STOCK MARKET WATCH, Thursday 7 October

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

Last trade 88.34 Change -0.14 (-0.16%)

Crude futures break new ground above $52 mark

http://futures.fxstreet.com/Futures/news/AFX/singleNew.asp?menu=latestnews&pv_noticia=1097146380-9e32d306-19486

WASHINGTON (AFX) -- Crude-oil futures were back at it Thursday, setting another new record above the $52-a-barrel mark

Renewed concerns about the potential for supply disruptions in Nigeria, a major exporter of oil to the United States, buoyed the market

In electronic trading, crude for November delivery added 33 cents to lately stand at $52.35 a barrel. Overnight, the benchmark contract hit an all-time high of $52.53

In Nigeria, the country's oil workers threatened to join in a nationwide general strike scheduled for next week, according to media reports. They are seeking government talks over rising fuel prices

On Wednesday, inventories data indicating tight domestic petroleum supplies pushed November crude to close at $52.02 a barrel, up 93 cents, during the regular trading session on the New York Mercantile Exchange. Also Wednesday, November natural gas closed at $7.04 per million British thermal units, down 11.9 cents, on Nymex. The Energy Department will report weekly data on gas in storage later Thursday

Meanwhile, November heating oil tacked on 1.41 cents to close at $1.4209 a gallon, also an all-time high for futures, amid expectations for higher winter demand in parts of the U.S

...more...

Overnight debt/forex report

http://www.fxstreet.com/nou/noticies/afx/noticia.asp?pv_noticia=aapnew2004107399

Comments from a Federal Reserve official suggesting prospective rate hikes might not be as slow-and-steady as currently expected pushed yields on US Treasuries higher on Wednesday, dragging Australian interest rate futures lower. However European debt yields resisted the bearish sentiment and ended steady or a touch firmer.

Federal Reserve Bank of St Louis president William Poole, also a current voting member of the Federal Open Market Committee, warned that Federal Reserve's statements about the likely pace of interest rate changes were
not ´commitments´. He said the intended path of rate moves could be adjusted up or down as new information on the economy comes in.

Investors, seeing a risk that rate hikes could turn out faster than expected, retreated from Treasuries, pushing prices down and yields up.

The two year Treasury note ended at 2.69 per cent from 2.63 per cent at the previous close, while the 10 year note finished the day at 4.22 per cent from 4.17 per cent.

An auction of $US15 billion of five year notes weighed on the market. It met with tepid demand from investors, with bids totalling 2.32 times the amount on offer. Indirect bidders snared 38.7 per cent of the total, signalling ongoing support from foreign accounts, including central banks.

Share prices provided an easy escape route from the US debt market. The Dow Jones Industrial Average gained 0.6 per cent and the S&P 500 rose by 0.7 per cent and the Nasdaq Composite index ended the day 0.8 per cent
higher.

...more...

Oil erases share gains as rate moves, data loom

http://futures.fxstreet.com/Futures/news/afx/singleNew.asp?menu=economicnews&pv_noticia=MTFH56044_2004-10-07_10-57-50_L07527426

LONDON, Oct 7 (Reuters) - European stock markets faded on Thursday after an initial Wall Street-inspired jump to 5-month highs, as crude oil prices chalked up yet another record high and investors prepared for a raft of key economic news.

Government bonds were flat after the previous day's losses, after a disappointing 5-year U.S. Treasury bond auction, and the dollar was mostly steady ahead of Friday's pivotal U.S. jobs data .

"We marked up some prices because the U.S. market finished quite a bit better than we left it yesterday but we've got some big numbers coming out tomorrow, the payroll data particularly," said one equity trader in London.

"So perhaps it's right the market pauses for breath," he said, adding that the U.S. presidential elections in November were also beginning to prey on investors' minds.

...more...

It's MaeveDay!

Here are the reports due today:

Oct 07 8:30 AM
Initial Claims 10/02
report -
briefing.com anticipates 345K
market anticipates 355K
last report 369K
revised -

Oct 07 3:00 PM
Consumer Credit Aug
report -
briefing.com anticipates $8.0B
market anticipates $6.0B
last report $10.9B
revised -

Have a Great Day Marketeers!

8:31am 10/07/04 U.S. JOBLESS CLAIMS DROP DUE TO HURRICANES' IMPACT

8:31am 10/07/04 U.S. WEEKLY JOBLESS CLAIMS DROP 37,000 TO 335,000

must mean that they revised last week's up to 372,000 claims from 369,000 claims

http://cbs.marketwatch.com/news/story.asp?guid=%7BC57D6106%2D3BC2%2D4D3E%2D903A%2D9AA50C769E88%7D&siteid=mktw

U.S. initial claims fall back to 337,000
Decrease not due to volatility surrounding hurricanes

WASHINGTON (CBS.MW) - First-time claims for U.S. unemployment benefits dropped unexpectedly by 37,000 to 335,000 in the week ending Oct. 2, the Labor Department said Thursday.

The decline in initial claims was not due to the volatility surrounding recent hurricanes that have battered Florida and other Southeast states, a Labor Department spokesman said.

Storm-battered states continued to have elevated levels of initial claims in the most recent data, the spokesman said. Layoffs declined elsewhere in the nation.

Economists were expecting a decline to about 353,000, according to a survey conducted by CBS MarketWatch.

The more reliable four-week moving average of initial claims rose by 4,250 to 348,500, the highest level since February. Economists generally prefer to track the four-week average, since it smoothes out weekly distortions caused by weather and other one-time events.

But many economists have said the recent storms have muddied the view of the underlying fundamentals of the labor market. It will take weeks for the impact of the storms to wash out of the data.

<snip>

The impact of the storms on the jobs data could be significant, cutting employment by 100,000 or more, some economists say. Hurricane Ivan landed late in the week used by the Labor Department to survey some 400,000 businesses and 60,000 households to gauge the monthly labor market.

<snip>

Long-term unemployment has been particularly insidious during this business cycle. In August, 1.7 million, or 20.7 percent, of the 8 million workers classified as unemployed had been out of work longer than six months. The average duration of unemployment remained high at 19 weeks.

...more...

(edited to add news story)

the Bush administration was looking for. But then, they are really betting the farm on the job creation figures, aren't they?

http://www.thestreet.com/markets/rebeccabyrne/10186527.html

To generate a reaction in the polls or at the Federal Reserve, Friday's employment report for September needs to show a labor market that is either falling apart or exploding.

And while most economists say that's not likely to happen, recent labor market indicators suggest the risks may lie on the side of a weaker number. What's more, White House hopes for a sweeping, upward revision of previous months' payroll data might also be dashed, some economists say.

According to consensus estimates, nonfarm payrolls rose by 150,000 last month, up slightly from 144,000 in August. The unemployment rate is expected to have held steady at 5.4%, and average hourly earnings are slated to rise 0.3%.

"If it is not startling outlier on either side ... Friday's numbers will not have much effect on the outcome in November," said Vincent Boberski, director of fixed-income research and a senior economist at RBC Dain Rauscher.

more...

to come Friday? :evilgrin:

http://quote.bloomberg.com/apps/news?pid=10000081&sid=aKYC4okrXodw&refer=australia

Oct. 7 (Bloomberg) -- Australia's economy added the most jobs in almost two years in September, reducing the unemployment rate to 5.6 percent, on hiring by service companies including Qantas Airways Ltd.'s Jetstar budget airline. The dollar rose and bonds fell.

Employment rose 63,500 in September after a loss of 8,600 jobs in August, the Australian Bureau of Statistics said in Sydney. The unemployment rate fell from 5.7 percent and was close to May's 23- year-low of 5.5 percent.

The creation of twice as many jobs as economists expected is a boost for Prime Minister John Howard ahead of a weekend election, with the latest opinion poll showing Australians almost equally split between his Liberal-National Party coalition and the opposition Labor Party. Job creation and interest rates are key election issues for Howard as he seeks to win a fourth term.

``It's good news for the government just before the election,'' said Tom Kenny, chief economist at Nomura Australia Ltd. in Sydney. ``Howard will use the figures to bolster his argument that the government has been a good economic manager.''

more...

here. Cripes, they can't even keep the spin straight in their heads anymore. "Hey KKKarl, should we attribute the drop to the storms, or leave it open for the boss to use it in the debates as evidence the scheme is working for the little guy?":eyes:

could go down." Sheesh, left that wide open to interpretation. HA! Notice he used the word path vs. speed, rate, velocity, pace, etc. So could path possibly also mean direction? :shrug:

Time to find a direct quote.

