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Could have been some EOM/EOQ window dressing. Regulators don't like it when the managers wait till the last day.
Moskow: Fed still has room to tighten
Chicago Fed president eyes post-hurricane spending
By Rachel Koning, MarketWatch
Last Update: 3:30 PM ET Sept. 26, 2005
CHICAGO (MarketWatch) - The Federal Reserve has more room to raise interest rates, the president of the bank's Chicago branch said Monday.
Michael Moskow said there may still be excess capacity in the nation's economy but that inflation is running at the upper end of the Fed's comfort zone - a position he's offered in other recent speeches.
"We feel it's necessary to reduce accommodation," Moskow said Monday.
Moskow sits on the Fed's rotational interest-rate panel this year. He was speaking on the sidelines of the National Association for Business Economics conference here. Read more on the group's economic forecast survey.
In raising rates for the 11th time in some 15 months earlier in September, the Fed took its lending target to 3.75% and left the door open to more interest-rate increases. The Fed's statement continued to focus on inflation risks.
Moskow said the impact from the storms in holding down output and pushing up prices may be temporary. He will continue to monitor, in particular, government spending that came in response to Katrina.
A pledge for increased outlays from President Bush and Congress led many private-sector economists to stick with or increase their 2006 economic-growth projections, despite the many uncertainties still posed by Katrina and, to a lesser degree, Hurricane Rita.
During a speech earlier, Moskow said he doesn't support a shift toward specific inflation targets at the U.S. central bank, a practice used in Europe and elsewhere and one favored by former Fed Governor, now Bush economic aide, Ben Bernanke.
Bernanke, who will address the NABE conference Tuesday, is on the short list of replacements for outgoing chairman Alan Greenspan.
Note: those saying GDP will virtually have no growth slow down because of stimulus of money pouring into Mississippi Delta are simply failing to grasp this stimulus will not be getting to the nations consumers.
Good point Welles
As expected bounced off blue line. Back in that previously broken black down channel. IMO the first break was a significant warning shot. I think we see the bottom of the red channel by weeks end.
Agree on Gold. I think it goes over a grand an ounce by 2010.
Worked out pretty well. Managed to get an offsetting tax loss and ended up with more shares than I had Friday. I wasn't in but suspected a G&C day.
Switching back to all Ndx short this AM. Using the Spx loss to offset YTD gains.
No, did not. Just switched half of Ndx short to Spx short. Not sure about this Fair value quote...seems wrong
NASDAQ +8.00 1585.00 9/23 4:21pm
Fair Value 1583.34 9/23 6:45pm
Difference* +1.66
Makes me think April rally was retail driven, if so easily reversed w/o institutional backing.
Relief rally on Wall Street? Maybe
Where Rita went will help set the course for stocks but a mild hit from the storm seems built in.
September 25, 2005: 10:14 PM EDT
By Alexandra Twin, CNN/Money staff writer
Relief rally on Wall Street? Maybe
Where Rita went will help set the course for stocks but a mild hit from the storm seems built in.
September 25, 2005: 10:14 PM EDT
By Alexandra Twin, CNN/Money staff writer
NEW YORK (CNN/Money) - So goes the storm, so goes the stock market.
Wall Streeters returning to work Monday morning will be preoccupied with one issue: where Rita made landfall and how much the storm damaged oil and gas facilities and other industries in the Gulf.
But beyond the knee-jerk reaction to the storm's path and its aftermath, analysts say, investors will be trying to assess the impact on the economy and inflation.
"The damage from the storm, both in terms of the physical damage and any human impact, was certainly less than expected so that should really bode well for the financial markets," Tim Ghriskey, chief investment officer of Solaris Asset Management in Bedford Hills, N.Y., told Reuters after the storm hit over the weekend.
But some analysts disagreed.
"The stock reaction over the next few weeks is likely to be fairly neutral, with a lot of the damage already factored into prices," Stephen Leeb, president of Leeb Capital Management, said Friday.
Investors were already betting late last week that Rita's impact would be less damaging than Katrina's. While stocks fell for the week, they stabilized Thursday and Friday as oil prices tumbled on news that Rita had lost some steam. Oil fell further in special trading sessions Sunday. (Full story).
"The market seems to be betting that the storm won't have a long-term impact, but that really depends on how much the storm disrupts the oil infrastructure, something we may not know for weeks," Stephen Stanley, chief economist at RBS Greenwich Capital, said late Friday.
