STOCK MARKET WATCH, Friday 25 June

[ozymandius]

Friday June 25, 2004

COUNTING THE DAYS
DAYS REMAINING IN THE * REGIME 213
DAYS SINCE DEMOCRACY DIED (12/12/00) 3 YEARS, 196 DAYS
WHERE'S OSAMA BIN-LADEN? 2 YEARS, 250 DAYS
WHERE ARE SADDAM'S WMD? - DAY 463
DAYS SINCE ENRON COLLAPSE = 946
Number of Enron Execs in handcuffs = 18
Recent Acquisitions: Jeff Skilling
ENRON EXECS CONVICTED = 2
Other Arrests of Execs = 54

---

U.S. FUTURES & MARKETS INDICATORS
NASDAQ FUTURES-----------------------------S&P FUTURES

---

AT THE CLOSING BELL ON June 24, 2004

Dow... 10,443.81 -35.76 (-0.34%)
Nasdaq... 2,015.57 -5.41 (-0.27%)
S&P 500... 1,140.65 -3.41 (-0.30%)
10-Yr Bond... 4.65% -0.05 (-1.11% )
Gold future... 403.50 +8.00 (+2.02%)


|||


GOLD, EURO, YEN and Dollars

---

PIEHOLE ALERT

Heads Up!
Preliminary info on appearances by Bush & Co. throughout the country. Details & links are added as they become available so check back. And if you know more, are organizing something, or would like to, contact [e-mail]

For information on protests and other actions Citizens For Legitimate Government

---

[ozymandius]

1. WrapUp by Martin Goldberg

"Stock Market Long View – Is This a New Era?"
Also, "Casinos Under Distribution" and
"Some Aggressive Tech. Funds Back In Bear Market"

This short article presents a long view of the stock market performance from early 80’s until the present. My trendline analysis suggests that, even though the stock market is well off of its highs of a few years ago, we are still in somewhat un-chartered high ground with respect of stock market valuations. If you believe that we are now in a new bull market, you have to believe that the 8.2% appreciation trendline that began off of historically high valuations in 1987 (at least 5 years into a secular bull market), is not a legitimate trendline because 8.2% per year is not steep enough. In short, you would have to believe that we are in a “new era” of stock market valuations and business earnings growth.

-cut-

Where Do We Go From Here?

Are we in a new bull market or are we near the end of a secondary correction within a secular bear market? If you assume that the historically high valuations reached at the origin of the trendline in 1987 were “fair,” then there are five logical views of the long-term stock market. I’ll summarize them in order of the most to the least optimistic.

-cut-

Most Aggressive Nasdaq-Invested Funds Back Into Bear Market

Some of the most aggressive technology and Internet funds are showing technical weakness. Can the entire Nasdaq index be far behind? Following is an arithmetically plotted chart of an aggressive technology/internet mutual fund dating back to its inception in July of 1999. As you can see, the fund performance has resembled the Nasdaq with a magnifying glass on it. This is due to its very aggressive growth holdings.

-cut-

After yesterday’s rally, today the indices performed in a way that any hot guru would suggest is “just what you would like to see”. Each index pulled back on lower volume than the day before. The Dow and S&P 500 were each down about 1/3 of a percent, and the Nasdaq was down 1/4 of a percent. It seems as though those stocks that were down the most from the January top carried the rally of the last few days. Example: the fund whose chart is featured above was up marginally today in an overall down market.

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

[Kukesa]

25. Thanks, you smart people!

I read the market watch every day and am still hoping some of your "smarts" will rub off on me; so far no luck.

I have a modest portfolio and always learn something from the regular posters.

Thanks so much -- you do a terrific job and I appreciate all of you.

[UpInArms]

2. daily dollar watch

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

Last trade 88.97 Change +0.22 (+0.25%)

http://www.fxstreet.com/nou/noticies/afx/noticia.asp?pv_noticia=1088152700-9e32d306-13046

Forex - Yen strength capped by BoJ intervention talk

LONDON (AFX) - The yen's appreciation against the dollar has been capped for now at least on growing expectations the Bank of Japan may look to stem the export-sapping strength of the Japanese currency

In addition, the 0.1 pct decline in Japanese CPI inflation in June diminished expectations of an imminent tightening in Japanese monetary policy, while North Korea's apparent threat to conduct a nuclear weapons test raised some regional concerns. "Rumours about BoJ intervention, the surprising decline in Japanese CPI as well as the apparent threat made by North Korea to test a nuclear device... should help stabilise dollar/yen above the 107 level for the time being," said Michael Klawitter, currency strategist at WestLB

"However, with next week's Tankan report likely to confirm the Japanese economic recovery scenario, the upside in the dollar should be limited towards the 108.50 yen area," he added

Other market participants are wary of pushing the yen much higher for fear of provoking the Japanese monetary authorities to enter the market and sell yens

Steve Pearson, chief currency strategist at HBOS, reckons the Japanese authorities are "much less confident" on the "self-sustaining" properties of the current Japanese economic upswing than global equity managers

Elsewhere, the dollar was steady after declining yesterday on rumours that Russia is looking to increase the share of its euro currency reserves and disappointing US economic data

...more...

http://www.fxstreet.com/nou/noticies/afx/noticia.asp?font=Reuters&pv_noticia=MTFH32297_2004-06-25_10-22-08_N2W317982

Europe gold holds above $400, eyes dollar and data

LONDON, June 25 (Reuters) - Gold was slightly lower in Europe on Friday but held above the $400 psychological barrier cracked on Thursday, supported by a weak dollar and heightened geopolitical tension after violence in Turkey and Iraq.

Spot gold <XAU=> was trading at $401.45/402.20 per troy ounce by 1004 GMT, compared with $402.25/403.00 last quoted in New York on Thursday. The price spiked to $402.50 earlier -- its highest since mid-April.

"We're only just above $400 -- if the market holds here then the technical picture would indicate higher prices, but it's fairly quiet," Peter Hillyard, head of European metal sales at ANZ Bank, said.

Gold's rally came amid a mix of technical and geopolitical factors. The dollar sold off after insurgents launched assaults in five cities in Iraq, killing about 100 people and wounding several hundred.

In Turkey four people were killed in the country's two main cities ahead of a visit by U.S. President George W. Bush to Ankara.

The U.S. currency was also knocked by an unexpected fall in U.S. May durable goods on Thursday.

"Having moved above $400, the big question is whether this move is sustainable. I think next week will be the real decider for the market with the handover of power in Iraq and the US FOMC meeting in particular set to shape longer-term views," James Moore of TheBullionDesk.com said in a daily report.

"Scaled up resistance should be found at $405/412 while support should now be found at $400-398/392," he added.

...more...

http://news.ft.com/servlet/ContentServer?pagename=FT.com/StoryFT/FullStory&c=StoryFT&cid=1087373262520

Citigroup suspends senior bankers in China

Citigroup has suspended two of its most senior investment bankers in China for allegedly presenting "false information to the company and its regulators".

The world's largest financial services group said it had informed government authorities of the suspension of Margaret Ren, its head of China investment banking and the daughter-in-law of former Chinese premier Zhao Ziyang, and Earl Yen, a director in her unit.

The move, which could prompt regulatory investigations in China, Hong Kong and the US, could endanger Citigroup's reputation and strong position in China's fiercely competitive investment banking market.

Last year, the bank came second by volume in the league tables for merger and acquisitions advice, and third by volume on equity deals, according to Dealogic, the data provider.

