STOCK MARKET WATCH, Wednesday 4 August

NASDAQ APPROACHES CRITICAL SUPPORT

Stocks opened lower this morning after the government reported a drop in consumer spending and the price of crude oil reached another all-time high by climbing above $44 per barrel. Economists were forecasting a slight drop in consumer spending of 0.1%, but the Commerce Department reported a sharp decline of 0.7% from the level in May. This was the first decline in consumer spending since September of last year and the largest drop in nearly three years. Economists estimated a rise of 0.3% for incomes in June, but they actually grew by only 0.2%, the lowest gain since last September.

Alan Greenspan told Congress last month that the economy just hit a “soft patch” in June, but expected economic activity to increase soon. Consumer spending accounts for roughly two-thirds of our economy, so getting the consumer back to spending again will be a key to Mr. Greenspan’s prediction. He also said high energy prices would be transitory, but they sure are putting a pinch on consumers. Since the numbers were compiled for June, energy prices have done nothing but move higher the entire month of July. In my opening statement I said the price of oil hit another all-time high, but I must qualify the statement by saying it has reached a high in absolute dollars, but using inflation adjusted dollars, we still have a long way to go.

-cut-

Back to the Markets

I just went back to see where the markets are trading and it’s nice to see silver and gold march higher throughout the day and close near the highs for the session. August gold settled at $394.00, a gain of $2.30 per ounce and September silver settled at $6.68, up six cents for the day. The performance of the metals during New York trading was actually better than the closing prices indicate, since they were pounded lower during overseas trading in London. Gold opened at $390.00 and silver opened at $6.50, so silver once again added more in percentage terms. As I recall, some of the major bullion banks closed up their operations in New York a couple years ago and moved their offices to London. Maybe it’s easier to carry on their shenanigans without oversight from the U.S. authorities…reminds me of the lyrics to an old song… “Dirty deeds done dirt cheap!” I’m not complaining…market forces will eventually prevail!!

-cut-

My short bond position hasn’t worked out as well as I have been expecting due to the weak economic reports we’ve been getting. It started with the weaker than expected GDP report on Friday and poor consumer spending numbers today. I’m going to give it one more day since tomorrow brings the closely watched ISM data on the service sector of the economy along with factory orders. Last month the ISM Service Index came in at 59.9 and economists are forecasting an increase to 61.5 for the July reading. If the number comes in stronger than expected, bond prices should move lower, the dollar will gain support and the stock market could be rescued again. A weaker number than expected should move bonds higher and look out below for falling stock prices! We’ll just have to see what tomorrow brings!

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

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:donut: :donut: :donut: :donut: :donut: :donut:

My boy and I must get out of the house early this morning. So I will be scarce for a few hours, perhaps to return later this morning.

It will be interesting to see how these markets open. I have been hearing reports this morning of markets around the world in sharp decline over oil fears. Do you ever wonder how the markets would be transformed if we never had to figure oil into the mix?

Have a wonderful day!

Ozy :hi:

the terror alerts are used by government insiders to influence the market and profit by the billions. terror alert = dollar goes down, oil prices up, market stocks down.

Someone has suggested that you can tell if a terra alert is "real" by watching the market....

http://story.news.yahoo.com/news?tmpl=story&cid=568&ncid=749&e=1&u=/nm/20040804/bs_nm/markets_stocks_us_europe_dc

LONDON (Reuters) - U.S. shares were expected to open weaker on Wednesday after crude oil hit a record high in overnight trade and investors fretted about the strength of the economy ahead of key data later in the week.

snip>

Overnight, U.S. light crude hit a peak of $44.28 a barrel on continuing concerns that any hiccup in the tightly stretched supply chain could lead to a major disruption in global crude flows.

"The surge in oil prices has left many brokers thinking that the $50 mark is no longer implausible," said Camilla Vasa, market analyst at Finspreads in London.

Apart from oil, attention would be focused on fresh due later on Wednesday, with the ISM non-manufacturing data for July and factory orders for June, both due at 1000 EDT, she added.

DATA EYED

Questions over the strength of the economic recovery have resurfaced following data on Tuesday showing a plunge in consumer spending in June and weaker-than-expected second-quarter GDP (news - web sites) figures.

snip>

"The market saw a decent bounce over the last couple of days but it could not perform when it really mattered," said Tom Hougaard, chief market strategist at City Index.


"The sentiment in the market is bearish and the economy looks like it is stalling. The 'terrorist' threat is no doubt very real but it is being milked for all it is worth in the run-up to the election in the U.S."

http://quote.bloomberg.com/apps/news?pid=10000039&refer=columnist_mysak&sid=az_FuP.BdzT8

August 4 (Bloomberg) -- Don't borrow money for 30 years in order to avoid raising taxes or cutting spending for one year.

That's good advice, and common sense, and apparently bears some repeating, to judge from recent statements by the New Jersey Supreme Court and New York's Citizens Budget Commission.

It's very good advice to keep in mind this November, when politicians seek votes for themselves and for bond issues.

The Citizens Budget Commission, a nonpartisan organization that studies finances in New York City and state, put it this way: ``Stretching out an obligation increases the total costs of the obligation and foists them off on future taxpayers.''

This line was contained in a letter the organization sent to Governor George Pataki last week, urging him to veto a bill allowing the state and its localities to stretch pension contributions over 10 years instead of five years.

The New Jersey court gave its advice in a ruling on a state plan to sell $2.5 billion in bonds backed by cigarette taxes and motor vehicle fees and use some of the money raised to balance the budget. The court said this was unconstitutional, but let the state do it this year, anyway, saying overhauling the current budget would result in a ``great disruption'' otherwise.

more...

http://www.nytimes.com/2004/08/04/business/04prop.html

snip>

CNL, the owner of 130 hotels under 19 different brands, is a so-called private real estate investment trust, as opposed to the more familiar REIT's, which are traded on stock exchanges. These funds have markedly increased the amount of money they have raised from investors in recent years, and other kinds of competitors have become more vocal in their criticism.

snip>

Private REIT's have been heavily criticized by real estate specialists, including executives of their publicly traded rivals, who say that these companies could tarnish their industry because investors pay high fees to own these securities. Investors receive regular dividends, the critics charge, but these are not necessarily paid out of cash flow and may be financed through borrowing. Another complaint is that the organizers of private REIT's generally invest little of their own money in them.

Executives of the private REIT's, who prefer to call their companies "unlisted public REIT's," say that their investors do very well without subjecting themselves to the volatility of the stock market. The shares are not traded on any exchange, but the REIT's are required to file reports regularly with the Securities and Exchange Commission, just like public companies.

snip>

And private REIT's also have their defenders. Dale Anne Reiss, the global director for Ernst & Young's real estate, hospitality and construction practice, said that private REIT's were sold to people looking for a safe investment, who might otherwise buy a certificate of deposit at a lower rate of return. "Wall Street talks a lot about the fees," she said, "but what they forget is that these REIT's are being marketed to a different audience. These are people with different investment criteria."

more...

http://www.reuters.com/newsArticle.jhtml?type=businessNews&storyID=5863189

DETROIT (Reuters) - General Motors Corp. (GM.N: Quote, Profile, Research) and Ford Motor Co. (F.N: Quote, Profile, Research) reported weaker U.S. July sales on Tuesday, but strength among some of their Japanese rivals helped drive industrywide sales up sharply from a dismal June.

While GM's sales fell 3.4 percent, the decline was not as much as in some previous months and July represented the best month of the year so far for the world's largest automaker. Ford's July sales fell 6.8 percent.

The U.S. market share of Detroit's traditional Big Three automakers ended July at about 59 percent, close to an all-time low as they continue to lose share to foreign brands

snip>

Heavy discounting has eroded profits for virtually all players in the hypercompetitive U.S. auto industry, but the Big Three have been the leading victims of a protracted price war.

