STOCK MARKET WATCH, Thursday November 16

[ozymandius]

Thursday November 16, 2006

COUNTING THE DAYS
DAYS REMAINING IN THE * REGIME 795 LONG DAYS
DAYS SINCE DEMOCRACY DIED (12/12/00) 2150 DAYS
WHERE'S OSAMA BIN-LADEN? 1856 DAYS
DAYS SINCE ENRON COLLAPSE = 1817
Number of Enron Execs in handcuffs = 19
ENRON EXECS CONVICTED = 7
Enron execs conveniently deceased = 3
Other Arrests of Execs = 54


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




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

AT THE CLOSING BELL ON November 15, 2006

Dow... 12,251.71 +33.70 (+0.28%)
Nasdaq... 2,442.75 +12.09 (+0.50%)
S&P 500... 1,396.57 +3.35 (+0.24%)
Gold future... 623.80 -1.50 (-0.24%)
30-Year Bond 4.70% +0.04 (+0.75%)
10-Yr Bond... 4.62% +0.05 (+1.03%)






GOLD, EURO, YEN, Loonie and Silver


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 Chris Puplava

HOUSING SLOWDOWN CONTINUES THOUGH CONSUMER CONFIDENCE AND MANUFACTURING HOLD STEADY

Mid-Cycle Slowdown or Recession?

A protracted period of weak housing prices will likely lead to reduced retail sales with a decline in the wealth effect and depressant on confidence, though the latter has yet to be seen. Housing prices are still searching for a bottom as are building permits, with previous bottoms in year-over-year (YOY) rates for home prices seen in prior cycle lows near 2% and building permits near 800,000 units.

-see chart-

The current contraction in housing may or may not follow previous cycles, and there is no guarantee that the final bottom in YOY price change or building permits necessarily has to bottom near previous housing downturns. In the wash of liquidity and decade-low interest rates, the bottom may come sooner than many anticipate as both may help to keep a higher floor on housing than in prior downturns.

-cut-

When the housing cycle peaked in 1977, the fixed-rate-mortgage (FRM) was roughly 9% and was nearly 14% at the 1984 peak in housing starts. The peak that was seen last summer corresponded with a FRM below 6%. The lower interest rates in this cycle should help stimulate demand as lower interest rates make housing more affordable.

This is currently happening as the Mortgage Bankers Association of America (MBA) released their Applications Survey which showed that purchase applications increased 2.7% last week and refinance applications increased 6.5% over the prior week. The MBA purchase index is 7% higher than a month ago, though still 14% below last year's levels while the refinance index is 15% higher than a month ago and 19% above last year's levels. The increase in the purchasing applications is likely due to the FRM falling 71 basis points from its recent high seen in the week ending June 23rd. The rise in refinance applications is likely the result of adjustable-rate-mortgage (ARM) home owners locking in lower rates as their ARMs reset, as the ARM has fallen 61 basis points from the peak seen in the week ending July 7th.

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

[ozymandius]

2. Today's Reports-a-plenty

8:30 AM Core CPI Oct
Briefing Forecast NA
Market Expects NA
Prior 0.2%

8:30 AM CPI Oct
Briefing Forecast -0.2%
Market Expects -0.3%
Prior -0.5%

8:30 AM Core CPI Oct
Briefing Forecast 0.2%
Market Expects 0.2%
Prior 0.2%

8:30 AM Initial Claims 11/11
Briefing Forecast 310K
Market Expects 310K
Prior 308K

9:00 AM Net Foreign Purchases Sep
Briefing Forecast NA
Market Expects $71.0B
Prior $116.8B

9:15 AM Capacity Utilization Oct
Briefing Forecast NA
Market Expects NA
Prior 81.9%

9:15 AM Industrial Production Oct
Briefing Forecast 0.2%
Market Expects 0.3%
Prior -0.6%

9:15 AM Capacity Utilization Oct
Briefing Forecast 81.9%
Market Expects 82.0%
Prior 81.9%

12:00 PM Philadelphia Fed Nov
Briefing Forecast 4.0
Market Expects 5.0
Prior -0.7

http://biz.yahoo.com/c/e.html

[UpInArms]

13. 8:30 reports (it's all "good"!)

U.S. CPI up 1.3% y-o-y, slowest inflation since 2002 - 8:29 AM ET, Nov 16, 2006 - 1 minute ago

U.S. Oct. CPI medical prices up 0.3% - 8:29 AM ET, Nov 16, 2006 - 1 minute ago

U.S. real weekly earnings up 3.2% y-o-y - 8:29 AM ET, Nov 16, 2006 - 1 minute ago

U.S. Oct. CPI owners' equivalent rent up 0.4% - 8:29 AM ET, Nov 16, 2006 - 1 minute ago

U.S. Oct. CPI energy prices fall 7.0% - 8:29 AM ET, Nov 16, 2006 - 1 minute ago

U.S. continuing jobless claims flat at 2.44 mln - 8:29 AM ET, Nov 16, 2006 - 1 minute ago

U.S. 4-week avg. initial jobless claims up 1,000 to 313,750 - 8:29 AM ET, Nov 16, 2006 - 1 minute ago

U.S. initial weekly jobless claims fall 2,000 to 308,000 - 8:29 AM ET, Nov 16, 2006 - 1 minute ago

U.S. core CPI up 2.7% y-o-y vs. 2.9% in Sept. - 8:29 AM ET, Nov 16, 2006 - 1 minute ago

U.S. Oct. core CPI up 0.1% vs. 0.2% expected - 8:29 AM ET, Nov 16, 2006 - 1 minute ago

U.S. Oct. CPI falls 0.5% vs. -0.2% expected - 8:29 AM ET, Nov 16, 2006 - 3 minutes ago

[54anickel]

21. U.S. September capital flows fall to $65.1 billion - Data hits Treasury bond market

http://www.marketwatch.com/News/Story/Story.aspx?guid=%7BD554CCF6%2DF55E%2D44B1%2DB472%2D20A16521424F%7D&source=blq%2Fyhoo&dist=yhoo&siteid=yhoo

WASHINGTON (MarketWatch) -- Foreign investors put a smaller amount of money into long-term U.S. securities in September than in August, the Treasury Department reported Thursday.

