Friday, May 29, 2009

End of day - Friday - 4:05PM

Final numbers for today: Dow 8,513.08 +109.28 (1.30%) S&P 500 919.76 +12.93 (1.43%) Nasdaq 1,774.33 +22.54 (1.29%) Gain by sector today: The financials only came in second today? I'm surprised to say the least. Today's heatmap: Gold 980 +17 +1.78% Oil 66.38 1.23 1.89%
Notice the price of oil? How can that be good for the economy? Pump price gaining on $3.00. Can anyone say "discretionary spending" evaporating?

Bank lobby: Consolidated regulator is a bad idea - MarketWatch - 10:20AM

Bank lobby: Consolidated regulator is a bad idea - MarketWatch WASHINGTON (MarketWatch) - The Treasury should not create a consolidated bank regulator to oversee financial institutions, a major bank lobbying group said on Friday. "A federal regulatory agency would undoubtedly have a strong bias toward federally regulated institutions," the American Bankers Association wrote in a letter to Treasury Secretary Timothy Geithner. The Treasury is considering merging the Office of the Comptroller of the Currency, the Office of Thrift Supervision, parts of the Federal Deposit Insurance Corp. and the Federal Reserve Board into one agency, according to people familiar with the Treasury. The ABA, which is made up of large and small financial institutions, said it supported the creation of a council of agencies headed by the Federal Reserve chairman that is charged with identifying problems and recommending solutions. The ABA joins the Independent Community Bankers of America who is opposed to a consolidated regulator, arguing it would result in "overwhelming concentration of power."
Really? I'm shocked, just shocked. The banksters don't want anyone looking over their shoulder, unless it meets their terms. Anyone want to bet they get their way?

GDP report - 8:45AM

Gross Domestic Product, 1st quarter 2009 (preliminary) Corporate Profits, 1st quarter 2009 (preliminary) Real gross domestic product -- the output of goods and services produced by labor and property located in the United States -- decreased at an annual rate of 5.7 percent in the first quarter of 2009, (that is, from the fourth quarter to the first quarter), according to preliminary estimates released by the Bureau of Economic Analysis. In the fourth quarter, real GDP decreased 6.3 percent. The GDP estimates released today are based on more complete source data than were available for the advance estimates issued last month. In the advance estimates, the decrease in real GDP was 6.1 percent (see "Revisions" on page 3). Full report here.
Drilling down in this report, we see this line; Gross domestic purchases Real gross domestic purchases -- purchases by U.S. residents of goods and services wherever produced -- decreased 7.5 percent in the first quarter, compared with a decrease of 5.9 percent in the fourth. Green shoots huh?

Pre-market - Friday, May 29,2009

Futures up a little before the GDP report. Economic indicators today: GDP - 8:30 AM ET Corporate Profits - 8:30 AM ET Chicago PMI - 9:45 AM ET Consumer Sentiment - 9:55 AM ET Farm Prices - 3:00 PM ET Earnings reports today:

Thursday, May 28, 2009

Home sales report - not good - 10:15AM

NEW RESIDENTIAL SALES IN APRIL 2009 Sales of new one-family houses in April 2009 were at a seasonally adjusted annual rate of 352,000, according to estimates released jointly today by the U.S. Census Bureau and the Department of Housing and Urban Development. This is 0.3 percent (±14.5%)* above the revised March rate of 351,000, but is 34.0 percent (±11.0%) below the April 2008 estimate of 533,000. The median sales price of new houses sold in April 2009 was $209,700; the average sales price was $254,000. The seasonally adjusted estimate of new houses for sale at the end of April was 297,000. This represents a supply of 10.1 months at the current sales rate. Full report here. From CNBC on the housing: New Home Sales Rose 0.3% in April Sales of newly built U.S. single-family homes rose slightly less than expected in April, a government report showed on Thursday, and the previous month's figures were revised down to show a steeper fall. The Commerce Department said sales rose 0.3 percent to a 352,000 annual pace, from a downwardly revised 351,000 in March. March sales were revised to show a 3 percent decline, which had been reported as a 0.6 percent slide. Economists polled by Reuters had forecast sales at a 360,000 rate in April. The median sales price in April fell 14.9 percent to $209,700 from a year earlier, the department said. The median marks the half-way point, with half of all houses sold above that level and half below. However compared to March, the median price was up 3.7 percent, the biggest increase since November. The inventory of homes available for sale in April fell 4.2 percent to 297,000, the lowest level since May 2001. April's sales pace left the supply of homes available for sale at 10.1 months' worth, the lowest since a matching reading in July.
As soon as the video is up on CNBC I will post the interview with their real estate reporter Diana Olick who puts this in perspective nicely. Here it is - good report from Diana;

