STOCK MARKET WATCH, Thursday 26 May

[ozymandius]

Thursday May 26, 2005

COUNTING THE DAYS
DAYS REMAINING IN THE * REGIME 3 YEARS, 240 DAYS
DAYS SINCE DEMOCRACY DIED (12/12/00) 4 YEARS, 158 DAYS
WHERE'S OSAMA BIN-LADEN? 3 YEARS, 221 DAYS
DAYS SINCE ENRON COLLAPSE = 1278
Number of Enron Execs in handcuffs = 19
ENRON EXECS CONVICTED = 2
Other Arrests of Execs = 54


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




AT THE CLOSING BELL WHEN BUSH TOOK OFFICE on January 22, 2001
Dow - 10,578.24
Nasdaq - 2,757.91
S&P 500 - 1,342.90

AT THE CLOSING BELL ON May 25, 2005

Dow... 10,457.80 -45.88 (-0.44%)
Nasdaq... 2,050.12 -11.50 (-0.56%)
S&P 500... 1,190.01 -4.06 (-0.34%)
10-Yr Bond... 4.07% +0.04 (+0.87%)
Gold future... 418.90 +1.20 (+0.29%)

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 Mike Hartman

Signs of Blow-Off Top in Home Sales

The Commerce Department said durable goods orders for April rose 1.9% following forecasts for a gain of 1.3%. The headline number looks good, but the market has been more focused on durable goods orders less transportation items. Expectations called for a gain of 1% but ex-transportation, orders actually declined 0.2%. The early headlines had stocks down and bonds higher due to the weak economic data but check this Bloomberg take on the impact to the dollar. “The dollar extended its gains against the euro after a government report showed U.S. durable goods orders last month rebounded from a March drop, adding to confidence in the U.S. economy.” The durable goods report took on a different spin depending on whether you were looking at stocks, bonds or the dollar. As it turns out, the dollar and Treasuries have both done an about face and are now headed lower. I’ll check back later to see where they close for the day.

The mixed durable goods numbers put a bid in both Treasuries and the dollar, but after watching the dust settle from the initial report, they both rolled over and turned negative. I’m speculating the currency traders shifted their focus to the core weakness in the ex-transportation data and subsequently sold the dollar, but it looks like Treasuries are now reacting more to the report of booming new home sales which depict a rapidly expanding economy. Bond prices are now moving lower, pushing interest rates higher.

-cut-

Treasuries and Stocks

The Treasury market was weird again today. Bond prices began the morning higher on the weak durable goods numbers, and then turned negative. At one point the five and 30-year maturities were positive while the 10-year note was in the red. I heard scattered reports about some problems with futures contracts on the 10-year note. Evidently, sellers of the 10-year paper are in a position where they need to deliver the 10-year notes, but they don’t have enough to satisfy the outstanding contracts. Frankly, I don’t understand all the shenanigans in the Treasury market…right now it seems to be a tug-o-war between inflation concerns and a slowing economy mixed with hedge fund problems on the wrong side of the trade. In my opinion, we will get both inflation and a slower economy…along with slowly rising interest rates. The only other noteworthy item in the bond market today was the auction of $22 billion of two-year notes by the U.S. Treasury. It’s strange to see this much volatility in Treasuries on an auction day.

I’ve been asked to comment more on the general health of the broad stock market. In the past few months I haven’t had much to say about stocks because I just don’t like the valuations. We have historically high price to earnings ratios and historically low dividend yields that are more indicative of market tops, not a base to send stock prices higher. I also look at the geopolitical tensions around the globe and know the dollar and U.S. bond markets are much more important than the stock market as overall indicators for the health of the U.S. economy. Bond prices need to remain elevated to hold interest rates down. If the bond market breaks significantly lower, it will take stocks and real estate right down with it. I have not been focused much on the overall stock market because I still believe there are better opportunities to invest and trade in commodities. In today’s trading, the Dow Industrials lost 45 points to 10,457, the NASDAQ Composite fell 11 points to 2,050 and the S&P 500 shed four points to close at 1,190. I like the resource stocks, but for the broad stock market I believe the risks outweigh the potential reward.

more...

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

[RawMaterials]

8. Morning Ozy

Life & work are slowly getting back to normal after the move (at work),

from the wrap up "In my opinion, we will get both inflation and a slower economy…along with slowly rising interest rates" --- isn't this stagflation? If so aren't we screwed. :eyes:

[ozymandius]

11. Good morning RawMaterials.

Yes, I believe the general consensus says that we are screwed. Mogambo Guru's spiel posted here yesterday says a good deal about how fubar our numbers are:

mean, inflation is up, but bond yields are down, which is the exact opposite of what you would expect. In fact, the yield on the 10-year T-note is barely over 4%! Foreign demand for US debt is down, yet prices for debt go up, the exact opposite of what you would expect. Inflation is up, yet gold is down, again the exact opposite of what you would expect. Demand for oil is up, yet prices are coming down, the exact opposite of what you would expect. The economy is slowing, yet stocks are soaring, the exact opposite of what you would expect. It just goes on, day after day, item after item, which explains why I am cowering in the hall closet, gobbling tranquilizers and whimpering, "It doesn't make sense! It doesn't make sense!"

This is framed as a rant. But the basic numbers do not equate to a logical scenario.

Congratulations on the transition to a more normal life. We've missed seeing you around the place.

Ozy :hi:

[RawMaterials]

2. The Fed Is All Wrong About Inflation

For the last year, I've been convinced that inflation is back and getting worse. I can feel it in my everyday life. My favorite pizza guy raised his price for a slice by 20% last month. My kids' tuitions climbed 8% this year. Heating oil and electricity are more expensive. Breakfast cereal. Books. You name it, it costs more.

Yet for the last year, Alan Greenspan and the other members of the Federal Reserve's interest-setting body, the Federal Open Market Committee, have been telling me not just that there isn't any inflation, but that there really isn't any danger of inflation.

snip..