Autos account for roughly one-fifth of U.S. retail sales, and the drop in June car sales helped U.S. consumer spending for the month take its biggest plunge since September 2001, according to a government report issued on Tuesday.

snip>

Ford economist Jarlath Costello, who noted that consumer confidence strengthened in July, said on a conference call the economy should improve through the second half of the year, helping autos and retail sales overall.

"The fundamentals that drive consumer spending, namely income and wealth, are supportive," he said.

"Despite higher energy prices in the second quarter, households still have the benefit of a 4 percent increase in real income compared with a year ago and companies are adding to payrolls, so prospects for further income gains are encouraging."

Huh? :shrug:

http://quote.bloomberg.com/apps/news?pid=10000085&sid=aWR9b7fK4oU8&refer=europe

Aug. 4 (Bloomberg) -- Germany's unemployment rate rose to an 11-month high in July, reducing the chances that consumer spending in Europe's biggest economy will recover from two years of stagnation.

snip>

An export-led recovery in Germany hasn't been strong enough to persuade executives to take on more workers, keeping retail spending subdued as consumers worry about job prospects. Companies such as DaimlerChrysler AG and Siemens AG are demanding staff work longer hours or risk jobs being relocated to lower-cost countries.

snip>

U.S. Job Growth

Falling job numbers in Germany contrast with employment growth in the U.S., where a report to be released Friday will probably show 243,000 jobs were created in June and an unchanged unemployment rate of 5.6%, the median of 70 forecasts in a Bloomberg News survey showed.

``All the signs point to the German economy recovering but it hasn't affected the labor market yet,'' the labor agency said. Economists had expected the number of unemployed to increase by 5,000 in July, according to the median of 34 forecasts in a Bloomberg survey.

While German exporters have been reporting sales increases, companies that rely on the domestic market are cutting costs and shedding staff.

BMW, the world's No. 2 maker of luxury cars, today said second-quarter profit rose to a record on ``strong growth'' in all its main export markets. By contrast, KarstadtQuelle AG, Germany's largest department-store operator, plans to reorganize after its second-quarter loss widened more than analysts expected.

Working Hours

Germany's biggest companies are also pressing their staff to work longer hours. In June, Munich-based Siemens won an extension of the work week at two phone factories to 40 hours from 35 hours at no extra pay, after threatening to cut 2,000 jobs there. DaimlerChrysler employees at Mercedes factories in Germany agreed last month to smaller pay increases and longer hours to save 500 million euros a year.

more...

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

Last trade 89.90 Change +0.33 (+0.37%)

http://quote.bloomberg.com/apps/news?pid=10000101&sid=ah3EO8h.3CeA&refer=japan

Dollar Falls as Drop in Spending Cools Fed Rate Speculation

Aug. 3 (Bloomberg) -- The dollar fell against the euro after a drop in personal spending damped speculation the Federal Reserve will accelerate the pace of interest-rate increases this year.

``I come out of this on the bearish side'' on the dollar, said Michael Woolfolk, senior currency strategist in New York at Bank of New York, the second-biggest custodian of investor assets. ``It suggests the Fed may not hike 25 basis points at every meeting.''

Against the euro, the dollar traded at $1.2066 at 10:35 a.m. in New York from $1.2026 late yesterday, according to EBS, an electronic currency-dealing system. It was at 110.60 yen from 110.72.

The euro extended its advance after the International Monetary Fund raised its growth forecast for the dozen countries that use the currency to 2 percent this year, compared with the 1.7 percent forecast in April.

U.S. personal spending dropped 0.7 percent in June, more than the 0.1 percent forecast by economists in a Bloomberg survey. The personal consumption expenditure core deflator, a gauge of inflation tied to consumer spending, rose 1.5 percent in June from the same month last year, after increasing at a 1.6 percent clip in May, the U.S. Commerce Department said.

The reports added to recent figures, including consumer spending, that showed the economy slowed in June. Fed Chairman Alan Greenspan told Congress last month in his semiannual testimony on the economy and monetary policy that June's slump would prove to be ``short-lived.''

...more...

http://www.guardian.co.uk/business/story/0,3604,1275310,00.html

Petrol price unlikely to fall again as Opec warns on supply

With oil prices setting fresh highs on a daily basis, experts are warning that the current spike in prices may not be followed by the sharp falls that have often come after previous jumps. They say dearer oil could become a fact of life, spelling further pain for motorists already paying more than 80p a litre at the pumps.

The price of US light crude hit a new record yesterday of $44.24 (£24.23), the highest in the 21-year history of the New York Mercantile Exchange. In London, Brent crude surged to $40.45, half a dollar below the all-time high set in October 1990 during the run-up to the first Gulf war.

The latest rise is due to brinkmanship between the Kremlin and oil firm Yukos over unpaid taxes.

With Yukos, which produces 2% of the world's oil, facing bankruptcy, it is small wonder the markets have taken fright.

On top of that, the United States warning of possible al-Qaida strikes in New York and Washington have made markets even more jittery.

...more...

http://www.newsday.com/news/local/wire/ny-bc-nyseseatsales0803aug03,0,3206989.story?coll=ny-ap-regional-wire

Three NYSE seats sold, one goes for $1.25 million

NEW YORK (Dow Jones/AP) _ Three New York Stock Exchange membership "seats" were sold Tuesday, with one fetching $1.25 million, a decline of nearly 11 percent from the last seat sale.

The seat sales were the first announced after the stock exchange formally unveiled a proposal for trading reforms on Monday. The planned changes are expected to lead to more trades being done electronically at the Big Board, a potential threat to the primacy of the securities professionals on the NYSE floor who now handle the vast majority of transactions.











The NYSE said the other







two seats that were sold Tuesday went for $1.3 million and $1.35 million. Before these, the last NYSE seat to change hands was sold on July 8 for $1.4 million.

NYSE spokesman Ray Pellecchia declined to comment on Tuesday's seat sales.

The $1.25 million sale marks a new recent low for NYSE seats, which confer the right to trade stocks at the Big Board. It's the lowest price paid for a Big Board seat since December 1998, when a seat was sold for $1,225,000.

Seat values have been under pressure recently. Late last year, prices fell to as low as $1.3 million as the Big Board confronted the aftermath of the ouster of its chairman and chief executive, Dick Grasso, as well as a since-settled investigation into the trading practices of the NYSE stock traders known as specialists.

...more...

Today's reports:

Aug 04 10:00 AM
Factory Orders Jun
report -
briefing.com anticipates 0.9%
market anticipates 0.5%
last report -0.3%
revised from -

Aug 04 10:00 AM
ISM Services Jul
report -
briefing.com anticipates 63.0
market anticipates 61.5
last report 59.9
revised from -

The dollar is bouncing upward this morning.

Here are a couple clues:

http://www.koreaherald.co.kr/SITE/data/html_dir/2004/08/02/200408020020.asp

excerpt:

The won fell 1.3 percent in July, after a 1.5 percent advance in May and June. Currency traders said record international oil prices are raising increasing worries about their impact on energy-dependent Korea. Costlier oil will raise demand for dollars, eroding profits.

The currency hawks appear to be prevailing so far. On Saturday, the government said it plans to issue 2 trillion won ($1.71 billion) worth of bonds this month to help stabilize the foreign exchange market. The government bonds raise funds it can use to buy dollars and weaken the won.

It will be the second consecutive month of bonds worth 2 trillion won. Up until July, the government had issued 1 trillion won in currency bonds every month this year.

Parliament has approved bond sales totaling as much as 11.8 trillion won for the rest of this year to help stabilize the currency market and fend off currency speculators. The original figure was 7.8 trillion won.

