STOCK MARKET WATCH, Thursday 21 October

WHY WAIT FOR THE ELECTIONS?

There are eight days of trading before voters head to the polls on November 2nd to decide the outcome of the Presidential elections, but it doesn’t look like the markets will be idle waiting for the elections to pass. The recent high level of complacency in the stock market has been confirming the popular belief that the U.S. stock markets and/or the U.S. dollar won’t go down ugly before the elections. In this time leading up to the vote I’ve been asking myself if the timing is really that simple or if the markets will have a mind of their own and begin to lean in the directions that we should see post election. Financial markets are normally friendly to the incumbent administration with a little easy money to juice a stock rally and keep the money flowing for everyone. Today we are seeing the dollar take another significant hit and stocks have declined seven out of the last ten sessions. If we continue to witness declining stock prices and a falling dollar through next week, Mr. Bush will face serious headwinds on Election Day.

Wall Street is absolutely littered with executives that have no ethics and no respect for the law…only lust for more money and power. It makes me sick!! You people that cook the books and lie are disgusting and I hope you jerks get some serious jail time!! With scandal after scandal, why shouldn’t investors lose confidence…nobody knows who to believe. Even the government statistics of CPI and PPI inflation along with employment and income data are being called into question. Some of the analysts I read are saying why bother with data that doesn’t paint the true picture. In the final analysis one must conclude that this game of bullishness and confidence is showing some major cracks, and for good reason. Once confidence and hope have left the stock market, there won’t be much to hold it up as economic momentum declines and corporate earnings flatten out.

-cut-

Big Daddy Deep Pockets!

Our record trade deficits and federal budget deficit have rendered the dollar fundamentally unsound. Foreign investment in the U.S. has declined consistently throughout 2004. With capital flows to the U.S. weakening, the dollar is coming under more pressure. Remember that the dollar dropped over 30% in purchasing power during the decline of 2002-2003, but it hasn’t been enough to slow down our imports which would help to correct our negative trade balance. The simple conclusion is the dollar must fall further. So far in 2004 the dollar has consolidated sideways with a trading range of roughly 87 to 93 on the U.S. Dollar Index since March. Today the dollar closed decisively below the 87 level at 86.45 which tells me this consolidation is resolving to another downside move rather than a dollar rally. I don’t believe we will get such a thing as a “synthetic short squeeze” on the dollar due to deflationary pressures…the Fed will make sure there’s enough liquidity to not allow it to happen. A stronger dollar will only make our longer-term problems even worse. With that said, the bearish scenario for the dollar is in place. Now on to gold and silver.

-cut-

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

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

Last trade 86.04 Change -0.31 (-0.36%)

http://futures.fxstreet.com/Futures/news/afx/singleNew.asp?menu=economicnews&pv_noticia=MTFH92401_2004-10-21_10-33-17_L21365517

GLOBAL MARKETS-Dollar down, gold up as economy risks weigh

LONDON, Oct 21 (Reuters) - Nagging concern over the U.S. economy battered the dollar on Thursday and European shares pared early gains as supply worries pushed U.S. crude oil <CLc1> up to within a whisker of $55 a barrel.

<snip>

Market watchers are becoming increasingly concerned about the quickening pace of dollar losses, unsure of official policy towards the greenback in the runup to next month's U.S. presidential elections.

"The long period of stability for the U.S. dollar may be coming to an end. It is too early to be definitive, but the slide against the euro and the yen seems to be gathering momentum," said Mark Tierney, international strategist at Macquarie Bank.

Further pointers to the strength of the U.S. consumer will be available with the 1230 GMT announcement of weekly jobless data, while markets will be looking for mild support from the Philadelphia Fed's factory survey and September leading economic indicators.

Investors will mark comments from Fed Board Governor Ben Bernanke, who speaks at 1600 GMT, amid growing suspicions that a widely-anticipated Fed rate hike in November could be the last for a while.

Speculation of fresh disappointments in the U.S. job market, could slow monetary tightening in the future, traders say.

"The market is slowly factoring in a slowdown in the (U.S.) economy and the pace of U.S. interest rate hikes," said Kenji Kobayashi, senior manager of forex at the Bank of Tokyo-Mitsubishi.

...more...

It's MaeveDay! Today's Reports:

Oct 21 8:30 AM
Initial Claims 10/16
report -
briefing.com anticipates 340K
market anticipates 345K
last report 352K
revised -

Oct 21 10:00 AM
Leading Indicators Sep
report -
briefing.com anticipates -0.2%
market anticipates -0.1%
last report -0.3%
revised -

Oct 21 12:00 PM
Philadelphia Fed Oct
report -
briefing.com anticipates 20.0
market anticipates 18.0
last report 13.4
revised -

Great 'toon, Ozy, and the wrap truly expresses the frustrations I feel with these corporate liars.

Have a Great Day Marketeers!

is holding gold down again today. B-)

http://www.fxstreet.com/nou/noticies/afx/noticia.asp?font=Reuters&pv_noticia=MTFH92270_2004-10-21_10-25-38_L21378991

snip>

"It's pretty much crunch time for the dollar. If it does break down, gold could take out $431. Barring that, gold could make a high between current levels and $431 and then retreat. It's delicately poised at the moment," a trader said.

Fundamentally, gold's upturn looks set to continue, because as well as dollar weakness, gold is also being supported by record high oil prices as a hedge against inflation, they said.

"This move in the dollar looks increasingly like a sustained break lower and this is likely to see the dollar-denominated gold price move higher," John Reade of UBS said.

However, speculative liquidation is likely to cap the move higher at some point, he added.

On the charts, the next target is the $428.95 and $430.40 peaks hit in April, with the key objective the $430.50 high of January. Above here, the market would be at levels last seen in December 1988.

more...

NEW YORK (Reuters) - The dollar weakened across the board on Thursday, forging new lows as a deepening sense of gloom over the U.S. economic and external deficit picture weighed on sentiment, analysts said.

That, combined with the recent break of key technical chart support levels and warnings from Federal Reserve (news - web sites) officials on the unsustainability of the current account deficit, is putting the dollar under severe pressure, they added.

"You've got a combination of fundamental and technical factors which is sending the dollar lower," said Alex Beuzelin, senior strategist at Ruesch International in Washington, D.C.

Those fundamentals include soaring oil prices, falling U.S. bond yields, mixed economic indicators and record U.S. external deficits.

http://story.news.yahoo.com/news?tmpl=story&ncid=1196&e=4&u=/nm/bs_nm/markets_forex_dc&sid=95609877

http://cbs.marketwatch.com/news/newsfinder/pulseone.asp?dateid=38281.5095023148-824264476&siteID=mktw&scid=0&doctype=806&

CHICAGO (CBS.MW) -- The U.S. dollar's decline was aggravated by a report on business activity in the Philadelphia region. The report's headline number was much stronger than expected, at 28.5 percent vs. 13.4 percent. But details, including a sharp drop in the employment index to 14.1 from 21.5, weighed on the U.S. currency. The dollar was quoted at 107.39 yen vs. 107.42 yen before the data. The euro was at $1.2625 vs. $1.2612.

won't be able to see the numbers for another 12 minutes - 30 minute delay in chart :(

http://www.businessweek.com/print/bwdaily/dnflash/oct2004/nf20041021_1307_db035.htm

Having hit a six-month high, the precious metal seems to be saying America's recovery "isn't that great." Not everyone agrees, though

snip>

"Gold is a store of value when uncertainty is out there," says Michael Cuggino, manager of the Permanent Portfolio Fund (PRPFX ), which keeps about 20% of assets in gold. "It could be the pace of the economic recovery isn't that great," he says.

Stock investors seem to be coming to the same conclusion. The Dow Jones industrial average fell back below 10,000 yet again (it closed at 9,887 on Oct. 20) as Wall Street worries about less-than-stellar third-quarter corporate profits, rising energy costs, and declining consumer strength.

snip>

"Whenever you see gold going higher and the stock market treading water or going lower, it indicates to me that people are looking for alternatives," says Ed Giobbe, president of ESG Capital Management in New York. He invests about 10% to 25% of client assets in gold. "Those trends tend to last a long time."

snip>

Talk to Wayne Angell, a former member of the Federal Reserve Board who now has his own economic consulting firm, Angell Economics, and he'll tell you gold prices are actually declining -- relative to an index of other commodity prices, that is.