You see, the kind of inflation that the Fed cares about -- and tries to fight -- is the short-term, cyclical kind. Prices jumped by 13% in 1979, for example, after a 9% increase in 1978, as members of the Organization of the Petroleum Exporting Countries (OPEC) ratcheted up the price of oil. So the Fed, under then-chairman Paul Volcker, drove U.S. interest rates up to 14.7% on three-month Treasury bills in 1981, throwing the country into a recession that did indeed put an end to double-digit inflation. By 1982, inflation was down to 3.87%.

snip..

Price Waves Boiled Down
#
Hard to spot: In the early stages of a price wave, no one recognizes that a period of price equilibrium has ended and that a long wave of rising prices has begun. Partly, that's because the long-term upward trend in prices is obscured by short-term movements in prices such as those that the Fed manages. For example, Fischer finds that a great price wave began about 1729, with rising wheat prices in Paris, and by the early 1740s it had spread to most of Europe. At the time, people thought this was simply cyclical fluctuation in prices. But prices would rise by nearly 2% on average for the next 100 years. It wasn't until the 1760s that writers began to comment on rising prices and scarcity.

#
Food and fuel: All of the price waves back to the first one that Fischer examines -- the medieval wave of inflation that started in 1180 -- began with increases in the price of food and fuel. Prices of manufactured goods actually fall during the initial phases of each price wave. The explanation seems straightforward: Through history, it has been relatively difficult to increase supplies of food and fuel to meet rising demand. Expanding food production often meant farming new, less productive land. Fuel for much of human history has meant wood, and it's hard to get trees to grow faster.

snip..
#
Production costs: Cost-push forces add to inflation, especially in food production, as higher prices encourage farmers to bring marginal, less-productive land into use. That produces more food, true, but at a higher cost, which leads to higher prices as the costs are pushed along to consumers.

#
Money supply: An increase in the money supply kicks in to drive inflation higher after the initial demand-based inflation has set prices in motion. Governments typically attempt to combat rising prices by increasing the amount of money in circulation. That, of course, just adds speed to price increases. This is true even in the 20th and 21st centuries, where central banks may try to fight cyclical inflation by raising interest rates or slowing growth in the money supply, but where the economy as a whole keeps creating new money in the form of looser credit requirements or no-down-payment mortgages.

#
The advantage of wealth: In the first half of a price wave, the wealthy are able to stay ahead of inflation by demanding tax cuts as they did in the run-up to the French Revolution, increasing rents on their property, demanding subsidies from government and using the power of the government and the courts to force increasingly impoverished wage-earners to pay their debts.


#
Rising pessimism: The rising prices of a long price wave have a psychological effect on a society. As inequalities rise, optimism gives way to pessimism. Since price waves are accompanied by increases in violence, family breakups, alcoholism and poverty, there's a growing sense in a society that something is wrong. Could the sense that something has gone wrong in this country that shows up in current opinion polls -- shared by conservatives and liberals, by the devout and the secular -- even if we don't agree on what it is or how to fix it, be an instance of this shift in social psychology?

#
Finally, crisis: As prices rise, the economy and the society become increasingly stressed until a bit of bad luck that would have been shrugged off earlier leads to a crisis. So, for example, by 1789 a wage-earner in France was spending 88% of his income to feed his family. In the period from 1726 to 1791, it took only 50% of income. So when the harvests failed in 1788 and 1799 and prices soared, as they had done in earlier years of bad harvests, it was enough to tip the country into chaos. Make up your own list of tipping points for today's economy.



more...


http://www.thestreet.com/funds/jubak/10225038.html

[AnneD]

3. Morning Marketeers

:donut: Another day in paradise (or pair-a-dice if you live in Vegas, Atlanta, or work on Wall Street). Today is the last day of school and it is a 1/2 day so I will be so busy, but it will be worth it. This the time when parents understand why little Janie and Johnny got those bad conduct marks. When we smile and way good bye-we really mean it. Happy hunting and watch out for the bears.

[RawMaterials]

5. Morning AnneD have a great

day at school.You are shaping the the next generation thats going to have to bail us out of this mess. Please do a good job :hi: :yourock:

[converted_democrat]

10. Good morning AnneD.....

:hi: I appreciate your career choice!!!! We need more teachers like you!!! :applause:

[AnneD]

13. Actually,

I am the school nurse, although I do health teaching as part of my job description.
Believe me, I have an uphill struggle to keep Nurses in schools (gee, with so many kids uninsured and medically fragil-ya think it makes sense for the kids to at least have access to medical help during the school year). I have testified before the Texas Legislature 2x and lobbied reps 3x this session on this and other school health issues. Thank God my union underwrites the cost of my trips (your dues at work) and my principal is very gracious to let me off on those days (and my Nurse colleagues at nearby schools cover for me).

[ozymandius]

17. Good morning to you, AnneD.

I know you are having a big sigh of relief. Congratulations on reaching the beginning of your vacation season.

Ozy :hi:

[RawMaterials]

4. A rich record, indeed: U.S. has more millionaires than ever

The number of millionaires in the United States increased to a record last year, boosted by gains in stocks and global financial markets, according to two new studies.

The number of U.S. households with a net worth of $1 million or more rose 21 percent in 2004, according to a survey released Tuesday by Spectrem Group, a wealth-research firm in Chicago. It is the largest increase since 1998, according to the study, which was based on data from more than 450 qualified respondents.

snip..

The surveys also show that despite growing pessimism among wealthy investors about the economy, the rich continue to increase in number and in wealth.

"People's attitudes toward the economy are so negative, but the reality is that the affluent are bouncing back to where they were before the bear market," says Catherine McBreen, managing director of Spectrem.

Economists question, though, whether the wealth boom will continue in 2005. Stock markets have swung wildly this year, and many are predicting slower growth — and potentially losses — in hedge funds.

