STOCK MARKET WATCH, Tuesday 15 June

[ozymandius]

Tuesday June 15, 2004

COUNTING THE DAYS
DAYS REMAINING IN THE * REGIME 223
DAYS SINCE DEMOCRACY DIED (12/12/00) 3 YEARS, 186 DAYS
WHERE'S OSAMA BIN-LADEN? 2 YEARS, 240 DAYS
WHERE ARE SADDAM'S WMD? - DAY 453
DAYS SINCE ENRON COLLAPSE = 936
Number of Enron Execs in handcuffs = 18
Recent Acquisitions: Jeff Skilling
ENRON EXECS CONVICTED = 2
Other Arrests of Execs = 54

---

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

---

AT THE CLOSING BELL ON June 14, 2004

Dow... 10,334.73 -75.37 (-0.72%)
Nasdaq... 1,969.99 -29.88 (-1.49%)
S&P 500... 1,125.29 -11.18 (-0.98%)
10-Yr Bond... 4.87% +0.08 (+1.65%)
Gold future... 384.20 -2.40 (-0.62%)


|||


GOLD, EURO, YEN and Dollars

---

PIEHOLE ALERT

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

For information on protests and other actions Citizens For Legitimate Government

---

[bain_sidhe]

1. OMG! I'm up early enough to see this thread "born"!

Sorry, nothing to do with the stock market, I'm just amazed I'm up this early! We're getting our house re-roofed, and they started at 7 EFFIN' O'CLOCK IN THE MORNING!! (We're night people so this is pretty much the middle of the night for us.)

[trogdor]

18. It's summer, dude.

I'm sure they want to finish before it gets too F-in hot. I know I don't want to be on the roof at 2 PM in mid-June.

[54anickel]

2. Great toon Ozy!! Side note, some report must have just come out, lookie

at gold and the euro. WTF? CPI must have surprised someone!

[UpInArms]

4. here are the 8:30 EST reports

Jun 15 8:30 AM
Business Inventories Apr
reported 0.5%
briefing.com projected 0.3%
market anticipated 0.4%
last month 0.7%
revised -

Jun 15 8:30 AM
Core CPI May
reported 0.2%
briefing.com projected 0.2%
market anticipated 0.2%
last month 0.3%
revised -

Jun 15 8:30 AM
CPI May
reported 0.6%
briefing.com projected 0.4%
market anticipated 0.5%
last month 0.2%
revised -

Jun 15 8:30 AM
NY Empire State Index Jun
reported 30.2
briefing.com projected 29.0
market anticipated 30.5
last month 30.2

[54anickel]

3. Investor says China unable to handle collapse

http://business.timesonline.co.uk/printFriendly/0%2C%2C2020-5-1144785-8307%2C00.html

“DANGEROUSLY” inexperienced policymakers are steering China to a Japan-style collapse that could derail the world economy, a leading investor in the region fears.

Uichiro Niwa, one of Japan’s most respected business leaders and an economic adviser to the Mayor of Beijing, said that he was “very concerned” that the Chinese bubble is about to collapse.

Speaking exclusively to The Times, Mr Niwa, one of Japan’s largest investors in China, with a portfolio of more than 200 business interests in the country, said: “I hope the Chinese Government knows how dangerous the situation is. The Chinese very shortly face an extremely severe time, and the more they enjoy, the more severe is the situation they face.”

Mr Niwa, who heads Itochu, a Japanese trading and venture capitalist firm, added that he was extremely concerned at the lack of experience in the Chinese administration. He said: “The problem is that the Chinese do not have good people to control the economy under capitalism. If things don’t calm down, there will be a very sharp setback, and a hard landing that will be felt across the world.”

more...

[Wright Patman]

5. Controlling the economy

under capitalism is an oxymoron. Capitalism is the reign of unfettered free markets. It is practiced nowhere in the world because it leads to chaos and depression and the loss of political power by those who try to ride the dragon. See Herbert Hoover.

Karl Marx was all for it because he saw how his system could rise to power out of the ashes of unfettered free market capitalism.

[54anickel]

6. Hiring Plans Near Boom Levels-Survey

http://www.reuters.com/newsArticle.jhtml;jsessionid=D52M3JQKUVOV2CRBAE0CFFA?type=businessNews&storyID=5421204

NEW YORK (Reuters) - U.S. companies are gearing up to create jobs at rates not seen since the height of the 1990s boom, a survey released on Tuesday showed, adding to evidence that job growth will keep the U.S. economic recovery rolling.

Following two months of strong government payroll reports, the survey is a boon to President Bush in the run-up to elections and will likely confirm expectations that the Federal Reserve will raise U.S. interest rates at the end of June as it moves to beat off emerging inflation.

Thirty percent of polled U.S. employers plan to add to their payrolls in the July to September period, the survey by Manpower Inc. showed. That is up from 20 percent a year earlier and 28 percent in the April to June period.

The survey hit its highest level of 35 percent in 2000, powered by the Internet-fueled boom.

snip>

The quick change in employers' outlooks comes as demand surges for products and services.

:eyes: And couldn't that change just as quickly as demand drops when folks run outta cheap money?

more...

[Frodo]

7. It certainly didn't forcast good things in 2000

"The survey hit its highest level of 35 percent in 2000"

Add a lot of jobs in the years following that, did they?

[UpInArms]

9. that link thing

http://www.reuters.com/newsArticle.jhtml?jsessionid=D52M3JQKUVOV2CRBAE0CFFA?type=businessNews&storyID=5421204

the link thing that breaks links:

when you see a semi-colon ( ; ) in a link, the link breaks

to fix it:

delete the semi-colon ( ; ) and replace it with a question mark (?)

it works like magic!

:hug: :hi:

(edited to get the smilies out of my text :D )

[54anickel]

13. Thanks UIA, I didn't even notice it this time I'll have to watch for that

[UpInArms]

16. the sites that usually

have that dratted semi-colon are the CBS and NYT pages.

I have felt like the "Broken Link Queen" at times because I posted so many of them :pals:

[loudsue]

25. This report is bunk.....I'll tell you why...

I'm in a field that serves a large sector of the economy, and just yesterday afternoon, all of us contractors were told the big company is shutting down all contracts.

This means that this big sector of our economy doesn't see enough growth ahead in their market to invest any more $$, and they're stopping an expansion project that they were 3/4 of the way through with.

The economy on the ground is much less palatable than the economy of these stupid "reports" that come out.

:kick::kick:

[54anickel]

27. Yep, Frodo hit it dead on - look how accurate it was as an indicator back

in 2000. But, I guess if you say it often enough it becomes true. The self fulfilling prophecy. Tell everyone how great things are and they'll believe it and act accordingly. Image and marketing lies is all this mal-admin has to go on. Thank goodness they own most of the media to spew their BS.

[UpInArms]

8. daily dollar watch

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

Last trade 90.02 Change +0.08 (+0.09%)

http://www.reuters.com/newsArticle.jhtml?type=businessNews&storyID=5425292

Dollar Looks to CPI, Greenspan for Hints

LONDON (Reuters) - The dollar held in narrow ranges against the yen and euro on Tuesday as markets awaited U.S. inflation data and testimony from Federal Reserve Chairman Alan Greenspan that may give new clues on U.S. interest rate hikes.