He doesn't think the Fed will need to raise rates to keep wages and prices in check. "Inflation isn't possible unless we get an increase in wages that enables workers to buy the products at higher prices," he says. "Clearly that hasn't happened." Pay is up just 2.3% year-over-year in the U.S. "Anyone that thinks inflation is a problem is simply out to lunch," he says.

more...

http://www.bmsinc.ca/content/view/106/48/

Gold – casually mention the word to a group of investment-minded friends and colleagues and watch as it inspires a visceral reaction, since people either love gold or hate it; there aren’t many who feel ambivalent toward it. Those who love it realize that gold has been the ultimate store of wealth for over 3,000 years, while various paper currencies have come and gone. Those who hate it maintain that gold is an “archaic relic”, no longer relevant in a world where the majority of business transactions are carried out with a few clicks on a computer keyboard, and money is nothing more than a digital entry on a computer.

Or is the antagonism toward gold because they realize that a rising gold price makes them uncomfortable? Subconsciously the disbelievers may sense that a rising gold price is like an economic barometer forewarning of a coming financial storm.

Since 1971, when Richard Nixon ended convertibility of the US dollar into gold, various myths and misconceptions have been circulating, influencing people’s opinions and resulting in a number of unfounded myths that have dogged the yellow metal.

more...

:spank::spank::spank::spank::spank::spank::spank::spank:
:spank::spank::spank::spank::spank::spank::spank::spank:
:spank::spank::spank::spank::spank::spank::spank::spank:

the usual subscription. :wtf:

http://www.fallstreet.com/oct2104.php

Dollar Daze Give Gold Commercials Sleepless Nights
By Brady Willett


On Monday the U.S. Treasury Department reported that net foreign capital flows into the United States were $59 billion in August, down from $63 billion in July. The Treasury Department also noted that for the first time in a year foreign private investors sold more Treasury bonds and notes than they bought. While this dated data alone would have been enough to give FX traders pause, other lingering issues – including $55+ oil and US current account deficit fears – have also played a role in currency dealings this week. For those of you keeping score, the currency being dealt down the most has been the U.S. dollar.

With the dollar in a renewed slump the price of gold has rallied to 6-month highs. The current gold rally is potentially dreadful news for the commercials, which have – unlike most rallies in recent years – positioned themselves for a gold decline before one is due.

snip>

Election Stability Gone Wrong

One reason why the commercials may have been adding to their short position over the last two weeks is that they wanted to be positioned to profit from a stable dollar/lower gold outcome before the U.S. elections (many have speculated that hidden forces would keep the U.S. dollar stable at least until after the election). However, with this theory showing signs of stress/death, the story now could be that the commercials are awaiting a November rebound in the dollar and a subsequent sell off in gold (or the post election ‘all is well’ rally in the dollar). Some statistics back this, albeit weak, theory. Notably the flows which spooked the markets this past Monday:

Over the last decade September and October are, on average, the two worst months for net foreign capital inflows, while November is the second strongest month for net foreign inflows.

Some crazed equity bulls have undoubtedly placed bets on the weak stock market breaking out of its funk in late October (as it often does). For that matter gold speculators have probably arrived on the scene over the last 6 trading sessions hoping that December gold will bring them profits (as it often does). Failing to profit from a stable dollar/unstable gold outcome for most of October, the commercial shorts may be betting on rebound in the dollar leading into November and/or after the elections.

more...

85.90 compared to what? Is there a magic number cobbled up out of something like the price of a loaf of bread (my favourite indicator)?

http://www.321gold.com/editorials/mackenzie/mackenzie102104.html

One Point Six Trillion Dollars, that's a whole lotta JING, but all in a day's trading for Uncle Buck. The Price of Loyalty to the Globe's Reserve Currency is increasing hourly. The trials and tribulations of King Dollar (aka Federal Reserve Note Confetti) are self evident:



The delicate fabric, finely woven 33 years ago by the Nixon Administration is beginning to fray. Yesterday's announcement by "Strong Dollar" prankster, Secretary of Treasury, John Snow, appears to have been received for what it was... an act of cowardice on the part of an Administration whose Policy "Faith" has already been seriously undermined by the rest of the Globe's ACTION Strategies.

If you doubt who controls the future direction in this war of words between the Administration and the Federal Reserve, follow the above chart closely. In my opinion the Central Bankers have let loose, sans Japan, of course, but they'll fall on the sword awhile longer as they are in as bad a shape as the United States.

Integrity, Character and Priorities should shape a Nation's Policies, but without STRATEGY grounded in the confines of knowledge and intelligence, we are adrift and at the mercy of our counterparties in the Global Financial Community.

We are quickly arriving at the "Double Bind" inflection point, whereby those holding our Treasury Bills, Notes and Bonds must decide how badly they are willing to be beaten for having swallowed Alan Greenspan and Company's Faux Recovery. In simple terms it amount to a "Table Tilt" at the World Championship of Liar's Poker. He who gets to the Cashiers window first... loses the least. The winner will not likely emerge for sometime, but I would venture a guess that the one with the most at stake ends up the BIG LOSER.

more...

Heh-heh, I just like the title. :evilgrin:

http://www.reuters.com/printerFriendlyPopup.jhtml?type=reutersEdge&storyID=6570834

LONDON (Reuters) - Lasting imbalances in the United States' economy are coming back to haunt the dollar as the U.S. recovery appears to lose momentum, and analysts are warning that new lows for the greenback may be on the cards again.

This shift in market focus toward the structural problem of the current account deficit threatens the return of a broad dollar downtrend, which had led the currency to record lows against the euro in February after a two-year decline, they said.

"With the economic story diminishing, people are again focusing on the underlying structural issues," said Michael Metcalfe, senior strategist at State Street in London. "And if this cyclical support continues to fade we could easily see euro/dollar break new records."

snip>

"The structural problems were always there. But cyclical strength in the U.S. economy and expectations of interest rate hikes were masking them," said Mansoor Mohi-Uddin, chief currency strategist at UBS in London.

"What has now happened is the current account deficit has gotten wider at a time when markets began to question the cyclical story," he said. "To break new levels already this year will be tough. We are more likely to see a slow grind lower."

STRUCTURAL FEARS

snip>
WHO'S ON THE BANDWAGON?

snip>

Many European manufacturers had scaled down their hedging of currency risk since, when the euro and the dollar were locked in trading ranges throughout much of this year. But a new wave of hedging could accentuate the dollar's fall, analysts said.

"Many corporates do not realize yet that the current account is a problem," said Thomas Stolper, global market economist at Goldman Sachs in London. "But they will undoubtedly become a factor when we have taken out those record euro highs because then they will become nervous."

8:29am 10/21/04 U.S. WEEKLY JOBLESS CLAIMS FALL 25,000 TO 329,000

8:30am 10/21/04 U.S. 4-WK AVERAGE INITIAL CLAIMS OFF 5,500 TO 348,250

8:30am 10/21/04 U.S. CONTINUING CLAIMS FALL 8,000 TO 2.8 MILLION

8:30am 10/21/04 U.S. WEEKLY INITIAL JOBLESS CLAIMS AT 6-WEEK LOW

8:30am 10/21/04 HOLIDAY MAY BE FACTOR IN DROP IN CLAIMS: LABOR DEPT.

http://cbs.marketwatch.com/news/newsfinder/pulseone.asp?dateid=38281.3543287037-824245161&siteID=mktw&scid=0&doctype=806&property=symb&value=&categories=&

WASHINGTON (CBS.MW) - First-time seasonally adjusted claims for state unemployment benefits fell by 25,000 to 329,000 in the week ending Oct. 16, the Labor Department reported Thursday. It's the lowest level in six weeks. A Labor Department spokesman noted that initial claims are often volatile during holiday weeks, despite attempts to adjust the data. The less-volatile four-week average of new claims dropped by 5,500 to 348,250, the lowest in three weeks. The number of former workers continuing to collect state unemployment checks fell by 8,000 in the week ending Oct. 9 to 2.798 million, the lowest in three months.

