Derivati USA: CME-CBOT-NYMEX-ICE Tbond,Tnote,Bund&CO-giu/lug2006: fuga dai Bonds (vm18) (2 lettori)
- Creatore Discussione f4f
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The Implications of Stagflation
Inflation up, economic activity down. It's likely that these five words, which describe stagflation, sum up the worst fears of many investors lately. Even those who don't remember the Seventies have heard the stories of just how bad a time it was. Whenever anyone mentions the word stagflation, the Seventies come to mind so quickly that the two terms can almost be used interchangeably. Could the coming years also be forever marred in our memories if stagflation strikes again? We decided to face our fears and see how the market acts during periods of stagflation, if only to understand what we're up against.
Our first step was to define stagflation, but unlike recessions (negative GDP growth) and bull and bear markets (20%+ moves up or down from a trough or a peak), we found no specific definition of stagflation that is generally accepted. Most of the definitions we came across were subjective in nature and described the phenomenon as a period of high inflation and slow economic growth. In the end, we settled on any period of two quarters or more in which y/y CPI was above the overall average since 1948 and y/y GDP growth was below its overall average since 1948. We realize that some may say this approach is too simplistic, but its a starting point at least.
After combing through the data, we found five interesting periods that fit this criteria. First, three of the periods either began or ended in the Seventies, so the fact that so many of us associate stagflation with that decade isn't surprising (and it also means our definition of stagflation is somewhat on the mark). Second, periods of stagflation aren't short. There was no period that lasted only two quarters. In fact, the shortest period was four quarters while the average was eight.
Also noteworthy is the fact that the first occurrence of stagflation didn't occur until 1969 -- over 20 years into our sample series. We also haven't had a period of stagflation (according to our definition) since 1991, which could be a reason why so many of us are fearing it now; If the market can be 'due' for a 10% correction, is the economy 'due' for stagflation?
Many investors believe that the Federal Reserve has refined its policies over time to the point where it can now guide the economy away from these pitfalls. But let's not forget that the economy went through a similar stagflation-free stretch in the Fifties and Sixties, and no one refers to William McChesney Martin (Fed chairman from 1951 to 1970) as a Maestro because of it. We would guess that the truth of the matter is that the economy is a bigger ship than any one individual or government entity can steer.
Now let's get on to what we really care about. How do stocks perform during stagflationary periods? The chart below highlights the S&P 500 performance during each of the periods we identified, as well as the average S&P 500 performance of the five periods. Overall, the returns are mixed, but the average return is roughly 6%.
We can also divide the stagflationary period in half (although keep in mind that in the midst of a stagflationary period we would not be able to identify its halfway point) . As the chart below details, stock performance during the first half of a stagflationary period is generally negative (-11%). Returns were only positive in one of the five periods (1979 - 1981). Performance in the second half of a stagflationary period is positive, however, as the S&P has risen during each of the five periods for an average gain of 21%. (Note all returns in this example are unadjusted for inflation).
Inflation up, economic activity down. It's likely that these five words, which describe stagflation, sum up the worst fears of many investors lately. Even those who don't remember the Seventies have heard the stories of just how bad a time it was. Whenever anyone mentions the word stagflation, the Seventies come to mind so quickly that the two terms can almost be used interchangeably. Could the coming years also be forever marred in our memories if stagflation strikes again? We decided to face our fears and see how the market acts during periods of stagflation, if only to understand what we're up against.
Our first step was to define stagflation, but unlike recessions (negative GDP growth) and bull and bear markets (20%+ moves up or down from a trough or a peak), we found no specific definition of stagflation that is generally accepted. Most of the definitions we came across were subjective in nature and described the phenomenon as a period of high inflation and slow economic growth. In the end, we settled on any period of two quarters or more in which y/y CPI was above the overall average since 1948 and y/y GDP growth was below its overall average since 1948. We realize that some may say this approach is too simplistic, but its a starting point at least.
After combing through the data, we found five interesting periods that fit this criteria. First, three of the periods either began or ended in the Seventies, so the fact that so many of us associate stagflation with that decade isn't surprising (and it also means our definition of stagflation is somewhat on the mark). Second, periods of stagflation aren't short. There was no period that lasted only two quarters. In fact, the shortest period was four quarters while the average was eight.
Also noteworthy is the fact that the first occurrence of stagflation didn't occur until 1969 -- over 20 years into our sample series. We also haven't had a period of stagflation (according to our definition) since 1991, which could be a reason why so many of us are fearing it now; If the market can be 'due' for a 10% correction, is the economy 'due' for stagflation?
Many investors believe that the Federal Reserve has refined its policies over time to the point where it can now guide the economy away from these pitfalls. But let's not forget that the economy went through a similar stagflation-free stretch in the Fifties and Sixties, and no one refers to William McChesney Martin (Fed chairman from 1951 to 1970) as a Maestro because of it. We would guess that the truth of the matter is that the economy is a bigger ship than any one individual or government entity can steer.