Foreign exchange authorities said the bond issuances would prevent unemployment and boost exports. But the Bank of Korea and Korea Development Institute opposed the move, saying the artificial depreciation of the won against the U.S. dollar would have a negative effect on prices and domestic demand.

"The recent life in currency stabilization bond issues seems a bit excessive, and this will eventually translate to the burden on taxpayers," Rhee Yeung-kyun, BOK's assistant governor who is responsible for the foreign exchange policy, told The Korea Herald.

"Our position is that any intervention should be limited to smoothing operations and a sound market should be protected," said Rhee Gwang-ju, director general at BOK's international department.

The finance ministry earlier this year said the government would limit its role in currency markets to "smoothing operations.

...more...

Have a Great Day Marketeers!

http://www.reuters.com/newsArticle.jhtml;jsessionid=AXDNK1TUGB2PWCRBAELCFEY?type=businessNews&storyID=5869070

LONDON (Reuters) - The yen suffered broad-based losses on Wednesday as record high oil prices dimmed Japan's recovery outlook and encouraged investors to pull out of Asian stock markets.

The euro, meanwhile, teetered near recent six-week lows against the dollar as rising German unemployment reinforced concerns the region's recovery was dependent on exports, not domestic demand. The yen suffered the same fortunes as Toyko's benchmark stock index, which tumbled to its lowest in over two months as U.S. light crude touched $44.28 a barrel -- the highest price since oil futures were launched on the New York Mercantile Exchange in 1983.

"High oil prices squeeze the yen from both sides," said Trevor Dinmore, foreign exchange strategist at Deutsche Bank, noting that Japan imports all its oil and the yen's recent reliance on equity flows made it particularly vulnerable to a more uncertain global growth outlook.

snip>

European shares also struggled, but analysts noted that money flowing out of stocks was going into euro zone bonds, thereby having less currency impact.

DOLLAR BUOYED BEFORE PAYROLLS

The dollar remained firm against most European currencies, buoyed by expectations of an upbeat U.S. July jobs report on Friday.


more.....


But wait, what's this?

Japan's 10-Year Bond Has Biggest Gain in Month as Stocks Drop
http://quote.bloomberg.com/apps/news?pid=10000101&sid=az86hI0v9DJg&refer=japan

Aug. 4 (Bloomberg) -- Japanese 10-year bonds surged, causing the biggest decline in yields in a month, as record-high oil prices and signs of slowing economic growth pushed down stocks.

Rising crude prices may rein in consumer spending, which accounts for more than half the economy. Retail sales and household spending fell in June, the government said last week. The Nikkei 225 Stock Average today sank 1.2 percent to the lowest in two months.

``Slumping stocks are shoring up the bond markets,'' said Yoshihito Ishii, a fund manager in Tokyo of Japanese debt at Asahi Life Investment Management Co., which oversees the equivalent of $10.5 billion. ``Sentiment for Japan's economic growth has waned as recent economic reports are coming in softer.''

snip>

Auction

Bonds also rose after a sale of 10-year securities yesterday drew bids worth 8.74 times the amount of debt auctioned, compared with the 8.38 times average for the past year, a sign of rising demand.

Investors' appetite for bonds may decline later this month because government debt sales will include a quarterly auction of 30-year securities as well as monthly sales of two-, five-, 10-and 20-year debt.

``With a five-year note auction next week and 30-year and 20- year sales following that, it will be difficult for bonds to push higher,'' said Eiji Dohke, chief strategist in Tokyo at UBS Securities Japan Ltd., which is owned by UBS AG, Europe's biggest bank by assets.

Bonds also rose on expectations an economic recovery may decelerate.

snip>

Assets grew 34 percent to $795 billion while the number of funds climbed to 7,000 from 5,700, according the 10th annual hedge fund survey by consultant Hennessee Group LLC.

Hedge funds are unregulated investment pools originally designed for the wealthy. They use strategies, such as short sales, which mutual funds are restricted from using. The Securities & Exchange Commission is considering regulating hedge funds for the first time because of concerns the industry is becoming too influential in markets.

snip>

Hedge funds still account for less than 2 percent of global financial markets, Gradante added.

But because they can borrow extensively, their influence on the markets can be magnified. Gradante said 85 percent of the funds surveyed have never exceeded a leverage ratio of more than 2-to-1.

snip>

Among other findings, Hennessee said that hedge funds have more short positions than at any time since 1999, reflecting concern that equity markets may have gained too much in 2003.

more...

http://www.prudentbear.com/archive_comm_article.asp?category=Guest+Commentary&content_idx=34680

snip>

However, this year it seems that nothing is working. The major stock indices are flat and failing. The bond market is not to be touched with rates expected to rise further. And, gold and commodities have been savagely “hammered” in the biggest correction since the bull market in gold started. Where is an investor to put money nowadays?

I believe the answer at least in part lies in the value of the dollar. The dollar index has virtually collapsed in the last two years losing 30% of its value. No wonder we are paying more for food and gasoline. One would think that this would be good for gold’s price. Well, it has been and will be again in the future, but it is not the only factor to consider.

snip>

Everyone in the world who holds dollars and does business with us has lost about 30% of their purchasing power by holding those dollars the last two years. Can they be expected to continue to lose more – indefinitely? I don’t think so. Foreign governments have devalued their own currencies in order to attempt to adjust to the “de facto dollar devaluation” so that they may sell us their goods more cheaply than we can make them for domestically. This is a DEFLATIONARY NOT INFLATIONARY problem by which generally the lowest cost producer wins – every time! And that winner is Asia, specifically China.

So, what I believe is happening is that the deflationary global forces are taking over in the world in spite of massive U.S. government (and other) expenditures designed to ward off an economic collapse in this election year.

http://www.prudentbear.com/archive_comm_article.asp?category=Guest+Commentary&content_idx=34760

After "Bubbles" Greenspan initiated the possibility that someday, sometime, there might be "measured pace" increases in interest rates, the markets briefly seemed to question the wisdom of THE GREAT CARRY OR REFLATION TRADE. This questioning has been "measured". As an example, emerging market debt spreads went out 150 bps of the 1000 bps they had contracted since the fall of '02. Even the GSE's saw a short spasm of spread widening. When "measured" was briefly abandoned by some of the Fed talking heads, there were even a couple of more volatile moments. "Bubbles" then used his re-nomination hearings and the promised first 25 bps to reinforce "measured" and complacency returned.

These goings-on are situated in what might be called the FINANCIAL/POLITICAL/ECONOMIC/"MASTERS OF THE UNIVERSE" CONVENTIONAL WISDOM UNIVERSE

This is a fascinating Garden of Eden universe populated by ALL acolytes of published financial wisdom, U.S government minions, anyone remotely connected with Wall Street or the various elements of money and banking domestic and international and, seemingly, most of the population of the U.S. along with a plethora of Central Bank heads abroad.

This universe has a global economic expansion of considerable vigor underway, led and driven by the resurgent U.S. entrepreneurial miracle, aided and abetted by a deity-ized Fed Head and bolstered by a New World/Age financial system itself bolstered by the twin miracles of structured finance and derivatives. Through Alchemy (dissected below) inflation remains (reportedly) modest, job growth is soaring (with a small hiccup disturbing the Independence Day weekend departure of the moguls), equity markets expect a continuing bull market in new age of price/earnings ratios historically high but new age warranted, and debt markets respond joyously to Fed-Head direction. The U.S. currency is again in favor on the hinted rate increases. OPEC and the Saudi Royal family are now great friends, having reversed the oil price from injurious highs. Business investment, nourished by instant depreciation, flourishes. U.S. consumers, having sustained the economy throughout the mini downturn, continue to spend and spend. Housing seems to throw off the talk of rate increases as starts and sales seem immune to any slowdown, rising to new records in sales. State and local budgets return to some kind of equilibrium (Discussion of the Federal budget will be in the other universe as even spinmeisters have difficulty in this universe). Virtually all media, telecom and internet providers of financial information seem to completely or partially (more in the complete camp than not) subscribe to and live in this universe!

