STOCK MARKET WATCH, Thursday 2 December

GOLD AND SILVER REMAIN UNDERVALUED

To the disbelief of many, the U.S. dollar continues sinking to new lows. Many analysts and investors have been thinking someone would step in to support the dollar near its all-time low on the U.S. Dollar Index at 81.8 reached back in 1995. Today the index closed at the new low of 81.57, with the dollar exchange rate for the euro at $1.332, Swiss franc at $.876 and the Canadian dollar at $.845. Mainstream market analysts are mostly playing it off as a good thing that will make our exports more competitive and work to inflate our way through the federal budget deficit and trade deficits. Most Americans don’t seem to be alarmed much by the falling dollar; after all, with Mr. Greenspan virtually endorsing a lower dollar, how could it be all that bad? The Fed has been advertising higher interest rates and the spin right now has interest rates moving higher due to an improving economy, not because of a falling dollar. Today the stock markets are getting happy with the prospects of an improving economy based on the ISM report and got an extra boost as energy prices declined with higher than expected inventories.

The day opened with a positive report from the Institute for Supply Management showing their factory index rose to 57.8 from 56.8 in October. This was the first increase in the manufacturing index since July and came in stronger than expectations at 57.0. The employment index also rose from 54.8 to 57.6. The report said consumer spending increased 0.7%, but incomes only rose 0.6%, which means consumers either went into savings or increased their borrowing. Consumer sentiment has been in steady decline, so we’ll just have to see if the spending will remain at a high rate. We already had a warning from Wal-Mart that sales are running behind plan for the first week of the holiday shopping season.

The ISM report was enough to get stocks headed into positive territory, and got an extra boost when the Energy Department said crude inventories gained by 849,000 barrels and distillate inventories (including gasoline and heating oil) grew by 2.3 million barrels following the expected build of 1.5 million barrels. By the end of the day crude was clobbered for a huge loss of $3.64 (7.3%) a barrel to close at $45.52, with gasoline falling 6.5% and heating oil down 6.3%. (This won’t last with a falling dollar.) The lower energy prices were well received by Wall Street sending stock prices higher across the board. By the end of the session the Dow Jones Industrial Average added 162 points to 10,590, the NASDAQ Composite moved 41 points higher to 2,138, and the S&P 500 closed in new high territory for the move by adding 17 points to 1,191. I’ve been expecting a near-term correction for stocks, but they just don’t want to come down! Me thinks reality will set in for stock investors shortly after the first of the year when fourth quarter earnings come out. This re-election rally feels like the “sentiment war rally” that took stocks higher in 2003. I’ll need to see stronger earnings in January to believe it.

Higher interest rates will put additional pressure on stock prices, as bonds with higher yields become more and more attractive. The higher interest rates should work to contract price to earnings multiples for stocks. Remember that the P/E ratio for a stock is the inverse of the stock’s yield. The P/E ratio works well as a relative number because it reflects stock prices for each dollar of earnings. A stock with a P/E of 15 would have a return of one dollar for every 15 invested, or 1/15 = 6.7%. To get the total yield for a given stock, just add any dividends to the “earnings yield.” The markets have been sporting historically high P/E multiples and the high multiples have been justified by low interest rates.

more...

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

Gold rose to a new 16-year high in London on Thursday as the dollar fell to a record low against the euro, increasing the appeal of the US denominated commodities as a hedge against declines in US asset prices.

Bullion has the closest negative correlation to the dollar among all commodities. Gold rose to a high of $456.75 a troy ounce in early London trade, before easing to $455.25/$456.00 in mid-morning trade, up about $2 from the late quote in New York on Wednesday.

Silver broke through the $8 a troy ounce level for the first time since touching a 17-year high of $8.43 in April. Silver hit a morning high of $8.04 up from the late quote of $7.98.

more...

http://story.news.yahoo.com/news?tmpl=story&cid=1106&ncid=1106&e=2&u=/ft/20041202/bs_ft/8010dd0c444d11d99f6a00000e2511c8

John Snow's hopes of staying on as US Treasury secretary well into next year are running into resistance in the White House and among senior Republicans on Capitol Hill.

The names of potential successors to Mr Snow, including Stan O'Neal, chief executive of Merrill Lynch, have been floated in Washington and on Wall Street by Republicans disenchanted with the Treasury secretary.

People close to Mr O'Neal say he is not interested in the job. Having been chief executive for only two years, he is determined to stay on to realise his ambitions for the bank and the financial rewards it promises, they say.

http://story.news.yahoo.com/news?tmpl=story&cid=1106&ncid=1203&e=1&u=/ft/20041202/bs_ft/719f72b2440011d9af0600000e2511c8

Snowjob looks to be pleading for his job with his lipstick smeared across his face and wig disheveled. He checked his dignity at the door to prostitute himself for the past two years. And for what?

http://www.nytimes.com/2004/12/02/opinion/02friedman.html

December 2, 2004
NYT - OP-ED COLUMNIST
The 9/11 Bubble
By THOMAS L. FRIEDMAN


The Washington Post had a story on Monday that contained possibly the greatest hint to a sitting cabinet secretary to start looking for another job that has ever been printed. The article reported, "One senior administration official said Treasury Secretary John W. Snow can stay as long as he wants, provided it is not very long."

SNIP

The very reason Mr. Bush had the luxury of launching a war of necessity in Afghanistan and a war of choice in Iraq, without a second thought, was because of the surpluses built up by the previous administration and Congress. Since then, the Bush team has been slashing taxes in the middle of two wars, weakening the dollar and amassing a huge debt burden - on the implicit assumption that nothing will go wrong in the future.

But what if there is another 9/11 or war of necessity? We're cooked. The tax revenue won't be there, so the only option will be more borrowing and a weaker dollar. But what happens if the Chinese and other foreigners, who now hold over 40 percent of our Treasury securities, decide they don't want to hold these depreciating dollars anymore, let alone buy more?

It is now clear to me that we have followed the dot-com bubble with the 9/11 bubble. Both bubbles made us stupid. The first was financed by reckless investors, and the second by a reckless administration and Congress. In the first case, the public was misled by Wall Street stock analysts, who told them the old rules didn't apply - that elephants can fly. In the second case, the public was misled by White House economists, peddling similar nonsense. The first ended in tears, and so will the second. Because, as the dot-com bubble proved, elephants can fly - "provided it is not very long."

*****

The first of item of work for the next Treasury Secretary will be to buy a parachute. How high the balloon?

As you may or may not know Marketeers, I am a dabbling historian. No matter what goes on today, you can find parallels in history.

This: The very reason Mr. Bush had the luxury of launching a war of necessity in Afghanistan and a war of choice in Iraq, without a second thought, was because of the surpluses built up by the previous administration and Congress.

and this: But what if there is another 9/11 or war of necessity? We're cooked. The tax revenue won't be there, so the only option will be more borrowing and a weaker dollar. But what happens if the Chinese and other foreigners, who now hold over 40 percent of our Treasury securities, decide they don't want to hold these depreciating dollars anymore, let alone buy more?

These blurbs remind me of another troubled time in history, the country in question is England, the time, around 1217. Henry II was a remarkable king and amassed a great fortune. His son Richard, upon ascending the throne, was blown away to find tons of treasure in the secretly built coffers. He went on to spend like a drunken fool on his Crusades and other endeavors of conquest and personal glory. His brother John was little better with the spending. By the time John died, between harsh rule from his father and brother, and his own dirty dealings, the nobles and commoners alike had had enough. They invited France to come on over and take the throne.

John dies, leaves the 9 year old Henry as king. William Marshal is charged with saving the country. He had an empty treasury and almost no resources. He managed to do so, quite remarkably.

The similarties in the situations are several but the two I see worth noting is that, like Richard, the trained chimp seized the throne and was drunk on how much treasure there was. Like the greedy, grasping nobles who lived during the time Marshal was trying to save England from French rule, the top 1%-ers will do nothing to help the country's economic struggles. They will do all in their power to feather their nests, squeeze what the can from the disaster and leave the lowly peasants to clean up the mess.

All things old are new again. We need a William Marshal. He/she won't come from the current "nobility".

Julie

and all of this reads like the fall of Rome.

