STOCK MARKET WATCH, Tuesday 13 April

Sums up their whole philosophy AND explains their policies, too.

http://www.wgoeshome.com

http://quotes.ino.com/chart/?s=NYBOT_DXY0&v=s
Last trade 89.53 Change +0.58 (+0.65%)

Settle 88.95 Settle Time 23:35
Open 88.92 Previous Close 88.95
High 89.62 Low 88.85


US Dollar Collapse a Real Possibility
http://www.fxstreet.com/nou/content/102670/content.asp?menu=macro&dia=1342004

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The Iraq and terrorist issues remain on the front page. It must be said that developments on the ground in Iraq over the last two weeks or more do not encourage a bullish US psychology in the rest of the world. Such developments do effect market dynamics if they continue to build. It could be said the psychological ground toward the US dollar has been softened by these developments. Should there be, and most hopefully not, a significant terrorist event in the US in coming weeks, coming as it would on the back of a perceived to be failing Iraq policy, a change of administration in the US would become highly probable.

The Bush administration would be left with a still free terrorist leadership, a struggle to maintain civil order in Iraq, and a still vulnerable US homeland. In such circumstances the current policies would come to be seen as blatantly inappropriate and ineffective.

This is a dark picture being painted here, and not one we favour. Yet it is the role of a strategist to look for the soft side of a market, and how that soft side may be fundamentally punctured. We simply cannot see how the Bush administration could survive such a backdrop, regardless of how well the economy was doing.

We have long offered the view that the Bush administration is vulnerable at the forthcoming election, and most importantly that this is not something the market is pricing. There is no administration change “risk” currently priced into the US dollar, let alone actual change of administration. This probably has nothing to do with the large and record contributions made by some Wall Street investment banks to the Bush campaign?

more...


Key factors today:
http://www.fxstreet.com/nou/content/102055/content.asp?menu=market&dia=1342004

The US retail sales report will be important, although markets will also continue to monitor developments in Iraq.

Market analysis

Euro/dollar:

There is the potential for a further dollar advance over the next week with optimism over the economy and a lack of enthusiasm for the Euro helping to offset the persistent political concerns surrounding Iraq. The dollar will still find it difficult to advance strongly and there will be initial resistance around 1.1980, but the 1.1850 level remains a realistic medium-term target.

The dollar has retained a firm tone against the Euro and, after being blocked at the 1.2050 level on Monday, the dollar strengthened further to a high of 1.1985 in early Europe on Tuesday before retreating slightly to 1.20.

The Euro has been undermined by selling against the yen and there is a general lack of confidence in the Euro. If sentiment fails to revive soon, there will be an increased risk that longer-term Euro sentiment will be damaged with a further closing of long Euro positions.

The US economic data will remain important and markets are expecting a retail sales increase of 0.6% today. The dollar should be able to survive a slightly disappointing set of figures, but monthly growth below 0.2% would damage the potential for a further near-term advance. Monthly growth above 1.0% would be dollar positive and reinforce expectations of a Fed tightening, especially after the comments from the Fed's Parry on Monday who warned that rates would eventually need to rise.

Tokyo Stocks End Higher, Dollar Lower
http://www.columbiabasinherald.com/articles/2004/04/12/ap/Headlines/d81trb300.txt

TOKYO - Tokyo stocks rose to a new 32-month high Tuesday as investors bought shares in banks, retailers and other sectors poised to benefit from an economic upturn. The U.S. dollar was down against the Japanese yen.

The Nikkei Stock Average of 225 issues closed up 85.12 points, or 0.71 percent, at 12,127.82. It was the third time in two weeks that the blue-chip index has finished at a 32-month high, edging closer to a mark of 12,163.67 reached on Aug. 8, 2001. On Monday, the Nikkei rose 145.19 points, or 1.22 percent.

The dollar was trading at 105.65 yen at 5 p.m. (0800 GMT) Tuesday, down 0.61 yen from Monday in Tokyo but above the 105.36 yen it bought in New York later that day. The U.S. currency fluctuated between 105.06 yen and 105.73 yen during Tokyo trading hours.

more...

In Beijing, Cheney to Meet With Chinese Leaders
Tensions Over Taiwan, N. Korea to Dominate Discussion
http://www.washingtonpost.com/wp-dyn/articles/A7331-2004Apr13.html

With tensions rising across the Taiwan strait, Vice President Cheney arrived here Tuesday for meetings with top Chinese officials, including President Hu Jintao, on a range of economic and security issues, including Chinese complaints about the narrow reelection of Taiwanese President Chen Shui-bian and his campaign to write a new constitution for the island.

Cheney plans to tell the Chinese, who believe Taiwan is a renegade province, that the administration still adheres to the cornerstone of U.S.-Chinese relations -- an ambiguous phrase that Chinese on both sides of the straits believe there is "one China." He also will reiterate that the administration opposes unilateral efforts by either side to change the status quo in the region, a senior administration official said.

