STOCK MARKET WATCH, THURSDAY, AUGUST 21.....(#1)

Good morning to those who live in the U.S. - it's early afternoon in Germany! Found this interesting bit on mortgages, that fits many of the concerns about yet another bubble:


SNIP
Mortgage lenders are luring consumers to so-called ARMs by offering introductory charges that are about 2.5 percentage points below fixed mortgages for one to seven years.

The number of Americans choosing ARMs rose to a three-year high, the Mortgage Bankers Association of America said yesterday. While the shift may buoy the housing market by allowing people to borrow at initially lower rates, it leaves consumers vulnerable to a surge in rates once the introductory period is over, said Diane Swonk, chief economist at Bank One Corp. in Chicago.

SNIP

Interest-rate futures contracts show investors expect the Federal Reserve to raise its benchmark interest rate by a quarter point to 1.25 percent by April, as economic growth accelerates. Adjustable mortgages are linked to money-market rates, which in turn track the overnight bank-lending rate set by the Fed.

U.S. consumers with ARMs are more likely to make late payments or land in foreclosure, according to the MBA. Mortgage applications for adjustable loans jumped to 23 percent in the week ended Aug. 15, from 13 percent in June, according to the MBA. That's the highest level since May 2000.

More: http://quote.bloomberg.com/apps/news?pid=10000103&sid=aql36AMawiL4&refer=us

pretty good day in their markets.

Frankly I pity those jumping into the ARMs race (fun play on words) because things are going to change a lot and they will pay a sttep price in my opinion.

Julie

Hi Julie,

similar picture here as in the U.S. - social cuts, unemployment numbers going up, economy in recession, but the stock market seems to live on hope and is rising.

Some general numbers here: http://quote.bloomberg.com/apps/news?pid=10000100&sid=aKjjF7LhwXx8&refer=germany

My guts feeling is that we will see a long economic stagnation for some time to come. With some bad luck, even prolonged recession. The overall economical and political situation has created a climate of anxiety that is hard to overcome - and big structural problems (like rising health costs and a crumbling pension system) are looming in the future.

Let's hope reality proves me wrong!

Well it certainly looks like it's going to be a bright sunny day! Futures are way high this morn. Mayhem everywhere, hostilities have resumed between I/P, things going horribly awry in Afghanistan and Iraq so it is time to buy, buy, buy!!!

A few words from Hartman's wrap-up:

If you are in the bear camp for equities, it has been a grueling ordeal to watch the indices pulled higher in the futures pits. I watched it happen three times yesterday and the same garbage today after the gap–down open, and again in the last thirty minutes of trading. Frankly, I almost got frustrated enough today to pull my short positions, but I’m going to stay the course. This stock market has no substance. Pro-forma earnings are now outpacing GAAP earnings by a full 60% according to Dresdner Kleinwort Wasserstein Research. Pro-forma earnings are a joke! Rather than watch the earnings numbers, it makes more sense to watch the Fed repo numbers (Federal Reserve Repurchase Agreements). According to Mike Bolser of GATA the Fed repo pool grew by $5 billion yesterday bringing the total to $36.25 billion. Above $30 billion the repo pool has an “uplifting” effect on the broad stock market, and it looks like the Feds do not want to see this market go down. Please excuse me, but I’m a bit nauseated by capitalism and free markets. Enough said. The market will win in the end. It always has.

To sum up a few of the extremes that we see today, I have extracted my ten favorite ALL TIME RECORDS from capitalstool.com. They are as follows:

* Ratio of insider selling vs. buying: 32 to 1. An all time record.
* Bullish Percent divided by Fear Gauges: All time record.
* Number of stocks trading above 200-day: Over 90% for 2 ½ months.
New Record
* Money supply: All time record.
* Gold sold short or leased out: All time record.
* Number of penny stocks up 50%+: All time record.
* Trading volume as a % of GDP: All time record.
* Number of companies “tapping the bond market” for new funds:
All time record.
* Number of phony appraisals and stated incomes on mortgage apps.:
New record
* Level of emotional hysteria, confusion and bewilderment.

<snip>

Treasury bonds and notes sold-off today supposedly in fear of good economic reports that are due out tomorrow. New claims for unemployment benefits are expected to remain below 400,000 and the numbers from regional manufacturing are expected to improve. With the expectations of further improvement in the economy, the 30-year bond fell to 106 22/32, down 21/32 or 0.6% to yield 5.29% and the 10-year note fell 20/32 to yield 4.45%. The spinsters on Wall Street want you to believe that interest rates are rising because of the expected economic improvement.