Net long-term capital inflows fell to $65.1 billion in September from a revised $114.4 billion in August. August's inflows had previously been reported as $116.8 billion, which was a record.

Private foreign investors slowed their purchases of securities, buying $71.3 billion in Treasury bonds and notes, government agency bonds and other securities in September. Investors sold $8.1 billion in Treasury bonds and notes in the month.

Foreign central banks also bought fewer Treasurys in September, the data show. Official institutions bought $16.7 billion in U.S. securities, with $7.7 billion of that being Treasury bonds and notes. In August, central banks purchased $16.9 billion in Treasurys.

Treasurys gave up their gains after the report Thursday, sending yields higher, on fears that foreign investors are losing their taste for U.S. government assets. See full story.

more...

[54anickel]

23. Rubin, Volcker Say Investors May Avoid Buying Dollars (Update2)

http://www.bloomberg.com/apps/news?pid=newsarchive&sid=a4rpYkt9vI.Q

Nov. 15 (Bloomberg) -- Robert E. Rubin, Treasury secretary under President Bill Clinton, and former Federal Reserve Chairman Paul Volcker said foreign investors probably won't keep increasing dollar holdings, raising the risk of a slump in the currency.

Failure by the U.S. government to shrink its budget deficit may spook the central banks, hedge funds and others who have been buying Treasury notes, Rubin said. Volcker said the U.S. borrowing requirements raise the risk of a ``crisis'' in the dollar as soon as the next two and a half years.

``It seems almost inconceivable that this will continue indefinitely,'' Rubin, who now chairs Citigroup Inc.'s executive committee, said in a videotaped message for a dinner hosted by the Concord Coalition yesterday in New York.

Rubin, 68, who served as Treasury chief from January 1995 to July 1999, helped engineer economic policies that allowed Clinton in 1998 to claim the first budget surplus in almost 30 years. The dollar, measured against the currencies of the largest U.S. trading partners, rose 14 percent under his tenure.

The Arlington, Virginia-based Concord Coalition was founded in 1992 by the late former Senator Paul Tsongas, a Democrat from Massachusetts, and former Senator Warren Rudman, a New Hampshire Republican, to lobby for reducing the fiscal deficit and raise awareness about the cause and consequences of the persistent shortfall.

more...

[ozymandius]

3. Oil prices steady in slow Asian trading

SINGAPORE - Oil prices moved little Thursday, a day after rising in reaction to a U.S. government report that gasoline inventories had fallen for the fifth-straight week.

Light sweet crude for December delivery dropped 2 cents to $58.74 a barrel in Asian electronic trading on the New York Mercantile Exchange.

-cut-

On Wednesday, the U.S. Energy Information Administration said in its weekly report that crude oil inventories rose 1.3 million barrels to 336.0 million barrels last week, but gasoline inventories fell by 3.7 million barrels to 200.3 million barrels.

-cut-

U.S. inventories of gasoline have fallen about 7 percent over the past five weeks to levels that are about the same as a year ago, when Gulf Coast producers were still recovering from hurricanes Katrina and Rita. Refiners have been trimming production on the back of a 25 percent drop in oil prices over the past few months.

http://news.yahoo.com/s/ap/oil_prices

[ozymandius]

4. OPEC slightly increases estimate of world oil demand

VIENNA (AFP) - Oil exporters' group OPEC has increased its forecasts for world oil demand this year and said that its recent production cut had succeeded in stabilizing prices.

The forecast and comments by the cartel, contained in its monthly report, came amid speculation about whether the 11-member organisation would further reduce its output quota at its next meeting in December.

The Organization of Petroleum Exporting Countries slightly increased its estimate of worldwide demand for oil in 2006, now expected to average 84.3 million barrels per day (bdp), the powerful cartel said in a report Wednesday.

The estimate is an upwards revision of 100,000 bpd from a previous forecast of 84.2 million bpd.

http://news.yahoo.com/s/afp/20061115/bs_afp/opecenergyoil_061115152425

[ozymandius]

5. Big Oil headed for tougher Congress

NEW YORK - So far this year, 40 bills have been introduced in Congress about alleged gasoline price gouging. Twenty-one bills have addressed windfall profits by oil companies. Few have gotten past the press-release stage.

But next year, Big Oil is likely to feel as if it's wearing one of those "kick me" signs.

The Democratic leadership has already indicated it will try to repeal earlier tax breaks for oil companies. A gusher of new legislation could develop as well, as Democrats get a chance to see their energy bills move past the trash can. In fact, the Democrats will try to put together their own version of a comprehensive energy bill that tackles everything from gas-mileage standards to tax breaks for alternative energy sources, some congressional analysts believe.

"The oil companies are a big target for the Democratic majority," says Steven Smith, a congressional expert and professor at Washington University in St. Louis. "There is virtually near unanimity among the Democrats to do something about company tax breaks, but they will almost certainly seek a package of energy and environmental proposals in this Congress."

http://news.yahoo.com/s/csm/20061115/ts_csm/abullseye_1

[WePurrsevere]

10. FYI, the article at the link has changed (it's so annoying when news sources do that)

I had wanted to read it.