Reflecting their doubts about the future of the financial markets and the economy, the affluent continue to hold large amounts of cash. The Spectrem survey showed that 9 percent of their assets were in cash deposits.

snip..

The amount of money held by the wealthy also surged. Millionaire households in the nation controlled more than $11 trillion in assets in 2004, up more than 8 percent from 2003, according to the Boston Consulting Group.

The wealthy remain highly skeptical of financial advisers, given their stock-market losses in 2001 and the wave of scandals on Wall Street. Thirty percent of affluent investors make most of their financial decisions without the help of a professional, an increase from past years, according to the Spectrem survey. Only 10 percent let their advisers make all the decisions.




http://seattletimes.nwsource.com/html/businesstechnology/2002288889_millionaires26.html

[RawMaterials]

6. Snow says yuan peg global risk-AWSJ

TOKYO (Reuters) - U.S. Treasury Secretary John Snow called China's currency peg a threat to the global economy and said the benefits of a near-term revaluation outweigh any risks in a newspaper article published on Thursday.

"I believe the risks associated with delay far outweigh any concerns with immediate reform," Snow wrote in the Asian Wall Street Journal.

"The currency system poses a risk to China's economy, its trading partners and global economic growth."

Snow called the yuan's tight 8.28 peg to the dollar "highly distortionary" to the global economy

snip..

A proposed bill in the U.S. Senate would slap tariffs on Chinese goods if Beijing does not soon relax the yuan.

Snow will give testimony on the Treasury's recent report on the currency practices of trade partners in the Senate at 1400 GMT. The Treasury stopped short of calling China a currency manipulator in the report.

A report in the Financial Times earlier this week said the Treasury had enlisted the help of unofficial envoys, including former Secretary of State Henry Kissinger, to convince China that it should soon act to prevent such protectionist trade measures.

Snow said a more flexible yuan would support China's economic stability, allow for better allocation of resources, promote productivity and quell speculative capital inflows.

Chinese officials have steadfastly said they will not bow to outside pressure and have no timetable for adjusting the yuan's peg.




http://news.yahoo.com/s/nm/20050526/bs_nm/economy_china_yuan_snow_dc?_ylt=AnrqrWFrzlR5r8YgF7BKZK6yBhIF?_ylu=X3oDMTBiMW04NW9mBHNlYwMlJVRPUCUl

[RawMaterials]

7. Oil holds over $51 after U.S. crude draw

LONDON (Reuters) - Oil prices held firm above $51 a barrel on Thursday after surging on news of a drop in U.S. crude stocks and on expectations of strong gasoline demand as the U.S. summer driving season gets under way.

U.S. light sweet crude for July delivery (CLc1) was up 20 cents at $51.18 a barrel after a jump of 2.6 percent on Wednesday.

Brent crude (LCOc1) rose nine cents to $50.16 a barrel, adding to gains of more than a dollar on Wednesday.

"The latest data may finally be signaling an end to the substantial builds... in the U.S. crude stocks," Martin King, energy analyst for FirstEnergy Capital Corp., said in a report.

Fund managers said the two-week dip below $50 that ended on Wednesday had lured more buyers in.

snip..

U.S. gasoline supplies rose by 600,000 barrels to 215.4 million barrels, leaving them in the upper end of the average range for this time of the year.

Many analysts say they should be adequate, though demand is expected to be very high.

The AAA auto and travel group said in a survey last week a record number of drivers would take to the roads over the upcoming Memorial Day weekend.

Demand is also still high in China, even if the rate of growth has cooled from last year's levels.

Chinese implied oil demand grew by 2.3 percent in April compared with the same month of 2004, slowing from an estimated 7.3 percent rise in March, Reuters calculations based on government data showed on Thursday.

Sharply lower net product imports versus last year partly offset a significant rise in refinery output, figures showed.

Chinese oil demand grew a modest 4.5 percent in the first quarter of this year versus 19.3 percent in the same quarter of 2004, the International Energy Agency said. It expects Chinese demand to rise by 7.4 percent over the whole year.



http://biz.yahoo.com/rb/050526/markets_oil.html?.v=3

[ozymandius]

9. good morning everyone. Here's yor pre-open blather

:donut:

8:32AM: S&P futures vs fair value: +5.3. Nasdaq futures vs fair value: +10.5. Futures trade holds relatively steady following the latest read on GDP, still indicating a higher open for the indices... The Commerce Dept. has revised Q1 GDP up to 3.5%, versus a prior read of 3.1% in the advance report, while Chain Deflator came in unchanged at 3.2%... Initial claims rose 1K to 323K... Bonds have also held steady, as the 10-yr note (+4/32) now yields 4.06%

8:00AM: S&P futures vs fair value: +4.6. Nasdaq futures vs fair value: +7.0. Futures market versus fair value suggesting a higher open for the cash market amid expectations the economy grew faster than previously estimated... At 8:30 ET, the market will get a revised read on Q1 GDP (consensus 3.6%) and its accompanying Chain Deflator (consensus +3.3%) - a key inflation measure... Weekly jobless claims (consensus 325K) will also be out at the bottom of the hour

[54anickel]

12. Bernanke's Outspokenness at Fed Faces Test in White House Job

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

snip>

Bernanke, whose nomination as council chairman was the subject of Senate Banking Committee hearings yesterday, will be taking on a role that once was filled by Fed Chairman Alan Greenspan. Others, including Harvard economics professor Greg Mankiw, who left as head of the Bush administration's CEA in February, ended their tenure with political scars and diminished chances for higher government posts.

It's a job that balances politics and economics, and where strong ideas frankly expressed don't guarantee success.

``When you're an academic, you actually get points for saying something that's original or different than conventional wisdom,'' said Harvard economist Jeffrey Frankel, a classmate of Bernanke's at Massachusetts Institute of Technology in the 1970s and CEA member from 1997 to 1999. ``In the government, usually it's dangerous, and one might think in this administration it would be particularly difficult.''

snip>

In the first test of how he would negotiate the political territory, Bernanke aligned himself with Bush's economic priorities at the Senate panel's hearing. The country, he said, needs an energy strategy, solutions for dealing with an aging population and a simpler tax code.

