Best of the Week
Most Popular
1.Crude Oil Price Trend Forecast 2016 Implications for Stock Market - Nadeem_Walayat
2.Odds of Winning Walkers Crisps Spell & Go olidays K, C and D Letters - Sami_Walayat
3.Massive Silver Price Rally During The Coming US Dollar Collapse - Hubert_Moolman
4.Pope Francis Calls For Worldwide Communist Government - Jeff_Berwick
5.EU Referendum Opinion Polls Neck and Neck Despite Operation Fear, Support BrExit Campaign - Nadeem_Walayat
6.David Morgan: There Will Soon Be a Run to Gold Like You've Never Seen Before - Mike Gleason
7.British Pound Soars on BrExit Hopes Despite Remain Establishment Fear Mongering - Nadeem_Walayat
8.Gold Price Possible $200 Rally - Bob_Loukas
9.The Federal Reserve is Not Going To Raise Interest Rates and Destroy Gold - Michael_Swanson
10.Silver Miners’ Q1’ 2016 Fundamentals - Zeal_LLC
Free Silver
Last 7 days
EU REMAIN Population Forecasts - England 4.1 million Explosion, London Migration Crisis - 28th May 16
A Guide to the Trump-Sanders Debate - 28th May 16
Gold And Silver – At Significant Support. New “Story” Developing - 28th May 16
The Next Systemic Lehman Event - New Scheiss Dollar & Gold Trade Standard - 27th May 16
Energy and Debt Crisis Point to Much Higher Silver, Metals Prices - 27th May 16
Gold Junior Stocks Q1 2016 Fundamentals - 27th May 16
These Crisis Markets Are Primed to Deliver Big Gains, Platinum Never Cheaper! - 27th May 16
Operation Black Vote BrExit Warning for the Wrong EU Referendum - 27th May 16
UK Immigration Crisis Hits New Extreme, Catastrophic ONS Migration Stats Ahead of EU Referendum - 27th May 16
Many of the World’s Best Investors Made Their Fortunes This Way…And You Can Too - 27th May 16
The Ugly Truth About Stock Market Manipulation and Gold Prices - 27th May 16
Gold Price Looking Vulnerable While Gold Stocks Correct - 27th May 16
The 5 Fatal Flaws of Trading - 27th May 16
The Next Big Crash Of The U.S. Economy Is Coming, Here’s Why - 27th May 16
A New Golden Bull or Has the Market Gone Too Far Too Fast? - 27th May 16
It Feels Like Inflation - 26th May 16
Negative Interest Rates Set to Propel the Dow Jones to the Stratosphere? - 26th May 16
S&P Significant Low has Occurred – Not Likely! - 26th May 16
Statistics for Funeral Planning in UK Grave - 26th May 16
Think Beyond Oil And Gold: Interview With Mike 'Mish' Shedlock - 26th May 16
Hard Times and False Mainstream Media Narratives - 26th May 16
Will The Swiss Guarantee 75,000 CHF For Every Family? - 26th May 16
Is There A Stocks Bear Market in Progress? - 26th May 16
Billionaires Are Wrong on Gold - 26th May 16
How NOT to Invest in the Gold Market - 26th May 16
The Black Swan Spotter...Which Saw the Oil-Crash coming; now says the “Invisible Hand” will push Brent to $85 by Christmas - 26th May 16
U.S. Household Debt Still Below 2008 Peak - 25th May 16
Brexit: Wrong Discussion, Wrong People, Wrong Arguments - 25th May 16
SPX is at Strong Resistance - 25th May 16
US Dollar, Back From the Grave? - 25th May 16
Gold : Just the Facts Ma’am - 25th May 16
The Worst Urban Crisis in History Could be Upon Us - 24th May 16
Death Crosses Across The Board Are IRREFUTABLE Stock Market Sell Signals - 24th May 16
Bitcoin Trading Alert: Bitcoin Price Stays below $450 - 24th May 16
Stock Market Crash Death Cross Doom Prevails - 23rd May 16
Did AMAT Chirp? Implications for the Economy and Gold - 23rd May 16
Stocks Extended Their Rebound On Friday - Will They Continue Higher? - 23rd May 16
UK Treasury Propaganda Warns of 3.6% Brexit Recession, the £64 Billion Question? - 23rd May 16
Stock Market Support Breached, But Not Broken! - 23rd May 16
George Osborne Warns of 18% Cheaper House Prices - BrExit for First Time Buyers - 22nd May 16
Gold Bull-Phase I Continues to Confound (The Trek to “Known Values”) - 22nd May 16 r
Avoiding a War in Space - 22nd May 16
Will Venezuela Be Forced to Embrace the US Dollar? - 21st May 16
Danish Central Bank Stumbles with Its Currency Peg to the Euro - 21st May 16
SPX Downtrend Underway - 21st May 16
George Osborne Warns of More Affordable UK Housing Market if BrExit Happens - 21st May 16
Gold And Silver 11th Hour: Globalists 10 v People 0 - 21st May 16
David Morgan: There Will Soon Be a Run to Gold Like You've Never Seen Before - 21st May 16
Gold Stocks Following Bull Analogs - 20th May 16
The Gold Chart That Has Central Banks Extremely Worried - 20th May 16
Silver Miners’ Q1’ 2016 Fundamentals - 20th May 16
Stock Market Rally At the End of the Road? - 20th May 16
British Pound Soars on BrExit Hopes Despite Remain Establishment Fear Mongering - 20th May 16
NASDAQ 100, FTSE, and British Pound - When Rare Market Data Screams, Listen  - 20th May 16