He said the intended path of rate moves could be adjusted up or down as new information on the economy comes in.

on edit:

Here's some quotes:
http://www.reuters.com/financeNewsArticle.jhtml?type=bondsNews&storyID=6431436
"It is possible -- I would argue likely at some point -- that new information will cause the FOMC to adjust the target at a pace different from what is currently anticipated," Poole said, referring to the Fed's use of the phrase "measured pace" in its recent statements on policy.

"The pace could be faster or slower, depending on how the economy evolves," he said.


No more hints for you!!! (Hmmm, maybe not such a tool afterall)
http://cbs.marketwatch.com/news/story.asp?guid=%7B88A91608-B919-476F-91D6-A8832B6EB768%7D&siteid=google&dist=google

"Given ... the danger of misleading the market when indicating a probable future course for policy, I have generally been opposed to announcing, or hinting, future policy adjustments," Poole said Wednesday in a speech prepared for delivery to a business group in Springfield, Mo. A copy of his remarks was released in Washington.

Poole said that markets might misinterpret the statement as "a firm commitment" when it is only meant to give the public some idea of how policy might proceed.

Poole raised the possibility that he may even dissent from the statements, if such hints continue to be added.

He said that, in some cases, a statement on the probable future course of monetary policy could be more important than the setting of the current intended Fed funds rate.

more...

http://www.reuters.com/financeNewsArticle.jhtml?type=bondsNews&storyID=6432007

"Where the funds rate has to go is going to depend on the circumstances. Three to 5 (percent) might be informative in the sense of a long-run average. It should not be read as saying clearly the Fed is going to stop when we get there," Federal Reserve Bank of St. Louis President William Poole told an audience after a speech here.

"Because the conditions might force us, or require for equilibrium, that we be above or below that point," he said.

http://www.baltimoresun.com/business/bal-bz.heating07oct07,1,267979.story?coll=bal-business-headlines

WASHINGTON - U.S. heating oil consumers will pay 28 percent more for the fuel this winter than a year earlier, as lower-than-normal inventories and record crude oil prices sent wholesale costs to all-time highs, the Energy Department said yesterday in an annual forecast.

Natural gas and propane consumers will also find fuel more expensive. Gas users will pay 15 percent more to heat their homes and propane consumers will see an increase of 22 percent, the department's Energy Information Administration predicted in its Winter Fuels Outlook.

The EIA released its forecast as crude oil prices surged above $52 a barrel on worries about a possible strike by Nigerian oil workers and the continuing disruption of petroleum output in the Gulf of Mexico more than two weeks after Hurricane Ivan whipped through the region.

The hurricane wrecked at least 40 derricks and undersea pumps Sept. 16, more than any storm since Hurricane Andrew in 1992. Oil output in the Gulf of Mexico remains 28 percent below normal three weeks later, making total U.S. production the lowest since 1950.

Light crude for November delivery rose 93 cents to $52.02 a barrel yesterday on the New York Mercantile Exchange, a record settlement high. In London, November Brent crude futures were up 86 cents to $47.99 per barrel on the International Petroleum Exchange.

While oil prices are 64 percent higher than a year ago, when adjusted for inflation, they remain about $28 below the peak reached in 1981.

...more...

Gee. when you compare it to 1981, I'm certain that the 28% increase in cost from last year won't even leave a bruise!

and here's an Oopsie!

http://quote.bloomberg.com/apps/news?pid=10000006&sid=aoVyHJOiYQww&refer=home

Oil Rises to Record 3rd Day; Winter Supply May Be Insufficient

Oct. 7 (Bloomberg) -- Crude oil futures rose to a record for a third day, reaching $52.53 a barrel in New York, on concern U.S. supplies may be insufficient to meet demand this winter.

U.S. inventories rose less than expected last week, and heating-oil stocks are 11 percent lower than normal. OPEC, source of more than a third of the world's oil, is pumping near capacity with little margin to compensate for disruptions to supply. Oil prices, up more than 60 percent this year, are putting world economic recovery at risk, ministers from the Group of Seven industrialized nations said last week.

``We'd expect the driver for prices to reach $60 to be low U.S. inventories and a looming potentially cold winter,'' said Kevin Norrish, an energy analyst at Barclays Capital in London. ``It could happen very quickly with some supply disruption because the market is now extremely sensitive to them.''

Crude oil for November delivery rose 43 cents, or 0.8 percent, to $52.45 a barrel in after-hours electronic trading on the New York Mercantile Exchange at 10:27 a.m. London time. November Brent crude climbed to a record $48.50 a barrel on London's International Petroleum Exchange, up 51 cents.

Goldman Sachs & Co. chief commodities strategist Steve Strongin and Mitsubishi Corp. manager for international petroleum Business Anthony Nunan said they also expect prices to rise to $60 with cold weather or disruptions to supply.

<snip>

Speculation that the U.S. may tap its emergency stockpiles further grew after a fifth refiner borrowed oil from the Strategic Petroleum Reserve yesterday in the wake of Ivan to keep processing plants running.

...more...

It seems that invading Iraq for all that oil didn't do much for the US consumer. What with the tab for the invasion and continuing quagmire, this has cost everyome even more than the tax bill and run up in the national debt.

It seems that this is not a passing phase either.

IMF: High Oil Price a Threat for Years

http://olympics.reuters.com/newsArticle.jhtml?type=businessNews&storyID=6437737

SINGAPORE (Reuters) - Tight oil supplies could leave the global economy worryingly vulnerable for years to come, a senior International Monetary Fund official said on Thursday.

David Robinson, deputy director of the IMF's research department, said the relentless rise of oil prices meant the fund's recent forecast of 4.3 percent global growth in 2005, published on Sept. 29, was already out of date.

Because oil has risen by about $5 a barrel since then the fund would probably pencil in growth of around 4 percent if it were to issue its projections today, Robinson said in a presentation to reporters and bankers.

"So there are clearly downside risks to global growth because of oil prices looking forward," Robinson said.

U.S. light crude oil futures hit an all-time high of $52.38 a barrel on Thursday, while Brent crude futures, the most widely used international benchmark, hit a record $48.15 a barrel on the International Petroleum Exchange.

But prices remain well below historic highs when adjusted for inflation. And given that the world economy is due to grow this year at its fastest clip in 30 years, Robinson described the surge as "distinctly uncomfortable but still manageable." He said he was more worried about oil supply bottlenecks, low inventories and, in particular, very low spare output capacity.

"This is perhaps the biggest concern right now and the biggest concern looking forward," Robison said. "I do worry about the medium-term outlook, about the sustained vulnerability to oil prices."

Robinson said it was significant that long-dated oil futures contracts had tracked spot prices higher.

....more...

Can anyone say "Peak Oil"?

transitory! They'll be back down to 30 bucks in no time! :evilgrin:

if energy and food prices were calculated into the cost of living?

careful massaging of these numbers, we can rest assured that our economic future is safe and sound.

No repeat after me:

I don't believe in ghosts.

I don't believe in ghosts.

I don't believe in ghosts.

I ....

http://www.theregister.co.uk/2004/10/07/peregrine_charges_fraud/

Eight former executives of Peregrine Software have been charged with conspiracy to commit fraud. An external Arthur Andersen auditor and two business partners of Peregrine face the same charges.

The eleven are accused of manipulating accounts between March 1999 and May 2002 and deceiving the public and investors about the true state of the company. They are accused of: “improperly booking software license revenue on backdated, impaired or sham transactions...fraudulently deceiving financial institutions into extending credit based on false financials concealing Peregrine's mountain of uncollectible accounts”.

Attorney General John Ashcroft said: “The indictment charges these defendants with a massive conspiracy that had at its core one corrupt goal: to hit the numbers quarter after quarter, no matter what. The betrayal of the public trust alleged in this indictment extended from the Chief Executive Officer who headed the scheme to the independent auditor who knowingly certified the company's false financial statements and allegedly made the continuing fraud possible.”

<snip>

Between its IPO in 1997 and March 2000 Peregrine shares rose from $2.25 to $79.50. Its subsequent collapse saw the loss of $4bn of equity value.

...more...

