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Economic Statistics
There was nothing to be happy about in the PPI (Producer Price Index)unless you're a producer of basic materials. The PPI rose a lot more than expected (0.5% compared with the consensus guess of 0.1%), and the headline PPI is now growing at a rate of over 5% a year.
The PPI less food & energy is a bit less worrisome, but I don't know of many businesses that don't use energy. The "core" number rose 0.2%, which was in line with expectations.
Prices of "crude" goods - mostly raw materials - rose a whopping 8.7% (2.7% excluding energy) - and both the headline and core PPI for crude goods have risen by over 25% compared with the same time last year. Can anybody spell "downstream margin compression"?
What I mean by that is, that if Consumer Prices aren't rising, but crude goods prices are, then producers that use crude goods are not able to pass on the massive price increases they are experiencing on their supply chain.
The University of Michigan Consumer Sentiment index was also out, with the number at 95.7, which exceed the consensus guess (93.5). This is a preliminary estimate, which will be revised a couple of times before it's final.
Forthcoming US Economic Data Tomorrow's US Economic Data Calendar
Federal Reserve Open Market Operations
The Fed's Open Market Operations desk performed 1 measly repurchase operation last night:
- a $2.25billion, weekend repurchase with $2.25billion in T-backed collateral .
It was almost not worth bothering with, as far as da Boyz were concerned; nowhere near enough to give the jamjob any juice. Still, it was Friday, so everybody was probably glad of the lack of liquidity... it meant the interns who hold the fort on Friday afternoons couldn't do too much damage to house accounts.
I'm not sure if a picture is still worth a thousand words (it's easier to produce a picture than it was when that saying was promulgated, and not that much easier to produce words... so the exchange rate may have changed), but take a gander at the intraday chart... it is a story of a whole lotta not much. Still the 7-point intraday rally would have been a nice capture, but we're only trading the last 90 minutes at present (too much else to do).
Major US Indices
It really was quite a dull session. The odd program trade was fired off just to keep everybody on their toes, but the Dow traded in a rather narrow range (50-odd points, which seems like a lot until you try and make any money trading it... we were up less than 5% last night... but you can't have a good day every day...it was Friday after all).
The Dow was lethargic all session, with GE giving it some help as a result of an increase in its quarterly dividend (to 22c), but J&J continuing to weigh on the Dow as a result of relatively unfavourable evaluations of its desire to acquire Guidant. By the close, the downside won (but not by enough to make it interesting) with the DJIA dipping 9.6 points (0.09%), closing out the day at 10543.22 points.
The broader S&P500 dipped 1.24 points (0.1%), ending the day at 1188. Over at Times Square, the Nasdaq Composite slid 0.94 points (0.04%), to close at 2128.07, while larger-cap technology issues fared worse with the Nasdaq100 losing 4.63 points (0.29%), to end at 1605.16 points.
NYSE Volume was pretty solid with 1.44 billion shares changing hands, while Nasdaq Volume was chunky (but below the week's average of over 2 bill), with 1.8 billion shares zapping around like so many space invaders.
| Index | Close | Gain(Loss) | % |
| DJIA | 10543.22 | -9.6 | -0.09% |
| S&P500 | 1188 | -1.24 | -0.1% |
| Nasdaq Composite | 2128.07 | -0.94 | -0.04% |
| Nasdaq100 | 1605.16 | -4.63 | -0.29% |
| NYSE Volume | 1.44bn | - | - |
| Nasdaq Volume | 1.8bn | - | - |
Bellwethers
My 9-stock "bellwethers" group fell by an (unweighted) average of 0.29%; the damage was primarily in tech, with IBM, Intel and EBay dragging on the group.