You know they (Bush, McClellan, et al) will not be able to leave this one alone. They'll trumpet this a triumph of their policies - because it could have been a lot worse.

Jobless Claims Dip; Labor Recovery Growing

WASHINGTON - The number of new people signing up for jobless benefits fell sharply last week, offering a dose of encouraging news that the recovery in the labor market may be strengthening a bit.

The Labor Department (news - web sites) reported Thursday that new filings for unemployment insurance declined by a seasonally adjusted 25,000 to 329,000 for the week ending Oct. 16. That marked the lowest level since early September. In the prior week, claims had climbed by 16,000.

-cut-

President Bush (news - web sites) and his Democratic opponent, John Kerry (news - web sites), frequently spar over the health of the economy and the availability of jobs in the United States. Bush says his tax cuts helped the economy to rebound from the 2001 recession. Kerry contends the tax cuts mainly benefited the wealthy and plunged the government's balance sheets deeper into red ink.

http://story.news.yahoo.com/news?tmpl=story&ncid=1203&e=1&u=/ap/20041021/ap_on_bi_go_ec_fi/jobless_claims&sid=95609868

pinkslips will appreciate *Co's spew.

http://www.chron.com/cs/CDA/ssistory.mpl/business/2858437

Motorola spinoff
to slash 1,000 jobs

AUSTIN - Freescale Semiconductor plans to cut at least 1,000 jobs from its worldwide operations, the company said as part of its second earnings report since going public in July after being spun off from Motorola.

The layoffs, which will affect about 4.5 percent of the Austin-based company's global work force, are part of an effort to streamline operations and reduce spending, Michel Mayer, Freescale's chairman and chief executive, said this week.

Freescale said it expected to record about $65 million in fourth-quarter restructuring charges because of the layoffs and related streamlining.

On Wednesday, a company spokesman declined to say how many of the cuts would be in Austin.

About 6,600 workers in Freescale's 22,000-member worldwide work force are based in Austin.

The layoff notices keep piling in and no matter how the numbers at the bls get massaged, people that suddenly can't pay their bills and can't find a job are going to find that they have lots of company.

8:51am 10/21/04 ELI LILLY TO DISCONTINUE R&D IN INFLAMMATION

8:52am 10/21/04 ELI LILLY TO CLOSE RTP LAB IN NORTH CAROLINA

8:50am 10/21/04 ELI LILLY TO CUT ABOUT 1,000 JOBS

http://cbs.marketwatch.com/news/newsfinder/pulseone.asp?dateid=38281.3721643519-824247555&siteID=mktw&scid=0&doctype=806&property=symb&value=&categories=&

NEW YORK (CBS.MW) -- Eli Lilly (LLY) reported third-quarter earnings of $755.2 million, or 69 cents per share, up from its year-ago profit of $714.2 million, or 66 cents per share. Sales rose in the latest three months to $3.28 billion from $3.14 billion in the same period a year earlier. The average estimate of analysts polled by Thomson First Call was for earnings of 68 cents per share in the September period. The Indianapolis drug maker also disclosed a restructuring plan, saying it expects to eliminate 1,000 jobs in total. 575 jobs are related to its sales and marketing operations, and the changes it announced in these areas last week. Looking ahead, the company sees adjusted earnings of 73 to 75 cents per share in the fourth quarter, and $2.80 to $2.82 per share for the full year. Wall Street's consensus estimate for the fourth quarter was for a profit of 76 cents per share. The stock closed Wednesday at $55.10, down 90 cents.

the problems with Vioxx et al...perhaps some main ingredient they've all been utilizing. :shrug:

Don't put much stock in claims data, economist says

http://cbs.marketwatch.com/news/newsfinder/pulseone.asp?dateid=38281.3840277778-824249216&siteID=mktw&scid=0&doctype=806&

WASHINGTON (CBS.MW) -- The drop in initial jobless claims to 329,000 in the latest week does not signal vast improvement in the labor market, said Steve Stanley, chief economist for RBS Greenwich Capital. "I think we would be well-served to ignore the claims figures, at least for another week or two," Stanley wrote to clients Thursday, noting the distortions caused by hurricanes last month and the Columbus Day holiday last week. "We think that the underlying pace of job growth is mediocre right now and will pick up once the election is behind us and (hopefully) oil stabilizes," he said, forecasting nonfarm payroll gains of 180,000 or so in October.

So when was the last time that we had 180,000 jobs gained in a month? The layoff notices are ticking in and I haven't seen any big hiring articles. :eyes:

NEW YORK (Reuters) - U.S. stock futures trimmed early losses, pointing to a slightly lower market open on Thursday, as oil prices rose and the insurance sector was in the spotlight after American International Group (NYSE:AIG - news) said it was being investigated by a federal grand jury.

-cut-

S&P 500 futures were down a point, 2 points below fair value accounting for dividends, interest rates and time to expiration on the contract, indicating the market would open lower.

Dow Jones industrial index futures fell 12 points, while Nasdaq 100 futures were up 3 points.

"The fact that corporate results are coming in weaker than expected is eating away a little at investor sentiment," said Commerzbank market analyst Kevin Baker.

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

UIA, thanks for your commendation of the barchart.com site. I re-checked the chart to see if it auto-updates. Alas, it appears not.

There are some more econ news sites that remain. It will just take time to check. In the meantime, if anyone runs across a chart that auto-updates like those posted in the code sheet, please forward it to me.

thank you,

Ozymandius

EDIT: I have been searching for "light sweet crude" among the commodities markets.

here's it page:

http://futures.tradingcharts.com/chart/CO/B4

Let's see if this updates throughout the day.

I cannot see the chart when looking at the regular page. The chart only appears when I hit the 'reply' link and open the 'post a message' window. Any clues as to why this is?

but it was there :tinfoil:

:D

European Commission president Romano Prodi said the oil problem was a "structural" one that needed a long-term response.

"Even if we produce the maximum amount of oil possible, global demand of an economy in rude health is more than can be supplied," he said.

"We need to reflect on a global strategy on energy and on new methods of energy production."

http://www.eubusiness.com/afp/041020185644.x2e0p7th


So the supply-demand crunch is publicly acknowledged (Peak Oil plateau), only one small still needed to admit publicly that global oil supply capacity will start to decrease in few years... how about that, IEA?

http://putinru.com/news/item/31930.html

Most oil-rich countries are burdened by corruption and oil companies contribute to the problem by not publishing information on payments made to governments and state-owned oil companies, according to a study by Berlin-based Transparency International (TI).

"Transparency International urges Western governments to oblige their oil companies to publish what they pay in fees, royalties and other payments to host governments and state oil companies," said Peter Eigen, chairman of TI, in a statement released on Wednesday. "Access to this vital information will minimize opportunities for hiding the payment of kickbacks to secure oil tenders, a practice that has blighted the oil industry in transition and post-war economies."

The survey's "Corruption Perceptions Index" for 2004 shows oil-rich Angola, Azerbaijan, Chad, Ecuador, Indonesia, Iran, Kazakhstan, Libya, Nigeria, Russia, Sudan, Venezuela and Yemen all with extremely low scores, suggesting significant crooked business practices.

"In these countries, public contracting in the oil sector is plagued by revenues vanishing into the pockets of Western oil executives, middlemen and local officials," he said, adding that TI estimates that at least $400 billion is lost worldwide in all business sectors each year due to bribery in government procurement.

A total of 146 countries were surveyed and corruption was deemed "rampant" in 60 countries, while 106 scored less than five points on the scale, where a score of ten represents the least corrupt.

...more...

In a world of lies, where does one even begin to look for the truth?

2:50pm 10/21/04 DEC CRUDE CLOSES AT $54.47/BRL, UP 6C FOR THE SESSION

briefing.com

09:18 ET Cash market looks set to begin the day on a modestly higher note, boosted by the better than expected initial claims report and tech leadership

08:57 ET S&P futures vs fair value: +0.1. Nasdaq futures vs fair value: +7.0. The release of the initial claims report at 08:30 ET has been an inflection point for traders today as the futures market indication has swung from a negative reading to a positive one following the data... Nasdaq 100 futures, in particular, have gained momentum since 08:30 ET and now suggest the tech sector will assume an early leadership role... The favorable response to the eBay report (EBAY trading nearly 6 points higher in pre-market) is serving as an added underpinning factor

08:33 ET S&P futures vs fair value: -1.2. Nasdaq futures vs fair value: +5.0. Better than expected initial claims report (329K vs 345K consensus) provides futures market with a boost, but stronger reaction has been lacking due to recognition that net hiring has replaced layoffs as the more important driver of sentiment with respect to the labor market determinant... nonetheless, from a headline perspective this will be taken as good news

08:26 ET S&P futures vs fair value: -2.5. Nasdaq futures vs fair value: +0.5.

