STOCK MARKET WATCH, Monday December 4

THE DOW REPORT
An Intermediate-Term Look at Oil

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

LONDON - Oil prices dropped Monday, reversing some of their increases last week. Last week's climb reflected worries about possible production cuts by OPEC and the impact of wintry weather on fuel demand in the United States.

Light, sweet crude for January delivery fell 63 cents to $62.80 a barrel in electronic trading on the New York Mercantile Exchange by midday in Europe.

January Brent crude at London's ICE Futures exchange fell 81 cents to $63.81 a barrel.

"Corrections should be short-lived, though, as we believe participants have adopted a 'buy the dips' mentality," said John Kilduff, senior vice president for energy risk management at Fimat USA.

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

ABU DHABI/VIENNA (Reuters) - OPEC is worried by a fall in the dollar that is eroding member states' oil revenue and ministers will take up the issue when they meet next week to discuss a further cut in output.

The dollar is at a 20-month low against the euro -- a bonus for non-dollar oil consumers but a threat to producers.

Most OPEC ministers are leaning toward cutting production beyond the 1.2 million barrels per day they agreed in October to prevent a supply glut. A weak dollar provides another argument for trimming reduction and supporting prices.

"The dollar is not helping (matters). It affects revenue. If there is a significant drop, it is of concern to us," United Arab Emirates' Oil Minister Mohammed al-Hamli told Reuters.

http://news.yahoo.com/s/nm/20061204/bs_nm/oil_opec_dc_4

fuckers.

Time has been really short for me this morning. Work has called me in early.

Have a great time watching the Casino!

Ozy :hi:

...and good morning...

:donut: :donut: :donut:

:donut: and lurkers. Thanks Ozy, make that real money and hurry back.

Things are happening so fast. The folks are coming with the trailer. They may arrive today or tomorrow. I am a little bit nervous buying it site unseen. They are friends of 15 years of Hubby and he says health is making him give the travel trailer up. He said they were thrilled to sell it to Hubby for 3K. They were offered 5K (and that is the going rate)by a nephew but they know hubby is a hard working nice guy who really needs a good place. We laughed over the phone and they are such nice folks. I can't wait to meet them and see the trailer. It runs off electricity and propane so we can actually have a choice. He said he had it weatherized for up north so we shouldn't have any problems in Houston.

After the holidays, we are planning a housewarming party. I love themes so we will have a White Trash Party and Red Neck House Warming Party. Our Indian friends will be scratching their heads, but everyone else will love it. I'll tell you more as the party gets closer. I don't give many parties, but I have a rep as a great hostess because my parties are fun. Can't wait.

One of my daughter's friends (I am happy to adopt her and her brother)is a design student and has offered to redecorate and reupholster for me if and when I want to. What a gal.
The landlord from hell came by at 5:30 this morning-I guess to catch hubby parking in the parking lot. What a jerk.

Happy hunting and watch out for the bears.

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

Last trade 82.57 Change -0.02 (-0.02%)

Collapse of the Greenback

http://www.dailyfx.com/story/strategy_pieces/trade_or_fade/Collapse_of_the_Greenback_1165212217149.html

What began as technically based, liquidity starved rally last week has turned into a full fledged dollar rout this week as US economic data has started to flash warning signs of recession. Both Chicago PMI and ISM printed below the key boom/bust level of 50 – for ISM this was the first time since spring of 2003. Furthermore, 5 out of the 10 subcomponents of ISM fell below 50 including employment – which tends to be a leading indicator for next Friday’s NFP. In short, a blizzard of bad data has destroyed most dollar longs and if the bad news persists the greenback may be caught in a perfect storm as liquidation will become disorderly and traders will dump dollars regardless of price.

Next week ISM Non-Manufacturing may buy the dollar a small reprieve if it surprises to the upside especially given the fact that services are a much larger part of theUS economy than manufacturing. If that index can remain comfortably above the 50 level it may cool some of the speculation regarding a possible 2007 US recession. All eyes however will be focused as usual on the Non Farm payroll report due next Friday. Employment growth will be critical to Fed’s ability to maintain its hawkish tone. If job growth begins to slow, the pressure on the Fed to begin easing will increase exponentially which in turn could open the floodgates to additional dollar liquidation. – BS



...more...

US Manufacturing Wearing On Growth

http://www.dailyfx.com/story/currency/eur_news/US_Manufacturing_Wearing_On_Growth_1165006578204.html

The last economic weigh-in for the dollar this week led to yet another market-wide sell off, further pushing some of the majors to new lows. After a number of disappointing indicators sprinkled through the sessions, today’s numbers seemed the worst of the lot with surprises that have triggered irrational bears’ fears that the world’s largest economy is slipping into a recession.