Arthur Andersen seems to have not given them the "best advice" - you know, like Dick Cheney got when he was cooking those Hellaburnin books.

http://www.reuters.co.uk/newsPackageArticle.jhtml?type=businessNews&storyID=597984§ion=finance

IRVING, Texas (Reuters) - Top U.S. executives are pessimistic about next year's economy, citing high oil prices, geopolitical threats and stuttering consumer confidence, according to a survey.

About 70 percent of the chief executives surveyed by The Business Council projected flat to 2 percent U.S. economic growth, more bearish than forecasts from major economists.

The Business Council survey, often seen as a gauge of corporate sentiment, was released ahead of a meeting of the group's members -- 125 CEOs from companies such as DuPont Co. DD.N , General Electric Co. GE.N and Procter & Gamble Co. PG.N . About 50 CEOs responded to the survey.

"Generally CEOs are a bit more pessimistic," DuPont CEO and Chairman Charles Holliday said at a news conference, referring to the difference of opinion between executives and economists.

...more...

Oh those nattering naybobs of negativity!

Because the Fed board and the rest of the Bush/Cheney campaign says that we are past that soft patch in the economy. I really wish that they had let the Fed review and correct their numbers because we really don't need to hear any bad news.

:silly:

Federal Reserve Chairman Alan Greenspan testifies on Capitol Hill Tuesday, April 20, 2004. The U.S. banking system, having weathered a recession, bankruptcies of several big corporations and his gross incompetence, is in very good shape, Greenspan said Tuesday, Oct. 5, 2004, in remarks to the American Bankers Association's annual convention in New York. (AP Photo/Dennis Cook)


Fed: Economic Growth on Track

WASHINGTON (Reuters) - U.S. economic expansion remains on track and inflation under control, top Federal Reserve (news - web sites) officials said Wednesday in comments likely to reinforce views the Fed will hike rates again this year.

"I think we're in a pretty solid situation and can look forward to a good long business expansion, provided we don't have any more unforeseen shocks," St. Louis Federal Reserve Bank President William Poole said in Springfield, Missouri.

-cut-

Oil spells double trouble for the economy because it can dampen activity by sapping disposable household income while also being a source of inflation.

But Kansas City Federal Reserve Bank President Thomas Hoenig, speaking at an economic forum in Lincoln, Nebraska, said that so far, he was not unduly worried about the impact of high oil prices on either the U.S. economy or inflation.

http://story.news.yahoo.com/news?tmpl=story&ncid=1203&e=3&u=/nm/20041007/bs_nm/economy_fed_dc&sid=95609869

spinners is making me crazy :crazy:

"I think we're in a pretty solid situation and can look forward to a good long business expansion, provided we don't have any more unforeseen shocks," St. Louis Federal Reserve Bank President William Poole said in Springfield, Missouri.

Let's see:

Oil over $50 barrel
Corporate scandals still being uncovered
Iraq a definite quagmire after "handover"

I guess all that was "foreseen"?

Just this morning at Yahoo's collecftion of news stories we see yammering Fed pieholes telling us how great everything is.


Fed's Hoenig: Oil Impact on Growth Modest


Fed's McTeer: U.S. Economy Back on Track

http://money.cnn.com/2004/10/07/commentary/column_hays/hays/



NEW YORK (CNN/Money) - Tepid, tepid, tepid -- that's the outlook for consumer spending when retail giant Wal-Mart has monthly sales that only rise 2.4%.

Okay, maybe the late 1990s spoiled us, when sales at Wal-Mart were frequently up in high single digits -- if not in the low double digits!

The knee-jerk analysis points to higher gas prices. And just wait till we all get hit with higher home heating oil and natural gas bills to see what happens to spending. On the other hand, big-ticket purchases are holding up pretty well, aided by low interest rates, so it doesn't make sense to put consumer spending in the economy's minus column, not yet.

<snip>

The big question now: Will consumers keep spending enough to push manufacturing ahead, or conversely, does manufacturing have enough oomph to keep growing and keep the economy on track?

wad of spit about Hurricanes impacting same store sales everywhere.

This sounds like another William Safire column in which he latches onto the latest headlines or admin-approved catch phrase as the basis for his column. Nevermind that the premise is flawed.

http://cbs.marketwatch.com/news/story.asp?guid=%7B8DE01D0D%2DACB8%2D47F1%2DAA94%2DADDBA47AE871%7D&siteid=mktw

CHICAGO (CBS.MW) -- Consumers proved to be a frugal bunch in September as a heap of retailers delivered disappointing sales results and warned that earnings were coming up short of expectations.

The sluggish results were widespread -- with some bright exceptions -- to seal a slowdown trend in consumer spending that began in June and goes beyond hurricanes on one coast and warm weather on another.

"The soft patch remains in place for the retail sector at this point," said Michael Niemira, chief economist for the International Council of Shopping Centers.

With 58 of the nation's largest chain stores reporting, Niemira is seeing a 2.5 percent sales gain for the month. That's better than what he thought would happen as late as Tuesday, but the results are spotty and show a clear divide between the haves and have-nots. However, September has the toughest year-over-year comparisons after last September's 5.6 percent increase. Comparisons the rest of the year get easier.

Discounters were mixed, too. Wal-Mart Stores (WMT: news, chart, profile) said sales at stores open longer than a year -- the key industry benchmark -- rose 2.4 percent in September. That's slightly better than last weekend's preliminary estimate of a 2.3 percent gain, but on the lower end of earlier forecasts of a 2 percent to 3 percent gain. Technically, however, Wal-Mart beat the average expectations of analysts reporting to Thomson First Call. By Wednesday, the consensus has been lowered to a 2.3 percent gain.

...more...

at least this writer was not drinkin' that funky koolaid

I had to go to the picture site to make sure "his gross incompetence" was not in the subject line of the photo. Very good!:evilgrin:

Throw Away the Cookbook and Focus on the Big Picture
"There's No Magic Formula"

The latest sharp and bullish “V” shaped correction against the apparent primary downtrend has motivated negative emotions in many market observers because of the excessive valuations and speculative stocks once again leading the market upward. It is times like these where it is best to keep your wits about you and follow a logical strategy, but of course this isn’t easy. We’re seeing levels of speculation that are actually like those of late ’99 early ’00. Although my stake in the market is only that of my family and friends, emotions may run deeper for professional money managers who rely on their stock market judgment for their living. As I pen this on Sunday night, it’s the sheep that are the smart animals once again in this stock market and there seems to be many breeds of sheep out there. My “standing” on FSO such as it is, has given me both the privilege and the pain of discussing the market with many professionals, and I feel their pain to some extent. Seems that the best of them have integrity and deal with the stock market as an independent thinker and without rigidity or emotion. Now’s not the time to disagree with the market, but it is also not the time for blind use of inflexible formulas, or finding excuses why the stock market is “wrong.” Accordingly, if Dow Theory flashes a technical “buy” you may want to consider whether you want to hop aboard large and long stock market positions using a method that would have had you missing the first 47% of an upturn in the S&P 500 index, while buying at just the time when business fundamentals suggest that by all historic standards, the market is due for a severe fall. It is better to consider the entire technical picture of the stock market before acting on such a mechanical buy signal.

The stock market is an organic thing, and the blind use of rigid models may not be successful for reasons that go back to the basis of most technical analysis. That basis is that the purpose of technical analysis is not to be right all of the time. It is to provide good investment/speculation results by managing risk and trying to put the odds in your favor over an extended period of time. In short, it’s to make your wins more frequent and larger than your losses. That brings up the need for investors to avoid making one big decision. If the one big decision is wrong, then the results will be faulty (even disastrous) and very damaging to your financial well being. If you are out of the stock market and the Dow theory flashes you a “buy,” good luck with it, but I probably won’t be joining you in all likelihood. (At least not in a big way.) Hopping into the stock market in a big way based on such a mechanical “buy” without thoroughly examining the entire technical and fundamental picture is too risky because losses can mount if the sell signal is as slow as the buy signal may be.