The Chinese government is very sensitive to the reputation of the advisers it chooses for landmark initial public offerings of state- owned companies.

<snip>

Citigroup declined to comment further. The two bankers could not be reached for comment yesterday. Rival bankers said the suspension of Ms Ren, a high-flyer with strong political connections who has been credited with Citigroup's recent success in China, would hit the bank's position in the country.

...more...

http://servihoo.com/channels/kinews/v3news_details.php?id=46262&CategoryID=47

Japan's central bank vows to keep loose-money policy to fight deflation

Bank of Japan governor Toshihiko Fukui renewed his pledge to root out deflation with his super-loose monetary policy as the latest data confirmed that falling prices remain a problem.

The central bank's nine-member policy board voted unanimously to leave its ultra- easy monetary policy unchanged, as widely expected, to support a sustained recovery in the world's second-largest economy and keep expectations of future interest rates at low levels to help borrowers.

The bank has been conducting a "quantitative" credit easing in which it pumps cash into the financial system instead of lowering key short-term rates that are already near zero percent.

"It is too premature to discuss the post-quantitative easing policy framework," Fukui told a news conference.

Fukui said neither the results of the central bank's latest Tankan quarterly survey of business sentiment, due out Thursday, nor future consumer price index (CPI) data is likely to affect the BoJ's view on prices.

"It is hard to envisage that the Tankan or CPI data will show a result that will affect our view on the trend of prices," Fukui said.

...more...

There are a few economic reports due out this morning:

Jun 25 8:30 AM
Chain Deflator-Final Q1
report -
briefing.com est. - 2.6%
market anticipates - 2.6%
last report - 2.6%
adjusted -

Jun 25 8:30 AM
GDP-Final Q1
report -
briefing.com est. - 4.4%
market anticipates - 4.4%
last report - 4.4%
adjusted -

Jun 25 9:45 AM
Mich Sentiment-Rev. Jun
report -
briefing.com est. - 95.2
market anticipates - 95.0
last report - 95.2
adjusted -

Jun 25 10:00 AM
Existing Home Sales May
report -
briefing.com est. - 6.50M
market anticipates - 6.50M
last report - 6.64M
adjusted -

Have a Great Day Marketeers!

[54anickel]

9. Interesting, this talk about Yen capping and NK risks when taken with

this from the Articles & Ideas section of Forex News that was posted on the 23rd.

Yen`s Safe Haven to See Rising Sun

http://www.forexnews.com/AI/default.asp

Updating our May 28 call "Foreigners to Extend Yen's Upturn" in which we forecasted the dollar/yen rate to reach the 107 handle this month, the Japanese currency is set to reach its target. That rationale was primarily based on surging foreign interest into Japanese stocks and bonds, including a record gross 2.5 trillion yen infusion in Japanese bonds. Although weekly data of foreign flows into Japan have shown a retreat in the past few weeks, including a net outflows in bonds, the Japanese currency still flexes its muscle against the US dollar.

Yen's Safe Haven Exploits MidEast Violence

The yen's recent gains have mainly emerged from the beneficial combination of surging geopolitical risks targeting US interests and the swelling US current account gap, which highlights the superiority of Japan's external position. With Japan's trade surplus standing at about 3% of GDP, there is no preoccupation with Japan's ability to attract the necessary capital flows to balance its deficit. And with Japan's isolation from the US' involvement in the MidEast, the yen makes for a solid alternative as long as rate hike expectations are not fuelling the dollar. The atrocious executions of US citizens in Saudi Arabia yesterday's execution of a South Korean interpreter underlined the terrorists' fury against the support for the US cause in the region. With violence undoubtedly seen continuing in Iraq and Saudi Arabia after next week's handover of sovereignty, the Japanese currency should regain its upward momentum. Such gains would only be hampered in the event of severe escalation in oil prices, in which case it could weigh on demand.

From FX Intervention to Monetary Policy Jawboning

As the Japanese currency hovers around 2-month highs, traders are fixated on whether authorities will revert to this spring's interventionist practices of selling yen for dollars at record amounts. Despite a record 18 trillion yen worth of interventions in the first 3 months of the year, all that authorities could do was to slow the dollar's decline towards its 4-year lows. As the yen pushes up further, Bank of Japan officials are resorting to a policy of verbal intervention in the money market, with the aim at convincing markets that no policy tightening would take place as long as inflation is below zero.

more...

[UpInArms]

3. U.S. Q1 GDP revised lower to 3.9% growth rate

http://cbs.marketwatch.com/news/newsfinder/pulseone.asp?dateid=38163.3544212963-815511355&siteID=mktw&scid=0&doctype=806&

WASHINGTON (CBS.MW) - The U.S. economy grew at an annual rate of 3.9 percent in the first quarter, much slower than the 4.4 percent growth rate previously estimated, the Commerce Department said Friday. The downward revision to GDP was unexpected. Economists had forecast that GDP would be unrevised at a 4.4 percent growth rate. Based on the revision, the economy slowed down a bit from the fourth quarter. GDP increased 4.1 percent in the fourth quarter following an 8.2 percent growth rate in the third quarter. The slower growth in the first quarter reflected weaker exports and a sharp decline in spending on equipment and software. Inflation was revised higher in the first quarter. The closely watched personal consumption expenditure price index rose at a 3.2 percent annualized rate in the quarter, up from the 3.0 percent previously estimated. The core rate, excluding food and energy, rose at a 2.0 percent rate, instead of 1.7 percent previously. This is the fastest pace since the third quarter of 2002.

[54anickel]

7. Futures and the buck didn't like those numbers very much

US$ back down to 88.81


S&P500 (990N) -.50
Nasdaq -1.00
Dow +13.00
(20 minute delay)

But hey, don't they keep saying profits are way up? It's a buyers market right now! :eyes:

"Real" economic growth or virtual "financial engineering"?

So, now what's Greenspin gonna do?

On edit add:
Hmmm, strange, from the chart at INO it looks like gold took a tumble on the reports as well. Right around 8:30

[Frodo]

8. Not as bad as you would expect though

I wonder what the spin is?


Keep in mind that the headlines are not the real story on this one. Growth was NOT weaker than expected... it was the INFLATION was much HIGHER than expected.

The GDP figure is NET of the price deflator. So last month actually reported 7% growth... minus a 2.6% measurement of inflation... to give us a NET GDP growth of 4.4%.

Now the "final" revision comes in at a NET GDP growth of "only" 3.9% (not that 3.9 is anything to sneeze at).... with the deflator shooting up to 3.8%.

That gives you a GROSS GDP growth increase to 7.7% from 7.0%.


Things actually grew FASTER than expected. But the dramatic increase in inflation more than offset that.

[54anickel]

10. Thanks Frodo, maybe there is no "spin" just lots of confusion as they

try to digest it all. :shrug:

[UpInArms]

4. U.S. Q1 PCE CORE PRICE INDEX UP 2.0% VS 1.7% PREV EST (n/t)

[UpInArms]

5. 8:30 EST reports

Jun 25 8:30 AM
Chain Deflator-Final Q1
reported - 3.8%
briefing.com est. - 2.6%
market anticipated - 2.6%
last report - 2.6%
revised -

Jun 25 8:30 AM
GDP-Final Q1
reported - 3.9%
briefing.com est. - 4.4%
market anticipated - 4.4%
last report - 4.4%
revised -

next report is due at 9:45 EST

[UpInArms]

6. pre-opening blather

briefing.com

8:54AM: S&P futures vs fair value: +1.5. Nasdaq futures vs fair value: +1.5. Futures indications continue to drift lower, suggesting the cash market will only start the day incrementally higher... Troubling headlines out of Iran, the fear of further violence in Iraq over the weekend, and the lack of upside catalysts this morning have kept buying interest in check.