Anyway, I just thought you should know that it currently is this (& who knows what it will in in a few more minutes):

Oil prices rise on OPEC leader's warning

By GEORGE JAHN, Associated Press Writer 9 minutes ago

VIENNA, Austria - Oil prices rose Thursday after the U.S. government reported that gasoline inventories had fallen for the fifth straight week and
OPEC's president warned that the group may decide to further reduce output.
ADVERTISEMENT


The Organization of Petroleum Exporting Countries last month announced its intention to cut production by 1.2 million barrels a day — 4 percent of its output — to shore up falling oil prices.

But market skepticism about how serious OPEC members are about reducing their quotas has meant oil prices have failed to rally. That, said OPEC President Edmund Daukoru, is leading to deliberations within the group about further cutbacks when oil ministers meet next month in Abuja, Nigeria.

"We very well might cut more output in December," Daukoru, who is also Nigeria's oil minister, told Dow Jones Newswires.

As always thank you for doing this thread. Although I rarely post it's one of the first threads I scan in the morning. :)

[AnneD]

14. Morning Marketeers.....

:donut: and lurkers.:hi:Wepurr. I read it for a while before I jumped in. It was a bit daunting because everyone was so knowledgeable. But folks were really nice too and answered my questions too. I have been hanging my hat here for some time.

Just in time for the Thanksgiving holidays-a gas price hike-I'm so surprised:sarcasm:and shocked:eyes: that this would happen after the elections. Thanks for the heads up.



Happy hunting and watch out for the bears.

[54anickel]

15. Here's a new link

http://www.cbsnews.com/stories/2006/11/16/ap/business/mainD8LDUHHO0.shtml

[ozymandius]

6. Mergers could follow Delta-US Airways

MINNEAPOLIS - Whether or not US Airways manages to buy Delta Air Lines, more airline mergers could be on the way, analysts said.

On Wednesday, US Airways Group Inc. said it was offering $8 billion in a hostile bid to take over rival Delta Air Lines Inc. and create the nation's largest carrier. The move, despite Delta's repeated statements it isn't interested in a merger, could start a stampede of competing bids in a long-predicted industry consolidation.

US Airways Chief Executive Doug Parker said Wednesday one of the attractive things about Delta is that it's in bankruptcy protection, making it easier to structure the operation the way the new owners want. That's true of Northwest Airlines Corp., too, which filed for bankruptcy protection on the same day as Delta in September 2005.

-cut-

Some potential mergers can be ruled out because of overlap. UAL Corp.'s United Airlines, for instance, has publicly said it would be open to mergers, but a tie-up with Northwest is doubtful because their Asian routes overlap. And Continental's merger prospects could be dimmed by Northwest's "golden share" agreement from 2000 that gives it the right to block certain business combinations.

http://news.yahoo.com/s/ap/delta_us_airways

[ozymandius]

7. Delta spurns $8bn bid by US Airways and vows to go it alone

DELTA AIRLINES, the bankrupt American carrier, yesterday rejected an $8 billion (£4.2 billion) hostile takeover bid from the rival US Airways and said that it was determined to remain an independent company.

The bid, which would create the biggest transatlantic airline in the world and the No 1 US domestic carrier, came after Doug Parker, chief executive of US Airways, made two friendly approaches to Gerald Grinstein, his Delta counterpart.

Mr Parker first contacted Mr Grinstein by phone earlier this summer to sound out the idea of a merger. Mr Grinstein did not respond, and so the US Airways chief made his intentions clear in a letter dated September 29.

Mr Grinstein rejected the offer in a written response on October 17, causing Mr Parker to make public his request in a formal hostile takeover bid. The terms of the bid, and the letters between the two chiefs, were published by US Airways yesterday.

http://business.timesonline.co.uk/article/0,,13129-2455513,00.html

[ozymandius]

8. How a hostile takeover might work

A hostile takeover is never simple. But when the company being sought is in bankruptcy, it gets even more complicated.

Jack Williams, a Georgia State law professor and bankruptcy expert, describes what US Airways faces in its $8 billion unsolicited bid for Atlanta-based Delta Air Lines, which is operating under federal bankruptcy court protection.

-cut-

By buying up the debt, US Airways would become the largest creditor.

But that wouldn't give it much immediate leverage. At least until Feb. 15, and probably longer, Delta retains the exclusive right to file a reorganization plan with the federal bankruptcy court in New York that is handling its case.

Even Delta's largest creditor can't file a plan on the company's behalf as long as the airline remains in court.

Williams said US Airways will make premium offers to creditors, and may even throw a little money on the table for Delta's stockholders, who now stand to get nothing.

http://www.ajc.com/business/content/business/delta/stories/2006/11/15/1115deltahostile.html

[ozymandius]

9. Have a great day at the Casino folks!

And good morning to you.

:donut: :donut: :donut:

See you when it's over.

Ozy :hi:

[UpInArms]

11. daily dollar watch

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

Last trade 85.44 Change +0.11 (+0.13%)

Dollar Leery In Joining Optimism Aroused By Empire Report

http://www.dailyfx.com/story/dailyfx_reports/cross_markets_data_reaction/Dollar_Leery_In_Joining_Optimism_1163640346092.html

Empire Manufacturing Survey (NOV) (13:30 GMT; 08:30 EDT)

Actual: -1.6%
Consensus: -0.5%
Previous: -1.3%

How Did the Markets React?