Thanks for the history, Julie! :hi:

http://www.castlewales.com/marshall.html

http://bladezone.com/marshal/intro.html

Remember Friends come and go, while enemies accumulate. In the Case of Marshall he was to popular to oppose while he was alive, but many of his opponents took their displeasure of him when attacking his children. Just like Republicans are still blaming everything on Clinton and/or Carter (And drag up LBJ every so often).

WASHINGTON - The economy is gaining momentum, bolstered by home building, shipping and even the country's beleaguered manufacturing sector, the Federal Reserve (news - web sites) said Wednesday in a newly upbeat assessment.

Evidence of a strengthening economy showed up in other reports as well while Wall Street hailed a big drop in oil prices.

The Commerce Department (news - web sites) said consumer spending shot up by 0.7 percent in October, the best showing since July, as Americans' incomes, the fuel for future spending, rose by 0.6 percent. The gain in incomes reflected the big increase of 337,000 payroll jobs in October, the best in seven months.

more...

http://story.news.yahoo.com/news?tmpl=story&ncid=1203&e=3&u=/ap/20041201/ap_on_bi_go_ec_fi/economy&sid=95609868

Stocks Seen Opening Flat After Rally

NEW YORK (Reuters) - U.S. stocks were expected to open flat on Thursday, with investors pausing after Wednesday's rally and oil prices holding below $45 a barrel.

-cut-

S&P 500 futures rose 1.5 points, about even with fair value accounting for interest rates, dividends and time to expiration on the contract.

Dow Jones industrial index futures rose 6 points, while Nasdaq 100 futures gained 5 points.

"After yesterday's move, the market is a touch overbought, so we're seeing it take a little breather," said Mike Lenhoff, chief strategist at Brewin Dolphin Securities Ltd. "After a bit of consolidation, I think we'll see the market up for the day. The underlying tone of the market is quite strong right now."

more...

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

NEW YORK - The nation's retailers had a disappointing start to the holiday season, reporting sluggish sales for November as a hoped-for surge in Thanksgiving weekend business failed to materialize.

As merchants reported their first solid results for the season Thursday, the disappointments cut across the sector, including Wal-Mart, Limited Brands and Bombay Co.

"It is a little disappointing," said Ken Perkins, an analyst at RetailMetrics Inc., a research firm based in Swampscott, Mass., as the first retailers released their sales figures. "This can't bode well for the holiday season."

Consumers, particularly low- and middle-income Americans, have been forced to cut spending on clothing and other non-necessities as gasoline prices and grocery bills rise. They're also nervous about jobs — on Tuesday, the Conference Board (news - web sites) reported that doubts about the economy helped push consumer confidence down in November for a fourth consecutive month.

more...

http://story.news.yahoo.com/news?tmpl=story&cid=530&ncid=530&e=1&u=/ap/20041202/ap_on_bi_ge/retail_sales

9 minutes ago
By JANE WARDELL, AP Business Writer

LONDON - Crude oil futures fell below $45 a barrel Thursday, after surprisingly healthy U.S. inventory data eased fears about a supply crunch over the Northern Hemisphere winter.

Analysts said the sell-off through key support levels was also being aided by comments from an OPEC (news - web sites) official that the group is likely to keep production at current levels when it meets next week.

"It doesn't surprise me, to be honest, we've been looking for lower oil prices for some time," said Jason Kenney, an analyst at ING Financial Markets in London. "They have been testing levels to get lower."

-cut-

The U.S. Energy Department reported Wednesday that the nation's supply of distillate fuel, which includes heating oil, grew by 2.3 million barrels last week to 117.9 million barrels. U.S. crude oil inventories grew by 900,000 barrels last week to 293.3 million barrels.

http://story.news.yahoo.com/news?tmpl=story&cid=530&ncid=530&e=4&u=/ap/20041202/ap_on_bi_ge/oil_prices

DETROIT - In what has become a familiar pattern, the country's top two automakers reported weak November sales on Wednesday, while Chrysler and the Japanese companies continued to surge ahead.

-cut-

Overall, U.S. vehicle sales fell 1 percent to 1.2 million units. The seasonally adjusted sales rate was 16.4 million units, compared to 16.9 million units a year ago and in October.

-cut-

GM said its total vehicle sales fell 13.1 percent from November 2003, with a 17.1 percent decline in cars and a 10.3 percent decline in trucks. The company said it intends to produce 1.25 million vehicles in the first quarter, down 7.1 percent from the same quarter last year.

No. 2 Ford said sales of its Ford, Lincoln and Mercury brands fell 4.3 percent in November from the year before, its ninth monthly decline this year. Car sales fell 12.5 percent, while sales of pickups and SUVs were down 0.9 percent. Ford said it would build 930,000 vehicles in the first quarter of 2005, a 7.7 percent reduction.

http://story.news.yahoo.com/news?tmpl=story&cid=530&ncid=530&e=12&u=/ap/20041202/ap_on_bi_ge/auto_sales

holy toledo----we really are standing at the edge of an abyss when ann coulter can make it as santa clause

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

Last trade 81.59 Change +0.03 (+0.04%)

Settle 81.56 Settle Time 23:36

Open 81.37 Previous Close 81.56

High 81.68 Low 81.18

Dollar Drops on Speculation U.S. Officials Seek Weaker Currency

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

Dec. 1 (Bloomberg) -- The dollar declined to a 12-year low against the pound and fell versus the yen and euro on speculation U.S. officials favor a weaker currency to shrink the record current-account deficit.

``Everyone still feels confident that the U.S. is happy with the dollar weakening,'' said Andreas Hahner, a currency strategist at Dresdner Kleinwort Wasserstein in Frankfurt. ``Every currency is making new highs against the dollar and sooner or later the pound had to follow.''

<snip>

San Francisco Federal Reserve Bank President Janet Yellen helped send the dollar down almost 1 percent on Sept. 10, when she said the deficit will widen unless the dollar falls. Yellen said today in Phoenix that the U.S. trade gap is holding back U.S. economic growth.

``We can call what's happening to the dollar a `benign neglect''' by President George W. Bush and Treasury Secretary John Snow, said Enrico Caruso, chief trader at currency hedge fund Tempest Asset Management in Newport Beach, California. ``They are smart and they know one of the ways to get rid of the deficit is by letting the currency devalue.''

<snip>

Snow, who sets dollar policy, said in London on Nov. 17 the U.S. supports a ``strong dollar,'' while at the same time suggesting the Bush administration will not act in currency markets to boost its value. His comments sent the dollar plunging to a record low against the euro.

<snip>

The dollar is down 5.9 percent against a basket of six of its major counterparts this year and needs to drop about another 15 percent to cut the country's current-account deficit to sustainable levels and prevent ``disruptions'' to the world economy, according to a study by the Institute for International Economics in Washington.

...more...

According to my calculations - another 15 percent will put the dollar at 69.

Have a Great Day Marketeers!

http://news.ft.com/cms/s/712b751a-43d8-11d9-af06-00000e2511c8.html

Japan and the eurozone authorities have discussed the prospect of joint currency market intervention if the yen and euro continue to strengthen against the dollar, a senior Japanese finance ministry official said on Wednesday.

Although he declined to comment on his European counterparts' response, he said a common eurozone view had emerged that the euro had reached levels that were harming Europe's economy. The European Central Bank refused to comment.

The official, speaking to reporters on condition of anonymity, added that recent comments about the US current account deficit by Alan Greenspan, chairman of the US Federal Reserve, were a “misjudgment” that had increased market volatility.

The official's comments mark rising stridency in Japanese rhetoric about currencies, and a determination not to let US disapproval prevent Japan from resuming its intervention campaign to slow the yen's rise. Separately, Hiroshi Watanabe, vice-finance minister for international affairs, told Reuters on Wednesday: “Conditions are in place for Japan and Europe to be able to take harmonised action. It is natural for Japan and Europe to act when the dollar alone is falling.”

The ministry official said the dollar should not be weakening given the superior US growth performance. “If there is a general depreciation in the dollar, we should have harmonised action,” he said. “If the movement affects the European economy and the Japanese economy, we should defend ourselves.”

more...