Recent hawkish comments from Fed officials, including Greenspan, have boosted the dollar as investors weighed the chances of more aggressive tightening than previously expected.

Greenspan could reinforce such expectations again, while inflation may serve as another argument for tightening, especially since it has been highlighted recently by some Fed officials. The next hike may come in as soon as June 30.

"There is a lot of event risk for the dollar today so the market will be very twitchy," said Paul Mackel, currency strategist at ABN AMRO in London.

"Core inflation will be the main focus. There is also a lot of discussion as to whether Greenspan will repeat his hawkish stance."

At 7:30 a.m. EDT the dollar traded at $1.2050 per euro, steady on the day. It was a cent below Monday's three-week high of $1.1950.

Markets largely looked past the Bank of Japan's anticipated decision to keep rates on hold, awaiting more clues on U.S. monetary policy prospects.

Even though the BOJ kept monetary policy unchanged, it upgraded its view of the economy, highlighting its dilemma over a combination of rising bond yields and lingering deflation.

...more...

http://abcnews.go.com/sections/business/US/Greenspan_CSM_040615.html

Greenspan's White House Visits Raise Questions About Policy Influence

June 15, 2004 — He's history's most famous jazz musician turned central banker. He's the most powerful financial figure in the world. And in May, President Bush nominated him for a fifth term as chairman of the Federal Reserve.

There are many ways to describe Alan Greenspan. But is he also a "social butterfly," as one economist puts it?

About once a week, the nation's top monetary official leaves the neoclassical Fed building on Constitution Avenue in Washington, and takes a limousine ride over to 1600 Pennsylvania Avenue.

On occasion, he meets with President Bush (once in 2003), but more often it's a tête- à-tête with members of his inner circle. Last year, he met with Vice President Dick Cheney seven times, with National Security Adviser Condoleezza Rice six times, and with Chief of Staff Andrew Card three times. In July 2003 alone, he met with six members of the cabinet, including Secretary of State Colin Powell.

More telling: The Republican central banker's visits to the White House have nearly quadrupled since Bush replaced President Clinton.

Those statistics make Greenspan a "social butterfly" in the White House, says Kenneth Thomas, a finance professor at the University of Pennsylvania's Wharton School, who generated the numbers.

Greenspan's private meetings at the White House are usually not disclosed at the time they take place. Nor is any record made public of what was discussed. Thomas used Freedom of Information Act requests to the Fed for Greenspan's personal calendar.

His visits lead to two intriguing questions: How involved is the Fed chairman in setting White House policy? And do those friendships with the highest level officials of the Bush administration alter what Greenspan does with interest rates?

...more...

http://www.crainsny.com/news.cms?newsId=8186

NY employers remain cautious on hiring

Despite signs of an economic recovery, New York City employers remain cautious about hiring, according to employment agency Manpower Inc.’s quarterly Employment Outlook Survey.

Between July until September, 20% of companies plan to hire more employees, 10% expect to reduce the size of their workforces, and another 68% expect to maintain current employment levels, Manpower’s survey shows.

This summer, job prospects appear best in construction, durable goods manufacturing, and finance. Meanwhile, weakness is seen in non-durable goods manufacturing, transportation, and wholesale/retail trade.

In Manpower’s last survey, going into the April-June 2004 quarter, 16% of city employers planned to add staff while 4% expected reductions.

...more...

http://cbs.marketwatch.com/news/newsfinder/pulseone.asp?dateid=38153.364525463-815235562&siteID=mktw&scid=0&doctype=806&

Dollar dips as tame core CPI seen holding back US rates

CHICAGO (CBS.MW) -- The U.S. dollar fell against its major rivals as a tame reading for core U.S. consumer price data was seen lowering the odds of aggressive Federal Reserve interest-rate hikes over the coming months. Higher rates would make the dollar more attractive to foreign investors, but at least some Fed action, probably beginning later this month, has already been priced into the foreign-exchange market. The dollar was down 0.4 percent at $1.2086 per euro and fell 0.3 percent at 110.70 yen per dollar.

...short newsblurb...

http://cbs.marketwatch.com/news/newsfinder/pulseone.asp?dateid=38153.3543865741-815235310&siteID=mktw&scid=0&doctype=806&property=&value=&categories=&

U.S. May CPI up surprising 0.6% on food, energy costs

WASHINGTON (CBS.MW) - Higher gas and food prices pushed the U.S. consumer price index up 0.6 percent in May, the fastest gain in more than three years, the Labor Department said Tuesday. The core rate of inflation - which strips out food and energy prices - rose 0.2 percent in May. Economists expected a 0.5 percent gain in the headline CPI and a 0.2 percent increase in the core measure. Headline inflation has risen 3.1 percent in the past 12 months, the fastest gain since June 2001. However, core inflation rates fell to a 1.7 percent year-over-year increase in May from 1.8 percent last month. In May, price increases were muted outside energy and food. Energy costs rose 4.6 percent in May, the most since January. Food prices jumped 0.9 percent, the biggest increase in 14 years.

...short newsblurb...

Have a Great Day Marketeers!

[UpInArms]

14. here's the dollar's reaction to the reports

Last trade 89.64 Change -0.30 (-0.33%)

Last tick: 2004-06-15 08:45:11 ET

Looks like there won't be an anticipated rate increase.

[UpInArms]

10. some pre-market blather

from Ino:

The September NASDAQ 100 was higher overnight due to short covering as it consolidates above the 50% retracement level of the January-March decline crossing at 1463.25. Stochastics and the RSI are overbought and have turned bearish signaling that a top has been posted. Closes below the June 6th reaction low would open the door for a larger- degree decline. The September NASDAQ 100 was up 3.50 points at 1470 as of 6:47 AM ET. Overnight action sets the stage for a steady to firmer opening by the NASDAQ composite index later this morning.

The September S&P 500 index was higher in overnight trading due to short covering as it consolidates below initial support marked by the 10- day moving average crossing at 1128.52. Closes above last week's high at 1142.20 would open the door for a test of April's high crossing at 1147.10 later this month. However, stochastics and the RSI are turning bearish signaling that a short-term top is in or is near. Closes below the 10-day moving average would confirm that a short-term top has been posted. The September S&P 500 Index was up 2.80 pts. at 1128.30 as of 6:49 AM ET. Overnight action sets the stage for a steady to firmer opening when the day session begins later this morning.

and from Briefing.com

8:32AM: S&P futures vs fair value: +9.0. Nasdaq futures vs fair value: +12.0. The market breathed a sigh of releif on the heels of the roughly in-line CPI report and NY Empire State reports. The S&P futures are up 3 points, while the Nasdaq futures have also advanced 3 points. Accordingly, the cash market remains set for a higher open.

8:25AM: S&P futures vs fair value: +5.4. Nasdaq futures vs fair value: +8.5. Several economic reports are due to be reported at 8:30 ET. The highlight is the May CPI report, which will shed more light on the inflation picture. The consensus estimate is for a reading of 0.5%, with the core CPI at 0.2% on the heels of last month's 0.3% increase. Separately, the NY Empire State report for June is expected to come in at 30.5, while the consensus for the Business Inventories report for April stands at 0.4%.

