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LONGER TERM:
A few weeks,
The chance of closing dow
nthe 80 day moving average ask for $SPX
Then
The floor is is 860
Tokyo: Markets face a 'death spiral'( wiredbrain password synergy )
The Nikkei 225 average has plunged 13.7 per
cent since Wednesday it fell to 14,555, a two-year low - now back to 17,000called the death spiral and Tokyo
is staring it in the face.
The high dollar and weak foreign economies hurt foreign earning, ( in dollars) profits and exports.
Technologies NEWS & INDEX are leaders and Markets. We do have to worry about the trade gap - with the YEN down and exports hurt -
$IXCO NASDAQ High Technology Index
U.S. STOCKS SEEN HURT AMID WAVE OF EARNINGS WARNINGS.
MarketWatch
US Q3 GDP REVISED DOWN TO 3.1% FROM 3.3%. DEFLATION: DJ COMMODITY NDX
5:01PM 131.38 +10.45 -7.37% 131.38 - 142.93
141.33 - 167.28 ^DJC
markets Watch for sectors - technology leads the market ( 85 % chance )
Range charts ( 960 to 930 ) This is a good resting place - at the 180 day average - 950
ASIA
CURRENCIES down set the tone The next days market is
posted ( before it happens) at 8 PM EST the day before and 11 PM and again
at 6 AM update ( GMT +4) for how
the day will open
at 9:30 to 10:30
AM the first bounce
-
see for yourself
second bounce from around 10:30 to noon
CNNFN :
"It's
all about the Far East," one London share trader said. "But there's no
depth to this market, there's
not very much on the order book so underneath it's not that red."
ECONOMIC MORNING
U.S. STOCKS SEEN HURT AMID WAVE
OF EARNINGS WARNINGS.
BABBLE: Don't believe most of the market reports that say the decline was due to " some BS, such as profit taking, inflation concerns,
The FED AKA the Wizard of OZ or one stock such Oracle fall yesterday, or Wed. a problem at banks, because it was built into the market before it opened. If you understand how something works you can predict its behavior. All the numbers are in motion so change all the time !
There we be a great amount of political
pressure to get the dollar down and interest rates down- policy has to
be to flood the world in MONEY
to avoid deflation
- everyone wants to buy US bonds Euro $ or DM or ECU's?
Japan Nov. trade surplus 1.064 trln yen, up 58.7% on year .9057 Govt aide
says Japan to target 1.9% growth in FY98 real GDP
Editorial: see
CME
- 75 % chance of CME forecast being right direction
on the open
Wiredbrain's Monday, Tuesday, Wednesday and
Thursday were right on ! +- 10 %
Asia Markets, Europe , ( London , Paris , Frankfort ) BUT it's technology
(PSE) that is critical today - if they go up or down
markets
go with them ( $NDX
) - watch
$IXCO NASDAQ High Technology Index
SEE
01/26 06:54 London U.S. stocks flat, eyes on Clinton, earnings
Traders said the rebound today suggested the market had gotten overly pessimistic last week about the consequences of allegations that President Bill Clinton had an affair with a former White House intern, Monica Lewinsky, and then advised her to lie about.
When the news first broke last week about the charges against Clinton, "the market got very oversold on a short-term basis," said Anthony Basile, a managing director at PMG Advisers in West Conshohocken, Pa. Basile noted that President Clinton denied the charges again today.
"Until we know more about the situation other than the allegations...we had sort of a reflex rally," Basile said. A US bond trader said some of the market's agitation about Clinton had subsided.
"People think that although Clinton probably did it, from a legal view he might be able to work something out," he said, and added that there is more of a sense in the market that the president could find a "way out."
Some traders said the bond market's rally had less to do with its assessment of the president's situation than with the purchase of up to 15,000 Mar bond contracts alleged to have been done by one account, said to have been either a hedge fund or a West Coast fund manager.
LIBOR 94.365 = 5.635 % ( prime down ) very close to
30Y
Interest rates DOWN
5.9
30 Y bond at 106 flat curve = low inflation. commodities PRICES falling
( Why would anyone want long term bonds with it's
increased price risk vs. notes or 1 to 5 yr. bonds tax free, discount rates
and notes and short term bonds could drop to under 4 % ( down quite a bit
) -
DJ COMMODITY NDX 131.38 UP to 144 from 167.2 high
Global deflation - therefore are the best long buy. EC bonds will have to go up before long bond can go much higher from here. Short blue chips
BLACK Friday is POSSIBLE. All in all US shares are too high and will come down 10% from S&P500 955 or 15 % from their highs before they go up past new highs again. In fact, what are US shares and companies and what are "foreign" is not very important. International firms are global enterprises, really they are not just in theory but they really are global firms with global prices for their shares.
IMF faces critical chorus over Asia bail-out
SEE DEFLATION: How the IMF can make things worse from Soros:
The market is becoming increasingly worried about the potential fall-out from the scandal. US Treasury Secretary Robert Rubin's reiteration Thursday that a strong dollar is "very much" in the US interests should continue to underpin the currency.