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

snip>

The results from the latest Business Roundtable survey showed that CEOs continue to be an optimistic bunch. Eighty-five percent expect sales will increase during the first half of 2005 with only two percent reported that they will decline. Moreover, 50% expect capital spending to increase versus only 7% that expect to spend less. Employment will continue to expand according to the survey. Forty percent of CEOs plan on hiring more workers, compared to 20% that plan to cut workers. We have discussed the soaring cost of medical care several times, and CEOs share this concern as well. This was the second year in a row that health care was reported as the greatest cost pressure. it was the most cited cause for rising cost pressure with 43% citing it. While it was still the most cited issue, the number of CEO claiming it was their greatest declined from 58% last year. Concern over rising energy and materials prices increased from last year. Nineteen percent of CEO citied energy (7% last year) and 11% listed materials (not listed last year) as their greatest pressure.

The Federal Reserve released the latest Beige Book on Wednesday. Most districts reported that economic expansion continued from mid-October to mid-November. While most districts reported increased retail sales, but sales were mixed in Boston and Dallas and “sluggish or lower” in Chicago, New York, Richmond and St. Louis. A few districts mentioned that sales of luxury items are stronger than lower-priced merchandise citing lower-income households are getting pinched by higher energy prices. Auto sales were weak throughout most districts. Manufacturing activity increased in nine districts with Cleveland, Richmond and San Francisco reporting that activity was unchanged or slowed from the previous report. Similar to the Business Roundtable survey, several districts reported increases in hiring and capital spending. Residential real estate was described as “robust…although some signs of cooling were noted by the Atlanta, Chicago, Cleveland, Dallas, Kansas City, Richmond and San Francisco Districts.” Most districts reported that manufacturers were able to pass along price increases to customers, but retailers were “less successful.”

There were a few indications that the economy may be weakening. On Monday, Wal-Mart announced that it was lowering its November sales forecasts because of “weaker” than expected over Thanksgiving weekend. Other signs that that holiday sprit was not controlled by the Grinch, MasterCard reported that the number of transactions increased 9.3% for the two days following Thanksgiving and Visa reported a 6.1% increase. Several analysts view Wal-Mart’s recent weakness due to lower-income shoppers being squeezed by higher energy costs. Most retailers will report November sales Thursday morning. A recent Reality Check column from Market News International reported that several retailers noticed that activity was a little slower during the Thanksgiving weekend, but it was stronger during the beginning of the month. One noted that after the election, “retail sales really kicked into fifth gear.”

U.S. vehicle sales in November came in at a 16.4 million unit rate, just below estimates of 16.5 million units. This was the lowest selling rate since it reached 15.4 million in June and tied the second lowest rate this year, January was also 16.4 million. Ford and GM reported that sales fell from the year ago period by 7.3% and 13% respectively. These results, which were lower than expected, forced the two domestic automakers to announce production cuts. Ford will slash first quarter production by 7.7% and GM will cut production by 7.1% . Analysts are starting to think it will be cheaper for the automakers to production rather than maintaining the high level of incentives. Average incentives declined in November mostly due to the introduction of new models that typically carry lower incentives.

Consumer Confidence unexpectedly fell in November according to the Conference Board. The 2.3 point drop to 90.5 was 5.5 points lower than economists expected. The decline was due to consumers view in expectations, confidence in the current situation actually rose. Interestingly, the weakness in expectations was mostly in the number of consumers that plan to make a major purchase within the next six months. The percent of consumers that plan on buying a car within the next six months fell dramatically to 4.2%. This was down from 7.6% last month and is the lowest the Conference Board has ever recorded since the survey started in 1964. In fact, all three measures of anticipated purchasing fell. Perhaps most worrisome was the decline in the number that plan on buying a house. Only 2.4% plan on buying a house, down from 3.6% last month and ties an over twenty-year low that was also reached in June 1994.

more...

briefing.com

9:17AM: S&P futures vs fair value: -3.1. Nasdaq futures vs fair value: -5.0. Cash market still slated for a modestly lower start, however, another dip in oil prices (-$0.64 at $44.85) and the approximately $33 bln special dividend payout from Microsoft are serving as underlying sources of support

8:54AM: S&P futures vs fair value: -3.9. Nasdaq futures vs fair value: -8.0. Not much conviction in futures market on the part of buyers or sellers, but the initial bias seems to be skewed to the downside as a batch of disappointing same-store sales from the retailers, a smattering of earnings warnings (NYT, DLM, ANN), and expected profit taking are holding things in check

8:33AM: S&P futures vs fair value: -1.1. Nasdaq futures vs fair value: -3.5. Initial claims rose 25K to 349K, which was worse than the consensus estimate of 330K... futures market took a bit of a dip on the headline, but overall, the attention to this number has been minimal as traders are eyeing tomorrow's nonfarm payrolls number for November as the better guide for hiring activity

8:19AM: S&P futures vs fair value: -0.7. Nasdaq futures vs fair value: -1.0. Futures market showing some reserve this morning as current indications suggest the cash market will start the session on a flat to somewhat weaker note... Expected profit taking after yesterday's rally and a batch of generally disappointing same-store sales results for November, relative to consensus estimates, are acting as limiting factors

8:00AM: S&P futures vs fair value: -0.9. Nasdaq futures vs fair value: -2.0. Futures market suggesting a flat to slightly higher open for the cash market...

ino.com

The December NASDAQ 100 was slightly higher overnight as it extends Wednesday's rally. Stochastics and the RSI are diverging but are turning bullish again signaling that additional short-term gains are possible. If December extends this fall's rally, weekly resistance crossing at 1717 is the next upside target. Closes below the 20-day moving average crossing at 1564.67 would signal that a short-term top has been posted. The December NASDAQ 100 was up 3.50 pts. at 1606 as of 5:50 AM ET. Overnight action sets the stage for a steady to firmer opening by the NASDAQ composite index later this morning.

The December S&P 500 index was slightly higher overnight as it extends Wednesday's rally, which marked a new contract high. If this fall's rally resumes, a test of monthly resistance crossing at 1265.80 is the next upside target. Stochastics and the RSI are diverging but have turned bullish signaling that sideways to higher prices are possible near- term Closes below the 20-day moving average crossing at 1178.04 would signal that a short-term top has been posted. The December S&P 500 Index was up 0.80 pts. at 1190.50 as of 5:52 AM ET. Overnight action sets the stage for a steady to firmer opening when the day session begins later this morning.

http://www.nytimes.com/2004/12/02/business/worldbusiness/02euro.html

FRANKFURT, Dec. 1 - To get a sense of how fast the falling dollar can ruin a European businessman's day, talk to Udo Pfeiffer, the chief executive of a small German machinery maker in the industrial Ruhr Valley.

Mr. Pfeiffer's company, SMS Elotherm, builds machines that forge crankshafts for cars. He exports many to the United States and Mexico, selling them for dollars to manufacturers like DaimlerChrysler.

In recent weeks, the euro has been rising so rapidly against the dollar that Mr. Pfeiffer lost $10,000 in profit in the three days between shaking hands on a $1.5 million deal for a machine and signing the contract. The profit on these machines, he said, will be no more than $30,000.

snip>

Exports, which have fueled a fragile recovery of European economies, are losing steam, according to a survey of purchasing managers by Reuters. The index for new orders in the 12-nation euro zone, a crucial measure of export strength, has fallen below 50 for the first time since July 2003.

The European Central Bank is expected to lower its forecast for the euro zone's economic growth in 2005, to 1.9 percent from 2.3 percent. But it may raise its inflation forecast.

With the bank's bedrock goal of keeping prices stable, most economists do not expect it to lower interest rates. But a minority has begun calling on the bank to do so, saying it must respond to the problems created by the strong euro.

more...

Make sure the contract's quoted in Euros, not dollars

to try and break apart the EURO. It's still a baby currency.

there threatening our hegemony now can we? :evilgrin:

Dow 10,556.08 -34.14 (-0.32%)
Nasdaq 2,137.04 -1.19 (-0.06%)
S&P 500 1,187.44 -3.93 (-0.33%)
10-Yr Bond 4.398% +0.023

NYSE Volume 101,734,000
Nasdaq Volume 199,108,000

9:40AM: Stock market starts the day on a downward note on the heels of rather disappointing November same store sales results... Despite reports of a robust Black Friday, a number of retailers have registered soft numbers relative to expectations, and some - such as Ann Taylor (ANN 20.00 -2.22) - even cut their Q4 (Jan) outlooks... The negative headline has prompted traders to take light profits from yesterday's impressive 1.5-2.0% run...