The pervasive feeling in the market that the economy will at least slow further is seen in the relative levels of the majors. The EURUSD pushed for another 21-month high after a hefty 130 point move to 1.3350. Seemingly unstoppable, the pound is exploding higher with another 200 points added to the GBPUSD’s ascent to 1.9850. With no visable levels of support or resistance in sight, the market is obviously using big round figures in the interim. Shunting the overall trend, a week Japanese yen helped the USDJPY from straying to far from its range, with a 140 point drop only setting the pair down on the 115 figure. Finally, the franc made its own 105 point peak-to-trough drop, but solid support seen around 1.19 is helping the pair catch its breath.

Over the past three sessions, a number of indicators have been released to the great interest of fundamental and technical traders. However, each day had at least one release that effectively kept the bearish sentiment under wraps. Today’s offerings, on the other hand, were singularly burdensome for a currency representing an economy whose pace of growth has stepped down markedly over a year-and-a-half. The two significant releases scheduled for release this morning hit the wires simultaneously, which in effect leveraged the resulting sell off. Construction spending for October was expected to be a non-event. Though housing has become a media red-alert staple, the broader construction number was only expecting a 0.4 percent contraction, only slightly worse than the previous month. This was perhaps one of the reasons the market was caught off guard. When the shock of the headline number dulled, the market surveyed the damage. The previous month’s original 0.3 percent contraction in spending was revised to a 0.8 percent drop to make it one of the worst back-to-back declines in years. Also, this was the sixth month that the gauge has either gone unchanged or declined. A quick scan of the breakdown of building projects revealed a 1.9 percent drop in home building the pace car for the huge drop. Another sign that the housing market’s correction will exert pressure on growth, the sub-gauge has fallen now for seven consecutive months.

The other reason the dollar was sent into a tailspin of wholesale selling was the nationwide ISM manufacturing read. Yesterday’s Chicago PMI report proved a spot-on forecast of national activity for November. For the first time in over three years, factory activity in the United States slowed, a second pillar knocked out from under the economy. The least of the market’s worry was the fact that the 49.5 print was below the market’s 51.5 consensus. More important was the unimpressive breakdown. Making up nearly a third of the overall report, the new orders component hit its lowest level since April 2003 when it dropped 3.4 points to 48.7 on the month. Not an Earth-rocking surprise given October’s durable goods report showing the biggest drop in orders in six years. Production slipped below the 50.0 contractionary/expansionary mark as well to 48.5. Another key issue was the drop in the employment factor to 49.2, which led the market to quickly discount its previous expectations for NFPs and the manufacturing jobs report due next Friday. From the lines of bad and worse news, one number was met with mixed feelings. Prices paid rebounded solidly into expansionary territory from its four-and-a-half year low in November. For the already struggling manufacturing sector, this could help flood the boat; but the inflationary aspects for the Fed are easily construed as a means to keep interest rates from the guillotine. Now market participants will look ahead to next week’s sparse offerings (ISM services and NFPs), and those itching to buy on the prospect of an oversold dollar will see if the suspected easing in volatility in the first half of the week can help.

...more...

http://news.yahoo.com/s/ft/20061204/bs_ft/fto120420061412406960

...

There are few better places to observe the extent of economic ties between North America and Europe than the top of a grain silo 12 storeys above Liverpool's docks. Below, on the quayside, a ship unloads wheat from Canada, while another brings US soya-beans. In a nearby terminal that handles some 30 per cent of the UK's containers on the North Atlantic route, cargo speeds on and off vessels waiting for the next high tide.

In 2001, the US recession led to falling trade volumes between Britain and the US, says Frank Robotham, group marketing director of Peel ports group, the owners of Liverpool's docks. Yet he is not worried about the effect of a slowdown. "We're not pulling our hair out," he adds.

Europe's policymakers are similarly relaxed. Joaquin Almunia, the
European Union's monetary affairs commissioner, said last month: "So far our estimate for the net impact of the US slowdown on the European economy is not very important because our growth is mainly based on internal demand."

Look to the other side of Liverpool's Mersey River and you can understand Mr Robotham's confidence. There, in Birkenhead, is a giant pontoon handling traffic from Ireland, which today represents a bigger slice of business for the port than its North Atlantic trade.While container volumes on North Atlantic routes have doubled over the past 20 years, traffic to Ireland has risen sixfold.

Similar stories of diversification from US business are increasingly told in continental Europe. At weekends the narrow streets of baroque Heidelberg, on the Neckar River in southern Germany, bustle with tourists. Its castle on the hill and university buildings below are particular attractions.