``The economic challenges facing the United States today, including the needs to address the implications of an aging population, to achieve long-term energy security, while protecting the environment, and to reform our tax system so that it is simpler, fairer, and more supportive of economic growth -- are as great as any time since the Council was created,'' Bernanke said in his statement to the committee.

He also showed he is adaptable. Asked by Maryland Senator Paul Sarbanes, a Democrat, whether he was retreating from what he wrote in a 1991 textbook that increasing the minimum wage would have only minor economic drawbacks, Bernanke replied: ``No, senator, I've just become more uncertain.''

more...

[54anickel]

14. EU cuts off China talks and moves to WTO

http://www.iht.com/articles/2005/05/26/business/textile.php

With one eye firmly on the French referendum on the European constitution this weekend, the European trade commissioner, Peter Mandelson, decided Wednesday to cut short talks with Chinese trade officials and begin action at the World Trade Organization that could lead to quotas being reimposed on some of the Chinese textiles that have been flooding into Europe.

"We are going ahead with formal consultations," said the commission's trade spokeswoman, Claude Véron-Réville. She added: "We made it clear to the Chinese that time is pressing."

The move to the WTO will almost certainly lead to protectionist measures being re-introduced on two categories of textile products at issue - T-shirts and linen cloth - in the first half of June.

It also may hamper the European Union's attempts to keep the dispute from widening to other categories of textiles, and from poisoning the broader trade relationship with China - its biggest trading partner after the United States.

snip>

Campaigners for a no vote on Sunday have used the sharp rise in Chinese textile imports as a symbol of the perils of globalization - a process they claim is driven by the free-market, Anglo-Saxon approach they see as championed by the EU.

Mandelson's decision to end efforts to resolve the issue informally is seen as an attempt to woo French voters by demonstrating decisive action in the matter.

more...

[ozymandius]

15. It's 9:30 and markets are open for bidness.

Dow 10,478.71 +20.91 (+0.20%)
Nasdaq 2,057.99 +7.87 (+0.38%)
S&P 500 1,190.01 0.00 (0.00%)
10-Yr Bond 40.84 +0.12 (+0.29%)

NYSE Volume 6,275,000
Nasdaq Volume 32,049,000

[54anickel]

16. A rich record, indeed: U.S. has more millionaires than ever (Again? -

Didn't we just read that same headline last year?)

http://seattletimes.nwsource.com/html/businesstechnology/2002288889_millionaires26.html

The number of millionaires in the United States increased to a record last year, boosted by gains in stocks and global financial markets, according to two new studies.

The number of U.S. households with a net worth of $1 million or more rose 21 percent in 2004, according to a survey released Tuesday by Spectrem Group, a wealth-research firm in Chicago. It is the largest increase since 1998, according to the study, which was based on data from more than 450 qualified respondents.

snip>

The study excluded the value of primary residences but included second homes and other real estate.

A separate study, also released Tuesday, by Boston Consulting Group found that the United States continues to lead the world in creating millionaires. The number of households in the nation with liquid assets of $20 million or more is increasing by 3,000 households a year.

The studies suggest that despite falling wages for nonmanagement employees in 2004, the fortunes of those at the top continued to rise. Unlike many wage earners, the wealthy rely on investments for much of their increasing wealth. They also tend to invest in higher-risk and potentially faster-growing investments, including hedge funds, private-equity funds and debt instruments.

more...

[RawMaterials]

18. Its inflation 1 millions just

is not what it used to be.

[AnneD]

25. Ok, but......

how many American families slipped from middle class to lower middle class and to poor. Where is that study. I remember something from the IRS that said incomes dropped for the 2 year in a row recently? Sorry to be the fly in the ointment, but Rosey Scenerio is not my favourite author.

[54anickel]

26. Shhhh, nobody's supposed to be noticing that part of the transfer

of wealth. This is the phase where they hollow out the middle class. That's where the "re-edumacation" comes to play.

They move a few middle class to upper middle class, while a handful of upper middle class are bumped to upper class. That sets the rosy scenario example for the rest (lower and middle). "Why, that could be me someday"! That metality gets the folks left at at the bottom half of the middle to vote against their own best interests, and in the interest of the upper middle class and above(to hell with the lower class - they don't tend to vote). They continue to move down the ladder, but don't realize it - all the while hoping they'll move up a rung or two, just like those in the shining example.

Once the middle class gets hollowed out to one tier (which actually "re-catogorizes" those upper middle class as just middle class (everyone else has become lower class), they become the sheep for the final fleecing. :evilgrin:

[AnneD]

40. Sooooo

When do you think shearing time will be......I see a pump and dump too.

[cosmicdot]

46. poverty rate up 3rd year in a row (from 2004)

posted at

http://www.democraticunderground.com/discuss/duboard.php?az=show_topic&forum=104&topic_id=3734962


Flipside:

http://www.washingtonpost.com/wp-dyn/articles/A35175-2004Aug26.html

Poverty Rate Up 3rd Year In a Row
More Also Lack Health Coverage

By Ceci Connolly and Griff Witte
Washington Post Staff Writers
Friday, August 27, 2004; Page A01

The number of Americans living in poverty or lacking health insurance rose for the third straight year in 2003, the Census Bureau announced yesterday, reflecting a job market that failed to match otherwise strong economic growth.

Overall, the median household income remained stagnant at $43,318, while the national poverty rate rose to 12.5 percent -- 35.9 million people -- last year, from 12.1 percent in 2002. Hit hardest were women, who for the first time since 1999 saw their earnings decline, and children. By the end of 2003, 12.9 million children lived in poverty.