Another drop in the price of crude oil - to below the $45/bbl mark - and the approximately $33 bln special dividend from Microsoft (MSFT 27.27 +0.02), however, have provided a floor to the selling... The market will gets its final economic report of the day with October Factory Orders (consensus of +0.2%) at 10 ET... The first, weekly initial claims, was worse than expected at 349K as compared to the consensus of 330K...

http://cbs.marketwatch.com/news/story.asp?guid=%7BBDBA33AE%2DD3F7%2D433D%2D8A1C%2D3B3B16192FEB%7D&siteid=mktw

CHICAGO (CBS.MW) -- The specter of Scrooge haunted U.S. retailers in November as the country's largest chain stores delivered decidedly lackluster sales results.

" 'Dismal' is a good word," said Mike Niemira, chief economist at the International Council of Shopping Centers. With 66 chain retailers having reported their tallies, sales at stores open longer than a year -- an industry benchmark known as same-store sales -- rose a meager 1.7 percent.

That's well below Niemira's original forecast of a 3 percent gain, and it puts the crucial holiday sales period at risk.

"With such a weak start, it's going to be real tough to get a strong performance for the two months," Niemira. "It's hard to find any real positive in the aggregate, no matter how you cut it."

Wal-Mart Stores Inc. (WMT: news, chart, profile), the world's largest seller of everything, set the tone early in the week by reporting that same-store sales in November were a mediocre 0.7 percent higher than a year ago. On Thursday, the retailer said December sales are looking like they'll ring higher by 1 to 3 percent, better than November's, but still relatively weak.

With few exceptions, retailers said traffic was slow, sales were sluggish and results were short of expectations -- many by wide swings:

...more...

Ann "the man" Coulter is truly an appropriate "Santa Claws" this year.

http://www.chinadaily.com.cn/english/doc/2004-12/02/content_396688.htm

Other than tradition, the latest round of the gold rush has been fuelled by a combination of factors, including the depreciation of the US dollar, the world's major reserve currency; and the surge in prices of a wide range of commodities, including oil, otherwise known as black gold.

Unsurprisingly, China's 300 or so gold producers are smiling all the way to the bank.

Their combined profits for the first three quarters of 2004 jumped 35 per cent from a year earlier to more than 2 billion yuan (US$240 million). China's gold production during those three quarters increased 7 per cent from a year earlier to 149 tons, while demand is expected to increase to 220 tons in 2004 from 207 tons in 2003.

The strong demand for the yellow metal has not gone unnoticed by the nation's banks and other financial institutions, which are gearing up to cash in on the boom.

For instance, Bank of China's Shanghai branch, in November introduced "Gold Treasure," a gold-based investment instrument operated by the People's Bank of China, the central bank.

"Gold Treasure" has been designed to make it convenient for the public to invest in the precious metal. Instead of taking physical delivery of the gold, the investor is given a document issued by the bank certifying the amount purchased. The investor can sell the gold back to the bank and surrender the certificate.

more...

http://cbs.marketwatch.com/news/newsfinder/pulseone.asp?dateid=38323.4178181019-828500362&siteID=mktw&scid=0&doctype=806&property=symb&value=&categories=&

WASHINGTON (CBS.MW) - New orders for U.S.-made manufactured goods increased 0.5 percent in October after a small gain in September, the Commerce Department estimated Thursday. Shipments increased 1.2 percent in October to a record $375.9 billion, the fifth increase in the past six months, led by an 8 percent rise in shipments of petroleum and coal products. Shipments fell 1.1 percent in September. The figures are not adjusted for price changes. It's likely much of the increase in both orders and shipments is due to higher refined petroleum prices, not more demand.

10:00am 12/02/04 U.S. OCT. DURABLE GOODS ORDERS REVISED TO 1.1% DROP

10:00am 12/02/04 U.S. OCT. FACTORY SHIPMENTS UP 1.2% ON OIL

10:00am 12/02/04 U.S. OCT. FACTORY ORDERS UP 0.5%

Benchmark Treasury yields near 4-month high

http://cbs.marketwatch.com/news/story.asp?guid=%7B84552282%2DEEAF%2D42C6%2D96D8%2DE5D8461F456A%7D&siteid=mktw

CHICAGO (CBS.MW) -- Treasury prices traded lower Thursday for a seventh consecutive session -- with benchmark yields at near four-month highs -- as bond investors overlooked early economic data to focus on an expected hike in interest rates later this month.

At 9:55 a.m. Eastern, the benchmark 10-year note was off 12/32 at 98 24/32. Its yield ($TNX: news, chart, profile), which moves in reverse of price, stood at 4.41 percent.

The U.S. debt market drew fleeting support from a Labor Department report on jobless claims, with the count of those filing for state unemployment benefits last week climbing 25,000 to 349,000, exceeding forecasts calling for 331,000. Read the full story.

But given seasonal volatility, economists said the numbers should be taken with a grain of salt.

"These data confirm our suspicions that friendly seasonals helped hold claims down in the previous couple of weeks," said Ian Shepherdon, chief economist at High Frequency Economics. "But all forecasts need to be viewed with even greater caution than usual at this time of year. Overall, we think claims are trending down slowly."

...more...

"Pay no attention to that man behind the curtain," the ivory tower economists demanded!

Dow 10,572.70 -17.52 (-0.17%)
Nasdaq 2,140.52 +2.29 (+0.11%)
S&P 500 1,188.69 -2.68 (-0.22%)
10-Yr Bond 4.396% +0.021

NYSE Volume 255,002,000
Nasdaq Volume 423,711,000

10:05AM: Major indices ease off their morning lows as tech, telecom, and health care show some resilience early on... Tech has been an exceptional standout as most groups (software, semiconductor, networking, disk drive) have traded in the green... Biotech is also showing relative strength after posting losses in yesterday's buying drive.... Meanwhile, retail and energy are trading much lower on account of November comparable store sales and the second consecutive drop in the price of crude oil (yesterday marking a 7% sell-off), respectively...

Elsewhere, October Factory Orders was just released and checked in at +0.5% (consensus of +0.2%)... The market has improved with the blue chips nearing the unchanged mark as a result...NYSE Adv/Dec 1081/1472, Nasdaq Adv/Dec 1119/1358

Last trade 81.41 Change -0.15 (-0.18%)

Settle 81.56 Settle Time 23:36

Open 81.37 Previous Close 81.56

High 81.68 Low 81.18

Last tick: 2004-12-02 09:42:22 ET
30-min delayed quote.

Dow 10,598.64 +8.42 (+0.08%)
Nasdaq 2,144.90 +6.67 (+0.31%)
S&P 500 1,191.64 +0.27 (+0.02%)
10-Yr Bond 4.407% +0.032

NYSE Volume 381,292,000
Nasdaq Volume 603,052,000

10:30AM: Stocks settle around the flat line as mixed breadth figures and split industry leadership prevent a rally... Yesterday's large-scale advance has reduced the incentive for buyers to actively bid equities higher... At the same time, selling pressure has not been especially strong and concentrated in groups impacted by sector-specific developments... The $1.39 decline in the price of crude oil (to $44.10/bbl) following the largest four-month increase in crude oil stockpiles yesterday has alleviated the tendency to take profits in all groups...

October Factory Orders also came in stronger than expected, charging 0.5% higher (consensus of +0.2%) as nondurable goods orders surged 2.4%... NYSE Adv/Dec 1161/1744, Nasdaq Adv/Dec 1399/1278

Last trade 81.51 Change -0.05 (-0.06%)

Settle 81.56 Settle Time 23:36

Open 81.37 Previous Close 81.56

High 81.68 Low 81.18

Last tick: 2004-12-02 10:05:22 ET
30-min delayed quote.