US citizens comprise the largest share of foreigners. But what would happen if a US economic slowdown meant that suddenly fewer came? It is the sort of scenario for which Nils Kroesen, for 37 years managing director of the city's convention and visitors centre, has prepared.

After the first world oil shock in the early 1970s, he led an initiative to encourage Japanese visitors. "At that time we decided that we wanted to create additional markets alongside the US," he says. Now Heidelberg is seeing 40,000 overnight stays by Japanese visitors a year, with many taking advantage of wedding packages.

Japanese signs are obvious in tourist shops, but recent years have also seen significant growth in visitors from the Gulf States, China and India. Clubs to promote the city have been established recently in Delhi and Beijing. "The mix of nationalities on the demand side means we have few worries about visitor numbers," says Mr Kroesen. For Heidelberg, a US economic slowdown "is not a big risk".

Economists and European policymakers regard Liverpool's docks or Heidelberg's tourism as good examples of the new European economy: robust, diversified and able to sustain growth without a US motor. But anecdotes cannot supply conclusive proof of Europe's new resilience.

Sceptics, who have heard talk of recovery and strength in Europe's economies many times before only for it to have been exposed as an illusion, want to know what is different this time. In recent months, the debate has been fierce, with opinion among economists split roughly equally between optimism and pessimism.

The first point made by optimists such as Dirk Schumacher, economist at Goldman Sachs, is that economic cycles in the US and Europe are linked less than we might think. The 2001 downturn was rare in being synchronised globally: in the early 1990s, 1980s and mid-1970s, US recessions were not strongly correlated with Europe.

Mr Schumacher argues that the correlation between US and eurozone growth can vary,and that when there has been a strong correlation, it might have been because both regions were hit by a common shock, rather than any intrinsic link. That was true in 2001, he argues, when both Europe and the US were hit by an equity market collapse and the effects of September 11 2001. "What we have now is a US domestic-specific reason," he says.

Mervyn King, governor of the Bank of England, made a similar point at a recent press conference. "I know there's this phrase 'when the US sneezes the rest of us catch a cold', but I think we need something a bit more sophisticated to make that analysis now and it's got to take on board why the shocks occur," he said.

"In 2000, when we also had this debate, the original shock was a worldwide slowdown in the IT sector. What we're seeing now in the US is not a consequence of a worldwide slowdown - world growth has been and continues to be pretty strong - rather we'reseeing a slowdown in the US housing market."

The second reason for optimism is reduced dependence on trade with the US, cited last month by the
European Commission. Over the past five years the relative importance of the US as a destination for EU exports has declined and EU25 countries, on average, are dependent on the US for only 8 per cent of their exports of goods.

Third, the Commission points to the revival of domestic demand in Europe, and especially the revival of the German construction industry, which had acted as a drag on growth over much of the past decade. Corporate balance sheets were also in better shape compared with 2000-2001.

/ plenty more...

K&R

And I wish they'd hurry up.

It IS a great toon.

when gold is staying flat?

poor man's gold?

http://english.peopledaily.com.cn/200612/04/eng20061204_328023.html

China's foreign exchange reserves have become a thorny issue for the government. Experts around the world have suggested ways in which China might address the surplus of foreign exchange reserves. However, many of these simply involve consuming the excess which could easily lead to inflation. Any attempt to address the excess of foreign exchange reserves should incorporate a fundamental economic restructuring and an adjustment of the RMB exchange rate formation mechanism, which will be a long and slow process. In the process the government can pursue some complementary policies to reduce its huge foreign currency reserves. The author believes that raising gold holdings should be one of government's strategic choices.

Gold has played a very important role in the international monetary system. With the Demonetization of Gold, decided at a meeting in Jamaica in 1976 after the breakdown of the Bretton Woods system, the function of gold as a currency has been weakened and its status in the international reserve system fallen. As a result, many countries and regions reduced their gold holdings. However, following the Asian financial crisis, the US' economic downturn and the depreciation of the dollar, gold once again has risen in importance. Many countries have restored or even raised their gold holdings and adjusted the proportion of gold in their reserves, seeking a better role for gold in the modern economy.

...

Gold assets have unique features. Gold holdings is an issue that concerns national sovereignty. Every country has autonomous control of its gold. Gold does not involve a liability, nor is it subject to any country's economic policies, including the direct impact of monetary and fiscal policies.