Durable goods report - 8:45AM

New orders for manufactured durable goods in April increased $3.0 billion or 1.9 percent to $161.5 billion, the U.S. Census Bureau announced today. This was the second increase in the last three months and followed a 2.1 percent March decrease. Excluding transportation, new orders increased 0.8 percent. Excluding defense, new orders also increased 1.0 percent. Full report here.

Jobless claims - 8:38AM

Jobless claims: In the week ending May 23, the advance figure for seasonally adjusted initial claims was 623,000, a decrease of 13,000 from the previous week's revised figure of 636,000. The 4-week moving average was 626,750, a decrease of 3,000 from the previous week's revised average of 629,750. The advance seasonally adjusted insured unemployment rate was 5.1 percent for the week ending May 16, an increase of 0.1 percentage point from the prior week's unrevised rate of 5.0 percent. The advance number for seasonally adjusted insured unemployment during the week ending May 16 was 6,788,000, an increase of 110,000 from the preceding week's revised level of 6,678,000. The 4-week moving average was 6,608,250, an increase of 123,750 from the preceding week's revised average of 6,484,500. The fiscal year-to-date average for seasonally adjusted insured unemployment for all programs is 5.131 million. Full report here.

Pre-market - Thursday - May 28th - 8:20AM

Futures pretty much flat this morning. Economic calendar today: Durable Goods Orders - 8:30 AM ET Jobless Claims - 8:30 AM ET New Home Sales - 10:00 AM ET EIA Natural Gas Report - 10:30 AM ET 3-Month Bill Announcement - 11:00 AM ET 6-Month Bill Announcement - 11:00 AM ET 52-Week Bill Announcement - 11:00 AM ET 7-Yr Note Auction - 1:00 PM ET Money Supply - 4:30 PM ET Earnings reports before open: Earnings after close:

Wednesday, May 27, 2009

Moody's and the US credit - 12:02PM

Moody's says U.S. triple-A sovereign rating stable - MarketWatch SAN FRANCISCO (MarketWatch) -- Moody's Investors Service said Wednesday that even with a significant deterioration in the U.S. government's debt position, its rating has a stable outlook and demonstrates the attributes of a Aaa sovereign. The ratings agency cited the U.S.'s diverse and resilient economy, strong government institutions, high per capita income, and a central position in the global economy for its stable outlook. "Moody's expects that, because of these factors, U.S. economic strength will emerge after the crisis without major impairment," said Steven Hess, Moody's vice president. "The global role of the U.S. currency also contributes to the ability of the economy and government finances to rebound." However, going forward, "contingent liabilities" related to Social Security and Medicare could pressure the rating, Moody's said.
Ok, sure, whatever. Two questions, 1)why would anyone believe Moody's, 2)Who told them to say this? Moody's, Fitch's, and S&P rating agencies are notorious to issuing reports long after everyone else knows the scoop. This is no different. What a JOKE! The United States is broke, and we don't deserve a AAA rating.

FDIC release - 11:30AM

FDIC-Insured Institutions Earned $7.6 Billion in the First Quarter of 2009 Commercial banks and savings institutions insured by the Federal Deposit Insurance Corporation (FDIC) reported net income of $7.6 billion in the first quarter of 2009, a decline of $11.7 billion (60.8 percent) from the $19.3 billion that the industry earned in the first quarter of 2008. Higher loan-loss provisions, increased goodwill write-downs, and reduced income from securitization activities all contributed to the year-over-year earnings decline. Three out of five insured institutions reported lower net income in the first quarter and one in five was unprofitable. "The first quarter results are telling us that the banking industry still faces tremendous challenges, and that going forward, asset quality remains a major concern," said FDIC Chairman Sheila C. Bair. "Banks are making good efforts to deal with the challenges they're facing, but today's report says that we're not out of the woods yet." She added, "As I see it, we're now in the cleanup phase for the banking industry. It will take some more time. But in the end, we'll have a stronger banking industry that's better able to meet the demand for credit as the economy recovers." Entire report here.

Home Sales - March - Update 10:01

Existing-Home Sales Rise in April WASHINGTON, May 27, 2009 Existing-home sales rose in April with strong buyer activity in lower price ranges, according to the National Association of Realtors®. Existing-home sales – including single-family, townhomes, condominiums and co-ops – increased 2.9 percent to a seasonally adjusted annual rate1 of 4.68 million units in April from a downwardly revised pace of 4.55 million units in March, but were 3.5 percent below the 4.85 million-unit level in April 2008. Full report here.

Pre-market - Wednesday, May 27, 2009 - 7:30AM

Futures up slightly this morning: DJIA INDEX 8,484.00 23.00 S&P 500 910.90 2.20 NASDAQ 100 1,411.00 0.25 Wednesday Economic indicators: MBA Purchase Applications - 7:00 AM ET ICSC-Goldman Store Sales - 7:45 AM ET Redbook - 8:55 AM ET Existing Home Sales - 10:00 AM ET EIA Petroleum Status Report - 10:30 AM ET 4-Week Bill Auction - 1:00 PM ET 5-Yr Note Auction - 1:00 PM ET Earnings reports before open: Today after close:

Tuesday, May 26, 2009

Rio Tinto cuts prices - 7:10PM

Rio Tinto agrees 33% iron-ore price cut with Nippon Steel - Market Watch HONG KONG (MarketWatch) -- Rio Tinto Ltd. has agreed to a 33% cut in iron-ore prices with Nippon Steel Corp., establishing a possible benchmark for pricing the commodity this year amid a tumble in prices for finished steel. Rio Tinto(RTP) $176.79 +2.95 (1.70%) said in a statement Tuesday that it had reached a pricing agreement with Nippon Steel for fiscal year which began in April, setting its fine iron ore at 97 U.S. cents per dry metric ton, compared to $1.45 a ton last year. A higher-grade ore, known as the Pilbara Blend Lump, will fall 44% in price to $1.12 a metric ton, Rio said. Attempts to strike a similar deal with Chinese steel giants, such as Baoshan Iron & Steel, may meet resistance, however. Various news reports Tuesday said the Chinese mills want a total reversal of last year's almost doubling of ore prices by Rio and fellow Australian miner BHP Billiton Ltd.(BHP). However, Rio Chief Executive Sam Walsh promoted the Nippon deal Tuesday, saying: "We believe this is a realistic outcome for both parties, one that reflects the global market for iron ore and the current challenging market conditions facing our customers." Sydney-listed shares of Rio were up 1.4% in late Tuesday trade. In Tokyo, Nippon Steel shares fell 0.6%.
Granted, this is only one customer, but last I looked, you lower margin, you lose profit. Stock rose. Must have been "not as bad as expected."

Fast Money - Where's Macke? Update - 5:10PM

I haven't noticed Jeff Macke on CNBC lately. I wonder if this had anything to do with it? That was from last Tuesday, the 16th, best I can tell, and I haven't seen him since. What's up with that? I was a fan of Fast Money, didn't buy into all of their trades, but an entertaining show for someone who likes to hear traders. Macke was kind of a loudmouth but for the most part, I thought he told it like it was. Dylan Ratigan was the same way. Both could be loud, rude, and self righteous, but they seemed to ask better questions than the other poodles on the show. I don't know what the rant Macke was about, but talking to Dennis Kneale might do that. Either he had a really bad day, or he wanted to, well, get canned? It seems to this blogger CNBC would like more poodles than pit bulls. They don't want people asking the tough questions, nor telling it like it is. It's all about cheering the market higher and kissing the bankster's ass. From time to time I post a video of someone telling it like it is. Santelli, Macke, Ratigan, and I used to say Mark Haines, gave us the straight information we wanted in a business channel. Mark seems to be getting a bit "poodlish" but he's been doing this a long time, so I'll give him a pass. Those are the people who carry the water, borrowing a phrase from Santelli. The rest are actors, even though Ratigan could qualify as one. I wonder if Macke finally had too much, and left the building. Could the anchor's be pressured to cheerlead, NOT ask the tough questions, slapped when they are too critical about government, or are down right told to lie to people? Not telling us is the same as lying in my book. Granted, there is a line where politics and financial news crosses the border, but to go looking for it when it fits some agenda, then to censor it at another, is pathetic. I don't read Macke or Ratigan as toe the company line of BS sort of people. I know, they say "there is no shame on Wall Street" but you would sure hope there is a little bit. Just guessing and hoping.

Market Wrap - 4:15PM

Another strange day in the Wall Street casino. Markets flew today, then backed off a little at the end of the day. Dow 8,473.73 +196.41 (2.37%) S&P 500 910.30 +23.30 (2.63%) Nasdaq 1,750.43 +58.42 (3.45%) Gold - $953.00 -6.00 -0.58% Oil - $62.29 +0.78 1.27% Notables: Home builders index (XHB)12.34 +.38 (3.18%) on poor Case-Shiller report this morning. Real estate Res & CRE (IYR) 33.35 +1.64 (5.17%)on reports this morning housing is not any better. Today by sector: (any guess who leads the pack?) The banks! Who would have guessed it! Today's heatmap:
CNBC cheerleading grade for the day - "A" They did anything and everything they could today to convince us everything is fine, get your money in the market. Consumer confidence is great, look at that, everything is fixed. Larry Kudlow even found a way to spin the Korean missile test as a positive sign for the market. After listening to Dennis Kneale and Michelle Caruso-Cabrera on Power Lunch carry on about the auto companies, combined with some talk show host posing as an expert on bankruptcy law, I had to turn the channel. They can't wait to bash the government, Obama, Geithner, and especially the auto company unions (to the point of almost cheering when the news broke the retirees will get hosed) while slobbering over the banks and their oh so powerful banking people - I could just puke. I don't agree with all this bailout, intervention by the government stuff, but jeez Louise CNBC, these are real people you were so giddy about. So the retiree's are going to get hosed, your glad about it. But you rant and rave when the "poor" bankers and Wall Street criminals have to take a cut. Poor things! CNBC, your as criminal as the damn banksters. Shut the hell up. In my house you have, it's called the channel changer. I hope GE needs bailed out and your the first plug that gets pulled. Your channel has become nothing more than a Jerry Springer show. You suck!

GM news - 2:00PM

UAW Discloses Terms of GM Deal - WSJ The United Auto Workers told union officials Tuesday that it has agreed to a deal with General Motors Corp. that will lead to the union owning 17.5% of the company once it restructures as part of GM's obligation to fund future retiree health-care obligations, a person familiar with the matter said. Under the deal, which was agreed to last week and is set for a UAW vote in coming days, GM place $10 billion of assets into a Voluntary Employee Beneficiary Association, of VEBA, on Jan. 1, 2010. The UAW will also receive a new note, payable in cash, for $2.5 billion. That note will be paid out in three installments taking place in 2013, 2015, and 2017. The details of the arrangement were outlined in an informational brochure detailing the agreement, which was obtained by The Wall Street Journal Tuesday. The UAW's VEBA had been owed $20 billion, but the UAW – responding to Treasury Department demands – has agreed to cut the cash obligation and receive a significant amount of what it is owed in stock or notes. In addition, the UAW will be given $6.5 billion in preferred stock in a reorganized GM. That stock includes a 9% cash dividend, under which the union's VEBA will receive $585 million annually for as long as the UAW holds the stock. That preferred stock is in addition to 17.5% of the company's common stock that is being promised by GM to the VEBA. The UAW also will receive a warrant for an additional 2.5% of the common stock in the new company. The UAW said that "with a greatly improved balance sheet, as well as with the significant restructuring of business operations, there is a realistic prospect that the stock in the new company will represent significant value in the future."
This information is coming out in bits and pieces. Watch the news for further details. GM stock now up after being up down all day.

Consumer Confidence - May- 10:15AM

The Conference Board Consumer Confidence Index™, which had improved considerably in April, posted another large gain in May. The Index now stands at 54.9 (1985=100), up from 40.8 in April. The Present Situation Index increased to 28.9 from 25.5 last month. The Expectations Index rose to 72.3 from 51.0 in April. The Consumer Confidence Survey™ is based on a representative sample of 5,000 U.S. households. The monthly survey is conducted for The Conference Board by TNS. TNS is the world's largest custom research company. The cutoff date for May's preliminary results was May 19th. (Full report here) The market has gone up for almost two months. The cheeleaders have done their best to tell us things are getting better. No surprise this is higher, market reacts accordingly.

Case-Shiller Home Price Index - Update 9:05AM

New York, May 26, 2009 – Data through March 2009, released today by Standard & Poor’s for its S&P/Case-Shiller1 Home Price Indices, the leading measure of U.S. home prices, show that the U.S. National Home Price Index continues to set record declines, a trend that began in late 2007 and prevailed throughout 2008. (full report here) The chart above depicts the annual returns of the U.S. National, the 10-City Composite and the 20-City Composite Home Price Indices. The S&P/Case-Shiller U.S. National Home Price Index – which covers all nine U.S. census divisions – recorded a 19.1% decline in the 1st quarter of 2009 versus the 1st quarter of 2008, the largest decline in the serie’s 21-year history. The 10-City and 20-City Composites recorded annual declines of 18.6% and 18.7%, respectively. These are slight improvements from their returns reported for February.

News & articles of interest - Update 8:30AM

North Korea's Move Rattles Futures - WSJ Stocks to watch - Market Watch 5 Stocks Poised to Shine This Summer - WSJ As time runs out, GM stakeholders brace for bankruptcy - MarketWatch Oil falls below $61 ahead of OPEC meeting - Reuters Porsche on the financial brink - Telegraph UK Mass layoffs hit some areas worse than others in 2009 - Yahoo World Bank warns of social unrest - BBC World economy 'to shrink in 2009' - BBC JPMorgan $29 Billion WaMu Windfall Turned Bad Loans Into Income - Bloomberg Lowest Libor Hides ‘Exceptionally Wide’ Bank Spreads (Update2) - Bloomberg

Economic calendar for the week - 7:30AM

Economic calendar today: Consumer Confidence - 10:00 AM ET State Street Investor Confidence Index - 10:00 AM ET 4-Week Bill Announcement - 11:00 AM ET 3-Month Bill Auction - 11:30 AM ET 6-Month Bill Auction - 11:30 AM ET 2-Yr Note Auction - 1:00 PM ET Wednesday: MBA Purchase Applications - 7:00 AM ET ICSC-Goldman Store Sales - 7:45 AM ET Redbook - 8:55 AM ET Existing Home Sales - 10:00 AM ET EIA Petroleum Status Report - 10:30 AM ET 4-Week Bill Auction - 1:00 PM ET 5-Yr Note Auction - 1:00 PM ET Thursday: Durable Goods Orders - 8:30 AM ET Jobless Claims - 8:30 AM ET New Home Sales - 10:00 AM ET EIA Natural Gas Report - 10:30 AM ET 3-Month Bill Announcement - 11:00 AM ET 6-Month Bill Announcement - 11:00 AM ET 52-Week Bill Announcement - 11:00 AM ET 7-Yr Note Auction - 1:00 PM ET Money Supply - 4:30 PM ET Friday: GDP - 8:30 AM ET Corporate Profits - 8:30 AM ET Chicago PMI - 9:45 AM ET Consumer Sentiment - 9:55 AM ET Farm Prices - 3:00 PM ET

Tuesday - Pre market - Futures - 7:20AM

Futures pointing a bit lower to start the week: DJIA INDEX 8,212.00 -48.00 S&P 500 878.80 -6.10 NASDAQ 100 1,344.50 -16.25 Economic calendar today: Consumer Confidence - 10:00 AM ET State Street Investor Confidence Index - 10:00 AM ET 4-Week Bill Announcement - 11:00 AM ET 3-Month Bill Auction - 11:30 AM ET 6-Month Bill Auction - 11:30 AM ET 2-Yr Note Auction - 1:00 PM ET Earnings reports today: Company's in bold are before market opens.