Barely noticeable, ephemeral contrary manifestations are situated in the PERVERSE, CULTIST, PESSIMISTIC, ANTI-CULTURAL ALARMIST UNCONVENTIONAL WISDOM UNIVERSE

more...

briefing.com

9:14AM: S&P futures vs fair value: -5.8. Nasdaq futures vs fair value: -9.0. Expectations remain intact for a moderately lower start with the futures market at its lows... Two economic reports will be released at 10 ET and should give the market something to trade off of - June Factory Orders (consensus of +0.5%) and July ISM Services (consensus of 61.5).

9:00AM: S&P futures vs fair value: - 5.8. Nasdaq futures vs fair value: -9.0. Futures indications continue to sink and suggest a noticeable retreat at the open... The market remains stuck in the same malaise as yesterday with investors hung up on a handful of discouraging guidelines (oil, earnings warnings, etc).

8:31AM: S&P futures vs fair value: -5.8. Nasdaq futures vs fair value: -8.5. Futures trade continues to point to a weaker start for the cash market as buyers remain put off by large losses in overseas trading, reports of new North Korean missile capabilities, and the rise in crude oil for a 4th consecutive day... The commodity is again at new record highs, burdened about worries about supply constrictions.

8:01AM: S&P futures vs fair value: -6.0. Nasdaq futures vs fair value: -8.0. Looks like a lower open for the indices following yesterday's 0.6-1.7% pullback... Asian and European trading have turned similarly negative this morning (Nikkei -1.2%, DAX Index -1.5%) and have pressured the US market... Disappointing earnings reports from CIEN and IACI, as well as reports North Korea is deploying new missiles that carry nuclear warheads and can reach the US, have also prompted selling.

ino.com

The September NASDAQ 100 was lower overnight due to spillover selling following Tuesday's sharp decline. Stochastics and the RSI have turned bearish again signaling that sideways to lower prices are possible near-term. Multiple closes above last Friday's high crossing at 1414 are needed to confirm a bottom. If September extends this week's decline, a test of July's low crossing at 1360 is possible in the near future. If this support level is broken, a test of weekly support crossing at 1346 is possible later this summer. The September NASDAQ 100 was down 7.00 pt. at 1371.50 as of 6:48 AM ET. Overnight action sets the stage for a steady to weaker opening by the NASDAQ composite index later this morning.

The September S&P 500 index was lower overnight and below the 10- day moving average crossing at 1094.65. Stochastics and the RSI are bullish hinting that a low has been posted. However, multiple closes above the 20-day moving average crossing at 1100.69 would open the door for a larger-degree rebound during the first half of August. If September extends July's decline, a test of May's low crossing at 1079.50 is the next downside target. The September S&P 500 Index was down 5.80 pts. at 1091.50 as of 6:49 AM ET. Overnight action sets the stage for a steady to weaker opening when the day session begins later this morning.

that's with a 20 minute delay. Funny it also shows the NAS at -5.00 and the S&P at -4.10

:shrug:

into effect in October may cost a few more jobs down the road.

Posted this earlier this week.

http://www.chron.com/cs/CDA/ssistory.mpl/business/2712351

snip>

Known in the banking industry as Check 21, the new law allows the electronic image to substitute at a bank or in a court of law for the real thing.

Right now, when a check is deposited, the bank that receives it sends the original paper check back to the bank on which the account is drawn to get paid. It may handle "presentment" electronically, if it has an agreement with the other bank and the permission of the consumer.

The new rules let banks that want to process checks electronically scan the paper original and shred it without sending it to the originating bank or getting the bank's or the customer's consent.

snip>

"Today's check clearing is the most efficient inefficient way of moving money," says Mario Villarreal, chief technology officer of US Dataworks, a check processing and conversion software company in Houston. "It's efficient because the money does leave my account, but it is inefficient because each check gets handled about 12 times."

The law lets banks work directly with each other to settle accounts without involving the Federal Reserve System, which has served as the check clearinghouse.

http://www.thestreet.com/stocks/energy/10176348.html

excerpt:

Crude oil for September delivery was recently trading up 5 cents to $44.20 a barrel after touching $44.28 earlier -- a new high for the 21- year-old contract. Oil is up more than a third from a year ago and has spent most of the past month above $40.

<snip>

Also weighing on sentiment Wednesday were expectations of a fall in oil and gasoline inventories in a key report due out later in the day. The U.S. Energy Information Administration is expected to report that crude stocks fell by 300,000 barrels last week and that gasoline stocks fell by 600,000 barrels, according to Reuters.

...more at link...

http://www.tucsoncitizen.com/index.php?page=business&story_id=080404d1_halliburton

Halliburton filed "materially misleading" financial statements that raised its profits in 1998 and 1999 while Vice President Dick Cheney was its chief executive, but it did not violate accounting rules, the Securities and Exchange Commission said yesterday.

The SEC did not hold Cheney responsible for the errors. It brought charges against the company's former chief financial officer and former controller. Halliburton agreed to a $7.5 million fine to settle SEC charges that it did not cooperate fully when the SEC's investigation began in mid-2002.

The SEC action ends one controversy for the government's lead contractor in the rebuilding of Iraq. In an unusual disclosure that reflected the investigation's political sensitivity during a tight presidential election campaign, the SEC said Cheney "cooperated willingly and fully" with the investigation.

Joan Claybrook, president of Public Citizen, said the penalty was "too small" compared with the $120 million by which Halliburton's accounting boosted profits in 1998 and 1999.

The SEC investigation focused on a 1998 change in Halliburton's accounting for cost overruns on construction contracts. Before 1998, whenever a project's costs exceeded budget, Halliburton booked an immediate loss. If the company later recouped the cost overrun, it recognized revenue then. In 1998, Halliburton began estimating how much it would recover and booking the revenue before the client approved payment.

...more...

http://news.bbc.co.uk/1/hi/world/americas/2119981.stm

Wednesday, 10 July, 2002, 22:22 GMT 23:22 UK

Cheney accused of corporate fraud

excerpt:

Our correspondent says that, almost as embarrassing for Mr Cheney is a promotional videotape he made praising the now disgraced accounting firm Andersen.

The video, which fell into the hands of the Wall Street Journal, was made in 1996 when Mr Cheney was at Halliburton and showed his personal relationship with Andersen.

In it, he describes how Andersen gave advice "over and above" what would normally be expected from auditors.

In a short section of the video, Mr Cheney says: "I get good advice, if you will, from their people, based upon how we are doing business and how we are operating, over and above the normal, by-the-books auditing arrangement."

Last month, Andersen was convicted of obstructing justice by shredding documents relating to the failed US energy giant Enron.

...more...

or responsibility at the top. So exactly why do these CEOs get millions if not billions per year again? Oh yeah, they get the credit for all the great profits the folks beneath them, that we never hear about, create. But when there's a screw up - then we hear all about those "underlings"? Sheesh :crazy:

And this mal-admin is being run exactly the same way, so we get torture, dereliction of duty in providing for our safety, fake numbers, scandals, etc, etc, etc, with no one accepting the responsibility. No, instead we get more rules such as torte reform to cover their irresponsible asses.

Reminds me of an old boss I had who told me my job responsibility was to make him look good, period. If that meant taking the fall for one of his lame-brained ideas - so be it. :grr:

markets? Or do they only ignore it if it's bad news? This is fairly new, like '97 or '98 isn't it? A survey of purchasing agents in the Service sector? OK, so they've been busy buying stuff.

