Archive through November 03, 2007
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     hilarius
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Username: hilarius
Post Number: 3070
Registered: 04-2004
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| | Saturday, October 06, 2007 - 12:47 am: | 
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The U.S. unemployment rate rose to 4.7% in September, but job growth was stronger than expected over the past three months, the Labor Department reported Friday.
Nonfarm payrolls rose by 110,000 in September, including 73,000 in the private sector, very close to expectations of a 113,000 gain in total payrolls. See Economic Calendar.
As measured by a survey of businesses, payroll growth in July and August was revised higher by 118,000, the government said. Instead of falling by 4,000 in August, payrolls rose 89,000 after revisions.
The unemployment rate ticked up to 4.7%, the highest in a year, as expected. The labor force expanded by 573,000, and employment, as measured by the household survey, rose by 463,000, the biggest growth in more than two years. The labor participation rate rose to 66% from 65.8% in August.
The details of the report paint a picture of a stronger job market than expected and could lead financial markets to lower their expectations for another interest-rate cut by the Federal Reserve at the end of the month.
Payrolls have increased by an average of 90,000 over the past three months, compared with 147,000 per month in the first five months of the year.
I come in peace to share my thoughts and to shine my candle light on possible long term opportunities
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holycow
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Username: holycow
Post Number: 3283
Registered: 08-2004
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| | Saturday, October 27, 2007 - 08:59 pm: |
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http://tinyurl.com/2xex7z
There is an analyst cheat sheet doing the rounds on how to react to data and market releases in the current market.
Weak data - Fed ease, stocks rally.
Consensus data - lower volatility, stocks rally.
Strong data - economy strengthening, stocks rally.
Bank loses $4 billion - bad news out of the way, stocks rally.
Oil spikes - great for energy companies, stocks rally.
Oil drops - great for consumer, stocks rally.
Dollar plunges - great for multinationals, stocks rally.
Dollar spikes - lowers inflation, stocks rally.
Inflation spikes - will inflate all assets, stocks rally.
Inflation drops - improves earnings quality, stocks rally.
*** now just be patient and wait for a bear's version... that will be the signal to pump all your money into stocks.
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HC
Look at a man's acts; watch his motives; find out what pleases him: can the man evade you?
... the essence of chart reading
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holycow
Member
Username: holycow
Post Number: 3284
Registered: 08-2004
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| | Saturday, October 27, 2007 - 09:06 pm: |
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http://tinyurl.com/ypjym5
British investors warned of slide in shares...
The bank also raises its "danger level" warning on all parts of the financial system and warns that the value of shares – known in the City as equities – is now at risk.
"The financial system is more than usually vulnerable to further adverse shocks — sourced either in recent events or from new sources, such as the equity markets or a weakening commercial property market," the report says.
The warning will cause major concern in the markets, since many had assumed that the City had already shaken off the effects of this summer's financial crisis.
The credit crunch occurred after hundreds of thousands of US home owners defaulted on their mortgages, leaving banks and investors across the world out of pocket. The resulting squeeze pushed up borrowing rates in the UK as banks attempted to recoup their money.
The Bank of England expresses surprise that the UK stock market, which dropped in value significantly over the summer but has since recovered fully, has remained so resilient.
However, it warns: "A deeper downturn in the United States and rising credit defaults could trigger a further round of asset price falls. Equity markets seem particularly vulnerable."
**** don't think the investment public is taking note of this warning at this moment. They are too busily indulging themselves in next round of rally...
HC
Look at a man's acts; watch his motives; find out what pleases him: can the man evade you?
... the essence of chart reading
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holycow
Member
Username: holycow
Post Number: 3285
Registered: 08-2004
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| | Sunday, October 28, 2007 - 09:38 am: |
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JHX/BLD/BBG Daily
1) As a follow up, on Sep 20 (http://tinyurl.com/2yygg5), I was commenting on these stocks due to their business exposure in the USA... since then, take a look. One of the major cause for their decline I believe is due to the ever declining US$ denting their profit margin when it is converting back to A$.
Two days ago, the BBG management was telling the market they are having such problem. The question I am asking is - when will it end? I mean the declining US$? Until there's a clear and firm sign that the US$ has stopped dropping, it is not going to be good news for these companies who have bulk of their profit earned in US$.
Anyway, sp wise, these stocks are reaching a watershed, a major and important support/resistance level. Should they fail to hold on to it, I think, the stocks will be getting some serious routing.
Day of reckoning is very near... I reckon.
HC
Look at a man's acts; watch his motives; find out what pleases him: can the man evade you?
... the essence of chart reading
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holycow
Member
Username: holycow
Post Number: 3286
Registered: 08-2004
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| | Sunday, October 28, 2007 - 10:20 am: |
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Back in September, ANZ was saying this to the market -"ANZ rejects claims it is exposed to credit woes..." (you can chase thru' the link here:http://tinyurl.com/38fwjs).
The issue has gained traction because money for loans that is not sourced from deposits is obtained on global credit markets, where fallout from the subprime mortgage crisis has made investors nervous about backing debt.
Monthly figures provided by the Australian Prudential Regulation Authority show that ANZ's total lending to households — including owner-occupied mortgages, investment mortgages, credit cards and other loans — is worth 3.5 times the value of the bank's deposits.
This compares with 3.2 times for National Australia Bank, three times for Westpac and 1.8 times for Commonwealth Bank...
Three days ago (http://tinyurl.com/3y2kfw), they were getting their butt kicked due to these a sharp rise in second half bad debt provisions, something that was signalled back at the interim announcement and at the yearly result a year ago.
The rise in provisions resulted in the bank missing second half analysts' forecasts with 7% rise to $1.988 billion on a cash basis. Analysts had been looking for around $2.008 billion or a bit more.
The result was out before the market opened and the shares opened 2.7% down, fell a bit more and then struggled for the rest of the day.
The reason: a 39% rise in the ANZ's provisions for credit impaired loans, to $567 million...
*** ok, may be the two things are not related. ANZ doesn't have a subprime woe... so what caused the rise in their bad debt provisions? Are they "slowly and quietly" shifting their hardtomarket and nobuyerisinterested CP/SIV into their balancesheet? Dunno, just my wild speculation here. But one thing for sure, I don't trust them banks on this matter. As long as they have not come clean on their outstanding CP/SIV/DEADONARRIVALCERTIFICATES, they are all suspects to me. Next, we will watch NAB... but they seem to be doing a much better job here, coz the market just love their shares... hmmm. Why?
HC
Look at a man's acts; watch his motives; find out what pleases him: can the man evade you?
... the essence of chart reading
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holycow
Member
Username: holycow
Post Number: 3287
Registered: 08-2004
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Votes: 0
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| | Sunday, October 28, 2007 - 04:13 pm: |
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USD vs the WORLD
1) some interesting numbers since Aug17 from DBS Singapore. Take a look at how much the AUD has risen since then - 13.8%! Yes, quite a fair bit, and thank you very much if you are a big spender... that's quite a big saving. But, what if you are an exporter, and you have to sell at US$ at a fixed contractual price?
Do you reckon some Aussie exporters will be getting a hit since Aug this year? Hmmm... next qtr/half's report will be "interesting".
2) http://tinyurl.com/ynt965... McL's big call here, and I am with him.
HC
Look at a man's acts; watch his motives; find out what pleases him: can the man evade you?
... the essence of chart reading
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holycow
Member
Username: holycow
Post Number: 3288
Registered: 08-2004
Rating: N/A
Votes: 0
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| | Sunday, October 28, 2007 - 05:00 pm: |
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http://tinyurl.com/23u2s8
Talking BRICs... and don't count on them taking over the US of A!
... the so-called BRICs -- Brazil, Russia, India and China -- specifically, are key to global decoupling, they said.
The four BRICs, which sport growth rates of 5.4 percent to 11.5 percent, may be the toast of the evolving economic order. But declaring them the new citadels of the world economy is a stretch and premature.
Too Small
Although developing countries are projected to account for about three-quarters of global growth in 2007, their size is still too small to power the world economy. Take the four BRIC nations: Collectively their GDP amounted to $5.6 trillion at the end of 2006. That's 43 percent of U.S. GDP, 56 percent of the 13- nation euro area's and 130 percent of Japan's.
When it comes to stock markets, the gap is even wider. The aggregate free-float value of the Brazilian, Russian, Indian and Chinese stock markets is a mere 4.9 percent of world market value, according to Morgan Stanley Capital International. The four BRICs are 12 percent of the U.S. market value, 16 percent of Europe's and 56 percent of Japan's.
China's CSI 300 Index has more than tripled in the past 12 months. Still, the country's stock market represents just 1.9 percent of total world-market value compared with U.S. equities' global share of 42 percent.
Even though developing countries are trying to boost domestic demand, they remain dependent on exports, accounting for about 45 percent of the world's cross-border sale of goods...
*** food for thought for those who are arguing for the Chinese consumption taking up the slack in demand when the USA slows down. Good luck to them. Incidentally, from memory, there was a report on 2 year bond being the most popular for investors - I reckon that is a strong signal that indicates beyond the 2nd year, the risk of the sky falling has become more real than real... thought the long terms may want to know.
HC
Look at a man's acts; watch his motives; find out what pleases him: can the man evade you?
... the essence of chart reading
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holycow
Member
Username: holycow
Post Number: 3289
Registered: 08-2004
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| | Monday, October 29, 2007 - 07:56 pm: |
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BLD Daily
1) http://tinyurl.com/22h4c4 - Boral downgrades on US housing, dollar worries...
2) Spoke too soon? Anyway, today could be a capitulation day... if not, it's very near. I am expecting a low at around 6.50 this time but I won't want to bet my life on this. It's best to stay away from this stock for the time being until the investors got used to the current price level.
Also, it pays to keep this in mind - on a day of total/complete/absolute irrational exuberance, this stock is getting some serious spanking, just imagine when the "heat" dies down and fear creeps back into the market?
HC
Look at a man's acts; watch his motives; find out what pleases him: can the man evade you?
... the essence of chart reading
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holycow
Member
Username: holycow
Post Number: 3290
Registered: 08-2004
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Votes: 0
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| | Monday, October 29, 2007 - 08:39 pm: |
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http://tinyurl.com/292qgz
According to futures listed on the Chicago Board of Trade, traders are pricing in an 86 percent chance that the central bank will lower the fed funds rate by a quarter of a percentage point, to 4.5 percent.
Investors have also priced in a 14 percent chance that the Fed will take even more drastic action, as it did in September, and cut rates by another half of a percentage point, to 4.25 percent.
Keith Hembre, chief economist with First American Funds, said that the Fed's hands are tied. He believes the Fed would prefer to not cut rates, especially since the rising price of oil and other commodities like gold could add to inflation pressures.
But he said the Fed won't want to make matters worse in the credit markets by shocking Wall Street with no rate cut. So he thinks a quarter-point cut is likely.
Oil continues record run -- tops $92
However, Hembre added that the Fed will then try to draw the line. He believes the central bank will say in its closely-watched statement that it is still worried about inflation - in an effort to convince the market that there may not be many, or any, more rate cuts in the immediate future.
"Fed members don't want to contribute to volatility in the market. And to the extent that the market is expecting a move, if a rate cut doesn't happen they would do that," Hembre said. "But they have other considerations as well."
David Wyss, chief economist with Standard & Poor's, also thinks the Fed will cut rates. He does not think the central bank needs to be as concerned about inflation as it does about the possibility of weak consumer spending ahead of the holidays.
But he added that the Fed may want to soon cut rates once more to ensure that the economy does not enter a recession in 2008...
*** it seems futile to bet on anything less than a 0.25% cut, but as a contrarian, I won't want to rule out a "no cut" outcome. Why not? I think it is a good compromise...
HC
Look at a man's acts; watch his motives; find out what pleases him: can the man evade you?
... the essence of chart reading
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holycow
Member
Username: holycow
Post Number: 3291
Registered: 08-2004
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| | Tuesday, October 30, 2007 - 01:56 pm: |
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http://tinyurl.com/3xkg9p
How a Fed rate cut raises oil prices...
NEW YORK (CNNMoney.com) -- If you think oil price are high now, wait till Wednesday.
That's when the Federal Reserve is set to announce its decision on interest rates. Most say a cut is coming.
Oil prices seen rising if the Fed cuts interest rates.
"If the Fed cuts rates, it will probably push oil prices higher," said Adam Sieminski, chief energy economist at Deutsche Bank.
There are a couple of reasons lower interest rates usually cause higher oil prices. The first is lower interest rates are designed to spur economic growth by making money for investment cheaper to borrow. Stronger economic growth usually entails using more energy, so traders bid up oil prices on the expectation of higher demand.
Second, lower interest rates usually cause the dollar to fall, as they make dollar-denominated investments like Treasurys less attractive for foreign investors.
Oil, like many other commodities, is priced in dollars worldwide. If the dollar falls, oil producing nations, like those in OPEC, need a higher price per barrel to maintain a the same level of revenue. While oil producing countries don't set the price of oil in the market, they do have control over production and are less likely to increase it when faced with the declining dollar. Also, foreign consumers have less incentive to reduce demand if oil is, relatively, getting cheaper for them.
The real question is this: Is a rate cut already priced into the cost of a barrel and, if not, how much higher is crude expected to go?
"Some has been priced in, but we could see more," said Neal Dingmann, a senior energy analyst at Dahlman Rose & Co., a New York-based energy investment boutique. "I think a couple of bucks is possible."
That would push crude prices, already at record nominal levels, to somewhere near $95 a barrel. That's just shy of the all-time inflation adjusted level of between $93 and $101 a barrel (depending on which calculation is used) set in early 1980s during the Iran-Iraq war.
Sieminski didn't say how much higher oil could go, but also suggested a rate cut hasn't been fully priced in.
"The temptation is to say it must be priced in, but it could still go higher," he said...
*** so, is lowering rate resulting a hike in oil price a good thing or bad for the global economy? Is high oil price an equity market damper? Well, if you want to know, you can read this up - http://tinyurl.com/d5wdp and come to your own conclusion. Remember the author was talking about a US$50 oil back in 2005, since then many moons have come and gone and many suns have risen and set and many lives had been lost in Iraq...
Oil at US$90, 92, 94 and shooting for 100? I am sure it is worth a read even while you are busily immersing yourself in exuberance.
ps: I wish others could be more considerate in not "branding" me with their own jaundiced view of what I am doing here... since I don't brand them and call them with some kind of label they don't like. I hope they can be as civilise as moi. There's so much they don't know about me and what I do, frankly, I think it reveals a lot more about their own short coming than mine.
HC
Look at a man's acts; watch his motives; find out what pleases him: can the man evade you?
... the essence of chart reading
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holycow
Member
Username: holycow
Post Number: 3292
Registered: 08-2004
Rating: N/A
Votes: 0
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| | Tuesday, October 30, 2007 - 02:04 pm: |
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http://tinyurl.com/ytluuq
Pressure builds over renminbi...
China is facing increasing pressure to allow its currency to appreciate faster, a senior central bank official says, because of the combination of falling US interest rates and the rising cost of money at home.
...
The renminbi has risen by only about 10 per cent against the US dollar since China broke its currency’s peg with the greenback in July 2005. Over the same period it has fallen against the euro and barely moved on a trade-weighted basis.
China has been able to resist pressure for appreciation by buying the dollars coming into the country with renminbi, and then draining the local funds out of the system by selling central bank bills, a process known as sterilisation.
However, the convergence of US and Chinese interest rates threatens to turn that into a loss-making proposition for Beijing.
The federal funds rate in the US is now 4.75 per cent, with expectations of a cut of at least 25 basis points this week. Three-month bills are about 4 per cent.
China offered 3.32 per cent for bank bills sold in early September, which is up from 2.8 per cent at the start of the year. Most analysts expect Chinese rates to rise at least once and possibly twice in coming months.
Nicholas Lardy, of the Peterson Institute for International Economics in Washington, said the central bank agency that managed China’s reserves could in a matter of months be actually losing money, if current trends continued.
“That would be a dramatic change from where they have been in the past.”
By one measure, China is already losing money in local currency terms on its US dollar reserve holdings, because of the gradual appreciation of the renminbi against the dollar, at about 4-5 per cent a year.
China has already anticipated the interest rate convergence problem to an extent, using other tools to take funds out of the financial system rather than selling central bank bills.
The authorities have increased reserve requirements eight times in the past year, forcing commercial banks to keep larger amounts of money on deposit with the central bank.
Further interest rate rises are inevitable in China because of inflation, which stood at 6.2 per cent in September, well above the one-year deposit rate...
HC
Look at a man's acts; watch his motives; find out what pleases him: can the man evade you?
... the essence of chart reading
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holycow
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Username: holycow
Post Number: 3293
Registered: 08-2004
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