8:00AM: S&P futures vs fair value: +5.5. Nasdaq futures vs fair value: +8.5. The futures market is trading higher on the heels of yesterday's disappointing session that took that major averages lower by 0.7-1.5%. The market's inflation fears will get addressed with the CPI report, which is expected at 8:30 ET.

[UpInArms]

11. Britain's central bank head warns of house price fall

http://news.xinhuanet.com/english/2004-06/15/content_1527492.htm

LONDON, June 15 (Xinhuanet) -- Britain's central bank governor warned on Tuesday that the rampant house prices would start to fall and consumers should be aware of a growing risk.

Mervyn King said prices were now "well above what most people would regard as sustainable in the longer term" and he also gave aclear indication that there may be further interest rate rises on the horizon.

He made the remarks days after the Bank's Monetary Policy Committee increased interest rates by a quarter of a percentage point for the second month in a row, bringing the base rate to 4.5 percent.

The bank is concerned that the gradual pace of tightening was going unheeded by consumers who keep borrowing and spending freely-- debt is set to hit a trillion pounds (1.8 trillion US dollars) in June -- and that house prices are still rising too fast, increasing the risk of a crash later on.

King told consumers that "there are some early signs of a slowdown in the housing market". "After the hectic pace of price rises over the past year, it is clear that the chances of falls in house prices are greater than they were," he added.

...more...

[ozymandius]

12. WrapUp by Jim Willie CB - TALES FROM THE CRACK-UP BOOM

For many months much has been written about the surge in price inflation in the real world. Evidence in the daily life and times of ordinary citizens, and those who run a business, testifies to not just mildly increasing prices, but a virile outbreak. Across the spectrum, from production to raw material to energy to intermediate products to food, costs are rising almost out of control. These items are not so much rising in price, as the USDollar is declining in value. The last two months has removed some froth, but in certain areas speculative investment continues to exacerbate the effect.

Austrians warn of a crack-up boom, wherein the real economy suffers from encroachment by the financial sector, and monetary debasement urges on investment in hard assets, commodities, and energy supplies. The flight from paper currency and securities has encouraged investment in things essential for industrial production, building construction, energy output, and food preparation.

-cut-

Our banking leaders and directors either wear blinders or have embarked on a deliberate course of deception. They deny a reality that hits them squarely in the face every time they leave their ivory tower enclaves and visit a real business located outside the financial sector, or head for home, or head for an event in society’s maze, or head to a community outing. The gulf between the officially reported state of inflation and the actual world, where inflation erodes on a daily basis, has widened steadily to an alarming degree. Govt credibility is on a major slide. In April, Fed Governor McTeer, who in the last few years had been a rare source of reason and perceptiveness, if not rebellion against Chairman Greenspan, came out with a funny but tragic quote. He said to a CNN/fn reporter “We have seen the whites of one eye of inflation, and we are waiting for two.” Any competent student of economics knows one must head off inflationary pressures, not await them with smug arrogance. They work through a system with fierce unrelenting force. Fed Governor Parry prefers a neutral interest rate of between 3.5 and 5.5%, but claims “we are not there yet.” When we are there, it will be too late to prevent at least a few quarters of powerful price pressure. Fed Governor Broaddus claims continued patience should be exercised until more evidence of inflation is seen. These men are charlatan clowns, led by a combination Wizard of Oz and Pied Piper. They are living testimony to doomed human attempts to override free markets based upon equilibrium and indisputable wisdom. Chairman Greenspan pulls the control levers, speaks with a voice louder than life, deceives the public like a Minister of Propaganda, even as he leads both investors and economic participants over a cliff. He may have already embarked on his next initiative, to accelerate the money supply growth and monetize the purchase of US Treasury bonds. The Fed will sanction an attempt to cap interest rates (and support the financial sector), but expose the nation to even more USDollar depreciation, which will unleash more aggravated production cost inflation (and hurt the real economy more).

-cut-

China has become the fourth largest gold producer. They eagerly seeks mechanized mining techniques. Citizens of China are now permitted to own gold, and the new Shanghai Gold Exchange is an avenue for its producers to sell gold. Soon, active trading of gold futures contracts will arrive, certain to stimulate investment. For over two years, grapevines report that the Peoples Bank of China has been avidly purchasing gold on the open market, but done so by hidden parties in Hong Kong. The PBOC might be accumulating gold in preparation for a future gold backing for their yuan currency. The risk is two-fold for the US Economy and financial markets. First is the competition for minerals & resources with China, which has driven up price. Behind only to Japan, China holds $400 billion in foreign exchange reserves, about half in the form of US Treasurys. They hold 600 tons of gold bullion, or less than 2% of its reserves in gold. Compare this ratio to European counterparts, who hold 13% of reserves in gold. Second is the risk of Chinese withdrawn credit support. Should they decide to redeem a significant portion of their USTBond reserves, the United States would clearly feel a threat to our way of life, even our national security. Chinese bankers must put reserves to work for new fixed investment, for consumer debt expansion, or for the much discussed pan-Asian credit market. Expect relations with China to undergo great stress, followed by deterioration. Expect trade war, expect protection (quotas and tariffs) of American food supplies and other critical building supplies, expect competition for MidEast oil, expect leverage attempts over Taiwan, expect concessions to sustain supply of $1.5 billion in foreign capital on a daily basis, expect a horn onto the geopolitical stage where the USA has dominated for five decades. Unfortunately, the USA has little leverage, since we import so much of our raw materials and energy supplies from foreign sources, as does China. We compete with China.

more...

http://www.financialsense.com/Market/willie/2004/0614.html

[UpInArms]

17. Meanspin is

a modern day Pied Piper.

[UpInArms]

15. Crude Oil Futures Rebound After Attack Slows South Iraq Exports

http://quote.bloomberg.com/apps/news?pid=10000087&sid=afHUx_gLzx.A&refer=top_world_news

June 15 (Bloomberg) -- Crude oil futures pared earlier losses in London and rallied in New York after Iraq's southern oil exports were reduced following an explosion last night on a pipeline that feeds crude oil to the Basra Oil Terminal.

Pumping to the Basra terminal in the Persian Gulf, Iraq's largest export outlet, has slowed by about 60 percent to 30,000 barrels an hour, Mouyd Hashem, harbor master at the terminal, told Bloomberg. Iraq has the world's second-largest oil reserves, after Saudi Arabia.

The attack ``supports all these fears that people have about terrorist activity affecting supplies,'' said Kirsty Ager, an analyst at Energy Information Centre, a consulting firm in Newmarket, England. ``If terrorists can affect Iraqi production, they might have a go at Saudi Arabia.''

Brent crude for July settlement was down 4 cents at $35.45 a barrel on London's International Petroleum Exchange at 1:19 p.m., after falling as low as $34.73 earlier.

On the New York Mercantile Exchange, crude oil for July delivery was up 21 cents at $37.80 a barrel in electronic trading at 8:24 a.m. New York time. It has traded between $37.05 and $38.08 so far this session.

Sabotage to oil pipelines has repeatedly halted exports from northern Iraq, and less frequently from the country's southern fields. Attacks on foreign workers in Saudi Arabia, the world's top oil exporter, raised concern Saudi supplies also may be curbed.

...more...

[UpInArms]

19. Market Numbers at 9:48 EST

Dow 10,398.25 +63.52 (+0.61%)
Nasdaq 1,992.27 +22.28 (+1.13%)
S&P 500 1,134.27 +8.98 (+0.80%)
10-Yr Bond 4.761% -0.109

dollar

Last trade 89.63 Change -0.31 (-0.34%)

[54anickel]

20. The Story of the Fed Is a Story of a Crime

Sound familiar? Reaching for the tin foil box....

http://www.strike-the-root.com/4/smith/smith5.html

snip>

The Morgans had always been closely connected to the Rothschild financial empire in Europe. When war in Europe broke out, the House of Morgan, in partnership with the Rothschilds, became the American sales agent for English and French war bonds. When the money came back to the States to acquire war-related materials, it was funneled through Morgan as the U.S. purchase agent. From 1915 to 1917, J. P. Morgan arranged for $3 billion in exports to France and England, earning a commission of $30 million. <4> As historian Thomas Fleming has dryly noted, the U.S. became a branch of the British armament industry during the first 32 months of its neutrality. <5>

But it was a precarious feast. If the Allies should lose, American investors would sustain huge losses and Morgan’s business would nosedive. Getting the U.S. into the war would extend the financial windfall, but the American public opposed involvement by ten to one.

In May 1915, the British passenger ship Lusitania gave war hopefuls a much-needed boost. Nearly 1,200 passengers, including 128 Americans, lost their lives when a German U-boat torpedoed it off the coast of Ireland. With its hold stuffed with U.S. munitions contraband, the Lusitania exploded a second time and sank in less than 18 minutes. As Griffin documents meticulously, British and American officials did everything in their power to make Lusitania a sitting duck.

With Morgan-controlled newspapers beating the drums for American participation, Wilson finally got his war on April 16, 1917. Eight days later, Congress extended $1 billion in credit to the Allies. The British took their initial advance of $200 million and paid it to Morgan. When they ran up an overdraft of $400 million three months later, Morgan turned to the U.S. Treasury for help. Treasury Secretary William McAdoo stalled until Benjamin Strong, the Fed’s main man, came to his rescue and paid Morgan piecemeal during 1917 - 1918. Where did Strong get the money? He simply created it.

The income tax, also enacted in 1913, raised $1 billion during World War I. <6> But 70% of the cost of the war came from inflation, through a doubling of the money supply. As Rothbard understates, “For those who believe that U.S. entry into World War I was one of the most disastrous events . . . in the Twentieth Century, the facilitating of U.S. entry into the war is scarcely a major point in favor of the Federal Reserve.” <7> In addition to grabbing wealth through direct taxes, government, in collusion with the Fed, took roughly one-half of the people’s savings from 1915 – 1920. It also took the lives of nearly a half-million Americans for a war they never wanted. <8>

In his 1919 book, The Economic Consequences of the Peace, John Maynard Keynes wrote that by “a continuing process of inflation, governments can confiscate, secretly and unobserved, an important part of the wealth of their citizens . . . and, while the process impoverishes many, it actually enriches some . . . . The process engages all the hidden forces of economic law on the side of destruction, and does it in a manner which not one man in a million is able to diagnose.” <9>

[UpInArms]

21. Dollar Falls as CPI Trims Expectations for Fed Rate Increases

http://quote.bloomberg.com/apps/news?pid=10000101&sid=aYTn58CsKrGo&refer=japan

June 15 (Bloomberg) -- The dollar declined against the euro, yen and 12 other major currencies after U.S. consumer prices rose less than some traders had predicted, trimming expectations for Federal Reserve interest-rate increases.

Demand for the U.S. currency waned after the Labor Department said prices paid by U.S. consumers climbed 0.2 percent excluding food and energy. Some traders had bet the figure would be higher, said currency strategists including David Durrant at Bank Julius Baer & Co. in New York.

``The market was expecting an acceleration in inflation, and the CPI report showed that's not the case yet,'' said Durrant, whose bank manages $76 billion. Chances of a half-point rate increase at this month's Fed meeting are now ``much lower, and that's why we are seeing the dollar weakening.''

Against the yen, the dollar fell to 110.46 at 9:11 a.m. in New York from 111.03 late yesterday, according to EBS, an electronic foreign-exchange dealing system. Versus the euro, the dollar dropped to $1.2100 from $1.2059.

Interest-rate futures declined after the report, suggesting traders pared their bets for how fast and how far policy makers will raise borrowing costs. The July fed funds futures contract yield dropped to 1.28 percent, from 1.33 percent before the CPI report. The yield shows traders see a 100 percent chance of a 25 basis-point increase this month.

``People were looking at this number, thinking it could be the catalyst for something more than 25 basis points,'' said Ian Gunner, head of foreign-exchange research in London at Mellon Financial Corp. ``A higher number than this would have given the dollar a lift, and now there is some unwinding of those bets.''

...more...

[54anickel]

22. The Bear's Lair: The monster awakes

http://www.upi.com/view.cfm?StoryID=20040614-024308-4991r

snip>

It thus raises questions in the mind of the suspicious that the release of the producer price index (PPI), traditionally one of the two mainstream measures of inflation (the other being the consumer price index) was delayed Thursday, owing to technical difficulties. This is the second delay this year. The Bureau of Labor Statistics, publisher of the PPI, have had considerable difficulties, with their multifactor productivity statistics (key to assessing the reality of the current recovery) having been delayed several months beyond their normal April publication date and, we are told, likely to be only roughly comparable to past years' figures when they are published. "Technical difficulties" therefore could conceivably cover a multitude of last minute minor adjustments in the PPI, the effect of which would be to suppress a sudden surge in the index.

The political imperative behind statistical suppression of a surge in inflation could hardly be stronger. The Cleveland Fed.'s median consumer price index, which looks at the weighted median consumer price movement of all items, rose at an annual rate of 4.1 percent in April, significantly higher than the consumer price index itself, and a substantial increase over the annual rate of 2.4 percent seen in the preceding year. The markets don't closely follow the Cleveland Fed. index, and that is in any case the figure for a single month, which may be distorted. However, if the bond market gets the idea that inflation is running at the 4 percent level, we are in for a very rough ride indeed.

Four percent may be a low estimate of where inflation ends up. M3 money supply, the best predictor of inflation, rose by 94 percent over the 7 year period from 1966 to 1973, an annual rate of 9.9 percent, or 5.1 percent net of the average 4.6 percent per annum consumer price inflation in those years. The result was high inflation in the late 1970s -- averaging 9.4 percent per annum in the eight years 1973-81 -- together with a collapse to almost zero of the historically healthy productivity growth that had been seen in 1947-73.

