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Nightly Recap 3-29-2010

Posted by Investing Freak on March 29, 2010
General / Comments Off on Nightly Recap 3-29-2010

Market Summary:
DOW      +45.50 (10,895.86)
S&P        +6.63 (1,173.22)
Nasdaq  +9.23 (2,404.36)
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Disclaimer:
Open Positions:  SRS at 5.97
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Nightly News Links

US Economy:

Seasonality Map for April, 2010(MarketSci Blog)
On the link above is a map of expected strong/weak days for the U.S. market for April, 2010 based on historical seasonality patterns. “I want to make clear that I do NOT think that seasonality alone is sufficient to justify a trade; however, all of the seasonality plays included in this report have been powerful enough and consistent enough that I do think they should be one of many tools in the trader’s toolbox.”

Have commodities outpaced fundamentals?(Investment Postcards)
Have metal prices and the prices of other commodities such as oil outrun the underlying fundamentals? The significant strength of the US dollar since December last year has capped rises in commodity prices. However, metal prices continue to be driven largely by Chinese demand, with China’s manufacturing PMI for new export orders and total new orders leading metal prices. The risks of investing in commodities are increasing as we move forward. The metal markets currently smack of speculation and manipulation. Metal stocks on the London Metal Exchange are currently at levels similar to those at the height of the global liquidity crisis

World Economy:

Euro Trashed (New York Times)
Germany and other “euro-optimists” hoped that the introduction of a common currency and the global economic competitiveness it spurred would quickly lead to sweeping economic and societal modernization across the union. But the opposite has occurred. Rather than pulling the lagging countries forward, the low interest rates of the European Central Bank have lured governments and households, especially in the southern part of the euro zone, into frivolous budgetary policies and excessive consumption. In short, the euro is headed toward collapse.

Greek CDS’s Exploding After Horrible Debt Auction, Greeks Blame Weak Demand on Easter(Zero Hedge)
Greek CDS are moving 10 bps wider from 293 to 303 bps as demand for the bailed out country’s bonds was much weaker than expected. Greek weakness is spreading to other European countries: The cost of protecting other euro zone government bonds from default were also mostly higher. The German 5-year credit default swap rose to 30.1 bps from 28.9 bps. In the meantime, and in keeping with the Greek tradition of scapegoating, the very weak demand for the new 7 Year issue was blamed on… Easter. About 175 institutions bid for a slice, sources at the lead managers said, compared to 400 investors for the 10-year issue.
“It is Easter week in Greece and Europe and this explains why demand may seem a bit softer, with the book growing at a slower pace compared to the previous 10-year bond issue,” said a source at one of the five banks leading the issue.

Japanese Production Takes a Breather(Econompic)
Japan’s industrial production retreated in February, snapping an 11-month winning streak that helped to secure a recovery from the country’s worst postwar recession.
Factory output declined 0.9 percent from January, when it rose 2.7 percent, the most in eight months, the Trade Ministry said today in Tokyo. The median estimate of 24 economists surveyed by Bloomberg News was for a 0.5 percent drop.
The slide is unlikely to last as Asian demand for the country’s electronics and machinery continues to fuel exports, Junko Nishioka, chief economist at RBS Securities Japan Ltd. in Tokyo, said before the report was published. Factory output and exports have yet to return to their peak set two years ago, and the recovery remains plagued by deflation.

Have a Good Night

-K

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Nightly Recap 3-23-2010

Posted by Investing Freak on March 24, 2010
General / Comments Off on Nightly Recap 3-23-2010

Market Summary:
DOW      +102.94 (10,888.83)
S&P        +8.36 (1,174.17)
Nasdaq  +19.84 (2,415.24)

Nightly News Links

US Economy:

Existing Home Sales fall further in February (The Mess That Greenspan Made)
The National Association of Realtors reported that sales of existing homes fell 0.6 percent in February after a drop of more than 7 percent in January and sales are now at their lowest level in eight months.  It’s probably best not to make too much of the winter data for existing home sales because it is a very slow time of the year but, the “Months of Supply” metric certainly looks to be going in the wrong direction right now.

What is the Homebuilders Index pricing in? (Investment Postcards)
David Rosenberg, chief economist and strategist of Gluskin Shedff & Associates, states that his regression analyses show the Homebuilders Index to be pricing in the following:
Housing starts: pricing in a level of 800-900k (versus 575k currently)
Existing home sales: pricing in a level of 5,500k (versus 5,050k)
NAHB Housing Market Index: pricing in a level of 35 versus 15 actual.
Is this the most expensive part of the US stock market?

US Debt Update: 6 Months To Revised Debt Ceiling Breach (Zero Hedge)
As a reminder, the debt limit is $14.3 trillion. We are $1.7 trillion away from the limit. At March’s run-rate of about $300 billion per month, the debt ceiling will be breached by October 2010. If somehow the government manages to reduce the monthly issuance to “just” $200 billion, we have eight and a half months until breach, or January 2011.

World Economy:

Spain to join Portugal in issuing Dollar-denominated Bond (Zero Hedge)
Yet more countries are anticipating the Fed finally killing the dollar sooner or later, as Spain now joins Portugal in issuing dollar-denominated bonds. If Europe’s most insolvent countries are getting on board of the asset side of the Fed’s balance sheet, it can only mean one thing: the odds for the winner of the currency race to the bottom are squarely in favor of the US currency.   (K remark:  I really see this as a contrary indicator being that there is an imbalance in those countries who are betting on a collapse of the dollar.)

Germany Sets tough terms for EU help for Greece (Reuters)
ermany signaled for the first time on Tuesday that it may accept European financial aid for Greece as a last resort, but only if the IMF is involved and euro zone partners accept tougher budget discipline rules.  “The condition for action, as a last resort, is that Greece’s financing on the capital markets is exhausted,” the official said.”Furthermore, it would be necessary for the International Monetary Fund to provide a substantial contribution,” he said, stressing there will be no decision on actual aid at the summit.

Interesting Reads:

Jim Rogers Starts Some Short Positions (Market Folly)
Potentially the most notable bit of his conversation was when he said, “I had no shorts for about 15 months so I started putting out some shorts recently. But the fact that I’ve been putting out shorts means the stock market won’t pull back.” So, it’s interesting to see Rogers fight the current trend. In his mind, it’s the right play, but he knows he’s going to potentially feel some pain first.

Morning Humor- American And Greek Capitalism Explained  (Video) (Zero Hedge)
Explaining US economics (with an emphasis on generally accepted criminal accounting practices).
httpv://www.youtube.com/watch?v=7uUXwakPR1U}

Have a Good Night

-K

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