-cut-

In Spite of Wonder Rallies, the Nasdaq Looks Weak

The charts below depict technical characteristics that suggest that the intermediate and long-term trend of the Nasdaq are still down. I do not wish to depict these observations as the “holy grail” of technical analysis, but only to show that we are dealing with actual technical weakness that deserves attention if not immediate action. Coupled with the fundamental case of excessive valuations and negligible dividends suggests that it would not be a good idea to “plunge in” because of a mechanical method buying signal. I focused on the Nasdaq index because this is a major driving force in the highly speculative market. The chart below depicts the intermediate term Nasdaq in the form of a 2-year weekly candlestick chart that includes Chalkin Money Flow and the 26-week simple moving average. Note that since the January of ’04 top, there have been 22 weeks where the Nasdaq finished lower and only 15 “Up” weeks. “Down” weeks that had above-average trading volume where more frequent than “Up” weeks. There were 9 such “Down” weeks and only 5 such “Up” weeks. Thirteen-week Chalkin money flow is negative, and this has been a useful indicator over the last 3 years.

-cut-

For Fun Only – A Prediction – When and What Will Happen When Dow Theory Says “Buy”

I’m guessing that some supermarket-sold monthly magazines are presently considering cover stories on Dow Theory for their November ‘04 issues. On Friday, October 29th 2004, at about 1pm New York time, the Dow Theory will flash a “buy” signal when the Dow Jones Industrial Average moves to a new 52-week high. That Friday the Dow will rise 350 points and the Nasdaq will put in its first triple digit rise since February of 2000. The “buy” signal will be embraced by most bulls and (former) bears alike, all parading on TV one after another to tell and sell the public on the positive stock market implications of the “Buy signal.” For the first time in years both “perma-bulls” and legions of Dow Theorists will be thinking and selling the same thing to anyone who will listen - “BUY”! CNBC will run a special on the following weekend entitled, “Dow Theory Buy Signal – What Does It Mean for Your Portfolio?” (Hosted by Sue Herrera and Larry Kudlow). It will include bullish interviews with the usual regulars in addition to the most esteemed and popular proponents of the Dow Theory, and these people will all espouse the bullish long-term implications of the signal. Of course the “Buy signal” will be a discussion topic on “Luis Rukeyser’s Wall Street.” The following Monday on “Morning Call” and “Squawk Box,” commentators (not including Barron’s Mike Santoli) will don party hats. On Monday, once again the Dow and Nasdaq will post healthy gains of 100 and 35 points respectively, as volume will swell to well above the highest trading volumes on record on all the US exchanges. On Tuesday the indices will be up by only single digit amounts and the volume will stay well above average. That Wednesday, after a positive futures market and a gap up open, the Dow and the Nasdaq will trade at the flat line or perhaps up a few points and again volume will be impressive. On Thursday, S&P futures will trade down 20 points before the open, as morning business commentators suggest its just a little correction following the early week surge. Following the open, the indices will drop as volume and intensity of the drop will accelerate throughout the day as the early market break turns into panic selling. That day will be known from then on as “Black Thursday.” November 2004 popular weekly magazines with “DOW THEORY SAYS BUY” as the cover story become collectors’ items. In long-term retrospect these magazines become the best performing investments of our era. Is this for-fun prediction beyond the realm of possibility? Decide for yourself.

more...

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

here a couple:

http://cbs.marketwatch.com/news/newsfinder/pulseone.asp?dateid=38267.3521759259-822809254&siteID=mktw&scid=0&doctype=806&property=symb&value=&categories=&

Neiman Marcus Sept. same-store sales up 6.3% (NMGA) By Leslie Wines
NEW YORK (CBS.MW) - The Neiman Marcus Group (NMGA) Thursday said its same-store sales in September increased 6.3 percent from year-earlier levels. The Dallas-based retailer's total monthly revenue also increased by 6.3 percent, to $366 million from $344 million. The stock rose 64 cents to $57.98.

http://cbs.marketwatch.com/news/newsfinder/pulseone.asp?dateid=38267.3412731481-822807546&siteID=mktw&scid=0&doctype=806&property=symb&value=&categories=&

Dillard's Sept. same-store sales fell 3% (DDS) By Leslie Wines
NEW YORK (CBS.MW) - Dillard's (DDS) Thursday said its same-store sales for the month of September declined 3 percent, due partly to the impact of hurricanes. Total sales for the period were $688.8 million, down from $707.7 million in the year-earlier month. The stock Wednesday gained 3 cents to $19.78.

Sears - down
Target - up
Payless Shoes - down
Mays Dept - down
Penneys - flat
Dollar General - up

...especially for kids that have outgrown last year's clothing.

9:18am 10/07/04 BANK OF AMERICA TO CUT 4,500 JOBS

will post a link as soon as it becomes available.

:(

edited to add link:

http://cbs.marketwatch.com/news/newsfinder/pulseone.asp?dateid=38267.3926041667-822814649&siteID=mktw&scid=0&doctype=806&

Bank of America to layoff 4,500 employees (BAC) By David Weidner
NEW YORK (CBS.MW) -- Bank of America said it will lay off 4,500 employees, or 2.5 percent of its workforce, as part of its integration of FleetBoston Financial. BofA (BAC) based in Charlotte, N.C., said the cuts will cost $150 million in severance from the third quarter of 2004 through the first quarter of 2005. The cuts will come mostly from back-office positions. Shares of BofA closed up 53 cents to $45.25 on Wednesday.

briefing.com

9:15 ET S&P futures vs fair value: -1.4. Nasdaq futures vs fair value: -3.5. More of the same in the futures market, which is to say buyers are showing some reserve at the moment... Rising oil prices and some reluctance to commit to positions ahead of tomorrow's employment report and presidential debate are helping to keep things in check

8:55AM: S&P futures vs fair value: -0.9. Nasdaq futures vs fair value: -2.0.

8:34AM: S&P futures vs fair value: -1.3. Nasdaq futures vs fair value: -4.0. Initial claims checked in better than expected (335K vs 355K consensus), but hasn't had much impact on the futures market, which is cognizant that the Sept. employment report is due out tomorrow... while improved since our last update on the futures market, current indications still suggest the cash market is likely to start the session on a slightly lower note

8:10AM: S&P futures vs fair value: -1.1. Nasdaq futures vs fair value: -5.0. Futures market is trading lower this morning in the face of rising oil prices (+$0.48 at $52.50) and some generally unimpressive same-store sales results from retailers... As such, the cash market is projected to start the day on a modestly negative note

ino.com

The December NASDAQ 100 was slightly lower overnight due to light short covering as it consolidates some of Wednesday's rally, which led to a breakout above the 75% retracement level of the June-August decline crossing at 1476.55. Stochastics and the RSI are bullish but overbought hinting that a short-term top might be in or is near. If December extends the rebound off August's low, a test of test of the July 5th reaction high crossing at 1500.50 is the next upside target. Closes below the 10-day moving average crossing at 1436.60 would temper the bullish outlook in the market. The December NASDAQ 100 was down 3.00 pts. at 1476 as of 5:48 AM ET. Overnight action sets the stage for a steady to weaker opening by the NASDAQ composite index later this morning.

The December S&P 500 index was slightly lower overnight due to light profit taking as it consolidates some of Wednesday's rally. If the rally continues, a test of June's high crossing at 1146.50 is possible later this week. Stochastics and the RSI are bullish but very overbought hinting that a short-term top might be in or is near. Closes below the 10-day moving average crossing at 1124.61 would temper the friendly outlook in the market. Overnight action sets the stage for a steady to weaker opening when the day session begins later this morning. .

Dow 10,214.99 -24.93 (-0.24%)
Nasdaq 1,970.08 -0.95 (-0.05%)
S&P 500 1,139.39 -2.66 (-0.23%)
10-Yr Bond 4.234% +0.010

NYSE Volume 56,762,000
Nasdaq Volume 124,595,000

9:34am 10/07/04 FED'S FERGUSON WARNS AGAINST EXAGGERATING OUTSOURCING

9:31am 10/07/04 FED'S FERGUSON: PROTECTIONISM WON'T LOWER TRADE DEFICIT

9:30am 10/07/04 FED'S FERGUSON: CURRENT ACCT DEFICIT CAN'T RISE FOREVER

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

snip>

The homebuilders are among the most hotly debated sectors in the financial markets right now. On Monday evening, Pulte Homes revised its third quarter and full year guidance downward due to signs of tempering home price increases in the Las Vegas region. Apparently in the past few months, new home inventory in the area has nearly tripled. Pulte’s Las Vegas cancellation rates have skyrocketed to 75% in September. This compares to an industry average of 25%.