In the eight years to May 2004, M3 money supply has grown by 93 percent, an annual rate of 8.5 percent per annum, or 6.1 percent per annum net of the average 2.3 percent per annum inflation rate during the period. In other words, a significantly faster real growth rate in money supply than in 1966-73. The result must inevitably also be high inflation, at a rate comparable to the mid 1970s, in the years to come. There will probably also be an equally sharp decline in productivity in the economy, as resource allocation suffers from much of the inefficiency that plagued the middle 1970s.

snip>

After the mild recession of 1970-71, there was a strong recovery, but price inflation, suppressed by controls in 1971-72, burst out in 1973. The U.S. economy went into a much deeper recession in 1973-75, followed by a surge in inflation, while the stock market, which had made a sturdy recovery in 1970-72 sank far below its initial trough in real terms. In other words, as Milton Friedman predicted and Fed Chairman Arthur Burns did not, a period of rapid money supply growth during and after a stock market bubble at first produced an apparently vigorous recovery, but then led to a decade of stagnation, accompanied by much higher inflation and high nominal interest rates.

If you superimpose this pattern on 1996-2004, we now appear to be in early 1973, the point at which price rises began to take off and the economy began to head south.

[54anickel]

23. Housing for workers falls short

http://www.azcentral.com/arizonarepublic/business/articles/0615affordablehousing15.html

snip>

A collection of national and local experts outlined the problem: a ballooning lack of quality, affordable places to live for the sort of workers who make up the backbone of a community.

snip>

The problem won't disappear even if Phoenix is successful in attracting more high-wage jobs, said Scottsdale economist Elliott Pollack. He said that those jobs force the creation of such lower-wage jobs as grocery clerk or those in office services or retail sales, and the people who fill them need housing.

snip>

Spurred by the heads of major corporations to find solutions to what they saw as their top challenge, the group appeared before city councils to advocate for affordable-housing developments, talked up the issue with community organizations and with planning commissions, and created a housing trust fund that was funded by private donations.

George Latimer is a former mayor of St. Paul, Minn., and a founding board member of a housing fund for Minneapolis and St. Paul.

He said part of the issue is overcoming the perception that affordable housing is something that people will think of as undesirable and something damaging to neighborhoods.

"We have to get them thinking that hard-working people need a place to stay," he said.

[54anickel]

24. 10:46 numbers & babble

Dow 10,410.89 +76.16 (+0.74%)
Nasdaq 1,993.80 +23.81 (+1.21%)
S&P 500 1,134.59 +9.30 (+0.83%)
10-yr Bond 4.753% -0.117
30-yr Bond 5.411% -0.118

NYSE Volume 332,772,000
Nasdaq Volume 422,208,000

10:30AM: The favorable bias is extended, as the major averages reach to fresh session highs... The Nasdaq is spearheading the way higher with gains of 1.3%... In its advance, the tech composite has lifted above its 50-day simple moving average (at 1979 today)... Remember that the Nasdaq failed at this technical level in yesterday's session and closed below it, so the index's ability to pull back above it is a favorable technical development...

While today's advance is encouraging, keep in mind the bigger picture: the major averages have been range-bound for most of the year and the overall action remains choppy... NYSE Adv/Dec 2138/345, Nasdaq Adv/Dec 1985/641

[54anickel]

26. Black Helicopter Theories Whir Through Markets

http://quote.bloomberg.com/apps/news?pid=10000039&cid=baum&sid=ao9ZrDl_sQPs

June 15 (Bloomberg) -- It must say something about fear and greed that normally sane people take leave of their senses to construct financial market conspiracy theories.

Some of these theories, embarrassing as it would seem, find their way into print. A recent conspiracy theory (CT) making the rounds concerns the surge in money supply growth and -- watch the web being spun -- the implication that ``the Fed must know something.''

According to this line of thinking, the Federal Reserve is flooding the banking system with reserves in the same way that it did following the Sept. 11, 2001, terrorist attacks -- except this time it's anticipating the event.

Two weeks ago, Safehaven.com posted an alarming analysis on its Web site, warning of the ``unprecedented, unheard-of pre- catastrophe M3 expansion'' (unprecedented for a four-week period unless you count similar spurts in July 2003 and November 2002).

M3, the broadest monetary aggregate, rose $154 billion, or 22 percent annualized, from mid-April to mid-May. This suggested to the author (with a Ph.D. after his name) ``a crisis of historic proportions coming, and the Federal Reserve is making sure that there is enough liquidity in place to protect our nation's fragile financial system.''

``The Fed's actions mean they know what is about to happen,'' the posting went on. ``They are aware of a terrible, horrific imminent event.''

more...

[KoKo]

29. hmm...Caroline Baum who wrote this article. Seems to me Mogambo

quoted her in his latest rant...

[54anickel]

30. Yes, it would seem "stick your head in the sand" in the MO of the

pundits in the press these days. Nothing to see here - move along now. Those folks are all tinfoilers.

[54anickel]

28. 12:13 Lunchtime update

Dow 10,406.34 +71.61 (+0.69%)
Nasdaq 1,997.98 +27.99 (+1.42%)
S&P 500 1,134.85 +9.56 (+0.85%)
10-yr Bond 4.702% -0.168
30-yr Bond 5.386% -0.143

US$

Last trade 89.52 Change -0.42 (-0.47%)


12:00PM : The market opened higher and has been vacillating around its session highs ever since... The favorable bias is rooted in this morning's in-line core CPI report at 0.2%, which relieved some of the market's inflation concerns that led to yesterday's disappointing session... With regard to the latter, the core CPI report suggested that core inflationary pressures are not rising so fast as to force the Fed to take aggressive action and raise rates 1/2% with the June 30 policy announcement...
Accordingly, the bond market has rallied, with the 10-year note up 42/32, bringing its yield down to 4.70%, aided by Fed Chairman Greenspan's testimony at the Senate Renomination hearing, where he said that inflation is not a serious concern over the coming period... This morning's other economic reports were also roughly in-line and supportive of an expanding economy, as the NY Empire State report came in at 30.2 (consensus 30.5), the Business Inventories report rose 0.5% (consensus 0.4%), and the preliminary Michigan Sentiment report checked in at 95.2 (consensus 90.8)...

Supporting the market's favorable trade has been upward guidance from multiple companies, including cyclicals like Yellow Roadway (YELL 38.53 +0.83) and Maverick Tube (MVK 24.50 +1.17)... Earnings reports, in the meantime, are continuing to come in better than expected, as exhibited by Lehman Brothers (LEH 75.50 -0.59) and Circuit City (CC 12.71 -0.22) this morning... Today's strength is broad-based, with the bulk of the sectors trading in positive territory... Among the leaders to the upside are the software, hardware, semiconductor, networking, disk drive, biotech, transportation, housing, oil services, cyclicals, energy, and materials groups... There is no leadership to the downside... NYSE Adv/Dec 2595/542, Nasdaq Adv/Dec 2062/830

[54anickel]

31. Afghanistan: The Forgotten Component In The War On Terror

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

"We are in a massive train wreck financially. The time has come to be tough about the way we are spending money on programs that we cannot see the ability to fund in later years.”
– Rep. Curt Weldon, R-Pa., chairman of the House Armed Services subcommittee on tactical air and land forces.

Last week we discussed America’s growing military tab in the context of Iraq. This week we turn our attention to Afghanistan, where the administration’s quick initial military success in ridding the country of a brutal regime is in danger of being undermined by the refusal (inability?) to devote adequate financial resources toward completing the task of normalising this long suffering nation. This is evidenced by the fact that America is now overstretched by deployment of about 150,000 troops to Afghan/Iraq, even though the country is spending more on defense in constant dollars that at the peak of Vietnam (where the US deployed 530,000 troops there in addition to hundreds of thousands in Europe/Asia to fight Cold War, not to mention the thousands of nuclear warheads maintained on high alert in bombers, submarines, and missile silos).

Afghanistan is perhaps a more interesting illustration of the risks embedded in an America whose economic adventurism – and resultant financial stresses – sits uneasily with its current global ambitions. The current financial limitations of the US, combined with its relatively isolated diplomatic position (the notion that a Korean President or German Chancellor could win an election on a platform of visceral anti-Americanism would have been unthinkable just 20 years ago), risks re-creating a scenario in which Afghanistan degenerates yet again into a new centre for narco-terrorism. In essence, imperial overstretch demonstrates how America’s ongoing exhaustion of its economic resources undermines important national security objectives.

According to the Pentagon's annual inventory of real estate – its so-called Base Structure Report – the US today now has over 725 military bases in some 132 countries around the world. This vast network of American bases deploys well over half a million soldiers, spies, technicians, teachers, dependents, and civilian contractors in other nations. To dominate the oceans and seas of the world, the US maintains some thirteen carrier task-forces, which constitute floating bases, as well as operating numerous espionage bases not included in the Base Structure Report to monitor what the people of the world, including our own citizens, are saying, faxing, or emailing to one another.

And whilst the American taxpayer continues to pick up a considerable tab for these growing operations, the economic benefits are comparatively minimal, except insofar as these operations generate profits to civilian industries, which design and manufacture weapons for the armed forces or, like the now well-publicized Kellogg, Brown & Root, a subsidiary of the Halliburton Corporation of Houston, undertake contract services to build and maintain US outposts.

snip>

So why should this matter to the markets? Well, leaving aside the obvious economic impact of another September 11 style terror attack, it is clear that violent Islamic nihilism continues to spread beyond the lawless pockets and failed states where terrorists tend to thrive, and into the cities of the west. Countries like Afghanistan may increasingly be seen not as a tragic one-off anomaly, but as a representative symbol of worldwide demographic, environmental and societal stress, in which criminal anarchy emerges as the real ‘strategic’ danger. Disease, overpopulation, unprovoked crime, scarcity of resources, refugee migrations, the increasing erosion of nation-states and international borders, and the empowerment of private armies, security firms, and international drug cartels all become characteristic features of the emerging world. This is clearly not the kind of backdrop conducive to thriving global economic activity and bull markets. The markets may not care about this today, but another devastating attack in the West and that focus could change with a vengeance.

more...

[54anickel]

32. Testimony of Chairman Alan Greenspan

http://www.federalreserve.gov/boarddocs/testimony/2004/20040615/default.htm

The performance of the U.S. economy has been most impressive in recent years in the face of staggering shocks that in years past would almost surely have been destabilizing. Economic policies directed at increasing market flexibility have played a major role in that solid performance. Those policies, aided by major technological advances, fostered a globalization, which unleashed powerful new forces of competition, and an acceleration of productivity, which at least for a time has held down cost pressures.

We at the Federal Reserve gradually came to recognize these structural changes and accordingly altered our understanding of the key parameters of the economic system and our policy stance. But while we lived through them, there was much uncertainty about the evolving structure of the economy and about the influence of monetary policy.

The Federal Reserve's experiences over the past two decades make it clear that such uncertainty is not just a pervasive feature of the monetary policy landscape; it is the defining characteristic of that landscape. As a consequence, the conduct of monetary policy in the United States has come to involve, at its core, crucial elements of risk management. This conceptual framework emphasizes understanding the many sources of risk and uncertainty that policymakers face, quantifying those risks when possible, and assessing the costs associated with each of the risks.

snip>

However, despite extensive efforts to capture and quantify what we perceive as the key macroeconomic relationships, our knowledge about many of the important linkages is far from complete and, in all likelihood, will always remain so. Every economic model, no matter how detailed or how well designed, conceptually and empirically, is a vastly simplified representation of the world that we experience with all its intricacies on a day-to-day basis. Policymakers have needed to reach beyond models to broader--though less mathematically precise--hypotheses about how the world works.

more...

[54anickel]

33. 2:18 update

Dow 10,397.96 +63.23 (+0.61%)
Nasdaq 2,003.02 +33.03 (+1.68%)
S&P 500 1,134.86 +9.57 (+0.85%)
10-yr Bond 4.699% -0.171
30-yr Bond 5.384% -0.145


2:00PM: Little changed over the past half an hour, the major averages retain the bulk of their earlier gains... The move in the price of crude oil is somewhat notable as it moved higher earlier in the session, but has since backed off and is currently down $0.28 at $37.60/bbl... The early move higher came on the heels of two sabotage attacks near Iraq's vital Basra Oil Terminal in the Gulf, which threatened export rates, which had been cut to less than 500K barrels per day from about 1.7 mln barrels per day...
The dollar is slightly weaker against the euro today and the price of gold had its biggest gain in two weeks, increasing by $4.90 to $389.10/oz...NYSE Adv/Dec 2673/601, Nasdaq Adv/Dec 2184/836

1:30PM: Buyers remain in control of the session, as the major averages remain within only a short reach of their respective session highs... Lehman Brothers (LEH 75.54 -0.55) initiated the Q2 earnings season for the brokerage sector with its EPS of $2.01, $0.11 ahead of the consensus, and year/year revenues increase of almost 28%...

Despite the difficult operating environment associated with rising interest rate, LEH's earnings boded well for better than anticipated earnings results from competitors, such as Bear Stearns (BSC 81.53 +1.30), which is scheduled to report its results tomorrow before the market opens... Please read the Story Stocks column for more perspective on LEH's earnings...NYSE Adv/Dec 2684/552, Nasdaq Adv/Dec 2203/810

1:00PM: New session highs for the major averages, as today's rally carries on... In its advance, the Nasdaq has cruised right through the psychologically significant 2000 mark, which had acted as a formidable resistance earlier last week...The market's momentum is being supported by favorable breadth figures, whereby advancers are outpacing decliners by a 5-to-1 degree on the NYSE and a 5-to-2 degree on the Nasdaq... Up volume is outpacing down volume by a 15-to-2 margin on the NYSE and a 9-to-2 margin on the Nasdaq...

The number of new 52-week highs versus new lows is somewhat more impressive than seen of late, with 67 and 41 new highs on the NYSE and Nasdaq, respectively, juxtaposed with 16 and 28 new lows... Notably, volume is running at a heavier pace than seen over the past two weeks, although it's only moderate at best...NYSE Adv/Dec 2674/540, Nasdaq Adv/Dec 2175/812

[54anickel]

34. And the latest on the buck....

Last trade 89.19 Change -0.75 (-0.83%)

[54anickel]

35. Wall Street vs. the Fed

Investors and the Fed disagree about inflation. The May CPI report may prove the Fed is right.

http://money.cnn.com/2004/06/15/markets/fed_wallstreet/?cnn=yes

NEW YORK (CNN/Money) - For months, Wall Street has been nervous about the prospect of higher interest rates, and a new survey shows that anxiety has only gotten worse lately.

