July 062010 Posts

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Markets Lose Early Bullish Momentum ‘… As I mentioned in my note on index levels this morning, there was a lot of attention paid to fund managers selling large positions over recent weeks. For now, it appears that they are taking advantage of temporarily higher prices to continue to unload positions. In many respects, this is classic behavior for a bear market, which can often have wild swings to the upside that lure in the unwary, then fade just as they seem to offer refuge and solace. Given th
  Markets Lose Early Bullish Momentum ‘   … As I mentioned in my note on index levels this morning, there was a lot of attention paid to fund managers selling large positionsover recent weeks. For now, it appears that they are taking advantage of temporarilyhigher prices to continue to unload positions. In many respects, this is classicbehavior for a bear market, which can often have wild swings to the upside that lurein the unwary, then fade just as they seem to offer refuge and solace. Given theproximity to earnings season next week, it isn't a total surprise to see a lack of commitment on the long side. That is even more the case if traders are concernedabout guidance, rather than past-quarter results. Regardless of what happens now,the loss of upside momentum after a long string of down sessions will weigh onsentiment. Those who committed to bullish positions this morning expecting asustained move are likely now to reconsider that strategy. That could simply seemore participants sidelined rather than becoming sellers. Right now the short-sideis working better, and what works on the Street usually prevails until it no longer does. Note too that the weakness extends beyond just stocks. Commodities, notablyenergy, are having a devil of a time holding a bid.’ EQUITIES RALLY FIZZLES Midnight Trader 4:17 PM, Jul 6, 2010 – ‘  Here's where marketsstand at the close: ã NYSE up 51.28 (+0.80%) to 6,486.09 ã DJIA up 57.14 (+0.59%) to 9,743.62 ã S&P 500 up 5.48 (+0.54%) to 1,028.06 ã Nasdaq up 2.09 (+0.10%) to 2,093.88GLOBAL SENTIMENT ã Hang Seng up 1.22% ã Nikkei up 0.77% ã FTSE up 2.93%NYSE INDEX WATCH ã NYSE Energy up 1.38% at 9,489.33 ã NYSE Financial up 1.07% at 4,296.82 ã NYSE Health Care up 0.84% at 5,760.28 ã NYSE Arca Tech 100 up 0.16% at 841.86UPSIDE MOVERS(+) WAG (+1%), June same-store sales rise 2%.(+) GS (+1%), gets upgrade.(+) JASO (+5.3%), inks supply deal with MEMC Electronic Materials (WFR). (+) AUTC (+2.1%), leased vehicles rise 174% from a year earlier.(+) PWER (+9.7%), buying back some convertible notesDOWNSIDE MOVERS(-) TGB (-13.3%), independent panel sees adverse effects from proposed project.(-) SNWL (-3.6%), third party drops out of potential bidding war.(-) YRCW (-13.2%), court orders payment to bondholdersMARKET DIRECTION  Stocks gave back most of their gains to close up only modestly as an early rally fizzled oncontinued concerns about the strength of the economy. The major indexes all dipped intothe red late in regular-session trading before bouncing back slightly in the last hour toclose in the black. The DJIA had jumped more than 170 points in the first hour of trading,but declined throughout afternoon trade led lower by retail stocks ahead of Thursday'ssales reports. Retailers are scheduled to report June sales Thursday, and investors areconcerned that the weak economy deterred shoppers. Shares of Macy's (M)were down about 2.5%, while Sears (SHLD) fell more 4% and Office Depot(ODP) was 5% lower. Stocks initially rallied on the day in a reversal from last week after data showed a surge insemiconductor sales, and positive news out of China overshadowed a weaker thanexpected strength in the nation's service sector. The Semiconductor Industry Associationsaid global chip sales grew 4.5% in May from the prior month, besting April's record for monthly sales. And early in the session investors appeared to shrug off data that showedservice sector activity grew more slowly in June, according to the Institute for SupplyManagement. The institute's index of non-manufacturing activity changed to to 53.8 lastmonth, from 55.4 in May. Economists had expected a 54.9 level. In company news, BP plc(BP) shares rose 8.7%, including a late-day spike, after it reportedly said it doesn't plan toissue new equity to cover the costs of the Gulf oil spill. Speculation has been growing thatthe company was seeking private funding from Middle East and Asian groups to stave off possible hostile takeover bids from rivals. Anadarko Petroleum (APC)shares were briefly halted after tripping an NYSE circuit breaker at midday. The trade of 200 shares at around$100,000 a piece was quickly canceled. The company's shares traded higher despite aSunday New York Times report that BP, facing a stiff bill for the Gulf of Mexico oil spill,would demand $272 million from Anadarko based on its 25% ownership in the Macondowell. Sanofi-Aventis (SNY) signed a deal with Dutch biotech firm Pharming to increaseproduction capacity of its drug Ruconest in an effort to trim costs in front of an expectedlaunch in Europe this year, Reuters reported. Pharming has struggled financially amiddelays in getting the drug approved in Europe, the report said. Genzyme (GENZ)fell after  The Wall Street Journal reported European regulators said they expect shortages of GENZ's drug Fabrazyme, a treatment for Fabry disease, to last through the year due tochronic production problems. The regulators added that no new patients should be startedon Fabrazyme and patients requiring smaller doses of the drug be migrated to a rivalproduct made by Shire PLC (SHPGY)called Replagal. Goldman Sachs Group Inc. (GS) gave back some earlier gains with the broader market, but remained in the black after receiving some favorable attention from Wall Street. The firm landed an upgrade after more than a half-dozen analysts downgraded the bank in recent weeks, according to aReuters report. JP Morgan analysts Kian Abouhossein and Delphine Lee raised GoldmanSachs to Overweight from Neutral, pointing to the bank's strong Tier 1 capital levels,among other favorable elements in the firm. Commodities fell with equities in afternoontrading. Crude for August delivery had traded above $73 early in the session only to fall inthe last hour to end down 0.2%, or $0.16, to $71.98 a barrel on Nymex. Gold fell $12.60, or 1%, to $1,195010 an ounce.’ The following is well worth the look and explains how and why the fraudson wall street have gotten away with their devastating fraud thus far (UPDATE: MORE CLAIMS OF RACE BIAS AT JUSTICE... US v. AZ...  Cases against Wall Street lag despite Holder’s vows to target financialfraud Washington Post | Obama has promised to hold Wall Streetaccountable for the meltdown. ):‘THE OBAMA DECEPTION’http://www.youtube.com/watch?v=eAaQNACwaLw&feature=PlayList&p=2EFAB57B44063742&playnext _from=PL&index=0&playnext=1  – well worth a look.   While boner and barton are indeed jokes / vegetables that bespeak thesingle-digit approval rate for congress, obama’s failure to deliver onpromises with as well, endless war spending despite defactobankruptcy of the nation and a watered down nothing financialregulation bill for talking points but little substance, make him as big a joker. This well researched / produced video tells the real story :http://www.youtube.com/watch?v=eAaQNACwaLw&feature=PlayList&p=2EFAB57B44063742&playnext _from=PL&index=0&playnext=1‘THE OBAMA DECEPTION’ – wellworth the view.   My Short-Term Market Forecast  G   raham Summers –‘We’re at a critical juncture. Last weekI thought it possible that we would see a bounce. Stocks were oversold in the short-term and institutional money managers had every incentive to push for a strong endof June performance. Indeed, they needed to hold the S&P 500 at 1070 to make Junea break-even or better performance. Coming on the tail of the worst May since 1940,I thought for sure we’d see some serious performance gaming. It was, after all, theend of 2Q10. [chart] Instead, we got another severe sell-off with stocks breaking tonew lows from their collapse off the late April high. [chart] It’s as though the entireworld suddenly jumped on the Bear bandwagon in a matter of weeks. It’sextraordinary given that most everyone was a Bull up until late April. And yet, herewe are, a mere eight weeks later and suddenly the whole investing world is talkingabout a double dip in the economy, the bear market returning, and the famous “headand shoulders” pattern that has become a mainstream talking point: [chart] It’s trulyodd given that ALL of the facts the investing world is now collectively realizing havebeen staring us in the face for months. It’s not as though anything really changed.Last year’s “recovery” was in fact simply a “things not getting as horrible quite asquickly” stage in the worst economic downturn in 80 years. The fact that everymonetary faucet was opened and every accounting gimmick implemented to attain amere slowing  (not a true reversal) of the downturn should give you an idea of justhow terrible things are in the real world. Collectively, the entire world spent moremoney in one year than was spent during WWI, WWII, and the New Deal combined.And all we got for it was a one-year melt-up in various asset classes. This is trulyworrisome because it indicates that most assets are now trading at levels severelydetached from economic realities. This, of course, is something I’ve been warningabout for over a year. To be honest, I don’t know how the entire world failed to see it.But the last eight weeks indicate that the world is now waking up to these facts: thatall talk of recovery and a new bull market was in fact a load of bunk backed by weakif not outright fraudulent data. Whenever the whole investing world wakes up tosomething, the potential for extraordinary market action increases dramatically.Today that “extraordinary market action” is a potential 1987-type event. Given thefeeble state of the financial system as well as the insane level of computer tradingoccurring in the stocks market, this is definitely a possibility. However, we need toremember that few if any expected the October 1987 debacle. You certainly did notsee major financial outlets talking about a full-scale collapse occurring soon(something that is happening today). So I for one am a bit suspicious about the talkof a sudden and immediate Crash. So far, the market action for this last leg downhas occurred in a very different fashion from what happened in 1987. The lead up toOctober 1987: [chart] The lead up to today: [chart] Moreover, thus far the collapsehas occurred in a stair-step fashion, not the sort of tension before falling off a cliff-action seen in 1987: [chart] So while the possibility of a 1987 event is there, I thinkwe’re likely to continue to see this kind of “down the stairs” collapse instead. Of course, it never pays to be married to one forecast. For that reason, having someopen shorts to profit from a potential 1987 Collapse isn’t a bad idea. However, if   you’re looking to maximize the profits from the type of drops we’re seeing, you needto get in and get out using temporary bottoms to lock in the gains and temporaryrallies to enter new positions.’ Economists, Financial Experts: U.S. Is Trapped In 1932 Size Depression    Following Nobel Laureate Paul Krugman’s declaration last week that theU.S. is in entering a third period of great depression, more and moreeconomists are following suit, comparing the scale of the crisis to that of the early 1930s.Profits and Moves Behind the DownturnThe Fed saysUS unemployment is likely to stay high for a long time, and that justifieszero interest rates indefinitely.Is America Really Free, If A Privately-   Owned Central Bank Controls Our Currency And Runs Our Economy?T   hisweekend we celebrated America’s Independence Day. But are we really afree nation? The truth is that it is really hard to argue that we are “free”when our currency system and our economy are run by an unelectedprivately-owned central bank.TSA To Block Websites With“Controversial Opinions”T   he Transportation Security Administration willblock all websites that contain “controversial opinion” from its federalcomputers in the latest example of how Internet censorship is expanding inboth the private and public sector as the federal government prepares topush through a power grab that will empower President Obama to shutdown the world wide web with an emergency decree.With the US trapped in depression, this really is starting to feel like 1932    Ambrose Evans-Pritchard | “All the booster rockets for getting us beyond itare failing.”   Global Elites Struggle to Keep EU, Euro Intact   James P.Tucker  | Bilderberg members pushed hard in a frantic attempt to save theeuro during the recent weekend-long economic summit in Toronto.EuroWeakens, Bonds Rise on Trichet Austerity Comments; Stocks Fluctuate    Bloomberg | The euro ended a three-day winning streak and bonds roseafter European Central Bank President Jean-Claude Trichet urged“austerity” measures to contain budget deficits. Banks Too Big to Fail, Too Big to Bail Out: Roubini   European governmentsface the quandary of being unable to afford to bail out banks that arestill considered too big to fail, while the global economy is heading for a slowdown in the second half of the year, economist Nouriel Roubiniof Roubini Global Economics told CNBC Tuesday.Graduateswarned of record 70 applicants for every job   Graduates are facing themost intense scramble in a decade to get a job this summer, as a pollof employers reveals the number of applications for each vacancy hassurged to nearly 70 while the number of available positions ispredicted to fall by nearly 7%.Analyst: Gold To bounce back to   $1,309   While prices may weaken in the near term, the underlying trendis strong.Ken Rogoff: “China Property Market Collapse Starting” 
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