Pulte has been the most aggressive homebuilder in raising prices in Vegas and clearly buyers showed that there is a limit to these price increases. Management said that the cancellation rates were so high because homeowners were having problems selling their existing homes (they bought a new house before they sold the old one), and that customers were better off canceling and buying a cheaper house as prices have declined to that extent.

Pulte management confirmed that they are undertaking what many would consider drastic measures to decrease their cancellation rates in Vegas. For instance, if a home buyer had purchased a home for $200K and their home was in the “backlog” as they say in the homebuilding business, Pulte is calling the customer and offering to lower the price to $180K (an example) so that the customer won’t cancel. Because homebuilders have been able to aggressively raise prices of homes in areas like Las Vegas, Southern California, and Washington DC, all these price increases have gone directly to the bottom line. While Pulte is saying that this is a Las Vegas-specific issue, if similar dynamics present themselves in other parts of the country, we could see significant earnings revisions at many of the homebuilders.

This also chips away at one of the main pillars of the bullish story on the homebuilders. Investors have argued that residential real estate is supply constrained and homebuilders are simply creating supply for the excess demand. At the beginning of the year, Pulte said there was about 1,400 homes for sale, new and existing combined. Currently, there is about 14,000. This ten-fold increase was caused by the aggressive price acceleration and one of the basic tenets of economics, higher price produces higher supply.

higher price produces higher supply

that sword swings both ways:

higher prices - fewer buyers - higher supply

higher prices - more speculators in the game - more construction - higher supply

and as the sword swings back:

oversupply of construction -flooded market - lower prices

So now traders have decided to start worrying about oil???

Oil Weighs, Stocks Open Lower

NEW YORK (Reuters) - U.S. stocks opened lower on Thursday as rising oil prices and lackluster September sales reports from retailers overshadowed a government report showing a decline in weekly jobless claims.

http://story.news.yahoo.com/news?tmpl=story&ncid=1196&e=1&u=/nm/bs_nm/markets_stocks_dc&sid=95609877

...short blurb...

NEW YORK (Reuters) - Top U.S. retailers, including Wal-Mart Stores Inc. (WMT.N: Quote, Profile, Research) , reported lackluster September sales on Thursday, as warm weather and string of hurricanes that battered the East Coast dampened buying.

The soggy sales prompted many retailers to curb their enthusiasm about third-quarter results. AnnTaylor Stores Corp. (ANN.N: Quote, Profile, Research) slashed its earnings forecasts for the rest of the year, and Federated Department Stores Inc. (FD.N: Quote, Profile, Research) said that the modest improvement in September sales was "not enough to predict a robust October."

Wal-Mart, the world's biggest retailer, reported a 2.4 percent gain in September sales at its U.S. stores open at least a year -- a key retail gauge known as same-store sales.

-cut-

Still, the news was largely bleak.

"The magnitude of the misses can't be explained away by hurricanes and an Indian summer," John Morris, retail analyst at Harris Nesbitt, said. "We clearly have evidence of the consumer slowing in the last two weeks (of September), and some of the retailers are backing off of saying we'll see a significant rebound in October."

more...

http://www.reuters.com/newsArticle.jhtml?type=businessNews&storyID=6441132

10:08
Dow 10,200.25 -39.67 (-0.39%)
Nasdaq 1,963.77 -7.26 (-0.37%)
S&P 500 1,137.63 -4.42 (-0.39%)

10-Yr Bond 4.222% -0.002
NYSE Volume 205,416,000
Nasdaq Volume 304,622,000

http://cbs.marketwatch.com/news/newsfinder/pulseone.asp?dateid=38267.4207407407-822818223&siteID=mktw&scid=0&doctype=806&

SAN FRANCISCO (CBS.MW) -- Crude futures tapped a high of $53 in early New York trading as traders remained concerned about global supplies of the commodity. "Heating oil supplies should be building at this time of year yet they are falling," according to a report Wednesday from the Energy Department, said Phil Flynn, a senior analyst at Alaron Trading. November crude was last at $52.92, up 90 cents.

http://cbs.marketwatch.com/news/newsfinder/pulseone.asp?dateid=38267.420162037-822818145&siteID=mktw&scid=0&doctype=806&

WASHINGTON (CBS.MW) -- The U.S. is not worried that foreigners who've purchased hundreds of billions of dollars of government securities in past years will sell or suddenly stop buying, said U.S. Assistant Treasury Secretary Randal Quarles on Thursday. It would not be in the interest of foreign central banks and others to dump their Treasury holdings suddenly, he said. Even if foreigners' appetite for U.S. bonds were satiated, he said, "someone else would step up to buy at roughly the same price."

Dow 10,203.05 -36.87 (-0.36%)
Nasdaq 1,967.02 -4.01 (-0.20%)
S&P 500 1,137.88 -4.17 (-0.37%)
10-Yr Bond 4.214% -0.010

NYSE Volume 279,434,000
Nasdaq Volume 392,109,000

10:00AM: Market is on the defensive in the early-going with the pharmaceutical stocks acting as the biggest weight... To that end, Merck (MRK 30.44, -1.23) and Pfizer (PFE 29.29, -1.89) are leading the blue chip decline as investors have been unnerved by a New England Journal of Medicine report indicating heart trouble is not solely a Vioxx problem - and that it extends across the entire class of cox 2 inhibitors, including Pfizer's Celebrex and Bextra... Other laggards of note include the health care supplies, homebuilding, and telecom groups...

Retail is helping to limit losses in the broader market as several issues, like Abercrombie & Fitch (ANF 35.11, +3.11), Gap (GPS 19.53, +0.55) and Limited (LTD 23.25, +1.37) trade higher in the wake of their September same-store sales results... NYSE Adv/Dec 904/1569, Nasdaq Adv/Dec 906/1410

Dow 10,186.83 -53.09 (-0.52%)
Nasdaq 1,962.59 -8.44 (-0.43%)
S&P 500 1,136.29 -5.76 (-0.50%)
10-Yr Bond 4.236% +0.012

NYSE Volume 462,001,000
Nasdaq Volume 623,742,000

11:00AM: A fairly narrow trading range for the major indices thus far as the bulk of their losses occurred shortly after the start of the session... By and large, buyers have been a reluctant bunch and the indices have been stuck in negative territory; currently, they are hovering near their lows for the day... Semiconductor stocks remain a pocket of relative strength as evidenced by the SOX Index, which is posting a slight gain for the session, supported by the likes of Intel (INTC 21.31, +0.18), KLA-Tencor (KLAC 43.58, +0.27), and Linear Technology (LLTC 38.00, +0.14)... NYSE Adv/Dec 1053/1830, Nasdaq Adv/Dec 1037/1658

10:35AM: Market has been knocked down in the early-going, but it hasn't been knocked out as strength within the retail sector is helping to offset losses in the health care sector... Beyond retail, though, the leadership is limited as traders, to this point, have been a bit reluctant to commit to long positions ahead of tomorrow's employment report, which is anticipated to invite some volatile trading conditions... The market has been resilient in the face of rising oil prices, and lately, has shown a propensity to be moved more by an intra-day dip in oil prices than an intra-day increase...

At the moment crude futures are up $0.53 at $52.55 versus an earlier high of $53...NYSE Adv/Dec 984/1769, Nasdaq Adv/Dec 904/1655

and we still have not "recovered" to the path of scandal-free steady growth in all sectors of the economy.

In the "growth" column:
*CEO pay
*trade deficits
*uninsured workers
*energy prices
*healthcare prices
*food prices
*the size of government
*consumer debt
*outsourcing

In the "yet-to-recover" column:
*average wages, minimum (living) wage
*employment opportunities commensurate with numbers of workers entering the work force
*job security
*manufacturing
*dollar valuation

in my files (the link no longer works) and found this:

http://www.eubusiness.com/cgi-bin/item.cgi?id=103860&d=101&h=240&f=56&dateformat=%o%20%B%20%Y

Confidential EU paper spells out economic gloom of war on Iraq

by Jitendra Joshi

BRUSSELS, Feb 19 (2003) (AFP) - An EU country that fights in a war against Iraq may be allowed to relax strict rules governing the euro zone in the worst-case scenario of worldwide recession, said a confidential document obtained by AFP Wednesday.

The European Commission study, which was presented to a meeting of EU finance ministers on Tuesday, lays out four scenarios for the economic impact of a war on Iraq:

-- oil prices undergo a sharp but short hike as during the Gulf War of early 1991.