But recently there have been signs such jitters could be overblown. If so, then stocks could be in for a relief rally.

The June survey of 225 global fund managers by Merrill Lynch, released on Wednesday, highlighted the worry investors feel about monetary policy. Sixty-five percent of those surveyed said global monetary policy is "too stimulative," compared with just 35 percent in May.

Ninety percent of those surveyed said inflation would be higher in the next 12 months, and 10 percent said it would be "a lot higher," compared with just 4 percent in May.

Most fund managers said they believed Fed policy wouldn't be considered neutral until the U.S. central bank's target for the fed funds rate, the key overnight lending rate it manipulates to run the economy, is at 3 percent. The rate now stands at 1 percent, the lowest level in more than 40 years, and fed funds futures contracts are only pricing in a rise this year to 2.25 percent.

more...

[54anickel]

36. Oil slides on increased supplies

http://news.ft.com/servlet/ContentServer?pagename=FT.com/StoryFT/FullStory&c=StoryFT&cid=1087295103619

Crude oil futures on Tuesday dropped more than 2 per cent in early trade as oil markets now appear to be well supplied with oil for the time being following forecasts of a sharp rise in Opec production this month and estimates of another gain in US commercial crude inventories this week.

snip>

The fall in crude and gasoline prices comes as the fundamental picture of the oil market has improved with an unwinding of the tight supply and demand balance to a scenario where higher production from Opec over the past few months has started to flow in to US ports showing an increase in inventories. Further output increases this month from the oil cartel should help calm fears about supply shortages this month in the world's largest oil consuming nation.

Further Opec production increases were highlighted by a survey by Petrologistics, an oil tanker tracking consultancy, said on Monday that Opec-10, which excludes Iraq, will have increased output by 27.4m barrels a day this month, up 800,000 barrels on May. This is almost 4m b/d above their current production quota, which is to rise to 25.5m b/d from July 1. The survey also said that Iraq's oil output should increase by 350,000 b/d to 2.3m b/d this month.

Oil traders said fears about the impact of the widening unrest in Saudi Arabia has eased as the market has taken the view that the fatal attacks on foreign workers in the Kingdom although may shake confidence has so far not led to any supply disruption.

more...

[54anickel]

37. More rich with more money finds survey of world's wealthy

http://www.stuff.co.nz/stuff/0,2106,2942436a6026,00.html

LONDON: The world's richest people saw their wealth rise 7.7 per cent to $US28.8 trillion ($NZ46.74 trillion) in 2003, taking it back to levels before the collapse of the dot-com stock market boom four years ago, a survey found yesterday.

There were an estimated 7.7 million "high net worth" individuals in the world at the end of 2003, 500,000 or 7.5 per cent more than in 2002, according to the survey by IT services firm Capgemini and investment bank Merrill Lynch.

Rallying stock markets helped more people get rich in Britain and put the UK in the global top 10 for growth in high net worth individuals – classed as those with financial assets of at least $1 million excluding home real estate – the survey revealed.

It found that 383,000 people joined the high net worth bracket in Britain last year, an increase of eight per cent. Their combined wealth also rose eight per cent, to $US1.34 trillion.

Wealth creation varied from country to country, with Asia and North America seeing growth of 10 per cent and 13.6 per cent respectively in 2003.

more....

Dang, I didn't make it into that 13.6% club! Wonder what the percentage of increase was for the poverty level group. I'd fall into those statistics now.

[54anickel]

38. Related article - 1 in 125 Americans are Millionaires (per link title)

http://money.cnn.com/2004/06/15/pf/millionaires/

snip>

The report asserted that many of the wealthy returned to stocks last year after, to a large degree, sitting out the stock market decline of 2001. Rather than trying to create new wealth, they opted to preserve their assets during the down times by investing in fixed income vehicles, real estate, and keeping lots of cash.

Many U.S. millionaires benefited from tax law changes undertaken by the Bush administration, according to the report. The Tax Relief Act of 2001 meant a drop in the maximum tax bracket to 35 percent for 2003.

The trend to alternate investments such as hedge funds, which often offer higher returns continued in 2003, increasing to 13 percent of the total invested, up from 10 percent in 2002.

Robert Fairbairn, managing director of Merril Lynch Investment Managers, says "Investment in these has become mainstream in the last three to four years."

The report predicted that the wealth of millionaires would continue to grow at a high rate, 7 percent annually though 2008. North America's wealthy, with 10.7 percent growth, will lead the way.

[54anickel]

39. The price of cheap mortgages

http://www.louisianaweekly.com/cgi-bin/weekly/news/articlegate.pl?20040614o

In America, we revel in our low interest rates. Mr. Greenspan has seemingly brought us a utopia of cheap money, but the cost has been the reputation of our money abroad.

Throughout Eastern Europe, and most of the continent for that matter, the American dollar was the lingua franca of money -- accepted and acceptable everywhere. As the real value of the greenback has plunged, so has the enthusiasm of merchants and others in Europe to take it, a dangerous precedent for the American economy.

Three years ago, one Euro amounted to less than the value of a U.S. dollar. (At one point,.89 U.S. cents bought one Euro, so low the reputation was of the new currency.) Today, 1.23 U.S. buys one Euro. Almost a quarter of an American's buying power in Europe evaporated in less than 30 months. Dollars used to be accepted in shops across the European continent from West to East -- most of the time with more enthusiasm than the local currency.

Now, stores that never hesitated to accept a Jackson, Lincoln, Franklin, or Grant turn pale at the prospect of seeing a Greenback. Tourists from other countries, who always came armed to Europe with dollars, now would not consider it.

more...

[54anickel]

40. Daily Reckoning

http://www.howestreet.com/story.php?ArticleId=460

snip>

But if America got so much richer, why did real wage rates not rise? A man sweats, humps, busses, totes and schleps today, on average, for about the same wage he got before the Reagan revolution fired its first shot. Go figure.

And now, from today's International Herald Tribune, comes more evidence that America's great boom was a scam.

"More than two-thirds of older households - those headed by people 47 to 64 - had someone earning a pension in 1983," says the article. "By 2001, fewer than half did... "

"New evidence suggests that the waning of the pension has, imperceptibly but surely, stripped older workers of an immense store of wealth - much more than they probably guessed... "

And here's the money paragraph:

"When the holdings of typical households are traced... today's near-retirees turn out to be a little poorer, in constant dollars, than the previous generation was when it approached retirement in 1983."

Edward Wolff, an economist at NYU, looked at 18 years of household financial data from the Fed. Somehow he retained his sanity long enough to discover that "the net worth of the median older household... declined by 2.2%, or $4,000, during the period <1983-2001> to $199,900."

We look upon that fact in shock and awe.

How could it be, dear reader, that after the biggest explosion of wealth-creation in the history of man, the average man is not richer, but poorer?