08:08 ET S&P futures vs fair value: -3.7. Nasdaq futures vs fair value: -0.5. A barrage of earnings news since yesterday's close that, overall, has failed to impress participants... Accordingly, the futures market is signalling a slightly lower open for the cash market. For the full rundown of earnings results, be sure to visit Briefing.com's Earnings Calendar and Earnings Guidance pages... Initial Claims report is released at 08:30 ET; consensus estimate is 345K

ino.com

The December NASDAQ 100 was lower overnight as it consolidates some of Wednesday's rally but remains above the 10-day moving average crossing at 1442.70. Stochastics and the RSI are diverging and are turning bearish again signaling that sideways to lower prices is possible near-term. Closes below last week's low crossing at 1419 would renew this month's decline and would mark a breakout below the August-September uptrend line. The December NASDAQ 100 was down 1.50 pts. at 1443 as of 5:51 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 lower overnight and trading below the 50% retracement level of the August-October rally crossing at 1102.60. Stochastics and the RSI remain bearish signaling sideways to lower prices are possible near-term. Closes below September's low crossing at 1101.60 would open the door for a possible test of the 62% retracement level of the August-October rally crossing at 1092.90 later this month. Closes above the 10-day moving average crossing at 1111.12 would signal that a short-term low has been posted. The December S&P 500 Index was down 3.00 pts. at 1098.80 as of 5:52 AM ET. Overnight action sets the stage for a steady to weaker opening when the day session begins later this morning.

(that's BILLION with a "B")

http://www.forbes.com/work/feeds/ap/2004/10/21/ap1602223.html

AT&T Corp. swung to a third-quarter loss of $7.12 billion after recording huge charges related to the company's retreat from traditional telephone services, which has included at least 7,500 more job cuts and a writedown in the value of the company's long-distance network.

The loss reported Thursday amounted to $8.95 per share for the July-September period. The figures reflect $12.47 billion worth of charges as well as a resulting $4.38 billion tax benefit and an after-tax drop of $331 million in depreciation expenses resulting from the asset writedown.

Excluding the charges and benefits, AT&T would have reported a profit of $262 million, or 33 cents a share. In the same quarter last year, AT&T earned $418 million, or 53 cents a share.

Third-quarter revenues totaled $7.6 billion, down 11.7 percent from $8.65 billion a year earlier, as the long-distance business extended its multiyear decline. Broken down, AT&T Business Services revenues fell 10.4 percent to $5.65 billion and AT&T Consumer Revenues fell 15.2 percent to $1.98 billion.

AT&T, still the nation's largest long-distance company, had warned two weeks ago that it would be slashing the book value of its assets by about $11.4 billion now that its network is expected to carry far less consumer voice traffic.

...more...

Dow 9,871.07 -15.86 (-0.16%)
Nasdaq 1,936.63 +3.66 (+0.19%)
S&P 500 1,103.41 -0.25 (-0.02%)
10-Yr Bond 4.004% +0.013

NYSE Volume 35,227,000
Nasdaq Volume 76,491,000

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

Third quarter earnings season got in full force this week. There are 179 of the S&P 500 that report earnings this week, and 136 next week. As of Wednesday afternoon, 172 S&P 500 companies have reported third quarter results and 107 earned more than analysts expected and 33 failed to meet forecasts. By combining actual results for those that have reported and estimates for the others, earnings are expected to increase 14.5% compared to 15.7% last Friday. Over the past several months we have discussed the rise in raw materials, mainly steel and oil. While this is boosting earnings for energy and materials companies, it is negatively impacting most other industries.

Several companies in the auto sector reported earnings over the past week and have guided earnings estimates lower for the fourth quarter. The central theme from all the companies is summed up by Michael Burns, CEO of Dana, “The magnitude of the raw material increases, coupled with a decrease in light-vehicle production volumes, hit us harder than expected.” Delphi, the largest auto parts maker, said it will cut an additional 1,500 jobs to 8,000 cuts already announced as the company fights to regain profitability that it lost in the third quarter.

The automakers continued their reliance on financing. General Motors’ earned $656 million from GMAC, while it lost $116 million from making automobiles. GM also benefited from reducing its product liability reserve by $250 million. The company stated that it decided to reduce what it reserves from the high-end of the range of estimates to a more “appropriate estimate within that range.” This alone added 44 cents to EPS. Health care is also eating into the automakers bottom line. Early in the year it was experience an 8.5% increase in health care costs. Currently, it is running in the low double digits and they expect this increase in continue into next year. And adding insult to injury S&P downgraded its debt to BBB-. Any lower and its debt falls to junk status.

United Technologies is benefiting from the current boom in manufacturing. Sales increased 17%, but only increased earnings by 13%. Again, higher raw materials cost pressured margins. For the full year, higher commodity prices will cost the company $150 million. The maker of Carrier air-conditioning systems noted that there has been a pick-up in commercial office construction, but is reluctant to call it a recovery. Sales at the Carrier unit advanced 9% from last year’s depressed levels. The company noted that the mild summer impacted sales.

snip>

The price of steel has started to decline from the peak reached during the third quarter. According to Steel Dynamics, this is a typical pattern. Companies typically build up inventory during the third quarter and work it down during the fourth quarter. This lessens the demand during the fourth quarter for steel products, which lowers the price. Companies do this because most steel supply agreements are negotiated during the end of the year.

more...

http://www.prudentbear.com/archive_comm_article.asp?category=Guest+Commentary&content_idx=36909

Richard Duncan is a financial analyst based in Asia and author of "The Dollar Crisis: Causes, Consequences, Cures" (John Wiley & Sons, 2003)

Three months ago, the yield on 10 year US treasury bonds was 4.9% and market participants were nearly unanimous in expecting it to go considerably higher. They were spectacularly mistaken. The yield fell below 4% in late September. The world’s central banks are creating too much paper money to allow interest rates to rise. In this new age of fiat money, the rules have changed. From now on, the supply of money will be at least as important as the demand for it in determining interest rates.

Once upon a time—before the breakdown of the Bretton Woods System—interest rates were determined by the supply and demand for money. That is still true today. There is one very important difference, however. Then, there was a limited amount of money and governments did not have the power to create it at will. Today, governments can create as much money as they want. This convenience makes global economic management very much easier. Then, if governments spent more than their tax revenues, government borrowing pushed up interest rates and crowded out the private sector. Today, that is no longer true…at least not for the United States government. Today, the interest rate on the US 10 year Treasury bond is determined primarily by the relationship between the demand for money from the US Federal Government and Government Sponsored Enterprises (like Fannie Mae) and the amount of paper money created by the United States’ trading partners, which, in turn, is generally (but not always) determined by the size of their trade surplus with the United States. Capital markets were stunned in recent months by the sharp drop in 10 year treasury bond yields. The explanation for the unexpected decline is simply that the supply of paper money outstripped the demand for it as government debt expanded less than the US current account deficit. Consider the data in the table below.

snip>

The central banks of the United States’ trading partners printed as much money as was necessary to acquire all the dollars entering their economies to prevent their currencies from appreciating… and with those dollar they bought US treasury bonds and agency debt. However, as can be seen below, beginning in the second quarter of 2004, the increase in the amount of new debt being offered by the government and government sponsored enterprises was insufficient to meet the demand for it.



snip>

That’s why interest rates fell. More paper money is currently being created as a result of the rapidly expanding US current account deficit than is needed to fund the budget deficit and the GSEs’ demand for credit. This surfeit of money also explains why the interest rate spread on corporate bonds over treasuries is at multi-year lows.



more...