8:32AM: S&P futures vs fair value: +1.7. Nasdaq futures vs fair value: +4.0. Futures trade weakens a tad on the weaker than expected final revision to Q1 GDP... The figure fell to 3.9% (consensus of 4.4%) from 4.4%... Despite the slight dip in the futures, the indices are still poised for a higher open.

8:00AM: S&P futures vs fair value: +3.4. Nasdaq futures vs fair value: +6.0. Futures market pointing to a modestly higher open for the cash market ahead of the final revision to Q1 GDP at 8:30 ET.... The consensus estimate expects the figure to remain unchanged, at 4.4%... Positive earnings reports from names like NKE have helped lift the market in the early action.

ino.com

The September NASDAQ 100 was higher overnight and is poised to test the early-June high crossing at 1500. Stochastics and the RSI are bullish signaling that sideways to higher prices are possible near-term. Closes above 1500 would renew the rally off May's low while opening the door for a test of the contract high crossing at 1514 later this summer. Closes below the reaction low crossing at 1455.50 would open the door for a possible test of the June 3rd low crossing at 1446.50 later this month. The September NASDAQ 100 was up 3.00 points at 1478.80 as of 6:47 AM ET. Overnight action sets the stage for a steady to firmer opening by the NASDAQ composite index later this morning.

The September S&P 500 index was higher overnight as it consolidates above the early-June high crossing at 1142.20. This week's breakout above minor resistance crossing at 1142.20 has opened the door for a test of April's high crossing at 1147.10. Stochastics and the RSI are bullish signaling that sideways to higher prices are possible near-term. Closes below last Monday's low at 1121.80 would confirm that a short- term top has been posted. The September S&P 500 Index was up 1.00 pts. at 1142.30 as of 6:49 AM ET. Overnight action sets the stage for a steady to firmer opening when the day session begins later this morning.

[UpInArms]

Markets Open at 9:33 EST

Dow 10,445.06 +1.25 (+0.01%)
Nasdaq 2,017.45 +1.88 (+0.09%)
S&P 500 1,141.29 +0.64 (+0.06%)
10-Yr Bond 4.642% -0.004

9:11AM: S&P futures vs fair value: +1.5. Nasdaq futures vs fair value: +1.5. No change in the futures market, and thus expectations remain set for a modestly higher open... Two more economic reports await the market upon start of trading: the revision to June Consumer Sentiment (9:45 ET) and May Existing Home Sales (10 ET)... Consensus estimates can be found on Briefing.com's Economic Calendar.

[JCMach1]

11. Link to GDP Inflation story

http://www.democraticunderground.com/discuss/duboard.php?az=view_all&address=102x645385

[54anickel]

12. 1st-Quarter Growth Slashed, Inflation Up

http://biz.yahoo.com/rb/040625/economy_gdp_2.html

WASHINGTON (Reuters) - The U.S. economy grew much more slowly than previously thought in the first quarter while inflation was higher, a government report showed on Friday.
The surprise downward revision to gross domestic product -- which measures total output within the nation's borders -- cut growth to a 3.9 percent annual rate in the first three months of 2004 from the 4.4 percent reported a month ago and below the 4.1 percent pace in the final quarter of last year.

The government also ratcheted up a key gauge of inflation, confirming an acceleration in price rises that has fueled expectations the Federal Reserve will begin raising interest rates from 1958 lows next week to head off inflation.

The core price index for consumer spending -- a favorite of Fed Chairman Alan Greenspan that cuts out volatile food and energy prices -- gained at an annual rate of 2.0 percent in the quarter, a bump up from the 1.7 percent reported a month ago.

more...

[UpInArms]

13. UMICH JUNE CONSUMER SENTIMENT REVISED TO 95.6 VS 95.2

Eveyone clap your hands! Tinkerbell is counting on you!

{edited to add link and text)

http://cbs.marketwatch.com/news/newsfinder/pulseone.asp?dateid=38163.4122916667-815513994&siteID=mktw&scid=0&doctype=806&

Consumer sentiment up slightly in late June- UMich By Greg Robb
WASHINGTON (CBS.MW) -- Consumer sentiment improved slightly in late June, according to media reports Friday of proprietary research from the University of Michigan. The UMich consumer sentiment index improved to 95.6 in June from 95.2 earlier in the month. The index is above May's 90.2 level. The improvement was unexpected. Economists were expecting a slight decrease to about 94.0 in late June.

[54anickel]

14. Tinks, ah, err, sort of busy right now

[UpInArms]

15. MAY EXISTING-HOME SALES UP 2.6% TO RECORD 6.80 MLN, NAR (n/t)

(edited to add link and text)

http://cbs.marketwatch.com/news/newsfinder/pulseone.asp?dateid=38163.4234837963-815514540&siteID=mktw&scid=0&doctype=806&

May existing-home sales up 2.6 percent to new record By Maggie McNeil
WASHINGTON (CBS.MW) -- Sales of existing homes in the United States unexpectedly rose 2.6 percent in May to a new record seasonally adjusted annual rate of 6.80 million units, according to the National Association of Realtors. The sales were well ahead of expectations. Economists had been predicting a drop to 6.50 million units from 6.63 million units in April. The May activity was up 15.8 percent compared to a year ago. NAR chief economist David Lereah said May's pace is "probably the peak" for housing activity. The national median for home prices was $183,600 in May, up 10.3 percent from a year ealier.

[54anickel]

16. Current Account Deficit Poses Serious Risks

http://quote.bloomberg.com/apps/news?pid=10000039&refer=columnist_berry&sid=az8ywcXba0.M

June 25 (Bloomberg) -- The U.S. current account deficit, a record $144.9 billion in the first three months of this year, clearly is unsustainable, and whenever it begins to unwind, it will be a painful process.

The deficit is more than 5 percent of gross domestic product, double or more the level economists say could be maintained indefinitely. At the very least, trimming it to a more manageable size will take several years during which consumption will stagnate and high long-term interest rates may hurt housing and business investment.

And the adjustment process will impose new restraints on the policy choices open to Federal Reserve officials.

All those things happened in the late 1980s, the last time the U.S. was forced to make such an adjustment after years of living beyond its means.

more...

[UpInArms]

20. wow! that was one hell of a statement coming from a

Bloomberg editorialist.

Production Shortfall

The whopping U.S. trade deficit reflects the shortfall in production. The required inflow of foreign capital, which finances the trade deficit, reflects the shortage of savings.

The situation worsened because U.S. economic growth consistently outstripped that of other industrial nations, creating much stronger demand for imports in the U.S. than demand for American-made goods in other countries. In addition, the U.S., for each additional dollar of income, has a much higher propensity to purchase imports than other countries do.

Meanwhile, the huge swing in the federal budget from surplus to deficit has made things worse by reducing national savings. The deficit absorbs some of the private savings that might otherwise finance investment.

Fixing any of this will be difficult both economically and politically, according to several speakers at the Boston Fed conference.