- Intl Bus Machine (IBM) -$0.84 (0.86%) to $96.67;
- Intel Corp (INTC) -$0.20 (0.88%) to $22.56;
- Fannie Mae (FNM) +$0.40 (0.57%) to $70.22;
- Cisco Systems (CSCO) +$0.02 (0.1%) to $19.42;
- Wal-Mart Stores (WMT) -$0.06 (0.11%) to $52.71;
- General Electric Co (GE) +$0.67 (1.86%) to $36.69;
- Freddie Mac (FRE) -$0.42 (0.61%) to $68.25;
- Citigroup (C) -$0.53 (1.14%) to $45.91;
- Ebay Inc (EBAY) -$1.81 (1.56%) to $114.41;
Market Breadth & Internals
On the NYSE advancing Issues exceeded decliners by 1831 to 1443 for a single-day A/D reading of 388; Nasdaq gainers trumped losers by 1658 to 1437
On the NYSE declining volume was greater than volume in advancing issues by 745.11 to 666.8 million shares; Nasdaq advancing volume was greater than volume in decliners by 499.12 to 487.27 million shares.
175 NYSE-listed stocks rose to new 52-week highs, and 9 posted fresh 52-week lows, while on the Nasdaq there were 78 stocks that hit new 52-week highs, and 9 which fell to fresh 52-week lows.
| NYSE | Nasdaq | |
| Advancers | 1831 | 1658 |
| Decliners | 1443 | 1437 |
| Advancing Volume (m) | 666.8 | 499.12 |
| Declining Volume (m) | 745.11 | 487.27 |
| New Highs | 175 | 78 |
| New Lows | 9 | 9 |
Bond Market
Bonds rose at the long end, with the yield on the benchmark 30-year Treasury bond shedding 1.1 basis points to 4.82%. The December04 30-year bond future rose 3/32 (it was all over the shop due to rollovers - institutions moving their holdings to the March05 contract).
| Index | Close | Gain(Loss) | % |
| UST 2Y (yld) | 2.929 | 0.02 | 0.72% |
| UST 5Y (yld) | 3.527 | -0.053 | -1.48% |
| UST 10Y (yld) | 4.151 | -0.08 | -1.96% |
| UST 30Y (yld) | 4.82 | -0.085 | -1.73% |
The Banks Index advanced a meagre 0.01 points (0.01%), ending the day at 101.51; within the index there were some decent gainers -
- North Fork Bancorp (NFB) +$0.46 (1.66%) to $28.21;
- Northern Trust (NTRS) +$0.77 (1.63%) to $48.07;
- Suntrust Bank (STI) +$0.75 (1.04%) to $72.91;
- Golden West Financial (GDW) +$0.89 (0.74%) to $121.76; and
- Fifth Third Bancorp (FITB) +$0.32 (0.69%) to $46.64.
The Broker-dealer Index rose 1.45 points (0.98%), at 149.91; the ticket clippers were led higher by the usual suspects -
- A G Edwards Inc (AGE) +$1.44 (3.6%) to $41.44;
- Charles Schwab (SCH) +$0.28 (2.55%) to $11.26;
- Morgan Stanley (MWD) +$1.19 (2.27%) to $53.70; and
- Goldm Sachs (GS) +$1.91 (1.78%) to $109.40.
The Philadelphia SOX (Semiconductor) index declined 2.71 points (0.64%), to 422.75; the worst performers in the index were as follows -
- ST Microelectronics (STM) -$0.33 (1.66%) to $19.58;
- Freescale Semiconductors B (FSLb) -$0.26 (1.52%) to $16.90;
- Infineon Tech (IFX) -$0.16 (1.47%) to $10.74;
- Teradyne (TER) -$0.22 (1.3%) to $16.65; and
- Advanced Micro Devices (AMD) -$0.27 (1.22%) to $21.83.
Gold & Silver Markets
Gold fell by $3.20 (0.73%) to close at $433.70 per ounce (basis the December04 contract; next week sees the March05 contract move to the front of the queue).
Gold Bugs Index slid 1.29 points (0.6%), closing at 213.56, with hefty falls in
- Kinross Gold (KGC) -$0.25 (3.4%) to $7.10;
- Eldorado Gold (EGO) -$0.07 (2.33%) to $2.93;
- Golden Star Rscs (GSS) -$0.08 (2.19%) to $3.57;
- Glamis Gold (GLG) -$0.31 (1.65%) to $18.50; and
- Harmony Gold Mng (HMY) -$0.14 (1.47%) to $9.41.
Silver fell by $0.11 (1.54%) to close at $6.70 per ounce - $8 sure seems a long way away and a long time ago, but it was only a week or so. The Gold and Silver Index (XAU) lost 0.92 points (0.93%), ending the day at 98.32 points; some of its membership overlaps with the HUI, which is a pain, but the leaders (pulling downwards) were:
- Kinross Gold (KGC) -$0.25 (3.4%) to $7.10;
- Harmony Gold (HMY) -$0.14 (1.47%) to $9.41;
- Barrick Gold (ABX) -$0.31 (1.32%) to $23.20; and
- Agnico Eagle (AEM) -$0.16 (1.15%) to $13.72.
| Index | Close | Gain(Loss) | % |
| Gold | 433.9 | -3.2 | -0.73% |
| Silver | 6.7 | -0.105 | -1.54% |
| PHLX Gold and Silver Index | 98.32 | -4.08 | -3.98% |
| AMEX Gold BUGS Index | 213.56 | -11.06 | -4.92% |
Oil Market
Oil lost ground, shedding $2.07 per barrel, closing at $40.57 per barrel. The long side of the oil market is now pretty much shell-shocked, however it would be sensible to start looking for an entry (long) into oil again. The supply-demand characteristics simply do not support falling oil prices, and the technical setup (and the institutional penchant for nuffie-slaughter) cannot hold back the black tide forever.
The Oil and Gas Index (XOI) lost 6.03 points (0.85%), closing at 704.92, dragged down by
- Kerr Mcgee Corp (KMG) -$1.12 (1.92%) to $57.25;
- Unocal Corp Del (UCL) -$0.61 (1.42%) to $42.47; and
- Royal Dutch Pete (RD) -$0.77 (1.36%) to $55.77.
- Halliburton Co (HAL) -$0.91 (2.31%) to $38.47;
- Noble Corp (NE) -$0.61 (1.3%) to $46.16; and
- Smith Intl Inc (SII) -$0.68 (1.19%) to $56.64.
| Index | Close | Gain(Loss) | % |
| Reuters CRB | 276.5 | -0.6 | -0.22% |
| Crude Oil Light Sweet | 40.57 | -2.07 | -4.85% |
| AMEX Oil Index | 704.92 | -13.33 | -1.86% |
| Oil Service Index | 118.88 | -1.03 | -0.86% |
Currency Markets
The dollar's little bounce continues, however early strength gave way to fresh intraday selling. Here's another 1000 words (i.e., another picture) of the intraday action in the USDX...
There was a sharp spike in the Euro (downwards) to the high 1.31's, but the pan-European currency recovered quite handily by the close.
| Index | Close | Gain(Loss) | % |
| US Dollar Index | 82.68 | 0.5 | 0.61% |
| Euro | 1.3203 | -0.0102 | -0.77% |
| Yen | 105.21 | 0.57 | 0.54% |
| Sterling | 1.9145 | -0.0094 | -0.49% |
| Australian Dollar | 0.751 | -0.0031 | -0.41% |
| Swiss Franc | 1.1604 | 0.0098 | 0.85% |
| Canadian Dollar | 0.8154 | -0.002 | -0.24% |
European Markets
France's benchmark CAC-40 Index gained 20.96 points (0.56%), ending the day at 3768.42; the German DAX-30 Index rose 24.14 points (0.58%), at 4174.55; and in the UK, the FTSE-100 Index advanced 5.6 points (0.12%), to 4694
| Index | Close | Gain(Loss) | % |
| CAC-40 | 3768.42 | 20.96 | 0.56% |
| DAX-30 | 4174.55 | 24.14 | 0.58% |
| FTSE-100 | 4694 | 5.6 | 0.12% |
Monday's Pivots (US Futures Market)
| Dow | S&P500 | Nasdaq | Bonds | |
| R2 | 10613 | 1195.97 | 1618.5 | 114 4/32 |
| R1 | 10587 | 1192.63 | 1613.5 | 113 28/32 |
| Pivot | 10553 | 1188.67 | 1606.5 | 113 23/32 |
| S1 | 10527 | 1185.33 | 1601.5 | 113 15/32 |
| S2 | 10493 | 1181.37 | 1594.5 | 113 10/32 |