Dow 10,623.84 +33.62 (+0.32%)
Nasdaq 2,153.31 +15.08 (+0.71%)
S&P 500 1,193.71 +2.34 (+0.20%)
10-Yr Bond 4.408% +0.033

NYSE Volume 546,860,000
Nasdaq Volume 835,692,000

11:00AM: The major indices catch a second wind and sprint to new session highs... In the past hour, the Dow, Nasdaq, and S&P 500 have jumped approximately 30, 8, and 4 points, respectively... The catalyst has been another plunge in the price of crude oil, now down over 3% to $43.60/bbl... This leaves this week's descent at 12% off Friday's closing prices - one of the largest downward moves this year... Buyers have used the oil plunge as a reason to add positions to equities, and to reduce exposure to bonds...

The treasury market has been mildly lower today, with the 10-year note down 10 ticks, bringing its yield to 4.40% - one of the highest levels since August...NYSE Adv/Dec 1307/1681, Nasdaq Adv/Dec 1572/1240

Last trade 81.72 Change +0.16 (+0.20%)

Settle 81.56 Settle Time 23:36

Open 81.37 Previous Close 81.56

High 81.72 Low 81.18

Last tick: 2004-12-02 10:35:26 ET
30-min delayed quote.

Everybody's HAPPY! (well, except for those treasuries)

http://www.321gold.com/editorials/stern/stern120204.html

snip>

Yet today that is the case. Not a day goes by in the world's business press that the enormous size of the US public, private, and government debt isn't emphasized and pointed to as a huge cause for concern.

Interesting how what was considered a "conspiracy theory" a year ago is today a "mainstream" topic.

The mainstream press never used to talk about this subject - of how much the US government is or isn't in debt - and how it has become so bad that the IMF recently commented that "the US is broke." While a year ago, it was a 'conspiracy theory" to suggest this - and that the US was awash in red ink - today it is common knowledge.

Another fact that is widely reported in the mainstream press today is that the US can simply "print up money" and use it to pay its obligations. That very apparent fact of life never appeared in the press until fairly recently. How and why the dollar was an "international currency" was never an issue with business and economic editors. Suddenly - it is.

A year ago, the mere mention of "Peak Oil" was restricted to a very small number of websites, such as From the Wilderness. Magazines such as Business Week or Fortune would never run article suggesting such things. Today the concept of "Peak Oil" is written up everywhere in the mainstream media.

snip>

There is no inherent reason why the price of oil has to be valued in US dollars - and then in all the other currencies. It is obviously that way because it serves US interests, but that argument too would be considered "a conspiracy theory" just a few years ago. Until fairly recently the mainstream view didn't except the notion that anything there was any connection between the price of gold, and "US interests." Even just last year, where did you read about how important it is for the price of oil to be in US dollars, in order to create demand for the US dollar? Not long ago that would have been a view only "conspiracy theorists" accepted. Today one sees these viewpoints plastered all over the mainstream press.

more...

Dollar gained about 100 pips on the euro in the last 15 minutes.

check out the simultaneous movements on all of these currency charts

http://www.weblinks247.com/exrate/

can you say "intervention"?

Cable, fiber and yen are all in play. CHF correction/intervention is largest, moving a whole percentage point..

http://www.dailyfx.com/currency_chf_thomson.html

I would guess more corrections to come this evening as euro faces weak econ data, positve US non-farm payroll, and obvious intervention(s).

Happy trading!

there was true intervention or just verbal - all these rumors of a concerted effort. Might have spooked them off just a bit - for now. Remember we saw a lot of verbal intervention in the early stages last year as well, but after a couple of weeks it lost its effectiveness. Traders just seemed to ignore the jaw-boning.

From the article:

snip>

The dollar showed a muted reaction to a report of 349,000 new U.S. jobless claims in the latest week, above economists' forecasts of 330,000.

Currency traders are paying close attention to U.S. jobs data on the eve of the November non-farm payrolls report, due on Friday.

The dollar pared a few losses against the euro after news that U.S. October factory orders, swelled by demand for military aircraft, rose 0.5 percent, exceeding economists' forecasts of a 0.3 percent rise.

http://cbs.marketwatch.com/news/newsfinder/pulseone.asp?dateid=38323.4434232639-828503674&siteID=mktw&scid=0&doctype=806&

CHICAGO (CBS.MW) -- The dollar improved modestly against the euro and Japanese yen after a U.S. report revealed a larger-than-expected 0.5 percent rise in factory orders last month. The dollar was trading at 102.70 yen, up 0.1 percent from Wednesday and up from 102.54 before the report. The euro was quoted at $1.3321 vs. $1.3343 before the report. The common currency was down 0.2 percent from Wednesday's late U.S. trading.

WOW! :wow:

Circular logic! The dollar gets "lifted" by the HIGH PRICE OF OIL - which is partially caused by the drop in value of the dollar! (together with global uncertainty resulting from the actions of this mal-administration).

http://www.321gold.com/editorials/daughty/daughty120204.html

snip>

Everybody has something to say about the weak dollar. To the amazement of many, including myself, there are those who are actually saying that a weak dollar is going to be good for us! To explain how this is possible, sit down and make yourself comfortable, as the plot is a long and complicated one, but it all started with somebody in a coma not knowing that her sister had a baby, the father of which is not her husband, and two sets of evil twins return from a long absence, vowing revenge, while the father's uncle, whose nephew is having an affair with her sister because the mother had an affair with a Ukrainian dwarf that was in town with the circus, which is secretly owned by the guy that she was blackmailing, and, ummm, well, I sort of forget how the thing goes, but there is another episode on tomorrow, where we find out if the doctor lives or dies before he can perform the delicate operation on the orphan, which not an orphan at all, but is the illegitimate daughter of the mayor!

No! Wait! Now that I think about it, that is not the plot at all! Sorry! In fact the plot is simplicity itself. A strong currency is good for a country that imports stuff, because you get to buy so much stuff for so little money, and you end up with a whole shopping basket full of bargains, beautiful, beautiful bargains, including that new hollow-point .50- caliber ammo for the machine gun and two cases of grenades for the price of one! And a new shower curtain that will look absolutely darling!

Conversely, a weak currency is good for a country that exports stuff, as you get a pricing advantage over your competitors in the international marketplace when your stuff hits the market shelves in that foreign market and the shopkeeper puts a price tag on it in local currency. Up to now, see, America has been a consuming country, and therefore we had a strong dollar policy, and we got to buy stuff cheap. And we borrowed money and bought it all. Now we are at the limits of the amount of money a working-class peasant like me can bear without waking up in the middle of the night, drenched in sweat over impending bankruptcy and ruination.

As a sweat-drenched people desperately in need of sleep and debt relief, we are not going to be buying as much stuff from now on, and therefore we will not be importing as much stuff from now on, and so we don't need a strong currency anymore. What we need is a weak currency, so that we can sell stuff to foreigners real cheap, and hopefully getting back into the game.

And now we are going to get one, and if you think that a nation of gluttonous consumers in a Big Government Economy, who make nothing, but consume everything, is going to seamlessly transition itself into an exporting powerhouse without monumental disruptions, and heartache, and misery, and ruination, and collapse of everything you hold near and dear, then I know that, although you are much better looking than me, and much smarter than me, and everybody likes you, that there are more differences between us than just those things. For instance, I also know that you have not spent any time reading history, because if you had, then you would be screaming in horror and fear, which is probably redundant, but saying just "horror" or just "fear" sounded inadequate, somehow, to describe the situation.

more...

http://cbs.marketwatch.com/news/newsfinder/pulseone.asp?dateid=38323.4705093287-828507265&siteID=mktw&scid=0&doctype=806&

NEW YORK (CBS.MW) -- The Dow industrials ($INDU) rose to its highest levels seen in 9 months as crude prices extended their recent tumble. The Dow was last up 36 points at 10,626, the highest price seen since early March, with 21 of 30 components contributing to gains. The Dow had surged 162 points on Wednesday. January crude futures slumped $2.69 to $42.80, after suffering a $3.64 slide on Wednesday, as last week's climb in U.S. distillate inventories combined with near-term forecasts for mild weather eased heating-fuel concerns.