[54anickel]

19. Barclays Predicts Higher Loan Losses on U.K. Slowdown

(Thank goodness we have the new bankruptcy laws here!!!) :eyes:


http://www.bloomberg.com/apps/news?pid=10000102&sid=aw.Y4AHaoY3k&refer=uk

May 26 (Bloomberg) -- Barclays Plc, Britain's third-largest bank, predicted loan losses this year will swell amid ``signs of strain'' in the U.K. consumer-lending market. The stock had its biggest decline in more than 2 1/2 years.

The company's earlier forecast for a ``significant'' increase in loan losses is now ``somewhat higher,'' Finance Director Naguib Kheraj said on a conference call with analysts today. Declining house prices in Britain will ``slow the rate of growth of consumer borrowing in the U.K.,'' Kheraj said.

``It's not going to be easy for the banks over the next few months,'' said Colin Morton, who manages about $550 million in assets, including Barclays shares, at Rensburg Fund Management Ltd. in Leeds, England. The average analyst downgrade on Barclays's 2005 earnings after today's statement may be ``a couple of percent.''

snip>

U.K. lenders, which reported record earnings last year because of the borrowing boom, have been scrutinized by the country's lawmakers and regulators on concern they may have encouraged consumers to borrow more than they could repay.

Barclays said today that loans that may not be repaid increased in the first quarter, led by a jump in its credit-card unit, which issued Europe's first card in 1966. Late payments on loans also rose in mortgage and consumer lending. Last year the bank's total loan losses amounted to 1.09 billion pounds.

``It's very clear that the credit cycle in the U.K. has turned,'' said Michael Helsby, head of U.K. banks research at Fox- Pitt, Kelton. ``The fact that Barclays has seen a deterioration in the quality of their credit card-book is not good news.''

more...

[54anickel]

20. Today's reports - it's Maeve Day!

KEY EVENTS TO WATCH FOR:

Thursday, May 26, 2005

8:30 AM ET. 1st Quarter Preliminary GDP (expected +3.6%; previous +3.8%)

8:30 AM ET. 1st Quarter Preliminary Corp Profits (previous +12.5%)

8:30 AM ET. May 21 Initial Jobless Claims (expected +4K; previous - 20K)

10:00 AM ET. May 7 DJ-BTM Business Barometer (previous -0.1%)

10:00 AM ET. April Conference Board Help-Wanted Index (previous 39)

12:00 PM ET. April Chicago Fed Midwest Mfg Index (previous -1.4%)

4:30 PM ET. May 21 Money Supply

[54anickel]

21. GDP Up 3.5 Percent; Jobless Claims Rise

http://www.forbes.com/business/feeds/ap/2005/05/26/ap2057999.html

snip>

The new reading is close to the 3.6 percent growth rate that economists were forecasting before the release of the GDP report.

The 3.5 percent pace clocked in the first quarter of this year - while better than an initial calculation for the quarter - still represented some slowing from the 3.8 percent pace seen in the final quarter of 2004. Higher energy prices and borrowing costs did make consumers and businesses a bit cautious in the first quarter, the main reason for the moderation in overall economic growth compared with the previous quarter.

Meanwhile, the Labor Department said Thursday that initial jobless claims grew by 1,000 to a seasonally adjusted 323,000 in the week that ended May 21.

Recent economic reports have suggested that the economy, which hit a rough patch in March, is bouncing back. Importantly, employers boosted payrolls in April by 274,000, a noticeable improvement from the lackluster 146,000 new jobs generated in March. The employment report for May will be released by the government next week, and economists are forecasting a gain of around 175,000, which would be respectable but not spectular job growth.

President Bush wants the job market, the overall economy and certainly the financial markets to be on sound footing as he sells his overhaul of Social Security, which would allow workers to set up personal investment accounts in stocks and bonds.

So, will they cook him what he wants? Me thinks so

more...

[ozymandius]

24. So is this why Mogambo Guru, the folks at Financial Sense

and other iconoclast observers have sounded the alarm over the recent unreal market results? Most everything is occurring opposite of what one would expect. Sectors of retail sales slump, yet the market does a happy dance. Crude oil prices go up yet gas prices go down. No sense.

Is 990N pumping the numbers so sheeple will buy a bill of goods?

[54anickel]

27. 990N might be at work in the S&P numbers, but I think some of what

we have seen the past few weeks is the result of hedge-funds attempting to unwind a bit. The month end and quarter end could get interesting (liquidity crisis?). That Money supply report due out late in the day will probably give Mogambo a heart attack - there were some HUGE repos issued since GM joined the ranks of junk.

That downgrading will also cause a lot of fund reallocation, as funds that held GM and/or Ford would now be considered "agressive growth" funds rather than "income" funds. Fund managers will need to replace them in their portfolios or deal with a lot of holders that do not want to be holding "agressive growth" funds transferring out. We've seen how the downgrading has effected related companies down-stream as well.

All in all, there's a whole lotta shiftin' goin' on.

[54anickel]

22. U.S. Q1 before-tax corporate profits rise record 23.6%

http://futures.fxstreet.com/Futures/news/afx/singleNew.asp?menu=latestnews&pv_noticia=1117111523-c84d0f08-29033

WASHINGTON (AFX) -- U.S. corporations' before-tax profits from current production rose a record 23.6% to $1.307 trillion annualized in the first quarter, the Commerce Department estimated Thursday. The increase brought the year-over-year growth up to 35.9%, the fastest growth since the third quarter of 1987. The government data are adjusted for inventory valuations and capital consumption.

[Roland99]

23. And the average employee raise is about 3-4%

This is a GREAT economy, if you're a CEO or a corporation.

[54anickel]

28. Here's a check on the buck - flyin' high

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

Last trade 86.76 Change +0.41 (+0.47%)

Settle 86.35 Settle Time 23:36

Open 86.38 Previous Close 86.35

High 86.90 Low 86.27


The June Dollar was higher overnight as it extends this spring's breakout above the 50% retracement level of the 2004 decline crossing at 85.95. Stochastics and the RSI are overbought, diverging and have turned neutral signaling that a short-term top might be in or is near. If the Dollar extends this spring's rally, the 62% retracement level of the 2004 decline crossing at 87.18 is the next upside target. Closes below the 10- day moving average crossing at 86.26 would signal that a short-term top has been posted. Overnight action sets the stage for a steady to higher opening in early-day session trading.