I always wondered about these ISM reports. I mean, yeah the purchasing agents where I worked was busy as hell ordering parts and materials for ALL of our facilities. What does that mean if some of those facilities are overseas - ie tech call centers in India? Is that accounted for in these reports? :shrug:

10:33 EST and all is getting better

Dow 10,102.54 -17.70 (-0.17%)
Nasdaq 1,853.34 -6.08 (-0.33%)
S&P 500 1,096.13 -3.56 (-0.32%)
10-Yr Bond 4.419% -0.003

10:30AM: Equities get a temporary boost from the encouraging June Factory Orders and July ISM Index, but quickly return to their earlier lows... June Factory Orders grew 0.7% (consensus of +0.5%) as May orders were revised to a much stronger +0.4% (prior reading of -0.3%)... Factory orders now stand 12% higher from a year ago and lend further support to a recovering manufacturing sector... The ISM Services index showed similar strength, reaching 64.8 in July (consensus of 61.5) and marked the 17th month in a row of expansion in the non-manufacturing sector...

These data, however, have been dismissed by the market - as most investors believe such expectations are already built into the market...NYSE Adv/Dec 758/2011, Nasdaq Adv/Dec 815/1766

the markets ignore reports. Remember when the idea of rising interest rates hit the markets and nearly everyday for a 2 week period they'd say the rate increases were priced in, and yet the markets continued to decline. :eyes:

Those Adv/Dec ratios just don't seem to match up with the market numbers today, do they?

must come down. 11:02 numbers

Dow 10,077.84 -42.40 (-0.42%)
Nasdaq 1,843.41 -16.01 (-0.86%)
S&P 500 1,092.47 -7.22 (-0.66%)
10-yr Bond 4.431% +0.009
30-yr Bond 5.177% +0.014
NYSE Volume 382,049,000
Nasdaq Volume 553,061,000

11:00AM: Market remains on the defensive as buyers remain a scarce force at this juncture... Decliners are outpacing advancers by a more than 2-to-1 margin at the NYSE (slightly less at the Nasdaq), and down volume is leading up volume by a 3-to-1 ratio at the NYSE (a 3-to-2 ratio at the Nadsaq)... Sector leadership reflects the weak participation on the part of market bulls, with financial, industrial, material, and transportation all down... Interestingly, the energy shares are some of the worst performers of the market (-1.2%)...
Traders have taken profits following 4 straight sessions of new highs for crude... Oil has actually reversed and dropped some in the past hour - Saudi Arabia has said it has started production at 2 new fields 3 months ahead of schedule, and may delay shutting down older fields... NYSE Adv/Dec 965/1917, Nasdaq Adv/Dec 950/1772

Advances & Declines
NYSE Nasdaq
Advances 944 (30%) 913 (31%)
Declines 1962 (63%) 1790 (62%)
Unchanged 196 (6%) 163 (5%)

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

Up Vol* 72 (22%) 168 (34%)
Down Vol* 239 (73%) 318 (64%)
Unch. Vol* 14 (4%) 6 (1%)

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

New Hi's 22 11
New Lo's 66 97

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

Last trade 89.73 Change +0.16 (+0.18%)

Settle 89.57 Settle Time 23:37

Open 89.78 Previous Close 89.57

High 90.19 Low 89.53

http://us.oneworld.net/article/view/91203/1/3319

WASHINGTON, D.C., Aug 4 (OneWorld) - To the disappointment of independent environmental and development groups, the executive board of the World Bank Group (WBG) has given general approval to a management plan to continue investing in oil, gas, and mining projects despite a three-year Bank-sponsored review that called for an immediate halt to the WBG's support for coal projects and a four-year phase-out of its lending for oil projects in poor countries.

In an all-day meeting at WBG headquarters Tuesday, the 24 executive directors, who represent the Bank's 184 member-countries, agreed to management's response to the "Extractive Industries Review" (EIR), headed by former Indonesian Environment Minister Emil Salim, subject to a further "refinement" of some provisions regarding poverty reduction and local participation in mining and energy-related projects.

Most important, however, the board backed up management's determination to continue investing in oil, gas, and mining projects in developing nations while only gradually increasing its portfolio for renewable-energy projects which the EIR had recommended be increased by as much as US$500 million a year.

snip>

The WBG -- which includes the World Bank; its soft-loan affiliate, the International Development Association (IDA), and the International Finance Corporation (IFC), which provides loans and other support to the private sector - has long been a major backer of extractive-industry projects in developing countries. While it has provided on average only about $1 billion a year in lending to that sector over the past decade, its mere endorsement of such projects - through such instruments as co-financing, advisory services, and insurance - still acts as a powerful magnet for private capital that would otherwise be reluctant to invest in certain countries.

more...

http://news.moneycentral.msn.com/breaking/breakingnewsarticle.asp?feed=OBR&Date=20040804&ID=3886408

NEW YORK (Reuters) - Power company Reliant Energy Inc. (RRI) posted a wider second-quarter loss on Wednesday, hurt by charges for discontinued operations.

The Houston company reported a second-quarter net loss of $71.7 million, or 24 cents per share, versus a loss of $5.9 million, or 2 cents per share, in the year-ago period.

...a bit more...

and some history:

http://cbs.marketwatch.com/news/story.asp?guid={8a6cac0f-b13e-4fc0-a11c-54fb87d0cb40}&siteid=mktw&dist=SignInArchive&archive=true¶m=archive

Bush: "Act boldly, swiftly' on energy

By Rex Nutting, CBS.MarketWatch.com
Last Update: 5:26 PM ET Jan. 29, 2001

WASHINGTON (CBS.MW) -- President Bush asked his top economic and energy advisers to "act boldly and swiftly" to address America's energy problems, but he indicated he has no magic fix for California's energy problems.

In fact, the Bush administration signaled that it's unlikely to give California any additional leeway on energy shortages, although it might seek to grant relief from regulations that make building new power plants more difficult.

<snip>

"If we don't find more energy supplies to meet the growing demand in places like California, the consumer's going to pay a dear price," Bush said. "And a good place to look is going to be
<snip>

Cheney insisted that Bush would not order power generators like Reliant Energy (REI: news, chart, profile) and Duke Energy (DUK: news, chart, profile) to sell electricity to California once the current federal order expires at midnight on Feb. 6. "It's merely spreading the problem to other parts of the West," he said in an appearance on ABC.

<snip>

"We'll give him two weeks," Lindsey said, referring to California Gov. Gray Davis. "Longer than that, and there's real suffering in the rest of the West."

...more...

and

http://www.citizen.org/congress/campaign/special_interest/articles.cfm?ID=6539

Got Juice? Bush's Refusal to End California Electricity Price Gouging Enriches Texas Friends and Big Contributors

Nine power companies and a trade association that stand to gain the most from President Bush s hands-off policy in California contributed more than $4 million to Republican candidates and party committees during the last election, and some of the company heads have close personal ties to Bush, according to a new Public Citizen report.

Three of the companies Enron, Reliant Energy and Dynegy are based in Texas and gave more than $1.5 million to Bush s campaign, his inauguration committee, and the Republican National Committee, which served, in effect, as an arm of the Bush presidential campaign. Two companies Enron and Reliant Energy are headed or steered by Kenneth Lay and James Baker III, both close Bush advisors.

According to the report, the contributions and personal relationships could explain why the Bush administration has refused requests by bipartisan groups of eight western governors and 20 members of the California congressional delegation to intervene in the California and regional power crisis, and cap wholesale electricity prices. The companies and the association more than doubled their contributions in 1999-2000 compared to the last presidential cycles, as they pushed for deregulation in Congress and across the nation.