This implies an average price for a barrel of oil of 43 dollars in the first quarter of 2003, compared to 30 dollars at the start of February.

Such a scenario would knock 0.1 percentage points off EU growth and add 0.1-0.2 percentage points to inflation in 2003, the document said.

-- Oil prices stay high for months longer, doubling to an average of 57 dollars per barrel in the first quarter of 2003. Under this scenario, growth would suffer by 0.3-0.4 percentage points, and inflation would rise by 0.5 points.

-- Oil prices go up for much longer, remaining above 35-40 dollars per barrel "for a few years instead of coming down already in the second quarter".

This would dent growth by 0.2-0.4 percentage points each year for the next two-three years. Inflation could rise by 0.7 percentage points this year, and by 0.4 and 0.2 points over 2003-2004.

-- Not only do oil prices rocket, but economies crash across the board because of a slump in consumer confidence, investment, stock markets, tourism and trade. A more volatile euro-dollar exchange rate could also be expected.

In this worst-case scenario, the world and EU economies tumble into recession, with 2003 growth in the euro zone contracting by 1.3-1.4 percent.

The policy response would be a challenge for governments and central banks, the paper acknowledged.

...more...

if you want the entire article, PM me and I will forward the balance

fore nor hind sight. Guess he's just blind, or dumb as a rock, or perhaps just a horses ass.

Dow 10,162.12 -77.80 (-0.76%)
Nasdaq 1,954.44 -16.59 (-0.84%)
S&P 500 1,132.89 -9.16 (-0.80%)
10-yr Bond 4.24% +0.016
30-yr Bond 4.991% +0.021
NYSE Volume 767,960,000
Nasdaq Volume 985,296,000

12:30PM : Indices continue to languish near their lows for the session as buyers haven't shown much giddy-up today... Market internals reflect the advantage held by sellers as the A/D line shows decliners leading advancers by a better than 2-to-1 margin at both the NYSE and Nasdaq... From a market-cap standpoint, the small- and mid-cap issues appear to be experiencing the most selling pressure as the Russell 2000 and S&P 400 Midcap Index are down 1.1% and 0.9%, respectively...
The specter of tomorrow's employment report is perhaps encouraging traders to step up profit taking efforts in some of the higher beta stocks that populate those indexes... NYSE Adv/Dec 918/2158, Nasdaq Adv/Dec 877/2022

12:00PM : Since the start of trading the major indices have been mired in negative territory with today's bearish bias being tied to the persistent rise in oil prices, anxiety ahead of tomorrow's employment report, and a sickly drug group... The latter circumstance stems from a disconcerting article in the New England Journal of Medicine that suggests heart trouble is not solely a Vioxx problem and that it extends across the entire class of cox 2 inhibitors, including Pfizer's Celebrex and Bextra...

Accordingly, investors have put Merck (MRK 30.50, -1.17) and Pfizer (PFE 29.65, -1.53) in their crosshairs today... Having done so, the Dow and S&P have been weighed down by their weakness which has spilled over to other drug stocks like Schering-Plough (SGP 18.12, -0.41), Johnson & Johnson (JNJ 56.41, -1.34) and Eli Lilly (LLY 59.73, -1.74)... The health care sector, in general, is getting beaten up as the biotech, health care supplies, and health care distributor groups also find themselves on today's list of worst-performing S&P industries... The retail stocks have been the one constant thus far in terms of strong groups...

That strength comes on the heels of September same-store sales results that could be characterized as unimpressive relative to expectations... A few standouts, though, like Abercrombie & Fitch (ANF 35.02, +3.02), Nordstrom (JWN 40.86, +1.81), and Costco (COST 44.74, +1.81), have helped contain the broader market's slide... Buyers, though, have been reluctant to this point to step up and buy the dips... Presumably, the release of the September employment report and the presidential debate, both of which will occur tomorrow, have acted as deterrents... Rising oil prices, of course, have also been a focal point...

Earlier this morning crude futures reached $53/bbl on the back of supply concerns, but have since pulled back some and are now up $0.38 at $52.40/bbl...NYSE Adv/Dec 844/2199, Nasdaq Adv/Dec 788/2053

11:30AM : Market is struggling to find a bid this morning as rising oil prices have been causing some slippage in the indices, which are at new lows for the day... Although oil prices are off their highs of the session, the pullback, unlike recent sessions, isn't provoking any buying interest... A general lack of leadership has been a limiting factor for the market as gains in the retail sector haven't been enough to overcome some widespread selling efforts that are reflected in the A/D line at the NYSE and Nasdaq... NYSE Adv/Dec 958/2014, Nasdaq Adv/Dec 824/1940

Advances & Declines (OUCH)
NYSE Nasdaq
Advances 932 (28%) 879 (28%)
Declines 2176 (66%) 2041 (66%)
Unchanged 177 (5%) 153 (4%)

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

Up Vol* 185 (25%) 442 (46%)
Down Vol* 527 (73%) 481 (50%)
Unch. Vol* 8 (1%) 22 (2%)

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

New Hi's 225 98
New Lo's 19 37

Huh? When did it become "giddy" or is it a horse?

http://www.latimes.com/business/la-fi-rup7.6oct07,1,3775731.story?coll=la-headlines-business

U.S. health insurance costs will rise 8% in 2005, lower than this year's increase, as employers boost fees for workers and monitor medical care for patients with chronic conditions such as diabetes, according to a study released Wednesday.

Use of disease-management programs and tougher negotiations with health insurers cut 2 percentage points from premiums for some businesses, according to the survey by consulting firm Towers Perrin. Benefit cuts trimmed costs further.

- I fear for the reputation of our country!

Bush, Hu Discuss N. Korea, Trade Deficit

http://www.latimes.com/news/nationworld/politics/wire/sns-ap-bush-china,1,254589.story?coll=sns-ap-politics-headlines

WASHINGTON — President Bush called Chinese President Hu Jintao on Thursday, reviewing U.S. positions on a wide range of delicate issues with the leader who is amassing new power in China.

Bush placed the call 2 1/2 weeks after former President Jiang Zemin handed over his last post as military chief. That move consolidated China's top party and military posts under Hu's control, giving him and his premier, Wen Jiabao, a freer hand to act.

The changes also raised the stakes in Bush's relationship with Hu, about two years after Hu became Communist Party leader.

White House spokesman Scott McClellan did not mention the shifts in Chinese politics, remaining vague on what prompted the call. He said it was "part of our continuing, constructive, cooperative and candid dialogue with China on U.S.-China relations."

The two leaders talked about several big-ticket issues between their countries, including the North Korea nuclear problem; Hu said his country remained committed to the stalled talks between the two Koreas, the United States, Russia, China and Japan. Three rounds of talks have been held in Beijing, but yielded little progress. A fourth round was set for September, but North Korea has refused to attend.

According to McClellan, Hu also committed to "move forward firmly and steadily to a market-based, flexible exchange rate."

...more...

http://www.nytimes.com/2004/10/07/business/07oil.html?oref=login

snip>

Normally, traders like volatility, because for them it is an opportunity to make money. But the rush to $50-plus oil has become a little rough even for seasoned traders, and many of them have decided to pull in their horns a bit.

That is because traders also like what is called depth, or liquidity, said Mr. Hopkins, who has been trading oil for two decades. When trading volume, in relation to the volatility of the market, is adequate, it smoothes price movements, whether they are up or down. Without adequate volume, there can be big, sudden jumps in the price from one trade to another. Those kinds of price gaps can turn a profit to a loss in an instant. And although a lot of new money from hedge funds and pensions has been chasing the oil price higher, it has not been enough to keep up with the rising volatility.

"Now you have a lot of volatility without the depth you used to have and that has made people pull back their positions," Mr. Hopkins said.

snip>

Among these is the large flow of money from hedge funds, many of them betting for months on higher oil prices. Data from the Commodity Futures Trading Commission show that oil bets from these kinds of speculators have been rising again in recent weeks and are back above their average for the year.

The total assets in hedge funds dedicated to investing in the energy sector had jumped to $3.27 billion at the end of the second quarter, from $2.39 billion at the end of 2002, when oil was around $31 a barrel, according to Hedge Fund Research Inc.

Analysts also say that money is flowing in from pension funds that believe that they need the kind of investment diversity that exposure to the commodities markets can bring to their portfolios.

more...

