birth/death" model. The household survey is the one that Republicans, at the first of the year, were touting as a better indicator of the real labor market, since it actually interviewed real people - and had better numbers at that time. Some of us, again - at that time - suggested that the household survey's numbers were off because people would be likely to call themselves "self employed" rather than "unemployed" for pride's sake. (Hell, I do that myself! Never mind that I've only made... oh, about $100 this year, I think, on my cafepress shop and my writer's calendar.) Looks like we may have been right about that.

The details of the household survey have certainly been less encouraging than those in the establishment survey.

In May, the household survey showed that employment rose by 196,000 but 137,000 workers were classified as self-employed. (Ed. note, that's nearly 70% of the increase.) Hunt said many of those workers are self-employed because they can't find a payroll job and they won't have health or retirement benefits.

Full-time employment actually fell during May while part-time employment increased, the household survey showed. Those working part-time because they couldn't find a full-time job rose by 134,000. Meanwhile, 39,000 more people were out of work in May compared to April, and both the average and median duration of unemployment increased last month.

**edit: fixed formatting**

[54anickel]

20. 10:47 numbers

Dow 10,397.75 -34.77 (-0.33%)
Nasdaq 2,009.03 -14.50 (-0.72%)
S&P 500 1,137.12 -5.06 (-0.44%)
10-yr Bond 4.803% +0.032
30-yr Bond 5.475% +0.023

NYSE Volume 319,508,000
Nasdaq Volume 405,769,000

10:30AM: The market is choppy, with the major averages not making much headway one way or another and sticking to negative territory... Notably, the banking sector, which is influential in determining market direction, is trading in positive territory... The group's continued resilience should limit the extent of losses in the blue-chip averages... Other groups trading in positive territory include industrials, consumer, REIT, and aerospace & defense groups, although the airline sector remains the only group posting gains of over 1%, as indicated by the XAL index...
The latter's advance comes in conjunction with a pullback in the price of crude oil (down 1.0% at $36.90)... Remember that fuel costs comprise the second biggest expense for airlines, surpassed only by labor costs...NYSE Adv/Dec 1231/1535, Nasdaq Adv/Dec 1091/1474

10:00AM: Off its opening lows, the market continues to trade in negative territory, with the S&P 500 underperforming the Nasdaq and the Dow on a relative basis... The bulk of the sectors are trading in negative territory, but are little changed at this juncture... To that effect, leaders to the upside are limited to the airline sector... Among the laggards of note are the gold, semiconductor, oil services, and energy groups... Separately, the Wholesale Inventories report declined 0.1% for April versus the consensus of a 0.5% increase and last month's rise of 0.6%...NYSE Adv/Dec 1059/1461, Nasdaq Adv/Dec 1158/1213



Advances & Declines
---------NYSE ----- Nasdaq
Advances 1228 (40%) 1085 (38%)
Declines 1641 (53%) 1555 (54%)
Unchanged 187 (6%) 191 (6%)

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

Up Vol* 88 (35%) 123 (34%)
Down Vol* 158 (62%) 225 (63%)
Unch. Vol* 5 (1%) 4 (1%)


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

New Hi's 78 48
New Lo's 5 12

[54anickel]

21. Lunchtime check in and I gotta go

Dow 10,393.70 -38.82 (-0.37%)
Nasdaq 2,005.47 -18.06 (-0.89%)
S&P 500 1,135.43 -6.75 (-0.59%)
10-yr Bond 4.809% +0.038
30-yr Bond 5.485% +0.033

NYSE Volume 484,164,000
Nasdaq Volume 593,606,000

11:30AM: New sessions lows for the major averages, which continue to slip lower, like they have through most of the morning... Leadership to the upside has dissipated, as groups including airline, industrials, and consumer (to name a few) have reversed the entirety of their earlier gains and are now trading in negative territory... While the market has traded in an inverse relationship with the price of crude oil of late, today's drop in the price of the commodity has done little to incite buying interest... Currently, the price of crude oil is down $0.26 at $37.02/bbl...NYSE Adv/Dec 986/2028, Nasdaq Adv/Dec 805/1959

11:00AM: The market is weakening, with the S&P 500 spearheading the decline... The internet, networking, disk drive, software, biotech, broker/dealer, iron & steel, and housing groups have joined the "laggards of note" list... The semiconductor sector is notably weak, with the SOX index down 2.0%... Note that the group has a tendency to lead the Nasdaq... Omnivision Tech (OVTI 17.80 -7.67) is among the laggards after the company said it would delay its FY04 earnings, while guiding Q1 down to $0.29-0.31 versus the consensus of $0.34... NYSE Adv/Dec 1178/1717, Nasdaq Adv/Dec 990/1694



:hi: Have a great day at the Casino!

[loudsue]

23. Kicking the Market Watch thread for the afternooners.

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

[Frodo]

24. An interesting note from the closing blather.

"Note that with the market closed on Friday to honor the death of former Presiden Reagan, the PPI report has been delayed <b>indefinitely</b>."


I could have sworn I saw it this morning as being moved up for tomorrow. Now I see it for next Tuesday listed as DELAYED.


Interesting.

[loudsue]

26. Hey, Marketeers....What was the Close today???

I haven't had my final "fix" from this thread yet!! Just because I don't always post, doesn't mean I'm not paying attention!!

:kick::kick::kick:

[54anickel]

28. Whoops, sorry about that....

Real life called me away for the afternoon, but the job took much longer than I thought so just got home now!

[UpInArms]

27. Closing Numbers and Blather

Dow 10,368.44 -64.08 (-0.61%)
Nasdaq 1,990.61 -32.92 (-1.63%)
S&P 500 1,131.29 -10.89 (-0.95%)
10-Yr Bond 4.812% +0.041

Close: With the market having rallied strongly over the past three sessions and the S&P 500 having advanced to within a short reach of the top of its trading range for the year, the market used today's session as an opportunity to take some money off the table... Accordingly, the major averages spent the entirety of the session trending lower and closed near their respective session lows, with losses of 0.6- 1.6%... The market's weakness was broad- based, with the bulk of the sectors participating in the retreat...

Laggards of note included influential sectors such as software, hardware, semiconductor, networking, disk drive, biotech, banking, broker/dealer, transportation, drug, healthcare, retail, and materials groups... As a matter of fact, leadership to the upside was limited to the telecom services sector, which advanced on the heels of the government's decision not to appeal the court decision regarding FCC's rules for Unbundled Network Elements, which benefited regional bells such as SBC (SBC 24.61 +0.27) and Verizon (VZ 35.82 +0.27) and supported the Dow's relative outperformance of the S&P 500 and the Nasdaq...

Elsewhere, the bond market was on the defensive on the heels of Fed Chairman Greenspan's comments from yesterday, which have been interpreted as meaning that the Fed could hike rates sooner and faster than previously anticipated... To that effect, federal funds futures are currently pricing in 100% probability of a 25 basis point hike at the June 30 meeting and a 19% probability of a 50 basis point hike... The 10-year note pulled back 10/32, bringing its yield up to 4.80%... Note that with the market closed on Friday to honor the death of former Presiden Reagan, the PPI report has been delayed indefinitely...