China's Central Bank says that China has 600 tons of gold holdings, equal to about 19.29 million ounces. This figure has not changed since December 2002. China's gold reserves account for only 1.3 percent of its total foreign exchange reserves, far lower than the 3 percent that is standard in other countries. With the rapid growth of foreign exchange reserves, which now exceed US$1 trillion, the ratio of gold in China's foreign exchange reserves is even lower. In the long term, China should raise its gold holdings. The price of gold has rebounded since April 2001 and a record high was set in May 2006 ¨C US$725 per ounce. Currently an ounce of gold sells for approximately US$625. The price of gold has fluctuated but overall it remains high. If China adopts a long-term strategic approach, accurately predict the market price of gold and purchase gold in a timely and reasonable manner, it can preserve and increase the value of gold, improve the reserve structure, and create a solid foundation for the internationalization of the RMB in the future.

http://www.smartmoney.com/bn/ON/index.cfm?story=ON-20061204-000203-0552

Asian stocks were mixed Monday, with Japan's Nikkei 225 falling as export-related shares such as Canon Inc. and Matsushita Electric Industrial Co. declined on concerns over the U.S. economic outlook. Losses were capped as the U.S. dollar stabilized against major currencies.

The Shanghai Composite Index ended higher, however, as investors sought China shares after the yuan rose to a post-revaluation high against the dollar.

Japan's Nikkei 225 Averageended 0.1% lower to 116303.59. The broader Topix index rose 0.2% to 1,607.74.

...

Data released before the start of trading showed capital expenditure by Japanese companies in the July to September period rose 12% from the year-earlier quarter, the 14th consecutive quarterly increase, according to the Ministry of Finance. The pace of growth was down from a record 16.6% rise the previous quarter.

In Tokyo currency trading, the U.S. dollar was quoted at 115.70 yen, up slightly from its level of 115.39 yen in late New York. The euro was quoted at 153.74 yen, compared to 153.93 yen in late New York Friday.

...

Elsewhere in the region, Shanghai's Composite Index rose 2.8% and Taiwan's Weighted Price Index reversed early loses to trade 0.4% higher. Singapore's Straits Times Index rose 0.5%, Malaysia's KLSE Composite fell 0.3% and South Korea's Kospi fell 0.6%. New Zealand's NZX-50 index ended down 0.5% and Indonesia's Jakarta Composite fell 0.2%. Bombay's Sensex rose 0.2% in late afternoon trading.

Australia's S&P ASX/200 fell 0.1% after data released Monday showed Australian new home building approvals fell 7.4% in October, exceeding the 2% decline economists had expected.

Hong Kong's Hang Seng Indexended 0.1% higher at 18,702.73. The China Enterprises Index, a gauge of mainland-incorporated shares listed in Hong Kong rose 0.1%.

/...

http://mwprices.ft.com/custom/ft2-com/html-story.asp?dateid=39055.3116898148-885378984&guid={505EC99B-A594-4E32-A7DC-F63F345FBDB5}

European equity markets were flat by midday on Monday as losses for banks offset gains for utilities, while expectations of a lower open on Wall Street weighed.

The German-listed shares of US drug giant Pfizer fell as much as 12 per cent after the company ended development of a new cholesterol drug, which had been tipped to be its next blockbuster. Torcetrapib, which was being designed by Pfizer to replace its existing cholesterol treatment Lipitor, was scrapped at clinical trial stage after fatalities in patients taking the drug were 60 per cent higher than in the group not receiving it. AstraZeneca, whose rival treatment Crestor is among its biggest growth drivers, gained 0.4 per cent to £28.98, while Roche, the Swiss group which is developing a new cholesterol drug, added 0.1 per cent to SFr212.50.
...

The FTSE Eurofirst 300 was unchanged at 1,421.35, Frankfurt’s Xetra Dax was flat at 6,241.74, the CAC 40 in Paris was 0.1 per cent higher at 5,256.42 and London’s FTSE 100 climbed 0.2 per cent to 6,031.9.

/..

http://mwprices.ft.com/custom/ft2-com/html-story.asp?dateid=39055.4969560185-885388542&guid={505EC99B-A594-4E32-A7DC-F63F345FBDB5}

European equities ended the session with gains on Monday after a strong showing for drug companies and upbeat M&A hopes lifted markets over the flatline.

The FTSE Eurofirst 300 rose 0.6 per cent to 1,429.7, Frankfurt’s Xetra Dax was up 0.9 per cent at 6,295.2, the CAC 40 in Paris was 0.8 per cent higher at 5,296.1 and London’s FTSE 100 climbed 0.5 per cent to 6,050.4.

French heavy engineer Alstom was one of the biggest gainers on the Eurofirst 300 after Bouygues, the construction and telecoms group, revealed late last week it had raised its stake in the power station builder to 25.07 per cent, prompting speculation about a full takeover. Shares in Alstom gained 3per cent to €89.50, while Bouygues added 1 per cent to €44.60.