"It seems clear that the Bush administration is trying to return the favors done by friends and donors," Public Citizen President Joan Claybrook said. "Bush is helping out his buddies at the expense of every consumer in California, and his refusal to cap wholesale prices is threatening to wreak havoc on the entire western region of the United States."

<snip>

The top three contributing companies were Enron, Southern Company and Reliant Energy. The remaining seven entities are the Edison Electric Institute (an industry association), Williams Companies, Duke Energy, Arizona Public Service, Dynegy, AES Corp. and Calpine.

Enron s CEO is Kenneth Lay, a long-time Bush family friend and an architect of Bush s policies on electricity deregulation, taxes and tort reform while Bush was Texas governor. Baker, who serves on Reliant Energy s board of directors, is also a long-time Bush family adviser who oversaw Bush s legal efforts in the Florida election controversy. Baker Botts, the Houston law firm founded by Baker s great-grandfather and where Baker is a partner, was one of the largest contributors to the Bush campaign, contributing $113,621 in 1999-2000.

Further, two Reliant Energy top brass are members of the Bush "Pioneers," an elite group of people who pledged to raise at least $100,000 each to help launch Bush's presidential campaign. Bush Pioneer Don D. Jordan was CEO and chairman of Reliant Energy until June 1999 and December 1999 respectively. Pioneer Steve Letbetter, Reliant Energy s current CEO, is a long-time top corporate officer of the company. The company and its employees gave $47,000 to Bush's gubernatorial campaigns in 1994 and 1998, and gave Bush and the RNC $289,000 for last year's election.

...lots more...

out to get as much as they can for their corporate buddies in the "plutocracy" before they are ousted. Maybe all these rhetoric of pumping all the oil they can and the sudden increase in US oil imports to increase the gloal demand to maximum capacity is according to some master plan. :tinfoilhat:

thinking that this hike in the price per barrel and the screams of shortages does tend to remind me of the California "energy crisis".

As in all crime scenes, one has to wonder "who benefits".

With ChevronTexaco having record profits for the past 6 quarters (along with all the refiners) and with the dollars that were shoved into this mal-admin's pockets, it would seem that something unsavory may be just below the surface here.

be THAT powerful, can they? :tinfoilhat:

decided to back down before someone "catches on". :eyes:

Dow 10,073.27 -46.97 (-0.46%)
Nasdaq 1,842.63 -16.79 (-0.90%)
S&P 500 1,093.28 -6.41 (-0.58%)
10-Yr Bond 4.434% +0.012

dollar getting less enthusiastic

Last trade 89.79 Change +0.22 (+0.25%)

Dow 10,086.33 -33.91 (-0.34%)
Nasdaq 1,846.56 -12.86 (-0.69%)
S&P 500 1,094.49 -5.20 (-0.47%)
10-Yr Bond 4.424% +0.002

11:00AM: Market remains on the defensive as buyers remain a scarce force at this juncture... Decliners are outpacing advancers by a more than 2-to-1 margin at the NYSE (slightly less at the Nasdaq), and down volume is leading up volume by a 3- to-1 ratio at the NYSE (a 3-to-2 ratio at the Nadsaq)... Sector leadership reflects the weak participation on the part of market bulls, with financial, industrial, material, and transportation all down... Interestingly, the energy shares are some of the worst performers of the market (-1.2%)...

Traders have taken profits following 4 straight sessions of new highs for crude... Oil has actually reversed and dropped some in the past hour - Saudi Arabia has said it has started production at 2 new fields 3 months ahead of schedule, and may delay shutting down older fields... NYSE Adv/Dec 965/1917, Nasdaq Adv/Dec 950/ 1772

dollar going soft?

Last trade 89.71 Change +0.14 (+0.16%)

Market down, Treasuries down, US buck down, gold down, silver down?
Where's everybody going?

http://www.321gold.com/editorials/daughty/daughty080404.html

snip>

And speaking of oil, Peter Schiff of Euro Pacific Capital has looked at the future of oil prices, and has some very bad news in that regard. "Chinese oil demand today is only a small fraction of what it is likely to become after the Yuan is floated. Once that occurs, the value of the Yuan will rise to reflect the true productive output of the Chinese. As oil prices collapse in Yuan terms, hundreds of millions of Chinese will then be able to afford oil that was previously too expensive. The result will be a surge in oil demand emanating from China. However, additional world productions will not be able to accommodate this new demand. Instead, Chinese demand will be satisfied though reduced American demand, because while the price of oil will collapse in Yuan terms, it will increase substantially in dollar terms."

snip>

To illustrate the point, what do crazy, economically-illiterate people do with money? Answer: they do something crazy with it. If you will dim the lights, I will now present a little slide show. This first slide is a graph of national debt, and notice how total national debt continues to climb at its eerie linear rate, namely $52 billion per month! Look at that number again. That's right; look at it! Look at the number $52 billion! A month! Make sure that number is burned into your brain, because years from now your grandchildren are going to be sitting in the dirt playing with rat bones and dried doggie doo, which are the only kind of toys you can afford to give them, and they will be asking you, "How much money were you guys spending, anyway, that has caused us to suffer such misery?"

To put it in perspective, it's $372 more debt, PER MONTH, for everybody who has a job in this whole country, INCLUDING government workers! And next month it is going to be ANOTHER $372, bub! And then another and another and another! Month after month, year after year, the government is putting you farther and farther into debt. And this does not even include the debt that you voluntarily take on, so that you can have those matching Jet Skis.

snip>

In the last, short 25 months we bozo Americans have accumulated, in spooky straight-line fashion, another $1.3 trillion in new federal debt. Even if all of this money was loaned out at a lousy 2%, then the interest expense alone, which is one of those federal budget line items, is rising by $26 billion a year! At 3%, it's another $39 billion! At 4%, $52 billion! At 6%, which is closer to where short-term rates should be historically given the current inflation rate, we will now be paying $78 billion a year more in interest costs on that new debt! That's $557 for everybody who has a job in America!

And where does this money go? Who is going to end up with that $26 billion a year? To the guys who had money to start with, and who loaned it to the government! And who are these guys? Well, it ain't the poor, who don't have any money to lend, and it ain't the Mogambo, who was trying to borrow money from the poor, and we all know how well that worked out. So, once again, the rich got richer and the poor got poorer.

snip>

Now, there are many of you guys who are so mathematically gifted that your computer-like brains instantly recognize that if you multiplied $52 billion per month times twelve months, then you get $624 billion per year. This number probably has many unique qualities about it, but the one that strikes me is that it is a hell of a lot bigger than any estimate of government deficit-spending that I have ever heard from anybody connected with the government, who are forever prattling on about how the deficit is down to $445 billion or some such low-ball number.

more but you'd better be thick-skinned...

"Chinese oil demand today is only a small fraction of what it is likely to become after the Yuan is floated. Once that occurs, the value of the Yuan will rise to reflect the true productive output of the Chinese. As oil prices collapse in Yuan terms, hundreds of millions of Chinese will then be able to afford oil that was previously too expensive. The result will be a surge in oil demand emanating from China. However, additional world productions will not be able to accommodate this new demand. Instead, Chinese demand will be satisfied though reduced American demand, because while the price of oil will collapse in Yuan terms, it will increase substantially in dollar terms."


This makes me bite my lip and knit my brow. I fear China economically. I see a powerhouse climbing stealthily up the mountain to knock off and replace the current king of the mountain (us). Unfortunately the current king of the mountain is so busy denying there is any chance he'll ever be knocked off the opponent makes great progress. We are screwed.