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The crisis over North Korea's nuclear ambitions is also high on the agenda. China has pressed the Bush administration to show greater flexibility in the negotiations with the Pyongyang government. But U.S. officials said Cheney was delivering a message that the United States would offer no concessions as it seeks a sweeping dismantling of North Korea's nuclear programs, backed by a tough program of inspections.

snip>

Malaysia under pressure to review currency peg
http://news.ft.com/servlet/ContentServer?pagename=FT.com/StoryFT/FullStory&c=StoryFT&cid=1079420306670

Singapore's decision to strengthen its currency has renewed market speculation about the future of neighbouring Malaysia's fixed exchange rate.

The currency peg, imposed in 1998, has so far been seen as successful, boosting exports for the trade-dependent economy and creating stability in the wake of the 1997-98 Asian financial crisis.

snip>

Rafidah Aziz, the international trade and industry minister, suggested this week that exporters were relying too much on the peg instead of undertaking industrial restructuring to maintain competitiveness.

"Manufacturers and producers need to be more competitive rather than depending on the currency (peg)," she said.

EDITED BY ADMIN: COPYRIGHT

And by these terms, it seems that >EUR 1.30 is the definition of collapse. So am I correct in summarizing the message contained here: there is a disconnect between market brokers here and those abroad? It seems as though Wall Street is willing to throw money for a continuation of the lax oversight and pie-in-the-sky numbers we have seen during Bush's tenure. Europe, on the other hand, looks to be concerned with long-term fundamentals.

Europe is trying to stay with fundamentals, although there is plenty of disagreement over there on it, mainly their policy on deficit limits (can't think of the term they use for it).

Guess it gets sort of hard to compete if the players aren't abiding by the rules or even playing the same game. So the US uses lots of non-fundamental, artificial stimulus to create an artificial ecomomic recovery and using their influence in the IMF to push this ideology onto developing nations. Meanwhile the Europeans attempt to stick with sound business cycles as much as possible to drive their economy.

Yet which one do investors flock to these days? Where ever the carry-trade allows them to turn a quick, bit it risky, profit. It seems to working "as designed" by the Fed - so far. :shrug:

http://205.232.90.194/editorials/maund/maund041204.html

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For many, many months we have observed, and gone along with, the major bear market rally in the general stockmarket, aware that it has been fuelled by an unsustainable combination of zero real interest rates, a massive injection of liquidity and the unbridled expansion of credit and debt, the purpose seemingly being to stoke up a "Teflon recovery" and a feel good factor, so that the current US administration gets re-elected. It is a combination of circumstances that cannot continue - and will not continue.

There is a "Sword of Damocles" hanging over this market and that is the spectre of rising interest rates, which, given the magnitude of the excesses, will lead to a possibly disastrous implosion. The administration and the Fed are "keeping their fingers crossed" that they can stave off rate rises, or at least the effect of rate rises until after the election, but due to the fact that the situation is not entirely within their control this is a forlorn hope, especially given what has happened in the bond market over the past couple of weeks.

Rising rates are the "Kiss of Death" for the stockmarket, and the moment rates start rising we can expect to witness a severe decline in the general stockmarket. This is partly because the first rate rise, however modest, will be the equivalent of draping the New York stock exchange with a 50-foot high banner saying "Take Profits!" - whatever they say no-one will believe that the rise is anything other than the first of many. To be realistic, US investors should also factor in the ravaging effects of the falling dollar on their capital. Even though the US is a huge country, almost a continent and it is therefore easy to adopt an insular, inward looking attitude and ignore the effects of the falling dollar, it should still be acknowledged for what it is, a real loss of international purchasing power. It is for this reason that I have also included a long-term chart showing the Dow Jones index expressed in Euros above.

On Friday the 2nd the bond market plunged amid a wave of selling, resulting in the biggest one-day loss for years. Such a move at this juncture, although only a one-day occurrence, signals the probable start of the long-awaited stampede out of bonds. Bonds down equals interest rates up. Real interest rates are already rising and it is now only a matter of time, probably no more than a few months, before the Fed's hand is forced and "official" interest rates have to rise. The impact of rate rises on a chronically debt-ridden and maladjusted economy cannot be over-estimated. When this happens the stockmarket can be expected to nosedive.

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Without giving specific advice (it may sound like it, but I am not asking for that), what should we do with 401k investments?

I have always thought that you put your money in bonds during bear markets as a kind of haven from the unpredictability of stocks. I know that sounds simplistic to most of you investing types, but I am not an investing type and I have believed that until recently. My employer makes 401k contributions for me that must be invested in some type of mutual fund. I am not asking for specific advice about what fund or even what type of fund, but I am asking about the options. It seems that bonds may not be a safe haven for a bear stock market as I once believed they were.

money into stocks and bonds haven't they? They needed new blood, what a great way to get it. And most people that got into them just go along with the recommended allocations for their age and risk comfort and never look back. "Set it and forget it".