:eyes: There's that transformation of wealth as folks try to find the ever elusive return - from savings to investments to pure speculative gambling.

Dow 10,165.15 -74.77 (-0.73%)
Nasdaq 1,956.61 -14.42 (-0.73%)
S&P 500 1,133.58 -8.47 (-0.74%)
10-Yr Bond 4.251% +0.027
NYSE Volume 821,010,000
Nasdaq Volume 1,039,943,000

yesterday. But the S&P is getting close. I'll place my bet that the S&P is where the "hand" will come into play, but it's just a guess.

Support DOW=10180 S&P=1130 NAS=1930

http://money.cnn.com/2004/10/06/markets/gold/

snip>

But a weak dollar may not be the only thing driving gold prices. As with every other investment that's enjoyed a hot summer, including oil and U.S. Treasury bonds, some observers smell a whiff of speculation in gold prices and think a correction is due.

snip>

What could drive gold higher?
For one thing, there's always the chance that the dollar's decline could turn into a full-fledged rout, if foreign investors decide they've had enough of supporting America's wild deficit-spending binge. Oil prices could surge ever higher, slowing down the U.S. economy. Terror attacks could turn a slowdown into another full-fledged recession.

Eveillard said these are the kinds of disasters that would have to occur to drive gold much higher. But at $420 an ounce, it's become a fairly expensive insurance policy.

snip>

Like Eveillard of the First Eagle funds, Holmes says investors can't get rich trading gold or gold-related stocks, which rise and fall with the price of bullion. But he also recommends investors put 5-to-10 percent their money in gold and gold-related assets until the trouble for the U.S. dollar blows over -- which could take a while.

"Right now, we have negative real rates of return on Treasury bills and massive deficit spending," Holmes said. "Historically, a currency can't be strong with those two factors."

more...

1:00pm 10/07/04 FED'S BERNANKE URGES FED TO BE MORE TRANSPARENT

1:00pm 10/07/04 BERNANKE SAYS MORE INFO MAKES POLICY MORE EFFECTIVE

1:00pm 10/07/04 BERNANKE SAYS FED COULD SET CLEAR INFLATION TARGET

1:00pm 10/07/04 BENANKE SUGGESTS FED COULD PUBLISH ECON FORECASTS

1:00pm 10/07/04 BERNANKE TEXT HAS NO COMMENT ON ECONOMIC CONDITIONS

http://cbs.marketwatch.com/news/story.asp?guid=%7B364864D9%2D6DD4%2D48C8%2DBC60%2D780312EFF9F2%7D&siteid=mktw

WASHINGTON (CBS.MW) -- The Federal Reserve should take additional steps to be more transparent because monetary policy is more effective when the Fed gives the market guidance "on its outlook, objectives and plans," Federal Reserve Gov. Ben Bernanke said Thursday.

In a speech prepared for delivery to the Japan Society, Bernanke argued the Fed should consider groundbreaking reforms such as setting an explicit inflation target, and providing markets with a detailed economic forecast.

Bernanke said a key component of transparency is a public statement about future policy intentions.

"To the extent that a central bank talk provides useful guidance to markets about the likely future path of short-term interest rates, policymakers will exert greater influence over the longer-term interest rates that most matter for spending decisions," he added.

<snip>

A lively public debate is emerging among Fed officials over the issue of transparency.

On Wednesday, William Poole, the president of the Federal Reserve Bank of St. Louis, suggested the Fed may have already gone too far in telling markets about the prospective course of monetary policy.

...more...

2:12pm 10/07/04 FED'S BERNANKE SEES CURRENT ACCOUNT DEFICIT EXPANDING

http://cbs.marketwatch.com/news/newsfinder/pulseone.asp?dateid=38267.5982291667-822839824&siteID=mktw&scid=0&doctype=806&

Fed's Bernanke sees current account deficit expanding By Greg Robb
NEW YORK (CBS.MW) -- The U.S. current account deficit will continue to expand in the near term, said Federal Reserve board governor Ben Bernanke. "It will take concerted policy actions on our part and the part of our trading partners," to contract the deficit, Bernanke said during a question and answer session after a speech to the Japan Society. As part of this effort, the U.S. should take steps to increase domestic savings and Japan should open its domestic economy. Bernanke said shrinking the U.S. current account deficit is not only in the U.S. interest, but also in the interest of its major trading partners.

http://quote.bloomberg.com/apps/news?pid=71000001&refer=commodity_futures&sid=ajyQRZfX2_jE

Oct. 7 (Bloomberg) -- Copper prices in New York rose to a 15- year high amid forecasts that demand will outpace supply from mines and scrap yards.

Copper futures for December delivery rose 1.4 cents, or 1 percent, to $1.437 a pound at 11:15 a.m. on the Comex division of the New York Mercantile Exchange after reaching $1.4385, the highest since April 1989. A futures contract is an agreement to buy or sell a commodity at a specific price and date.

Prices have jumped 37 percent this year with a global supply deficit forecast at 701,000 metric tons in 2004 by the International Copper Study Group in Lisbon.

`` This is a huge bull market,'' said Steven Savitsky, a copper trader at Broken Story.

http://moneycentral.msn.com/content/invest/forbes/P96412.asp

snip>

As oil prices continue to rise, U.S. gasoline prices are increasing in response, and economists are starting to take notice. For now, few are predicting a return to recession, despite the fact that oil price spikes in 1981, 1990 and 2000 all tugged recessions in their wake. After years of ignoring inflation in reporting "record" oil prices, now most reports can't talk about it enough, pointing out that oil prices are still not at the inflation-adjusted levels of 1981.

But oil prices are today much higher -- even adjusted for inflation -- than they were in 1990 and 2000. And compared to earlier decades, a greater percentage of U.S. oil is imported, so more of the price hike flows overseas.

Less room for maneuvering
Still, according to an interesting report from Goldman Sachs (GS, news, msgs), oil, even with the price surge, is not the biggest macroeconomic problem for the U.S. right now. Bigger problems: the loss of tax stimulus and "the waning of mortgage equity withdrawal." Goldman economists said they are not changing their forecast for U.S. gross domestic product growth, which they project at 3.5% for the second half of 2004, but they are starting to rethink and may rethink even harder if oil prices do not fall back to $36 per barrel, as Goldman expects they will.

Of greater concern, they said, is that household finances are stretched after a wave of home mortgage refinancing (including trade-ups to larger homes with less equity in the second home). Also troubling is the loss of tax stimulus to the economy as some tax cuts garnered by consumers in the last two years will end this year. Those two factors could put a damper on consumer spending, which is 70% of GDP. Both have had a greater effect than the rise in oil prices, Goldman said.

snip>

A spike that's beginning to look permanent
Like most economists, Goldman sees $50 for a barrel of oil as a price "spike." Its GDP forecasts assume oil prices will settle back to $36. Recently there has been political turmoil in oil-producing nations like Russia, Venezuela, Nigeria, Iraq and even Saudi Arabia. Just last month U.S. Treasury Secretary John Snow said, "I think there's a recognition that this $50 price is the result of an anomalous set of circumstances" resulting in part from the current "geopolitics of oil."

But while political trends shift on a dime -- including for the worse -- at least part of the rise in oil prices looks to be from "permanent" factors like increasing demand from China and India...

more...

http://www.iht.com/articles/542486.html

In an act of pre-election largess, U.S. House and Senate negotiators have approved a sprawling corporate tax bill that would shower corporations and farmers in politically sensitive states with about $145-billion worth of new tax cuts.
.
Hopint to get backing from Southern Democrats, Republican leaders on Wednesday included a $10 billion buyout for tobacco farmers to be paid for by taxpayers. But they rejected a Senate provision to link that buyout with a requirement that cigarette companies be subject to regulation by the Food and Drug Administration.

snip>

The agreement involves the cozy deal-making that often characterizes pork-barrel politics.
.
The big winners include General Electric, Exxon Mobil, electric utilities, movie producers, and agricultural producers.
.
Keith Ashdown, vice president for policy at Taxpayers for Common Sense, a public advocacy group in Washington, said: "This legislation is an early Christmas gift for corporate fat cats."

more...

(trying for the Churchlady voice)

The big winners include General Electric, Exxon Mobil, electric utilities, movie producers, and agricultural producers.