In other news, ZOWIE!! Great thread! I have missed so much, been so busy. Very long but exciting days. We moved to our storefront office, had big grand opening, got 1,000 lawn signs on Monday, they're almost gone. All this in the past 5 days! Levin and Stupak and a few others came to our opening, candidates were there, it was great. Many had come from the Kerry/Edwards rally in Grand Rapids. I couldn't believe the turn-out considering our opening day had been moved up by six days (had to do it if we wanted the dignitaries there) and we had no chance to publicize it. We had well over 100 people. We are making the most of the favorable situation and, in the middle of all this fundraising for candidates, we're doing a private put fierce effort to raise a big chunk so we can rent the store-front throughtout the year. I am pushing for this and my chair is completely on board. I tell people it's one reason we are so weak, having visibility only during elections. Many are agreeing judging by the Rent Fund contributions. :toast:

The over-throw is progressing right on schedule in the north, I hope it's all good for all my fellow marketeers. Ozy, I hope you are all set in your new home.

Cheers--

Julie

rising inflation was the only part of the rant that made sense to me.

Lots of Dem trashing. He's really concerned about raising the minimum wage,(it's his second rant about it) but calling Dems stupid is kind of low. :shrug: :crazy:

http://www.321gold.com/editorials/pollock/pollock080404.html

Captive over-reliance on the United States means that international markets are hesitant to accurately discount the future costs of war, natural resource shortfall, lost manufacturing base, and terror.. The value of dollar denominated assets are much too high to be realistic to risk and reality. Adjustments have not occurred because a large dependency on US GDP means that US markets and assets have artificial staying power.

We know that on worldwide basis common political interests have broken down. Economic ties, interdependence, and interrelationships are a bit more sticky. However, the global economy has no choice but to follow the political tone that has been set to conclusion.. To date, the magnitude of global dependency means that orderly exit out of US dominated institutions and US denominated assets may be impossible. For now, the ranchers governing the global economy know they cannot afford to have the cattle stampede out of the dollar and the DOW. News must not be allowed to tarnish the safety of a peace time facade. Eventually private large money will exit, it may have done so already.

In a fit of fantasy, preserving the status quo means, that everything has to stay the same even though people notice that individual purchasing power for food and energy has visibly eroded through the effects of wartime. Economic and security risks are issues and costs without mention.

As part of a society in denial, the Federal Reserve, and CIA (footnotes), have intentionally misanalysed the war by limiting the definition and scope of this conflict. The events unfolding are global, they are not localized in Iraq, nor can they be contained. Denial means that the US has limited social, financial, and political commitments to war. This does not mean that global war has not been occurring. Many wars begin unilaterally, with a single aggressor aligned against an unprepared or unwilling enemy. Because of denial, ultimately more civilians will be adversely effected than direct combatants. Again, beyond 9-11 and Iraq, the first domestic casualty of war has been the recent declination of the US standard of living.

more...

Dow 10,087.28 -32.96 (-0.33%)
Nasdaq 1,848.14 -11.28 (-0.61%)
S&P 500 1,094.38 -5.31 (-0.48%)
10-yr Bond 4.406% -0.016
30-yr Bond 5.152% -0.011
NYSE Volume 597,359,000
Nasdaq Volume 804,386,000

12:05PM: The stock market took its cue from yesterday and opened with moderate losses - ones it was not able to erase throughout the morning... A huge decline in Asian (Nikkei -1.2%) and European (DAX -1.4%) trading, a few downside earnings pronouncements from Ciena (CIEN 2.12 -0.64) and Interactive (IACI 22.44 -4.59), and a number of troubling international developments kept buyers from coming back in...
Reports surfaced that North Korea is developing a missile that could carry nuclear warheads and hit US targets, talk circulated that a homemade bomb exploded outside of Athens, Greece, and crude oil set new record highs in the early morning... The latter quickly fell (just below $44/bbl) as Saudi Arabia agreed to open two new oil fields three months ahead of schedule... The dip prompted traders to take profits from the energy sector's huge run.... Other industry groups have also posted large moves to the downside - namely, transportation, managed care, and retail... In fact, most sectors have slipped lower this morning, although they have not fallen too far below the unchanged mark... Economic data were generally upbeat this morning and supportive of the strengthening economy...

June Factory Orders rose 0.7% (consensus of +0.5%) as May was revised much higher (to +0.4% from -0.3%), and July ISM Services came in at 64.8 (consensus of 61.5) as new orders rose and the price index fell... The movement there was in keeping with the Fed's belief that gradual rate increases should not lead to a spike in inflation or drop in demand...NYSE Adv/Dec 899/2145, Nasdaq Adv/Dec 817/2032

http://www.gold-eagle.com/editorials_04/rostenko080204.html

snip>

Of course, as astute market students are aware, one of the market's functions is to discount the future. Today's bullish data was already discounted months ago. We had the rally for the bullish second quarter months before the second quarter started. It shouldn't be any major surprise to anyone (except for maybe the dingbats over at CNBC) that many companies have warned of a slowdown in the second half. Look at the action in the market thus far this year and it becomes quite clear that the pace of today's bullish data is not likely to be sustained.

It's that whole discounting thing that the "experts", (that is, folks who get paid to talk about the market but couldn't actually trade/invest their way out of a soggy paper bag with a bucket full of box cutters), just don't seem to get. Crude oil futures are trading at lifetime highs and this, my friends, is not a good thing for the economy. But everyday the financial media reports on some clown talking about how prices don't reflect the "reality" of the supply/demand situation.

Take a gander at some of last week's quotes from Reuter's. The names have been dropped to protect the innocent. (Actually, to protect me.)

"We're crazed about the price level, but there's no physical shortage of oil."

"I think the market is overdoing it on Yukos."

Here's my favorite, from a Reuter's "journalist" himself: "...but the fundamental supply and demand situation has been quietly improving, making record energy costs harder and harder to justify."

Here's a little clue for the experts: markets don't price the CURRENT supply/demand situation. Today is old news. Markets attempt to anticipate where things are headed, to account for potential risks. $44 oil doesn't give a rat's fuzzy little butt about "no physical shortage of oil" or "Yukos". $44 oil says "Something is coming up ahead that will make you number crunching pencil-pushing 'experts' look foolish yet again. Just like when you said oil will be trading under $25 after we kick some major fallujah in Iraq."

I remind the reader that every upsurge in oil prices in the past few decades has led to a recession some months later. Given that, what do you think the odds are that RECORD HIGHS in crude oil and gasoline are simply, as Greenspan is fond of saying, "transitory" factors that won't pressure the so-called recovery?

more...

http://www.reuters.com/financeNewsArticle.jhtml?type=businessNews&storyID=5872686

LONDON (Reuters) - Oil prices slipped from record highs on Wednesday after U.S. government data showed growing oil product stockpiles.

snip>

In its weekly data, the U.S. Energy Information Agency said gasoline stocks rose 2.4 million barrels last week to 210.1 million barrels. Analysts had expected stocks to fall 600,000 barrels due to peak summer demand from vacation drivers.

U.S. distillate stocks rose 2.1 million barrels, above analysts' expectations for a rise of 1.4 million barrels.

Gasoline demand over the past four weeks was down 0.3 percent on the year, a reversal of strong demand growth that took U.S. gasoline futures to record highs in May and helped push crude prices higher.

"It's a bad report for products," said Kyle Cooper, analyst at Citigroup Global Markets. "We now are 8.3 million barrels above last year in terms of gasoline, and yet we are 50 percent higher in terms of price. I'd like someone to explain that to me."

more...