While today’s regional factory indicator buoyed equities and Treasury yields on their respective markets, dollar traders were somewhat wary over the bullish allusions the leading report held for broader strength in the industry. US manufacturing accounts for 15 percent of total GDP, and today’s release from the Federal Reserve of New York is the first in a series of regional surveys that will conclude with the nationwide ISM number on December 1st. Breaking down the survey’s components reveals certain weak and strong points underlying general business conditions. The demand-related gauges were of primary concern when the report was first read. Both shipments and orders grew over in November to five-month highs. Also worthy of note from the list of numbers was the jump in the employment component, which advanced 5.1 points to 24.5, the highest level in the indicator’s nine-year history. The one downside to activity in the area was the price pass-through. While businesses lower prices in order to stay competitive, costs had subsequently rebounded for the first time in five months according to the percentage of respondents reporting on the data. Nonetheless, stocks and yields moved higher on the headline number as both markets sought out bullish news. However, currency traders were skeptical over the performance of the indicator that had digressed from every other factory read in October, especially with the CPI report on deck.

...more...

Tomorrow's Economic Releases: US CPI To Settle Inflation Dispute

http://www.dailyfx.com/story/calendar/key_events/Tomorrow_s_Economic_Releases__US_CPI_1163636152885.html

US Consumer Price Index (YoY) (OCT) (08:30 GMT; 13:30 EDT)
(Headline) (Core)
Consensus: 1.5% 2.9%
Previous: 2.1% 2.9%

Outlook: Inflation in the consumer basket is expected to decelerate for a second month in October as cheaper gasoline prices continue to offer relief to Americans. Predictions for a headline drop of 0.3 percent over the month should subsequently pull the annual figure of growth down to a 1.5 percent gait. Considered one of the most important price gauges behind the Fed’s monetary policy meetings, such a contraction in the year-over-year value would pull it below the central bank’s 2.0 percent target rate. With two October inflationary gauges already in print, the expectations for the CPI seems almost staid. Last week, the import price index reported a repeat 2.0 percent drop for the month while breeching into negative territory in the annual measurement for the first time since September of 2002. More recently, and considered fundamentally more correlated to the consumer read, the producer price index reported its own disappointing numbers for inflation hawks. The headline monthly read reported its biggest decline in history while the core print for the same period marked a 16-year negative watermark. Though both of these indicators fully support outlooks for the headline CPI figures, there is a disparity in the core numbers. Economists expect annual inflation to remain its decade-high 2.9 percent pace through October, even as underlying PPI and Import indicators slid. Should all the CPI reads follow suit with the previously released price gauges, the Fed’s tone could turn much more dovish as inflation warnings are phased out.

Previous: The consumer price index contracted once again in September, reflecting the steepest decline in energy prices through the multiple month easing. During the month, the energy group reported a sizable 7.2 percent drop in total value, the biggest one-month decline since November of last year. Isolating the petrol products to media-magnetized gasoline, prices at the pump plunged 13.5 percent. On the basis of these volatile products, headline inflation slipped 0.5 percent following a 0.2 percent slide over August. In the more closely watched annual report, the specific gauge eased from a 3.8 percent pace of growth to 2.1 percent. Comparing today’s inflationary picture from that of 12 months ago, the marked change was fundamentally dampened on the realization that Hurricane Katrina was wreaking havoc on energy prices in 2005. With this in mind, the real surprise was the tick higher in the core report. Excluding the effects of the more volatile components in the index, annual inflation actually ticked higher to 2.9 percent, its highest since February of 2006. From the number of underlying price groups, a 0.3 percent rise in housing and rental costs proved a few of the prominent factors for the month. With the opposing contraction in overall and rise in core prices, economists expect the Fed to pass on any changes to monetary policy in the immediate future.


US Net Long-term TIC Flows (SEP) (14:00 GMT; 09:00 EDT)

Consensus: $70.0B
Previous: $116.8B

Outlook: The net purchases of US assets indicator (TICS) is expected to retrace from its record high in August, with the market consensus pegging a $72.0 billion surplus. During the period, the allure of both debt and equity instruments grew as benchmark indices rose. For stocks, both the Dow Jones Industrial Average and S&P 500 indices rose to new multi-year highs as investor optimism grew in tandem with steady labor strength and a large drop in energy prices. Elsewhere, the treasury market was also on the move higher as it grew increasingly clear that the Federal Open Market Committee would not raise lending rates again as the housing market tumbles into its full-blown slump and headline price pressures ease. Over the month, the benchmark ten-year T-note rose 0.6 percent to a recent high. On the other hand, though the government paper with corporate debt in tow was taken higher on reduced expectations for yields, the same Fed stance could have turned some foreign investors off of bonds as a long-term investment. With the Fed leaving the Federal Fund rate at 5.25 percent, the nation’s benchmark return will not overtake the yield of Australian and New Zealand instruments, while European and British rates continue to play catch up. All of this will diminish the attraction of US debt. When the TICS data hits the wires though, it will not be digested in isolation. The market will compare the September contraction in asset purchases to the bigger than expected drop in the same period’s physical deficit.

Previous: Net foreign investment in US assets grew to a record $116.8 billion in August on the back of a 14-month low $32.9 billion in the month prior. The large jump in purchases more than doubled expectations for the month as foreigners tuned into the Fed’s decision cap 17 consecutive interest rate hikes. As would be expected, the treasury group reported the biggest response to the change in policy. Over the month of August, net purchases of T-bonds and notes jumped $46.3 billion from a modest $6.6 billion the previous period. Riding the government assets’ coattails, government agency debt rose $31.3 billion while purchases of corporate bonds climbed $37.5 billion. Still stuck in a congestion area on many of its benchmark indices, stocks were only contributing modest gains to the overall report. Buying of corporate stocks grew only $4.4 billion during the month. While the record was strong in its own right, its relationship with the physical deficit was producing even more optimism. After an earlier release revealed that the goods and services trade shortfall grew to a record $69.9 billion, the strong foreign investment suggests that the US will be able to fund its trade accounts into the future.