The June Euro was lower overnight as it extends this spring's decline. Stochastics and the RSI are oversold but are neutral to bearish signaling that additional short-term weakness is possible. If June extends this spring's decline, the 62% retracement level of the 2004 rally crossing at 124.940 is the next downside target. Closes above last week's high crossing at 126.980 would signal that a short-term low has been posted. Overnight action sets the stage for a steady to lower opening in early- day session trading.

The June British Pound was lower overnight as it extends the recent breakout below the 50% retracement level of the 2004 rally crossing at 1.8358. Stochastics and the RSI are oversold and are neutral hinting that a short-term low might be in or is near. If June extends this spring's decline, the 62% retracement level of the 2004 rally crossing at 1.8123 is the next downside target. Closes above the 10-day moving average crossing at 1.8321 are needed to confirm that a short-term low has been posted. Overnight action sets the stage for a steady to lower opening in early-day session trading.

The June Swiss Franc was lower overnight and trading below the 62% retracement level of the 2004 rally crossing at .8152. Stochastics and the RSI are oversold and have turned neutral hinting that a short-term low might be in or is near. If June renews last week's breakout below February's low crossing at .8216, the 75% retracement level of the 2004 rally crossing at .7988 is the next downside target. Closes above the 20- day moving average crossing at .8254 are needed to confirm that the decline off April's high as come to an end. Overnight action sets the stage for a steady to lower opening in early-day session trading.

The June Canadian Dollar was lower overnight as it consolidates below the 38% retracement level of the 2004 rally crossing at .7963. Stochastics and the RSI are turning bearish again signaling that sideways to lower prices are possible near-term. If June extends this spring's decline, the 50% retracement level of the 2004 rally crossing at .7801 is the next downside target. Closes above the 20-day moving average crossing at .7969 are needed to confirm that a short-term low has been posted. Overnight action sets the stage for a steady to lower opening in early-day session trading.

The June Japanese Yen was lower overnight as it extends last week's breakout below the 75% retracement level of the April-May rally crossing at .9354 and the 10-day moving average. Stochastics and the RSI are oversold and are neutral hinting that a short-term low might be in or is near. If June renews last week's decline, April's low crossing at .9233 is the next downside target. Closes above the 10-day moving average crossing at .9321 would signal that a short-term low has been posted. Overnight action sets the stage for a steady to lower opening in early-day session trading.

[54anickel]

29. 11:38 numbers, then I gotta run

Dow 10,519.28 +61.48 (+0.59%)
Nasdaq 2,067.12 +17.00 (+0.83%)
S&P 500 1,196.62 +6.61 (+0.56%)
10-Yr Bond 4.061% -0.01
NYSE Volume 646,381,000
Nasdaq Volume 678,206,000


11:30AM : Little changed since the last update as the major averages vacillate in roughly the same ranges... Aside from this morning's encouraging GDP data, investors have also witnessed a smaller than expected rise in weekly jobless claims, which rose 1K to 323K (consensus 326K)... However, even though the Labor Dept.'s report has left the 4-week average at 331K and at a low level consistent with 175K or so monthly increases in nonfarm payrolls, the volatile data have been relatively overshadowed by the more influential GDP report... NYSE Adv/Dec 2192/808, Nasdaq Adv/Dec 1929/826

11:00AM : Indices back off their best levels, but still show noticeable gains for the day... Treasurys, however, have come back into favor, as the 10-year note (+3/32) has turned positive to yield 4.07%... Prompting the recovery effort have been comments from Fed Governor Gramlich on the politics of inflation targeting... Gramlich has said that the economy has made it "through the soft patch" and that the inflation record in the US is "already good."...NYSE Adv/Dec 2196/760, Nasdaq Adv/Dec 1954/767

10:30AM : Renewed buying interest lifts the major indices to new session highs... While Technology (+1.1%) continues to lead the charge on a percentage basis, spirited leadership from the influential Financial sector (+0.5%) has recently helped the Dow and S&P nearly double early gains... Notable movers turning positive within the last 30 minutes have been blue chips like Citigroup (C 47.64 +0.19), JP Morgan (JPM 36.04 +0.13) and American Express (AXP 52.86 +0.23)...NYSE Adv/Dec 2059/746, Nasdaq Adv/Dec 1823/750

10:00AM : Equities remain on the offensive as virtually every sector trades in positive territory... Strength across the board has helped Technology pace the way higher while Financial, Health Care and Industrials have also been influential leaders to the upside... Energy has also shown relative strength amid decent follow-through buying interest in oil futures while a rebound in Steel has provided a boost to the Materials sector... One of the best performing S&P groups has been Homebuilding (+2.2%), following a strong report and upside FY05 guidance from Toll Brothers (TOL 88.95 +3.22)... NYSE Adv/Dec 1791/619, Nasdaq Adv/Dec 1604/695

9:40AM : Market opens modestly higher following a report that showed the economy grew faster than previously expected... The Commerce Dept. upwardly revised Q1 GDP to a 3.5% annual rate of growth, versus a disappointing prior read of 3.1%, due to a smaller than expected March trade deficit... Even though the GDP revision checked in just shy of economists' expectations of 3.6%, the data help to undermine lingering concerns that the recent "soft patch" in the monthly economic data was overdone...

Meanwhile, the report made no adjustments to key measures of inflation - the core PCE price index and chain deflator were left unchanged at 2.2% and 3.2%, respectively...

[ozymandius]

30. Have a great afternoon 54anickel.

See you later!

Ozy :hi:

[AnneD]

32. Thank you , 54anickle

enjoy your day.....