BONDS:
There are some Fed speakers on the slate, but the market remains focused on Asia and on any new developments in the Clinton scandal. Weakness in Asia or more bad news for the President is likely to add to the flight-to-quality bid at the short end. Also look out for more steepening in the yield curve.
US STOCKS: Further weakness in Asia is likely to spill over into US trading. But investors will also be attentive to earnings reports and will react accordingly to those firms that surprise positively or disappoint. All eyes on trade, but the story everybody is looking tomaterialize, the Asia effect, still won't be felt for some months now.
TheUS trade deficit will widen, but not by that much in November.
The realimpact probably won't be seen until March, when January data seeps out.
INDONESIA'S 'VOLUNTARY FRAMEWORK' FOR CORP. DEBT RAISES DEFAULT CHANCE: S&P. FOCUS-Jakarta stock market rises, rupiah fragile By Mantik Kusjanto JAKARTA, Jan 26 (Reuters) - Indonesia's stock market soared on Monday, ignoring persistent weakness in the rupiah currency which remained weighed down by fears over the country's massive private debt and political concerns.
The composite index of 288 companies closed 5.03 percent higher at 473.69 ( now 485) points despite increasing concern over Indonesia's debt situation and potential social unrest as food prices spiral upwards.
Australia on alert over Indonesia By Peter Hartcher, Asia-Pacific Editor
The Federal Government is making contingency plans to evacuate Australian citizens from Indonesia, fearing the breakdown of its economy could lead to serious unrest. Officials said although there was no immediate cause for alarm, the possibility of mass protests and violence was increasing daily as the country's economy deteriorated. Food riots have erupted in parts of East Java over the past month. Some Australian officials believe the number and scale will increase at the end of the Ramadan month of fasting and prayer on January 30.
The price of rice and of cooking oil has been escalating and supplies are short. Water is scarce because of drought.
The Government has forecast a 50 per cent increase in the number of jobless this year.
See what I see go where I go !
Market short term:
REPORT : if you have strong faith ( which I don't ) short ( puts ) on market highs - - the market can do anything it wants - including proving me wrong - but the breath is weak, there is no tech leadership, dollar and bonds are down other markets have better value.. Earning reports are in the past - and the cost of doing business is going up - ``It does make you kind of nervous, and when people are nervous, they sell stocks,''- the index means direction -+ if to buy, sell, close or hold, time to hold them, fold them or bet them? Hold down - maybe close them ?
"It's blindingly obvious what the opposing forces are,"
said Chris Carter, global strategist at UBS. [
For
this he get paid and quoted - makes some sense if you don't stop and think
] "Company earnings face downward
pressure while support is coming from strong bonds and interest
rate expectations,"
Carter said it would take a combination of big earnings disappointments and an environment where bond yields were going up to drive the market lower --
COMMENT: If tomorrow as it
did today the cost of wages and oil goes up ( maybe a War near all that
Oil ) - then the bonds go down and interest rates up. The earning are hurt
by increased costs of both labor and the price of money and energy. SO
big earning disappointments and higher bond yields are possible if you
can't raise prices because of cheap imports.
The US is not an island
There is growing awareness as Soros pointed out that the international financial and the IMF is broken and doesn't know what its doing - the cure is making things worse - the international meeting to Fix it maybe too little too late but very welcomed - come on guys get real !
while to drive it higher would take rising earnings forecasts
coupled with falling bond yields.( Then why didn't
the market go up during the last 7 months - with the market stuck at SP500
955 +- 25 with great earning growth and much lower interest rates )
Neither combinations seemed likely, he said. "
The bulls see the Dow going to 9,000 and the bears see it dropping to 7,000, but I don't see why either should happen for some time."
Sunday January 25, 4:20 pm Eastern Time
FOCUS-German econ experts fear Asia-led deflation
By Catherine O'Mahony
FRANKFURT, Jan 25
(Reuters) - Germany is facing an ever-growing risk of being infected by a deflation plague from Southeast Asia because of the relative weakness of its current economic recovery, top economists warned on Sunday.
Norbert Walter, chief economist of Germany's leading commercial bank Deutsche Bank AG (OTC BB:DTBKY - news; DBKG.F), and the DIW economic institute both said there was a significant danger that German prices and wages will start to fall.
In a comment piece for the Welt am Sonntag newspaper, Walter said that the Asian crisis was far from over, but that even if it spread, the worst-case scenario for the U.S. was inflation stagnating below two percent.
``However Europe, including Germany, is in greater danger of being infected by Asian deflationary tendencies, since the recovery -- carried solely by export growth -- is weak,'' Walter said.
``Asian deflationary tendencies make it probable that European interest rates will tend to fall on average in 1998 rather than rise,'' Walter added.
The risk of deflation has taken firm hold as an issue in Germany, just as in many other nations, as economists weigh the potential side-effect of the ongoing financial crisis in Asia.
Moving the Market
WALL ST. WEEK AHEAD Investors await Super Tuesday
By Huw Jones
NEW YORK, Jan 18 (Reuters) - Wall Street investors face a shortened trading week that will be heavy on earnings and light on economic data, with Asia's financial woes still the market's wild card.