Two major refineries reported damage from Rita Saturday, but Texas Gov. Rick Perry said overall damage to oil facilities appeared to be modest and Energy Department officials also expressed cautious optimism. (Full story).
"Hopefully they'll be back in production very soon," Perry said in an interview on CNN.
Longer-term impact?
Studies from Ned Davis Research and Standard & Poor's show the hurricanes are likely to hurt economic growth in the third and possibly fourth quarter but not necessarily beyond, as the rebuilding effort brings in new money and new business -- including considerable spending by the federal government.
But the impact could potentially be worse than past hurricanes would suggest. (Full story).
At the very least, the rebuilding should be a positive for the economy down the line, analysts argue, although that could mean a pickup in inflation and higher interest rates.
"It's a mixed bag," Leeb said. "There's no question that the economy is likely to be hurt temporarily, but on the other hand, the storm could have been even worse. We're likely to see a near-term slowdown, (and a) longer-term pick up in economic activity with a slight increase in inflation," he added.
Of interest rates and inflation
Investors will also be looking for hints about how the storm's aftermath might impact Federal Reserve policy going forward
Last week, the Fed raised interest rates another quarter point to 3.75 percent, as many expected, but surprised some investors by signaling it was likely to keep raising rates for some time -- a sign the central bank's policy makers are more worried about inflation than any risks to growth. (Full story).
This week brings two speeches from Fed Chairman Alan Greenspan and Ben Bernanke, a former Fed governor who heads President Bush's Council of Economic Advisors. Investors will be listening closely to see if the policy makers have changed their rhetoric at all after Rita hit over the weekend.
Beyond the storm
Other factors that investors will keep an eye on next week include a slew of economic reports, a smattering of earnings, the weekly oil inventory report on Wednesday, and some end-of-quarter moves as September draws to a close.
Economic reports next week include reads on home sales, durable goods orders and personal income and spending. Most of the reports cover the period before Hurricane Katrina made landfall in late August. However, a few September reads are on tap, including the Conference Board's survey of consumer confidence. (For a preview of these reports, click here.)
Although the earnings reporting period won't heat up in earnest for a few weeks, Lennar, Micron and a few other companies are set to report. (For a preview, click here).
Friday marks the last trading day of September and the third quarter. According to the Stock Trader's Almanac, the last week of September is typically tough for investors as money managers and other Wall Street professionals make last minute adjustments to their portfolios.
http://money.cnn.com/2005/09/25/markets/sun_lookahead/index.htm
Fed can't stop as long as the administration is throwing around cash. Essentially, the Fed is trying to slow inflationary forces but the government is fighting them by adding stimulus.
They're not being given any choice.
Oil down could be seen as the Oil traders pricing in a slowing of demand. i.e. worldwide slowdown.
We'll have to wait and see if the equity markets see it that way.
Thanks. Looks like the markets expended a lot of energy stair stepping up on low volume since April. Acc/Dist peaked Jan 04 and steadily declining since. Could be significant that volume picked up on the last two candles.
Could be an early rise to test the broken blue line then a move to the bottom of the red channel.
The question is what will it take to get the bears to cover?
Profits will do it.
Click on Sp for Spx
http://www.softwarenorth.com/trading/commitmentscurrent/
The 1st OEX chart looks to be a weekly.
Bullish percent has increased amongst Hedge Funds and Commercials. Their taking profits on shorts.
Oex Put/Call suggests Oex traders are not looking down.
This chart suggests a bottom in the Semi's as they relate to other commodity related stocks. The presumption being that Semi's have become largely commoditized.
POG relative to Spx. If recent ratio holds suggests a high in Gold or a low in Spx. Spx could decline with POG falling harder to keep the relationship intact.
I'm not seeing a substantial breakdown in willingness to take risk, but we could be at the beginning of something. I put alot of stock in the ratios of safer assets to riskier ones and what people are willing to hold. (ala Steve Saville)
I'm coming to the conclusion that this is not the big kahuna decline. Bearish sentiment amongst traders is increasing but Imo not yet at a level which suggests a bottom. The flip side is price action suggests great complacency amongst J6P. Market risks seem high but price is not responding enough...yet.
Yes, staying short but switched 1/2 to Spx. just spreading my bet. Banking and Energy may be weak going forward.
I'd say that spurt higher was taking out a cluster of short stops from 1570. Since we've rallied into the storm could be sell the news now Mon.