[ozymandius]

31. 11:46 update

Numbers are up and stammering.

Dow 10,516.97 +59.17 (+0.57%)
Nasdaq 2,066.27 +16.15 (+0.79%)
S&P 500 1,196.08 +6.07 (+0.51%)
10-Yr Bond 40.65 -0.07 (-0.17%)
NYSE Volume 678,081,000
Nasdaq Volume 709,902,000

[loudsue]

36. O Happy Day! Free Kool-aid for EVERYONE! On the House!

:popcorn: So....let me guess! The economic recovery is working, and all is well in the world and in the financial markets, and that's why the stock market is up?

O8) The world must be at peace, and the money must be flowing freely to all God's children. O8)

Ok. I'll quit drinking this early in the day. I promise.

Keep up the good work, Marketeers! :yourock:

:kick::kick::kick:

[ozymandius]

37. The Kool-Aid is monkey flavored.

That's why I start hitting the scotch after breakfast.

[AnneD]

41. Oh Ozy

:spray: :rofl: and I was concerned that someone laced my coffee with zoloft.

[ozymandius]

33. Oil Prices Edge Past $51 Per Barrel

http://biz.yahoo.com/ap/050526/oil_prices.html?.v=14

Oil Prices Edge Past $51 a Barrel After Drop in U.S. Inventories Ahead of Summer Driving Season

BUDAPEST, Hungary (AP) -- Crude oil futures prices edged above $51 a barrel on Thursday after an unexpected drop in U.S. crude inventories ahead of the summer driving reason rattled markets.

Traders were expecting another increase in inventories. The decline reported Wednesday was just the second in 15 weeks.

-cut-

The U.S. Energy Information Administration's latest petroleum data showed U.S. commercial crude oil inventories fell 1.6 million barrels to 332.4 million barrels in the week ending May 20 from the previous week.

more...

[ozymandius]

34. Oops - a thread dupe. n/t

[ozymandius]

35. 12:37 numbers and blather

Dow 10,517.31 +59.51 (+0.57%)
Nasdaq 2,067.90 +17.78 (+0.87%)
S&P 500 1,196.39 +6.38 (+0.54%)
10-Yr Bond 40.70 -0.02 (-0.05%)

NYSE Volume 828,441,000
Nasdaq Volume 854,434,0

12:30PM: More of the same for stocks as market internals still suggest a bullish bias... Advancers on both the NYSE and the Nasdaq hold a more than 2 to 1 advantage over decliners while a more than 3-to-1 ratio of up to down volume at the Big Board and the Composite reflects an even more positive tone to trading... Meanwhile, the Dow, S&P and Nasdaq continue to trade well above initial support levels but have run into secondary resistance near levels of 10530, 1198 and 2072, respectively...NYSE Adv/Dec 2216/900, Nasdaq Adv/Dec 1946/895

[ozymandius]

38. range bound and coming off highs

1:31
Dow 10,502.21 +44.41 (+0.42%)
Nasdaq 2,065.70 +15.58 (+0.76%)
S&P 500 1,195.53 +5.52 (+0.46%)
10-Yr Bond 40.81 +0.09 (+0.22%)
NYSE Volume 981,664,000
Nasdaq Volume 1,011,325,000

[ozymandius]

39. slice of blather

1:00PM: Range-bound trading persists as the major averages continue to trade sideways... Meanwhile, investors have sifted through better than expected earnings reports from two S&P constituents... However, even though both Costco Wholesale (COST 45.20 -0.22) and HJ Heinz (HNZ 37.21 -0.23) beat analysts' forecasts by a penny, shares have suffered... Lower than expected Q3 revenues and merely reaffirmed Q4 guidance, even as oil prices - which weighed on Q3 results - have come down since Costco last warned (Apr. 22), have so far cost the retailer roughly $105 mln in market cap...

Preventing Heinz shares from catching up to the rest of the market has been downside FY06 earnings guidance... NYSE Adv/Dec 2238/919, Nasdaq Adv/Dec 1954/919

[ozymandius]

42. numbers and blather

2:15
Dow 10,517.28 +59.48 (+0.57%)
Nasdaq 2,068.49 +18.37 (+0.90%)
S&P 500 1,196.69 +6.68 (+0.56%)
10-Yr Bond 40.81 +0.09 (+0.22%)

NYSE Volume 1,120,103,000
Nasdaq Volume 1,128,905,00

2:00PM: Market rebounds somewhat following the modest pullback, as buying still remains widespread across most areas... Bucking the bullish bias, however, has been Dollar General (DG 19.60 -2.45)... While one of the most actively traded stocks on the NYSE, the retailer has been the worst performing NYSE-listed issue, losing more than 11.0% after it missed analysts' Q1 forecasts by $0.02 and merely issued in-line Q2 guidance...

Boston Scientific (BSX 28.10 -1.36) has also been a big mover to the downside, extending yesterday's 3.7% disappointing outlook-induced drubbing while Hormel Foods (HRL 30.12 -2.63) has been another Top five Big Board laggard after missing Q2 expectations and simply reaffirming its outlook... NYSE Adv/Dec 2202/972, Nasdaq Adv/Dec 1975/961

[ozymandius]

43. numbers are stuck

3:15
Dow 10,522.03 +64.23 (+0.61%)
Nasdaq 2,068.09 +17.97 (+0.88%)
S&P 500 1,196.92 +6.91 (+0.58%)
10-Yr Bond 40.82 +0.10 (+0.25%)

NYSE Volume 1,335,144,000
Nasdaq Volume 1,304,262,000

3:00PM: Stocks continue to hold their own and sport broad-based gains heading into the final hour of trading... Of the best performing S&P groups, Homebuilding (+3.7%) continues to lead the charge, surging after Toll Brothers (TOL 90.41 +4.68) more than doubled Q2 profits, handily beating analysts' forecasts by $0.22 on year-over-year revenue growth of over 50%, and raised its FY05 profit outlook...