Now let's get on to what we really care about. How do stocks perform during stagflationary periods? The chart below highlights the S&P 500 performance during each of the periods we identified, as well as the average S&P 500 performance of the five periods. Overall, the returns are mixed, but the average return is roughly 6%.
We can also divide the stagflationary period in half (although keep in mind that in the midst of a stagflationary period we would not be able to identify its halfway point) . As the chart below details, stock performance during the first half of a stagflationary period is generally negative (-11%). Returns were only positive in one of the five periods (1979 - 1981). Performance in the second half of a stagflationary period is positive, however, as the S&P has risen during each of the five periods for an average gain of 21%. (Note all returns in this example are unadjusted for inflation).
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Signs of the Bear: Ned Davis
in Data Analysis | Investing | Markets | Psychology/Sentiment | Technical Analysis
I pulled a few key lines from an interview in Barrons last week with Ned Davis, a technician and quant wonk whose institutional service is top notch.
Here's the relevant excerpt:
Barron's: Is this simply a "stiff correction," as you have said, or a new bear market?
Davis: I'm concentrating on the downside risk. We are in a pretty defensive position, and in our investment strategy we are underweight stocks at 45%, market weight bonds at 35% and overweight cash. In my hotline trading strategy, I have a market-neutral stance currently, which I define as about as many shorts as longs.
How related is this market performance to the second year of the four-year cycle?
In the case of the four-year cycle, we plotted it against stimulus from the Federal Reserve and the federal government budget deficits and money-supply growth, and we found they correspond very well. Problems in a mid-term election year are generally because the Fed is tightening, and so the fundamentals fit with the cycle. As you get closer to the election, you know, there is uncertainty that is going to weigh on the market. As we get closer to October, it will become clearer. This is going to be a particularly bitter election with a lot of divisiveness. The country is as polarized as I have ever seen it. One of the unusual aspects of this period is how quiet labor has been. Job growth has been okay, but wage rates have not been good and the spread between the rich and the poor has gotten bigger and bigger.
If rates aren't too high, what's the problem?
When you look at the historical averages, they're not. But when you look at it versus $42 trillion in debt and wonder how we are going to service all that debt, then you get a little different feeling about it. In the last year the federal government is paying 21% more in net interest then it did a year ago. They have to keep rolling it over and are running deficits on top of that. That tends to be more deflationary than not.
How much downside risk to the market could there be if the economy stays strong?
There have been a lot of bear markets when earnings kept rising. In the 1973-74 bear market, earnings rose the entire period. A lot of that was inflationary, but a lot of the earnings today are coming from energy and other sectors that are inflationary. In 1946 we had a big crash and a bear market and yet earnings exploded. In 1962 we had a crash while earnings exploded. In 1987 we had a crash and earnings did very well. Just because we don't see a recession on the horizon doesn't mean there is not risk in the stock market.
What about profit margins?
High profit margins tend not to be bullish. They tend not to be bearish, though. High profit margins tend to translate into a flat market.
What's your view on the dollar here?
My view on the dollar is that it is structurally very, very weak. Even though currency depreciation really does not solve the trade-deficit problem, it has to be part of the solution. There will be a tendency for the dollar to go down. The problem is that it is in nobody's interest for the dollar to go down. It is not in the Fed's interest because of inflation. It is not in Europe's or Japan's interest because those economies are growing more slowly than ours. All the central banks in the world maybe want the dollar to go down, but only very slightly and very slowly. It will be a controlled slide. Right now, our economy is running particularly strong. The Fed is still tightening. Our rates at 5¼% are way above global rates at about 2½%. The dollar has a lot going for it, and it has been rallying a little bit. But the trend is down.
Is it for that reason you have been bullish on gold?
Yes. When you consider alternatives to the dollar, one of them is gold. Gold is such a small market, it doesn't take much to push it up. I'm pretty bullish on gold even after its unbelievable run. We've had a big correction here after it got beyond its fair value of about $540 an ounce. Being bullish on bonds and gold is a strange combination because one is deflationary and one is inflationary, but I think gold is acting now as a currency replacement and, in that light, it looks pretty bullish.
Good stuff from Barron's.
Source:
Signs of the Bear
Interview with Ned Davis, President and senior investment strategist, Ned Davis Research
SANDRA WARD
Monday, July 3, 2006
http://online.barrons.com/article/SB115170849821395833.html
in Data Analysis | Investing | Markets | Psychology/Sentiment | Technical Analysis
I pulled a few key lines from an interview in Barrons last week with Ned Davis, a technician and quant wonk whose institutional service is top notch.
Here's the relevant excerpt:
Barron's: Is this simply a "stiff correction," as you have said, or a new bear market?
Davis: I'm concentrating on the downside risk. We are in a pretty defensive position, and in our investment strategy we are underweight stocks at 45%, market weight bonds at 35% and overweight cash. In my hotline trading strategy, I have a market-neutral stance currently, which I define as about as many shorts as longs.
How related is this market performance to the second year of the four-year cycle?
In the case of the four-year cycle, we plotted it against stimulus from the Federal Reserve and the federal government budget deficits and money-supply growth, and we found they correspond very well. Problems in a mid-term election year are generally because the Fed is tightening, and so the fundamentals fit with the cycle. As you get closer to the election, you know, there is uncertainty that is going to weigh on the market. As we get closer to October, it will become clearer. This is going to be a particularly bitter election with a lot of divisiveness. The country is as polarized as I have ever seen it. One of the unusual aspects of this period is how quiet labor has been. Job growth has been okay, but wage rates have not been good and the spread between the rich and the poor has gotten bigger and bigger.
If rates aren't too high, what's the problem?
When you look at the historical averages, they're not. But when you look at it versus $42 trillion in debt and wonder how we are going to service all that debt, then you get a little different feeling about it. In the last year the federal government is paying 21% more in net interest then it did a year ago. They have to keep rolling it over and are running deficits on top of that. That tends to be more deflationary than not.
How much downside risk to the market could there be if the economy stays strong?
There have been a lot of bear markets when earnings kept rising. In the 1973-74 bear market, earnings rose the entire period. A lot of that was inflationary, but a lot of the earnings today are coming from energy and other sectors that are inflationary. In 1946 we had a big crash and a bear market and yet earnings exploded. In 1962 we had a crash while earnings exploded. In 1987 we had a crash and earnings did very well. Just because we don't see a recession on the horizon doesn't mean there is not risk in the stock market.
What about profit margins?
High profit margins tend not to be bullish. They tend not to be bearish, though. High profit margins tend to translate into a flat market.
What's your view on the dollar here?
My view on the dollar is that it is structurally very, very weak. Even though currency depreciation really does not solve the trade-deficit problem, it has to be part of the solution. There will be a tendency for the dollar to go down. The problem is that it is in nobody's interest for the dollar to go down. It is not in the Fed's interest because of inflation. It is not in Europe's or Japan's interest because those economies are growing more slowly than ours. All the central banks in the world maybe want the dollar to go down, but only very slightly and very slowly. It will be a controlled slide. Right now, our economy is running particularly strong. The Fed is still tightening. Our rates at 5¼% are way above global rates at about 2½%. The dollar has a lot going for it, and it has been rallying a little bit. But the trend is down.
Is it for that reason you have been bullish on gold?
Yes. When you consider alternatives to the dollar, one of them is gold. Gold is such a small market, it doesn't take much to push it up. I'm pretty bullish on gold even after its unbelievable run. We've had a big correction here after it got beyond its fair value of about $540 an ounce. Being bullish on bonds and gold is a strange combination because one is deflationary and one is inflationary, but I think gold is acting now as a currency replacement and, in that light, it looks pretty bullish.
Good stuff from Barron's.
Source:
Signs of the Bear
Interview with Ned Davis, President and senior investment strategist, Ned Davis Research
SANDRA WARD
Monday, July 3, 2006
http://online.barrons.com/article/SB115170849821395833.html
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DAILY MARKET RECAP - 07/07/2006
Updated Each Business Day at Approximately 4:30 pm ET
The major indices loose ground during the final session of the holiday shortened week. The major indices were also lower for the week. The Dow was off a half of percentage point, the NASDAQ fell 1.9 percent and the S&P 500 lost 0.4 percent for the week. Oil prices were a major stumbling block for equity markets this week as prices rose to a new all-time high of $75.35 per barrel. A weaker than expected jobs report for June caused bond investors to price in a lesser likelihood that the Fed would continue to raise rates. However, equity investors worried that a larger than expected increase in hourly earnings would be inflationary and would cause the Fed to continue to raise rates. Meanwhile, a profit warning from Dow heavyweight 3M caused investors to fear that the economy was slowing too quickly. Tech companies Advanced Micro Devices and Business Objects also issued warnings. Coffee chain Starbucks reported disappointing June same store sales results.
The Dow retreated 134 points to close at 11090. 3M was the primary culprit behind the Dow's heavy losses. 3M dropped $7.29 to $74.10 and accounted for nearly two thirds of the Dow's losses. The NASDAQ unwound 25 points to 2130. The S&P 500 receded 8 points to 1265. The Dow Utility Index added 2 points to 416 while the Transports dropped 42 points to 4843. The Russell 2000 gave up 11 points to 709.
Trading volume was a relatively light 1.6 billion on New York Stock Exchange and 1.3 billion on the NASDAQ. There were 5 stocks lower for every 3 higher on the New York Stock Exchange. Losers paced winners by more than a 2 to 1 margin on the NASDAQ. Gold surged $5.50 to $631.50 per ounce. Oil eased $1.05 to $74.09 per barrel. The dollar again moved lower versus its major trading partners.
US treasury securities moved higher among mid and long-dated issues but were lower at the shorter end of the curve. Sample closing yields are as follows: 90-day 4.87%, 5-year note 5.09%, 10-year note 5.13%, 30-year note 5.17%. Next week investors can look forward to May's wholesale inventories, consumer credit, trade gap and business inventories as well as June's treasury budget, import and export prices and retail sales. July's consumer sentiment is also on tap. Have a great weekend! Dendra Lambert
Updated Each Business Day at Approximately 4:30 pm ET
The major indices loose ground during the final session of the holiday shortened week. The major indices were also lower for the week. The Dow was off a half of percentage point, the NASDAQ fell 1.9 percent and the S&P 500 lost 0.4 percent for the week. Oil prices were a major stumbling block for equity markets this week as prices rose to a new all-time high of $75.35 per barrel. A weaker than expected jobs report for June caused bond investors to price in a lesser likelihood that the Fed would continue to raise rates. However, equity investors worried that a larger than expected increase in hourly earnings would be inflationary and would cause the Fed to continue to raise rates. Meanwhile, a profit warning from Dow heavyweight 3M caused investors to fear that the economy was slowing too quickly. Tech companies Advanced Micro Devices and Business Objects also issued warnings. Coffee chain Starbucks reported disappointing June same store sales results.
The Dow retreated 134 points to close at 11090. 3M was the primary culprit behind the Dow's heavy losses. 3M dropped $7.29 to $74.10 and accounted for nearly two thirds of the Dow's losses. The NASDAQ unwound 25 points to 2130. The S&P 500 receded 8 points to 1265. The Dow Utility Index added 2 points to 416 while the Transports dropped 42 points to 4843. The Russell 2000 gave up 11 points to 709.
Trading volume was a relatively light 1.6 billion on New York Stock Exchange and 1.3 billion on the NASDAQ. There were 5 stocks lower for every 3 higher on the New York Stock Exchange. Losers paced winners by more than a 2 to 1 margin on the NASDAQ. Gold surged $5.50 to $631.50 per ounce. Oil eased $1.05 to $74.09 per barrel. The dollar again moved lower versus its major trading partners.
US treasury securities moved higher among mid and long-dated issues but were lower at the shorter end of the curve. Sample closing yields are as follows: 90-day 4.87%, 5-year note 5.09%, 10-year note 5.13%, 30-year note 5.17%. Next week investors can look forward to May's wholesale inventories, consumer credit, trade gap and business inventories as well as June's treasury budget, import and export prices and retail sales. July's consumer sentiment is also on tap. Have a great weekend! Dendra Lambert
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Wall St Week Ahead: Earnings en route, like it or not
Fri Jul 7, 2006 6:16pm ET
Jennifer Coogan
NEW YORK, July 7 (Reuters) - Stock investors will take a break from parsing Fed chatter and prognosticating interest-rate moves next week, turning their attention instead to the nitty gritty of corporate earnings on Monday when Alcoa Inc. (AA.N: Quote, Profile, Research) kicks off the earnings season.
Hopes are high that another solid quarter of earnings growth will give stocks a reason to bounce back after uncertainty about rates and the economy sent the market on a six-week tumble beginning in mid-May.
But a profit warning from Dow component 3M Co. (MMM.N: Quote, Profile, Research) on Friday put a damper on the earnings optimism. New York Stock Exchange specialist LaBranche & Co. (LAB.N: Quote, Profile, Research) and power management company O2Micro International Ltd. (OIIM.O: Quote, Profile, Research) both warned of second-quarter losses late on Thursday.
"Earnings growth is going to slow," said Rick Campagna, portfolio manager at Provident Investment Council in Pasadena, California, who added that the latest corporate and economic news was "reinforcing that. When earnings get into full swing, it could get pretty ugly. The answer is to sell on the strength."
Results from Dow component Alcoa, the world's largest aluminum producer, on Monday will be followed by earnings from the Pepsi Bottling Group Inc. (PBG.N: Quote, Profile, Research) on Tuesday, while quarterly scorecards from hotel chain Marriott International Inc. (MAR.N: Quote, Profile, Research) and food and beverage maker PepsiCo Inc. (PEP.N: Quote, Profile, Research) will be released on Thursday.
Earnings from industrial conglomerate General Electric Co. (GE.N: Quote, Profile, Research), another Dow component, will be reported on Friday.
"GE and Pepsico will probably be the most closely watched, in addition to Alcoa, as they are perceived to be market trendsetters." said Fred Dickson, market strategist and director of retail research at D.A. Davidson & Co. in Lake Oswego, Oregon.
Alcoa's earnings will be released after the closing bell on Monday.
With Pepsico, we'll get a gauge of consumer spending," Dickson said. "I'll be looking at how their Frito-Lay division is doing. We'll see if people took time to hop out of their cars to buy the chips and other goodies, or if they felt constrained by the shock factor at the pump."
STILL A CHANCE OF DOUBLE-DIGIT GROWTH
Newspaper publishers Gannett Co. Inc. (GCI.N: Quote, Profile, Research) and Tribune Co. (TRB.N: Quote, Profile, Research) report earnings on Wednesday and Thursday, respectively.
In the financial sector, commercial banks M&T Bank Corp. (MTB.N: Quote, Profile, Research) and Regions Financial Corp. (RF.N: Quote, Profile, Research) are set to announce quarterly results on Wednesday and Friday, respectively.
Earnings are forecast to rise 9.7 percent in the second quarter, according to a poll by Reuters Estimates. The forecast includes the actual results of the nearly 7 percent of S&P 500 companies that have already released their earnings. Once all companies have reported, growth should reach 12 percent, which would represent the 16th straight quarter of double-digit gains.
"One thing we need to realize is that earnings are now at an all-time record relative to GDP," said Gary Shilling, president of A. Gary Shilling & Co., an investment research firm in Springfield, New Jersey. "What do you do for an encore?"
On Friday, the Dow Jones industrial average <.DJI> slid 134.63 points, or 1.20 percent, to end at 11,090.67. The Standard & Poor's 500 Index <.SPX> fell 8.60 points, or 0.67 percent, to finish at 1,265.48. The Nasdaq Composite Index <.IXIC> dropped 25.03 points, or 1.16 percent, to close at 2,130.06.
For the week, the Dow average fell 0.53 percent, while the S&P 500 shed 0.37 percent, and the Nasdaq lost 1.94 percent.
SHOPPERS IN THE SPOTLIGHT
While earnings will take center stage, economic indicators may also steer the market somewhat. With weekly chain-store sales and consumer confidence on Tuesday as well as retail sales and consumer sentiment on Friday, investors will be able to take the pulse of U.S. shoppers.
Import and export prices, set for release on Friday morning, will shed some light on the pace of inflation.
The June nonfarm payroll report showed average hourly earnings rose and stirred worries about a pickup in inflation, while fewer-than-expected jobs were created last month. The softer jobs growth raised concerns about an economic slowdown.
Oil prices also will remain on investors' minds, after U.S. crude futures for August delivery <CLQ6> hit a record price of $75.78 in overnight electronic trading this week.
"We're going to see heavier activity next week," Dickson said. "This week was a semi-vacation week for Wall Street," he added, referring to the financial markets' closure on Tuesday, July 4th, for the U.S. Independence Day holiday.
The conflicting signals from the June jobs report threw Wall Street a curve ball at the end of a holiday-shortened week, he noted.
"Wall Street also will be bracing for some more earnings warnings, comparable to what we got from 3M." (Wall St Week Ahead runs weekly. Questions or comments on this column can be e-mailed to: jennifer.coogan(at)reuters.com) (Additional reporting by Caroline Valetkevitch)
Fri Jul 7, 2006 6:16pm ET
Jennifer Coogan
NEW YORK, July 7 (Reuters) - Stock investors will take a break from parsing Fed chatter and prognosticating interest-rate moves next week, turning their attention instead to the nitty gritty of corporate earnings on Monday when Alcoa Inc. (AA.N: Quote, Profile, Research) kicks off the earnings season.
Hopes are high that another solid quarter of earnings growth will give stocks a reason to bounce back after uncertainty about rates and the economy sent the market on a six-week tumble beginning in mid-May.
But a profit warning from Dow component 3M Co. (MMM.N: Quote, Profile, Research) on Friday put a damper on the earnings optimism. New York Stock Exchange specialist LaBranche & Co. (LAB.N: Quote, Profile, Research) and power management company O2Micro International Ltd. (OIIM.O: Quote, Profile, Research) both warned of second-quarter losses late on Thursday.
"Earnings growth is going to slow," said Rick Campagna, portfolio manager at Provident Investment Council in Pasadena, California, who added that the latest corporate and economic news was "reinforcing that. When earnings get into full swing, it could get pretty ugly. The answer is to sell on the strength."
Results from Dow component Alcoa, the world's largest aluminum producer, on Monday will be followed by earnings from the Pepsi Bottling Group Inc. (PBG.N: Quote, Profile, Research) on Tuesday, while quarterly scorecards from hotel chain Marriott International Inc. (MAR.N: Quote, Profile, Research) and food and beverage maker PepsiCo Inc. (PEP.N: Quote, Profile, Research) will be released on Thursday.
Earnings from industrial conglomerate General Electric Co. (GE.N: Quote, Profile, Research), another Dow component, will be reported on Friday.
"GE and Pepsico will probably be the most closely watched, in addition to Alcoa, as they are perceived to be market trendsetters." said Fred Dickson, market strategist and director of retail research at D.A. Davidson & Co. in Lake Oswego, Oregon.
Alcoa's earnings will be released after the closing bell on Monday.
With Pepsico, we'll get a gauge of consumer spending," Dickson said. "I'll be looking at how their Frito-Lay division is doing. We'll see if people took time to hop out of their cars to buy the chips and other goodies, or if they felt constrained by the shock factor at the pump."
STILL A CHANCE OF DOUBLE-DIGIT GROWTH
Newspaper publishers Gannett Co. Inc. (GCI.N: Quote, Profile, Research) and Tribune Co. (TRB.N: Quote, Profile, Research) report earnings on Wednesday and Thursday, respectively.
In the financial sector, commercial banks M&T Bank Corp. (MTB.N: Quote, Profile, Research) and Regions Financial Corp. (RF.N: Quote, Profile, Research) are set to announce quarterly results on Wednesday and Friday, respectively.
Earnings are forecast to rise 9.7 percent in the second quarter, according to a poll by Reuters Estimates. The forecast includes the actual results of the nearly 7 percent of S&P 500 companies that have already released their earnings. Once all companies have reported, growth should reach 12 percent, which would represent the 16th straight quarter of double-digit gains.
"One thing we need to realize is that earnings are now at an all-time record relative to GDP," said Gary Shilling, president of A. Gary Shilling & Co., an investment research firm in Springfield, New Jersey. "What do you do for an encore?"
On Friday, the Dow Jones industrial average <.DJI> slid 134.63 points, or 1.20 percent, to end at 11,090.67. The Standard & Poor's 500 Index <.SPX> fell 8.60 points, or 0.67 percent, to finish at 1,265.48. The Nasdaq Composite Index <.IXIC> dropped 25.03 points, or 1.16 percent, to close at 2,130.06.
For the week, the Dow average fell 0.53 percent, while the S&P 500 shed 0.37 percent, and the Nasdaq lost 1.94 percent.
SHOPPERS IN THE SPOTLIGHT
While earnings will take center stage, economic indicators may also steer the market somewhat. With weekly chain-store sales and consumer confidence on Tuesday as well as retail sales and consumer sentiment on Friday, investors will be able to take the pulse of U.S. shoppers.
Import and export prices, set for release on Friday morning, will shed some light on the pace of inflation.
The June nonfarm payroll report showed average hourly earnings rose and stirred worries about a pickup in inflation, while fewer-than-expected jobs were created last month. The softer jobs growth raised concerns about an economic slowdown.
Oil prices also will remain on investors' minds, after U.S. crude futures for August delivery <CLQ6> hit a record price of $75.78 in overnight electronic trading this week.
"We're going to see heavier activity next week," Dickson said. "This week was a semi-vacation week for Wall Street," he added, referring to the financial markets' closure on Tuesday, July 4th, for the U.S. Independence Day holiday.
The conflicting signals from the June jobs report threw Wall Street a curve ball at the end of a holiday-shortened week, he noted.
"Wall Street also will be bracing for some more earnings warnings, comparable to what we got from 3M." (Wall St Week Ahead runs weekly. Questions or comments on this column can be e-mailed to: jennifer.coogan(at)reuters.com) (Additional reporting by Caroline Valetkevitch)
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IMM speculators raise net euro long positions-CFTC
Fri Jul 7, 2006 4:20pm ET
NEW YORK, July 7 (Reuters) - Currency speculators in International Monetary Market futures increased their long euro positions for the period ending July 3, according to data released on Friday.
Net long euro positions rose further to 68,545 contracts, up from last week's 64,670 contracts, data from the Commodity Futures Trading Commission showed. Being "long" a currency is effectively a bet it will strengthen, while being "short" is a bet it will weaken.
David Powell, currency strategist at IDEAglobal in New York, said he expects euro long positions to increase further next week in the wake of hawkish comments on Thursday by European Central bank President Jean-Claude Trichet. Friday's CFTC data did not include Thursday's ECB comments.
Trichet's remarks suggested there would more interest rate increases in the euro zone due to rising inflationary pressures.
Speculative trading accounts in IMM futures also switched to a net short dollar position against six major currencies to around 25,100 contracts, from a net long of about 11,900 the previous week, according to estimates from IDEAglobal. These six major currencies are the euro, yen, sterling, Swiss franc, and the Canadian and Australian dollars.
The increase in short dollars reflected uncertainty about the future of U.S. interest rates, analysts said. Last week, the Federal Reserve lifted the overnight federal funds rate to 5.25 percent as expected but gave out a more dovish statement. The Fed said slower growth should keep price pressures in check, prompting traders to lower the chances of a Fed hike in August.
On Friday, prospects for an August Fed interest-rate increase, which would take the federal funds rate up to 5.5 percent, fell to 52 percent in futures <FFQ6> from 70 percent before the release of a weaker-than-expected U.S. non-farm payrolls number. But the chances quickly climbed back above 60 percent later in the session. Before the Fed decision last week, rate hike prospects in August were about 80 percent.
Speculators also reduced their net short yen position to 23,909 contracts from 35,572 the previous week.
The CFTC data on speculative positioning are often used by analysts as an indicator of future market direction.
For example, extreme net short speculative positions often suggest a rebound in the currency is imminent because dealers might be uneasy about keeping such a large position open and reckon it is time to buy the currency back at cheaper levels.
Similarly, extreme net long positions can suggest a currency has appreciated a great deal and is poised for a correction lower because dealers are ready to lock in profits.
JAPANESE YEN (Contracts of 12,500,000 yen)
7/03/06 week 6/27/06 week
Long 25,330 25,190
Short 49,239 60,762
Net -23,909 -35,572
EURO (Contracts of 125,000 euros)
7/03/06 week 6/27/06 week
Long 87,088 77,942
Short 18,543 13,272
Net 68,545 64,670
POUND STERLING (Contracts of 62,000 pounds sterling)
7/03/06 week 6/27/06 week
Long 22,169 17,709
Short 10,306 11,138
Net 11,863 6,571
SWISS FRANC (Contracts of 125,000 Swiss francs)
7/03/06 week 6/27/06 week
Long 21,327 14,509
Short 25,641 30,398
Net -4,314 -15,889
CANADIAN DOLLAR (Contracts of 100,000 Canadian dollars)
7/03/06 week 6/27/06 week
Long 42,762 38,165
Short 6,315 7,856
Net 36,447 30,309
AUSTRALIAN DOLLAR (Contracts of 100,000 Aussie dollars)
7/03/06 week 6/27/06 week
Long 17,141 14,220
Short 12,080 11,514
Net 5,061 2,706
MEXICAN PESO (Contracts of 500,000 pesos)
7/03/06 week 6/27/06 week
Long 10,965 8,917
Short 22,601 36,735
© Reuters 2006. All Righ
Fri Jul 7, 2006 4:20pm ET
NEW YORK, July 7 (Reuters) - Currency speculators in International Monetary Market futures increased their long euro positions for the period ending July 3, according to data released on Friday.
Net long euro positions rose further to 68,545 contracts, up from last week's 64,670 contracts, data from the Commodity Futures Trading Commission showed. Being "long" a currency is effectively a bet it will strengthen, while being "short" is a bet it will weaken.
David Powell, currency strategist at IDEAglobal in New York, said he expects euro long positions to increase further next week in the wake of hawkish comments on Thursday by European Central bank President Jean-Claude Trichet. Friday's CFTC data did not include Thursday's ECB comments.
Trichet's remarks suggested there would more interest rate increases in the euro zone due to rising inflationary pressures.
Speculative trading accounts in IMM futures also switched to a net short dollar position against six major currencies to around 25,100 contracts, from a net long of about 11,900 the previous week, according to estimates from IDEAglobal. These six major currencies are the euro, yen, sterling, Swiss franc, and the Canadian and Australian dollars.
The increase in short dollars reflected uncertainty about the future of U.S. interest rates, analysts said. Last week, the Federal Reserve lifted the overnight federal funds rate to 5.25 percent as expected but gave out a more dovish statement. The Fed said slower growth should keep price pressures in check, prompting traders to lower the chances of a Fed hike in August.
On Friday, prospects for an August Fed interest-rate increase, which would take the federal funds rate up to 5.5 percent, fell to 52 percent in futures <FFQ6> from 70 percent before the release of a weaker-than-expected U.S. non-farm payrolls number. But the chances quickly climbed back above 60 percent later in the session. Before the Fed decision last week, rate hike prospects in August were about 80 percent.
Speculators also reduced their net short yen position to 23,909 contracts from 35,572 the previous week.
The CFTC data on speculative positioning are often used by analysts as an indicator of future market direction.
For example, extreme net short speculative positions often suggest a rebound in the currency is imminent because dealers might be uneasy about keeping such a large position open and reckon it is time to buy the currency back at cheaper levels.
Similarly, extreme net long positions can suggest a currency has appreciated a great deal and is poised for a correction lower because dealers are ready to lock in profits.
JAPANESE YEN (Contracts of 12,500,000 yen)
7/03/06 week 6/27/06 week
Long 25,330 25,190
Short 49,239 60,762
Net -23,909 -35,572
EURO (Contracts of 125,000 euros)
7/03/06 week 6/27/06 week
Long 87,088 77,942
Short 18,543 13,272
Net 68,545 64,670
POUND STERLING (Contracts of 62,000 pounds sterling)
7/03/06 week 6/27/06 week
Long 22,169 17,709
Short 10,306 11,138
Net 11,863 6,571
SWISS FRANC (Contracts of 125,000 Swiss francs)
7/03/06 week 6/27/06 week
Long 21,327 14,509
Short 25,641 30,398
Net -4,314 -15,889
CANADIAN DOLLAR (Contracts of 100,000 Canadian dollars)
7/03/06 week 6/27/06 week
Long 42,762 38,165
Short 6,315 7,856
Net 36,447 30,309
AUSTRALIAN DOLLAR (Contracts of 100,000 Aussie dollars)
7/03/06 week 6/27/06 week
Long 17,141 14,220
Short 12,080 11,514
Net 5,061 2,706
MEXICAN PESO (Contracts of 500,000 pesos)
7/03/06 week 6/27/06 week
Long 10,965 8,917
Short 22,601 36,735
© Reuters 2006. All Righ
gipa69
collegio dei patafisici
China's economy may be overheating - MOF's Watanabe
Fri Jul 7, 2006 2:21pm ET
FLORENCE, Italy, June 7 (Reuters) - Japan's deputy finance minister for international affairs said on Friday there were signs that China's economy may be overheating and that its financial system was fragile.
"China should do something in order to have sustainable growth," Hiroshi Watanabe told Reuters at the sidelines of an economic conference in Florence when asked about Japan's position on China ahead of an upcoming G8 meeting in mid-July.
"There are some signs of overheating, some evidence of a fragile financial system," he said, adding Japan had already expressed its view to China.
© Reuters 2006. All Rights Reserved.
Fri Jul 7, 2006 2:21pm ET
FLORENCE, Italy, June 7 (Reuters) - Japan's deputy finance minister for international affairs said on Friday there were signs that China's economy may be overheating and that its financial system was fragile.
"China should do something in order to have sustainable growth," Hiroshi Watanabe told Reuters at the sidelines of an economic conference in Florence when asked about Japan's position on China ahead of an upcoming G8 meeting in mid-July.
"There are some signs of overheating, some evidence of a fragile financial system," he said, adding Japan had already expressed its view to China.
© Reuters 2006. All Rights Reserved.
ditropan
Forumer storico
gipa69 ha scritto:
Hoii ... mitticoooooooo GIPPONE !!!
In merito al gas : non tutti gli anni è la stessa solfa, dipende un'attimino anche dal tempo e dalle condizioni climatiche, nei mesi estivi il tempo condiziona molto i prezzi ... i quali usando un gioco di parole sono condizionati dall'uso dei condizionatori d'aria accesi in giro per l'America !
Insomma ... se il tempo è mite ... poki condizionatori accesi => poco uso di energia elettrica => prezzi sempre più compressi.
E' comunque ovvio e palese che questi non sono prezzi ... anche perchè li devi rapportare anche al prezzo degli altri energetici quali le benzine ed il petrolio.
Se andiamo quindi a prendere come riferimento l'olio crudo
ci accrorgiamo per esempio è vero che nel 2004 il gas è pure arrivato a 4,6$ (contratto scadenza ottobre 2004 --> ) ma con un petrolio a 42$Nel 2005 invece con scorte di gas più o meno analoghe a quelle di quest'anno ed un crude oil a 51$ il gas non è mai andato sotto a 6,2$ (grafico --> ).
I prezzi del gas a 5,5$ di quest'anno con un crude oil a 75$ sono dunque a dir poco ridicoli !!!
Io sono francamente convinto che da questi valori si dovranno risollevare ... per mostrarvi che non stò a raccontarvi le favole ed a quanto vado dicendo ci credo seriamente vi posso solo dire che al momento ho una posizione di 28 mini gas in perdita di 35.000 $ ...
... putroppo dire quando questo si riprenderà a correre non è dato a saperlo, potrebbe ripartire la prossima settimana come pure potrebbe farci soffrire fino a settembre. Al momento sono sprovvisto di sfera di cristallo !
Una cosa è certa ... questi a mio avviso sono prezzi su cui accumulare posizioni in vista di settembre ottobre.
Sul dove accumulare posizioni non è ancora ben chiaro ... uno potrebbe accumulare iniziando sul mese in scadenza e poi rollare di volta in volta sperando che ad ogni rolling la differenza di prezzo vada restringendosi via via ad ogni scadenza portandosi sui soliti 0,2-0,25% oppure decidere direttamente per la scadenza ottobre-novembre pagando subito la differenza di carry. Queste sono scelte personali cui preferisco non addentrarmi.