Dow 10,081.60 -38.64 (-0.38%)
Nasdaq 1,845.25 -14.17 (-0.76%)
S&P 500 1,093.93 -5.76 (-0.52%)
10-yr Bond 4.392% -0.030
30-yr Bond 5.139% -0.024
NYSE Volume 683,148,000
Nasdaq Volume 912,176,000

1:00PM: Market edges slightly lower but does not veer far from the day's pattern... Trading screens are awash in red as very few areas have found a bid... One group that has traded lower, yet has shown relative strength, has been semiconductor... The group has fallen so much over the past month (to 10-month lows the week before last) that analysts have begun to found contrarian appeal... Smith Barney Citigroup upgraded Applied Materials (AMAT 16.78 +0.33) to Buy from Hold, saying that the semiconductor equipment stocks are essentially converging over time to "fair value"...
The firm believes this downturn will be much shallower and generally shorter than prior cycles, and suggests buying on bad news as 2005 expectations come down over the coming months...SOX -0.1, NYSE Adv/Dec 1020/2094, Nasdaq Adv/Dec 958/1988

12:30PM: Equity market holds tight to its range below the flat line, with little movement in the past two hours... Buyers remain in a wait-and-see mode as several events that could be terrorist targets loom over the market... The Summer Olympics starts in a little over a week, and the Republican National Convention will take place August 30-September 2... Fear of potential activity at these sites has been heightened by reports of a homemade bomb that exploded near an electrical substation in Athens, Greece...

This can help explain the move higher in the treasury market, which is currently stronger across the curve and has sent the yield on the 10-year note below 4.40%...NYSE Adv/Dec 986/2101, Nasdaq Adv/Dec 901/1989

http://www.canada.com/national/nationalpost/news/story.html?id=541c1716-c6e9-40a9-93a6-72b1722c2576

BEIJING (AP) - A Chinese state oil company has called off plans for a foreign consortium including Royal Dutch/Shell and ExxonMobil to invest in a multibillion-dollar pipeline to supply natural gas to China's booming eastern cities, according to Shell.

The announcement came as PetroChina Co. said its workers on Tuesday welded into place the last segment of the 4,000-kilometre-long pipeline that links gas fields in China's northwest to Shanghai and nearby cities. PetroChina Co. issued a letter Monday ending the joint venture to develop the West-East Gas Pipeline, said Shell, the lead foreign partner.

The $5.2 billion US pipeline was the first major Chinese energy project opened up to foreign investors.

Shell said the foreign consortium, which also included Russia's Gazprom, failed to find "common ground" with PetroChina. Negotiations stalled early this year over issues including the rate of return on investment.

snip>

The government is also trying to develop domestic energy sources, despite their sometimes higher cost, amid worries about the reliability of supplies from the Persian Gulf and elsewhere.

more..

"recovery"!

Dow 10,126.51 +6.27 (+0.06%)
Nasdaq 1,855.06 -4.36 (-0.23%)
S&P 500 1,098.63 -1.06 (-0.10%)
10-yr Bond 4.429% +0.007
30-yr Bond 5.171% +0.008
NYSE Volume 1,369,630,000
Nasdaq Volume 1,657,787,000

Close: It was a choppy session for the stock market, with the majority of the action driven by one commodity's price fluctuations - oil... Crude oil started the day at new record highs (its fourth day in a row) as traders continued to fret over supply constrictions... That headline, along with talk North Korea was developing missiles with nuclear warheads that may reach the US and reports of a homemade bomb exploding near Athens, Greece, was enough to send equities lower in the morning...
The major indices, in fact, did not recover from their drubbing until approximately 14 ET - when the Dow, Nasdaq, and S&P 500 rallied 94, 22, and 10 points, respectively, from their lows to their highs of the session... The catalyst for the recovery was an over 3% drop in the price of crude oil to $42.83/bbl at its close... Weekly reports that indicated a rise in US oil and gas inventories, and a move by Russian authorities to let it largest exporter, Yukos, use its accounts for payment of crude oil production and transport - a positive step in its bankruptcy case - brought about the sudden price fall...

Other factors that also worked in the bulls' favor were the 0.7% rise (consensus of +0.5%) in June Factory Orders and the 4.9 point increase in July ISM Services (to 64.8 versus the consensus of 61.5)... Both reports helped put to rest concerns about inflation and slowing demand... Sector action at the end of the day was fairly mixed: semiconductor, biotech, airline, utility, and brokerage all posted healthy gains, whereas energy, retail, hospital, and casino traveled lower...SOX +0.9, XOI -2.5, NYSE Adv/Dec 1583/1694, Nasdaq Adv/Dec 1374/1718

3:30PM : Major indices dip a bit but retain the majority of their hard-won gains in the late-day trading session... Oil has been the theme of the session, as the 3% fall in the price of crude oil inspired an afternoon buying drive... Semiconductor, computer hardware, biotech, and airline have been the biggest winners, and offset large losses in energy... The strength of the former groups has led to positive breadth figures at the NYSE - for the first time all day...

Tonight and tomorrow morning, there are a hodge-podge of companies reporting - with none of them carrying particular weight - along with the release of July same store sales... The market will be looking for a recovery following June's weak results and the recent fall in personal spending.... For more insight into this, be sure to visit Briefing.com's Looking Ahead column... NYSE Adv/Dec 1737/1505, Nasdaq Adv/Dec 1449/1606

3:00PM : Buyers continue to come out of the woodwork and send the indices higher... The Dow, Nasdaq, and S&P 500 have each advanced 94, 22, and 10 points, respectively, in the past hour as the price of crude oil has continued to spiral lower - closing down over 3% to $42.83/bbl... This is a remarkable improvement in comparison to its highs of the day ($44.28/bbl)... Some exhilaration that (1) US and global oil inventories have risen and (2) YUKOS's situation is not as dire as previously believed has provoked the quick change...

The stock market has traded in tandem with oil for the past few months, and thus today's tumble has had quite an effect on equities... NYSE Adv/Dec 1676/1542, Nasdaq Adv/Dec 1507/1525

2:30PM : Stock market remains on course in its recovery effort as crude oil drops nearly 2% now, to $43.18/bbl... The Yukos development (see the 14:00 ET comment) combined with the rise in weekly US crude oil and gasoline inventories (as reported by the American Petroleum Institute), has led to the relief in oil prices... Right now, most of the blue chip groups have improved considerably - moderate gains for brokerage, consumer staple, and drug - and semiconductor has emerged as a tech leader...

It remains to be seen, however, how far the market can rally with the employment report on the horizon (due out Friday)... Worries that nonfarm payrolls will disappoint in July - like they did in June - are apt to curb buying enthusiasm somewhat... SOX +1.4, NYSE Adv/Dec 1570/1618, Nasdaq Adv/Dec 1369/1644

http://www.reuters.com/financeNewsArticle.jhtml?type=bondsNews&storyID=5873614

Wed Aug 4, 2004 01:42 PM ET

NEW YORK, Aug 4 (Reuters) - Treasury prices climbed on Wednesday after a sharp drop in the employment component of a service sector index raised questions about how strong employment growth was in July.

Economists polled by Reuters late last week estimated that 228,000 were created last month after a disappointing result for June. The Labor Department report is due on Friday.

Bond prices initially dipped after the Institute for Supply Management index of service sector activity rebounded to 64.8 in July from 59.9 in June.

But attention then shifted to the sharp drop in the survey's employment index, which sagged to 50.0 in July from 57.4 the month before. One trader said it was the sharpest month-to-month drop in the index in its seven-year history.

"There's a reasonable correlation between the employment component of the non-manufacturing ISM index and non-farm payrolls growth and since the majority of payroll gains have been on the service side, if the service employment component of the ISM is down, that raises a red flag about the July payrolls data that may be worth noticing," one market participant said.

Bond prices climbed as analysts began to assess the risk that payroll growth in July might turn out to have been weaker than the prevailing forecast.

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