Not to be taken as advice at all, but for those uncomfortable and wanting to wait the markets out a bit, most 401Ks do have a money market option. They earn next to nothing, but also risk next to nothing - short of a complete financial meltdown. The 401Ks that I've had experience with allow you to move your money around as much as you like, at no expense, and allocate to as many funds as you'd like within your providers portfolio.

If you are asking where to allocate your money for a decent return, I can't help too much with that. Need to do some homework and research. Your 401K provider should give you all the details of holdings in each of their funds. You need to do your homework from there.

http://205.232.90.194/editorials/mauldin/mauldin041004.html

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So, who's right? The optimists or the pessimists? If you are looking for the monthly BLS survey to tell you, I think you are wasting your debating time. The numbers are estimated, based upon a "survey," seasonal adjustments and a host of guessing games. Again, these are estimates which will inevitably be adjusted as real numbers begin to show up a lot later. The staff at the BLS does yeoman work, and I believe they sincerely do their best, but latest month reports are subject to fluctuations due to assumptions. We all know the old line about what assumptions can do.

Remember, we are looking at very small percentages in estimating the employment rate and the number of jobs created. There are 147,000,000 some odd workers in the US. 308,000 jobs is 0.2% of total jobs. Lately, the normal move is less than 1/10 of 1%. Do you really think they are anywhere near that accurate on a most recent month basis?

The value of the report is to see the trends over longer periods of time. The trends are clearly getting better than last year. Should we get excited (or distraught) over any one month's report? Probably not. Leave that nonsense for the politicians.

But the trends also show job growth weakness as compared to previous recoveries. This recent report suggests a new trend may be starting, one which is consistent with the weakness in job growth. Remember when I wrote a month or so ago that there were large numbers coming to the end of their welfare checks starting in the first quarter? There was a significant increase in the number of people looking for work in this most recent report. Coincidence? I think not. Evidently they decided it was better to get part-time or temporary jobs than remain without any income. I personally know that lack of money can clarify your priorities. That may be the lesson to take from this report and one which bears watching, to see if there is a new trend being started here: part-time and temporary work on the rise. Such is not the stuff of legendary recoveries, nor contented voters.

Also, I suspect, but have no statistical proof (although reasonable anecdotal evidence exists), that many companies are hiring "temporary" workers because such workers do not come with health and other benefits, nor do they bring a rise in unemployment insurance if they leave.

The bond market went into full retreat on these numbers, thinking the Fed will soon be able to raise rates. This data does nothing to suggest the Fed is going to feel free to move any time soon. Indeed, I exchanged a few emails with Greg Weldon on that note, and he wrote back:

"THE source of strength... Part-Time for Economic Reasons... Up Huge, enough to suggest Full-Time jobs contracted, and a thought FULLY supported by the disinflationary Earnings and Aggregate Hours figures... Let alone the new HIGH in Number Wanting a Job... and rise in Unemployed More than 27 Weeks... AND... DROP in Employment/Population Ratio. Hardly enough to 'budge' the Fed."

There are some monthly statistics from government sources that I think are reliable and meaningful. I would pay attention and adjust investment and trading strategies based upon them. But trading or investing based upon the most recent household employment survey? I leave that to those with more seasonally adjusted intuition. Or to those who get early hints.

Again, trends in the statistic can give us some clues, but monthly numbers are there to be gamed by the fast and nimble. If you are not in that crowd, I suggest you not play the game.

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Just want to take this opportunity as a newby to thank you for this daily post, Ozymandius.

My schedule does not allow for my full attention throughout the day. So kudos also need to be bestowed upon 54anickel and other regulars for their persistence in keeping the thread alive and entertaining.

Thank you for adding to the thread.

Ozy

Failure of the Fed Reflation Initiative

Since January of 2001, when the Federal Reserve embarked on a path extending over 20 months to reduce Fed Funds targeted interest rates down to 1.0%, the resolution is incomplete, uncertain, and hardly successful. By many measures, the outcome is arguably a failure. Aggressive monetary stimulus has jolted the economy and financial markets, to be sure. Clearly absent has been a foundation upon which to build an economic recovery. Twenty years of a rising USDollar, energy reserve depletion, and offshore manufacturing has led to an “evolution of dependence” which leaves our nation highly vulnerable in its supply of energy, raw materials, and capital. Also absent have been the internal dynamics to force traction of monetary policy into actual commercial performance. The foundation lacks the pent-up demand, principally in the car and housing sectors. More critically, it lacks domestic savings from which to recapitalize. The internal dynamics have been indeed radically altered by the rapid evolution of globalization itself. The business cycle has changed to the extent that cyclical behavior is challenged and debated. The cycle may be broken.