Back in the down channel. Retest of underside broken up channel.
Charts stale already. LOL
Nice to see you on the board. I figured you were numb and hibernating <ng>.
26-27 on this one.
Looks like it needs to break support and capitulate first.
After the selloff I'm thinking the materials sector will be a good play on the rebuilding.
Rydex Basic Materials Fund Holdings
As of: 09/23/05
Name Symbol % of Fund
1 DOW CHEMICAL DOW 3.8290135
2 DUPONT EI DE NEMOURS DD 3.3896123
3 GEORGIA-PACIFIC CORP GP 3.3250285
4 PHELPS DODGE PD 3.0513837
5 PRAXAIR, INC. PX 2.9147639
6 AIR PRODUCTS AND CHEMICA APD 2.3678619
7 MONSANTO CO MON 2.3573639
8 FREEPORT-MCMORAN COPPER FCX 2.3235979
9 ROHM & HAAS CO. ROH 2.1931583
10 HERCULES INC. HPC 2.0955995
11 NUCOR CORP NUE 2.0882437
12 PACKAGING CORP AMER PKG 1.9126823
13 LYONDELL CHEMICAL COMPAN LYO 1.7938439
14 INTERNATIONAL PAPER IP 1.7928957
15 NEWMONT MINING NEM 1.7863410
16 EASTMAN CHEMICAL COMP EMN 1.7826894
17 PPG INDUSTRIES PPG 1.7680774
18 SOUTHERN PERU COPPER COR PCU 1.7314602
19 WEYERHAEUSER CO WY 1.7270819
20 LUBRIZOL CORP LZ 1.6620321
21 VULCAN MATERIALS CO VMC 1.5367474
22 TEMPLE-INLAND INC. TIN 1.4583426
23 PACTIV CORPORATION PTV 1.4127563
24 MARTIN MARIETTA MATERIAL MLM 1.4016780
25 SIGMA ALDRICH CORP SIAL 1.3995921
26 DELTIC TIMBER COR DEL 1.3443258
27 AIRGAS INC ARG 1.3018522
28 ALLEGHENY TECHNOLOGIES I ATI 1.2406461
29 ALCOA INC. AA 1.2382407
30 UNITED STATES STEEL CORP X 1.2364536
31 FLORIDA ROCK INDUSTRIES FRK 1.2252806
32 SEALED AIR CORP SEE 1.2206272
33 CROWN CORK AND SEAL INC CCK 1.1461641
34 AGRIUM, INC. AGU 1.1418470
35 FMC CORP FMC 1.1393331
36 THE MOSAIC COMPANY MOS 1.0757861
37 HEADWATERS INC HW 1.0694495
38 OLIN OLN 1.0557136
39 COMMERCIAL METAL CO. CMC 0.9896006
40 CLEVELAND CLIFFS INC CLF 0.9887125
41 LAFARGE NORTH AMERICA IN LAF 0.9335917
42 QUANEX CORP. NX 0.9038113
43 ASHLAND INC ASH 0.9028979
44 OWENS-ILLINOIS INC OI 0.8584933
45 RELIANCE STEEL & ALUMINU RS 0.8355662
46 CARPENTER TECHNOLOGY COR CRS 0.8336548
47 ALBEMARLE CORP ALB 0.8293745
48 POSCO ADR PKX 0.8067213
49 SMURFIT STONE CONTAINER SSCC 0.8044458
50 HUNTSMAN CORP HUN 0.8010870
51 POTLATCH CORP PCH 0.8008718
52 LONGVIEW FIBRE LFB 0.7677049
53 ECOLAB INC ECL 0.7514498
54 APTARGROUP ATR 0.7450681
55 MATERIAL SCIENCES CORP MSC 0.7291550
56 BUCKEYE TECHNOLOGIES INC BKI 0.6534380
57 ALERIS INTERNATIONAL INC ARS 0.6523410
58 GOLDCORP INC GG 0.5986750
59 CENTURY ALUMINUM CO CENX 0.5919424
60 STEEL DYNAMICS INC STLD 0.5912420
61 CASTLE (A.M.) & CO CAS 0.5793044
62 FERRO CORP FOE 0.5668091
63 BALL CORP. BLL 0.5601899
64 RTI INTERNATIONAL METALS RTI 0.5416081
65 BOWATER INC BOW 0.5187680
66 TEXAS INDUSTRIES INC TXI 0.5179187
67 FULLER (HB) FUL 0.5171008
68 CHAPARRAL STEEL COMPANY CHAP 0.5141545
69 CHEMTURA CORP CEM 0.5112438
70 ROCK-TENN CO., CL.A RKT 0.4709924
71 POLYONE POL 0.4658167
72 TERRA INDUSTRIES INC TRA 0.4491617
73 CHESAPEAKE CORP CSK 0.4248097
74 METHANEX CORP MEOH 0.4089902
75 CAMBREX CORP CBM 0.4045489
76 MACDERMID INC MRD 0.3986960
77 ARACRUZ CELULOSE ARA 0.3892417
78 INTL FLAVORS AND FRAGRAN IFF 0.3747175
79 GLATFELTER P H CO GLT 0.3703900