Internet (+2.0%) has also been strong, amid news that Yahoo (YHOO 37.01 +0.74) will roll out its new PhotoMail service, while Biotech (+1.0%) has surged amid reports that Elan Corp's (ELN 8.08 +0.87) CEO predicted its suspended Tysabri drug will return to the market... NYSE Adv/Dec 2221/1002, Nasdaq Adv/Dec 1970/1001

[ozymandius]

44. 3:34 and pumping

Dow 10,531.17 +73.37 (+0.70%)
Nasdaq 2,070.64 +20.52 (+1.00%)
S&P 500 1,197.73 +7.72 (+0.65%)
10-Yr Bond 40.81 +0.09 (+0.22%)
NYSE Volume 1,426,528,000
Nasdaq Volume 1,388,083,000

3:30PM: Market showing no signs of slowing going into the close as buyers remain in control of the action... While this morning's GDP revision set the definitive tone to trading, a final read on May Consumer Sentiment (consensus 86.0) tomorrow morning (9:45 ET) could also influence market direction, during what is expected to be a day of limited participation ahead of the Memorial Day holiday... Keep in mind that just two weeks ago, the fifth consecutive decline on monthly consumer sentiment - the lowest level since March 2003 - contributed to overall nervousness heading into the weekend... NYSE Adv/Dec 2233/1000, Nasdaq Adv/Dec 2007/982

[RawMaterials]

45. Closing Numbers and Blather

Dow 10537.60 +79.80 (+0.76%)
Nasdaq 2071.24 +21.12 (+1.03%)
S&P 500 1197.62 +7.61 (+0.64%)
10-Yr Bond 4.081% +0.09

NYSE Volume 1,611,711,000
Nasdaq Volume 1,595,845,000



Close: Confirmation that the economy grew faster in Q1 than previously expected underpinned an upbeat sentiment that lifted stocks across the board and closed the major indices near session highs... The Dow posted a strong 0.8% gain, the S&P finished at its best levels since mid March and the Nasdaq more than erased its only blemish in ten days... The Commerce Dept. revised Q1 GDP up to a 3.5% annual rate of growth, versus a disappointing prior read of 3.1%, due to a smaller than expected March trade deficit...

Even though the upward revision was widely anticipated, the data helped alleviate concerns about the recent "soft patch" in economic data... The report also allayed worries that high energy costs weighed on economic expansion, providing a floor of broad-based buying support that helped all ten economic sectors close to the upside... Technology (+1.2%) paced the gains, getting a large lift from chip stocks, which surged 1.9% after Gartner Inc. raised its 2005 growth forecast for global semiconductor sales to 5.9% to $233 bln (from 3.4%)... Strength in Hardware, Software, Networking and Internet were also contributors to the upside...

The more influential Financial sector (+0.8%), however, provided the bulk of spirited leadership, following the upward revision to GDP... The removal of some nervousness surrounding issues at American International Group (AIG 55.75 +1.67), after New York Attorney General Eliot Spitzer filed his civil suit against the insurer, helped AIG surge more than 3.0% while falling bond yields also provided some buying support, as the benchmark 10-year note closed up 2 ticks to yield 4.07%...

Health Care (+0.4%) also climbed, getting a boost from Biotech - amid speculation that Elan Corp's (ELN 8.08 +0.87) suspended Tysabri drug could return to the market - and HMOs (i.e. AET, CI)... The Industrials sector (+0.6%) also showed relative strength, benefiting in part from a 2.5% surge in Boeing (BA 62.98 +1.53), which hit a four-year high after winning a $3.9 bln order from Indonesian air carrier Lion Air... Consumer Discretionary (+0.6%) was also strong, garnering the bulk of its buying support from strength in homebuilders...

Homebuilding (3.7%) was the best performing S&P group after Toll Brothers (TOL 90.25 +5.52) more than doubled Q2 profits, handily beating analysts' forecasts by $0.22, and raised its FY05 earnings outlook... Weakness from Dollar General (DG 19.60 -2.45) - the worst performing NYSE-listed issue - and Costco Wholesale (COST 45.20 -0.22), however, minimized gains in the S&P Retail Index (+0.5%)... DG missed analysts' Q1 forecasts by $0.02 and merely issued in-line Q2 guidance while COST beat estimates by a penny, but missed on revenues and simply reaffirmed Q4 guidance that was widely expected to be raised since oil prices have plummeted since it last warned...

Even though crude oil prices closed slightly higher, as $51.01/bbl (+$0.03), the Energy sector (+0.7%) closed higher, benefiting from solid follow-through buying interest in ExxonMobil (XOM 56.22 +0.54) and a 1.6% surge in Occidental Petroleum (OXY 72.69 +1.20), which was upgraded at Goldman Sachs to Outperform...Also shrugging off a strong dollar was the Materials sector (+0.6%), amid a rebound in Steel stocks and a 2.0% recovery effort in Monsanto (MON 57.76 +1.31), which lost roughly 3.0% two days ago after filing a $2.0 bln mixed shelf... The greenback strengthened against major currencies on speculation the French will vote (May 29) against the referendum to the EU constitution on Sunday...

Utilities (+0.4%), which garnered attention after Goldman Sachs initiated coverage of several names (i.e. EXC, DUK, AEP and ED to name a few), also closed in positive territory... Separately, the Labor Dept. showed that initial claims rose 1K to 323K (consensus 326K); however, even though he Labor Dept.'s report left the 4-week average at 331K and at a low level consistent with 175K or so monthly increases in nonfarm payrolls, the volatile data were relatively overshadowed by the more influential GDP report...DJTA +1.0, DJUA +0.2, DOT +1.4, Nasdaq 100 +1.1, Russell 2000 +1.4, SOX +1.9, S&P Midcap 400 +1.0, XOI +0.4, NYSE Adv/Dec 2287/988, Nasdaq Adv/Dec 2133/893