US NAHB Housing Market Index (NOV) (18:00 GMT; 13:00 EDT)

Consensus: 30
Previous: 31

Outlook: The National Association of Home Builders confidence index looks to match September’s 15-year lows, as a slowdown in construction spending sours outlook on the housing sector. Such a result would challenge initial calls for a bottoming out in the home building sector, but would perhaps prove unsurprising to those who continue to call for further housing weakness. There are accordingly relatively few bright spots for the real estate sector, but a recent improvement in housing starts could in fact help builder’s confidence come in above expectations. Analysts cite falling mortgage interest rates and falling energy prices as potential drivers of a bounce in the housing sector. Markets remain cautious, however, and wait to see tomorrow’s NAHB confidence results to gauge the likelihood of such an improvement.

Previous: Home builder confidence unexpectedly improved through the month of October, suggesting that the worst may be over for the embattled industry. Driving the gains, NAHB members reported an improvement of buyers’ traffic through prospective properties, with the relevant expectations index gaining four points to 41 on the month. This failed to spill over into actual sales, however, as the index of completed sales remained at 32 within the same period. The marginal improvement in the overall index perhaps masks the fact that the sentiment tracker has fallen 37 points in the calendar year. Thus housing bulls will likely contain their renewed optimism ahead of substantive improvements in sales and home prices.

...more...

[54anickel]

16. Gold gains as dollar pares gains after tame CPI

http://www.marketwatch.com/News/Story/Story.aspx?guid=%7B6FB8090C%2DCC57%2D4BD9%2D8C6F%2D565FCFCEDAED%7D&source=blq%2Fyhoo&dist=yhoo&siteid=yhoo

SAN FRANCISCO (MarketWatch) -- Gold futures rose Thursday morning on the heels of a four-session losing streak, finding some support in higher energy prices as the dollar pared gains following the release of a tamer-than-expected consumer inflation report for October.

"For the moment, gold should continue its theme of consolidation around $613-$628 with a bias to the upside amidst growing speculation of diversification away from the dollar," said James Moore, an analyst at TheBullionDesk.com, in a note to clients.

snip>

Meanwhile, the dollar climbed, but traded off early highs after the Labor Department said the consumer price index fell 0.5% in October for the second month in a row, led by falling gas and car prices. See Currencies. Core inflation, which excludes food and energy prices, rose 0.1%, the slowest pace in eight months.

The numbers were much better than expected. Economists were forecasting the CPI to fall 0.2% and the core rate to rise 0.2%. See full story.

The reading, which comes after a similarly surprisingly tame producer price report on Tuesday, eased fears that inflation pressure might force the Federal Reserve to raise interest rates again, pressuring the dollar. The dollar has been supported this year mostly by the interest-rate differential between the U.S. and Europe and Japan.

more...

[54anickel]

19. China's Central Bank Has Been Buying Yen, Wu Says (Update5)

http://www.bloomberg.com/apps/news?pid=20601089&sid=aLjZt2kWrOSA&refer=china

Nov. 16 (Bloomberg) -- The People's Bank of China, which holds $1 trillion in currency reserves, has been buying yen, Deputy Governor Wu Xiaoling said.

Asked whether the central bank had been purchasing the currency, Wu said: ``We have.'' She declined to say if the pace of buying has increased. ``We have been holding Japanese yen in our foreign exchange reserves for many years,'' she added, speaking on the sidelines of a Bank Indonesia conference in Bali.

Central banks in Russia, Switzerland and New Zealand are increasing holdings of yen, anticipating the currency will rebound from a 20-year low on rising interest rates and the longest economic expansion since World War II. China is diversifying its reserves, about two-thirds of which are held in dollars. The nation's investors own $339 billion of Treasuries, the second-largest overseas holding after Japan.

``They seem to be testing the water and moving toward more diversification away from the dollar and into the yen and probably the South Korean won too,'' said Nizam Idris, a currency strategist at UBS AG in Singapore. ``Though they're not selling dollars to buy yen, just buying less of the dollar.''

snip>

China may also be seeking to raise the value of the yen as it permits gains in the yuan, said Peter Morici, an economics professor at the University of Maryland. The yuan has risen 2.6 percent this year, in part as it responds to demands from some U.S. lawmakers who accuse China of artificially keeping the currency low to promote exports. By contrast the Japanese yen is little changed in 2006.

``China could push up the values of their currencies to ensure that it did not take up an undue share of the burden of currency realignment,'' said Morici in an interview today. ``Since most Asian currencies are convertible, it could buy lots of those currencies.''

more...

[UpInArms]

12. Dell delays quarterly results as SEC steps up probe

http://www.marketwatch.com/News/Story/Story.aspx?guid=%7B78DFCF6C%2DD95F%2D4371%2D8A0F%2DF5D2AD30AA2C%7D&siteid=mktw&dist=bnb

SAN FRANCISCO (MarketWatch) -- Dell Inc. (DELL : 25.75, +0.16, +0.6% ) Wednesday evening said it is pushing back announcing its preliminary third-quarter results to by the end of this month. The company had been scheduled to announce the results Thursday. Dell said it is delaying due to the "complexity" in preparation caused by Securities and Exchange Commission's ongoing investigation, as well as the company's audit committee probe into certain accounting and financial reporting matters, and the fact the company has yet to file its report for the second fiscal quarter. Also, the SEC has entered a formal order of investigation. Dell added that it is pushing back future earnings announcements by one week.