[KoKo]

42. Who writes this crap at Yahoo Finance? The hourly Market News..

Are they insane? The spinning is so far out it defies gravity:

3:30PM: With half an hour of trade remaining, the market has lots its steam and is slipping lower... As mentioned previously, Friday's options expiration and light volume portend well for volatile trade... Additionally, the broker/dealer sector, which was mentioned as spearheading the market's earlier subtle weakening is now down 1.1%, limiting gains in the blue-chip averages... After the market closes, look for earnings from Oracle (ORCL 11.75 +0.21), which is expected to report Q4 EPS of $0.18... The list of earnings reporters tomorrow morning is short, but sweet and includes BSC, BBY, GT, and LEN...

Tomorrow's Economic Calendar is busy with the Housing Starts and Building Permits among the releases... Note that the PPI report, which was originally scheduled for June 11, has been postponed indefinitely...NYSE Adv/Dec 2648/673, Nasdaq Adv/Dec 2175/946

3:00PM: The major averages stabilized over the past half an hour, with the major averages trading right off their respective session highs... The Nasdaq has outperformed its blue-chip counterparts on a relative basis, with gains of 1.5% at this juncture, although the tech composite has slipped back below the psychologically-significant 2000 mark... The stock market's favorable trade continues to be supported by the rally in the bond market, which has produced a sizeable pullback in bond yields... To that effect, the 10-year note is currently up 45/32, bringing its yield down to 4.69%...
Also helping the sentiment are Fed Chairman Greenspan's comments from this morning, suggesting that inflation is a non-issue over the near term... Volume, however, maintains its anemic level, speaking to participants' lack of conviction to the move higher...

http://finance.yahoo.com/mo

[54anickel]

43. Lots of steam and is slipping lower? HA! That's precious. n/t

[Frodo]

46. It's pretty obviously a typo. That's "'lost' its steam", not lots.

And the yahoo info is from Briefing.com

[54anickel]

47. Yeah, I realized that, but it's still great - along with the rest of the

spin!!!

Could be the options, maybe the light volume, then again the broker/dealer sector really sucks today. By the way, we're expecting some kick-ass earnings reports later today. Oh and that PPI report, not sure when that's coming out, but you don't need to see it, Greenspin says everything is fine, just fine, nothing to worry about there. Did we mention volume is pretty piss-poor again today?

[54anickel]

41. Concerns raised on unwinding of carry trade

http://news.ft.com/servlet/ContentServer?pagename=FT.com/StoryFT/FullStory&c=StoryFT&cid=1087295114480

Bond investors are worried about the unwinding of the carry trade and the effect it will have on their more risky assets such as high yield, or "junk", bonds.

Their fears, raised on Tuesday at a London conference organised by Euromoney, have become more pressing as US interest rate rises approach. The US Federal Reserve meets in two weeks to decide on interest rates, and economists strongly expect a rise either this month or next.

With a carry trade, short-term speculative investors borrow in the US-dollar denominated short rate market and reinvest the proceeds in higher yielding bonds. Such positions are highly sensitive to expectations of the timing of future changes in interest rates.

European institutional investors have been driven to riskier assets, many of them for the first time, by their need to diversify out of low yielding government bonds, but are now worried it may be costly to exit.

more...

[54anickel]

44. Hedge Fund Returns Down Again

http://biz.yahoo.com/ts/040615/10165964_2.html

Hedge funds suffered their second consecutive losing month in May because of sharp swings in energy prices and concerns over a looming interest rate hike.
The average hedge fund was down 0.23% for the month, according to an index run by Credit Suisse First Boston and Tremont Capital Management, a Rye, N.Y., investment and consulting firm. The average hedge fund lost 0.58% in April.

The benchmark S&P 500 stock index was up 1.37% last month, though its 1.47% year to date return still lags the CSFB/Tremont index, which marked a 2.58% return for all reporting hedge funds through May.

Tim Weaver, vice president of hedge fund databases and indices at Van Hedge Fund Advisors International, whose own index showed an average loss of 0.3% for May, said rising rates hit the many hedge funds that use leverage, bringing an end to the days of heavy borrowing at low rates.

"This is now an unfavorable climate," he said. "That and the oil spike were a big part of what's going on."

more...

[54anickel]

45. Closing numbers - waiting on the blather to update

US$
Last trade 89.12 Change -0.84 (-0.93%)
High 90.13 Low 89.08


Dow 10,380.43 +45.70 (+0.44%)
Nasdaq 1,995.60 +25.61 (+1.30%)
S&P 500 1,132.00 +6.71 (+0.60%)
10-yr Bond 4.686% -0.184
30-yr Bond 5.373% -0.156

NYSE Volume 1,345,338,000
Nasdaq Volume 1,520,700,000

Advances & Declines
NYSE Nasdaq
Advances 2591 (74%) 2131 (65%)
Declines 752 (21%) 1011 (30%)
Unchanged 125 (3%) 132 (4%)

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

Up Vol* 1043 (77%) 1185 (78%)
Down Vol* 285 (21%) 305 (20%)
Unch. Vol* 16 (1%) 20 (1%)

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

New Hi's 85 56
New Lo's 31 39


Edit for the blather:

Close Dow +45.70 at 10,380.43, S&P +6.72 at 1,132.01, Nasdaq +25.61 at 1,995.60: Although the market managed to close with gains (and sizeable ones in the case of the Nasdaq), the market's overall performance was not as impressive as many would've hoped considering the fact that the major averages closed well off their best levels of the day... Nevertheless, it's notable that the major averages spent the entirety of the session trading in positive territory... The positive bias got its foundation in the core CPI report, which checked in at 0.2% (in-line with consensus) and relieved some of the inflation concerns, which dominated yesterday's disappointing session... :eyes:

More specifically, the core CPI report suggested that core inflationary pressures are not rising so fast as to force the Fed to take aggressive action and raise rates 1/2% with the June 30 policy announcement... Fed Chairman Greenspan further echoed this sentiment in his testimony at the Senate Renomination hearing, where he said that inflation is not seen as a serious concern over the coming period... Accordingly, the bond market rallied, with the 10-year note closing up 48/32, bringing its yield down to 4.68%...

The pullback in yields supported the stock market's advance, along with upward guidance from numerous companies including cyclicals Yellow Roadway (YELL 38.76 +1.06) and Maverick Tube (MVK 24.94 +1.61)... The strength was broad-based, with the bulk of the sectors trading in positive territory and notable leaders to the upside including the software, hardware, semiconductor, networking, disk drive, biotech, transportation, housing, airline, oil services, energy, and materials groups...

There were virtually no sectors trading in negative territory for the bulk of the session, but the broker/dealer group emerged as a laggard of note toward the end of the day, despite better than expected earnings from Lehman Brothers (LEH 73.02 -3.07)... Outside of the CPI, this morning economic reports included the NY Empire State report at 30.2 (consensus 30.5), the Business Inventories report at 0.5% (consensus 0.4%), and the preliminary Michigan Sentiment report at 95.2 (consensus 90.8)... NYSE Adv/Dec 2591/753, Nasdaq Adv/Dec 2131/1011

[JNelson6563]

48. That's one big drop in yields!!

Zowie! Look at those Treasuries go! That was quite a day!

Hope it's all good for all my fellow Marketeers! The over-throw is progressing swimmingly, FYI.

:hi:

Julie