First, Mann and IIE colleague Edwin Truman, a former senior official for international matters at both the Fed and the Treasury Department, said a large portion of U.S. indebtedness to foreign investors is in interest- bearing liabilities.

Am going away for the rest of the day - back on Monday to watch the next chapter :D

Have a great weekend Marketeers! :hi:

[54anickel]

22. Bye UIA, Have a great weekend!!!!

[54anickel]

17. Emerging-Market Bonds Head for First Quarterly Loss Since 2002

http://quote.bloomberg.com/apps/news?pid=10000086&sid=aA7N8vb9YJKs&refer=latin_america

snip>

Emerging-market bonds are headed for their first quarterly loss since 2002 as yields on 10-year U.S. Treasury notes surged more than 1 percentage point to 4.9 percent. Demand for developing- nation debt declined as the extra yield on the securities was deemed insufficient for the risk of default. About 60 percent of J.P. Morgan Chase & Co.'s EMBI Global Diversified Index was rated below investment grade at the end of May. U.S. Treasuries have top AAA credit ratings.

Biggest Decliners

Emerging-market bonds fell 5.5 percent in the quarter, more than any other fixed-income securities, ending seven quarters of positive returns, according to the EMBI Global Diversified Index. The bonds surged every year since 1999 as sliding U.S. Treasury yields prompted investors to seek higher-yielding assets elsewhere.

Murrin's Emergent fund rose 3.8 percent since April 1, beating 364 other emerging-market bond funds tracked by S&P, as he sold Brazilian, Turkish and other bonds he borrowed, betting he'll be able to buy them back more cheaply. He also holds bonds of Autopistas del Sol SA in Argentina and PT Indocement Tunggal Prakarsa Tbk in Indonesia.

``We're in an environment where external events seem to be more important than what is happening in individual credit stories,'' said Jerome Booth, head of research at Ashmore Investment Management Ltd. in London, which manages $5 billion of emerging-market debt. Ashmore Emerging Markets Liquid Investment Portfolio, which has $1.7 billion of assets, lost 6.3 percent this quarter, according to Bloomberg data.

snip>

`Room for Accidents'

In 1994, when the Fed increased its key interest rate to 5.5 percent from 3 percent, J.P. Morgan's emerging-market index plunged 19 percent. The exodus was lethal for countries such as Mexico, which devalued the peso that December, shattering confidence in developing-nation debt worldwide.

``This time around it's different,'' ......

more...

[54anickel]

18. Tax loophole proving costly-

Lawmakers attempting to eliminate corporate shelter

http://www.chron.com/cs/CDA/ssistory.mpl/business/2646160

NEW ORLEANS - The "Geoffrey Loophole," named after the familiar giraffe mascot of Toys R Us, is no fun for state taxing authorities. Under the loophole, local outlets of large national chain stores pay royalties to sister companies in other states, claiming the payments as business expenses that are deducted from state income taxes.

It's difficult to determine how much the states are losing each year. But it's a sore spot with states trying to balance budgets.

The Maryland Legislature voted this year to prohibit companies doing business in that state from transferring part of their profits to holding companies chartered in Delaware, where the money is not taxed. Gov. Robert Ehrlich allowed it to go into law without his signature.

For the second straight year, a proposal to close the loophole failed in Missouri. While the Republican-led Legislature and Democratic Gov. Bob Holden said the loophole should be closed, they could not agree on how to do it.

more...

[Coventina]

19. The "I Ching" on today's market

Hello everyone!

I know I've been even less than sporadic lately. But I took a reading today. Here it is if you are interested. It is THE SOURCE changing to CRITICAL MASS.

Here is the changing line to THE SOURCE: The time has come to pull back and reorganize your life or re-evaluate your goals.

Here is a quote from CRITCAL MASS: Make a rapid assessment of your situation. Your environment is rapidly becoming the meeting ground for many of the major circumstances affecting you. Look for an avenue of escape.

Well, sounds a little dire to me. I'm going to guess the markets are going down today.

I also like to think the Critical Mass may refer to a certain movie we're all anxious to see......

Have a great day everyone.
Take care.
:hi:

[54anickel]

23. Ewwww, Thanks Coventina!!! n/t

[54anickel]

21. China Shouldn't Raise Interest Rates, Official Says (Update2)

http://quote.bloomberg.com/apps/news?pid=10000080&sid=a2JVnAULcz04&refer=asia

June 25 (Bloomberg) -- China should avoid raising interest rates to cool industrial expansion as lending restrictions introduced by the government are working and inflation is being brought under control, a government official said.

``Chances are slim that China's economy will have a hard landing, Shi Faqi, an official with the Beijing-based National Bureau of Statistics, said in a statement on the bureau's Web site. ``Raising interest rates now will do more ill than good.''

Higher borrowing costs may damp consumer spending, which the government is counting on to drive economic growth as lending curbs cool investment in car factories, apartment buildings and steel mills. The central bank's benchmark one-year lending rate, which was last raised in July 1995, is 5.31 percent and the one-year deposit rate is 1.98 percent.

Raising the lending rate ``is the least likely and the least desirable solution,'' said Timothy Bellman, regional director for strategy and research at real estate brokerage Jones Lang LaSalle Inc. ``Homeowners have never had to deal with receiving an increased demand for repayment. Would they stop consuming or spending?''

snip>

....``Raising interest rates would also attract hot money and add pressure for the yuan to appreciate.''

The Bush administration has pressured China to end the yuan's peg, set at 8.3 percent to the dollar since 1995, saying an undervalued Chinese currency is partly to blame for American job losses and a record $124 billion trade deficit with the Asian nation.

China's currency would rise to 8.087 against the U.S. dollar in a year if freely traded from the pegged rate of 8.277, forward contracts showed at 2:01 p.m. in Hong Kong. The contracts allow investors to bet on the future value of a currency that is not fully convertible or hedge investments that are denominated in it.

more...

[54anickel]

24. PLUNGING INTEREST RATES CAN HAVE A GOLDEN LINING

http://www.gold-eagle.com/editorials_04/appel062404.html

June 20, 2004 - A change in the psychology and actions of a large segment of the American population was severely altered when the Federal Reserve Board aggressively drove down short-term interest rates. For several years short- term rates on 90 day Treasury Bills were quite stable. They offered their holders annual rates of return above 4%, and occasionally exceeded 5%. In fact, 2000 witnessed these short rates rise above 6%. When that occurred, the lives of the investors who owned these and other short-term monetary instruments seemed certain to improve. This was due to their belief that the added income accruing from these investments would increase their purchasing capacity, and would allow them to experience an easy, more worry-free existence. They felt that they could lead a more comfortable life because their incomes had improved. Unfortunately, this mind-set was as short-lived as the fleeting +6% interest rates. For many, this brief period of contentment was soon replaced by the worst of all worlds.

A large and growing contingent of Americans live on fixed incomes. They are either retired or soon to be, and their primary source of income is largely generated from dividend or interest bearing accounts, or instruments whose rate of return is predicated upon the interest rate level. They may have savings accounts of one form or another, bonds or annuities, or one of a multitude of interest sensitive products. These individuals use the principle or interest generated by their investments to supplement their social security payments. Further, many of the throngs of baby boomers plan to shortly join their ranks, when they too will retire. Many individuals from this latter group are increasing their more stable investment type holdings as they near retirement, and their aversion to risk rises.