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An unusual debasement of the USDollar has been in progress for over three years. The first step in 2001 saw the re-emergence of the yield carry trade via massive bond speculation. Money is borrowed at a low short-term rate, and invested in long-dated Treasurys. This racket is highly profitable, but only available to the highest quality borrowers. Each round of Fed cuts ushered a new round of carry trade speculation. Hundreds of billions of USDollars are generated and spewed into our economy annually from this highly effective, but debilitative, monster apparatus. Financial engineering is the enabler of both inflation and deflation, even as it gradually destroys the real economy

The second step of the dollar debasement occurred with the growth of the real estate bubble, powered by the mortgage finance movement. After ample goading, Greenspan convinced bond speculators to push down mortgage rates later in the year 2001. The refinance deals are seen as rescue devices for the economy as a whole, when in reality we burn our furniture (home equity) to maintain a certain standard of living. Little heed seems paid to the parallels to Japan in the 1980 timeframe. Their bank system linked loan portfolios to both the inflated stock price and real estate price structures. Systemic failure of their entire banking system followed, which stalled economic behavior for over a decade. Is the United States ratcheting its mortgage finance system (banks and GSE agencies) in parallel fashion? Methinks YES. We march into the trap with history at our side, revised to be sure, and blinders on our eyes. As a nation, we greedily seek out new bubbles to exploit, despite the near guarantee of their temporary nature.

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Most so-called experts cannot properly define inflation. Is it the effect or the initial action? How can a problem be properly treated if it cannot be defined or diagnosed, let alone its root causes identified? One can tragically defend the position that recent Federal Reserve expansion of the money supply has initially led to far greater deflationary pressures within the economy. Not only are production costs and shipping costs rising, but household budgets are more strained. Corporate profit margins are being squeezed, and household discretionary spending is being hindered. Two decades of exported monetary inflation has built the Asian region’s manufacturing capacity to such an extent that pricing power is nonexistent in our domestic economy. Pricing power will return when China enforces it. The result has guided a renewal of offshore production and an acceleration of job outsourcing, thus massive job layoffs and reduced wages in the aggregate.

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

OK. I love Jim Wille and just can't seem to get enough of his stuff! :loveya:

Edit to stay within copyright rules

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

Failure of the Fed Reflation Initiative

Since January of 2001, when the Federal Reserve embarked on a path extending over 20 months to reduce Fed Funds targeted interest rates down to 1.0%, the resolution is incomplete, uncertain, and hardly successful. By many measures, the outcome is arguably a failure. Aggressive monetary stimulus has jolted the economy and financial markets, to be sure. Clearly absent has been a foundation upon which to build an economic recovery. Twenty years of a rising USDollar, energy reserve depletion, and offshore manufacturing has led to an “evolution of dependence” which leaves our nation highly vulnerable in its supply of energy, raw materials, and capital. Also absent have been the internal dynamics to force traction of monetary policy into actual commercial performance. The foundation lacks the pent-up demand, principally in the car and housing sectors. More critically, it lacks domestic savings from which to recapitalize. The internal dynamics have been indeed radically altered by the rapid evolution of globalization itself. The business cycle has changed to the extent that cyclical behavior is challenged and debated. The cycle may be broken.

Fed Chairman Greenspan has repeated the accommodative policy which succeeded in every past business cycle, to provoke the recovery with low interest rates. But wait, monetary excess caused the stock bust and its associated recession in the first place!!! Monetary ease cannot cure a problem that it caused!!! Why bother to change a tried & true method from the established playbook? Because they know nothing else. Examine the outcome to date. After three years, the US Economy has seen only two quarters with annualized 4% GDP growth. Job growth is abysmal. In 27 months, the economic recovery has produced a shortfall of nearly 8.2 million jobs, when compared to past hiring trajectories. Few seem to question why the outcome is so weak, against a backdrop of such a sharp rise in the monetary aggregate.

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Where goes the new money? Knee-jerk analysis lacks competent thought. We often hear about the business cycle “due to kick in,” which is utter nonsense. The current business cycle bears no resemblance to that of the 1960 decade, and little similarity to the 1980 decade (China was not a player). It has been severely altered by globalization, by debt burdens, by foreign dependence, and by technology itself. The high valuation of the USDollar has resulted in systemic lack of competitiveness. This is not your father’s business cycle anymore. For a more thorough discussion, see “The Broken Cycle: Paradigm Shift” (January 2004) wherein forces of globalization, changes from service sector outsourcing, and absent pent-up demand are covered in more depth. One cannot sit back on a recliner, read the newspaper, and expect passage of time to bring about traction of current monetary policy. The US Economy is a fast evolving system. It has been long stated that true wealth comes from “building it, growing it, or mining it.” American economists encourage “printing it” arrogantly, with little respect shown to the history of inflation or its effect on the US and world economies. We attempt to cheat Mother Nature, and invite her wrath in response. It is soon in coming, and might be in our midst now.

New money goes into several avenues, few of which foster sustainable growth, and most of which attempt to continue the futility of the past spending patterns in the maintenance of horrendous imbalances. If we are to follow the money, sign posts make the task easy. Merely follow the “triple zero” deals. Zero deal promotions are a symptomatic signpost of the last hurrah in a death march toward the Liquidity Trap. The most obvious are:

Automobiles

Large consumer electronics

Home furniture and home appliances

John Deere equipment (most recent to catch the eye)


more...

links have been posted here by "54" and Ozy, but it's great to have them all in one place in this article to link back to for reference.