I think the bond market is pricing-in inflation expectations, or at least stagflation expectations. Remember that inflation occurs when the total supply of money increases. The result of the inflated money supply is higher prices (more money chasing the same amount of goods). In the ‘70s the excess money supply showed up in consumer prices, whereas the excess money supply created these days ends up in the financial markets, pumping up the “value” of paper assets. That’s where we end up with the most sophisticated of financial terms called, “Bubbles.” Inevitably, bubbles pop.

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

Will the financial reports be as good as they hope? Will unemployment be below that magical 400,000 #?? Will the lemmings continue to follow the blather off of the cliff??

Stay tuned.......

Julie

386,000, down from last week's revised 403,000. I wonder what this latest number will be quietly revised to.

The continuing claims brings it to comfortably over 3 million though so I wouldn't say it's all good or anything. Of course this is reason enough to rush to the Buy window......

Julie

we've got highlights:

* Payroll employment has declined for the past 6 months.

* The unemployment rate was 6.2 percent in July; the number of unemployed persons was 9.1 million.

* The civilian labor force decreased by 556,000 in July to 146.5 million.

* In July, about 1.6 million persons (not seasonally adjusted) were
marginally attached to the labor force, little changed from a year earlier. These individuals wanted and were available to work and had looked for a job sometime in the prior 12 months. They were not counted as unemployed, however, because they did not actively search for work in the 4 weeks preceding the survey.

http://www.bls.gov/news.release/empsit.nr0.htm

Go have a look, interesting, if you're into that. :-)

Julie

So unemployment figures are down, eh? I guess that means XYZ Corp is selling more widgets. Reuters says so.

I will be leaving soon as the markets open. I have two meeting scheduled for today. At least one will mean that I will earn more money and, subsequently, will contribute to my efforts to prop up the economy.

HP to cut 1,300 jobs
Pallid quarter falls short by $100 million

Carrie Kirby, Chronicle Staff Writer Wednesday, August 20, 2003

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




Hewlett-Packard announced Tuesday that it will cut an additional 1,300 jobs after missing Wall Street expectations for its third-quarter earnings.

The disappointing quarter, in which sales fell $100 million below expectations, came after a rosy second quarter that many took as a happy ending to HP's 2002 acquisition of Compaq Computer.

<SNIP>

"The thing that's troubling is the inconsistency of the results. . . . The true profitability of the combined company is yet to be determined," said Joel Wagonfeld, an analyst with Banc of America Securities. Wagonfeld does not own HP stock. The company has provided banking services to HP in the past year.

Excluding one-time charges, HP earned 23 cents per share, 3 cents below consensus estimates. With the charges, the company earned $297 million (10 cents per share) compared with a year ago, when it lost $2.03 billion (67 cents per share). Revenue was $17.3 billion, up from $16.5 billion the year before.

<SNIP>

Disappointed investors drove HP shares down 10 percent in after-hours trading, to $19.97 from its regular-trading close of $22.11.


HP's shaky third quarter

-- Profit was 23 cents per share, or 3 cents below the consensus forecast.

-- Sales were $100 million less than expected.

-- 1,300 more layoffs were announced.

-- PC division suffered a $56 million loss after gains in two previous quarters.

Source: Hewlett-Packard

http://www.sfgate.com/cgi-bin/article.cgi?file=/chronicle/archive/2003/08/20/BU245383.DTL

"The company, which employs about 141,000 people worldwide, did not say where the job cuts would be made. In addition to reducing its workforce, HP is cutting costs by expanding its service centers in India, the Philippines, Poland and other places where labor is cheaper."

Gee, I wonder if Carly's taking a pay cut???? Didn't think so.

I never thought I would be upset about having a job, it cut into my DU addiction.

good to see you. :hi:

Might be a fun day on the Street. New job?

Julie

Been there 10 years, that is a record for me by the way. Thanks for the support and encouraging words though. A little overtime.

I know how you feel about the joys of working again. If I were in tune with the markets today then I would make a pronouncement on the day's events.

It does pay for it though. I am glad to be back. Look at yesterdays market watch when I fianally woke up, it was slow, very few post. So will the other shoe drop, will there be ripples or waves with the UE#'s.

In todays S.F. Chronicle CA has passed and Davis is expected to sign next week a law which requires banks and other financial institutions to obtain customers permission before they can share or sell that information with other companies. Good news for the consumer I think.

praise the lord and pass the hooch!!


Dow 9,477.16 +79.65 (+0.85%)
Nasdaq 1,782.41 +21.87 (+1.24%)
S&P 500 1,009.03 +8.73 (+0.87%)
10-Yr Bond 4.482% +0.041

Looks like a slight rebuff for treasuries.