We all structure our lifestyles based upon the amount of income that we expect to receive on either a weekly, monthly, or annual basis. This is the sum of earnings from our employment, investments, various businesses, as well as our anticipated interest and dividend payments. When one approaches or reaches retirement, the primary source of their lifelong income, their salaries, is removed from their income equation. It may be replaced by social security or other retirement benefits, but seldom are these as great as the salaries that they will no longer receive. Further, retirees desire a greater sense of security because their income is limited and they must rely on their finite, life-time accumulated wealth. To this end they husband their assets in the best fashion that they can. This motivates many to shun equities and other forms of investments due to their great volatility, and the potential for losing their assets from falling market prices.

Due to the enormous population of baby boomers, our nation consists of an increasing number of families that are dependent upon the returns from their interest sensitive investments. If their income is stable, they will have one less thing about which to be concerned. To these people, fluctuating interest rates pose great risk. They have already planned their spending decisions around their new income, and can suffer great hardship if their income stream is impaired. This will occur when interest rates sharply fall.

snip>

Most individuals who invest in interest bearing instruments are conservative by nature. Prior to the last decade it was common to hear statements like, "the stock market is a gamble". This was because in truth it is. Only recently have such statements as, "stocks are a form of savings" filled the airwaves. These conservative investors had taken to heart and understood the true nature of the stock market, and would normally have never considered investing in equities. Yet, the combination of their fear and the endless banter describing common stocks as a method of savings, combined with the widely fostered belief that stocks are assured to go higher in price over time, drove many of these poor souls into the stock market.

This is one of the reasons why stock prices have been so well supported during the past few years. Billions of dollars have been drawn into them by those whose desperation caused them to sell their conservative investments, and reinvest the proceeds into common stocks.

more...

[54anickel]

26. Memo to Richard Russell On the Margin Baby

This is a long, but I thought interesting article. Back to the inflation/deflation debate.

http://www.goldenbar.com/Briefs/23Jun04EditorialPF.htm

snip>

Thus, before we elaborate further on the dollar, and Mr. Russell's deflation fallacies, let me emphasize that there is no malice or defamation intended here. While I don't personally subscribe to his letter, I have enjoyed the occasional snippets encountered throughout my career and life. His courageous contrarian knack deserves respect if only because it's been correct often enough. And of course it was nice to have him on board the gold bull for a while, even though it's bucked him now.

The objective here is not to change his mind (although that would be nice) or to tell you that the renowned Dow Theorist doesn't know the first thing about inflation; it is to illuminate some of the common fallacies about the subject of money and gold.

Russell's views undoubtedly reflect those of a large segment of the investing population, and so in criticizing his widely read arguments I only hope that you may reflect on some of the common misconceptions in the case for gold.

USD Not Oversold, Don't Take Your Eye Off the Trade Ball
The US dollar has fallen about 30 percent in a little over two years against a basket of trade-weighted currencies, which is about as fast as it has ever fallen. However, there are at least two facts that suggest it is not oversold (on foreign exchange markets):

1) the trade deficit keeps widening (recall, a trade deficit arises when prices rise faster in the domestic economy, or fall faster abroad - in other words, because the dollar is falling slower on the currency markets than it is in exchange for domestic goods and services); and

2) if it weren't for the massive interventions last year by the Bank of Japan and China the US dollar would have fallen even faster than it did (and the trade deficit might then have narrowed).

Indeed, our explanation for the reason the trade deficit has continued to grow is that the Fed's inflation is causing the value of the medium to fall relentlessly faster in the US economy than on the market against other currencies - which is due to the artificial policy induced intervention-related demand by central banks abroad.

more...

[54anickel]

27. 11:16 update

Dow 10,463.57 +19.76 (+0.19%)
Nasdaq 2,030.38 +14.81 (+0.73%)
S&P 500 1,144.06 +3.41 (+0.30%)
10-yr Bond 4.654% +0.008
30-yr Bond 5.347% +0.009

NYSE Volume 418,323,000
Nasdaq Volume 524,121,000

11:00AM: Market holds around its earlier levels as tech continues to drive the market... The semiconductor group has emerged as the best name, and found support in other tech sub-sectors such as software, computer hardware, networking, internet, and electrical equipment... Small cap shares have also outperformed, influenced by the annual Russell 2000 reconstitution, which will be effective after the close of trading today... This week, there have been significant outflows from Russell funds - like the Russell 2000 iShares (ticker IWM) - as adjust for stocks that are slated to be deleted...
Briefing.com has followed the Russell re-balancing closely, and articles can be found in the Ahead of the Curve column archives...Russell 2000 +0.7, SOX +1.4, NYSE Adv/Dec 1898/987, Nasdaq Adv/Dec 1722/996

10:30AM: Major indices continue to march slightly higher, although gains - in an absolute sense - are not that large... Conviction on the part of buyers is not too impressive in the early going, with advancers barely outpacing decliners at the NYSE and Nasdaq... Still, sector participation has been fairly broad-based, and could support the market's stance in positive territory... Drug is the only noticeable laggard at this point, falling behind due to a detrimental report on Pfizer's (PFE 34.59 -0.22) Alzheimer's drug...

The Financial Times said that the first independent trial of Aricept has found it only minimally effective... NYSE Adv/Dec 1752/1028, Nasdaq Adv/Dec 1571/1000

10:00AM: Equity market gets a slight boost from the better than expected Michigan Consumer Sentiment report.... The index climbed to 95.6 (consensus of 95.0) from 95.2 as the economic outlook portion was revised higher, offsetting a decline in the economic conditions component...Right now, the majority of most sectors are showing gains - biotech, brokerage, and retail are moderately higher.... The strongest groups at this standpoint are tech, material, and airline... May Existing Home Sales was just released and jumped to 6.8 mln (consensus of 6.5 mln) from 6.64 mln in April...

The indices have moved higher again as a result... NYSE Adv/Dec 1480/1050, Nasdaq Adv/Dec 1401/954

9:40AM : Stocks open in the green, although gains are of a very slim nature... Today's news items have not been the most inspiring - troubling headlines out of Iran and few earnings reports to turn the attention back to the strong corporate growth picture - and thus buyers have not been fervent in their efforts... Final Q1 GDP dropped to 3.9% from 4.4% (consensus of 4.4%) as personal spending, business investment, imports. and inventories were revised lower... The GDP price deflator was also revised to a stronger 2.9% (consensus of 2.6%)...

The market will receive two more economic reports shortly: the revision to June Consumer Sentiment and May Existing Home Sales... The consensus estimates for each are 95.0 and 6.5 mln, respectively...

[54anickel]

28. Oil falls as Norway strike ends

Government of No. 3 exporter orders work stoppage to end; return of Iraq's exports also eases price.

http://money.cnn.com/2004/06/25/markets/oil.reut/

LONDON (Reuters) - Oil prices dipped Friday after the Norwegian government ordered an end to a strike that had threatened to bring exports from the world's third-biggest oil exporter to a standstill.

News that shipments from southern Iraq were getting back up to strength added to the perception that the market is adequately supplied with crude.

U.S. light crude for August delivery fell 28 cents to $37.65 a barrel, reversing modest gains the previous day. London Brent crude shed 21 cents to $35.09.

Prices eroded after the Norwegian Labor Ministry said Friday the government had ordered an end to an eight-day-old oil and gas strike.

Government intervention had been widely expected after employers raised the stakes by threatening to lock out almost 3,000 workers from offshore platforms Monday.

more...