Enjoyed his thrashing of the "Political" Economists.

Dow 10,479.29 -36.27 (-0.34%)
Nasdaq 2,051.18 -14.30 (-0.69%)
S&P 500 1,139.79 -5.41 (-0.47%)
30-yr Bond 5.129% +0.070

NYSE Volume 236,957,000
Nasdaq Volume 400,694,000

10:00AM: Indices lose all their early gains...good earnings reports generally help individual stocks such as Johnson & Johnson (JNJ 51.64 +0.44), Dow Jones (DJ 49.06 +0.11), and Pepsi Bottling (PBG 30.45 +0.13), but overhang of higher interest rates holds the market back...also not helping today are higher energy prices...
9:45AM: Stocks open weaker than suggested by early futures trade...the backup in interest rates is dampening the clearly bullish impact from the very strong retail sales report and excellent earnings reports...the 10-year note yield has jumped to 4.34%...

9:15AM: S&P futures vs fair value: +4.8. Nasdaq futures vs fair value: +7.0. Little changed since the last update, the futures market continues to point to a higher open for the cash market.

Dow 10,475.46 -40.10 (-0.38%)
Nasdaq 2,052.36 -13.12 (-0.64%)
S&P 500 1,140.60 -4.60 (-0.40%)
10-Yr Bond 4.330% +0.100
NYSE Volume 442,817,000
Nasdaq Volume 668,951,000

10:55AM: Market stabilizes...there is broad weakness, as decliners are well ahead of advancers even though the indices are not down tremendously...talk is now that real GDP growth will be closer to a 5% annual rate in the first quarter, up from most projections of 4% to 4 1/2%...that's what two very strong retail sales reports will do...there are very few up sectors today...gold is sharply lower on the strong dollar, knocking related stocks...interest sensitive stocks are also down sharply, as are investment banks with heavy bond market exposure...
http://finance.yahoo.com/mo

Dow 10,474.48 -41.08 (-0.39%)
Nasdaq 2,052.02 -13.46 (-0.65%)
S&P 500 1,140.52 -4.68 (-0.41%)
10-Yr Bond 4.330% +0.100

My day away from the computer is starting. I'll look forward to reading the day's events in a few hours. Thank you all for keeping this thread up-to-date.

See you in the morning!

Ozy :hi:

KUDOS to Ozy and the rest of you!

meanwhile...my 2cents on the markets

the Lemming effect:
buying and selling of stocks is based on preceptions.. if you think a particular stock is going to go up, you buy it, and enough other people think the same they also buy -- the more bought of a particular stock the higher the price goes... the reverse is true for selling of stock

hence a "trend" up or down of a given stock is suddenly noticed --- "HEY! such and such is tanking...sell sell sell", or "WOW! look at that one climb...BUY BUY BUY" --- and the lemmings jump in to buy or sell accordingly

This is not to discount economic effects on the markets -- certainly interest rates and other factors contribute to the overall health of a company

HOWEVER--how healthy a company is "perceived" is what determines it stock prices for a given period. A company can be doing great, but if it's perceived to be in trouble then it's stock prices drop

Social, political and other "events" will also cause the markets to rise and fall -- but it's rise and fall is based on "preceptions" of how a given event will effect a company or the market at large

my conclusion: stock markets are 90% based on psychological factors and 10% based on "numbers"

years we have Cable channels pointing the lemmings in the directions they should go.


Thankfully the Marketeers here help some of us keep some perspective that "all is not right with the financial world today." Even though the lemmings can make some money running after the same investments they unfortunately go off the cliff together when times are bad. Hopefully we here on the "Financial Underground Forum" can keep some coins in our pockets for the bad times a'coming.

Dow 10,455.16 -60.40 (-0.57%)
Nasdaq 2,048.12 -17.36 (-0.84%)
S&P 500 1,137.82 -7.38 (-0.64%)
30-yr Bond 5.135% +0.076

12:00PM: Stocks opened higher in response to very strong economic data and good earnings reports...March Retail Sales surged 1.8%, and the February increase was revised upward to a 1.0% gain from an originally reported 0.7% increase...and it wasn't due to the volatile auto category...excluding autos, sales were up 1.7%...this has economists raising first quarter GDP growth forecasts to about 5% from 4%...it also has the bond market hopping...the 10-year note is down 23/32 to yield 4.32%...expectations of Fed tightening have increased, with a 1/4% hike in short-term rates expected in August...
as a result of changing rate expectations, interest-sensitive stocks are getting slammed...banks, utilities, mortgage, and consumer financials stocks are all down sharply...the dollar is also higher as a result, which has gold tumbling...in this mix of macro news, good earnings reports from the likes of Johnson & Johnson (JNJ 51.90 +0.70) and Merrill Lynch (MER 58.60 -1.13) are having little impact...the weakness is widespread, as decliners lead advancers by a wide margin...volume is light...NYSE Adv/Dec 713/2463, Nasdaq Adv/Dec 829/2188

11:30AM: Bond market stabilizes with the 10-year note down 20/32 to yield 4.31%...utility and other interest sensitive stocks are getting hit hard...the banking stock index (BKX 99.30 -1.39) is down 1.4%, but that's not as bad as many other sectors...consumer financial services are down 2.37% and savings banks are down 1.97%....NYSE Adv/Dec 733/2410, Nasdaq Adv/Dec 821/2146

http://www.channelnewsasia.com/stories/afp_world_business/view/80009/1/.html

LONDON : Oil prices climbed in trading, helped by escalating violence in oil-producer Iraq, as the market awaited the latest figures on US crude inventories, dealers said.