:party::party::party::party::party::party::party::party:

Last trade 81.95 Change +0.39 (+0.48%)

Settle 81.56 Settle Time 23:36

Open 81.37 Previous Close 81.56

High 81.96 Low 81.18

Last tick: 2004-12-02 11:01:12 ET
30-min delayed quote.

USD/CHF just swung a whole percentage point.

http://www.dailyfx.com/currency_chf_thomson.html

http://www.dailyfx.com/FinanceChart.html?symbol=USD/CHF

effort globally, could they be able to thwart the little idiots plan on "defaulting" and force him to deal with the deficit?

Either way will be painful to us "regular" folks, yet if they can force Bushco to deal with the debt they may be able to thwart his visions of empire and star wars. If I've got to suffer through it regardless, I'd like to see the plug pulled on those visions. More bang for neutering the "buck". :shrug:

and letting the last country holding the bag take the biggest hickey :evilgrin:

also see my post #42

http://www.democraticunderground.com/discuss/duboard.php?az=show_mesg&forum=102&topic_id=1038312&mesg_id=1038872&page=

hard time deciding if I wanted to short the buck or Coke :evilgrin:

Any idea of how those guys are doing with the "short Coke" strategy these days?

the negative or even mediocre indicators, they may be
running for a year end close on a positive note. Traders
have suggested the euro to go 1.33, 1.34, 1.35 and up in increments
and to use any dips in the price as a buying opportunity.
This pseudo market rally after the election might be one
provide one last chance to get euros before they go up again.

But I must say: 54anickel, Ozy and UIA are fuckin AWESOME ! ....

WHO NEEDS The Motley Fool et al, when we have the AWESOME Trinity here ? ... RIGHT HERE at DU ! ....

Hot damn ....

Thanks for the kind words for the marketeers -

Everyone that posts or lurks here definitely makes a positive addition to the ongoing political/economic conundrum :D

:grouphug:

http://cbs.marketwatch.com/news/newsfinder/pulseone.asp?dateid=38323.5095159259-828512150&siteID=mktw&scid=0&doctype=806&

CHICAGO (CBS.MW) -- The average 30-year fixed mortgage carried a rate of 5.81 percent in the latest week, up from 5.72 percent last week, Freddie Mac said Thursday. The average for the 15-year fixed-rate mortgage was 5.23 percent, up from last week when it averaged 5.15 percent. One-year Treasury-indexed adjustable-rate mortgages (ARMs) averaged 4.19 percent, unchanged from last week.

Here's Meanspin's bubblemachine - wonder how longlasting it will be?

12:31pm 12/02/04 BERNANKE: FED RELIES MORE ON FORECASTS THAN RULES

12:31pm 12/02/04 FED'S BERNANKE SPEECH DOES NOT DISCUSS CURRENT ECONOMY

since Greenspin's attack of oral dysentery at the G-20? Has the pace of borrowing declined (by hedge funds is my guess) or did we miss a decrease in the reserve requirements? :shrug:

http://www.321gold.com/fed/temp_bank_res.html

http://www.newyorkfed.org/aboutthefed/fedpoint/fed45.html

Reserve requirements, a tool of monetary policy, are computed as percentages of deposits that banks must hold as vault cash or on deposit at a Federal Reserve Bank.

Reserve requirements represent a cost to the banking system. Bank reserves, meanwhile, are used in the day-to-day implementation of monetary policy by the Federal Reserve.

As of June 2004, the reserve requirement was 10% on transaction deposits, and there were zero reserves required for time deposits.

Reserve requirements are the portion of deposits that banks may not lend and have to keep either on hand or on deposit at a Federal Reserve Bank

The Monetary Control Act (MCA) of 1980 authorizes the Fed's Board of Governors to impose a reserve requirement of from 8% to 14% on transaction deposits (checking and other accounts from which transfers can be made to third parties) and of up to 9% on nonpersonal time deposits (those not held by an individual or sole proprietorship). The Fed may also impose a reserve requirement of any size on the amount depository institutions in the United States owe, on a net basis, to their foreign affiliates or to other foreign banks. Under the MCA, the Fed may not impose reserve requirements against personal time deposits except in extraordinary circumstances, after consultation with Congress, and by the affirmative vote of at least five of the seven members of the Board of Governors.

...more...

http://cbs.marketwatch.com/news/newsfinder/pulseone.asp?dateid=38323.5286478704-828514668&siteID=mktw&scid=0&doctype=806&

SAN FRANCISCO (CBS.MW) -- The U.S. Justice Department announced Thursday that four Infineon Technologies (IFX) (DE:623100) executives have pled guilty to price fixing in the dynamic random access memory market and will pay $250,000 each and serve time in prison. The company earlier this year pled guilty to price fixing and agreed to a $160 million settlement with the Justice Department.

12:35pm 12/02/04 INFINEON EXECS PLEAD GUILTY TO DRAM PRICE FIXING

12:36pm 12/02/04 INFINEON EXECS TO PAY $250,000 EACH, SERVE PRISON TIME

12:34pm 12/02/04 U.S. SAYS 4 INFINEON EXECS PLEAD GUILTY TO PRICE FIXING

What's "Infineon"?

http://cbs.marketwatch.com/tools/quotes/profile.asp?sid=170286&symb=IFX&siteid=mktw

nfineon Technologies Ag Website Annual Report
St Martin Strasse 53 Phone: +49 89 234 0
81669 Munich

Fax: +49 89 234 28482


Infineon Technologies AG(INFINEON). The Group's principal activities are the design, research, development, manufacture and marketing of semiconductors and complete systems solutions used in a variety of micro electrical applications. The Group operates through the following divisions: Memory Products (mainstream DRAMs, high speed graphics, ASICs with embedded DRAM, hard drive controllers); Wireless Communications (radio frequency discretes, ICs and modules, bbase banICs); Wireline Communications (codes, SLICs, transceivers, switching ICs, framers, protocol controllers, embedded DSP and embedded DRAM); Automotive & Industrial (power semiconductors and controllers with embedded memory); Security & Chip Card ICs; Opto (security memory ICs, security mimicro controlleCs, encryption ICs, FingerTIP identification ICs, MultiMediaCards).

Gosh, it all makes me just want to privatize my Social Security! :eyes:

I found this piece rather interesting as I've dabbled in comparative religion studies, the history of the church and this strange thing we call "economics". I do give him credit for attempting to grasp an understanding of it all.

http://www.321gold.com/editorials/willis/willis120204.html

NOTE: DO NOT TAKE THE COMMENTS IN THE FOLLOWING PAPER OUT OF CONTEXT FOR ANY REASON WHATSOEVER. WE ARE NOT DEFENDING THE CAUSE OF MILITANT, VIOLENT, CORROSIVE ISLAM IN ANY WAY, SHAPE OR FORM. We are, as good citizens, desperately trying to understand their mindset, tactics and possible permutations of their belief system and how it affects all of us. Our primary objective is to truly grasp the "big picture" that so many financial pundits absolutely miss. We are not in blind pursuit of material profit. We seek to protect ourselves from the insidious cancer of terrorism and its manifestation in the world's economy. There are no "pockets" of insurgency. This battle truly is everywhere. Our approach in this paper is as follows: we are aware that some of our readers may not be interested in the detailed examination of either the Judeo-Christian Biblical passages or the actual specific Koranic references that support our study. These references are in a separate "appendix" which is NOT included in this paper. Any reader who is interested may contact us by email for the omitted material once it is completed.

Introduction

As a fellow sound money proponent I enjoy reading the numerous thought provoking and well-researched articles regarding anything of interest to the "gold-as-honest-money" community. I have been studying the issue of the resurrection of the Islamic gold Dinar as a viable means of international trade settlement, e.g. for national balance of payments (BPA) as well as a legitimate mechanism for initially undermining and ultimately bypassing the hegemony of the US Dollar (USD). Articles by Jim Sinclair, Tim Wood, Jullian Phillips, Jay Taylor and others have appeared in the gold community related websites. I don't wish to duplicate any of their efforts; there are many fine contributions archived for reference. I have simply tried to tie everything together and place it in a macro context for the reader. Hence the justification for another paper.