[54anickel]

29. Experts' assurances fail to ease inflation pain for consumers

http://www.azcentral.com/arizonarepublic/business/articles/0625inflation25.html

snip>

Grace's experience seems to be at odds with government inflation numbers, which indicate that prices remain low by historical standards. Consumer prices are up 3.1 percent over the past year, which means an item that cost $1 a year ago now costs $1.03.

"Our general view is that inflationary pressures are not likely to be a serious concern in the period ahead," Federal Reserve Chairman Alan Greenspan told Congress earlier this month.

"He's obviously not talking about me," Grace said. "He's talking about people who have much more money - at his level, where his words matter."

Grace is right. Greenspan speaks to financial market players, telegraphing Fed plans to raise interest rates slowly because inflation appears to be tame.

What matters to Greenspan, however, is different than what matters to consumers.

more...

[Robbien]

33. That appears to be their standard operating procedure

Stand in front of middle class people and tell them there are plenty of jobs, inflation is low and the economy is booming, all the while the audience is wondering what planet these guys are living on.

[54anickel]

34. Makes you wonder....

What are these happy, happy people participating in the U Michigan survey are taking, AND where can I get me some of that? :evilgrin:

[54anickel]

30. Debt? What Debt? Oh, THAT Debt...

http://www.capitolhillblue.com/artman/publish/article_4737.shtml

That the national debt limit needs to be raised because we are borrowing so much money is no great secret, but the Republican-led Congress wants to raise that limit with as little public notice as possible.
That would rule out a freestanding vote because that would highlight the record deficits the Republicans have run up over the last three years. The Democrats, retroactive converts to the cause of balanced budgets, would point out that, after taking office with the publicly held share of the national debt declining thanks to four years of surpluses, the Bush administration has had to twice ask that the borrowing cap be lifted, for a total of $1.4 trillion. Now it needs a third of about $690 billion -- and soon. That would take the gross national debt to more than $8 trillion, an impressive number.

The leadership had hoped to slip the increase through as part of a congressional budget resolution, but for the second year in a row, House and Senate Republicans might not be able to agree on a budget.

snip>

The Treasury will bump up against the $7.3 trillion debt limit later this summer. The White House has told congressional Republicans that Bush's Treasury secretary, John Snow, could stall for time, and maybe even get past the November election without lifting the cap, by juggling some government accounts and borrowing from others.

But there's a problem: When President Clinton's Treasury secretary Robert Rubin did that, these same congressional Republicans threatened to impeach him. It's so true in Washington: What goes around, comes around.

more...

[54anickel]

31. We fight, you pay: Costs of the Iraq war

http://www.atimes.com/atimes/Middle_East/FF25Ak01.html

WASHINGTON - Unless you own a lot of stock in Halliburton or other big defense, security or construction companies, chances are the Iraq war has turned out to be a pretty bad investment, both in terms of human lives and taxpayer dollars, according to a new assessment by a Washington-based think-tank, the Institute for Policy Studies (IPS).

In what it claims is the first comprehensive accounting of the costs of the war on the US, Iraq, and much of the rest of the world, IPS concludes that not only have US taxpayers paid a "very high price for the war", they have also become "less secure at home and in the world".

Citing a number of recent studies, the report, "Paying the Price: The Mounting Costs of the Iraq War", also notes that the US$151.1 billion that will have been spent through this fiscal year could have paid for comprehensive health care for 82 million US children or the salaries of nearly 3 million elementary school teachers. According to one study cited in the 54-page report, the war and occupation will cost the average US household at least $3,415 through the end of this year.

If spent on international programs, the same sum could have cut world hunger in half and covered HIV/AIDS medicine, childhood immunization and clean water and sanitation needs of all developing countries for more than two years.

more...

[54anickel]

32. 12:45 update

Dow 10,446.68 +2.87 (+0.03%)
Nasdaq 2,027.42 +11.85 (+0.59%)
S&P 500 1,141.83 +1.18 (+0.10%)
10-yr Bond 4.648% +0.002
30-yr Bond 5.345% +0.007


12:25PM: Equity market continues to trend lower although it has stabilized some just above the flat line... The Nasdaq is still showing the largest gains of any of the major indices - up 0.5% versus up 0.1% for the S&P 500 - due to the strength of technology today... Sector rotation seems to be the case with much of today's action... Telecom, material, and consumer discretionary are advancing - after being down in recent months, and consumer staple, energy, and health care have all turned negative - after showing strength for much of this year...
As a side note, Briefing.com recently maintained our Overweight rating on Material on our Sector View page...NYSE Adv/Dec 1835/1256, Nasdaq Adv/Dec 1649/1218

11:55AM: The major indices have chalked up modest gains this morning, in keeping with the general give and take we've seen between buyers and sellers over the past couple of weeks... The market closed slightly lower yesterday, so it was only natural that it trade somewhat higher today... :eyes:

[54anickel]

35. 1:33 numbers & yada - Pretty dead here today

Dow 10,451.19 +7.38 (+0.07%)
Nasdaq 2,028.68 +13.11 (+0.65%)
S&P 500 1,141.95 +1.30 (+0.11%)
10-yr Bond 4.656% +0.010
30-yr Bond 5.356% +0.018

1:30PM: Equities head a bit lower but have yet to breakout of their range for the day... Volume has been fairly thin this session at the NYSE and Nasdaq, although it has been in keeping with recent trends... Most industry groups have been fairly strong today, although energy has been a notable exception... The price of crude oil has fallen by nearly 2% to $37.32/bbl... For the first time in 6 months, oil inventories reflected growth in the US... NYSE Adv/Dec 1832/1293, Nasdaq Adv/Dec 1722/1219

1:00PM: Market continues to trade in lackluster fashion, with the Dow flirting with negative territory... The indices have been relatively trendless over the past 3 weeks, with most strategists predicting a big move after June 30th - the date of the FOMC's meeting and the Iraq government handover...

Briefing.com does not foresee any big dip or rally happening then, as (1) the markets have arguably priced in several Fed tightening with the 10-year note at 4.65% (up from 4.25% six months ago) and (2) many events standout over the summer (the Olympics, the Republican and Democratic National Conventions) as possible terrorist targets... Activity should likely pick up in the fall - ahead of the Q3 (Sept) reporting season and the November general election...NYSE Adv/Dec 1762/1365, Nasdaq Adv/Dec 1664/1230

12:25PM: Equity market continues to trend lower although it has stabilized some just above the flat line... The Nasdaq is still showing the largest gains of any of the major indices - up 0.5% versus up 0.1% for the S&P 500 - due to the strength of technology today... Sector rotation seems to be the case with much of today's action...

[54anickel]

36. US court blocks media ownership reform

http://www.guardian.co.uk/business/story/0,3604,1247184,00.html

Controversial changes to US media ownership rules that would have allowed industry giants such as Rupert Murdoch's News Corporation to extend their empires have been thrown out by an appeals court.

The new laws were ushered in last year by the federal communications commission despite opposition from media activists and in Congress.

Critics claimed the changes would reduce diversity of views in the media and give companies greater control of news content, advertising revenues and cable rates.

snip>

"The judges agreed with us that preserving democracy is more important than helping big companies grow bigger."

snip>

Opposition focused on Mr Murdoch as "the man who wants to control the news in America" and said the changes would "weaken the very fabric of our democracy".