10:00am 10/21/04 U.S. SEPT. LEADING ECONOMIC INDICATORS DOWN 0.1 PCT

10:00am 10/21/04 5 OUT OF 10 U.S. LEADING INDICATORS FALL IN SEPT.

10:00am 10/21/04 U.S. LEADING ECONOMIC INDICATORS DOWN 4 STRAIGHT MONTHS

10:00am 10/21/04 US LEADING INDICATORS SIGNAL '05 SLOWDOWN - CONF BOARD

http://cbs.marketwatch.com/news/newsfinder/pulseone.asp?dateid=38281.4171180556-824253565&siteID=mktw&scid=0&doctype=806&

WASHINGTON (CBS.MW) -- The U.S. index of leading economic indicators fell 0.1 percent in September, the Conference Board said Thursday. This is the fourth straight monthly decline, the longest string since mid-2002. The fall was slightly smaller than the consensus forecast of Wall Street economists, who had expected a 0.2 percent fall. The coincident index rose 0.2 percent, while the lagging index was unchanged. A fourth consecutive decline in the index "is a clear signal that the economy is losing momentum heading into 2005," said Ken Goldstein, an economist at the Conference

http://www.cfo.com/article.cfm/3307315/c_3308803?f=home_todayinfinance

Since 2001, sales of new corporate bonds to retail investors have doubled to $25 billion annually. One reason: the granularity of the retail market ''helps smooth out the lumpiness of institutional issues.''

Marie Leone, CFO.com
October 21, 2004

Marie Leone's "Capital Ideas" column appears every other Thursday. Contact her at MarieLeone@cfo.com.

On September 30 the National Association of Securities Dealers released a report asserting that for their own protection, retail investors need more, and better, information about corporate bond pricing and transactions. NASD found that 60 percent of retail investors don't understand the reverse relationship between bond prices and interest rates; 34 percent either believe that bond transactions are free or don't know if they pay a fee to execute a transaction.

A day later — as if scripted in Hollywood — NASD launched the third and final phase of its Web-based bond transaction tracking system, TRACE (Trade Reporting and Compliance Engine). Today, the system provides investors with reports on 17,000 corporate bonds within 15 minutes of each trade; by February, TRACE will report on all 23,000 corporate bond issues.

For the NASD, retail investors were an obvious focus; its report emphasized that since institutional investors are more sophisticated and can bring greater resources to bear, they're a lower priority for near-term action. Accordingly, retail investors "should be regulators' immediate focus." And indeed, noted NASD, 65 percent of corporate bond transactions are in quantities of $100,000 or less — a level generally acknowledged as representing an individual investor transaction.

Retail investors are increasingly the focus of senior financial executives as well. Since 2001, sales of new corporate bonds to retail investors have doubled to $25 billion annually, and the number of issuers has jumped from 6 to 36, reports investment back Incapital LLC, which specializes in the retail market. General Motors Acceptance Corp. (GMAC) has been the top issuer three years running; its 2003 bond sales of $7.1 billion represented about 28 percent of the total market for corporate debt issued to retail investors. Ford Motor Co. and General Electric Capital Corp. each sold about $3 billion that year (12 percent).

more...

Dow 9,861.71 -25.22 (-0.26%)
Nasdaq 1,938.85 +5.88 (+0.30%)
S&P 500 1,103.97 +0.31 (+0.03%)
10-Yr Bond 3.995% +0.004

NYSE Volume 235,970,000
Nasdaq Volume 321,462,000

10:00 ET Indices hold on to early stability...oil prices are up, which is providing a drag to further gains...insurance stocks are rebounding today, despite news that the California Insurance Commissioner is looking into business practices in that state, and is working with the NY Attorney General...semiconductors, specialty retailers, and mining stocks are also doing well...the agricultural equipment sector is down because of Caterpillar (CAT 79.09 -1.29)... ..NYSE Adv/Dec 1146/1238. ..NASDAQ Adv/Dec 1006/1243.

09:40 ET Indices open near unchanged, not inconsistent with choppy pre-open futures trade...headline earnings from eBay (EBAY 96.28 +4.94), Merck (MRK 31.35 -0.05), AT&T (T 16.11 +0.53) and Caterpillar (CAT 79.00 -1.38) provide mixed impact...eBay report has boosted other Internet stocks...SOX semiconductor index is up 1.1%...despite little change in indices, there is action in a number of sectors... ..NYSE Adv/Dec /. ..NASDAQ Adv/Dec /.

Petro-euros anyone?

http://quote.bloomberg.com/apps/news?pid=10000085&sid=aOAf3lWED1fA&refer=europe

Oct. 21 (Bloomberg) -- The euro rose to an eight-month high against the dollar after European finance ministers said they favor a stronger currency amid rising commodity prices.

Gains in the currency will ease the impact of the record price of oil, which is denominated in U.S. dollars, said Dutch Finance Minister Gerrit Zalm. French Finance Minister Nicolas Sarkozy said ``a strong currency is better when commodity prices are high,'' after a meeting of European ministers in Luxembourg.

``The market is getting the message that there is going to be absolutely no problem in terms of the euro's strength,'' said Kurt Magnus, head of foreign-exchange sales at Westpac Banking Corp. in London.

snip>

``It's not an issue,'' Zalm said of the single European currency's advance. Any further gain in the euro to a record $1.30 would be ``good for oil prices,'' he said in Luxembourg.

snip>

Fed Governor Ben Bernanke, who votes on interest-rate policy, will speak today on oil and the economy in Albany, Georgia. The U.S. consumes a fifth of the world's oil.

Georgie and his gang!

http://www.latimes.com/business/la-fi-ports21oct21,1,4582871.story?coll=la-headlines-business

Efforts to unclog Southern California's jammed ports are foundering.

Labor officials said Wednesday that a highly publicized plan to hire and train 3,000 nonunion dockworkers — touted as a relatively quick way to ease record traffic at the ports of Los Angeles and Long Beach — has been a disappointment.

snip>

The upshot: Shiploads of cargo, some destined for store shelves for holiday shoppers, are stranded at sea.

snip>

Retailers already locked into their shipping schedules have been left with few palatable alternatives, according to port experts, who noted that the cargo crunch was global.

"Countries have outsourced so much of their production to Asia that it has produced far more demands on trade. It's only going to get worse," said Roger MacFarland, chief executive of UTi Worldwide Inc. in Rancho Dominguez. UTi Worldwide coordinates the shipment of goods worldwide from manufacturers to retailers.

more...

http://money.cnn.com/2004/10/21/news/fortune500/aig.reut/index.htm

NEW YORK (Reuters) - American International Group Thursday reported higher third-quarter earnings despite losses related to four U.S. hurricanes, and the insurer said it was the target of a grand jury investigation. :eyes:Like how they throw that in there, "blah, blah, blah...Oh and by the way, we are in the midst of a CRIMINAL probe.

snip>

Two executives at an AIG subsidiary pleaded guilty to fraud charges related to Spitzer's inquiry. In its statement, AIG said that it could not estimate the potential costs -- or the outcome -- of the resulting probe.

But the company added that "in the opinion of AIG management, AIG's ultimate liability for these matters is not likely to have a material adverse effect on AIG's consolidated financial condition," although it could impact consolidated results sometime in the future.

AIG also said it was the subject of a federal grand-jury investigation into certain products it marketed.

NEW YORK - The Index of Leading Economic Indicators (news - web sites), a widely watched barometer of future economic activity, edged lower in September for the fourth month in a row, indicating a slowing in economic growth, a private research group reported Thursday.

The Conference Board (news - web sites) said that its indicator of upcoming activity in the economy fell 0.1 percent last month, following declines of 0.3 percent in August and 0.3 percent in July.

The group said that while the weakness over the last several months in the economy has become more widespread, the declines in the indicator are not yet large enough nor have they lasted long enough to suggest that the current economic expansion is ending.

http://story.news.yahoo.com/news?tmpl=story&ncid=1203&e=1&u=/ap/20041021/ap_on_bi_go_ec_fi/economy&sid=95609868

12:00pm 10/21/04 BERNANKE: RISE IN ENERGY PRICES IS 'MANAGEABLE'

12:00pm 10/21/04 FED'S BERNANKE: RATE HIKE LIKELY AT 'MEASURED' PACE

12:00pm 10/21/04 BERNANKE: RISE IN ENERGY PRICES CUT 0.5%-0.75% OFF GDP

12:00pm 10/21/04 BERNANKE: 'DAYS OF PERSISTENTLY CHEAP OIL ARE OVER'

12:00pm 10/21/04 BERNANKE: SUPPLY, DEMAND BEHIND RISE IN OIL PRICES

12:00pm 10/21/04 BERNANKE ON ENERGY: NEXT FEW YEARS TO BE 'STRESSFUL

Bernanke: Higher energy prices are 'manageable'

http://cbs.marketwatch.com/news/newsfinder/pulseone.asp?dateid=38281.5003125-824263446&siteID=mktw&scid=0&doctype=806&

WASHINGTON (CBS.MW) -- The days of "persistently cheap oil are over," Federal Reserve Gov. Ben Bernanke said Thursday, but he expects the economic consequences of higher energy prices will be "manageable." Speaking at Dalton College in Albany, Ga., Bernanke said he believes the Fed will be able to maintain its "measured" pace of rate hikes, in part because inflationary expectations remain low. The rise in oil prices reflects fundamental facts about supply and demand, not just speculation, he said.

Too bad he did not come closer to Atlanta. I would have loved to heard the guy speak, perhaps heckle him and his boss.

deleted

12:01pm 10/21/04 U.S. OCT. PHILLY FED 28.5 VS 13.4 IN SEPT.

12:02pm 10/21/04 U.S. OCT. PHILLY FED NEW ORDERS 24.6 VS. 26.4 IN SEPT.

12:02pm 10/21/04 U.S. OCT. PHILLY FED PRICES PAID 57.1VS. 56.4 IN SEPT.

http://www.theglobeandmail.com/servlet/ArticleNews/TPPrint/LAC/20041021/CHINA21/National/

China's Communist rulers have a blunt message for anyone who frets about the planned Chinese takeover of Canada's biggest mining company: Get ready for more to come.

In an exclusive interview with The Globe and Mail in Beijing this week, Chinese Foreign Minister Li Zhaoxing made it plain that the controversial $7-billion takeover of Noranda Inc. is just a small element in a much more ambitious strategy of investment in Canada's resources sector to feed China's voracious appetite for raw materials.

"Given our rapid economic growth, we're facing an acute shortage of natural resources," the Foreign Minister told The Globe.

"No matter how plentiful our natural resources, when you divide them by our population of 1.3 billion, the figure will be very small," he said.

"The Chinese government is encouraging Chinese enterprises to make investments in Canada, particularly in the field of resources exploitation."

much more....

First you buy up the "commodities" and then you bring in folks to guard the commodites and then you build bases to house the guards and then....

:-(

Dow 9,870.78 -16.15 (-0.16%)
Nasdaq 1,941.30 +8.33 (+0.43%)
S&P 500 1,105.35 +1.69 (+0.15%)
10-Yr Bond 3.972% -0.019

NYSE Volume 734,674,000
Nasdaq Volume 888,743,000

12:00PM: The market has held up well today as a flood of earnings reports have been mostly upbeat, and oil prices are choppy...stocks opened near unchanged after over 175 companies reported earnings yesterday after the close and this morning combined...nearly 75% of those reports were above analyst estimates, and aggregate earnings for the S&P 500 are running about 3% above expectations...that suggests earnings this quarter will be up about 17%...

eBay (EBAY 98.25 +6.89) had a good report, Caterpillar (CAT 78.75 -2.05) experienced profit-taking after a seemingly strong report, and Merck (MRK 31.21 -0.19) had large charges due to the Vioxx issue...the latter two reports have caused the Dow to underperform today...oil spiked mid-morning, and knocked the indices down, but the December crude contract is now about unchanged...as oil came off its highs, the indices recovered...after the close today, Microsoft, Amazon.com, and Coca-Cola are among the earnings reports due...volume is active, reflecting the swirl of action below the overall mixed nature of the indices...advancers are ahead of declining issues by an impressive 2-to-1 ratio on the NYSE...

Dow 9,826.90 -60.03 (-0.61%)
Nasdaq 1,936.57 +3.60 (+0.19%)
S&P 500 1,101.16 -2.50 (-0.23%)
10-Yr Bond 3.973% -0.018

NYSE Volume 828,973,000
Nasdaq Volume 1,006,271,000

12:25PM: Indices back near unchanged...semiconductors and Internet stocks are boosting the Nasdaq, while Caterpillar and SBC are weighing on the Dow...volume is running at its highest level in a week, while market internals are positive...NYSE Adv/Dec 2060/1037, Nasdaq Adv/Dec 1502/1290

dollar

Last trade 85.99 Change -0.36 (-0.42%)

Settle 86.35 Settle Time 23:36

Open 86.32 Previous Close 86.35

High 86.44 Low 85.90

Last tick: 2004-10-21 12:05:19 ET
30-min delayed quote.

http://www.morganstanley.com/GEFdata/digests/20041021-thu.html#anchor0

No, this piece is not about how Japan and China do not get along politically. Rather, it is indeed about oil and water — or more precisely about how the competition for resources will shape the world in which Japan and China interact over the next decades. This piece is inspired by a recent book by Michael Klare entitled Resource Wars (Owl Books, 2001). In the book, Professor Klare makes the important (but also somewhat obvious) point that the combination of geography, economics, and politics will create intense competition for scarce resources, especially oil and water.

How will Japan and China interact in this world? Are they competitors or allies? Will the competition be diplomatic, negotiated, and peaceful, or will it be military?

The answer depends on the specific resource involved, and the geography (and politics) of the resource. However, fortunately, the details suggest that Japan and China (along with the United States) have much more to gain by cooperation than by competition, especially military competition. This conclusion is clearly good news for financial markets. Even better news is the opportunities that joint development will hold for business. Industries of particular interest include plant engineering and suppliers for energy development projects and trading companies or storage facility providers for agricultural trade in the region.

Oil

Most oil analysts are now convinced that the world does face high oil prices for at least a few years, even if speculative excess and weather-related distortions abate. There is virtually no spare capacity to produce more oil, but global demand will continue to increase. So the equilibrium price will be higher. The question for all countries now is how to find new energy sources and to promote conservation.

more...

http://cbs.marketwatch.com/news/newsfinder/pulseone.asp?dateid=38281.5199884259-824265766&siteID=mktw&scid=0&doctype=806&

SAN FRANCISCO (CBS.MW) -- Two high-level executives with Intel Corp. sold a combined 744,000 shares of the chipmaker at a market value of $15.1 million, according to filings with the U.S. Securities and Exchange Commission. Chairman Andy Grove acquired 768,000 shares through the exercise of options and sold 384,000 of them on Oct. 15, making his first insider transaction since January 2002, according to Thomson Financial. On Oct. 19, Chief Financial Officer Andy Bryant acquired 400,000 shares through options and sold 360,000 of them, making his first insider transaction since October of last year.

hmmmm....

what do they know that maybe we should find out?

CHICAGO - Sears, Roebuck and Co. posted a $61 million loss in the third quarter and lowered its estimate for full-year earnings as its tailspin continues. The giant retailer's stock fell sharply Thursday.

The results were worse than Wall Street expected and extended a long slump at the Hoffman Estates, Ill.-based company, where same-store sales have been falling steadily for more than three years.

Sears shares were down $2.36, or 6.4 percent, to $34.56 in heavy midday trading on the New York Stock Exchange (news - web sites) after sinking as much as 9 percent. They are down 23 percent this year.

http://story.news.yahoo.com/news?tmpl=story&cid=509&ncid=1189&e=7&u=/ap/20041021/ap_on_bi_ge/earns_sears

12:57pm 10/21/04 HALLIBURTON WINS OMAN OIL CONTRACTS WORTH UP TO $500M

http://www.reuters.com/financeNewsArticle.jhtml?type=businessNews&storyID=6571680

NEW YORK (Reuters) - Merck & Co. (MRK.N: Quote, Profile, Research) on Thursday reported a 28 percent drop in quarterly profit and said 2004 earnings will fall as much as 11 percent due to last month's recall of its Vioxx arthritis drug.