[54anickel]

17. U.S. Trade Deficit Has Roots Here, Not in China (RW talking points)

http://www.bloomberg.com/apps/news?pid=20601039&refer=columnist_berry&sid=ansUd.BWGoPE

Nov. 16 (Bloomberg) -- The harsh reality of America's trade woes is encompassed by two prominent numbers: September's $64.3 billion trade deficit and October's 4.4 percent unemployment rate.

With the U.S. economy operating at what most economists and policy makers -- including those at the Federal Reserve -- regard as full employment, and simultaneously running a huge trade deficit, the nation is consuming far more in goods and services than it produces.

The ideal resolution of this dilemma would be for the demand for U.S. exports to rise gradually while American households increase their savings and cut spending. That would allow some of the country's factory capacity to shift to production of exportable goods.

snip>

The Numbers

Over the past two decades, Bureau of Labor Statistics figures show that manufacturing productivity doubled. As a result of that greater efficiency, U.S. factory output grew by two- thirds while the number of manufacturing jobs declined by almost one-fifth.

snip>

In other words, even with a trade deficit approaching 7 percent of gross domestic product, the U.S. reliance on imported goods isn't nearly large enough to account for the long-term decline in manufacturing employment. Instead, the culprits are the big gains in factory efficiency and the major shift in consumption toward services and away from goods.

more...

[54anickel]

18. Trade Bills Now Face Tough Odds

http://www.nytimes.com/2006/11/16/business/worldbusiness/16trade.html?_r=2&ref=business&oref=slogin&oref=slogin

WASHINGTON, Nov. 15 — The Bush administration says it has no higher global economic priority than to combat rising protectionism. This week the challenge became harder and more complicated.

Like a lightning bolt that illuminates a dark landscape, the failure by the House to pass what should have been a routine measure sought by President Bush to extend normal trade relations with Vietnam shows how much harder it will be to win approval of trade bills from now on.

Administration officials said Wednesday that they still hoped the Vietnam trade bill would be approved by the end of the year in the lame-duck Congressional session that continues to be led by Republicans. They said the same for other bills that would grant trade preferences to poor countries in Asia, Africa and Latin America.

But after an election in which many winning Democrats ran on promises to look more skeptically at trade measures, Democratic leaders and trade lobbyists agreed that, at least next year, the administration is going to have to adjust to a new environment and make concessions in order to get such bills through a Democratic-controlled Congress.

Among the concessions might be greater efforts to get trading partners to crack down on sweatshops and labor abuses and to respect environmental standards and other types of regulations in their countries. Trade deals may also have to address what sorts of goods the American government can procure from overseas.

“The election was a reaffirmation of public skepticism on trade deals,” said Lori Wallach, director of Public Citizen’s Global Trade Watch, a group founded by Ralph Nader. “There’s going to be a majority for trade deals, but it’s going to be a different majority than the one we’re used to. The skeptics are going to have a say.”

more...

[Nimrod2005]

20. This summary keeps looking better and better

Less days left for the * regime
More Enron people in jail
Lower gas and crude prices than few months ago


.......

[54anickel]

22. Growing investor complacency a concern

http://news.yahoo.com/s/ft/20061115/bs_ft/fto111520061350314737

US equities are powering ahead once more. The S&P 500 is at its highs for the year, while the Russell 2000 smaller companies index, and the Dow Jones Industrial Average, are both at all-time highs. Even the Nasdaq Composite is up more than10 per cent for the year.

The rally looks broad-based, but increasingly analysts are asking how long it can survive. The Chicago Board Options Exchange's Vix index, which measures how much investors will pay to protect against future volatility, is at an all-time low - a sign of complacency.

Merrill Lynch's hedge fund monitor shows excessive bullishness as funds cram in to the S&P 500. Is the market overvalued, and should we fear a correction?

At least one measure answers "yes" to both.

more....

[54anickel]

24. 11:26 numbers and blather

Dow 12,285.64 33.93 (0.28%)
Nasdaq 2,441.56 1.19 (0.05%)
S&P 500 1,400.38 3.81 (0.27%)
10-yr Bond 4.6150% 0.0000
30-yr Bond 4.6970% 0.0020
NYSE Volume 987,072,000
Nasdaq Volume 764,921,000

11:00 am : Sellers seize another opportunity within the last 30 minutes to lock in some recent gains. The most noticeable area of weakness has been in Energy, which is selling off in sympathy with further deterioration in natural gas futures following the first build in natural gas inventories in three weeks. The Tech sector slipping back into the red is also removing some influential leadership. DJ30 +12.68 NASDAQ -4.40 SOX -0.5% SP500 +1.96 NASDAQ Dec/Adv/Vol 1382/1360/593 mln NYSE Dec/Adv/Vol 1056/1931/398 mln

10:30 am : The indices are back to retracing morning highs as all 10 economic sectors are back in positive territory. It is worth noting, though, that market gains are modest at best as four straight victories (on pace for a fifth) for the bulls, which has lifted the Dow to record levels and the S&P 500 to a six-year high, leaves buyers looking a bit tired. As of yesterday's close, the Dow, S&P 500 and Nasdaq were up 1.4%, 1.4% and 3.2% just two weeks into November; the Russell 2000 is up an even more impressive 3.3% for the month.DJ30 +26.91 NASDAQ +0.97 SP500 +4.41 NASDAQ Dec/Adv/Vol 1337/1311/428 mln NYSE Dec/Adv/Vol 1062/1822/260 mln