[Robbien]

39. Saw that

The only reason they kicked it was because Powell didn't give any support for his new limits. Of course he couldn't because the real reason is that current mega owners are above the old limits.

Now Powell should do his job and make those guys give up some of their holdings.

Yeah, I know, fat chance.

[54anickel]

37. Does Leverage Matter?

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

June 24, 2004
This has been a quiet week, especially compared to last week’s deluge of economic data. Earnings preannouncements and a few earnings reports attempted to keep investors attention ahead of next week’s FOMC meeting. By early indications, second quarter earnings should continue to be strong. For the first time that I can remember more companies are guiding earnings higher rather than lower. There have been 91 companies that have said earnings would be greater than analysts’ forecasts compared to 73 that have guided analysts to lower earnings projections for the second quarter. This of course leads analysts to increase their earnings estimates. Second quarter earnings growth estimates for the S&P 500 have increased to 20.3% from 19.0% at the beginning of the month and 13.6% at the beginning of the year. The sector with the greatest increase in earnings estimates is the energy sector. Earnings growth estimates for the energy sector have increased to 41% from 31% at the beginning of the month and just 8% at the beginning of May. Currently, analysts do not expect energy companies to sustain their current rate of earnings growth. Earnings growth for energy companies is forecasted to decelerate to 14% in the third quarter and to 12% in the fourth quarter.



FedEx reported that fiscal fourth-quarter earnings jumped 47% and package volume increased 7%. International priority shipments increased 7% with most of the growth coming from Asia. Shipments from China increased by 18% and U.S. domestic volume increased 2%. This was the largest gain in three years. Costs escalated during the quarter, with fuel costs rising 17% compared to last year. The number of packages sent via FedEx ground jumped 12%. FedEx also expects to increase its capital spending in fiscal 2005 to $1.6 billion from $1.3 billion last year. The company also increased its earnings guidance for the current quarter and fiscal year.



Last week, Richard Bernstein, Chief U.S. Strategist at Merrill Lynch, issued a report that added another plank in the housing bubble debate. Bernstein thinks there is a housing bubble in the United States based on five factors that he believes defines asset bubbles. These factors are:



Available liquidity.
Increased use of leverage.
Democratization of the market.
Increased turnover.
Increased new issuance.


It is easy to conclude that based on anecdotal evidence along with economic data that each of these conditions exist in the current housing market. Bernstein’s latest report focuses on the returns that homeowners have seen over that past couple years. He contends that homeowners have enjoyed much larger returns than the simple appreciation of their house. Since virtually every homebuyer finances the overwhelming majority of the purchase, the returns “earned” on the homeowners invested capital are substantially larger. He showed what the “cash-on-cash” returns have been for homeowners over the past twenty years and starting in the mid-1990s the “cash-on-cash” returns began to depart from the actual home price appreciation. The increased leverage associated with historic low levels of homeowner’s equity has caused the “cash-on-cash” return to increase faster than the underlying home prices. Just using the average percent of equity home ownership as the amount of leverage leads to “cash-on-cash” returns that are about twice as great as the underlying house appreciation. New homeowners are even more leveraged as they typically have twenty percent or less of equity. Assuming 20% equity, the “cash-on-cash” return is five times the home’s price appreciation. Unfortunately, leverage runs both ways. It is not uncommon to find homebuyers putting 10% or less down on a house. This means that a 10% decline in the price of the house reduces the homeowner’s equity to zero. Additionally, with the increased amount of cash-out refinancing and home equity loans in recent years, there are probably a substantial number of homeowners with less than 10% equity.


more...

[54anickel]

38. Medicaid still busting state budgets

http://www.stateline.org/stateline/pa=story&sa=showStoryInfo&id=381040

Retired factory worker Donna McNeil said she panicked when she received “The Letter” earlier this month notifying her that she is among 65,000 Mississippians who next week will lose health care coverage through Medicaid, the state-federal health program for the poor and disabled.

“They can’t do this,” she told Stateline.org in a telephone interview.

McNeil, a 50-year-old resident of Glen, Miss., said she immediately called Republican Gov. Haley Barbour’s office, her congressman and even the White House to protest the dramatic health care cuts Barbour approved May 26.

“I started calling everybody in the country to try and figure out what was going on,” McNeil said. “The only answer I can come up with is that the governor of Mississippi is trying to save the state some money because it’s in the hole.”

Mississippi’s Medicaid rollback, although the most drastic to date this year, is just one of several health care cuts looming in the states. Despite a recent uptick in state revenues, many states still are struggling to maintain services and avoid restricting the health care program that serves as a safety net for about 50 million Americans.

more...

[hadrons]

44. did Donna McNeil expect these Repukes to care???

if she was dumb enough to vote for them maybe, but come on

[54anickel]

48. I don't think it was necessarily an unreasonable expectation, regardless

of her political preference (assuming she even has one). There are a LOT of folks in this country that just do not keep up on politics. They are usually too busy keeping a roof over their heads and food on the table. I'm sure it was a very rude awakening for her, and perhaps as more folks run into similar circumstances they too will wake up from their slumber.

We should be ready and willing to welcome the late risers as they awaken from their little dream worlds into the nightmare that has become reality.

[54anickel]

40. 2:37 and ouch

Dow 10,403.40 -40.41 (-0.39%)
Nasdaq 2,019.03 +3.46 (+0.17%)
S&P 500 1,137.64 -3.01 (-0.26%)
10-yr Bond 4.646% +0.000
30-yr Bond 5.341% +0.003

NYSE Volume 947,468,000
Nasdaq Volume 1,077,177,000

2:25PM: Indices take a turn for the worse and set new session lows in the process... The market's inability to build off its early morning advance, and ultimately have it succumb to selling, has accelerated the pullback in the mid-afternoon... The exceptionally light volume has left the indices vulnerable to wide swings - ones we've seen in recent sessions... Late-day reversals have thus become fairly common, with the Dow, Nasdaq, and S&P 500 moving as much as 50, 10, and 6 points in one hour...
The catalyst for the current retreat appears to be a drop in the brokerage, biotech, industrial, and retails sectors - areas that were up early on...NYSE Adv/Dec 1754/1415, Nasdaq Adv/Dec 1629/1371

2:00PM: Blue chip averages continue to trade along their worst levels of the day, while the Nasdaq trades near its best levels... Most Friday afternoon sessions are generally directionless as most traders have headed out for the weekend... Next week, investors should be following market proceedings more closely with several notable events on the calendar... Wednesday is both the FOMC meeting (fed funds futures have priced in over a 100% chance of a 25 basis point increase) and Iraqi handover date, and Friday is the May Employment report...

While this will give the market more to cue off of, Briefing.com does not believe it will necessarily lead to higher volume totals... Please see today's Looking Ahead column for more explanation... NYSE Adv/Dec 1810/1339, Nasdaq Adv/Dec 1775/1202

[54anickel]

41. U.S. stocks turn mixed on weekend jitters

http://biz.yahoo.com/cbsm-top/040625/db5a9598ad91579891bf0debe2f215dd_1.html

NEW YORK (CBS.MW) -- U.S. stocks turned mixed in afternoon trading Friday as blue chips lost ground and the Nasdaq pared gains, with traders attributing the pullback to caution ahead of the weekend.

"You're coming into a Friday afternoon with Bush going overseas and people just want to be a little cautious because you never know what could happen," said Paul Mendelsohn, chief investment strategist at Windham Financial Services.

snip>

"The market reacted to the less-than-expected GDP with some equanimity," said Mike Holland, fund manager at the Holland Balanced Fund.