The price of benchmark Brent North Sea crude oil for May delivery won 16 cents to 33.50 dollars per barrel from 33.34 dollars on Thursday when the market in London shut for the Easter holiday weekend.

New York's reference light sweet crude May contract fell 34 cents from Monday to 37.50 dollars a barrel in pre-opening electronic deals.

"Over the weekend, there's been more unrest in Iraq, and that is bullish for prices," GNI-Man Financial analyst Lee Elliott said.

more...

http://money.cnn.com/2004/04/13/markets/gold/

Gold for June delivery fell $12.40 to $408.50 on the Chicago Mercantile Exchange as the dollar climbed to a 3-1/2 month high versus the euro following the U.S. retail sales figures.

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The stronger dollar gave more incentive to liquidate, by raising gold's price in other currencies, and some investors sold gold they had bought last week to hedge their portfolios against potential global security risks over the Easter break.

"Short-term direction is still heavily dependent on the currencies, however, with the market set to trade sideways around $405-30 for a while as traders continue to weigh up the latest economic news from the U.S., Europe and Japan," wrote analyst James Moore at TheBullionDesk.com, according to Reuters.

SEC Seeks Mutual Fund Cos.' Disclosure
SEC Moves to Force Mutual Fund Companies to Disclose Market-Timing Policies to Shareholders

The Associated Press

WASHINGTON April 13 — Federal regulators moved Tuesday to force mutual fund companies to clearly disclose to shareholders their policies and procedures for market timing, a practice at the heart of many of the cases authorities have brought in the industrywide scandal.

The five-member Securities and Exchange Commission voted to formally adopt rules requiring fund companies to disclose their market-timing policies in sales material and other documents provided to shareholders. The rules, which the SEC proposed and opened to public comment last December, will take effect Dec. 5.

Market timing, which exploits short-term movements in stock prices with quick "in and out" trading of shares, is not illegal but violates the rules of most fund companies because it skims profits from long-term shareholders.

more: http://abcnews.go.com/wire/Business/ap20040413_949.html

http://boston.bizjournals.com/boston/stories/2004/04/12/daily19.html

Putnam Investments, the beleaguered Boston mutual fund firm, will once again be able to vie for pension contracts in Massachusetts following a $110 million settlement on state and federal improper trading charges.

Massachusetts Treasurer Timothy Cahill told the Associated Press that having these penalties assessed "will sort of close the book."

Putnam was barred from managing $1.7 billion in state pension investments during an industrywide investigation.
more...

http://quote.bloomberg.com/apps/news?pid=nifea&&sid=aOpgT9Cohhv0

April 13 (Bloomberg) -- The world's 10 biggest investment banks, led by Citigroup Inc., earned at least $1.28 billion in fees since 2000 underwriting securities for companies such as WorldCom Inc. and Enron Corp. that went bankrupt.

Citigroup, Credit Suisse Group and Morgan Stanley were the most active sellers of $76 billion in stocks and bonds between 2000 and 2002 for companies that later collapsed, data compiled by Bloomberg show. Citigroup helped underwrite $10 billion of WorldCom bonds a year before its bankruptcy, and $1.75 billion of Enron bonds before its failure.

California, North Carolina, Alabama and New York pension funds as well as mutual funds and individual investors say Wall Street is partly to blame for corporate failures that wiped out $500 billion in debt and equity investments. The states are in court to get their money back, claiming banks hid information about clients' financial risks they were required to disclose.

``We're suing the aiders and abettors of the fraud -- the banks,'' said David Bronner, 59, chief executive of the Retirement Systems of Alabama in Birmingham, which manages $25 billion in pension fund assets for 300,000 state employees. ``The investment banks, the gatekeepers to the capital markets, are paid huge fees to say, `Here is our credibility.' For throwing their credibility in the trash can for dollars, they will hopefully get the punishment they deserve.''

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``The resemblances between what's going on today and what happened in the late '20s are amazing considering the securities acts and Glass-Steagall that were passed to prevent this sort of thing,'' said Charles Geisst.....