The utility of the internet to study the current trends and political implications of any such threat to the dollar is without equal. Very few understand the horrific implications of the wholesale bypassing of the USD by the rest of the world. Regardless of how Americans view our lovely, crisp, counterfeit-resistant (to everyone but us!) IOU's provided almost free by the Federal Reserve, the opinion of the rest of the world regarding their value will ultimately determine our economy stability, military success, way of life and our place in history. Will it be a worthy epitaph? Or shall we reside in disgrace in the rubbish heap alongside the vulture-picked carcasses of every other banana republic who believed they could have lasting prosperity by issuing ephemeral fiat?

Let me say at the outset that although I have studied the Koran for several years I am neither an expert in the Koran nor intimately familiar with Islamic culture. I have been a zealous student of the Bible for over 25 years. I am simply piecing together the comments that appear in numerous English language Arab-origin websites and newspapers so I can walk a mile or two in their sandals. For the past several months I have been going directly to the horse's mouth and studying both the technical details under discussion as well as the political commentary originating in the Arab/Islamic world. Of course I can only research the musings which are in English.

This Is No Game. The Stakes Are Very High

more...

If that is even feasable nowadays.. The coins would be hoarded I would think..

Have you seen any Gold dollars around? I haven't I think cause people hoard them.

for that matter, since they are both finite resources. But a currency backed by gold, or possibly a basket of commodities would be doable. That was the hope of the EU back in the early days, some sort of basket of commodities and/or currencies.

It's my understanding that vision was a part of the EU stability pact as well - an effort to maintain a store of value; which the US$ has failed miserably at.

Dow 10,564.20 -26.02 (-0.25%)
Nasdaq 2,136.51 -1.72 (-0.08%)
S&P 500 1,188.21 -3.16 (-0.27%)
10-Yr Bond 4.398% +0.023

NYSE Volume 1,106,030,000
Nasdaq Volume 1,591,078,000

1:30PM: Stocks take another hit and fall back below the unchanged markl... Decliners now outpace advancers at the NYSE and Nasdaq.... At the Dow, 18 out of the 30 components are actually showing gains... One of these winners is Walt Disney (DIS 27.73 +0.05), which announced last night it was increasing its annual dividend by $0.03 to $0.24 and adding Fred Langhammer, former CEO of Estee Lauder (EL 44.65 +0.71), as an independent director...

General Electric (GE 35.82 -0.20) stock, however, has been a laggard after the Wall Street Journal questioned the prices the company has paid for its acquisitions - and whether these investments have paid off...NYSE Adv/Dec 1230/1990, Nasdaq Adv/Dec 1502/1522

12:55PM: The market continues to weaken as the blue chip averages dip into negative territory... Buyers have backed off their efforts as several indices have set fresh multi-month highs in the past hours... Volume has run exceptionally strong today (and this week as well) as traders fear missing out on the year-end rally... Trading volumes, however, should drop off in the next few weeks as the Hanukkah and Christmas holidays approach.... Conditions should become thin and leave the indices open to volatile trading...

Look for the small-caps, though, to outperform during this time of year, owing in part to the January Effect...NYSE Adv/Dec 1296/1902, Nasdaq Adv/Dec 1531/1452

12:35PM: Indices give back some but continue to cling to modest gains... Most sectors remain in the green and supportive of the mildly positive tone... Semiconductor has performed particularly well despite the overhang of Intel's (INTC 23.13 +0.03) mid-quarter update tonight...

Last trade 81.97 Change +0.41 (+0.50%)

Settle 81.56 Settle Time 23:36

Open 81.37 Previous Close 81.56

High 82.13 Low 81.18

Last tick: 2004-12-02 13:06:10 ET
30-min delayed quote.

http://news.moneycentral.msn.com/breaking/breakingnewsarticle.asp?feed=OBR&Date=20041202&ID=4124962

CHICAGO (Reuters) - U.S. Treasury prices slipped on Thursday, continuing a week-long decline tied to prospects for ongoing rate increases by the Federal Reserve.

But the losses were trimmed at midday when Fed Gov. Ben Bernanke did not mention specific economic worries, such as rising inflation, during a speech on monetary policy.

The latest leg of bonds' decline came despite data on the weak side of Wall Street forecasts. Dealers instead focused on prospects for a strong monthly payrolls report on Friday.

<snip>

Adding to the unease on Thursday was a Wall Street Journal report from Fed watcher Greg Ip that said some Fed officials are increasingly concerned about inflation.

The sliding U.S. dollar, the recent sharp increase in gold prices and still-high energy prices have all contributed to fears of rising inflation.

``If the Fed thinks it's a potential problem, traders would be well-advised to feel the same way,'' Logan said.

<snip>

However, the durable goods component, originally reported at down 0.4 percent, was revised to down 1.1 percent, the weakest since April.

...more... (freakin' one-sentence paragraghs! :grr: )

to skip a rate increase? Now they start getting concerned about inflation? I call BS, and I think Greenspin would tolerate, if not welcome, a bit of inflation these days - that great, insidious invisible tax.

http://www.economist.com/finance/displaystory.cfm?story_id=3445928

snip>

Where the dollar has failed is as a store of value. Since 1960 the dollar has fallen by around two-thirds against the euro (using Germany's currency as a proxy before 1999) and the yen (see chart 1). The euro area, unlike America, is a net creditor. Never before has the guardian of the world's main reserve currency been its biggest net debtor. And a debtor may be tempted to use devaluation to reduce its external deficit—hardly a desirable property for a reserve currency.

Those bearish on the dollar are asking why investors will want to hold the assets of a country that has, by its own actions, jeopardised its reserve-currency position. And, they point out, without the intervention of central banks, which have been huge net buyers of dollars, the dollar would already be lower. If those same central banks were to begin to sell some of their $2.3 trillion dollar assets, then there would be a risk of a collapse in the dollar. However you look at it, America is likely to find it increasingly hard to finance its huge current-account deficit.

The deficit is at the heart of this issue. Various economists have put forward at least four arguments why the deficit does not matter and the dollar's reserve status is safe. First, the deficit is a sign of America's economic might, not a symptom of weakness. Second, sluggish demand overseas is a big cause of the deficit, so it is reversible. Third, the deficit exists largely because of multinationals' overseas subsidiaries. And fourth, central-bank demand for dollars creates, in effect, a stable economic system. It is not difficult to demolish each argument in turn.



Why the deficit matters
Start with the first argument, which has been favoured by America's Treasury. Foreigners want to invest in America, it is claimed, because it offers higher returns than Europe or Japan; and if America runs a capital-account surplus, it must by definition run a current-account deficit. There may have been some truth to this argument in the late 1990s, when America enjoyed large net inflows of direct and equity investment, but over the past year or so, there has actually been a net outflow from America of such long-term investment. Moreover, in the past few years America has had lower returns on foreign direct investment, equities and bonds than Europe or Japan.

more...

http://economictimes.indiatimes.com/articleshow/944409.cms

WASHINGTON: American clothing retailers and importers sued on Wednesday to prevent the Bush administration from slapping emergency restrictions on imports from China at the request of the domestic textile industry.

The suit filed at the US Court of International Trade in New York comes one month before a quota system that has shielded US textile producers for decades comes to an end as the result of a 1994 world trade pact.

China is expected to dominate the US import market for clothing and textiles after the quota system expires. To cushion the blow, textile industry groups have filed 12 separate petitions asking the government to impose emergency import restrictions on pants, underwear, bras and other clothing and textile imports from China.

However, US retailers such as JC Penney and Wal-Mart have eagerly awaited the end of the quotas, which is expected to mean lower clothing prices for consumers.

Laura Jones, director of the US Association of Importers of Textiles and Apparel, said her group had no choice after its complaints were ignored but to seek an injunction blocking a Bush administration committee headed by the Commerce Department from further considering the petitions.

more...

http://www.321gold.com/editorials/benson/benson120204.html

snip>

Another perspective on what is happening is if trade flows were currently matched, foreign countries would not be building up dollar credits; they would be spending dollars "taken in trade today!" This dollar spending would increase the demand for goods and services in America and raise prices, creating inflation. The very fact that foreign countries have not been spending their dollars now but are, instead, storing up massive dollar credits, means there is going to be a whole lot of dollar spending in the future. One can compare this to a huge dam filling up with dollar credits, but look out when this "dollar dam" breaks and the pent up dollar reserves flow out and flood America.