The recall cost the Whitehouse Station, New Jersey-based drugmaker $553 million in earnings, including customer returns and write-offs of inventory. The medicine was withdrawn on Sept. 30 after being linked to heart attacks and strokes.

snip>

The company is facing 300 lawsuits filed by former users of Vioxx who allege that the drug caused them gastrointestinal bleeding, heart attacks and kidney damage.

Merck said it was unclear whether insurance will adequately cover its potential liability to Vioxx users, which include 20 million Americans who have taken the drug since it was launched in 1999. It said in a statement that it has product liability insurance for claims brought in Vioxx lawsuits of up to approximately $630 million.

In contrast, rival drugmaker Wyeth (WYE.N: Quote, Profile, Research) has taken over $16 billion in charges to cover liability to 6 million Americans who took its two "fen-phen" diet drugs that were recalled in 1997 after being linked to heart valve damage.

Oh those damned trial lawyers again. ;-)

more...

Dow 9,834.28 -52.65 (-0.53%)
Nasdaq 1,938.28 +5.31 (+0.27%)
S&P 500 1,101.87 -1.79 (-0.16%)
10-yr Bond 3.983% -0.008
30-yr Bond 4.763% -0.018
NYSE Volume 931,480,000
Nasdaq Volume 1,114,574,000

1:00PM: Dow, at 9814, is now near the closing low of 2004...the S&P 500 index, meanwhile, is down less than 1% on the year...oil is near unchanged...NYSE Adv/Dec 1901/1230, Nasdaq Adv/Dec 1431/1396

From the DOW chart:
Day's Range: 9,809.72 - 9,903.15
52wk Range: 9,497.72 - 10,753.63

Advances & Declines
NYSE Nasdaq
Advances 1845 (55%) 1469 (48%)
Declines 1323 (39%) 1398 (45%)
Unchanged 171 (5%) 174 (5%)

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

Up Vol* 463 (53%) 682 (63%)
Down Vol* 396 (45%) 377 (35%)
Unch. Vol* 13 (1%) 11 (1%)

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

New Hi's 86 74
New Lo's 38 47

http://phoenix.bizjournals.com/phoenix/stories/2004/10/18/daily45.html

Denver-based Qwest Communications International Inc. (NYSE: Q) has agreed to a pay $250 million fine to settle a wide-ranging fraud investigation by the U.S. Securities and Exchange Commission (SEC), the Associated Press reported Thursday.

The SEC complaint has not been released publicly.

A source familiar with the case says the complaint alleges that Qwest improperly booked millions in revenue and that senior managers sought to cover it up.

The deal was expected to be announced as early as Thursday.

PONTIAC, Mich. (AP) - General Motors Corp., anticipating slumping demand for two of its most profitable vehicles, is cutting 900 hourly workers from its Pontiac Truck Assembly Plant in January.

The world's largest automaker is eliminating one of three production shifts it has operated at the Michigan plant since the fall of 2002. Spokesman Dan Flores said GM did not know how many of the 900 United Auto Workers (news - web sites) members would get jobs at other plants or remain permanently laid off.

The Pontiac plant is one of four in North America - including one in Oshawa, Ont. - that produces the popular Chevrolet Silverado and GMC Sierra.

http://story.news.yahoo.com/news?tmpl=story&cid=1821&ncid=1189&e=2&u=/cpress/20041021/ca_pr_on_bu/gm_layoffs

Did you catch this:

Fed's Daily Securities Lending
National Debt $7,429,784,468,774.71
New all-time high!
(snip from the link )

I like the little funny face :wow: better, but when you don't have any real goods to sell

What can you do?

(added Aussie graph)

http://www.angelfire.com/ab/trogl/looniewatch.html

Highlights.



http://www.x-rates.com/d/USD/CAD/data30.html


2004-09-21 Tuesday, September 21 0.776036 USD
2004-09-22 Wednesday, September 22 0.780275 USD
2004-09-23 Thursday, September 23 0.78235 USD
2004-09-24 Friday, September 24 0.783515 USD
2004-09-27 Monday, September 27 0.785053 USD
2004-09-28 Tuesday, September 28 0.784068 USD
2004-09-29 Wednesday, September 29 0.785546 USD
2004-09-30 Thursday, September 30 0.790639 USD
2004-10-01 Friday, October 1 0.791828 USD
2004-10-04 Monday, October 4 0.785793 USD
2004-10-05 Tuesday, October 5 0.792079 USD
2004-10-06 Wednesday, October 6 0.794155 USD
2004-10-07 Thursday, October 7 0.795102 USD
2004-10-08 Friday, October 8 0.799233 USD
2004-10-12 Tuesday, October 12 0.795229 USD
2004-10-13 Wednesday, October 13 0.791139 USD
2004-10-14 Thursday, October 14 0.798212 USD
2004-10-15 Friday, October 15 0.798722 USD
2004-10-18 Monday, October 18 0.796813 USD
2004-10-19 Tuesday, October 19 0.797321 USD
2004-10-20 Wednesday, October 20 0.804376 USD
2004-10-21 Thursday, October 21 0.804764 USD





Loonie's losing a bit of ground against other major currencies (I'm no longer counting the greenback) but nothing drastic. It gained against the Euro. I took the bus so I don't have any CBC reports. I'm a bit concerned about the Chinese wanting to buy up Canadian resources because they'll be paying for it with their hordes of greenbacks. I'm not sure what that will do to the greenback or the loonie.

And what's with the Aussie?? I think that may be the untold story.



Anyway, the loonie's above 80 cents for the second day in a row. No mention of anything in the papers. Harper's busy screaming about something else.

?s=CME_CDT4&t=f&w=5&a=2&v=s

http://quotes.ino.com/chart/?s=CME_CDT4&v=s

The December Canadian Dollar was lower overnight due to light profit taking as it consolidates some of Wednesday's rally. If December extends this year's rally, a test of weekly resistance crossing at .8060 is the next upside target. Stochastics and the RSI have turned bullish signaling that sideways to higher prices are possible near-term. Closes below last week's low crossing at .7871 are needed to confirm that a short-term top has been posted. Overnight action sets the stage for a steady to weaker tone in early-day session trading.

http://www.kitco.com/ind/Daughty/oct202004.html

snip>

And speaking of China and how they will soon be getting smart and spending those piles of American dollars on something that has some real value, we read that Todd Stein and Steven McIntyre, of the Texas Hedge Report, write "China Dumps Dollars for Oil and Gold." They say "China National Petroleum Corporation has a 40% stake in the international consortium extracting oil in Sudan, and it is constructing refineries and pipelines, enabling Sudan to benefit from oil export revenue over the last five years. "

Beyond that, they note that "Recently, China deployed thousands of troops to Southern Sudan to protect its pipeline interests while Western oil companies have been withdrawing from the war-torn African nation. The presence of Chinese PLA troops in Sudan, in our opinion, marks the middle kingdom's entrance into the great game." So there may soon be TWO large and powerful countries running around the globe, taking over the place, and randomly killing thousands of people who get in their way.

"A major problem will result when foreigners begin to dis-hoard their dollar stockpiles." Well, I turn off the tape player and look at the statistics. Last week these foreign scoundrels dis-hoarded $4 billion. And what will happen to us if those guys continue to dis-hoard dollar denominated assets? "It has the potential to generate a U.S. inflationary episode that will make the one that occurred during the latter part of the1970's pale by comparison. To my mind, it is not a question of if, but of when!"

snip>

So that may be part of the reason why the Fed produced $3.8 billion in Magic Money last week, giving their little slimy friends in the banks some money to play with. The Fed used some of that money to Bought Outright another $911 million in US debt, continuing to demonstrate that particular moral, ethical and intellectual bankruptcy.

And since we are speaking of "M,E, and I bankruptcies," and I say "thanks" for not noting how The Mogambo is likewise bankrupt in the old "M, E, and I categories. The Treasury issued another $5 billion in new debt, even as the Fed was buying up old debt, and taking us another notch above the Congressionally-mandated ceiling of $7.384 trillion. The Treasury also literally printed up another $4 billion in actual cash last week, too, and not out of Fairy Dust, like the Federal Reserve, but out of real ink and paper.

more...

and saw the Dow was almost in the 97** range. Boy, look at the economy surge! Prosperity is just around the corner (we've heard that for almost 4 years now). Someone please tell the middle class that they should be rejoicing. (So much for my retirement monies. Guess I'll work until I drop dead on the job.)

Dow 9,851.24 -35.69 (-0.36%)
Nasdaq 1,942.82 +9.85 (+0.51%)
S&P 500 1,103.44 -0.22 (-0.02%)
10-Yr Bond 3.976% -0.015

NYSE Volume 1,118,541,000
Nasdaq Volume 1,316,127,000

2:00PM: Stocks bounce off their lows as the Dow finds support at its 2004 closing low... Strikingly, advancers continue to outpace decliners at the NYSE and Nasdaq and up volume is leading down volume... The positive bias stemming from a rebound seen in retail and most of tech has positioned the breadth figures favorably... The Dow (-0.8%) continues to trail the S&P 500 (-0.4%) and Nasdaq (+0.2%) as 20 of its 30 components are sporting losses...

Caterpillar (CAT 77.20 -3.18) and AIG (AIG 56.43 -1.17) continue to act as the largest drags - both stocks following their companies' earnings reports this morning... The latter matched the consensus EPS estimate, but said that a federal grand jury is investigating products it sold that might have used to manipulate earnings...NYSE Adv/Dec 1881/1313, Nasdaq Adv/Dec 1490/1417

1:30PM: Market continues to deteriorate as the Dow nears its 2004 closing low and yesterday's low (a new year-to-date closing low) at 9814/9804... Traders - noting the indices' bearish stance over the past couple of weeks and their technical failure today - have opted for the path of least resistance and reduced exposure to stocks... Sector leadership remains to the downside, with biotech, disk drive, managed care, and telecom service showing large losses... Propping the Nasdaq up, though, has been semiconductor, networking, and software...

Siebel Systems (SEBL 9.27 +0.11) has boosted the latter with both its in line Q3 (Sept) earnings report/Q4 (Dec) outlook last night... NYSE Adv/Dec 1888/1279, Nasdaq Adv/Dec 1495/1389

allow one to defy the laws of gravity and fly.

Dow 9,884.71 -2.22 (-0.02%)
Nasdaq 1,950.23 +17.26 (+0.89%)
S&P 500 1,107.10 +3.44 (+0.31%)
10-Yr Bond 3.980% -0.011

NYSE Volume 1,193,529,000
Nasdaq Volume 1,419,362,000

14:30 ET Major indices rapidly improve as a semiconductor sector - strong now for two days running - lifts to new highs... The SOX index has just broken through a resistance level at 405/406, which marks (among other things) its September high... The programmable logic devices (PLD) names - Altera (ALTR 22.39 +2.16) and Xilinx (XLNX 20.82 +1.88) - have spearheaded the way higher... Altera turned in a better than expected Q3 (Sept) report last night, but then warned for Q4 (Dec) sales on its conference call... Traders, however, have written this off to an inventory correction... Optimism remains high for Xilinx's report tonight... ..SOX +3.6%. ..NYSE Adv/Dec 1911/1309. ..NASDAQ Adv/Dec 1580/1360.

Dow 9,888.18 +1.25 (+0.01%)
Nasdaq 1,956.83 +23.86 (+1.23%)
S&P 500 1,108.84 +5.18 (+0.47%)
10-Yr Bond 3.993% +0.002

NYSE Volume 1,345,946,000
Nasdaq Volume 1,593,891,000

3:05 ET Stocks continue to move higher in an extension of their recovery effort... Tech continues to be the driver, and suggests investors are reasonably upbeat about tonight's earnings reports... Amazon.com (AMZN), Broadcom (BRCM), Emulex (ELX), KLA-Tencor (KLAC), and Xilinx (XLNX) will all be releasing, and all have found buying interest in the afternoon... Briefing.com will be tracking their results on our Live In Play page, a Platinum product... Several notable non-tech companies, such as Coca-Cola (KO) and Gilead Sciences (GILD), will also be reporting... ..NYSE Adv/Dec 2113/1126. ..NASDAQ Adv/Dec 1705/1255.

http://www.nola.com/printer/printer.ssf?/base/money-0/1098253792150260.xml

World oil prices will rise to $100 a barrel in three years if demand continues to grow at the rate it has this year, an expert on the global oil market predicted Tuesday during a trip to New Orleans.

Global demand for crude oil has grown at a rate of about 2.5 million barrels per day this year, up from 1.3 million barrels per day in 2003, said Fereidun Fesharaki, a senior fellow specializing in energy research at the East-West Center in Honolulu. With little increase expected on the supply side, the market will remain tight for the foreseeable future, Fesharaki said.

"There is no scenario that the prices will go down," Fesharaki said. At best, he said, they will stay relatively flat.

snip>

One factor that could ease energy prices in the United States, at least the prices of gasoline and other fuels made from oil, Fesharaki said, is the development of more refineries in the United States. Allowing more refineries, he said, would have a greater impact on gasoline prices than almost any other policy decision. Even opening Alaska's Arctic National Wildlife Refuge for oil and gas exploration would not increase supply enough to result in lower prices, he said.

"Building refineries, that's a different story," he said. "If you build refineries in the U.S., it would have a big impact on price -- much greater than an ANWR opening."

more...

http://cbs.marketwatch.com/news/newsfinder/pulseone.asp?dateid=38281.6056597222-824275429&siteID=mktw&scid=0&doctype=806&property=symb&value=&categories=&

S&P may cut Kodak credit rating to 'junk' status (EK) By Tomi Kilgore
NEW YORK (CBS.MW) -- Standard & Poor's said it was reviewing Eastman Kodak's (EK) long- and short-term credit ratings for possible downgrades as the erosion of the company's core traditional photography sales raises concerns over the company's profit outlook. The long-term rating is currently "BBB-", which is the lowest investment grade rating, and the short-term rating is "A-3." S&P is also worried about the profit potential of the company's digital imaging business relative to conventional photography, the risk that further large acquisitions will keep debt at high levels and the burden from the company's large unfunded pension liabilities. The stock was last down 18 cents at $29.32. The stock had tumbled 9 percent on Wednesday after the company's third-quarter revenue fell short of expectations.

Dow 9,865.76 -21.17 (-0.21%)
Nasdaq 1,953.62 +20.65 (+1.07%)
S&P 500 1,106.49 +2.83 (+0.26%)
10-Yr Bond 3.997% +0.006

NYSE Volume 1,672,334,000
Nasdaq Volume 1,997,399,000

In a trading session that was analogous to yesterday's, tech emerged as a favorite of buyers, whereas most blue chip groups generally traded flat... The source of the Dow and S&P 500's general malaise was another batch of earnings that failed to live up to expectations... Caterpillar (CAT 77.04 -3.34) beat by $0.06 in its Q3 (Sept) report but failed to revised its FY04 (Dec) outlook higher - implying some downside to Q4 - and several drug companies such as Merck (MRK 31.26 -0.14) and Eli Lilly (LLY 52.64 -2.64) gave lackluster Q3 (Sept) reports and guidance... The effect translated into losses into machinery and health care - the latter of which became the largest laggard on the S&P 500... Telecom service was also exceptionally weak as traders took profits from that group's run year-to-date... Tech and retail, however, were some of the strongest groups of the date despite a number of mediocre earnings reports.... Sears (S 33.74 -3.18) effectively warned for Q4 (Dec) and Altera (ALTR 22.71 +2.48) and PMC-Sierra (PMCS 9.92 +0.92) also gave lighter than expected Q4 (Dec) forecasts... The latter two, though, did not translate into losses in semiconductor - which actually charged higher by 4% for the day... Traders were evidently optimistic about the batch of earnings (AMZN, BRCM, ELX, GOOG, KLAC, MSFT, and XLNX)... Finally, today's economic reports had very little impact on trading... Weekly initial claims dropped 25K to 329K (consensus of 345K), September Leading Indicators matched the consensus of -0.1%, and the October Philadelphia Fed Index - a regional manufacturing report - surged to 28.5 (consensus of 18.0)... ..NYSE Adv/Dec 2247/1056. ..NASDAQ Adv/Dec 1860/1143.