The earnings reporting season will move into top gear.
`But longer term worries lingered. John Noonan, head of Proprietary Trading at National Australia Bank Singapore summed it up: ``You have the classic market risk of buy the rumor, sell the fact.''
Investors Beware: Asia's Ills Not Over
By Pierre Belec
NEW YORK (Reuters) - Bargain hungry investors are looking at Asian stocks with lust in their eyes after months of deep declines that have been fueled by the Asian economic meltdown.
But the experts say there is still danger in ailing Asia and warn investors that they are not dealing with just a 24-hour flu.
Stocks in Japan, Hong Kong, Indonesia, Thailand, Singapore and South Korea have had near death experiences as investor hysteriahas walloped their markets, sending them to levels that priced their companies for outright bankruptcies.
The myth that the Asian economy was invincible came crashing to the ground in October, and the fallout is still being seen globally.
The Asian turmoil was critical because the region has been a key pillar in the global economy.
Asia was the victim of its own success as investors convinced themselves that trees grow forever to the sky and rising real estate prices beget ever higher returns. When the speculative bubble burst, the region's economies and stock markets fell like a house of cards.
Now it seems that all the bad news about Asia has been reflected in the stock markets, and the crisis may be easing.
Although some optimistic investors say they don't see anything that can still upset the markets, the experts warn that Asia's problems have not been solved and the healing will take time.
"
There's still danger out there even though it's tempting for investors after stocks have fallen so much," said Anthony Cragg, head portfolio manager for Strong Capital Management's Strong Funds, an internationally invested fund with assets of $250 million.
He said people are making a big mistake when they try to draw a parallel between the mid-'90s economic crisis in Mexico, -- a relatively brief economic disruption -- and the current Asian mess.
"I don't think we are going to get a rapid overnight recovery in Asia because, for one thing, several countries are involved and we are dealing with a different set of problems that will take longer to work out."
The hope that Asia was turning the corner this week helped spark a recovery in the Dow Jones industrial average.
By Friday, the index of 30 blue-chip stocks was up 173 points for the week, nearly halving the trading period's loss of 385 points, which was the biggest weekly fall in history. ( in points not % )
Cragg believes that Asian markets will eventually offer opportunities to investors but not before the second half of this year.
"Sure, there will be rallies in the markets -- dead cat's bounces or suckers' rallies -- but serious investors will need to be wary and very, very selective about getting back into Asia," he said.
Analysts feel it is still too early to talk about a bad situation where the worst is over.
01/20 00:38 FOCUS-Asian currencies shaken as rupiah caves in
By Sonali Desai
SINGAPORE, Jan 20 (Reuters) - Asian currencies headed back downhill on Tuesday as Indonesia's rupiah crumbled through a major support level and regional stock markets shed some of their recent gains.
01/19 05:32 FOCUS-Asia currencies firm but lag stocks rally
And analysts saw little scope for a sustained rebound.
"
The deteriorating balance sheets of corporates, coming debt payments, higher inflationary pressures and high interest rates will make it difficult for Asian economies to show much growth this year," Banque Paribas said in a daily commentary.
The Indonesian rupiah was flirting with the 15,000 per dollar level again in late trade, hit by rumours that Jakarta banks were unable to meet their maturing dollar obligations and were offering to make payments in rupiah.
Growing signs of social unrest due to rising food prices and uncertainty over who would succeed President Suharto also weighed against the rupiah.
(Updates with morning's trade)
But the rally had lost momentum by midsession when prices, though mostly still firm, ceded some of their gains.
German shares rose the most, by over two percent in early trade, and proved the most resilient when the initial surge faded, benefiting from the strong dollar which is a boon for Germany's big exporters. ``
The key issue is what's going to happen to corporate earnings in the next six to nine months ,'' he said. ``A lot of companies have and will continue to blame, rightly or wrongly, what's happening in Asia for any shortfall. That will have impact on equity markets. I wouldn't say we're out of the woods in terms of the impact of Asia on the U.S. economy and financial markets.''Durrant said that while Asian stock markets are moving up, currencies are not.``That tells us that economically the fundamentals haven't switched,'' he said, adding that overall improvement in the region may be ``more remission than reversal.''
` Russia Outlook: Analysts say banks threatened by Asian crisis Asia
crisis affecting growing number of European banks
07:35 GERMANY'S DAX UP 1.5%; GERMAN UNEMPLOYMENT JUMPS TO 12.6% IN JAN. 07:32 JAPAN'S NIKKEI UP 120.7 POINTS, OR 0.7%, TO 17003. 07:31 HONG KONG UP 139.5 POINTS, OR 1.35%, TO 10442. 07:21 LONDON'S FTSE UP 1.2% TO NEW RECORD HIGH. 07:18 ASIA MARKETS RALLY; HK UP 1.4%, JAPAN UP 0.7%.
``It will have major implications right the way through the market.'' Tech gains being paced by the chip makers which have benefitted from positive coverage from Morgan Stanley, DLJ, and Prudential... Chip equipment companies riding the coattails of the chip makers and are also trading higher... In the broader market, investors taking a sedative with respect to drug stocks after merger mania got their adrenaline running high yesterday... Subsequently, most drug makers are moving lower on profit taking..
02/03 06:57 ``We are seeing a little bit of reflection and consolidation given the tremendous rises over the past few days,'' said Brian O'Donnell, sales trader at Schroders.
`` There is no real selling pressure, we are just pausing
for breath.''
SINGAPORE , Feb 11 (Reuters) - Fears that Indonesia and South Korea could be hit by a mounting social backlash againsttheir economic crises sent stock prices in both countries sharply lower on Wednesday, brokers said.
Most Asian currencies meanwhile pared early gains made on Indonesia's moves towards a currency board system to stabilise its rupiah.
Weaker stocks in Jakarta and Seoul failed to deter a rejuvenated Philippine market, where prices surged by nearly seven percent to a five-month high on the back of a stronger peso and hopes its economic crisis was receding.
``
The market is alive,'' said Irving Ackerman, president at I. Ackerman and Co in Manila.
The Jakarta stock market demonstrated that despite recent signs of recovery Indonesia's crisis was far from over. Traders rushed to sell on rumours that riots had broken out in protest against rising food prices and as President Suharto warned that unknown ``parties'' were seeking to undermine the economy.
``Stocks fell drastically in the afternoon session, but so far people have been selling stocks based on rumours,'' commented one broker.
The composite index dived 30.09 points to 487.61, a fall of 5.81 percent.
Even a strong performance by the rupiah currency, boosted by the growing likelihood that a currency board will replace the current exchange rate system, failed to reassure the stock market.
Finance Minister Mar'ie Muhammad told parliament the government was drawing up a framework for such a system which would be submitted to the legislature ``in the near future.''
South Korean shares also suffered from jitters as a showdown loomed between the country's militant trade union umbrella group and the government.
The Korean Confederation of Trade Unions defied a government warning and said it would go ahead with a general strike planned for Friday.
The industrial strife fears spooked foreign investors and sent the main index slumping 3.99 percent, or 21.63 points, to 520.14.
A very different mood prevailed in Manila, though, as the peso's rise against the dollar inspired traders to go on a buying spree.
The currency strengthened to 37.568 in early trade against its U.S. counterpart from the previous day's close 39.28, before slipping back later.
``Dollars are flowing back into this country.
There is no question the worst is over, but there may be some rough spots,'' Ackerman said.
The main index galloped 6.71 percent higher to close at 2,218.32.
Trade elsewhere in the region was generally subdued, with the Tokyo stock market closed for a holiday and the Thai stock market also on a break.
Hong Kong stocks edged lower as traders balanced good news in the form of a new record high close on Wall Street and firmer Asian currencies against an urge to take profits while the Hang Seng hovered near the key 11,000 level.
Some bought on the logic that an Indonesian currency board would add to the credibility of Hong Kong's pegged exchange rate system. ``It would actually be quite good for Hong Kong,'' said Richard Verin, head of equities trading at CS First Boston.
The Hang Seng closed down 66.26 points, or 0.61 percent, at 10,793.41 after hitting a high of 11,189.80 earlier.
Taiwan stocks put on healthy gains as Tuesday's rise in U.S. share prices injected some fresh impetus.
``Taiwan's investors were looking for a reason to rally their market, and Wall Street gave the reason,'' said one analyst.
The main index ended 1.70 percent, 145.76 points, higher at 8,713.42.
Malaysian shares drifted lower after brokers said attempts at a rally were dashed by a weaker ringgit.
The composite index closed 0.36 percent, or 2.70 points, lower at 739.87.
The
Tailgate thing ``It does make you kind of nervous, and when people are nervous, they sell stocks,''- the index means direction -+ if to buy, sell, close or hold, time to hold them, fold them or bet them? Hold down - maybe close them ? -
Mail in your results before 9:30 Am and win free options profits
from $ 1,000 trade :
UP with some rapid change and some NEW instability in
The real problem is Financial chaos and US profits on foreign earnings, there are two reason for a high dollar - as in bonds a flight to quality or expectations of a strong US economy with low inflation, this is a flight to quality; ( money flowing in ) both support stock prices BUT make US stocks higher in relationship to world markets, the higher dollar is a very mixed blessing:
Bridge Reports
check again! Benchmarks: Dollar 127 from 133.71 1.764 UP to 1.83 DM per $ the dollar is UP when you get more DM for a dollar or .57 down to .545 one mark cost less in US cents, French Frank over 6 per dollar $1.084 = ECU = .923 of a ECU for one US $ , dollar is UP from (.895 1.11 ) A British pound is up and costs $1.66 up from $1.63 Us dollar is down from .61 English pennies per $ to .60 % of a pound for one $
The
Dollar
17,000 NIKKEI 16600 UP from 15258
The Nikkei 225 Stock Average fell 3.37% or 515.49 yen to end at a new 1997 settlement low of 14,799.40, as fears intensified further about the possibility of more bankruptcies on the back of the ongoing credit crunch, traders said. Today's close on the Nikkei average is the lowest since July 1995.
9252 HK STOCKS low 8121.06 down from 10843.47
"What we're seeing in Seoul is straight forward market meltdown. I have no idea where it's going to stop. Thank heavens we're out," said the senior fund manager at a European bank, who asked not to be identified.
The Seoul index ended down 7.50 percent at 366.36 -- its biggest-ever fall in percentage terms -- while the Korean won slumped to 1,962 against the U.S. dollar from Monday's close of 1,715. NOW
The Chosun Ilbo newspaper quoted Kim as telling party members on Monday: "I can't sleep since I was briefed (about the situation). I am totally flabbergasted."
"
These sorts of comments are guaranteed to send a market down. If the president can't sleep at night, what should investors be doing?," the fund manager said.
Indonesian stocks jumped, .
The composite index ended 11.18 points, or 2.90 percent, higher at 397.03 points. Indonesia Jakarta Composite ^JKSE
Battered Thai stocks ended 2.67 percent lower as local investors unloaded shares on concern over the weak baht and banks that may have to recapitalize due to rising non-performing loans. Thailand SET
The composite SET index slid for the third consecutive trading day, closing 10.08 points lower at 366.87.
The Taiwan stock index ended 0.81 percent lower at 8,038.31, with traders saying sentiment was affected by the falls in Korea. Taiwan Taiwan Weighted ^TWII
The Korean won's fall is getting worse and worse. How can Taiwan, as a tough competitor, not worry?" said Michael On, managing director of Young Asset Management.
Stocks in the Philippines were down 1.67 percent with traders in Manila depressed by a further fall in the peso. NOW AT 44.5 down 25 % Philippines PSE Composite ^PSI
Malaysian shares were hit by Standard & Poor's downgrading of the country's sovereign debt rating to A from A-plus.
Although the downgrade had been expected -- and Malaysia remains an investment grade -- thin trading conditions meant the effect of sell orders was exaggerated.
The benchmark composite index was off 2.37 percent at 556.35 at the close. Malaysia KLSE Composite ^KLSE Jan 2
Singapore stocks were slightly easier, with the Straits Times index ending down 5.34 points at 1,536.31. Singapore Straits Times ^SS1
Australia All Ordinaries ^AORD
China Shanghai Composite ^SSEC 2:01AM 1171.254 to
New Zealand NZSE 40 ^NZ40C 6:38PM 2227.97 +0.77 +0.03% to
Pakistan Karachi 100 ^KSE 6:03AM 1688.20 to Jan 3
Europe from Jan 2nd
Asia less of a problem and the ECU common currency - I expect EU to go up more that US for the whole year.
Technology
= - 1.5
$IXCO NASDAQ High Technology Index
Indications leading indicator NSDQ100 CCMP Nasdaq Comb - -NASD COMBINED-COMPUTER ($IXCO) and 539.16 the
WIREDBRAIN'S PORTFOLIO User Wiredbrain Password "synergy" personal Index General communications Weighted Technology - Last Updated: Monday, January 5, 1998 7:46PM EST - All data delayed at least 20 minutes Portfolio Totals Purchase Value 1,374,850.35 Today's Change +32,033.13 Accumulated Change 343,442.15 24 % since OCT/NOV Current Value
TOTAL
=
[+ 2.5 interest rates +1.5 dollar ] = + 4 up
+ 1.5 Markets ( Asia ) + 2.5 Europe - 1.5 Tech leaders
- 1.5 MO = + 1.5 down
+ 6.5 positive above the 80 day
moving average
MICROSOFT CORPORATION 10 1/ 2 - 1 1/ 4 (.MSQMX ) CLOSED
Index Call ( close at 975 on S&P)
start
@ 935 target 975 or close enough - Index PUT ( close at
935 on S&P)
start @ 975 target at 930 or close enough
STEP 12: NEW
Global deflation - therefore are the best long buy. EC bonds will have to go up before long bond can go much higher from here. Short blue chips
BLACK Friday is POSSIBLE. All in all US shares are too high and will come down 10% from S&P500 955 or 15 % from their highs before they go up past new highs again. In fact, what are US shares and companies and what are "foreign" is not very important. International firms are global enterprises, really they are not just in theory but they really are global firms with global prices for their shares.
IMF faces critical chorus over Asia bail-out
SEE DEFLATION: How the IMF can make things worse from Soros:
SINGAPORE, Jan 14 (Reuters) -
The International Monetary Fund faces a growing chorus of criticism for its attempts to push through economic reforms in Asia in return for billions of dollars to rescue the region from financial crisis.
The following are examples over the past week of outspoken opposition and criticism:
-- Leading German central banker Helmut Hesse said on Tuesday the IMF appeared to have been misled... for a long time on the situation in
Asia. Even in its annual report for 1997 it spoke in tones of highest praise of Thailand and Korea, for example, the Bundesbank council member said.
-- A confidential report by the IMF itself criticized Indonesian President Suharto's government for failing to enact promised reforms but acknowledged that instead of restoring confidence, IMF strategy had prompted panic.
In a dispatch from Jakarta, the New York Times said the report described a key moment in Indonesia's downturn, which came in November when the IMF forced the closure of 16 insolvent banks.
IMF economists believed the step would restore confidence in the remainder of the banking sector by eliminating bad apples, but instead it sparked panic.
SHORT TERM
The Search Engine for Stocks and Funds
ACTION a day or two:
After an rise to a 69-month high of 134.40 yen, the greenback temporarily fell below 125 yen in U.S. trading.
The back side of the flight to quality: As Asia look hot the American Market is not - Global investors sell dollar assets and dollars for under priced
Asian and EU assets.
The high dollar is a mixed blessing - so are financial shifts back from US to them.
`` That's a classic reason for the long end of the (Treasury) market to perform poorly,'' because the YEN value of the US bond has decreased. As the US dollar goes up the price of US assets ( stocks and bonds ) increase, as do the prices of all exports. If you think the dollar is going up more that's OK but if you think it's overvalued ( as a result of a flight to quality ) and US Government and exporters will work to DECREASE the value of the dollar then you want to sell US assets while they are HOT. Decline in US interest rates, growth rates, rates of return ( profits ) will make US assets less attractive with the EU and other areas. As people sell dollar assets and then the dollars themselves, the dollar declines, when it declines more people sell, and sell dollars and you have a free fall - as in South East Asia, Korea and in the past in Latin America.
The lower dollar makes US exports attractive and assets cheap as they are in
Asia today. If the IMF does not completely screw it up ( by forcing a credit crunch, and requiring killing interest rates ) money flows back into the low cost, high return areas.
European activity could be restrained ahead of monetary policy meetings in France, Germany and Britain today. Germany's Bundesbank and the Bank of France are expected to keep interest rates steady. German shares headed higher and were seen building on gains as a stronger dollar and healthy cash availability defeated any gloom from continued losses on some Asian stock markets, dealers said.
Yahoo
Thursday January 8, 5:37
am Eastern Time
Indonesia's military calls on people
not to panic
JAKARTA, Jan 8 (Reuters) - Indonesia's powerful military on Thursday urged the public not to panic over the meltdown in the country's financial markets.
`` It is easy to say it, but have faith that the government is trying its best to handle the crisis,'' the official Antara news agency quoted Lieutenant General Yunus Yosfiah, the head of the socio-political affairs division of the military, as saying.
Antara said he made the comments to reporters
when asked about the Rupiah plunge against the dollar earlier on Thursday.
The rupiah fell about 19 percent on Thursday, and
was quoted at an all-time low of 10,000 to the dollar late in the afternoon.
The fall sparked panic buying of food and other
essentials in Jakarta and elsewhere in the country, as people feared a
round of The
Mibtel index was up one percent at 17,959 points.
Italian shares were bucking the trend, storming
ahead to new all-time highs after Tuesday's Epiphany market holiday.
( SELF.HTM
free standing form )
Mail in your results before 9:30 Am and win free options profits
on $ 1000.00 trades:
__ Points for foreign markets (
bookmark ) assign from - 9 to + 9
__ Points for foreign exchange ( bookmark
) assign from -3 to + 3
________ sub-total for Markets and FX - 11 to + 11
__ Points for Technology as leading indicators (
bookmark
) assign - 3 to + 3
__ Points for market momentum (
bookmark ) and news ( bookmark
) look for FOCUS - 3 to + 3
________ sub-total for Market direction and technology as leading indicator - 6 to + 6
SUB-Total for above _________ ( Markets and FX ) + ( Direction ) - 5 to + 5
______ Interest rates (
bookmark ) - 3 to + 3
TOTAL _______
Future market S&P500 _________ ( bookmark
) less premium - 7.5 = _______ from cash price (
bookmark ) = ______ from cash
Grand total ________ Index of today's market
Then cut and paste to
Send Letter to Dr. Peter Pflaum
WHAT TO WATCH FOR: Investors get their first crack at
fourth-quarter growth data and the report is likely
to be a blockbuster. Growth should be around 4%. The
consensus is, however, that things can only go downhill from here
08:33 PERSONAL SAVINGS RATE FALLS TO 3.8% IN 1997. 08:32 REAL FEDERAL SPENDING DOWN 7 YEARS IN A ROW. 08:32 DEFENSE SPENDING +2.9% IN Q4. 08:32 NONDEFENSE GVT SPENDING -3.8% IN Q4. 08:32 FIXED INVESTMENT +9.7% IN 1997, MOST SINCE 1984. 08:32 BOOM IN BUSINESS INVESTMENT STOPS IN Q4. 08:31 DOMESTIC PURCHASES +3.1% IN Q4. 08:31 CHANGE IN INVENTORIES ADDED 0.7% IN Q4. 08:31 GVT SPENDING +1.6% IN Q4. 08:31 EXPORTS +11.3% IN Q4; IMPORTS +1.3%. 08:31 FIXED INVESTMENT -3.6% IN Q4, FIRST DROP SINCE 1991. 08:31 CONSUMPTION SPENDING +3.2% IN Q4. 08:30 CONSUMPTION, EXPORTS, INVENTORIES LED Q4 GROWTH. 08:30 GDP PRICE DEFLATOR +2% IN 1997, LOWEST SINCE 1965. 08:30 GDP PRICE DEFLATOR +1.5% IN Q4. 08:30 US GDP UP 3.8% IN 1997, HIGHEST SINCE 1988. 08:39 US MARCH FUTURE SHRUGS OFF EMPLOYMENT NEWS, DOWN 8/32 TO 120+19.
08:32 AVERAGE HOURS +0.2 HOURS TO 34.8 HOURS. 08:32 MANUFACTURING HOURS FALL 0.1 HOURS TO 42.1 HOURS. 08:32 SERVICES JOBS +89,000. 08:32 RETAIL JOBS +24,000. 08:31 SERVICE-PRODUCING JOBS +223,000. 08:31 GOODS-PRODUCING JOBS +135,000. 08:30 AVERAGE HOURLY EARNINGS +4 CENTS TO $12.51. 08:30 CONSTRUCTION JOBS +92,000 ON WARM WEATHER. 08:30 PAYROLL GROWTH EXCEEDS 240,000 ESTIMATE. 08:30 PAYROLLS GROW 358,000 IN JAN; JOBLESS RATE 4.7%. 08:03 GERMANY'S DAX CLOSES DOWN 1.15 PERCENT. 07:50 JAPAN ECON. CONDITIONS INCREASINGLY SEVERE: MITI.
The market is over priced, so is the dollar.
The stock exchange does not look forward but backwards - Prices are based on 10 to 14% earning growth that supports a P/E over 22 - the reality is more like 5 % growth in profits from growth rates of GDP at 2.5 % down from 3.8% and productivity gains which gives a P/E of 19 - 10 % below the 80 day average of S&P500 955 or - 90 points to 865 or DJIA about 7,000
A 4+ % growth rate = $ 400 billion of new activity per year = at one job for each $100,000 of economic growth = 350,000 new jobs a month or 4.2 million a year = clearly more than the labor supply can provide.
The new income creates demand for houses, cars, and other items with high marginal rates to income ( doesn't effect peanut butter much ) which create more income ( multiplied by 2.5 )
There will come a time soon when the EU is up and US is down as we exchange growth rates - US down from 3.2 % to 2.2 % and theirs up from 1.5 % to 3.2 % as communications and other technologies take off - P/E in Asia is over 50, Interests over 10 % real discounting currency risks, growth rates down from 7 % to 1 % and won't be back up for awhile ( a year or so), China is still growing 7 %, but with a very weak financial sector. In EU P/E are under 15, in US over 25- but these high P/E are not based on REAL future earning growth of 5 % down from 14 % - we have a small speculative bubble that will burst - Who knows when ?
The President really should not mess around... Things are NOT as they appear.
"
The potential for economic declines in Asia is worse than people think," Jones said, noting the effects would not be seen until the second half of the year. "What it will do is have a direct affect on exports and there will be a flood of Asian goods coming into the U.S. at lower prices... That will weaken U.S. business's pricing power and squeeze profit margins significantly."
Consequently, as stock prices erode, wealth contracts and consumer spending slows in response, leading to bond yields of 5.5 percent and lower.
"You have got a standoff -- weaker earnings and lower (bond) yields," Jones said. "But the earnings effect will override the interest rate effect."
Asia's impact has not been lost on Alan Greenspan.
The Fed chief last week told the Senate Budget Committee that the extent will not be known until the spring and the turmoil in Asia has given the Fed some breathing room.
The U.S. economy has "as yet experienced only the peripheral winds of the Asian crisis," Greenspan said.
Economists said the impact should last well into 1999, since virtually the only way Asia can recover is to go into recession to reverse its large current account deficits.
02/03 04:55 FEATURE-Turmoil to cut 0.5 pct or more from US GDP
By Steven Scheer
NEW YORK, Feb 3 (Reuters) - Economic troubles in Asia are expected to curb U.S. growth in 1998, but not too substantially, as any negative impact should be partially offset by effects from lower interest rates.
But analysts caution that despite various forecasts of 0.5 to 1.0 point shaved from U.S. gross domestic product (GDP) as a result of the so-called Asian-flu, it is still early and the full impact will not be known until later in the year.
Some signs of slowing have started to emerge.
The National Association of Purchasing Management (NAPM) on Monday reported its third straight drop in its manufacturing index in January.
The new orders index rose, suggesting solid domestic orders.
The export component fell to its lowest level in two years and prices measure dropped three points, indicating Asia's impact has begun to be felt.
Economists said exports should slow considerably more while inflation will remain tame due to imports of cheaper Asian goods
Wall Street has been lifted by a strong batch of earnings and the absence of further shocks out of Washington and Asia.
--------------------------------------------------------------- ``
The background was positive today but the market is finding progress hard,'' one dealer said.
01/30 08:42
INSTANT VIEW-US stocks to open up after GDP leap
NEW YORK, Jan 30 (Reuters) - U.S. stocks were expected to open higher after a stronger-than-expected 4.3 percent hike in real gross domestic product growth in the fourth quarter.
Wall Street economists had expected a 3.7 percent hike.
The following are analysts' comments:
ROY BLUMBERG, CHIEF INVESTMENT STRATEGIST, JOSEPHTHAL LYON:
"Obviously a very strong number, but with not much inflation implications, so it remains the best of all worlds. I think it will have a muted positive effect on stock prices.
The problem is that people are not that focused on old numbers here but on the new numbers because of what's happening in Asia."
A lower-than-expected price deflator index countered the inflationary pressures of the strong GDP, Blumberg said.
JOSEPH BARTHEL, CHIEF INVESTMENT STRATEGIST AT FAHNESTOCK & CO:"It's pretty much old news. People are looking forward to what the GDP might be with this Asian crisis.
The key thing is the FTSE100 reaching new highs. When the Footsie does this, we go to new highs -- there happens to be a good lockstep relationship. So right now, short-term, the market is a little overbought, and the power move is behind us, but I do think we will try to roll a little bit higher over the next one to two weeks."
The long bond and S&P stock futures wobbled on the GDP news, but then recovered their poise.
The long bond was up 10/32 to yield 5.81 percent.
Tailgate does not seem to interest the market at all UP Tuesday and Wednesday
Clinton Scandal May Trigger Dow Pullback
The earnings reporting season will move into top gear:
While many companies are beating
estimates by a penny or two, they are
warning of slower revenue growth in the months ahead...
longer term: a week
or so, ( the week is about over ) +
1.5
interest rates down ( bonds up) on flight to quality and lower US growth rate. Range from 5.9 +- .2 price from 102 to 105 - above 5.80 negative below 5.70 positive. Japan sells bonds;
Check
currencies + 1
.5
strong dollar has mixed economic
benefits - but a dollar going up helps the market and one going down hurts
that market -
on dollar was WAY up -but off highs
FX problems continue with Asia's currencies - dollar up is a mixed blessing.........Yen Bench mark 129 + - 2, DM ( 1.83 above ) 1.765 , above ECU at .9228 US cents = $1.08 is very positiveabove .90 1.10 benchmark
125.25
- DM .547 1.83 Global chaos - Indonesian Rupiah @12,500
down 70 % in the last few monthsDollar down from rally Yen at
Wiredbrain
explains
MARKET HEADLINES
There are more dogs than winners at the moment. Good looks
is having more bonds and cash and less stock market exposure. The
January effect could help us out temporarily -- it looks like a lot of
people sold for "window dressing" and tax reasons and are hoping to pick
up those stocks again in the next year,"+ 2
.00 on Europe
+ 1.5 on Asia
Europe
pays attention to problems in Japan - - ( Europe has only 7 % trade
with Asia vs. 30 % in US ) the tone of US markets are down from an over
bought condition but can have short term rallies on lower interest rates
and strong dollar, Europe's direction is UP on fundamentals - Asia is on
the long way to recovery both currencies and stock markets."Window dressing"
is dumping the "dogs" and buying the winners - in order for fund managers
to look good. = + 3.50
YAHOO BIZ NEWS HK stocks 8720.00 +598.94 +7.38%
EU forecast higher growth rates
) - 4350 off 5 months high German shares bow to consolidate, record high eyed
MAD:^SMSI) - 660.07 all time high
MIL:^CMMG) 17762 NEW HIGHS
EOE:^AEX) 939.11
All over their Benchmarks South Korea above 500, Japan above 16,000, Hong Kong over 10,000, London over 5,200, Paris over 3000, Frankfort over 4,200
Europe UP, Eastern Europe and Latin America are very weak, China next, Oil at 16.82
CPI steady to down INSIGHT
-
The tech stocks mark the way by being
up or down more than the market -(+ 1.5 Asia +2.5 Europe add Eastern Europe and
Latin America ) = + 3.0
on major markets, ( out of 8 ) +[ + 1.5 FX
stability in Asia & + 2.5 ( $ DOWN ) on currencies] = +
4.0 ( out of three
)
+ 7.0
on foreign markets and FX ,
MO plus charts technical
= -
( out of four ) plus 1.5
on technology UP and
DOWN more than the market as a whole.SOX and PSE up more than market,
NSDQ100 FUTURES CASH INDEX
(Nasdaq:^NDX)
- On the charts near top of up wave
Fundamentals
are down - 1.5
(
+1.5
on
interest rates UP ( out of three) =
TOTAL =+ 6.0
Copies of the SYNERGY JOURNALS sent by request: wiredbrain@earthlink.net Peter E. Pflaum Ph.D. , Headmaster GLOBAL_VILLAGE_SCHOOLHOUSE 225 Robinson Road, New Smyrna Beach, FL 32169 (904) 428+7924