10:00 am : Major averages now trade in split fashion, spearheaded by a reversal in Technology (-0.2%). The tech-heavy Nasdaq has relinquished early gains as Applied Materials (AMAT 17.95 -0.70) plunges 3.8% after it missed expectations and issued downside Q1 EPS guidance. To wit, Semiconductor Equipment (-2.9%) is this morning's worst performing S&P industry group. Tech is also being dragged down by a 3.7% sell-off in Dell (DELL 24.80 -0.95), which delayed its Q3 earnings report. Among the nine sectors posting gains, rate-sensitive areas like Utilities (+0.5%) and Financials (+0.4%) are pacing the way higher, which is understandable since modest strength in Treasuries has knocked bond yields lower across the curve. DJ30 +25.80 NASDAQ -1.10 SOX -0.8% SP500 +3.44 NASDAQ Dec/Adv/Vol 1131/1327/192 mln NYSE Dec/Adv/Vol 769/1759/66 mln

09:40 am : As expected, stocks open on an upbeat note as investors embrace a benign read on consumer inflation. Earlier, the Labor Dept. reported that total CPI fell 0.5% in October for a second straight month due to plunging oil prices. More notably, though, was a rise of just 0.1% -- the slowest pace in eight months -- on core CPI. Economists were expecting a fourth consecutive rise of 0.2%. Even though the year-over-year core rate is down from 2.9% at 2.7%, which is still higher than the Fed would like, the data confirm that the recent uptrend is moderating. That lends some validation to Tuesday's favorable PPI data and further strengthens the credibility of a Bernanke-led Fed which is on pace to engineer a much-desired soft landing for the U.S. economy. DJ30 +36.90 NASDAQ +5.86 SP500 +5.00 NASDAQ Vol 88 mln NYSE Vol 50 mln

09:16 am : S&P futures vs fair value: +6.3. Nasdaq futures vs fair value: +7.0. Bullish bias persists in pre-market trading, and as such, expectations for a higher start for stocks remain intact. Meanwhile, investors are sifting through yet another economic report. October Industrial Production rose 0.2% (consensus 0.3%) while Capacity Utilization checked in at 82.2% (consensus 82.0%); but investors remain more focused on today's dovish core-CPI since it suggests underlying inflation pressures are easing and that future numbers will be good as well.

09:00 am : S&P futures vs fair value: +7.0. Nasdaq futures vs fair value: +7.8. The stage remains set for equities to extend a four-day winning streak for all three major averages. Aside from the encouraging read on inflation, some more M&A news is also providing a floor of support for stocks and helping investors look past some disappointments in the Tech sector. Clear Channel Communications (CCU) has agreed to be taken private for $19 bln while Reader's Digest (RDA) will be bought out for $2.4 bln. Two bellwethers that aren't shaping up to partake in today's anticipated rally, however, are Dell (DELL), which delayed its Q3 earnings report, and Applied Materials (AMAT), which missed expectations and warned that Q1 EPS will fall short of forecasts.

08:34 am : S&P futures vs fair value: +6.9. Nasdaq futures vs fair value: +6.8. Futures trade spikes higher following a tame read on inflation, now suggesting stocks will get back on the buying track. Total CPI fell 0.5% in October (consensus -0.3%), due to plunging energy prices, while the closely-watched core rate (ex-food and energy) rose a lower than expected 0.1%, reflective of an easing in consumer inflation and pushing the year/year rate down to 2.7%. That lends some confirmation to Tuesday's favorable PPI data and further strengthens the credibility of a Bernanke-led Fed which may again forgo a rate hike when policy makers reconvene on December 12. Initial claims unexpectedly fell 2K to 308K (consensus 310K). Bonds, which were up slightly ahead of the data, have strengthened as the 10-yr note is now up 12 ticks to yield 4.56%.

08:00 am : S&P futures vs fair value: -0.2. Nasdaq futures vs fair value: -2.0. Early indications are pointing to a sluggish start for stocks, which is not surprising considering the plethora of economic reports scheduled for this morning. First up at 8:30 ET will be October CPI, which is the day's most closely-watched report since it will provide a more telling signal as to the direction of Fed policy and has the potential to move stocks and bonds in noticeable fashion. Economists are expecting a 0.2% increase in core-CPI for the fourth straight month, which would leave the year-over-year rate of increase unchanged at a 10-year high of 2.9%. While the recent trend actually points to an annualized rate closer to 2.4%, it's no secret now, thanks to yesterday's FOMC minutes, that nearly every Fed official views the current rates of core inflation as "uncomfortably high."

[UpInArms]

25. sweeping the floor and closing the door

Dow 12,305.82 54.11 (0.44%)
Nasdaq 2,449.06 6.31 (0.26%)
S&P 500 1,399.76 3.19 (0.23%)
10-Yr Bond 4.655% 0.04

NYSE Volume 2,858,631,000
Nasdaq Volume 2,126,434,000

The major averages extended their winning streak to five as investors rallied around encouraging economic data, most notably a benign read on consumer inflation, and oil prices plunging to their lowest level of the year. The Dow topped the 12,300 level for the first time ever and closed at another record high.

Before the bell, the Labor Dept. reported that core CPI rose just 0.1%, the slowest pace in eight months, lending further evidence the economy is on pace for a soft landing. Economists were expecting a fourth straight rise of 0.2%. Even though the year-over-year core rate is 2.7%, which is still higher than the Fed would like, the data confirm that the recent uptrend is moderating. The improved inflation outlook checks in a day after it became known that nearly every Fed official views the current rates of core inflation as "uncomfortably high."

In fact, such concerns were echoed by Chicago Fed President Moskow and St. Louis Fed President William Poole earlier in the session, which contributed to the midday reversal in Treasuries. Moskow said that, although inflation "is moving in the right direction," it is "premature" to declare an end to the inflation threat. Poole said the Fed is not being "cavalier" regarding the inverted curve and that, while inflation may be dissipating, they are "not out of the woods yet."

