STOCK MARKET WATCH, Tuesday May 15

[ozymandius]

Source: DU

Tuesday May 15, 2007

COUNTING THE DAYS
DAYS REMAINING IN THE * REGIME 615 LONG DAYS
DAYS SINCE DEMOCRACY DIED (12/12/00) 2326 DAYS
WHERE'S OSAMA BIN-LADEN? 2036 DAYS
DAYS SINCE ENRON COLLAPSE = 1996
Number of Enron Execs in handcuffs = 19
ENRON EXECS CONVICTED = 9
Enron execs conveniently deceased = 3
Other Arrests of Execs = 54

---

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

---

AT THE CLOSING BELL WHEN BUSH TOOK OFFICE on January 22, 2001
Dow - 10,578.24
Nasdaq - 2,757.91
S&P 500 - 1,342.90
Oil - $27.69/bbl
Gold - $266.70/oz.

AT THE CLOSING BELL ON May 14, 2007

Dow... 13,346.78 +20.56 (+0.15%)
Nasdaq... 2,546.44 -15.78 (-0.62%)
S&P 500... 1,503.15 -2.70 (-0.18%)
Gold future... 670.10 -2.20 (-0.33%)
30-Year Bond 4.86% +0.01 (+0.23%)
10-Yr Bond... 4.69% +0.02 (+0.43%)






GOLD, EURO, YEN, Loonie and Silver

---

PIEHOLE ALERT

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

For information on protests and other actions Citizens For Legitimate Government

---

Read more: DU

[ozymandius]

1. Today's Market WrapUp

A Sea of Debt
BY TONY ALLISON

Warren Buffett has famously quipped “it’s only when the tide goes out that you learn who’s been swimming naked.” Well, the great sea of liquidity currently swamping the global financial system will eventually ebb, and many, many people will be caught without a bathing suit.

Every new generation believes that it is special, and not subject to the lessons of history, or the laws of economics. Until things go terribly wrong of course. Then historical parallels are crystal clear, in hindsight.

-cut-

Setting the Stage for the Roaring 20’s

While every era is different, the problems associated with excess liquidity ultimately make their way to center stage. In a book titled “Money Central Planning and the State,” author Richard Ebeling makes some interesting observations about the Federal Reserve from inception in 1913 through the 1920’s.

“In the first seven years after the Federal Reserve came into full operation in 1914, wholesale prices in the US rose more than 240%. How had this come about? Between 1914 and 1920, currency in circulation had increased 242.7%, checking deposits had gone up by 196.4%, and time deposits had increased by 240%.” As an aside, this followed a period of over 100 years of stable prices, except for times of war when the gold standard was suspended.

-cut-

This Time Things are Different

Fast forward 78 years, and many things have changed, but not human nature. The Federal Reserve is supremely confident it could avert anything remotely like the depression of the 1930’s. The world financial system today is much more sophisticated. Any market “dislocations” can be handled with coordinated and savvy professionalism by the world’s central banks. This time things are different.

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

[Demeter]

3. A Voice Crying in the Wilderness

I'm so glad my grandfather, who lived through the first Depression, died before Bush got into office. It would have killed him!

[ozymandius]

5. My father lived through the Great Depression too.

He had degrees in business and law and was fiscally conservative to the core because of the hard circumstances of his youth. He was also a staunch Republican in the mold of Eisenhower. I think, had he lived to see this train wreck of an administration, he would have died from grief.

[ozymandius]

2. Today's Reports

8:30 AM CPI Apr
Briefing Forecast 0.5%
Market Expects 0.5%
Prior 0.6%

8:30 AM Core CPI Apr
Briefing Forecast 0.2%
Market Expects 0.2%
Prior 0.1%

8:30 AM NY Empire State Index May
Briefing Forecast 8.0
Market Expects 9.0
Prior 3.8

9:00 AM Net Foreign Purchases Mar
Briefing Forecast N/A
Market Expects $75.0B
Prior $58.1B

http://biz.yahoo.com/c/e.html

[UpInArms]

14. 8:30 reports:

06. U.S. May Empire State prices paid index 34.4 vs 40.5 April
8:30 AM ET, May 15, 2007 - 6 minutes ago

07. U.S. May Empire State employment index 9.7 vs 5.4 in April
8:30 AM ET, May 15, 2007 - 6 minutes ago

08. U.S. April owners' equivalent rent up 0.2%
8:30 AM ET, May 15, 2007 - 6 minutes ago

09. U.S. core CPI up 2.3% in past year, lowest in a year
8:30 AM ET, May 15, 2007 - 6 minutes ago

10. U.S. May Empire State new orders index 8.0 vs 3.9 in April
8:30 AM ET, May 15, 2007 - 6 minutes ago

11. U.S. CPI up 2.6% in past year
8:30 AM ET, May 15, 2007 - 6 minutes ago

12. U.S. April real weekly earnings fall 0.5%
8:30 AM ET, May 15, 2007 - 6 minutes ago

13. U.S. April CPI food prices up 0.4%
8:30 AM ET, May 15, 2007 - 6 minutes ago

14. U.S. May Empire State index in line with expectations
8:30 AM ET, May 15, 2007 - 6 minutes ago

15. U.S. April CPI energy prices up 2.4%
8:30 AM ET, May 15, 2007 - 6 minutes ago

16. U.S. April core CPI up 0.2% as expected
8:30 AM ET, May 15, 2007 - 6 minutes ago

17. U.S. April CPI up 0.4% vs. 0.5% expected
8:30 AM ET, May 15, 2007 - 6 minutes ago

18. U.S. May Empire State index 8.0 vs 3.8 in April
8:30 AM ET, May 15, 2007 - 6 minutes ago

[ozymandius]

4. Oil prices dip in Asian trading

SINGAPORE - Oil prices dipped in Asian trading Tuesday as traders monitored refinery woes and weighed uncertainties over whether U.S. gasoline inventories can meet summer driving demand.

Light, sweet crude for June slid 13 cents to $62.33 on the New York Mercantile Exchange mid-afternoon in Singapore. The contract gained 9 cents to settle at $62.46 a barrel Monday.

Brent crude contract for June delivery retreated 13 cents to $66.70 a barrel on the ICE Futures exchange in London.

With refinery outages reported a large Preem facility in Sweden, and a quickly resolved problem at a Valero Energy Corp. refinery in Texas last week, analysts are concerned that gasoline supplies, though rising, won't meet the peak demand of the U.S. summer driving season, which begins at the end of May.

Unplanned outages and scheduled maintenance at refineries, sluggish imports and strong demand have plagued gasoline stocks since early February. At least a dozen additional partial shutdowns have occurred in the U.S. and internationally that cut refining capacity.

http://news.yahoo.com/s/ap/oil_prices

[ozymandius]

6. Gas prices hit a new record at the pump

NEW YORK - Gasoline prices hit a new record at the pump on Monday, but gas futures prices fell on concerns that $3 gas will crimp demand. Oil prices, meanwhile, rose on reports of refinery problems in the U.S. and abroad.

The average national price of a gallon of gas hit $3.073 on Monday, up almost a penny from Sunday's also record-setting price, according to AAA and the Oil Price Information Service. Gasoline is now well above the previous record of $3.057, set on Sept. 5, 2005, soon after Hurricane Katrina.

But gasoline futures for June delivery fell 5.09 cents to settle at $2.3012 on the New York Mercantile Exchange. Light, sweet crude for June delivery rose 9 cents to settle at $62.46 a barrel on the Nymex.

-cut-

The summer driving season begins in two weeks, on Memorial Day weekend. The government reported that gasoline inventories rose slightly last week, but remain low by historical standards.

http://news.yahoo.com/s/ap/20070515/ap_on_bi_ge/oil_prices_13

Manufacturing is really picking up in the good ol' USA. Crisis manufacturing has been on an upswing about four months now.

[Roland99]

9. And many Americans don't give a rat's ass

(Judging by their speed on my morning commute today).

[mojavekid]

27. BBC: Locals seize Nigeria oil facility

http://news.bbc.co.uk/2/hi/africa/6658773.stm

Angry Ogoni youths have taken over an oil facility in Nigeria's volatile Niger Delta region leading to cuts in oil production, officials say.
The villagers, angered by oil spills from pipelines running through their community say they will not leave until they are paid compensation.

The protests have led Royal Dutch Shell Plc to reduce crude oil production by 170,000 barrels per day.

A Shell spokesman said negotiations with the youths had begun.

more...

[ozymandius]

7. Trend sees cell phone only use growing

WASHINGTON - More than a quarter of young adults have only cell phones, making them the leading edge of a strengthening move away from traditional landline telephones, a federal survey showed Monday.

Overall, the portion of adults with only cell phones grew by more than 2 percentage points in the latter half of last year to nearly 12 percent, an expansion rate that began in the first part of 2006 and was double earlier rates of growth.

One in four people aged 18 to 24 had only cell phones, as did 29 percent of those aged 25 to 29, the study showed. The percentages declined with age after that, with 2 percent of those 65 or over having only cell phones.

The trend away from landline phones affects the telephone industry, 911 emergency service providers, and government and private polling organizations, which rely heavily on random calls to households with wired telephones.

http://news.yahoo.com/s/ap/20070514/ap_on_bi_ge/cell_phones_only

The Ozymandius household ditched the landline a while back. Our internet service is through dsl but there's no actual phone plugged into a wall. Our cell phones do everything we need with no long distance fees and totally free calling at off-peak hours and on weekends.

[ozymandius]

8. Thomson, Reuters agree on merger terms

LONDON - Reuters Group PLC and Thomson Corp. said Tuesday they agreed on terms for a merger to create one of the world's largest financial news providers.

The cash and stock transaction values Reuters at $17.2 billion.

Holders of each Reuters share will be paid $6.99 in cash and 0.16 Thomson-Reuters PLC shares.

The value of the deal is calculated based on Thomson's closing share price of 48.46 Canadian dollars on the Toronto Stock Exchange on May 3, the day before the companies announced they were exploring a combination.

Thomson, formally based in Toronto but with its operational head office in Stamford, Conn., would control about 70 percent of the shares in the new company, Thomson-Reuters PLC. The combine will be headed by Tom Glocer, 47, who is now chief executive of Reuters.

http://news.yahoo.com/s/ap/20070515/ap_on_bi_ge/britain_reuters_thomson

[ozymandius]

10. Home Depot posts lower-than-expected profit

ATLANTA (Reuters) - Home Depot Inc. (HD.N: Quote, Profile , Research), the world's largest home improvement chain, posted lower-than-expected quarterly profit on Tuesday as the softer U.S. housing market hurt sales at its retail stores.

Based on the performance, Home Depot said it expected per-share earnings for this year to fall at the low end of a previously forecast range of 4 percent to 9 percent.

Earnings declined by about one-third to $1 billion, or 53 cents a share, in the first quarter ended on April 29, from $1.5 billion, or 70 cents a share, a year earlier.


Analysts on average expected profit of 59 cents a share, according to Reuters Estimates.

Sales rose less than 1 percent to $21.6 billion, shy of the analysts' average estimate of $21.78 billion. Retail store sales fell 4.3 percent to $18.5 billion, while sales in the supply segment geared to professional contractors rose 46 percent to $3.1 billion, aided by acquisitions.

http://investing.reuters.co.uk/news/articleinvesting.aspx?type=hotStocksNewsUS&storyID=2007-05-15T104103Z_01_WNAS1478_RTRUKOC_0_US-HOMEDEPOT-RESULTS.xml

[ozymandius]

11. Wal-Mart disappointed by results

NEW YORK (CNNMoney.com) -- Wal-Mart Stores posted fiscal first quarter earnings that the company said should have been better, as the world's largest retailer warned that second quarter results would come in at or below forecasts.

Wal-Mart (Charts, Fortune 500) reported earnings from continuing operations of $2.8 billion, or 68 cents a share, for the period ending April 30, up from $2.7 billion, or 64 cents a share on that basis a year earlier.

That was a record result and in line with the forecast of analysts surveyed by earnings tracker First Call. But the company's statement suggested it fell short of its own hopes.

-cut-

The company is now forecasting second quarter earnings per share of 75 to 79 cents. First Call's forecast is for EPS of 79 cents.

And it said that sales at stores open a least a year, a closely watched retail measure known as same store sales, would be up only 1 to 2 percent in the quarter. That would still be better than the 0.6 percent gain in those sales in the first quarter.

http://money.cnn.com/2007/05/15/news/companies/walmart_earnings/index.htm?postversion=2007051507

[ozymandius]

12. Good morning everyone.

:donut: :donut: :donut:

As best-laid plans go... My intent was to return here today. Same as it is today - but no promises this time. I am going to school for the Summer semester. This seems to take more time than I think it normally should. As usual, I'll try to check in as time allows.

Have fun watching the Casino do its bidness.

Ozy :hi:

[UpInArms]

13. dollar watch

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

Last trade 82.072 Change +0.036 (+0.04%)

Dollar Rebound? Housing Holds the Key

http://www.dailyfx.com/story/bio2/Dollar_Rebound__Housing_Holds_the_1179118322248.html

Despite colder than expected PPI numbers, the first negative Retail Sales since September and a wider than expected Trade deficit the greenback gained ground against its major counterparts this week as the data, while weak was not horrid. Retail Sales were a case in point. The market was looking for a poor print, but because of the early coming of Easter and unusual weather patterns many analysts suggested that the market look at March and April numbers together, instantly coining a new term in financial media – Mapril. While April numbers were quite weak, March data was revised higher, so the blended results did not look as bad

The greenback was also aided by a relatively hawkish Fed which continued to emphasize inflationary risks and left little doubt that it would not event consider lowering rates unless US economic growth deteriorated materially. Therefore, the dollar remains supported by the interest rate structure as US short term rates remain 175 basis point above the Eurozone.

Next week the calendar has plenty of US economic data, but its tone may be rather mixed. The key to dollars continued rebound is US housing data. After months of brutal negative surprises, traders need to see some signs of stabilization. That’s why Tuesday NAHB Housing Survey and Wednesday’s Housing Starts and Housing Permits releases are critical to the dollar bull case. Further contraction in the sector will only fuel speculation that US is on the brink of recession. A better than expected print however will go a long way to bolstering the dollar long’s argument that problems remain contained.

In addition to housing the market will scrutinize the series if manufacturing survey from Empire to Philly to IP. Given the greenback’s recent slide manufacturing should fare better this month, providing further support for the buck – BS



...more...

US Dollar: Gasoline Prices to Hit CPI, Not a Coincidence that US Postal Service Increased Stamp Prices

http://www.dailyfx.com/story/bio1/US_Dollar__Gasoline_Prices_to_1179177888524.html

Speculators trading the US dollar will need to focus on two things this week; inflation and housing. Even though trading has been very quiet today, consumer prices are due for release tomorrow, which tends to be a big market mover. Last week, the Federal Reserve remained steadfastly hawkish so the CPI number will be particularly important to traders looking for confirmation on why the Fed refuses to put growth ahead of inflation. Producer prices surprised to the downside on Friday, but the impact of record gasoline prices should be most strongly felt in consumer and not producer prices. Since the beginning of the year, gasoline prices are up 48 percent and we believe that not only will consumers feel the pain at the gas station, but also in many ancillary services that rely of transportation as a method of delivery. In fact, today’s 2 cent increase in postal charges could very well be related to the higher gas prices. Therefore dollar bulls are holding out for the CPI number tomorrow, because a strong print would validate the Fed’s decision to remain focused on inflation. The biggest beneficiary should continue to be USD/JPY because of the currency pair’s clear carry advantage. Should CPI fail to meet up to the market’s expectations however, traders will seriously question what factors the Fed is looking at and because of that they will punish the US dollar. Aside from the CPI number, the Empire State manufacturing survey and the Treasury International Capital flow reports are also due for release. The weak dollar and the rally in the stock market suggest that both of these numbers should be more dollar friendly. As for the housing market, there has been a lot of talk about a Wall Street Journal article focusing on foreclosures. According to the report, at an auction of 100 foreclosed homes in the San Diego area, the average house or condo was sold for about 30 percent below the appraisal value and in some cases, the discounts were as much as 50 percent. This is further evidence that the housing market is in trouble. Our focus will turn to the housing market on Wednesday, when we look to the release of housing starts and building permits.

...more...

[Ghost Dog]

35. Dollar drops as U.S. inflation appears contained

http://investing.reuters.co.uk/news/articleinvesting.aspx?rpc=401&type=hotStocksNewsUS&storyID=2007-05-15T181148Z_01_L15490993_RTRUKOC_0_US-FOREX.xml

NEW YORK (Reuters) - The dollar fell against the euro on Tuesday after a reading of U.S. consumer prices suggested inflation was well contained, backing a view that U.S. interest rates would lose their premium over European rates.

The euro's gains against the dollar also helped push it to a fresh record high against the yen. The euro has risen across the board over the past two months on expectations that euro-zone interest rates will continue to rise.

In contrast, the dollar has suffered from a view that the Federal Reserve will likely cut interest rates from the current level of 5.25 in the second half of this year to shore up a slowing economy.

/...

[Ghost Dog]

36. FOREX: Latest Global Forex Reserves Updated

http://www.tradingmarkets.com/.site/news/forex/553209/

San Francisco, May 15. the latest update on global central bank reserves has been updated on our website. Look at www.ifrmarkets.com, under "Forex Watch" then "Macro Flows." Japan"s reserve hit new record highs above $915 bln in April as did Russian reserves which rose to $369 bln and have increased $64 bln in the first four months of the year. Brazil reserves continue to make fresh highs, rising to $121.8 bln this month with India also making new highs of $204 bln. [e-mail] /rd

(The (Thomson) site referred to is subscriber-only. I do hope Reuters, then, is not going to end up that way).

[mojavekid]

15. Bloomberg: Junk Bonds May Repeat Crash of 2002 on LBO Credits (Update1)

http://www.bloomberg.com/apps/news?pid=20601103&sid=a6kt.8KCjAvg&refer=us

May 15 (Bloomberg) -- Never have so many made so much money from junk bonds, and that worries Dan Fuss.

Fuss, whose $10.7 billion Loomis Sayles Bond Fund has been the best performer among its peers the last 10 years, says high- yield, high-risk securities are showing unmistakable signs of a bubble. Yields are near record lows relative to government securities even though sales of the riskiest bonds increased 39 percent from last year, debt has grown faster than earnings and the economy is expanding at the slowest pace in five years.

``I haven't felt this nervous about a market ever,'' said Fuss, vice chairman of Loomis Sayles & Co. in Boston, who's been working in the banking and securities industries since he joined Wauwatosa State Bank in Wisconsin in 1958. His fund has returned an average 9.91 percent a year for the last decade, the best of 45 funds with similar investment rules, according to Lipper, the mutual fund research firm.

Martin Fridson, head of high-yield research firm FridsonVision LLC, and Mariarosa Verde, managing director of credit market research at Fitch Ratings, say sales of junk bonds and the record $366 billion of leveraged buyouts may lead to the worst bear market for bondholders.

more...

[Roland99]

16. Lunchtime check-in: You are the wind beneath my wings

DJIA 13,458.76 +111.98 +0.84%
Nasdaq 2,553.48 +7.04 +0.28%
S&P 500 1,512.36 +9.21 +0.61%
Dow Util 534.63 +6.31 +1.19%
NYSE 9,833.04 +67.66 +0.69%
AMEX 2,252.00 +16.32 +0.73%
Russell 2000 826.24 +3.91 +0.48%
Semcond 501.98 -2.15 -0.43%
Gold future 673.90 +3.80 +0.57%
30-Year Bond 4.87% +0.01 +0.14%
10-Year Bond 4.70% +0.01 +0.17%


And by *you* I really mean the Everlasting Gobstopper of Debt!

[Demeter]

19. Are They All Insane? I Don't Get It!

[Roland99]

28. It's a Magic Bus!! Climb aboard!

Every day I get in the queue (Too much, the Magic Bus)
To get on the bus that takes me to you (Too much, the Magic Bus)
I'm so nervous, I just sit and smile (Too much, the Magic Bus)
Your house is only another mile (Too much, the Magic Bus)
Thank you, driver, for getting me here (Too much, the Magic Bus)
You'll be an inspector, have no fear (Too much, the Magic Bus)
I don't want to cause no fuss (Too much, the Magic Bus)
But can I buy your Magic Bus? (Too much, the Magic Bus)
Nooooooooo!

I don't care how much I pay (Too much, the Magic Bus)
I wanna drive my bus to my baby each day (Too much, the Magic Bus)
*Magic Bus, Magic Bus, Magic Bus
Give me a hundred (Magic Bus)
I won't take under (Magic Bus)
Goes like thunder (Magic Bus)
It's a bus-age wonder (Magic Bus)

Magic Bus, Magic Bus, Magic Bus, Magic Bus
I want it, I want it, I want it...(You can't have it!)
Think how much you'll save...(You can't have it!)]
I want it, I want it, I want it, I want it ... (You can't have it!)

Thruppence and sixpence every day
Just to drive to my baby
Thruppence and sixpence each day
'Cause I drive my baby every way

Magic Bus, Magic Bus, Magic Bus, Magic Bus, Magic Bus...
I want the Magic Bus, I want the Magic Bus, I want the Magic Bus...

I said, now I've got my Magic Bus (Too much, the Magic Bus)
I said, now I've got my Magic Bus (Too much, the Magic Bus)
I drive my baby every way (Too much, the Magic Bus)
Each time I go a different way (Too much, the Magic Bus)
I want it, i want it, I want it, I want it ...

Every day you'll see the dust (Too much, the Magic Bus)
As I drive my baby in my Magic Bus (Too much, the Magic Bus)

[Demeter]

30. Is This a Drug Song?

I don't get that either, but take your point.

[Roland99]

32. Guess it could be. Not sure what Roger, Pete, John, and Keith were doing back then.

;)

[Ghost Dog]

17. Japan's Machine Orders Fall 4.5%, Undermining Growth

http://www.bloomberg.com/apps/news?pid=20601080&sid=a2X19fb9bpvE&refer=asia

May 15 (Bloomberg) -- Japan's machinery orders fell unexpectedly in March and companies said the slump will deepen, undermining growth in the world's second-largest economy.

Orders dropped 4.5 percent from a month earlier after declining a revised 4.9 percent in February, the Cabinet Office said today in Tokyo. The median estimate of 38 economists surveyed by Bloomberg News was for a 1.5 percent increase.

The report also shows companies expect orders to plunge 11.8 percent this quarter, weakening the central bank's case for raising interest rates, the lowest among major economies. NEC Electronics Corp., Japan's third-largest chipmaker, said yesterday it plans to reduce capital investment by 30 percent.

``Today's data cast dark clouds over the state of capital expenditure,'' said Masaki Fukui, a senior economist at Mizuho Corporate Bank Ltd. ``On every count, machine orders were bad.''

...

Japan's economic growth probably slowed in the first quarter as investment cooled in anticipation of waning demand in the U.S. The world's second-largest economy expanded an annualized 2.7 percent in the three months ended March 31, half the rate of the previous three months, according to the median estimate of 36 economists surveyed by Bloomberg.

...

Companies expect orders to decline the most in 20 years in the three months ending June 30, after they dropped 0.7 percent in the first quarter, according to today's report. The numbers exclude orders made by the government and those for shipping and utilities.

Economic and Fiscal Policy Minister Hiroko Ota said the outlook for machinery orders is ``somewhat worrisome.'' The Cabinet Office downgraded its assessment of the orders for the first time in six months, and described them as ``weak'' for the first time since November 2004.

Still, Cabinet Office spokesman Itsushi Tachi said companies tend to be conservative in their forecasts at the start of the fiscal year, and actual orders are usually stronger. In 2006, companies forecast a 2.5 percent drop in orders for the three months ending June before boosting them 8.9 percent.

/...

[Ghost Dog]

18. Asian Stocks Fall, Led by Sony, BHP on Economic Growth Concern

http://www.bloomberg.com/apps/news?pid=20601080&sid=aO7Upo2Jc5Ts&refer=asia

May 15 (Bloomberg) -- Asian stocks dropped after Japanese machinery orders unexpectedly fell and metals prices slumped.

Sony Corp., the world's second-largest consumer electronics maker, slumped the most in two months. BHP Billiton Ltd., the biggest mining company, dropped to a one-week low.

Japan's benchmarks led the decline as the 4.5 percent drop in machinery orders in March dented expectations for regional economic growth that has helped fuel a four-year rally in the Morgan Stanley Capital International Asia-Pacific Index.

``With the machine orders missing estimates, there's growing concern that Japan's economy has hit a soft patch,'' said Yoshihiro Ito, who helps look after $689 million in assets at Okasan Capital Management Co. in Tokyo. ``Metals companies were being bought on strong profit expectations, but their forecasts are weak. Falling prices are also having an effect.''

China Minsheng Banking Corp. lost the most in 11 weeks, pulling the country's benchmark down 3.5 percent from a record as investors judged recent gains to be excessive.

MSCI's Asia-Pacific index dropped 0.9 percent to 148.32 at 7:28 p.m. in Tokyo. The Nikkei 225 Stock Average fell 1.1 percent and the broader Topix index retreated 1 percent.

Benchmarks in Hong Kong, South Korea and Singapore slid from highs. Markets rose only in the Philippines, Thailand and Pakistan. Bank of Communications Ltd. shares surged on their first day of trading in Shanghai.

/...

[Ghost Dog]

20. China Retail Sales Rise 15.5 Percent as Wages Grow

http://www.bloomberg.com/apps/news?pid=20601080&sid=ak9Gg7uJr6CI&refer=asia

May 15 (Bloomberg) -- China's retail sales grew 15.5 percent in April from a year earlier as rising incomes and a stock market boom encouraged the world's most populous nation to spend.

Sales climbed to 667.3 billion yuan ($86.8 billion) after gaining 15.3 percent in March, the National Bureau of Statistics said today. That was the biggest increase since May 2004 if the first two months of each year are combined to eliminate Lunar New Year holiday distortions.

Premier Wen Jiabao is trying to boost consumption to make China less dependent on exports and investment for growth. The world's fourth-largest economy grew 11.1 percent in the first quarter and the benchmark CSI 300 Index of stocks has soared more than 80 percent this year.

``This is encouraging,'' said Sun Mingchun, an economist at Lehman Brothers Holdings Inc. in Hong Kong. ``But it's too early to say whether it can be sustained, because part of the increase was supported by the stock market.''

...

Households are switching money from bank deposits to the share market.

``I make about 5,000 yuan a month investing in stocks,'' said Peng Li, 25, a student eating at the food court of the Mix C Shopping Mall in Shenzhen. ``I spend most of my money on eating and shopping with friends.''

Minimum Wages

China will strengthen implementation of minimum wages and improve public welfare to support consumption, Premier Wen Jiabao told lawmakers at the annual meeting of the National People's Congress in March.

Disposable incomes in urban areas jumped 19.5 percent in the first quarter and rural households' earnings climbed 15.2 percent.

``Most Chinese people live in the country and the government needs to further boost rural incomes to expand consumption,'' said Zuo Xiaolei, chief economist at China Galaxy Securities Co. in Beijing.

Retail spending in towns and cities jumped 16 percent in April from a year earlier. In rural areas, the increase was 14.6 percent.

The increased wealth of China's consumers is leading retailers to boost investment.

/...

[Ghost Dog]

23. BoCom soars 80% in Shanghai debut

http://www.ft.com/cms/s/ee00716a-028c-11dc-ac32-000b5df10621.html

The fervour for new listings in mainland China continued on Tuesday when shares in Bank of Communications surged 79 per cent in the first morning of trading on the Shanghai stock market despite continued warnings about the risk of a stockmarket bubble.

Analysts had expected a sharp rise in the company’s share price given the strong demand shown during the offering, but the early rise in the share price was considerably higher than expected. Shares in BoCom rose from an offering price of Rmb7.90 to Rmb14.99 in early trading, before falling back to Rmb14.11.

The performance of BoCom’s shares underlined the continued massive demand for initial public offerings in China which has helped lift share prices by fourfold over the last two years. BoCom, China’s fifth largest bank in which HSBC has taken a strategic stake, attracted a record amount of subscriptions for its mainland IPO.

BoCom’s chariman Jiang Chaoliang was quoted by Dow Jones news agency on Tuesday as saying the bank has set aside shares in its Shanghai offering for HSBC to maintain its stakeholding, which had been diluted to 18.6 per cent from a maximum of 19.9% permitted under Chinese regulations.

As a result of the first-day jump, the company’s Shanghai-listed shares are now trading at a premium of around 70 per cent to its shares traded in Hong Kong, which also jumped 4 per cent in early trading. Although all the companies listed in both markets are trading at a premium in Shanghai, the average is around 45 per cent.

State media ran several articles on Monday warning about the risks of investing in the stockmarket, part of an apparent attempt by the authorities to reduce speculation by retail investors in a market which some analysts believe is considerably overvalued. Last week, Zhou Xiaochuan, chairman of the People’s Bank of China, said he was worried that a bubble might be developing in the stockmarket.

/...

[Ghost Dog]

25. Viewpoint: Flame that will burst bubble

http://business.guardian.co.uk/viewpoint/0,,1767628,00.html
Nils Pratley
Tuesday May 15, 2007
The Guardian

Pity the Chinese securities regulatory commission, charged with educating the locals about stock market investment. The commission doesn't deal in bland statements like "the value of shares can go down as well as up". It is obliged to spell out the dangers starkly. "There exists no stock on earth whose prices only surge and never slump," it declared last Friday. Did the locals listen? Of course not. The Shanghai Composite index rose again yesterday, by almost 1%, as it has been doing on average every day for the past two months.

It will clearly take something stronger than words to prick this bubble. As China's new breed of investors see things, they are making a rational bet. They get 2.8% by leaving their cash in the bank, which doesn't even match inflation. So why not have a punt, especially when the authorities appear terrified of triggering a crash ahead of the Beijing Olympics? That leaves plenty of time to be in and out of the market.

Such thinking, however simplistic, illustrates how difficult it will be for the Chinese authorities to calm the mania. They can increase savings rates, but even a doubling might be insufficient. They can float more state-owned companies to increase the supply of shares, but that can't happen instantly. Or they could loosen the rules on Chinese investors moving cash abroad, but that would be a big philosophical leap.

All three measures will probably happen eventually, but the deeper problem here is that China is accumulating foreign exchange reserves at the rate of $500bn (£250bn) a year. The cash has to be released somewhere, and shares have always been a natural home for speculation in emerging markets.

In this climate, a crash could happen at any moment. From current levels, the pain might be tolerable, though even February's one-day fall of 9% rippled around global markets. Even to return to those levels would now require a plunge of more than 25%, which shows why the authorities need something to happen sooner not later. If Chinese markets sustain their current pace until next summer, then the Olympic flame will ignite a rout.

[Ghost Dog]

31. Japan fund foreign assets surge $14.8 bln in April

http://yahoo.reuters.com/news/articlehybrid.aspx?storyID=urn:newsml:reuters.com:20070515:MTFH66357_2007-05-15_09-30-36_T310501&type=comktNews&rpc=44

TOKYO, May 15 (Reuters) - Japanese investment trust holdings of foreign assets surged 1.7749 trillion yen ($14.8 billion) in April, the biggest monthly rise on record, as investors kicked off the country's new fiscal year by ploughing funds into overseas assets.

Total holdings climbed to 32.2993 trillion yen last month, the highest on records dating back to 1989, data from Japan's Investment Trust Association showed on Tuesday.

Holdings of bonds, stocks and money market instruments each touched their highest levels ever last month, contributing to the yen's broad weakness that drove it to a 21-year low on a trade-weighted and inflation-adjusted basis last month.

Japanese households continue to flock to foreign bonds and stocks for better returns given very low domestic yields, while the country's bulge of ageing baby boomers are starting to invest money from lump-sum retirement payments.

Holdings of foreign stocks jumped 845.7 billion yen to 7.8736 trillion yen, while foreign bond holdings rose 629.8 billion yen to 19.2315 trillion yen. The monthly increases in both categories were the largest on record.

Stockholdings climbed as equity markets recovered from a global sell-off in late February, and total foreign equity assets have nearly doubled in the past year and make up 24.4 percent of all foreign assets, the highest proportion in nearly five years.

/...

[Ghost Dog]

26. Strong euro zone GDP weighs on bonds

http://yahoo.reuters.com/news/articlehybrid.aspx?type=comktNews&storyID=urn:newsml:reuters.com:20070515:MTFH66508_2007-05-15_09-38-12_L15442757&pageNumber=0&imageid=&cap=&sz=13&WTModLoc=HybArt-C1-ArticlePage3

LONDON, May 15 (Reuters) - Euro zone government bonds hit fresh multi-year lows on Tuesday as economic growth in the region remained solid, while falls in Asian markets and caution ahead of U.S. inflation data weighed on European equities.

Euro zone gross domestic product rose an estimated 0.6 percent in the first quarter, further evidence that the region was flourishing despite a slowdown in U.S. economic growth.

Year-on-year growth was estimated at 3.1 percent compared with U.S. growth of just 1.3 percent in the first quarter.

"Today's GDP report strengthens our belief that the euro zone economy is on a sustained growth trajectory and may no longer require monetary stimulus," said Martin van Vliet, an economist at ING.

"Accordingly, we think the odds of an additional 25 basis points of monetary tightening on top of the one scheduled for June have shortened further."

/...

[Ghost Dog]

29. European stocks end higher as M&A activity swirls

http://investing.reuters.co.uk/news/articleinvesting.aspx?type=eurMktRpt&storyID=2007-05-15T154133Z_01_L15735443_RTRIDST_0_MARKETS-EUROPE-STOCKS-URGENT.XML

LONDON, May 15 (Reuters) - European stocks ended Tuesday a touch higher, boosted by a swathe of mergers and acquisitions, while investors looked to Wall Street for direction after data calmed U.S. interest rate concerns.

Among major gainers, Gas Natural (GAS.MC: Quote, Profile , Research) rallied 2.6 percent after France's Suez (LYOE.PA: Quote, Profile , Research) said it planned to increase its stake in its Spanish rival, while takeover developments boosted both Reuters (RTR.L: Quote, Profile , Research) and Hanson (HNS.L: Quote, Profile , Research).

The FTSEurofirst 300 <.FTEU3> index of top European shares closed unofficially up 0.2 percent at 1,582.1 points, after dipping to 1,571.7 points earlier in the session.

http://mwprices.ft.com/custom/ft2-com/html-story.asp?pulse=true&siteid=ft&dist=ft&guid=%7Bfc8f9084%2D15dd%2D4e18%2Da4d6%2Db3b47b7fef3e%7D

Persistent talk of further consolidation in Italy’s banking sector helped drive shares in Capitalia to their highest for more than eight years on Tuesday, lifting the European banking sector. The FTSE Eurofirst 300 ended 0.2 per cent higher at 1,582.14. Frankfurt’s Xetra Dax was up 0.6 per cent to 7,505.35, the CAC 40 in Paris rose 0.4 per cent to 6,049.76 and London’s FTSE 100 added 0.2 per cent to 6,568.6. Capitalia rose as high as €7.8750, the highest since August 1998, before easing back to close 5.3 per cent stronger at €7.91.

[mojavekid]

21. Marketwatch: Gold futures climb as much as $5 an ounce

http://www.marketwatch.com/news/story/gold-contract-edges-higher-volatile/story.aspx?guid=%7B61F39BF4%2D7E32%2D40B0%2DB39D%2D5C91A0AE2C2B%7D

Silver shines after CPM reports strong demand; copper regains ground

SAN FRANCISCO (MarketWatch) -- Gold futures climbed as much as $5 an ounce Tuesday, trading inversely with weakness in the U.S. dollar on the heels of U.S. economic data, which showed that consumer inflation eased in April.
Gold for June delivery was last up $4.10 at $674.20 an ounce on the New York Mercantile Exchange after trading at a three-session high of $675.
The consumer-price index increased 0.4% in April, the Labor Department reported Tuesday. Economists surveyed by MarketWatch were expecting the CPI to rise 0.5% in April. Excluding food and energy, the core consumer price index rose 0.2%, as expected, cutting the annual gain in the core down to a one-year low of 2.3%.

more...

[mojavekid]

24. Ted Butler: A CLEAR PARALLEL

http://www.investmentrarities.com/05-08-07.html

This past week, Barrick Gold reported its financial results for the first quarter of 2007. Since I have written several articles on them in the past, I thought it appropriate to comment on their results.


Barrick is the largest gold miner in the world and, traditionally, the largest gold short seller, via forward sales of future production. They pioneered the practice of short selling gold borrowed from central banks (through dealers), more than a decade ago. In the early years, Barrick’s short selling strategy worked well for them, because the price of gold was stagnant or declining through 2001. But since then, gold prices have boomed and their short selling strategy has hurt them, as revealed in their newest earnings report.


For the quarter, ended March 31, Barrick incurred a net loss of $159 million, due to a $557 million charge on the closeout of gold short sales. They also announced a further $68 million loss on short closeouts after March 31. Barrick has incurred realized losses of more than $3 billion through its gold short buy backs in recent years.


For public relations purposes, Barrick has chosen to present their recent short covering as proof they’ve put the issue behind them. That might be true in public relations terms, but not in actual financial terms. They still have an open short position of 9.5 million ounces, more than a full year’s of Barrick gold mining production. This open short position has a current unrealized loss of $3.5 billion that’s in addition to the already realized $3 billion loss. For those who expect gold to move substantially higher in the years ahead, Barrick’s loss on their open short gold position will increase by roughly $1 billion for every $100 increase in the price of an ounce of gold.

More...

......Between Jim Willie and Ted Butler they have got Barrick down cold...

[mojavekid]

22. Daily Pfennig 5/15/07: Inflation Abating? NOT!

http://www.kitcocasey.com/displayArticle.php?id=1385

We just didn't see any traction in the currencies yesterday... The markets were waiting for U.S. CPI to print this morning... Me? I really don't give a rat's tail about CPI, because it is so trumped up, massaged and cooked to make us all "feel good" that I find it just doesn't have relevance any longer. But... The markets do, so here you go!

April CPI printed this morning slightly less than the experts forecast at .4%... To some, this represents what they feel is an indication of inflation abating... However, let's think about this for a minute... .4% in a month puts annual inflation at 4.80%... OUCH! But as long as they keep quoting it in small monthly numbers, they disguise the overall crunch on us!

The media will shout about the "core" number, which excludes food and energy, as if we don't use those items each and every day! The core advanced only .2% in April, putting the annual inflation for those that don't use food and energy at 2.4%...

I don't think the Fed Heads, even in their wildest dreams, would fall for this trick the media likes to play with CPI...

more...

[Ghost Dog]

33. 15:23: US Markets Flagging

Dow 13,388.23 Up 41.45 (0.31%)
Nasdaq 2,528.04 Down 18.40 (0.72%)
S&P 500 1,502.04 Down 1.11 (0.07%)
10-Yr Bond 4.71% Up 0.02
NYSE Volume 2,521,415,000
Nasdaq Volume 1,828,620,000

[Ghost Dog]

34. Stocks lose steam after post-inflation rally

http://www.marketwatch.com/news/story/us-stocks-lose-steam-after/story.aspx?guid=%7BB5227547%2D56AB%2D4218%2DA0A5%2D317A9261981F%7D
Dow retreats from record high; Fed cut hopes offset Home Depot, Wal-Mart

NEW YORK (MarketWatch) -- U.S. stocks lost steam in afternoon trade Tuesday, as investors consolidated some of the strong gains scored earlier after weaker-than-expected consumer price inflation boosted hopes that the Federal Reserve will cut interest rates to boost a slowing economy.

The inflation data helped offset disappointing results from Home Depot Inc. and Wal-Mart Stores. "The data was really positive and it turned us off of the concerns over Wal-Mart and Home Depot," said Kevin Kruszenski, head of trading at KeyBanc Capital.

Still, the Dow Jones Industrial Average was up just 46 points at 13,393, losing most of a 140-point gain that earlier led the Dow above 13,400 for the first time.

The Dow remained lifted by shares of General Motors Corp.

But now that earnings season is over - and the key inflation report is out of the way," the main concern on the minds of investors is the market's lofty levels," said Peter Cardillo, chief market economist at Avalon Partners.
"We need a new catalyst, some extraordinarily positive catalyst that would lead the market to continue rallying," Cardillo said. "But there's nothing immediately on the horizon."

/...

[UpInArms]

37. mixed end of the day numbers

Dow 13,383.84 37.06 (0.28%)
Nasdaq 2,525.29 21.15 (0.83%)
S&P 500 1,501.19 1.96 (0.13%)
10-Yr Bond 4.712% 0.022

NYSE Volume 3,115,563,000
Nasdaq Volume 2,288,222,000

Stocks were all over the board Tuesday as investors weighed more proof of a potential rate cut sooner rather than later against a growing sense the market has gotten ahead of itself.

With the Fed reiterating last week that inflation remains a "predominant" concern, core CPI rising just 0.2% was initially viewed as very bullish. That pushed the year/year rate to 2.3%, a one-year low, and closer to the Fed's "comfort zone." However, with the bulls pricing in a fourth consecutive 0.1% increase in core CPI after a flat reading on core PPI last Friday, the market's initial bullish response lacked staying power.

It is worth noting that the Labor Dept. also cited risks from rising energy prices in this morning's CPI report. Even though crude prices are about 9% lower than a year ago, prices at the pump rose to a record average of $3.08 a gallon yesterday with two weeks to go before the summer driving season officially begins. Crude for June delivery surged 1.1% today to close at $63.17/bbl, but the Energy sector failed to take notice.

Also taking some steam out of stocks intraday was a report at 1:00 ET that showed home builders don't see a recovery in the troubled housing sector until next year. When the survey unexpectedly slid to a reading of 30 in May, matching the 15-year low set last September, the bears returned with evidence of their own to argue an increasingly overbought situation given deteriorating fundamentals.

Of the 5 economic sectors trading higher, Materials paced the way; but as the S&P 500's least influential sector, it wasn't surprising to see why its 1.0% advance had little impact on the broader market. Fertilizers & Agricultural Chemicals was the day's best performing S&P industry groups as Monsanto (MON 60.98 +2.68) soared 4.6% to an all-time after a report showed crop plantings are catching up to year-ago levels.

The absence of upside leadership from four of the S&P 500's five most heavily-weighted sectors, though, contributed to the bulls' struggles to keep anything except the Dow from finishing lower. The Dow closed in record territory despite disappointing earnings results from two of its components.

Home Depot (HD 38.22 -0.79) plunged 2.0% after posting a 30% drop in Q1 profits that missed expectations and guiding full-year earnings at the low end of prior forecasts. Wal-Mart (WMT 47.58 -0.26) was one of 12 other Dow components not contributing to the price-weighted index's latest charge into record territory today. Wal-Mart merely matched consensus estimates and warned that Q2 earnings might miss forecasts.

As evidenced by the Nasdaq turning in the worst performance among the majors, Technology was the biggest drag on stocks today. Semiconductor Equipment (-2.5%) ranked among the day's biggest laggards after Goldman Sachs added Applied Materials (AMAT 19.78 -0.64) to its Conviction Sell list ahead of AMAT's earnings after the close. BTK -1.1% DJ30 +37.06 DJTA +0.2% DJUA +0.3% DOT -0.9% NASDAQ -21.15 NQ100 -0.9% R2K -1.0% SOX -1.2% SP400 -0.4% SP500 -1.96 XOI -0.04% NASDAQ Dec/Adv/Vol 2135/886/2.13 bln NYSE Dec/Adv/Vol 1977/1251/1.50 bln

3:30 pm : Equities are rebounding from their afternoon lows, but buyer's last-minute attempts to cut losses have only been enough to inch the S&P 500 back into the green. The lack of upside leadership from four of the five most heavily-weighted sectors is contributing to the bulls' uphill battle.

As an aside, Limited Brands (LTD 26.15 -1.34) has resumed trading following reports it is selling a majority interest in Express and exploring strategic options for Limited Stores. However, the stock is plunging 4.6% as accompanied downside EPS guidance acts as an offset. Apparel Retail (-2.4%) now ranks as one of this year's ten worst performing S&P industry groups (-6.1%). DJ30 +49.69 NASDAQ -15.70 SP500 +0.44 NASDAQ Dec/Adv/Vol 1982/1017/1.82 bln NYSE Dec/Adv/Vol 1857/1340/1.30 bln

3:00 pm : Selling remains the name of the game heading into the final hour of trading. Influential sectors like Financials, Health Care, and Consumer Discretionary recently joining Technology in negative territory have removed some notable leadership and pushed the S&P 500 below the flat line.

Adding to the Nasdaq's recent struggles has been its inability to find support above the key technical level of 2533. The Dow, in contrast, is still on pace to close at a new record but is nearly 100 points off its best levels. DJ30 +38.54 NASDAQ -16.65 SP500 -0.54 NASDAQ Dec/Adv/Vol 1985/1015/1.62 bln NYSE Dec/Adv/Vol 1642/1543/1.14 mln