Free Instant Analysis

Free Instant Technical Analysis


Market Oracle FREE Newsletter

Why 95% of Traders Fail

Stocks Modest Boost Ahead of US Jobs Data

Stock-Markets / Financial Markets 2009 Jun 05, 2009 - 04:24 AM GMT

By: PaddyPowerTrader

Stock-Markets

Best Financial Markets Analysis ArticleStocks got a modest boost from a upward revision to Q1 US productivity data (which was corrected to double the initial estimate) and a stabilization in continuing jobless claims. The number of people who have been claiming social security for a number of weeks which fell for the first time since early January.


This despite a wobbly start again yesterday after three-quarters of retailers reporting chain-store sales missed their targets, dashing hopes that consumers are again spending the American way. Oil stocks also saw buying Thursday on the back of a Goldman Sach’s research piece calling the year end price of a barrel of crude to $85.

Today’s Market Moving Stories

  • The blowout in US Treasury bond yields has resulted in mortgage rates hitting 5.3%. Ouch.

    Through the keyhole…now who lives in THIS house?

  • Miner Rio Tinto shares surged 8.2% after the mining giant rejected a $19.5 billion deal to sell part of itself to China’s Aluminium Corp., announced the launch of a heavily discounted rights issue to raise about $15.2 billion and signed a joint venture deal with BHP Billiton (whose shares are up 11% today.)
  • Elan saw its share price rise by 9.4% yesterday after reports that Pfizer may make a bid for the drug maker. The bid was said to enable Pfizer to gain access to the multiple sclerosis drug Tysabri, which Elan has developed in conjunction with Biogen Idec and which analysts believe could generate sales of more than $1bn a year upon its launch. Similar speculation surrounding a potential Pfizer bid of $4bn for Elan emerged in January, while as recently as Tuesday media speculation that Bristol Myers Squibb were reportedly considering a bid emerged. Any potential suitors will have to deal with Elan’s €1.2bn in debt and negotiate around the “poison pill” strategy said to be in place, which allows Biogen to buy the rights to Tysabri in the event of a takeover.
  • In the aftermath of Anglo Irish Bank’s awful results on May 29th, Moody’s has downgraded its senior debt rating by a notch to A3, just one notch above investment grade. It has put the ratings of ALBK, BKIR (and its subsidiary ICS Building Society) and IPM under review, pending a separate review of Ireland’s ‘ability to provide support to its banking system’. It currently rates ALBK and BKIR A3 and IPM at A1.
    According to the release, Anglo’s downgrade reflects ‘the serious challenges faced by the bank as indicated by a significant capital erosion and a liquidity position highly reliant on central bank support.’ It believes significant restructuring will be necessary for Anglo to ‘develop a viable business model again.’

Some Data That Slipped below the Radar

Amid the forest of the green shoots, last week the American Trucking Association (ATA) reported that their truck tonnage fell a seasonally adjusted 2.2% in April, after plunging 4.5% in March. After bouncing at the turn of the year this important guide to activity is slipping again. It’s easy to explain this downturn as an industry aberration. But the renewed downturn mirrors exactly what the railway guys are saying. The Association of American Railroads weekly traffic report also shows that rail freight traffic remains extremely weak compared to the turn of the year.