Julie

Good morning all. I don't know how good today's reading is, I'm so distracted by my work situation that I'm finding it hard to concentrate on anything else.

Anyway, today's reading is SYNERGY changing to ZENITH. I found the changing line interesting, "Act with moderation in dealing with others who may have been duped into wrong thinking." Maybe this is a signal that we can "enlighten" a good portion of the right, as long as we are cool about it.

I am going to predict an up day for the markets. ZENITH speaks for itself!

Have a good day everyone. I'm off to the salt mines. :-(

heading into the lunch hour (11:32):


Dow 9,418.98 +21.47 (+0.23%)
Nasdaq 1,770.07 +9.53 (+0.54%)
S&P 500 1,002.29 +1.99 (+0.20%)
10-Yr Bond 4.480% +0.039


Profit taking anyone?

Julie

11:45

Dow 9,397.79 +0.28 (0.00%)
Nasdaq 1,764.14 +3.60 (+0.20%)
S&P 500 999.84 -0.46 (-0.05%)
10-Yr Bond 4.467% +0.026


Uh-oh!

Julie

Fortunately the PPT is back from an early lunch in the nick of time!

12:18


Dow 9,458.28 +60.77 (+0.65%)
Nasdaq 1,774.59 +14.05 (+0.80%)
S&P 500 1,005.81 +5.51 (+0.55%)
10-Yr Bond 4.459% +0.018


That was a close one. According to the Great Santelli, big sell-off in the shorter term treasuries. Severe beatings.

Julie

NEW YORK (CBS.MW) - Benchmark Treasury yields neared a revisit of 13-month highs Thursday after the Philadelphia Federal Reserve reported its measure of regional factory activity surged in August.

At last glance, a 10-year Treasury note ($TNX: news, chart, profile) sank 20/32 at 97 27/32, to yield 4.52 percent vs. 4.45 percent at the previous U.S. close. The note's yield did trade into the 4.60 percent area last week, its highest mark since July 2002. Yields and price move inversely.

<snip>

The six-month expectations index rose to 62 in August, the highest in 10 years.

In the front end, the 2-year note dropped 4/32 to yield 1.87 percent while the 5-year Treasury note eased 12/32 to yield 3.42 percent.

Trading was already volatile after the Labor Department reported another modest decline in first-time jobless claims to a six-month low. The four-week average of initial claims has been below 400,000 for three weeks in a row.

Here's the best part, buried at the end of the story like an unimportant afterthought:

However, five other indicators were weaker in July, including the factory workweek and new orders for capital and consumer goods.

Little talk of any weak indicators from the talkingheads......

http://www.marketwatch.com/news/yhoo/story.asp?source=blq/yhoo&siteid=yhoo&dist=yhoo&guid=%7BECFD2539%2D6632%2D4AC7%2D8CBB%2D5A1D3581C5E9%7D

Read all about it!

On the here-and-now front, Yahoo tells me that at 12:38 it looks like this:


Dow 9,439.40 +41.89 (+0.45%)
Nasdaq 1,771.02 +10.48 (+0.60%)
S&P 500 1,003.63 +3.33 (+0.33%)
10-Yr Bond 4.530% +0.089


Julie

Here at the bond desk we must point out it is that sense that makes a market. Like Rummy's Office of Special disinformation, the big boys have a predestined idea in mind an ignore anything that might not jive with that rosy outlook. All the sellers of the curve will find themselves buyers again sooner than anyone thinks. I'm on the sidelines here with the exception of a small collar trade that is weighted to the downside of the 2s 5s and tens.But Next week I'm going to arrive at an inflexion point where only a fool would be long the S&P. Anyone wanna loan me their DIA or Cubes to sell? I need lots of lots.

I expect eventually it will dawn on these institutional sellers that there is a stronger smarter institution that is buying from them.

The meltdown appears on track and on course at this time; Late October perhaps?

The fans are all running on high speed, all that we await is for the delivery of fresh shit to be dumped.

Later from recall land

Right now I'm short on several September S&P futures contracts and the last couple of weeks have been excruciating. We've had a steady rally on virtually no good news, and bad news has had little effect.

I could really use a correction before the 3rd Friday in September!

Looks like the market is back in a somewhat happy mode again, despite the storm clouds on the horizon (and this morning's interest rate news).

Dow 9,426.21 +28.70 (+0.31%)
Nasdaq 1,771.40 +10.86 (+0.62%)
S&P 500 1,002.41 +2.11 (+0.21%)
10-Yr Bond 4.526% +0.085


Yahoo analysis:

"1:30PM: Equity market continues to tread water in positive territory as buyers and sellers lack conviction... The lead advancers have over decliners has narrowed somewhat at the NYSE and Nasdaq as investors have been reluctant to buy shares with the memory of this morning's pullback fresh in their minds... Admittedly, the retreat was rooted in talk of a trading floor error; however, the indices have recovered less than half of their gains since then...The treasury market's plunge that has resulted in a sharp rise in interest rates has partially overhung the stock market..."

Heard about this on the radio on the drive home last night.

CNN Money link

"After a slow summer for layoff announcements, the pink slips could start flying after Labor Day, according to a study released Tuesday by a layoff-tracking firm.

The weeks immediately following the Labor Day holiday are typically among the worst of the year for layoffs, said John Challenger, CEO of Chicago outplacement firm Challenger, Gray & Christmas, which publishes monthly reports of layoff announcements.


"You are 25 percent more likely to lose a job after Labor Day than in the preceding eight months," Challenger said. "The reasons: employers are finalizing budgets and business plans for 2004, and payroll levels are heavily impacted by both." "
</snip>

So if we see a flood of layoffs in September, I guess it means that Big Business doesn't think next year is going to go well.

Probably should post this article in GD also to see what people think...

So if the feces starts down the hill in Sept. it will be rollin' in around Oct. with UE #'s etc. Hmmmm. October surprise anyone?

2:04 and here's the scoop:

Dow 9,430.84 +33.33 (+0.35%)
Nasdaq 1,773.39 +12.85 (+0.73%)
S&P 500 1,003.24 +2.94 (+0.29%)
10-Yr Bond 4.536% +0.095


Looks like their walkin' the gauntlet in treasuries (again)....leaving a welt or two......Cap'n says the fans are full speed, just waiting for the next load. haha

Julie

2:51 seems pretty steady:


Dow 9,417.72 +20.21 (+0.22%)
Nasdaq 1,771.24 +10.70 (+0.61%)
S&P 500 1,001.49 +1.19 (+0.12%)
10-Yr Bond 4.531% +0.090


Of course no telling what that may happen between now and 4.

Julie

Dow 9,422.28 +24.77 (+0.26%)
Nasdaq 1,772.85 +12.31 (+0.70%)
S&P 500 1,002.26 +1.96 (+0.20%)
10-Yr Bond 4.531% +0.090

Yahoo Finance guards their words below - "somewhat encouragingly" - sheesh!

"3:00PM: Buying interest remains tepid as the indices oscillate just above the unchanged mark... Technology continues to anchor the market in positive territory, just as it has for all of this week and most of this year... Analysts and investors alike continue to look for signs of a meaningful uptick in end market demand, which will fuel substantial improvement in top and bottom-line numbers... Somewhat encouragingly, Intel (INTC 32.08 -0.20) CEO Craig Barrett told a Dow Jones newswire in Taipei this morning that "he's not prepared to declare a recovery, but is seeing some corporate PC buying"..."

wellllll, as of today AWOL has had his butt planted in the oval orafice for about 943 days

soooo, if we take 9.1 million and divide it by 943 days - we get
9,650 people laid off per day

Listened to talking heads last night - the blather is that the economy is picking up, but that JOBS will be the last to recover...

The question now is WILL JOBS RECOVER IN SUFFICIENT AMOUNTS TO MAKE A DIFFERENCE IN NOVEMBER 2004 IN ORDER TO SAVE AWOL'S BUTT?

AWOL returns to DC in a week or so, get ready for a tune being played on the war drums and the market getting war jitters again. Not much in the news lately about North Korea, Iraq or Syria, but then you don't roll out a new product in the summer time....heh?

Unemployment numbers will probably go up in September, all those summer jobs ending - or so goes the excuse

What's your local classified looking like these days? I regularlly check two of our local papers...Employment sections were 3-4 pages long, now they barely cover 1 page and majority of jobs are at minimum wage of the flipping burgers or telemarketing kind...


Will you survive the Bush Recovery?

we're goin' on 2.5 years with the excuse that "employment is a lagging indicator". Well we're beyond lagging and, I'd say, even beyond sagging.

It seems more and more that all signs point to a brutal October. As in the take-cover-and-peek-through-your-fingers kind of brutal.

Good to see you Rad!

Julie

Dow 9,424.03 +26.52 (+0.28%)
Nasdaq 1,777.55 +17.01 (+0.97%)
S&P 500 1,003.36 +3.06 (+0.31%)
10-Yr Bond 4.507% +0.066

Hey Rad - good to see ya in. How's work treating you in your new internet deprived-job?

(Edit - oops, last 3 hours)