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Dow 10,404.70 -110.86 (-1.05%)
Nasdaq 2,037.54 -27.94 (-1.35%)
S&P 500 1,131.68 -13.52 (-1.18%)
10-Yr Bond 4.330% +0.100
NYSE Volume 905,155,000
Nasdaq Volume 1,282,955,000
Quote data provided by Reuters

2:00PM: The interest rate fears keep the market on the slide...today's action tends to substantiate the previous contention that market valuations were supported by low rates...now, there is talk that a much stronger economy could lead to higher rates...scattered talk of the Fed raising rates 50 basis points late this year or early next year, after a 25 basis point hike this summer, is starting to surface

http://finance.yahoo.com/mo

Shrub better not have fudged those employment numbers for the 308,000 new jobs. He has now set some pretty high expectations.

Funny, in a truly strong economy, there wouldn't be quite so much concern throughout the entire economy about a little interest rate increase, would there? :shrug:

http://www.reuters.com/financeNewsArticle.jhtml?type=economicNews&storyID=4816383

WASHINGTON, April 13 (Reuters) - The U.S. government posted a $72.70 billion shortfall between receipts and outlays in the month of March, the Treasury said on Tuesday, continuing its path toward an expected record annual deficit.

In its monthly budget statement, Treasury said the March shortfall was bigger than the $58.89 billion budget gap seen in March 2003. It was also slightly above the $70 billion forecasts from Wall Street and the nonpartisan Congressional Budget Office.

With the 2004 budget year half over, the cumulative budget gap so far hit $299.47 billion in March, up from $253.12 billion in the first six months of fiscal 2003.

Hey To All the Marketeers!! :hi:

I'm ba-a-a-ack from my journey and slowly easing into the news of the moment.

Glad to see you are here and keeping the fires burning :D

But hey! A billion here, a billion there... what's the difference???

A billion here, a billion there... pretty soon it starts to add up to real money :D

nah - those numbers get so big no one can wrap their minds around them and they just shrug them off ... sigh ...

So how's the banking world doing, Frodo? What do you think of the interest rate rumors?

Concerns about higher rates continue to pressure stocks...it hardly seems likely that rates will rise dramatically over the months ahead, but there is increased talk that an upward trend will be steeper and more rapid than originally expected...

Rates are expected to move up - though there is disagreement with "how fast" it will happen. This is not necessarily a problem for banks (it all depends on how they handle their A/L management). In fact some will be helped, but if things get ugly you will eventually see banks have credit troubles. It's a mistake to pay SOOO much attention to the Fed... the market moves in the Treasury securities arena have had FAR more effect than the Fed Funds rate (who borrows from the Fed anymore? We depositors have been "happy" earning .25%!)

In general, the financial sector starts to under-perform at this point in a recovery. Of course, if you believe we've only JUST started the recovery they'll do ok. But this is not a place where I suggest putting your money where your mouth is. My guess is that the banks that will do well (stock price wise) over the next several months are the ones anticipated to be takeover targets.

here! :grouphug:

I missed you and the rest of the marketeers - my daily fix of news (although it appears that it was mostly bad to horrendous) and my chronic need to know went unsated for many days.

The trip was good for me in many ways, but am dreadfully tired and my hands are worn out (worked too hard :D)

Naptime (oh my age is showing) sounds appealing :D

:grouphug:

last hurrah! Climbing like there's no tomorrow. (Or scurrying like a cockroach with the lights turned on) :evilgrin:

seems to be rather an inverse charting :shrug:

here are the current numbers:

Dow 10,373.90 -141.66 (-1.35%)
Nasdaq 2,030.37 -35.11 (-1.70%)
S&P 500 1,128.99 -16.21 (-1.42%)
10-Yr Bond 4.322% +0.092

dollar numbers:

Last trade 90.01 Change +1.06 (+1.19%)

considered a HUGE interest rate increase. First 25, now talk of 50, moving to talk of hikes in quick succession.

I posted a few articles yesterday and most were using the 308,000 job number as evidence that rates would go up very soon. That one monthly statistic seems to be feeding upon itself now. :eyes:

:hi:

:hi:

It is really good to be home and back at the SMW :)

Guess I should send a round of :beer: to all!

:toast::toast::toast::toast::toast::toast::toast::toast::toast::toast::toast::toast::toast::toast::toast::toast::toast::toast::toast::toast::toast::toast::toast::toast::toast::toast::toast::toast::toast::toast::toast::toast::toast::toast::toast::toast::toast::toast::toast::toast:

Dow 10,387.10 -128.46 (-1.22%)
Nasdaq 2,030.49 -34.99 (-1.69%)
S&P 500 1,129.70 -15.50 (-1.35%)
30-yr Bond 5.148% +0.089

NYSE Volume 1,173,588,000
Nasdaq Volume 1,628,598,000

3:00PM: The carnage continues...there has been no sign of any real resilience yet...because the decline today is due to broad macro issues, there breadth of the weakness is very wide...the advance-decline line is extremely weak, and there are no strong sectors...this is a lower tide taking down all boats...NYSE Adv/Dec 481/2841, Nasdaq Adv/Dec 663/2515