Be that as it may, the rate-sensitive Financials sector's ability to look beyond the havoc an inverted yield curve can have on net interest margins was also reassuring. The spread between the 2-year and 10-year notes slipped deeper into inversion as the hawkish Fed speak and a rebound on Philly Fed offset the tame read on core CPI, at least in the bond pits. The Financials sector instead found support from the brokers, which were in focus as two potential blockbusters (e.g. KBR and HTZ) went public. The AMEX Securities Broker/Dealer Index hit an all-time high as did one of its most influential components, Goldman Sachs (GS 196.70 +3.59).

Given the market's preoccupation with the pace of economic growth, a rebound in the Philly Fed index lent some confirmation to yesterday's unexpected rise in the NY Empire State Index, serving as a reminder that manufacturing activity is holding up well. That provided an additional layer of support for the Industrials sector, which was among the eight sectors posting respectable gains.

Among the other seven sectors trading higher, Consumer Discretionary turned in the best performance. The sector was initially in focus after Clear Channel Communications (CCU 35.33 +1.21) agreed to be taken private for $19 bln but got an extra vote of consumer confidence as the bottom fell out of the price of oil late in the day.

Crude for December delivery began its initial descent following the first build in natural gas inventories in three weeks. However, with the December contract expiring tomorrow and some conflicting reports about oil tanker traffic exacerbating uncertainty about OPEC members living up to their production cut agreements, crude futures tumbled. Oil's 4.3% decline was its biggest one-day decline since August 2005, closing at $56.26/bbl and taking a toll on the Energy sector.

With Dell (DELL 25.10 -0.65) delaying the release of its Q3 report and a Q1 profit warning from Applied Materials (AMAT 17.98 -0.67), the lack of leadership within the influential tech sector left the Nasdaq relatively flat and kept market gains at a minimum midday. However, continued enthusiasm for other bellwethers like Microsoft (MSFT 29.47 +0.35), which hit a fresh two-year high, and Cisco Systems (CSCO 27.15 +0.55), which increased its share buyback program by $7 bln, eventually carried enough weight to keep the sector in positive territory. BTK +0.9% DJ30 +54.11 DJTA +1.1% DJUA +0.3% DOT +0.8% NASDAQ +6.31 NQ100 +0.5% R2K -0.2% SOX +0.4% SP500 +3.19 XOI -2.5% NASDAQ Dec/Adv/Vol 1514/1526/2.07 bln NYSE Dec/Adv/Vol 1535/1734/1.60 bln

3:30 pm : Stocks are making one final push to revisit session highs as sellers remain few and far between. In fact, commodities stocks are really the only area of significant weakness. To wit, the Energy sector accounts for half of today's ten worst performing S&P industry groups as crude oil futures post their biggest one-day decline (-4.3%) since August 2005. Drillers (-3.6%) pace the way lower among today's laggards. They are followed by the likes of Refiners (-3.0%), Oil & Gas Equipment (-2.9%), Integrated Oil (-2.5%), and Explorers (-2.3%). The Materials sector accounts for the others, led by a 3.5% in Steel.DJ30 +62.75 NASDAQ +7.37 SP500 +5.26 XOI -2.3% NASDAQ Dec/Adv/Vol 1619/1401/1.71 bln NYSE Dec/Adv/Vol 1520/1741/1.24 bln

3:00 pm : More of the same for stocks as spirited leadership from a number of blue chips still has the Dow outpacing the S&P 500 and Nasdaq to the upside. Of the 21 Dow components trading higher, Altria Group (MO 83.91 +1.66) now paces the way to the upside after raising its full-year profit outlook. Also helping to keep the price-weighted index at its highest levels ever is Boeing (BA 88.82 +1.74), which has more than doubled the 1.7% it was already enjoying over the last three days of trading. Other notable names posting intraday gains of at least 1.0% include DIS, MCD, MRK, MSFT, PFE and UTX. DJ30 +55.19 NASDAQ +4.50 SP500 +4.21 NASDAQ Dec/Adv/Vol 1610/1382/1.54 bln NYSE Dec/Adv/Vol 1495/1722/1.19 bln

2:30 pm : Buyers remain in control of the action but the indices have pulled back off their best levels. Albeit briefly breaking through key resistance levels of and 12315, 1400, and 2453 roughly 30 minutes ago, the Dow, S&P 500 and Nasdaq, respectively, have since been unable to attract more convincing buying efforts around those levels. As a result, investors sensing that stocks have gotten ahead of themselves have stepped back in to take some money off the table. DJ30 +53.94 NASDAQ +4.73 SP500 +4.54 NASDAQ Dec/Adv/Vol 1575/1394/1.44 bln NYSE Dec/Adv/Vol 1445/1759/1.10 bln

2:00 pm : The market is breaking out of its afternoon range and hitting fresh session highs as investors rally around further deterioration in oil prices. Crude oil futures are now down 3.3% and below $57/bbl as traders continue to doubt that OPEC members will live up to their production cut agreements in a market that is already well supplied. The December contract is experiencing additional volatility since it expires tomorrow. The Energy sector is now down 1.4%; however, its decline is being somewhat offset by a turnaround in the S&P 500 Retail Index (RLX +0.4%) which now has the Consumer Discretionary sector (+0.7%) turning in the day's best performance. DJ30 +69.23 NASDAQ +10.35 SP500 +6.69 XOI -1.4% NASDAQ Dec/Adv/Vol 1493/1471/1.22 bln NYSE Dec/Adv/Vol 1329/1868/998 mln