The American Truckers Association chief economist is a chap called Bob Costello. He is one of the few market commentators out there who seem to have understood what is going on at the moment and is able to square the current circle of madness. Costello said last week, “While most key economic indictors are decreasing at a slower rate, the year-over-year contractions in truck tonnage accelerated because businesses are right-sizing their inventories, which means fewer truck shipments…The absolute dollar value of inventories has fallen, but sales have decreased as much or more, which means that inventories are still too high for the current level of sales. Until this correction is complete, freight will be tough for motor carriers”. This is confirmed by the macro data as well. Inventories have indeed contracted deeply, but they are still wholly excessive in the absence of a revival of final demand

A nice visual from The Big Picture showing the anatomy of the U.S. economic collapse.

The UK is Browned-Off

Sterling has not been able to recover from yesterday’s dump. Rumours that UK PM Brown resigned may have been denied, but speculation is still rife. The latest in the political saga saw Work and Pensions Secretary James Purnell quit the Cabinet and calling for Gordon Brown to stand down to save the Labour Party. His resignation fuels fear of widespread dissent within the party. Meanwhile news Gordon Brown may replace Chancellor of the Exchequer Alistair Darling with Ed Balls has raised concerns about the UK credit rating once more. Darling had pledged to curb the deficit while Balls is a proponent of increased spending before the next general election. In regards to the local elections, first results are expected this morning, with most declarations in the afternoon. Short of any major divergence from expectations, today’s May PPI is likely to be overshadowed by the politics.

Foreign Exchange Mood swings
The German Philosopher, Arthur Schopenhauer, was presumably day-trading FX when he noted more than 150 years ago that “life swings like a pendulum backward and forward between pain and boredom.” The mood swings of the FX market continue to be extremely painful for anyone trying to sustain a position in the cash market amid the vagaries of fickle sentiment. I noted two days ago that the sell-off in the USD had moved beyond what was consistent with the movements in the equity market, and much of the price action since then could be seen as a drift to close that gap, but one which has occurred without any particular fundamental impulse. Instead, analysis of short-term moves is once again falling into the trap of trying to find a trigger for what was simply a shift in market mood, one which recognised that the sell-off in the USD was overdone in the same way that the sell-off in equities back in March was seen as overdone with hindsight !

So the man with the tan, former CNBC uber regular and purveyor of Ninja loans to millions of unlucky Americans, former Countrywide CEO, Mr Angelo Mozilo may have to do some porridge! The was no news on personal tanning machines behind bars as he’ll need more than one hour a day to keep that George Hamilton IV look.

Some humour upon a Friday

Ahead Today.

  • As it’s the first Friday of the month the US jobs report (non farm payrolls) at 13.30 BST will be the focal point o the session. After digesting the many US labour market releases this week, the market consensus is for a further 520k job losses. The unemployment rate release will take some of the limelight, with expectations centring on 9.2% from 8.9% previously.

    The market mood is that the worst job declines have passed and pretty much every labour market indicator points in that direction.

  • Now that we have got used to NFP numbers like -500K or worse, it seems like we will still have to see a forecast miss of 100K or more to get excited. Since August 2007, we have only seen one forecast miss of more than 100K (in November 2008) and last month we saw the number come in better than expected for the first time since July 2008.

    Interestingly, recent price action around the employment data has tended to see equities rally afterwards, presumably because the passage of the data has signalled one more bullet dodged.

  • The reaction after last month’s data was particularly notable for the large equity gains and the start of the USD rot. Currency traders now believe that the number either has to be extremely strong or extremely weak to help the dollar. Anything in the middle will tend to play with the grain of the positive risk appetite.

And finally…….
A new economic plan for America?

Disclosures = None

By The Mole
PaddyPowerTrader.com

The Mole is a man in the know. I don’t trade for a living, but instead work for a well-known Irish institution, heading a desk that regularly trades over €100 million a day. I aim to provide top quality, up-to-date and relevant market news and data, so that traders can make more informed decisions”.

© 2009 Copyright PaddyPowerTrader - All Rights Reserved
Disclaimer: The above is a matter of opinion provided for general information purposes only and is not intended as investment advice. Information and analysis above are derived from sources and utilising methods believed to be reliable, but we cannot accept responsibility for any losses you may incur as a result of this analysis. Individuals should consult with their personal financial advisors.

PaddyPowerTrader Archive

© 2005-2016 http://www.MarketOracle.co.uk - The Market Oracle is a FREE Daily Financial Markets Analysis & Forecasting online publication.


Post Comment

Only logged in users are allowed to post comments. Register/ Log in

Catching a Falling Financial Knife