Sooner or later all currencies come home to their native country to be spent, but as long as the dollar is viewed as the international reserve currency, the process of massive credit and dollar inflation showing up is delayed. The fact that the dollar has been the world reserve currency simply means that the dam full of dollars has been allowed to fill up higher than anyone could have ever imagined.

Take China as a shinning example. China has amassed over $500 billion in dollar credits and is a developing country with 1.3 billion hungry, needy and politically restless people. The Chinese government has built up dollar credits temporarily, but as their citizens learn more about the good life - which includes electricity, heat, air conditioning, two cars and meat in their diet - the government may have to share some of its wealth with them. Not only is it possible for the trade deficit to swing into balance if this occurs, but all those dollar credits will get spent while they are still worth something.

What is on China's shopping list? Already announced are purchases of Noranda and Husky in Canada, the large mining and energy groups, as well as other significant investments in synthetic oil (tar sands). A major Chinese supplier of automobile parts has been buying up rustbelt auto part suppliers in the American Midwest. President Hu of China just came back from Latin America and announced plans to invest over $30 billion in Argentina and Brazil in order to build plants that are needed to extract raw materials. We expect that China's shopping list will continue to grow and they will start buying up the world with America's money!

How do our dollars finally get back home to our country? Well, if China does buy Noranda, the Canadians can invade shopping malls south of the border. If China also buys Latin American resources, Latin Americans can then buy the rest of Miami. As dollars get spent and move from country to country like a hot potato, eventually the dollars will come marching home because a dollar will always buy something in America, even if it isn't very much.

more...

Ewww, and just think of the extra dollars washing up on shore in 2005 thanks to the 30% tax-cut for multinationals in the Jobs Creation Act.

Dow 10,585.12 -5.10 (-0.05%)
Nasdaq 2,143.57 +5.34 (+0.25%)
S&P 500 1,190.33 -1.04 (-0.09%)
10-Yr Bond 4.397% +0.022

NYSE Volume 1,772,512,000
Nasdaq Volume 2,423,263,000

4:20PM: It was a choppy day of trading for the indices that culminated in a relatively unchanged finish - an appropriate close considering the positive and negative catalysts throughout the day... To begin, the market was faced with a set of rather disappointing November same store sales that included multiple warnings from names such as Ann Taylor (ANN 20.52 -1.77)... Additionally, jobless claims for the week of November 27 rose 25K to 349K and checked in well above the consensus estimate of 330K... As a result, traders took profits from yesterday's 1.5-2.0% advance in the opening action...

The tide of trading, however, soon improved some with the nearly 5% drop in the price of crude oil (to $43.25/bbl) that came after yesterday's 7% price plunge... Today's decline followed a natural gas inventories report that showed a smaller than expected decline... A better than expected October Factory Orders report (+0.5% versus the consensus of +0.2%) - which showed evidence of increased business investment - also helped turn the tide of trading... Broad-based gains were short-lived after the major indices set new multi-month highs, but the market still managed to finish the day roughly flat...

Biotech and most pockets of technology posted up moves and helped keep the Nasdaq above water... Software, though, was not a major contributor as Microsoft's (MSFT 27.11 -0.14) special $33 bln dividend payout proved to be an incentive for profit-taking... Within the blue chips, telecom service and airline were the strongest whereas energy, utility, homebuilding, gold, and telecom service were the weakest...

Last trade 81.94 Change +0.39 (+0.48%)

Settle 81.95 Settle Time 16:35

Open 81.37 Previous Close 81.56

High 82.13 Low 81.18

Dow 10,585.12 -5.10 (-0.05%)
Nasdaq 2,143.57 +5.34 (+0.25%)
S&P 500 1,190.33 -1.04 (-0.09%)
10-yr Bond 4.397% +0.022
30-yr Bond 5.048% +0.021
NYSE Volume 1,772,512,000
Nasdaq Volume 2,423,263,000

4:20PM : It was a choppy day of trading for the indices that culminated in a relatively unchanged finish - an appropriate close considering the positive and negative catalysts throughout the day... To begin, the market was faced with a set of rather disappointing November same store sales that included multiple warnings from names such as Ann Taylor (ANN 20.52 -1.77)... Additionally, jobless claims for the week of November 27 rose 25K to 349K and checked in well above the consensus estimate of 330K... As a result, traders took profits from yesterday's 1.5-2.0% advance in the opening action...
The tide of trading, however, soon improved some with the nearly 5% drop in the price of crude oil (to $43.25/bbl) that came after yesterday's 7% price plunge... Today's decline followed a natural gas inventories report that showed a smaller than expected decline... A better than expected October Factory Orders report (+0.5% versus the consensus of +0.2%) - which showed evidence of increased business investment - also helped turn the tide of trading... Broad-based gains were short-lived after the major indices set new multi-month highs, but the market still managed to finish the day roughly flat...

Biotech and most pockets of technology posted up moves and helped keep the Nasdaq above water... Software, though, was not a major contributor as Microsoft's (MSFT 27.11 -0.14) special $33 bln dividend payout proved to be an incentive for profit-taking... Within the blue chips, telecom service and airline were the strongest whereas energy, utility, homebuilding, gold, and telecom service were the weakest...

Utility and homebuilding were hit off the bond market's continued decline, energy tumbled on the downward crude oil price action, and gold slumped as the dollar bounced off its lows against the euro and yen... Tomorrow's market will take its cue from two big-ticket items: Intel's (INTC 22.71 -0.39) mid-quarter update tonight and November's jobs report tomorrow...NYSE Adv/Dec 1254/2083, Nasdaq Adv/Dec 1638/1480

3:25PM : Indices continue to consolidate heading into the last half hour of trade... Biotech, tech, telecom service, airline, and drug have been leaders to the upside and have kept the blue chips from falling far... Oil service, utility, homebuilding, and gold, though, have counter balanced those gains with sizable losses of their own... A large drop in the price of crude oil, a downturn in the bond market that has sent rates higher, and a dollar that has rebounded from its lows have pressured those groups... NYSE Adv/Dec 1309/1980, Nasdaq Adv/Dec 1560/1524

3:00PM : More of the same as the indices bounce around the unchanged mark... Today's action has been a tug of war between the bears and bulls as the former point to discouraging November same store sales and the latter have a 5% dip in the price of crude oil - on top of 7% drop yesterday - in their corner... As a result, trading action has been listless in the afternoon and resulted in a basically unchanged standing... Tech, however, has demonstrated relative strength...

Positive news from names such as Nokia (NOK 16.66 +0.11), which benefited from news it increased its market share to above 30% in Q3, has played a role in the march higher...NYSE Adv/Dec 1300/1979, Nasdaq Adv/Dec 1569/1505

2:30PM : Major indices improve their stance slightly but continue to trade in a tight range... In addition to Intel's (INTC 22.96 -0.14) mid-quarter update tonight, tomorrow's November employment report has been one weight keeping buyers in check... Investors will be looking for job numbers similar to those first seen in August, when nonfarm payrolls started posting triple-digit gains... The consensus estimate this time around is set at 200K, which is 137K less than October's huge reading...

Should the market miss this mark, it could experience a sharp retreat as the recent climb higher has been predicated on stronger hiring trends...NYSE Adv/Dec 1183/2064, Nasdaq Adv/Dec 1391/1660
:eyes:


Advances & Declines
NYSE Nasdaq
Advances 1259 (36%) 1638 (50%)
Declines 2066 (59%) 1480 (45%)
Unchanged 151 (4%) 145 (4%)

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Up Vol* 715 (40%) 1435 (59%)
Down Vol* 1024 (57%) 965 (39%)
Unch. Vol* 33 (1%) 20 (0%)

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

New Hi's 524 339
New Lo's 14 24


And the buck:

Last trade 81.94 Change +0.39 (+0.48%)

Settle 81.95 Settle Time 16:35

Open 81.37 Previous Close 81.56

High 82.13 Low 81.18

Last tick: 2004-12-02 16:39:20 ET
30-min delayed quote

Have a great evening everyone :hi: