IDS World Markets Tues 11th October 05

[Guest]

 

 

 

 

 

 

 

Closed today

 

 

http://quote.yahoo.com/m2?u

[Guest]

 

 

 

http://money.cnn.com/markets/morning_call/

 

 

 

 

 

 

 

http://www.kitco.com

 

Energy futures

[Guest]

 

The day is young but if the buyers don't turn up asap then the bears will win today's round. All Ords -0.7% and every sector is in the red. IT is down the most, -2.2% and Consumer Staples showing the least damage, -0.3%.

 

Miners are on a downer, especially the golds, surprising really in light of the stable gold price. Oils are being pounded as well, led by Caltex -4%.

 

Up to sideways action in Asia...

[Guest]

South Korean Central Bank Raises Key Rate to 3.5%

 

Oct. 11 (Bloomberg) -- South Korea's central bank raised its benchmark interest rate from a record low, the first increase in more than three years to ward off inflation fueled by rising oil prices and a recovery in domestic spending.

 

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U.S. Treasury's Snow Wants More Flexibility in Yuan Trading

 

Snow, speaking at a press conference at the American embassy in Tokyo, said he will continue to hold private talks with China on its currency.

 

Treasury officials say China's currency policies are contributing to the record U.S. trade deficit by holding down the exchange rate, making it cheaper for Americans to import Chinese goods than to buy from factories at home. China's holdings of U.S. Treasury notes increased almost five-fold in the past five years, in part because authorities sought to control the yuan's value against the dollar.

[Hiding Bear]

Thanks aussiebear.

 

I expect that the Fed will return to add repos, etc., in the next two days to offset the reduction in the money base last week. If not, I would now conclude they have accepted that the economy will fall into recession.

 

The consumer portion of the economy already has entered into recession since late August, although economists seem to reluctent to call them as they see them. Even the usually blunt Econmic Cycle Research group has its own ECRIndex falling for most of the last six weeks, but doesn't want to say its a downturn. However its advance inflation gauge it charging ahead to records and getting a lot of attention.

 

Bottom line: Americans are being squeezed by prices rising faster than income. As the winter heating bills pile up and rising manufacturing and shipping costs make their way to store shelves, our loss of purchasing power will only get worse.

 

Second, let's look at rising debt payments. Americans owe about $11 trillion dollars ? $2 trillion for consumer debt and $9 trillion for mortgage debt. Americans owe over $800 million in home equity loans which are mostly tied to the prime rate, with an average interest rate of 8%. Americans also owe over $800 billion of credit card debt with an average interest rate of 13%.

 

Short-term interest rates have been rising 2% a year. Every time consumers are forced to pay another 2% on average for their $11 trillion of debt, they will have no choice but to raid the cookie jar for an extra $200 billion. The only problem is that most Americans haven't been saving so, unfortunately, their cookie jars are empty.

 

Worse yet, for consumers making credit card payments, the U.S. Treasury has new regulations that will come as a real shock this fall. The Treasury has the authority to set minimum principal payments on credit cards and is increasing the minimum from 2% to 4% per month.

...

If the consumer cuts back, it means recession.

http://online.barrons.com/article/SB112872259020263192.html

[Guest]

As promised, here's a list of housing and credit bubble-related sectors and stocks thanks to John Rubino. I believe these all have options. I've looked them over and added my quick impressions (the usual caveats apply). I simply look for trends using the 20-day exponential MA and the 50-day simple MA. If a stock is above both, I consider it to be in an uptrend; if it's below both, I consider it to be in a downtrend. I look for a 20-day average true range of at least $1, or else I consider the stock to be too slow. Good hunting!

 

Mortgage banks. Ironically FNM is the best behaved, obeying its downtrend as it should.

abk: Below 20 ema, sitting on 50 sma, but lot of whipsaws.

fnm: No comment necessary, or printable, even here.

fre: Back up between 20 ema & 50 sma.

mbi: < 20 & 50, but lot of whipsawing.

mtg: < 20 & 50, but lot of whipsawing.

 

Credit pushers. See AXP, CCRT, COF.

acf: < 20 & 50, but slow.

axp: American Express. Broke 20 & 50 today. Worth a look.

ccrt: Compucredit? Heh. Has had long uptrend. Broke 20 today, still over 50. If it can close below that, there may be fun ahead.

cfc: < 20 & 50. A little slow.

cit: < 20 & 50. A little slow.

cof: < 20 & 50. Burning nicely. 20-day EMA an okay guide. Worth a look.

luk: < 20, sitting on 50. Slow, low volume. Wouldn't bother.

pvn: < 20 & 50, but low and slow.

 

Homebuilders, obviously burning, some more than others. Anyone know of an index with options or futures that's closer to them than HGX? (Yahoo needs a "Customers who viewed this also viewed X" section, like Amazon.)

bzh: < 20 & 50.

ctx: < 20 & 50.

dhi: < 20 & 50.

hov: < 20 & 50. Burning nicely.

kbh: < 20 & 50.

len: < 20 & 50.

mdc: < 20 & 50.

phm: < 20 & 50.

spf: < 20 & 50.

tol: < 20 & 50.

 

Title insurance. They appear to be looking at rolling over. Except ORI, they appear reasonably respectful of moving averages. A group to watch going forward.

faf: Between 20 & 50.

fnf: Between 20 & 50.

lfg: Broke 20 today, still over 50.

ori: Between 20 & 50. Lot of whipsaws, low, slow, don't bother.

 

Carnival barkers. They don't look eager to die yet. See BEN.

ac: > 20 & 50, slow.

age: < 20 & 50 after a double top. Not that fast.

amtd: < 20, sitting on 50, but low and slow.

ben: < 20 & 50, but lot of whipsaws. Boxed between $79 and $83 since July. Distribution?

bsc: < 20 but > 50. Not clearly broken yet.

cme: > 20 & 50. I'm saving bullets for this one...

et: > 20 & 50. Low and slow, don't bother.

ev: < 20 & 50. Low and slow, don't bother.

fbr: < 20 & 50. Low and slow, don't bother.

gs: > 20 & 50.

leh: Between 20 & 50.

lm: < 20 & 50 but lot of whipsaws. Been bouncing between $103 and $110 for two months.

mer: > 20 & 50.

mwd: > 20 & 50.

sch: < 20 & 50 but low and slow, don't bother.

trow: < 20 & 50 but lot of whipsaws and not clearly dying yet.

wdr: Ditto.

 

Automakers, auto parts suppliers. A mixed bag. See BWA, GM, LEA, MGA.

alv: < 20 & 50, but not that fast.

bwa: < 20 & 50. Got hit today on heavy volume, worth a look.

dph: RIP.

f: < 20 & 50 but low and slow.

gm: < 20 & 50. Thanks to fxfox's suggestion I'll probably just watch the Fed for hints of its final demise.

gntx: < 20 & 50 but low and slow.

gpc: < 20 & 50. Not that fast, but possibly near support at $41?

jci: > 20 & 50.

lea: < 20 & 50. Burning nicely (no more housing ATM = no more private jets) but it peaked a while ago.

mga: < 20 & 50. From $74 to $66 in four days? Not sure what happened.

 

Construction materials. Mixed bag. See GVA, JEC.

cbi: < 20 & 50. Starting to roll over, or just another of its big dips?

eme: > 20 & 50.

flr: < 20 & 50 but lots of gaps and whipsaws.

gva: Granite Construction Inc. < 20 and closed < 50 for the first time today. I like it.

jec: < 20 & 50, from $68 to $61 in 3 days last week. Watch for bear traps though, it seems to like them.

 

Banks. Too slow, and they don't seem to care about my moving averages.

bac: < 20 & 50, but slow.

bk: < 20 & 50, but slow.

c: > 20 & 50, and slow.

ge: > 20 & 50, and slow.

hbc: < 20 & 50, but slow.

jpm: < 20 & 50, but lot of whipsaws and slow.

usb: < 20 & 50, but slow.

wb: < 20 & 50. Lot of whipsaws earlier but now in nice steady downtrend.

wm: Ditto.

wfc: < 20 & 50, but lot of whipsaws and slow.

 

Bank holding companies. Again, slow.

bbt: < 20 & 50, but slow.

fitb: < 20 & 50, but slow.

key: < 20 & 50, but slow.

mel: < 20 & 50, may be rolling over, but slow.

ncc: < 20 & 50, but slow.

pnc: < 20 & 50, but lot of whipsaws.

sti: < 20 & 50, but slow.

stt: > 20 & 50.

 

REITS:

reg: < 20 & 50, burning nicely.

 

Interior and furnishings. Too slow, but HNI may hold promise.

eth: < 20 & 50, but slow.

fbn: < 20 & 50, but low and slow.

hni: Between 20 & 50. Might be fun if it can close below the 50.

leg: < 20 & 50, but low and slow. Boat left in July.

lzb: < 20 & 50, but low and slow.

mlhr: < 20 & 50. A bit slow.

 

Tool makers. BDK looks best.

bdk: < 20 & 50. Not bad.

myg: < 20 & 50 but low and slow.

sna: < 20 & 50, but slow.

swk: < 20 & 50, but slow and rangebound.

whr: < 20 & 50. Has been whipsawing, but may be worth watching.

 

The list left out the "wealth effect" stocks like JWN, coach, abercrombie and felch etc but I believe those are Mark's department anyway...

[capitall]

Time for a joke.

 

Two alligators were sitting at the side of the swamp. The smaller one turned

to the bigger one and said, "I can't unnerstand how you kin be so much

bigger'n me. We're the same age, we was the same size as kids. I just don't get

it." "Well," said the big 'gator, "What you been eatin', boy?"

 

"Politicians, same as you," replied the small 'gator.

 

"Hmm. Well, where do y'all catch 'em?"

 

"Down 'tother side of the swamp near the parkin' lot by the capitol."

 

"Same here. Hmm. How do you catch 'em?"

 

"Well, I crawls up under one of them Lexuses and wait fer one to unlock the

car door. Then I jump out, grab 'em on the leg, shake the shit out of 'em,

and eat 'em!"

 

"Ah!" says the big alligator, "I think I see your problem. You ain't gettin'

any real nourishment. See, by the time you get done shakin' the shit out of

a politician, there ain't nothin' left but an ***hole and a briefcase."

[Guest]

 

Hmmmm well this arvo's action is looking suspiciously like a consolidation at the lows so da bearz could be seeing some more action tomorrow. All Ords closed down 0.8%, precisely the same as the am post but with a minor reshuffle in the sectors. IT and Energy finished neck-in-neck on the downside, both -2% and Telecom saw the least damage, -0.2%.

 

Miners and oils took a beating, especially the oils, but the gold specs looked quite stable with some even closing up.

 

Over in Asia, Nikkers went ballistic, +2.5% and Sth Korea did well, +1.4% but ordinary action on the rest.

 

The 3am ramp already started but it may fail to inspire Europe:

 

 

 

 

http://quote.yahoo.com/m2?u

[Guest]

Capitall...

 

[Guest]

Asian Stocks Rise; Japan's Mitsubishi UFJ Leads Gains by Banks

 

Oct. 11 (Bloomberg) -- Asian stocks advanced, led by Mitsubishi UFJ Financial Group Inc., after the Nihon Keizai newspaper said Japan's lenders will repay half the funds they received in government bailouts ahead of schedule.

 

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Japan August Machinery Orders Surge 8.2% on Spending

 

Oct. 11 (Bloomberg) -- Japanese machinery orders rose more than expected in August as companies equipped new factories, adding to signs the world's second-largest economy will expand for a fourth quarter. The Nikkei 225 Stock Average had its biggest jump since May.

[Guest]

You scratch my back...

 

War support could win US contracts

 

AUSTRALIA'S support of the US in Iraq could help local companies crack the huge US government contract market, a visiting American consultant says.

 

Robert Van Gorder, vice-president (consulting) of the Washington Management Group, is in Australia talking to local businesses about the opportunities available under the Australia-US free-trade agreement (FTA).

 

Under the FTA, Australian firms can for the first time directly tender for US government contracts. Last year those contracts were worth $US314 billion ($413 billion).

 

Mr Van Gorder said the market was highly competitive but Australia's support for the US in the war in Iraq would help firms.

 

"It is very helpful, especially under this administration," he said. "Companies from France (which opposed the Iraq war) are still having trouble.

[LeeWhee]

You scratch my back...

 

War support could win US contracts

 

AUSTRALIA'S support of the US in Iraq could help local companies crack the huge US government contract market, a visiting American consultant says.

 

Robert Van Gorder, vice-president (consulting) of the Washington Management Group, is in Australia talking to local businesses about the opportunities available under the Australia-US free-trade agreement (FTA).

 

Under the FTA, Australian firms can for the first time directly tender for US government contracts. Last year those contracts were worth $US314 billion ($413 billion).

 

Mr Van Gorder said the market was highly competitive but Australia's support for the US in the war in Iraq would help firms.

 

"It is very helpful, especially under this administration," he said. "Companies from France (which opposed the Iraq war) are still having trouble.

<{POST_SNAPBACK}>

 

Hey Briz, whatever happened to the buzz surrounding Brisbane-based Metalstorm, the company that claims it has developed a gun---invented by an Oz grocer---that shoots a million bullets a minute? Maybe they can hook up with Whole Foods.

 

Looks like the stock is making a comeback, but it's been pretty much Sell City since the IPO.

 

They just signed a $200K contract on 10/3 with the U.S. Dept of Energy for R&D on "short-range weapon systems that distribute large quantities of ammunition over a large area in an extremely short time frame."

 

Now why, pray tell, would the U.S. DOE need guns that shoot a million bullets a minute? Hmmm...

[The brown one]

You scratch my back...

 

War support could win US contracts

 

AUSTRALIA'S support of the US in Iraq could help local companies crack the huge US government contract market, a visiting American consultant says.

 

Robert Van Gorder, vice-president (consulting) of the Washington Management Group, is in Australia talking to local businesses about the opportunities available under the Australia-US free-trade agreement (FTA).

 

Under the FTA, Australian firms can for the first time directly tender for US government contracts. Last year those contracts were worth $US314 billion ($413 billion).

 

Mr Van Gorder said the market was highly competitive but Australia's support for the US in the war in Iraq would help firms.

 

"It is very helpful, especially under this administration," he said. "Companies from France (which opposed the Iraq war) are still having trouble.

<{POST_SNAPBACK}>

 

Good enough reason to support an illegal war,I suppose.

Although I imagine that any scraps that Oz co's get from the war party table will be just that....HAL cum suis doesn't see enough profit there.

 

Spoosblast having its effect in Europe as intended.They don't have to bother on Amsterdam's account......only 8 points off the 2-year top from a week or so ago.

[Hiding Bear]

The IEA sees big drop in oil supplies, small drop in demand:

 

IEA says oil market precarious after hurricanes

By Toby Shelley

Published: October 11 2005 09:00 | Last updated: October 11 2005 09:00

 

The global oil market coped with the immediate crisis posed by Hurricanes Katrina and Rita but the industry?s capacity to deal with the aftermath is precarious.

 

According to the latest oil market report of the International Energy Agency, the hurricanes disrupted 1.2m barrels a day of US Gulf crude production, dragging down projections of output for countries outside the Organisation of Petroleum Exporting countries by 300,000-400,000 b/d, not just for 2005 but also for 2006. US oil production next year is seen 310,000 b/d lower than previously forecast due to damage throughout the industry from the oil fields to the pipelines and refineries.

 

At the same time, the impact of the hurricanes on logistics, retail demand and prices has reduced the energy security watchdog?s global demand growth forecast for 2005 by 90,000 b/d to 1.25m b/d. However, it is seen rebounding to 1.75m b/d in 2006.

 

http://news.ft.com/cms/s/2622f806-3a2a-11d...000e2511c8.html

 

I would add the caveat tha a recession and/or a pandemic will change the above projections.

[Jorma]

Remember you heard it here first. the new Fed Chairman will be John Snow and replacing him at Treasury will be Andy Card. If I am wrong please to remember to forget the whole thing.