80 BASF AG - SPON ADR BF 0.3536086
81 NALCO CHEMICAL CO. NLC 0.3308477
82 THE SCOTTS MIRACLE-GRO C SMG 0.3295496
83 MYERS INDUSTRIES MYE 0.3248572
84 CARAUSTAR INDUSTRIES CSAR 0.3170461
85 SCHWEITZER-MAUDUIT SWM 0.3046771
86 WELLMAN INC WLM 0.2571620
87 VALHI INC VHI 0.2528569
88 COMPANHIA VALE DO RIO DO RIO 0.2475466
89 MITTAL STEEL COMPANY MT 0.2458056
90 PIONEER COMPANIES INC PONR 0.2232225
91 GEORGIA GULF GGC 0.2230707
92 OMNOVA SOLUTIONS INC OMN 0.2151565
93 PENFORD CORP PENX 0.2146819
94 VOTORANTIM CELULOSE-SPON VCP 0.2058262
95 CEMEX SE -SPONS ADR PART CX 0.2025983
96 STEEL TECHNOLOGIES INC STTX 0.2003554
97 POTASH CORP OF SASKATCHE POT 0.1956547
98 IPSCO INC IPS 0.1879795
99 WAUSAU PAPER CORP WPP 0.1589962
100 POPE & TALBOT INC
1570-71 is looking like pretty solid resistence.
People at work are lamenting on what a waste of time the market has been and how they should pull out and buy RE.
They love their bubbles.
When 1550 is taken out 200dma comes into play.
Ndx/Dow ratio looks set to breakdown. BB width exceedingly narrow, PSAR sell. MACD crossed down. Below 20dma. NDX leads moves.
Got to 1569.84 from a low 1551.81. No way was I nimble enough to play that bounce. HOD in I believe.
Went through 2100 Comp like it wasn't there.
If Rita damages oil/gas facilities look out below. Heating costs are going to strip away alot of consumer discretionary income this winter. My NG bill was triple this month compared to the same month 1 yr. ago. Not going to be fun.
I think it bounces to 1570 from 1550 but that 1550 gives way. I'm in today/tomorrow so may hedge some if pricing is favorable.
Oops.
Looks quite bearish falling out of the rising channel. Downtrend accelerating.
Could be those reasons or consumer retrenchment as discretionary income fades on energy costs.
Money going to fill the gas tank is money not spent elsewhere.
Recent headlines. Who's paying?
10:09 Bush pledges Katrina aid, vows no new taxes
10:06 Bush proposes tax breaks for investment in Gulf region
10:06 Bush to ask Congress to reimburse states for Katrina aid
10:06 Bush pledges housing, aid for Katrina victims
How do we pay for Katrina?
No new taxes (Bush). Okay, it doesn't make sense.
Print and inflate or borrow. Both poor choices.
Bottom line: the Fed will not stop tightening until consumer spending cools.
http://www.bcaresearch.com/public/story.asp?pre=PRE-20050915.GIF
Tuesday FOMC is going to set the stage for awhile, alot of positions are going to need unwinding.
I'm positioned for .25 hike and no change in bias.
I think gold is reacting to the government rebuilding NO with no way to pay for it other than printing dollars. The dollar has rallied too...not confirming the move in gold and setting its self up for continued rate hikes.
The stock market hasn't priced in tax hikes or inflationary printing of money to pay for Katrina. But somebody has to pay.....
No way can the temporary tax reductions enacted as stimulus by the administration in 2001-2002 be made permanent.
The squeeze is on and consumer spending is suffering. healthcare, energy, and higher interest rates.