For Holland, the muted reaction shows a lot of bad news is already priced in to the market, with investors quietly confident that corporate America remains in robust health.

more...

[54anickel]

42. GDP Slowdown No Reason for Panic

http://www.thestreet.com/markets/rebeccabyrne/10167976.html

If the Federal Reserve raises interest rates next week, as widely expected, it will do so at a time when the U.S. economy appears to be moderating. But many economists said they're not worried.

Gross domestic product grew 3.9% in the first quarter, according to the Commerce Department, down from the 4.1% pace reported in the fourth quarter and below the sizzling 8.2% growth in the third quarter.

The downward revision to GDP surprised economists, who had expected it to be unchanged at 4.4%. While the report is largely considered old news, it does come on the heels of a disappointing durable goods report and higher-than-expected unemployment claims.

snip>

Joseph Abate, an economist at Lehman Brothers, said that, at most, the data show a pause in activity, not a retrenchment. He is looking for 4.8% growth in the second quarter, 4.2% growth in the third, and 4.5% in the final three months of the year.

"What caused the revision was a surge in imports, which reflects strong consumer demand and business demand for capital equipment," he said. Imports act as a drag on GDP.

GDP would have been higher if not for the deterioration in the trade balance. The Commerce Department said the trade deficit widened to a record $48.3 billion in April.

more...

[54anickel]

43. Silicon Valley's Intellectual Bankruptcy

http://www.fool.com/News/mft/2004/mft04062532.htm

snip>

The argument to "save" stock options goes like this: innovation is enhanced by motivation, motivation is spurred on by the chance of substantial compensation, compensatory rewards are driven by stock options. Therefore, without stock options, innovation will die, and according to Andy Bechtolsheim, co-founder of Sun Microsystems (Nasdaq: SUNW), expensing options would move Silicon Valley backward to its history of orchards, if not the Stone Age.

Naturally, within this stream of thought, there is a massive disconnect of logic. OK, more like five massive disconnects. First, FASB isn't working to outlaw options, just to give them the accounting weight to match the economic weight that rallies such as the one attended by Bechtolsheim suggest they have. Second, the only group that is talking about the end of options in any real way includes companies such as the one Bechtolsheim founded. This logic escapes me. "Yes, it's just a change in reporting, but make us expense options, and we're going to get rid of them." Third, Silicon Valley boomed (and busted) several times in the interim between the Stone Age and the early 1990s, when stock options came into use. While I'm not opposed to hyperbole, this is a moronic comment. Fourth, there are plenty of non-cash methods that companies can use to compensate employees even if they do choose to cut back on options. Restricted stock, stock grants, and employee purchase plans all accomplish the same purpose. Know why more companies don't use them? It isn't economic; it's because of the accounting loophole that FASB is currently trying to close. And fifth, does Bechtolsheim really think that no other sort of motivation exists in the absence of stock options?

It's intellectual bankruptcy, pure and simple. Options are expensed everywhere they are used except when they come in the form of compensation. As Accounting Observer editor Jack Ciesielski pointed out to me, even Intel (Nasdaq: INTC) expenses stock options:

snip>

My favorite line from the rally, though, came from Sun employee Upendra Brahme, who stated of FASB that "they should stay out of this." It's a fairly bold assertion that the accounting standard setters should "stay out of" accounting, but while we can forgive Brahme his ignorance, we can also note the parallels between this crude argument and the ones being made throughout the Valley, and by its elected representatives.

Of course, since options expensing looks to be very likely, Silicon Valley doesn't have much to lose by throwing a fit. If it wins, it works out great; if not, it gets all sorts of "I told you so" excuses for years to come. And people will probably buy it, too, as long as they're unclear on the fact that we're just talking about an accounting entry. That's the point of the carping about, to scare people to death about the economic consequences of something that isn't economic in the first place. That's why Qualcomm's (Nasdaq: QCOM) chief financial officer tries to argue that his company would have been viewed as a "miserable failure" had options been expensed -- he hopes that he'll scare shareholders into supporting being given information of lower quality. After all, if the results turn out looking better, we can just have A Prairie Home Companion kind of market, where all companies are above average. It's why Intel's Craig Barrett is willing to play the "threat from China" card. It's why they keep the focus not on more robust information, but on the threat of grievous financial loss. I really didn't realize that we were all eating berries and bark before stock options came along, but apparently this is the case.

more...

[54anickel]

45. Wal-Mart, Rite Aid ink $9.8M settlement

Retailers settle suits alleging they submitted false prescription claims to federal insurers.
June 25, 2004: 4:10 PM EDT

http://money.cnn.com/2004/06/25/news/fortune500/riteaid_walmart/

WASHINGTON (CNN) - Wal-Mart and Rite Aid agreed to pay millions of dollars to settle separate suits alleging the firms submitted false prescription claims to government health insurance programs, the Justice Department announced Friday.

Wal-Mart Stores agreed to pay $2.8 million to settle allegations some of its pharmacies dispensed partial or "short" prescriptions due to insufficient stock, but billed Medicaid and other programs for the full quantities prescribed.

A whistleblower in South Carolina who brought the Wal-Mart case will receive more than $95,000 the department said.

snip>

In a statement, Wal-Mart said that "the practices at issue were used throughout the industry." :eyes:

more...

[54anickel]

46. Closing.......

Sort of lonely out here today. Here's the closing numbers and yada yada in case anyone is interested.

Hear the lonesome S&P,
He sounds too blue to fly
The late day trade is screamin' DOW
I’m so lonesome I could cry


Dow 10,371.84 -71.97 (-0.69%)
Nasdaq 2,025.47 +9.90 (+0.49%)
S&P 500 1,134.43 -6.22 (-0.55%)
10-yr Bond 4.645% -0.001
30-yr Bond 5.335% -0.003

NYSE Volume 1,817,183,000
Nasdaq Volume 2,041,845,000


Guess they decided it wasn't worth updating the blather for the day yet. Then again, what can they say....

3:30PM: The market drifts even lower as buyers disappear in the final hour of trading... As it stands now, the Dow is poised to close somewhat lower for the week, and the Nasdaq and S&P 500 are set to finish slightly higher - an exact reversal of the end to last week... The Russell 2000 Small-Cap index is also shaping up for an up week... The Russell 2000 reconstitution finalizes tonight, and more investors have flocked to small-cap funds following the new additions... Briefing.com has written a story on this year's process in today's Ahead of the Curve column....NYSE Adv/Dec 1648/1566, Nasdaq Adv/Dec 1637/1410

Advances & Declines
NYSE Nasdaq
Advances 1791 (52%) 1803 (55%)
Declines 1472 (43%) 1277 (39%)
Unchanged 159 (4%) 151 (4%)

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

Up Vol* 841 (46%) 1302 (66%)
Down Vol* 937 (51%) 644 (32%)
Unch. Vol* 38 (2%) 26 (1%)

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

New Hi's 149 170
New Lo's 30 85

[54anickel]

47. Important commercial break......RE: Fahrenheit 9/11

I know we don't normally do this, but with knowing that so many folks stop in to check out the SMW thread I thought I'd put in a plug for what is probably one of the best posts I've seen on DU on a long time.

Still have tears in my eyes.

http://www.democraticunderground.com/discuss/duboard.php?az=show_topic&forum=104&topic_id=1854244#