2:30PM: The slide continues...it is surprising with all the focus on earnings that the economic numbers are what is driving the market - and that they are too strong...perhaps the reaction has stimulated some underlying fears as well, but the correction to expectations of higher rates not just this year but into next year as well, is what the market is reacting to...gold, coal, and mining stocks are now the worst performing sectors, but it is still the interest-sensitive stocks that are the major factor behind the weakness in the indices...NYSE Adv/Dec 508/2795, Nasdaq Adv/Dec 720/2451

Is it me, or is this article just full of contradictions? :shrug:


http://www.theworldlink.com/articles/2004/04/13/news/news15.txt

snip>
Shoppers treated themselves to a wide range of goods in March, splurging on cars, clothes, furniture and building and garden supplies.

snip>
Economists said an improved job climate, tax refunds and super-low borrowing costs probably made shoppers feel more inclined to indulge in March.
hmmmm, the first one is sort of iffy yet, the 2nd is a one time shot, the 3rd might be coming to an end sooner than anticipated.

snip>
The 1.8 percent increase in retail sales, the biggest advance since March last year, followed a brisk 1 percent rise in February, which turned out to be much stronger than the 0.6 percent increase first estimated a month ago.

Fed Chairman Alan Greenspan and other Fed policy-makers have reminded Main Street and Wall Street numerous times that rates can't stay at such super-low levels indefinitely.

That has prompted some economists to predict that the Fed will start pushing up rates later this year. Others, however, don't see a rate increase until 2005. There seems to be agreement, though, that the Fed will leave rates alone at its next meeting in May.

much more...

And to think the day start off positive. Such a fickle group these lemmings are.

http://www.fredericksburg.com/News/apmethods/apstory?urlfeed=D81U3SS00.xml

snip>

But the sharp jump raised the specter of inflation, and concerns that the Federal Reserve would raise interest rates to keep the economy from growing too fast. And a hike before year's end could put President Bush's re-election into question, according to Hugh Johnson, chief investment officer at First Albany Corp.

"That worries investors that we're going to see a Democratic administration, which might roll back the 15 percent tax rate on capital gains and dividends," Johnson said. "It's a whole string of dominoes. If this weren't an election year, you'd see earnings and economics outweigh the interest rate concerns."

snip>

"I think the Fed will want to see more than one really strong employment number and maybe a few more numbers like this retail figure before they move," Freeman said, alluding to the 308,000 jobs created in March. "It increases the likelihood that they could do something before the end of the year, maybe a modest move this summer, but they may also wait until after the election."

snip>

"Investors want to be awed. It's come to that, quite frankly," said John Lynch, chief market analyst at Evergreen Investments. "We have the market expecting 17 percent, so it better be 20 percent for the market to be really impressed."

more...

1hour, 48 minutes ago Add Business - Reuters to My Yahoo!


By Gertrude Chavez

NEW YORK (Reuters) - The dollar posted sharp gains against major currencies on Tuesday after robust U.S. economic numbers signaled the U.S. recovery is on a firmer footing.

U.S. retail sales climbed 1.8 percent in March, easily topping economists' forecasts for a rise of 0.6 percent.

In addition, February U.S. business inventories rose 0.7 percent, higher than expectations and signaling stronger-than-expected economic growth, analysts said.

"The pervasive dollar pessimism that characterized trading in the fourth quarter of 2003 over a slowdown in foreign investment has given way to dollar optimism over renewed signs of above-trend growth," said Michael Woolfolk, senior currency strategist at Bank of New York.

more: http://news.yahoo.com/news?tmpl=story&u=/nm/20040413/bs_nm/markets_forex_dc_12

That pessimism can return rather quickly and with a vengance.

Dow 10,381.28 -134.28 (-1.28%)
Nasdaq 2,030.08 -35.40 (-1.71%)
S&P 500 1,129.44 -15.76 (-1.38%)
30-yr Bond 5.148% +0.089

NYSE Volume 1,423,340,000
Nasdaq Volume 1,957,947,000

Close: Stocks were revalued today for expectations of higher interest rates...there were some good earnings reports this morning from Johnson & Johnson (JNJ 51.39 +0.19), Merrill Lynch (MER 58.61 -1.12), and a number of other companies...that mattered little, however, after March Retail Sales were reported to have risen a much stronger than expected 1.8%...coupled with an upward revision to the February increase from 0.7% to 1.0%, the data have economists now talking about a 5% rate of growth in real GDP for the first quarter...previously, estimates were closer to 4%...
this confirmation that the economy is indeed very strong, rather than boosting stocks, has led to speculation that the Fed will raise rates sooner rather than later, and that rates may go up even faster after the first hike...the 10-year note fell sharply, with the yield rising to 4.33%...just three weeks ago it was 3.71%...higher interest rates lower the value of stocks by decreasing the value of future profits...so, higher rate expectations took the entire market lower...decliners led advancing issues by an astounding 5 to 1...

there were no strong sectors, while interest rate sensitive sectors such as utilities and banks took a beating...the dollar was higher, and gold sharply lower...stock volume was surprisingly moderate...