WASHINGTON — One lucrative corner of the banking community has been so well-connected in the Republican-controlled Congress that a powerful committee chairman once assured its members that the industry's interests were in "two trusted hands."

Now that Democrats are about to take control of Congress, that industry — the bankers and financiers who make college student loans — will have to contend with a lawmaker who has compared it to the greedy usurers Jesus drove from the temple of Jerusalem.

"It's time to throw the money-changers out of the temple of higher education," thundered Sen. Edward M. Kennedy, D-Mass., who is in line to become chairman of the Senate committee that oversees education programs.

Within the student-loan industry, the impending transfer of party control is producing waves of anxiety — in part because Democrats have promised that one of their first acts will be to cut interest rates on student loans.

...more

http://www.chron.com/disp/story.mpl/business/4375339.html

What a racket. You get laid off and try to retool yourself and this happens. Or worse yet, you are a young kid trying to build a life and you leave school a slave. It's shameful.

http://www.marketwatch.com/news/story/us-stocks-powered-up-merger/story.aspx?guid=%7B7A93EA05%2D02EA%2D439E%2DB910%2DA50E51688FF4%7D&siteId=

NEW YORK (MarketWatch) -- U.S. stocks were trading higher on Monday, as positive momentum from a flurry of mergers, including a mega deal in the banking sector, offset bad news for Pfizer Inc.

The Dow Jones Industrial Average ($INDU :12,258.22 +64.09 +0.53% 12:32pm 12/04/2006)

"Let's look 4 the purple banana
'Til they put us in the truck, let's go!"


U.S. stocks surge on merger flurry
Dow up triple digits, S&P 500 at 6-yr. high; BoNY, Mellon to merge
http://www.marketwatch.com/news/story/us-stocks-surge-slew-mergers/story.aspx?guid=%7B7A93EA05%2D02EA%2D439E%2DB910%2DA50E51688FF4%7D&siteId=



Gonna party like it's 1999!

Dow 12,283.85 Up 89.72 (0.74%)
Nasdaq 2,448.39 Up 35.18 (1.46%)
S&P 500 1,409.12 Up 12.41 (0.89%)
10-Yr Bond 4.433% Up 0.008
NYSE Volume 2,766,321,000
Nasdaq Volume 2,040,047,000

4:20 pm : Stocks rallied Monday as a resurgence in M&A activity and oil prices falling for the first time in more than a week helped investors shrug off Pfizer's (PFE 24.90 -2.96) biggest one-day decline in two years.

Since Dow component Pfizer is also among the most influential names on the S&P 500, the drug giant saying it halted the development of a drug (torcetrapib) that was seen as the successor to its blockbuster Lipitor therapy was the day's biggest news item. Fortunately for the bulls still optimistic that December will play out as well as it has for so long, a blockbuster $16.5 bln deal between Bank of New York (BK 39.75 +4.27) and Mellon Financial (MEL 42.78 +2.73) restored investors' confidence enough to look beyond Pfizer's misfortune. As the best performer on the S&P 500, Bank of New York's 12% surge helped provide a floor of notable support for the most influential of all 10 S&P 500 sectors -- Financials.

Of the eight other sectors closing higher, Technology also got a lift from M&A news as LSI Logic's (LSI 9.12 -1.44) proposed $4.0 bln deal for Agere Systems (AGR 19.30 +1.51) left investors wondering which chip maker might become the next takeover target. IBM (IBM 93.51 +2.26) surging 2.5% as the day's best performing Dow component after it was mentioned favorably in Barron's over the weekend provided additional sector support.

Even the Energy sector, despite a 1.6% decline in oil prices, found enough momentum late in the day to close in positive territory. After rising more than 6% last week to a two-month high on forecasts of colder weather across much of the U.S., an expected shift in the weather toward warmer-than-normal temperatures prompted traders to take some profits. Crude for January delivery finished the day at $62.44/bbl.

The absence of potentially disruptive economic reports also gave investors the green light to get back into equities, especially since more evidence of a slowing U.S. economy last week prompted participants to again question the sustainability of a 4 1/2-month rally. BTK +1.4% DJ30 +89.72 DJTA +0.8% DJUA +0.7% DOT +1.3% NASDAQ +35.18 NQ100 +1.4% R2K +1.9% SOX +2.0% SP400 +1.2% SP500 +12.41 XOI -0.3% NASDAQ Dec/Adv/Vol 931/2140/2.0 bln NYSE Dec/Adv/Vol 764/2543/1.40 bln