Those groups suffer so dreadfully in this economic boom. /sarcasm

like who gained the most? Puts the "farmers", who I thought were supposed to get the greatest benefit, at the end of the list. I'll bet by agriculture producers they meant tobacco companies more than the growers. :shrug:

are not "farmers".

They are despicable polluters and despoilers of the earth. They care not a whit about the world, the land or the consumer.

I wish someone with half a brain would rip every subsidy right out of their pockets and kick them to the curb.

(end of rant)

tomorrow with the indices on the defensive. Bwahahaha!

http://www.crn.com/sections/breakingnews/dailyarchives.jhtml?articleId=49900078

Unisys plans to cut 1,400 jobs, or nearly 4 percent of its workforce, and consolidate some facility space, moves that will help yield annualized savings of about $70 million a year by 2005.

The computer-services company, which employed 37,000 workers worldwide as of July, said in a statement Wednesday that the cost-cutting would result in an after-tax charge to earnings of about $63 million, or 19 cents per share, in this year's third quarter.

Unisys spokeswoman Elizabeth Douglass declined to comment on where the cuts would take effect. :eyes: any bets?

The company also said it would have an after-tax benefit in the third quarter of about $70 million, or 21 cents per share, related to the settlement of audit issues dating from the mid-1980s.

more...

http://cbs.marketwatch.com/news/newsfinder/pulseone.asp?dateid=38267.605787037-822841183&siteID=mktw&scid=0&doctype=806&property=symb&value=&categories=&

WASHINGTON (CBS.MW) -- The Federal Reserve's task to keep inflation low over the past 17 years was made easier by actions taken by former Fed chairman Paul Volker, said Fed chief Alan Greenspan. "Maintaining an environment of stability is simpler than restoring the public's faith in the soundness of our currency," Greenspan said in a speech prepared for delivery to a conference about Volcker's tenure as Fed chairman. In Oct. 1979, Volker sharply raised interest rates in a successful attempt to regain control over inflation.

Meanspin's life easier? Nothing would please me more than if this POS were stripped of his assets and left naked on the streets of Anchorage, Alaska.

(edited for html)

http://putinru.com/news/item/30852.html

President Vladimir Putin's economic adviser has warned that Russia is jeopardising its economic growth by drifting away from liberal market reforms and moving towards increased state intervention.
In an interview with the Financial Times, Andrei Illarionov said the effects of high oil prices were masking the damage done by poor economic policy over the past three years. He also criticised the government for allowing the controversy surrounding Yukos, the oil company, to escalate, and warned of "dire consequences" for the company.

"The quality of economic policy has got worse," said Mr Illarionov. "In 1999 and 2000 economic policy made a positive contribution to economic growth. The best economic policy was pursued in 1999. Since 2001, it has made a negative contribution to GDP growth." Mr Illarionov calculated that last year higher oil prices contributed 9.2 per cent to gross domestic product. But GDP increased only 7.3 per cent, so domestic factors cut growth by 1.9 percentage points.

"If we'd had stable external prices . . . wewould probably have had a fall in economic growth," said Mr Illarionov.

He has a reputation for challenging Russia's economic policymakers in public, but this is the first time he has launched such a comprehensive criticism of the government. His attack comes at a time when other officials have become increasingly careful of voicing dissident views in the face of growing authoritarianism in the Kremlin.

more...

http://cbs.marketwatch.com/news/newsfinder/pulseone.asp?dateid=38267.6251967593-822843091&siteID=mktw&scid=0&doctype=806&property=symb&value=&categories=&

WASHINGTON (CBS.MW) -- U.S. consumer credit contracted by $2.4 billion, or a 1.4 percent annual rate, in August to a seasonally adjusted $2.04 trillion, the Federal Reserve said Thursday. Revolving credit, such as credit cards, fell by $3.3 billion, or 5.4 percent. The fall was the seventh decline in nine months. Nonrevolving credit, such as auto loans, rose by $935 million, or 0.9 percent. July's increase in credit was revised to $11.2 billion from $10.9 billion earlier. Economists polled by CBS MarketWatch had forecast an increase of $6.3 billion in August.

Oopsie! I think that the consumer is finally thoroughly exhausted.

HedgeStreet launches cheap mart for individual investors

http://cbs.marketwatch.com/news/story.asp?guid=%7B349981E6%2D4FEB%2D4D09%2DB7CD%2DF2DEE8C6065C%7D&siteid=mktw

SAN FRANCISCO (CBS.MW) -- Exotic derivatives are going mainstream and down-market.

HedgeStreet launched this week, offering what it calls "hedgelets," which are akin to binary options but with a much lower price point: just $10 apiece, thereby carrying a much lower risk factor than other derivatives. Visit the site.

The wagers themselves also carry potentially broad appeal, including bets on average housing prices and federal economic data announcements.

Such wagers have previously been the domain of privately negotiated contracts called "exotics."

The exchange is also offering hedgelets based on conventional derivatives, such as interest-rate and commodity bets.

"Approximately 20 million Americans have online equity brokerage accounts but only a fraction of these actually trade derivatives. We believe that a fair portion of the remaining number are likely to participate over time, provided the methodology for doing so is easy to understand and it is financially and technically within their grasp," said Russell Andersson, co-founder and vice president of instrument generation, in a recent interview with FOW magazine.

...more...

Come on in, said the spider to the fly.

:-( Sounds like a cross between a hedghog and a pig....spikey and greedy.... Don't hear much about those Spyders and Diamonds anymore though...wonder why? :D

Silicon Investor - Editorial
... SPYders and DIAmonds are a better way to short the market, because they can be sold
on downticks and allow investors to short the market at intraday prices ...
www.siliconinvestor.com/insight/editorial.gsp?id=32368 - 19k - Supplemental Result - Cached - Similar pages[/i\

http://quote.bloomberg.com/apps/news?pid=10000082&sid=aNQElgb9EqQ0&refer=canada

Oct. 7 (Bloomberg) -- Canada's dollar reached a new 11-year high versus the U.S. dollar as prices of Canadian exports including oil, gold and copper surged in world markets. The dollar pared its gain when a central banker said the currency's rise may hurt growth.

Canadian companies price commodities in U.S. dollars and convert earnings to the local currency. Energy-related exports accounted for about a sixth of Canada's trade surplus in July. Commodity prices measured by Reuter's Commodity Research Bureau index rose to a 23-year high today.

``What's helping keep the Canadian dollar sustainable at these levels is the rally in commodity prices; it's allowing the Canadian dollar to hang in there,'' said George Davis, director of global markets research in Toronto at RBC Capital Markets, a unit of Canada's biggest bank by assets. ``It's really hard to argue with the move in the Canadian dollar.''

The currency jumped to 79.77 U.S. cents, the highest since March 30, 1993, before trading at 79.43 U.S. cents at 1:15 p.m. in Toronto. It reached 11-year highs three times in the last week. One U.S. dollar buys C$1.2579. Yesterday Canada's dollar closed at 79.44 U.S. cents.

...more...

Hey Trogl, can you spare a dime? :D

http://money.cnn.com/2004/10/07/news/economy/pension.reut/?cnn=yes

Solvency of fund that insures traditional pensions is 'at risk,' director tells lawmakers.

WASHINGTON (Reuters) - The longer-term solvency of the U.S. fund that insures traditional pensions is at risk, the director of the Pension Benefit Guaranty Corp. told lawmakers Thursday.

PBGC Director Bradley Belt said he expected to report a significantly increased deficit for fiscal 2004, which ended last Thursday, eclipsing 2003's record $11.2 billion deficit for the insurance fund.

"The longer-term solvency of the pension insurance program ... is at risk," Belt said in written testimony prepared for a Senate Commerce Committee hearing into the effect of pension policy and bankruptcy law on the airline industry.

The pension agency slipped into a deficit in 2002 after having to bail out major failed pension plans in the steel industry.

Since then, troubled major airlines have been straining the pension safety net.

US Airways is due in bankruptcy court later Thursday to argue its case for suspending pension payments after saddling the PBGC with $2.2 billion in liabilities from its last bankruptcy that ended in 2003.

...more...

More symptoms of the systemic wretchedness caused by this mal-administration's policies.

special? Cripes, and they worry about drugs from Canada. Yet that FDA is sure doing a fine job right here in the good ol' USofA. I, for one, am just so damned thankful they are here to protect me from those evil Canadian drugs. :puke: