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PAGE TWO
Everyone
can be right ( and wrong) :
today,
packets.htm
The
second wave model was based on production, from farm and mines, to factories
- material produce that was stored in inventory, sold to wholesalers and
ended up in shops.
The third wave model, products are less important than
services. Systems of ideas match client demands within networks of OEM
( original equipment manufactures ) and direct sales to users.
The open
market in electric power with commodity prices distributed directly to
end users down networks uses an Asymmetric out of equilibrium algorithm
rather than seeking a mythological equilibrium at some sort of steady state.
Networks of material and service providers on a global scale certainly
changes forecasts of economic futures. (
The use of networks to find practical
paths has to do with the "traveling salesman problem". If the sales person
has to visit a large number of points there is no single shortest path
and the "best" solution is often counter-intuitive. )
The
irrational increase in stock prices is now being justified by blithe forecasts
of endless growth. People want to forget that economic change has loosers
that out number winners in the short run; the iceman, the candle makers
are gone.
The internet replaces many middle people, from bankers and travel
agents, to wholesalers and distributors.
The "endless growth" craze now
is being used politically to avoid hard or unpopular changes in entitlement
benefits.
The
bulls and the bears are both right and both wrong.
The business cycle has
not been repealed but changes from a material one to one of the mind and
spirit, SYNERGY where the whole is more than the sum of the parts.
The
factory is replaced by the production of trust and faith in paper, computer
digits, balances and transfers of insubstantial assets.
The over supply
is of faith - belief in a "blue sky" future that produces an over abundance
of paper money, credit, market booms and financial high flightiness.
The
devaluation started in South East Asia last June, spread to Korea and now
Japan, the unwinding of building booms, market booms, inflated prices,
currencies and hopes. So while the real economy does have a bright future,
the paper empires built on hope will tumble- someday.
The total equity
market is over 35 Trillion with 1/3 in the US, 20 % in Europe, 15 % in
Japan - and the other 1/3 spread around the world.
The Americans are adding
about 1 billion a day in new investments - or .003 % of the world market
or .01 % ( 2.5 % a year) of the American Market of 10 Trillion. Not enough
to substain a long term boom.
The Global equity was about 35 trillion,
last year, before the devaluations.
The US market has grown 20 % from 8
trillion to 10 trillion.
The US has gained 2 trillion, Europe a trillion
in paper profits while the rest of the world has loss 3 Trillion -
Global
players have increased the USA % of their investments as they retreat from
declining markets. Now the move is into Europe, back to parts of Asia,
Eastern Europe, Latin America where more double digit returns are possible.
We will be surprised if the Year-to-Year return from April 1 to March 30th
will be 5 % for the US Market - a rate that suggest short term bonds -
with currency risks - or ECU inflation protected utility bonds at 1.5 %
more, with a currency gain for $'s.
The
best buy is a basket of Asia's 30 % bonds - the currencies have hit bottom
and the rates have hit their tops. Triple gains, increase in bond prices
as rates decline, increases in exchange values, and real high interest
- and risk !
OUR
RECORD: check
money.htm,
stock.htm
for past calls, been damn good
Alliance
Global , Bear Stearns Emerg Mkts Debt A Ticker: EMDFX , Countrywide, Dreyfus
Global Bond Ticker: DGBDX, Federated Intl High Income, Franklin Templeton
High Inc Curr Ticker: ICHIX - Gt Global High-Income A Ticker: GHIAX Kemper
Global, Morgan Stanley Worldwide High-Inc A Ticker: : MSWAX - Oppenheimer
Intl Bond C Ticker: OIBCX - Phoenix Emerging Markets Bond B Ticker: : PEMBX
Prudential Interm Global Inc B Ticker: PBIBX T. Rowe Price, Van Kampen,
Vontobel
Wiredbrain's
Yahoo at wiredbrain password "synergy"
SYNERGY
Group's Excite Channel
Technologies
2X market
IXCO
SOX MSH PSE NDX
down more than market
Pause
in
Asia's DOWN and Europe's down
from record high ( US Germany France London )
Why
does one index so different from the other ? Could it be the effects of
INDEX trading?
Stocks,
dollar active ( down again) and bonds drifting down;
Asia
down, Europe down from new highs:
bonds
at
5.8 %
bonds
DOWN interest UP well off lows of 5.65 and off high of 6.2 on money
supply, oil prices near $16 Gold at $310
Currencies
(dollar)
DOWN from rally in a
tight range in a
Negative FX market - (on
scale from +15 to +15).
Bottom
Line:
Krugmann:
"
The Fed doesn't formally care about anything in particular. That way
you can't pin them
down.
Their nightmare: I know what keeps Alan Greenspan awake at nights. I don't
need any inside
information
to tell you this. He thinks about Japan 1990. ( Sic.. South East Asia in
1997 or the US in 1969 )
A
stock market that went to dizzying heights and there were lots of explanations;
everybody had a good theory about why that made sense and then it plunged.
And in the course of plunging, took the real economy down with it and it
never actually recovered. And although you can give all sorts of reasons
why the U.S. is different from that, the Fed is very concerned about that.
They are very concerned that we have a bubble economy, which is different
in detail, but the same general position as Japan before the big crash.
If they could figure out some way to deflate the bubble gently, they would."
Brancaccio:
"Sounds like you're a little worried about that scenario as well."
Krugmann:
"Oh, I'm scared to death! I look at the current level of the market. I
can't come up with a
reasonable
reason for it. I can give you a lot of standard arguments about why, even
if the market
MIT
economist Paul Krugmann's most recent book is called "Pop Internationalism."
NEW
YORK, May 7 (Reuters) - Earnings of companies in the Standard & Poor's
500 index are up 3.1 percent year-on-year in the first quarter with 91
percent, or 453 companies in the index, having reported, said First Call.
This
could rise to about 4.0 percent once all the retailers have reported, which
would be slightly better than Wall Street expected, said Chuck Hill, First
Call's director of research.
Analysts
had slashed their profit growth forecasts for the first quarter because
of Asia's turmoil.
But
even 4.0 percent would still be less than half the 9.0 percent year-on-year
growth in the fourth quarter of 1997, and would be well below the 10 percent
growth originally forecast for the first quarter.
Wall
Street is still betting
on backloaded
earnings growth this year.
First
Call said analysts forecast that S&P500 earnings will grow 8 percent
in the second quarter, 13 percent in the third quarter and 18 percent in
the final quarter. ( I wouldn't bet on it
)
These
forecasts may= WILL change over the coming months as more companies discuss
earnings with analysts, First Call said.
This
looks like a organized attempt to talk the market down:
You
don't have to shoot the charging bull between the eyes to try to slow it
down. You can use a number of less radical techniques to try to slow down
the ragging bull. You wave red flags, then the picadors poke at it, then
if all else fails you draw on more powerful weapons for the coup de grace'.
The
Fed won’t release this “directive,” crafted at the
end
of each committee meeting, until May 21.
The primary
significance
of the directive is to signal financial markets
which
way the Fed is leaning.
Officials
say Asia seems to be stabilizing, and
domestic
economic vigor appears to be offsetting the ill
effects
of Asian woes on U.S. exports. First-quarter
consumer
spending and housing construction was strong,
and
the economy appears to be awash in credit. So, in
public
speeches and interviews, Fed officials are beginning
to
prepare markets for a Fed move to brake the
economy-unless
it slows on its own soon.
The
Fed has been expecting a slowdown for months,
but
it hasn’t materialized. Most forecasters say the
economy
expanded at an annual rate of between 3% and
3.5%
in the first quarter, which would be the sixth quarter
of
better-than-3% growth.
Worries
about destabilizing fragile Asian financial markets could delay a Fed move,
but
some
Fed officials privately acknowledge that they would sleep better if the
stock market were less ebullient. Indeed, a decline in stock prices would
tend to slow the economy, which is precisely what the Fed would like to
see.
WSJ
Magic,
Science, the market, financial reporting and Beliefs systems such as Futures,
values, prices, rates and other Religions
(1948)
by Malinowski, Bronislaw
The
principle dialectic of the modern world is the dualism of science and magic.
The conflict starts with Newton who spent most of his life at numerical
alchemy.
In
a seminal article Malinowski suggests that "primitive" people use science
to control events they understand and can do something about, and magic
for forces of nature that are out of control.
They are very resonable about
fishing, farming, hunting and warfare when they find a pattern in events
- but magical thinking takes over when events seem out of control such
as storms, earthquakes, plagues, and other unexpected traumas.
Maclay,
Kubary, Malinowski: Archetypes from the Dreamtime of
Anthropology
The
dreamtime is explained in the "Last Wave" a film by Peter Weir - as a reality
that exists beyond the day to day that gives values, meaning to the "Law"
or customs of a people. In this way it is the origin of religion, which
the age of reason called a "superstition ".
Malinowski,
Bronislaw Kasper (1884+1942), British anthropologist,
regarded
as the founder of the "functional" school of anthropology,
which
maintains that human institutions should be examined in the
context
of the culture as a whole. He was born in Kraków, Poland. In
1914
he took part in an expedition to New Guinea and Melanesia and
spent
the next four years studying the peoples of the Trobriand Islands
of
the southwest Pacific. Malinowski became professor of social
anthropology
at the University of London in 1927. His further research
took
him to Africa, Latin America, and parts of the United States.
LAST
WEEK IN REVIEW:
For
historical interest, the market will look at the minutes of the March 31
U.S. Federal Open Market Committee meeting to be released on Thursday.
According
to Treasury Department data, foreigners owned 38 percent of the $3.4 trillion
in outstanding Treasury
debt
at the end of August.
The Japanese owned 25 percent of the foreign-held
debt, followed by Great Britain,
20
percent, and Germany, 6 percent.
Japanese
officials played down speculation this week of another wave of Treasury
securities selling to finance
a
$77 billion bailout of Japan's banking system.
In
addition to capital flows, Wednesday's Commerce Department release reported
the broadest measure of
U.S.
foreign trade, known as the current account. It shot up 11.4 percent to
$42.2 billion in the third quarter, the
The
current account measures not only trade in goods and services but also
the flow of investment income
between
countries and foreign aid.
08:44
US JUNE BOND FUTURE UP 13/32 TO 120-27.
08:44
US 30-YR TREASURY BOND UP 13/32 TO 103-02, YIELD AT 5.90%.
Thursday
May 21, 7:07 am Eastern Time
Markets
in France, Germany and parts of continental Europe were closed for Ascension
Day, reopening on Friday. Countries which operated normally reported lower-than-normal
volume.
---------------------------------------------------------------
MARKET
PRICES AT 1100 GMT
Mark
1.7646/51 Yen 135.19/29 Sterling 1.6270/80
Gold
$300.00/0.40 +0.59 (pvs PM fix) Brent $13.87 +0.15
FTSE
100 5968.9 +61.5
---------------------------------------------------------------
Benchmarks:
London
6,100 record high, Paris 4025* high, Frankfort 5,450 * high
The
UK's FTSE 100 index was up more than one pct as world markets celebrated
the Asian rally after Suharto quit and a late sprint by the Dow to close
116.83 points, or 1.3 percent, higher on Wednesday.
Sterling
had hit a seven-month low of 2.8763/73 against the mark from 2.8893/98
late Wednesday, after Bank of England Monetary Policy Committee member
Willem Buiter said the British economy is slowing and will slow further.
Some
dealers in U.S. stocks said minutes of the March 31 interest-rate setting
Federal Open Market Committee (FOMC) policy meeting, due for release at
1800 GMT, would be keenly awaited.
LONDON,
May 19 (Reuters) - European shares closed with steep gains on Tuesday,
lifted by a Wall Street rally and growing optimism that U.S. interest rates
would not be increased later in the day.
In
currencies, the yen lifted itself gingerly from its 6+1/2 year low against
the dollar after Indonesian President Suharto pledged to hold elections,
causing tentative rebounds in southeast Asian markets.
---------------------------------------------------------------
MARKET
PRICES AT 1550 GMT
Mark
1.7848/58 Yen 136.18/28
Sterling 1.6230/40
Gold
$300.00/0.50 -0.05 (pvs PM fix) Brent $14.47 +0.01
FTSE
100 5877.8 +51.6 CAC 3980.84 +35.53 X-DAX
5441.00 +97.34
---------------------------------------------------------------
THE NEXT
STEP FORWARD
Where
we go from here !
A few years
ago we talked about the potential of the internet -
Doc1
to Doc5
Then we
talked about the impact on the
social -
political
-
economic and general
future
Then we
talked about how the technology will develop
packets.htm
We talked
about the
network computer and how the information
utility will take shape.
Now what's
next ?
One way
or another - enough bandwidth will be provided to inexpensive and tough
enough boxes so that all the hard complex stuff will be pushed upstream
and voice, video, data and new applications can work the channels to provide
news, entertainment, communications, commerce in dramatically different
ways.
The big
question is how and by whom ?
By
John Sidgmore
May
5, 1998 - John Sidgmore
outlines
his vision for the
future
of global
telecommunication
in this
NetWorld+Interop
Keynote
speech
Global
tele-communications utilities linked by satellites, then ground stations,
then optic wires, cables, broad band, wide band, (A)DSL - a global backbone
providing service to all of humanity - with solar charged instruments from
anywhere to anywhere.
The first world has a billion ready clients,
the global market place has a million firms ready to go, the second and
third world can add a 100 million new clients a year and a million new
firms, local governments, missions and schools, gaming centers and market
players as fast as the bandwidth and prices allow.
The global requirements
are different from America and the European community. While part of the
world is wired - much of the world is not.
The Global
communications network must be based on wire-less standards - that will
work on wires but do not require them.
NOTICE:
SOUTHWINDNET = http://www.highspeedhosting.com/newsite/message.cfm
The
digital communications age has arrived. Still a little expensive - but
if the price - quality relationships hold - high speed connections should
be quite cheap in a year or so.
Then local NODES can provide high speed
wireless connections for EVERYTHING - internet with telephone, video and
real time data bases, BYE-BYE to MA bell, cable companies, TV networks
- as we know them.
The REAL impact will be all the way to China - the billions
- the majority of people on this planet who have almost no two-way telecommunications
- they can make the great leap forward...
The
site is in the process of upgrading service to
ViperLink.
VMC Virtual Marketing Corporation
The
ViperLink system uses a wireless access system to connect to an ATM
(
Asynchronous Transfer Mode (ATM) ATM is a packet switched technology capable
of carrying
voice,
video & data.)
backbone
at an astounding 90Mbps! Our Kentucky office has a full 2.0Mbps
(30%
bigger than a T+1) dedicated connection that is burstable to 6.0 Mbps (4
full
T+1s) if needed. If at any time, our web sites need additional bandwidth
–
they’ve
got it! Never again will there be a problem with not
having enough
bandwidth.
Ask how many providers can make that claim!
SAN
JOSE, Calif.--(BUSINESS WIRE)--May 11, 1998--
Verilink
Corp. (NASDAQ:VRLK - news) today announced that
Splitrock
Services, Inc., the U.S.-based provider of Internet access to Prodigy customers,
has selected Verilink to provide
Ramblings:
The doors to creative thinking and doing are in the narrow
places between large structures.
The
empires of the world and the mind dominate the landscape.
Vast historic structures obscure the
view of the horizon and our real location. Down narrow
lanes and in far fields we sometimes can
gain images that glimmer with reflections of a pale light,
far off.
Where theses narrow lanes and far field meet are the focal
points of new creations.
There is a container, connected to nodes, connected to
networks, creating a info-sphere of billions
living reproducing pathways and elements.
The bio-sphere
began and is still largely made up of
micro-organisms that share genetic information through
networks of co-option, cooperation and
communication that become organic wholes from simpler
to complex. Cells take in parts from
elsewhere and collect abilities of different genes.
The
biological and infomation packets are
coming together on a global scale.
One element basic to global networks are standards.
The
critical standard is digital information
which can be understood and act upon by all the other
members of the community.
The
information utility will operate on a common operational
language - such as HTTP, FTP, Java,
that will co=option functions from different places,
in words, pictures, sounds and video.
The
Microsoft issue is their desire to make MS-OS/ active
X the universal language for all future global
networks, software, operations, communications and services.
Netscape’s inter-operation open
arch-culture has a somewhat different vision of inter
and intra operability.
The global scope of
mega networks makes Microsoft’s vision unlikely but not
impossible.
Their moves into
communications, cable, satellites, broadcasting and services
should be taken as very important but
not as a given. Without outside intervention or meaningful
competition they could set NT/active X
type systems as the standard for most if not all inter-net
communications.
Gates to everone - "Look upon my works ye humble of the
earth and give
up."
But all empires lack vision and ability to change.
It’s not hardware, it’s not software, but it is service-ware.
Companies that
don’t sell machines or programs but universal services.
Sign-up and we
give you the container, the link, and all the services
you can think of and
many that you haven’t though of yet.
I soon will be able to pull down the word processing "service"
tied to voice and video "services". I
will be able to pull down interactive forms "service",
a search service, marketing services,
shopping service, broadcast and narrow cast services,
product design and production services,
travel, insurance, investment and banking services designed
and distributed by other services .
All these services we now called companies, producers,
distributors, stores and markets become
part of the services network.
The telephone company (
tele - sounds )is a service: television ( tele -
pictures ) networks and stations are service including
broadcast ( send sound and picture over a
wide area ): computers are not a machine or thing but
provide systems capacity to do something,
assign traits and store information and programs ( software
to help machines - do stuff ). All these
THINGS are becoming parts of a system of service with
nodes and terminals.
The core of the global service system is the operational
codes and languages. Everyone has to
understand ever one else and terminals need to talk to
nodes and servers need to communicate
with servers in common coded packets moving a mega-speeds
back and fourth.
These codes and
languages are extensions of Hyper Text Transfer Protocol
, ftp ( file transfer ) and operations such
as Java.
Saturday
May 9 8:05 AM EDT
ZANNY
MINTON BEDDOES: When we talk about a bubble, we talk about rising
fundamentals
would warrant, and they're going up because of some kind of speculative
frenzy,
to use a phrase, again, that Chairman Greenspan used, some kind of irrational
exuberance.
We're all feeling good. We're buying shares. Prices are going up not because
of
fundamental changes or not only because of fundamental changes, more because
there's
a kind of frenzied buying.
And
that's what we mean by a bubble, and we worry about it for two reasons.
We worry about it because
bubbles
tend to burst. Financial markets have had bubbles ever since finance started.
But the problem is that they
The other
problem is that if they--if
the
bubble continues, then this kind of inflation in asset prices--because
that's really what it is--can spill over into
ZANNY
MINTON BEDDOES: Well, I agree that there have been changes in the world
economy, and there
have
been changes in the U.S. economy.
The question is how big have these changes
been and do they justify
today's
prices, and I think one argument that is frequently made by the people
who believe in this new economy or
happened
in the last two years in the U.S. economy, we've grown far faster than
the trend growth, and we--than
economists
normally think the economy can grow--and that is because we've used more
people. Unemployment
The one
thing that does seem to be different is
that
as wages are rising, there isn't this immediate transfer into higher inflation.
Now,
there are--that could be because of some new rules. It could also be because
there
are
a lot of temporary factors which have actually influenced. One is that
benefits have
been
rising much more slowly than they used to.
The HMO revolution has meant
that its
employers
have been able to cut costs in areas where they traditionally weren't able
to cut
costs.
Secondly, the dollar is very strong. Now, the strength of the dollar
also dampens
inflation.
Thirdly, commodity prices are weak.
They're weak in part because
of the
problems
in Asia, but they're not--those are not structural changes.
They're temporary
things
that could change, and when they change, I think we'll see the old rules
coming back into play.
Are
stocks poised to flame out?
Friday
May 8th:
08:33
U.S. UNEMPLOYMENT RATE FALLS TO 4.3%, AVERAGE HOURLY EARNINGS UP 4C IN
APRIL, NEAR CONSENSUS.
08:32
RETAIL ADDS 44,000 JOBS.
08:32
CONSTRUCTION ADDS 35,000 JOBS.
08:32
SERVICES ADD 139,000 JOBS.
08:32
10,000 FACTORY JOBS LOST IN APRIL.
08:32
AVERAGE FACTORY WORKWEEK FALLS 1.1 HOURS TO 40.7.
08:32
AVERAGE WORKWEEK FALLS 0.3 HOURS TO 34.4.
08:32
HOURLY EARNINGS RISE 4 CENTS IN APRIL OR 0.3%.
08:32
4.3% JOBLESS RATE LOWEST SINCE FEB 1970.
08:32
262,000 JOBS CREATED IN APRIL; UNEMPLOYMENT RATE FALLS TO 4.3%.
08:31
U.S. 30-YR TREASURY UP SLIGHTLY ON UNEMPLOYMENT NEWS.
08:48
US JUNE BOND FUTURE DROPS 8/32 TO 120-03 ON JOBLESS DATA.
08:48
US 30-YR TREASURY BOND DROPS 12/32 TO 102-03, YIELD AT 5.99%.
08:48
US 10-YR TREASURY BOND DROPS 5/32 TO 98+14, YIELD AT 5.71%.
08:48
US 5-YR TREASURY BOND DROPS 4/32 TO 100+13, YIELD AT 5.65%.
08:48
US 3-YR TREASURY BOND DROPS 1/32 TO 99+11, YIELD AT 5.63%.
08:48
US 2-YR TREASURY BOND DROPS 2/32 TO 100-02, YIELD AT 5.58%.
08:48
US TREASURIES GO LOWER ON APRIL JOBLESS RATE.
08:48
US 1-YR T-BILL DISCOUNT RATE UP 2 BASIS POINTS TO 5.15%.
08:48
US 6-MONTH T-BILL DISCOUNT RATE UP 3 BASIS POINTS TO 5.13%.
08:48
US 3-MONTH T-BILL DISCOUNT RATE UP 2 BASIS POINTS TO 5.00%.
08:31
U.S. UNEMPLOYMENT RATE LOWEST SINCE FEB. 1970.
08:31
UNEMPLOYMENT RATE FALLS TO 4.3%, DOWN .4 PERCENTAGE POINTS.
08:31
APRIL NON-FARM PAYROLL UP 262,000, CONSENSUS 250,000.
07:20
BRITISH POUND 1.6403 DOWN .0071, OR -0.4%.
07:20
GERMAN DMARK 1.7718 UP .0034, OR +0.2%.
07:20
JAPAN YEN 132.56 DOWN .72, OR -0.5%.
07:20
U.S. 30-YR. BOND 5.948 UP 1 17/32, OR 0.1%.
07:20
FRANCE CAC 40 3906.36 UP 41.09, OR +1.04%.
07:20
GERMAN DAX 5260.56 UP 74.33, OR +1.43%.
07:20
LONDON FT 100 5965.5 UP 18.5, OR +0.5%.
07:12
FOREIGN STOCK MARKETS MOSTLY LOWER AUSTRALIAN MARKET 2780.50 DOWN 0.3,
OR -0.01%.
Korea
down - Asia mixed - London and Germany UP, France down
To
see what we said this morning and last night, see
http://www.wiredbrain.net/short.htm
..
The
news before it happens: Unemployment drops 4.2 % and new jobs increase
260,000 - adding to worries of rate increases :
The
government on Friday is scheduled to release the monthly employment data
for April, its first major reading on how the economy performed last month.
Analysts
surveyed by Reuters expect the unemployment rate to be unchanged at 4.7
percent with 259,000 new jobs created outside the farm sector. That compares
with the March rate of a decline of 36,000.
Last
month, the Conference Board put the help-wanted advertising index, which
tracks employment growth, at 92.0 in March, unchanged from February but
well above the March 1997 rate of 87.0, showing no drop in demand for labor.
The
feeling among the skeptics is that even if the employment figure is satisfactory,
there is no guarantee that the Fed is not
going
to tighten," Metz said.
Investors
appeared little reassured by Fed Vice Chairwoman Alice Rivlin who said
that a desire to rein in a high-flying stock
market
would not be a reason by itself for the central bank to raise interest
rates.
The
Fed was not considering changing margin requirements on stock trades, Rivlin
said.
There was no big risk of inflation
taking
off, she added.
Thursday
May 7th:
Editoral:
The
tradition is that good news = bad news because rapid growth = inflation.
Starrting in Nov. good news was good news because it = higher earning. Now
with a market well over any rational P/E the growth of earning and/or changes
of 1/4 % in a minor bank rate really can't make much difference. BUT when
prices are so high any excuse is a good excuse to sell - SO good news is
bad news again and bad news is bad news -
The employment number will be
up because the GDP was growing at a very high rate ( over 4 %) Wages are
going up in areas of demand but not in semi-skilled service jobs - as it
has been since 1969.
The problem is not wage inflation but a bubble - ready
to pop - in real estate - in stock prices - yo-yo land - the President
and Congress want to be popular. A reasonable slow down will be a lot better
than a CRASH ! And now, rather than close to an election.
The clients of
the Federal Central Bank - the World Banking System - need order in a time
of some real problems - and order means being able to add to the money
supply - which you can't do without great risk during a speculative bubble.
Fed
reminds Wall Street it is still top dog
By
Pierre Belec
NEW
YORK (Reuters) - Life is good on Wall Street. Consumer confidence is
the highest in some 30 years, inflation the lowest since the 1960s and
the stock market is soaring to the moon.
But
the Federal Reserve says trouble is bubbling in the economy.
Wall
Street was again reminded this week that the Fed is still the top dog.
The
secretive Fed leaked information that it had shifted monetary policy toward
a bias, which called for higher interest rates, because of concern that
the economy's robust growth may reignite inflation.
The
hint that the cost of borrowing may go up hit the market like a ton of
bricks, sending stocks into a tailspin at the beginning of the week as
investors pushed the panic button.
The
market had been betting that the central bank would not raise interest
rates and there was even speculation that lending rates would drop before
the end of the year.
But
by week's end, the market had roared back with a vengeance on a report
that inflation was still holding at the lowest level in some 30 years,
even though the economy grew at a fast pace in the first quarter.
Is
the Fed looking at the wrong radar screen?
Some
experts believe the central bank is actually more worried about the surge
in stock prices than any underlying inflation.
"
The
stock market is too speculative, exuberant and overvalued and there's the
risk that it could lead to financial asset inflation eventually causing
real sector inflation," said Hugh Johnson, chief investment officer for
First Albany Corp.
----------
G
o to Wiredbrain's
ACTIVE-NEWS
PAGE
----------
G
o to Wiredbrain's
PAGE TWO
----------
G
o to Wiredbrain's
Current up-dates
Wednesday:
Long bond at
5.84
Talking
the market down-``People are starting to talk about deflation,'' said David
Brickman, international economist at PaineWebber. "
The Fed's worried about
the economy overheating," said Farrell. "I think the Fed would be thrilled
if the financial sector took a deep breath. I think we all should be thrilled."
Federal
Reserve officials Alice Rivlin, Laurence Meyer, and Edward Gramlich, and
Atlanta Fed president Jack Guynn are all speaking later on Wednesday.
U.S. Deputy Treasury Secretary Lawrence Summers is also speaking.
Federal
Reserve Chairman Alan Greenspan speaks at 1615 GMT on Saturday to a meeting
of state bank supervisors.
Wednesday
April 29 6:57 AM EDT
Greenspan
preserved consensus with bias
Home
| Client Access | Contact Us | Help
Market
Letter
05/26/98
The
Market Posture was downgraded to Mildly Bearish the week ending
4/10/98
(DJIA - 8994.96). Initial downside price projection for the DJIA
is
8750. CTI readings should remain negative until late May 1998.
****Check
out "ON THE EDGE" - A monthly review of the markets****
________________________________________________________________________
CURRENT
PRIOR
MARKET
TIMING MODELS READING WEEK CHG CONNOTATION
________________________________________________________________________
CYCLICAL
TREND INDEX (CTI): -4 -4 0 BEARISH
MOMENTUM
INDEX: -8 -6 -2 BEARISH
SENTIMENT
INDEX: 1 2 +1 NEUTRAL
________________________________________________________________________
DOW
JONES INDUSTRIAL AVERAGES (DJIA) CLOSE:................ 9114.44
DJIA
POINT CHANGE FROM PRIOR WEEK:......................... 18.44
DJIA
PERCENTAGE CHANGE FROM PRIOR WEEK:.................... 0.20%
MARKET
POSTURE THIS WEEK:..................................MILD BEARISH
MARKET
POSTURE PRIOR WEEK:.................................MILD BEARISH
DJIA
TARGET:............................................... 8750
TIME
FRAME TO ACHIEVE TARGET:.............................. 29-May-98
DATE
CURRENT MARKET POSTURE FORMULATED:.................... 10-Apr-98
DJIA
CLOSE ON DATE CURRENT MARKET POSTURE FORMULATED:...... 8994.96
________________________________________________________________________
CYCLICAL
TREND INDEX (CTI).......... -4 CONNOTATION
________________________________________________________________________
29-May-98
(Projected) 7 BULLISH
05-Jun-98
(Projected) 7 BULLISH
12-Jun-98
(Projected) 7 BULLISH
19-Jun-98
(Projected) 7 BULLISH
26-Jun-98
(Projected) 7 BULLISH
________________________________________________________________________
MOMENTUM
INDEX...................... -8 % CHG CONNOTATION
________________________________________________________________________
1)
DJ Transportation Average 3390.59 +1.0% BEARISH
2)
S&P 500 Index 1108.25 -0.0% BEARISH
3)
NYSE Composite Index 574.58 0.0% BEARISH
4)
Advance-Decline Line -5505 BULLISH
5)
10 Day MA Advance-Decline Line 0.80 0.0% BEARISH
6)
AMEX Index 730.57 -0.9% BEARISH
7)
NASDAQ Composite Index 1802.72 -2.4% BEARISH
8)
DJ Utilities Index 280.06 0.1% BEARISH
9)
TRIN+10 Day Average 1.04 0.0% NEUTRAL
10)
NYSE New Highs-New Lows 251+137 NEUTRAL
11)
Zweig Breadth Indicator 0.40 BEARISH
12)
McClellan Oscillator -76 NEUTRAL
13)
McClellan Summation Index 628 BULLISH
14)
Unchanged Issue Index 0.17 BEARISH
________________________________________________________________________
SENTIMENT
INDEX..................... 1 % CHG CONNOTATION
________________________________________________________________________
1)
Odd Lot Short Ratio-5 Day Ave 5.03 0.0% BEARISH
2)
NYSE Short Interest Ratio 6.32 1.1% BULLISH
3)
Public-Specialist Short Ratio 0.89 0.0% BULLISH
4)
Put/Call Ratio+10 Day Ave(INDEX) 1.12 0.0% NEUTRAL
5)
Dividend-Yield Spread 5.10 0.0% BULLISH
6)
Mutual Fund Liquid Asset Ratio 4.60 0.0% BEARISH
7)
Bullish Investment Advisors 45.5 0.0% NEUTRAL
8)
Bearish Investment Advisors 25.2 0.0% NEUTRAL
9)
Bearish + Corrections Total 54.5 0.0% NEUTRAL
Home
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Group Analysis
By
Isabelle Clary
NEW
YORK (Reuters) - Federal Reserve Chairman Alan Greenspan agreed at the
March meeting of Fed policy-makers to
reintroduce
a bias toward raising interest rates, appeasing anti-inflation hawks on
the panel and preserving consensus, sources
It
is important to remember that the major FED activity is NOT the federal
funds or discount rate but open market selling of bonds and repos to withdraw
liquid assets and increase reserves in the banking systems.
The bias gives
direction to day to day market activity which has more effect than the
discount rate changes. Real rates are below the 5.5 % target.
08:45
US 3-MONTH T-BILL DISCOUNT RATE DROPS 2 BASIS POINTS TO 4.90%.
08:44
US 6-MONTH T-BILL DISCOUNT RATE DROPS 1 BASIS POINT TO 5.09%.
The
effective discount rate ( the price of money to banks ) is LIBOR MAY98
94.32 London Inter bank loan rate at 5.68 % sets other bank loan rates
- the short term rate set by EURO $ JUN98 94.225 = 5.775 % is over the
target of 5.5 % and going up. So bias does matter more than the actual
official change is a minor rate - the federal funds ( over night ) discount
rate.
The cost of money is going up which might slow certain types of interest
sensitive economic activity. It is not that the fed does nothing but wait
and have meeting - but is very active every day in the market.
Dollar/mark
was unlikely to show major movement ahead of the weekend meetings of European
Union officials to decide the
countries
which will join the single currency from 1999, but the mark might receive
a boost subsequently, analysts said.
On
the foreign exchanges, the dollar was slightly firmer but trading was range-bound
partly because of a holiday in Japan and
as
the markets awaited a batch of speeches from central bank and finance officials.
---------------------------------------------------------------
MARKET
PRICES AT 1101 GMT
Mark
1.7972/77 Yen 132.18/28 Sterling 1.6686/96
Gold
$307.50/7.90 -0.75 (pvs PM fix) Brent $14.61 +0.01
FTSE
100 5818.0 +11.4 CAC 3756.49 -20.74 X-DAX 5125.71 +14.83
---------------------------------------------------------------
By
mid-session, London's blue-chip FTSE 100 index was 0.4 percent firmer,
rescued by bargain-hunters from earlier losses
and
Germany's Xetra DAX was up 0.4 percent.
The
Belgian, Dutch, Greek and Swiss markets were also amongst the gainers but
French, Italian and Spanish bourses were in
the
red, pausing for breath after Tuesday's gains amid nerves over Wall Street
and confusion over U.S. rates.
Friday
May 1, 10:50 am Eastern Time
US
Treasuries slip on talk Fed checks forex rates:
The
basics:
A
too fast growth rate, gives too much money in the system, plus the Asia
thing causes lower exports, higher inports, pressure on the dollar which
is falling.
A
listing of the main NAPM components follows:
April
March Feb Jan Dec Nov Oct Sept Aug
PMI
52.9 54.8 53.3 52.4 53.1 54.5 55.9 54.6 56.4
Production
53.4 57.6 55.3 53.3 55.8 58.5 59.6 58.4 61.2
New
Orders 56.8 57.3 55.9 55.2 53.9 55.1 58.4 56.1 60.4
Supplier
Del 52.3 53.4 52.1 52.0 54.0 55.2 55.0 55.5 55.6
Inventories
46.6 46.8 46.9 46.7 46.5 44.3 47.0 46.2 43.4
Employment
49.8 52.5 50.9 50.1 50.9 53.3 52.5 51.1 51.6
Prices
41.2 44.4 45.8 44.7 50.8 53.2 55.5 54.1 53.4
Export
Orders 49.7 48.0 47.9 45.0 50.6 52.6 51.9 51.2 55.1
Imports
56.3 53.4 51.2 53.9 55.4 52.6 51.7 53.1 53.9
US
Treasuries off post-NAPM highs in forex intervention fear. *Mkt talk Fed
checking forex rates, but Fed says ``no comment.'' *Impact greatest in
bills, 3-mo rates jump 5 bps in 45 mins. *Long end outperforming but off
highs, profit-taking seen. *Traders report foreign central bank selling.
Thursday
April 30, 8:56 am Eastern Time
U.S.
economy accelerated in Q1, inflation mute
Thursday
April 30, 8:56 am Eastern Time
WASHINGTON,
April 30 (Reuters) -
The U.S. economy unexpectedly picked up speed in the
first quarter of 1998, surging ahead at a brisk 4.2 percent annual rate
on booming consumer spending while inflation remained at its most muted
levels in 35 years, the Commerce Department said on Thursday.
It
was the sixth straight quarter in which Gross Domestic Product advanced
at an annual rate of 3 percent or more - well above the 2+1/4 percent target
range the Federal Reserve considers can be safely sustained without risking
a flareup in inflation pressures. First-quarter GDP growth handily outstripped
Wall Street economists' forecasts for a 3.3 percent rate of expansion as
it accelerated from last year's fourth-quarter 3.7 percent pace instead
of slowing.
A
chorus of U.S. central bank governors has warned recently that the economy
needs to soon show convincing evidence of a slowdown, unnerving financial
markets after reports the Fed has shifted to a position of increased willingness
to raise interest rates. Policymakers' concern that Asia's economic woes
were not enough to offset buoyant domestic demand appeared to be supported
by the first-quarter GDP report.
DOWN 40 or 50
to 1050
If
the news is "good", rapid growth that's "bad" because it implies inflation
and higher money costs. If the news is "bad", lower growth and earning
that's good- maybe. Labor costs are going to be higher but how high is
high ?
The chances are 2/3 down, 1/3 up - but the reactions to economic
news are not always what is expected.
Thursday:
April 30th
``If
the U.S. economic data are strong, fears of a rate rise will return, suggesting
dollar upside,'' said Sally Wilkinson, senior
economist
at Daiwa Europe in London.
--------------------------------------------------------------
MARKET
PRICES AT 0905 GMT
Mark
1.7937/42 Yen 132.05/15 Sterling 1.6686/96
Gold
$310.90/1.30 +2.65 (pvs PM fix) Brent $14.39 +0.14
FTSE
100 5843.7 +10.6 CAC 3746.61 +12.68 X-DAX 5101.43 +17.63
---------------------------------------------------------------
U.S.
Federal Reserve chairman Alan Greenspan is known to consider ECI figures
as an important indicator of inflationary
pressures
building in a robust U.S. economy.
Thursday
April 30, 4:14 am Eastern Time
Wall
St bubble risk looms,
but is Asia to blame?
By
Yoshiko Mori
TOKYO,
April 30 (Reuters) -
The U.S. stock market is being poisoned by a ``classic
bubble'' and the risk is looming of a
downward
correction of 10 to 20 percent, economists in Tokyo say.
``
The
current state of Wall Street is similar to what happened in Tokyo in 1987
when it was already apparent that the asset
market
bubbles were getting out of hand,'' said Richard Werner, Tokyo-based chief
economist and managing director of Profit Research Centre Ltd.
Excessive
capital created by the U.S. banking system and the Federal Reserve has
been the major cause of recent Wall Street
gains,
Werner said.
Excessive
credit creation is spurring financial and real estate transactions which
are pushing up asset prices -- ``the classic
bubble,''
Werner said.
Economists
said credit creation through loans by the U.S. banking system is expanding
at around 10 percent year-on-year, the highest growth rate since the 1980s.
``If
the U.S. economic data are strong, fears of a rate rise will return, suggesting
dollar upside,'' said Sally Wilkinson, senior
economist
at Daiwa Europe in London.
First
quarter U.S. employment cost index is expected to rise 0.9 percent from
one percent in the previous quarter.
An
advance estimate of quarter one U.S. gross domestic product is also expected
at 1230 GMT.
At
0835 GMT the dollar was at 1.7921/26 marks and 131.93/03 yen
Con't
on
News
and analysis GO TO
Money pages first
forecast.htm,
then
conditions.htm
Main page Flash.htm
----------
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o to Wiredbrain's
ACTIVE-NEWS
PAGE
----------
Con't on money
PAGE TWO
----------
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o to Wiredbrain's
Current up-dates
Make PORTALS
your home page and use "wiredbrain" password "synergy" for set-up start
pages.
MSN now does the best search
Social
ergonomics
----------
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o to Wiredbrain's
Current up-dates
To
see what we said this morning and last night, see
http://www.wiredbrain.net/short.htm
Alternative
site http://www.geocities.com/Yosemite/Trails/4333/flash.htm
News
and analysis GO TO
Money pages first
forecast.htm,
then
conditions.htm
Main page Flash.htm
----------
G
o to Wiredbrain's
PAGE TWO
Everyone
can be right ( and wrong) :
today,
packets.htm
The
second wave model was based on production, from farm and mines, to factories
- material produce that was stored in inventory, sold to wholesalers and
ended up in shops.
The third wave model, products are less important than
services. Systems of ideas match client demands within networks of OEM
( original equipment manufactures ) and direct sales to users.
The open
market in electric power with commodity prices distributed directly to
end users down networks uses an Asymmetric out of equilibrium algorithm
rather than seeking a mythological equilibrium at some sort of steady state.
Networks of material and service providers on a global scale certainly
changes forecasts of economic futures. (
The use of networks to find practical
paths has to do with the "traveling salesman problem". If the sales person
has to visit a large number of points there is no single shortest path
and the "best" solution is often counter-intuitive. )
The
irrational increase in stock prices is now being justified by blithe forecasts
of endless growth. People want to forget that economic change has loosers
that out number winners in the short run; the iceman, the candle makers
are gone.
The internet replaces many middle people, from bankers and travel
agents, to wholesalers and distributors.
The "endless growth" craze now
is being used politically to avoid hard or unpopular changes in entitlement
benefits.
The
bulls and the bears are both right and both wrong.
The business cycle has
not been repealed but changes from a material one to one of the mind and
spirit, SYNERGY where the whole is more than the sum of the parts.
The
factory is replaced by the production of trust and faith in paper, computer
digits, balances and transfers of insubstantial assets.
The over supply
is of faith - belief in a "blue sky" future that produces an over abundance
of paper money, credit, market booms and financial high flightiness.
The
devaluation started in South East Asia last June, spread to Korea and now
Japan, the unwinding of building booms, market booms, inflated prices,
currencies and hopes. So while the real economy does have a bright future,
the paper empires built on hope will tumble- someday.
The total equity
market is over 35 Trillion with 1/3 in the US, 20 % in Europe, 15 % in
Japan - and the other 1/3 spread around the world.
The Americans are adding
about 1 billion a day in new investments - or .003 % of the world market
or .01 % ( 2.5 % a year) of the American Market of 10 Trillion. Not enough
to substain a long term boom.
The Global equity was about 35 trillion,
last year, before the devaluations.
The US market has grown 20 % from 8
trillion to 10 trillion.
The US has gained 2 trillion, Europe a trillion
in paper profits while the rest of the world has loss 3 Trillion -
Global
players have increased the USA % of their investments as they retreat from
declining markets. Now the move is into Europe, back to parts of Asia,
Eastern Europe, Latin America where more double digit returns are possible.
We will be surprised if the Year-to-Year return from April 1 to March 30th
will be 5 % for the US Market - a rate that suggest short term bonds -
with currency risks - or ECU inflation protected utility bonds at 1.5 %
more, with a currency gain for $'s.
The
best buy is a basket of Asia's 30 % bonds - the currencies have hit bottom
and the rates have hit their tops. Triple gains, increase in bond prices
as rates decline, increases in exchange values, and real high interest
- and risk !
OUR
RECORD: check
money.htm,
stock.htm
for past calls, been damn good
Alliance
Global , Bear Stearns Emerg Mkts Debt A Ticker: EMDFX , Countrywide, Dreyfus
Global Bond Ticker: DGBDX, Federated Intl High Income, Franklin Templeton
High Inc Curr Ticker: ICHIX - Gt Global High-Income A Ticker: GHIAX Kemper
Global, Morgan Stanley Worldwide High-Inc A Ticker: : MSWAX - Oppenheimer
Intl Bond C Ticker: OIBCX - Phoenix Emerging Markets Bond B Ticker: : PEMBX
Prudential Interm Global Inc B Ticker: PBIBX T. Rowe Price, Van Kampen,
Vontobel
Wiredbrain's
Yahoo at wiredbrain password "synergy"
SYNERGY
Group's Excite Channel
Technologies
2X market
IXCO
SOX MSH PSE NDX
down more than market
Pause
in
Asia's DOWN and Europe's down
from record high ( US Germany France London )
Why
does one index so different from the other ? Could it be the effects of
INDEX trading?
Stocks,
dollar active ( down again) and bonds drifting down;
Asia
down, Europe down from new highs:
bonds
at
5.8 %
bonds
DOWN interest UP well off lows of 5.65 and off high of 6.2 on money
supply, oil prices near $16 Gold at $310
Currencies
(dollar)
DOWN from rally in a
tight range in a
Negative FX market - (on
scale from +15 to +15).
Bottom
Line:
Krugmann:
"
The Fed doesn't formally care about anything in particular. That way
you can't pin them
down.
Their nightmare: I know what keeps Alan Greenspan awake at nights. I don't
need any inside
information
to tell you this. He thinks about Japan 1990. ( Sic.. South East Asia in
1997 or the US in 1969 )
A
stock market that went to dizzying heights and there were lots of explanations;
everybody had a good theory about why that made sense and then it plunged.
And in the course of plunging, took the real economy down with it and it
never actually recovered. And although you can give all sorts of reasons
why the U.S. is different from that, the Fed is very concerned about that.
They are very concerned that we have a bubble economy, which is different
in detail, but the same general position as Japan before the big crash.
If they could figure out some way to deflate the bubble gently, they would."
Brancaccio:
"Sounds like you're a little worried about that scenario as well."
Krugmann:
"Oh, I'm scared to death! I look at the current level of the market. I
can't come up with a
reasonable
reason for it. I can give you a lot of standard arguments about why, even
if the market
MIT
economist Paul Krugmann's most recent book is called "Pop Internationalism."
NEW
YORK, May 7 (Reuters) - Earnings of companies in the Standard & Poor's
500 index are up 3.1 percent year-on-year in the first quarter with 91
percent, or 453 companies in the index, having reported, said First Call.
This
could rise to about 4.0 percent once all the retailers have reported, which
would be slightly better than Wall Street expected, said Chuck Hill, First
Call's director of research.
Analysts
had slashed their profit growth forecasts for the first quarter because
of Asia's turmoil.
But
even 4.0 percent would still be less than half the 9.0 percent year-on-year
growth in the fourth quarter of 1997, and would be well below the 10 percent
growth originally forecast for the first quarter.
Wall
Street is still betting
on backloaded
earnings growth this year.
First
Call said analysts forecast that S&P500 earnings will grow 8 percent
in the second quarter, 13 percent in the third quarter and 18 percent in
the final quarter. ( I wouldn't bet on it
)
These
forecasts may= WILL change over the coming months as more companies discuss
earnings with analysts, First Call said.
This
looks like a organized attempt to talk the market down:
You
don't have to shoot the charging bull between the eyes to try to slow it
down. You can use a number of less radical techniques to try to slow down
the ragging bull. You wave red flags, then the picadors poke at it, then
if all else fails you draw on more powerful weapons for the coup de grace'.
The
Fed won’t release this “directive,” crafted at the
end
of each committee meeting, until May 21.
The primary
significance
of the directive is to signal financial markets
which
way the Fed is leaning.
Officials
say Asia seems to be stabilizing, and
domestic
economic vigor appears to be offsetting the ill
effects
of Asian woes on U.S. exports. First-quarter
consumer
spending and housing construction was strong,
and
the economy appears to be awash in credit. So, in
public
speeches and interviews, Fed officials are beginning
to
prepare markets for a Fed move to brake the
economy-unless
it slows on its own soon.
The
Fed has been expecting a slowdown for months,
but
it hasn’t materialized. Most forecasters say the
economy
expanded at an annual rate of between 3% and
3.5%
in the first quarter, which would be the sixth quarter
of
better-than-3% growth.
Worries
about destabilizing fragile Asian financial markets could delay a Fed move,
but
some
Fed officials privately acknowledge that they would sleep better if the
stock market were less ebullient. Indeed, a decline in stock prices would
tend to slow the economy, which is precisely what the Fed would like to
see.
WSJ
Magic,
Science, the market, financial reporting and Beliefs systems such as Futures,
values, prices, rates and other Religions
(1948)
by Malinowski, Bronislaw
The
principle dialectic of the modern world is the dualism of science and magic.
The conflict starts with Newton who spent most of his life at numerical
alchemy.
In
a seminal article Malinowski suggests that "primitive" people use science
to control events they understand and can do something about, and magic
for forces of nature that are out of control.
They are very resonable about
fishing, farming, hunting and warfare when they find a pattern in events
- but magical thinking takes over when events seem out of control such
as storms, earthquakes, plagues, and other unexpected traumas.
Maclay,
Kubary, Malinowski: Archetypes from the Dreamtime of
Anthropology
The
dreamtime is explained in the "Last Wave" a film by Peter Weir - as a reality
that exists beyond the day to day that gives values, meaning to the "Law"
or customs of a people. In this way it is the origin of religion, which
the age of reason called a "superstition ".
Malinowski,
Bronislaw Kasper (1884+1942), British anthropologist,
regarded
as the founder of the "functional" school of anthropology,
which
maintains that human institutions should be examined in the
context
of the culture as a whole. He was born in Kraków, Poland. In
1914
he took part in an expedition to New Guinea and Melanesia and
spent
the next four years studying the peoples of the Trobriand Islands
of
the southwest Pacific. Malinowski became professor of social
anthropology
at the University of London in 1927. His further research
took
him to Africa, Latin America, and parts of the United States.
LAST
WEEK IN REVIEW:
For
historical interest, the market will look at the minutes of the March 31
U.S. Federal Open Market Committee meeting to be released on Thursday.
According
to Treasury Department data, foreigners owned 38 percent of the $3.4 trillion
in outstanding Treasury
debt
at the end of August.
The Japanese owned 25 percent of the foreign-held
debt, followed by Great Britain,
20
percent, and Germany, 6 percent.
Japanese
officials played down speculation this week of another wave of Treasury
securities selling to finance
a
$77 billion bailout of Japan's banking system.
In
addition to capital flows, Wednesday's Commerce Department release reported
the broadest measure of
U.S.
foreign trade, known as the current account. It shot up 11.4 percent to
$42.2 billion in the third quarter, the
The
current account measures not only trade in goods and services but also
the flow of investment income
between
countries and foreign aid.
08:44
US JUNE BOND FUTURE UP 13/32 TO 120-27.
08:44
US 30-YR TREASURY BOND UP 13/32 TO 103-02, YIELD AT 5.90%.
Thursday
May 21, 7:07 am Eastern Time
Markets
in France, Germany and parts of continental Europe were closed for Ascension
Day, reopening on Friday. Countries which operated normally reported lower-than-normal
volume.
---------------------------------------------------------------
MARKET
PRICES AT 1100 GMT
Mark
1.7646/51 Yen 135.19/29 Sterling 1.6270/80
Gold
$300.00/0.40 +0.59 (pvs PM fix) Brent $13.87 +0.15
FTSE
100 5968.9 +61.5
---------------------------------------------------------------
Benchmarks:
London
6,100 record high, Paris 4025* high, Frankfort 5,450 * high
The
UK's FTSE 100 index was up more than one pct as world markets celebrated
the Asian rally after Suharto quit and a late sprint by the Dow to close
116.83 points, or 1.3 percent, higher on Wednesday.
Sterling
had hit a seven-month low of 2.8763/73 against the mark from 2.8893/98
late Wednesday, after Bank of England Monetary Policy Committee member
Willem Buiter said the British economy is slowing and will slow further.
Some
dealers in U.S. stocks said minutes of the March 31 interest-rate setting
Federal Open Market Committee (FOMC) policy meeting, due for release at
1800 GMT, would be keenly awaited.
LONDON,
May 19 (Reuters) - European shares closed with steep gains on Tuesday,
lifted by a Wall Street rally and growing optimism that U.S. interest rates
would not be increased later in the day.
In
currencies, the yen lifted itself gingerly from its 6+1/2 year low against
the dollar after Indonesian President Suharto pledged to hold elections,
causing tentative rebounds in southeast Asian markets.
---------------------------------------------------------------
MARKET
PRICES AT 1550 GMT
Mark
1.7848/58 Yen 136.18/28
Sterling 1.6230/40
Gold
$300.00/0.50 -0.05 (pvs PM fix) Brent $14.47 +0.01
FTSE
100 5877.8 +51.6 CAC 3980.84 +35.53 X-DAX
5441.00 +97.34
---------------------------------------------------------------
THE NEXT
STEP FORWARD
Where
we go from here !
A few years
ago we talked about the potential of the internet -
Doc1
to Doc5
Then we
talked about the impact on the
social -
political
-
economic and general
future
Then we
talked about how the technology will develop
packets.htm
We talked
about the
network computer and how the information
utility will take shape.
Now what's
next ?
One way
or another - enough bandwidth will be provided to inexpensive and tough
enough boxes so that all the hard complex stuff will be pushed upstream
and voice, video, data and new applications can work the channels to provide
news, entertainment, communications, commerce in dramatically different
ways.
The big
question is how and by whom ?
By
John Sidgmore
May
5, 1998 - John Sidgmore
outlines
his vision for the
future
of global
telecommunication
in this
NetWorld+Interop
Keynote
speech
Global
tele-communications utilities linked by satellites, then ground stations,
then optic wires, cables, broad band, wide band, (A)DSL - a global backbone
providing service to all of humanity - with solar charged instruments from
anywhere to anywhere.
The first world has a billion ready clients,
the global market place has a million firms ready to go, the second and
third world can add a 100 million new clients a year and a million new
firms, local governments, missions and schools, gaming centers and market
players as fast as the bandwidth and prices allow.
The global requirements
are different from America and the European community. While part of the
world is wired - much of the world is not.
The Global
communications network must be based on wire-less standards - that will
work on wires but do not require them.
NOTICE:
SOUTHWINDNET = http://www.highspeedhosting.com/newsite/message.cfm
The
digital communications age has arrived. Still a little expensive - but
if the price - quality relationships hold - high speed connections should
be quite cheap in a year or so.
Then local NODES can provide high speed
wireless connections for EVERYTHING - internet with telephone, video and
real time data bases, BYE-BYE to MA bell, cable companies, TV networks
- as we know them.
The REAL impact will be all the way to China - the billions
- the majority of people on this planet who have almost no two-way telecommunications
- they can make the great leap forward...
The
site is in the process of upgrading service to
ViperLink.
VMC Virtual Marketing Corporation
The
ViperLink system uses a wireless access system to connect to an ATM
(
Asynchronous Transfer Mode (ATM) ATM is a packet switched technology capable
of carrying
voice,
video & data.)
backbone
at an astounding 90Mbps! Our Kentucky office has a full 2.0Mbps
(30%
bigger than a T+1) dedicated connection that is burstable to 6.0 Mbps (4
full
T+1s) if needed. If at any time, our web sites need additional bandwidth
–
they’ve
got it! Never again will there be a problem with not
having enough
bandwidth.
Ask how many providers can make that claim!
SAN
JOSE, Calif.--(BUSINESS WIRE)--May 11, 1998--
Verilink
Corp. (NASDAQ:VRLK - news) today announced that
Splitrock
Services, Inc., the U.S.-based provider of Internet access to Prodigy customers,
has selected Verilink to provide
Ramblings:
The doors to creative thinking and doing are in the narrow
places between large structures.
The
empires of the world and the mind dominate the landscape.
Vast historic structures obscure the
view of the horizon and our real location. Down narrow
lanes and in far fields we sometimes can
gain images that glimmer with reflections of a pale light,
far off.
Where theses narrow lanes and far field meet are the focal
points of new creations.
There is a container, connected to nodes, connected to
networks, creating a info-sphere of billions
living reproducing pathways and elements.
The bio-sphere
began and is still largely made up of
micro-organisms that share genetic information through
networks of co-option, cooperation and
communication that become organic wholes from simpler
to complex. Cells take in parts from
elsewhere and collect abilities of different genes.
The
biological and infomation packets are
coming together on a global scale.
One element basic to global networks are standards.
The
critical standard is digital information
which can be understood and act upon by all the other
members of the community.
The
information utility will operate on a common operational
language - such as HTTP, FTP, Java,
that will co=option functions from different places,
in words, pictures, sounds and video.
The
Microsoft issue is their desire to make MS-OS/ active
X the universal language for all future global
networks, software, operations, communications and services.
Netscape’s inter-operation open
arch-culture has a somewhat different vision of inter
and intra operability.
The global scope of
mega networks makes Microsoft’s vision unlikely but not
impossible.
Their moves into
communications, cable, satellites, broadcasting and services
should be taken as very important but
not as a given. Without outside intervention or meaningful
competition they could set NT/active X
type systems as the standard for most if not all inter-net
communications.
Gates to everone - "Look upon my works ye humble of the
earth and give
up."
But all empires lack vision and ability to change.
It’s not hardware, it’s not software, but it is service-ware.
Companies that
don’t sell machines or programs but universal services.
Sign-up and we
give you the container, the link, and all the services
you can think of and
many that you haven’t though of yet.
I soon will be able to pull down the word processing "service"
tied to voice and video "services". I
will be able to pull down interactive forms "service",
a search service, marketing services,
shopping service, broadcast and narrow cast services,
product design and production services,
travel, insurance, investment and banking services designed
and distributed by other services .
All these services we now called companies, producers,
distributors, stores and markets become
part of the services network.
The telephone company (
tele - sounds )is a service: television ( tele -
pictures ) networks and stations are service including
broadcast ( send sound and picture over a
wide area ): computers are not a machine or thing but
provide systems capacity to do something,
assign traits and store information and programs ( software
to help machines - do stuff ). All these
THINGS are becoming parts of a system of service with
nodes and terminals.
The core of the global service system is the operational
codes and languages. Everyone has to
understand ever one else and terminals need to talk to
nodes and servers need to communicate
with servers in common coded packets moving a mega-speeds
back and fourth.
These codes and
languages are extensions of Hyper Text Transfer Protocol
, ftp ( file transfer ) and operations such
as Java.
Saturday
May 9 8:05 AM EDT
ZANNY
MINTON BEDDOES: When we talk about a bubble, we talk about rising
fundamentals
would warrant, and they're going up because of some kind of speculative
frenzy,
to use a phrase, again, that Chairman Greenspan used, some kind of irrational
exuberance.
We're all feeling good. We're buying shares. Prices are going up not because
of
fundamental changes or not only because of fundamental changes, more because
there's
a kind of frenzied buying.
And
that's what we mean by a bubble, and we worry about it for two reasons.
We worry about it because
bubbles
tend to burst. Financial markets have had bubbles ever since finance started.
But the problem is that they
The other
problem is that if they--if
the
bubble continues, then this kind of inflation in asset prices--because
that's really what it is--can spill over into
ZANNY
MINTON BEDDOES: Well, I agree that there have been changes in the world
economy, and there
have
been changes in the U.S. economy.
The question is how big have these changes
been and do they justify
today's
prices, and I think one argument that is frequently made by the people
who believe in this new economy or
happened
in the last two years in the U.S. economy, we've grown far faster than
the trend growth, and we--than
economists
normally think the economy can grow--and that is because we've used more
people. Unemployment
The one
thing that does seem to be different is
that
as wages are rising, there isn't this immediate transfer into higher inflation.
Now,
there are--that could be because of some new rules. It could also be because
there
are
a lot of temporary factors which have actually influenced. One is that
benefits have
been
rising much more slowly than they used to.
The HMO revolution has meant
that its
employers
have been able to cut costs in areas where they traditionally weren't able
to cut
costs.
Secondly, the dollar is very strong. Now, the strength of the dollar
also dampens
inflation.
Thirdly, commodity prices are weak.
They're weak in part because
of the
problems
in Asia, but they're not--those are not structural changes.
They're temporary
things
that could change, and when they change, I think we'll see the old rules
coming back into play.
Are
stocks poised to flame out?
Friday
May 8th:
08:33
U.S. UNEMPLOYMENT RATE FALLS TO 4.3%, AVERAGE HOURLY EARNINGS UP 4C IN
APRIL, NEAR CONSENSUS.
08:32
RETAIL ADDS 44,000 JOBS.
08:32
CONSTRUCTION ADDS 35,000 JOBS.
08:32
SERVICES ADD 139,000 JOBS.
08:32
10,000 FACTORY JOBS LOST IN APRIL.
08:32
AVERAGE FACTORY WORKWEEK FALLS 1.1 HOURS TO 40.7.
08:32
AVERAGE WORKWEEK FALLS 0.3 HOURS TO 34.4.
08:32
HOURLY EARNINGS RISE 4 CENTS IN APRIL OR 0.3%.
08:32
4.3% JOBLESS RATE LOWEST SINCE FEB 1970.
08:32
262,000 JOBS CREATED IN APRIL; UNEMPLOYMENT RATE FALLS TO 4.3%.
08:31
U.S. 30-YR TREASURY UP SLIGHTLY ON UNEMPLOYMENT NEWS.
08:48
US JUNE BOND FUTURE DROPS 8/32 TO 120-03 ON JOBLESS DATA.
08:48
US 30-YR TREASURY BOND DROPS 12/32 TO 102-03, YIELD AT 5.99%.
08:48
US 10-YR TREASURY BOND DROPS 5/32 TO 98+14, YIELD AT 5.71%.
08:48
US 5-YR TREASURY BOND DROPS 4/32 TO 100+13, YIELD AT 5.65%.
08:48
US 3-YR TREASURY BOND DROPS 1/32 TO 99+11, YIELD AT 5.63%.
08:48
US 2-YR TREASURY BOND DROPS 2/32 TO 100-02, YIELD AT 5.58%.
08:48
US TREASURIES GO LOWER ON APRIL JOBLESS RATE.
08:48
US 1-YR T-BILL DISCOUNT RATE UP 2 BASIS POINTS TO 5.15%.
08:48
US 6-MONTH T-BILL DISCOUNT RATE UP 3 BASIS POINTS TO 5.13%.
08:48
US 3-MONTH T-BILL DISCOUNT RATE UP 2 BASIS POINTS TO 5.00%.
08:31
U.S. UNEMPLOYMENT RATE LOWEST SINCE FEB. 1970.
08:31
UNEMPLOYMENT RATE FALLS TO 4.3%, DOWN .4 PERCENTAGE POINTS.
08:31
APRIL NON-FARM PAYROLL UP 262,000, CONSENSUS 250,000.
07:20
BRITISH POUND 1.6403 DOWN .0071, OR -0.4%.
07:20
GERMAN DMARK 1.7718 UP .0034, OR +0.2%.
07:20
JAPAN YEN 132.56 DOWN .72, OR -0.5%.
07:20
U.S. 30-YR. BOND 5.948 UP 1 17/32, OR 0.1%.
07:20
FRANCE CAC 40 3906.36 UP 41.09, OR +1.04%.
07:20
GERMAN DAX 5260.56 UP 74.33, OR +1.43%.
07:20
LONDON FT 100 5965.5 UP 18.5, OR +0.5%.
07:12
FOREIGN STOCK MARKETS MOSTLY LOWER AUSTRALIAN MARKET 2780.50 DOWN 0.3,
OR -0.01%.
Korea
down - Asia mixed - London and Germany UP, France down
To
see what we said this morning and last night, see
http://www.wiredbrain.net/short.htm
..
The
news before it happens: Unemployment drops 4.2 % and new jobs increase
260,000 - adding to worries of rate increases :
The
government on Friday is scheduled to release the monthly employment data
for April, its first major reading on how the economy performed last month.
Analysts
surveyed by Reuters expect the unemployment rate to be unchanged at 4.7
percent with 259,000 new jobs created outside the farm sector. That compares
with the March rate of a decline of 36,000.
Last
month, the Conference Board put the help-wanted advertising index, which
tracks employment growth, at 92.0 in March, unchanged from February but
well above the March 1997 rate of 87.0, showing no drop in demand for labor.
The
feeling among the skeptics is that even if the employment figure is satisfactory,
there is no guarantee that the Fed is not
going
to tighten," Metz said.
Investors
appeared little reassured by Fed Vice Chairwoman Alice Rivlin who said
that a desire to rein in a high-flying stock
market
would not be a reason by itself for the central bank to raise interest
rates.
The
Fed was not considering changing margin requirements on stock trades, Rivlin
said.
There was no big risk of inflation
taking
off, she added.
Thursday
May 7th:
Editoral:
The
tradition is that good news = bad news because rapid growth = inflation.
Starrting in Nov. good news was good news because it = higher earning. Now
with a market well over any rational P/E the growth of earning and/or changes
of 1/4 % in a minor bank rate really can't make much difference. BUT when
prices are so high any excuse is a good excuse to sell - SO good news is
bad news again and bad news is bad news -
The employment number will be
up because the GDP was growing at a very high rate ( over 4 %) Wages are
going up in areas of demand but not in semi-skilled service jobs - as it
has been since 1969.
The problem is not wage inflation but a bubble - ready
to pop - in real estate - in stock prices - yo-yo land - the President
and Congress want to be popular. A reasonable slow down will be a lot better
than a CRASH ! And now, rather than close to an election.
The clients of
the Federal Central Bank - the World Banking System - need order in a time
of some real problems - and order means being able to add to the money
supply - which you can't do without great risk during a speculative bubble.
Fed
reminds Wall Street it is still top dog
By
Pierre Belec
NEW
YORK (Reuters) - Life is good on Wall Street. Consumer confidence is
the highest in some 30 years, inflation the lowest since the 1960s and
the stock market is soaring to the moon.
But
the Federal Reserve says trouble is bubbling in the economy.
Wall
Street was again reminded this week that the Fed is still the top dog.
The
secretive Fed leaked information that it had shifted monetary policy toward
a bias, which called for higher interest rates, because of concern that
the economy's robust growth may reignite inflation.
The
hint that the cost of borrowing may go up hit the market like a ton of
bricks, sending stocks into a tailspin at the beginning of the week as
investors pushed the panic button.
The
market had been betting that the central bank would not raise interest
rates and there was even speculation that lending rates would drop before
the end of the year.
But
by week's end, the market had roared back with a vengeance on a report
that inflation was still holding at the lowest level in some 30 years,
even though the economy grew at a fast pace in the first quarter.
Is
the Fed looking at the wrong radar screen?
Some
experts believe the central bank is actually more worried about the surge
in stock prices than any underlying inflation.
"
The
stock market is too speculative, exuberant and overvalued and there's the
risk that it could lead to financial asset inflation eventually causing
real sector inflation," said Hugh Johnson, chief investment officer for
First Albany Corp.
----------
G
o to Wiredbrain's
ACTIVE-NEWS
PAGE
----------
G
o to Wiredbrain's
PAGE TWO
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G
o to Wiredbrain's
Current up-dates
Wednesday:
Long bond at
5.84
Talking
the market down-``People are starting to talk about deflation,'' said David
Brickman, international economist at PaineWebber. "
The Fed's worried about
the economy overheating," said Farrell. "I think the Fed would be thrilled
if the financial sector took a deep breath. I think we all should be thrilled."
Federal
Reserve officials Alice Rivlin, Laurence Meyer, and Edward Gramlich, and
Atlanta Fed president Jack Guynn are all speaking later on Wednesday.
U.S. Deputy Treasury Secretary Lawrence Summers is also speaking.
Federal
Reserve Chairman Alan Greenspan speaks at 1615 GMT on Saturday to a meeting
of state bank supervisors.
Wednesday
April 29 6:57 AM EDT
Greenspan
preserved consensus with bias
Home
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Market
Letter
05/26/98
The
Market Posture was downgraded to Mildly Bearish the week ending
4/10/98
(DJIA - 8994.96). Initial downside price projection for the DJIA
is
8750. CTI readings should remain negative until late May 1998.
****Check
out "ON THE EDGE" - A monthly review of the markets****
________________________________________________________________________
CURRENT
PRIOR
MARKET
TIMING MODELS READING WEEK CHG CONNOTATION
________________________________________________________________________
CYCLICAL
TREND INDEX (CTI): -4 -4 0 BEARISH
MOMENTUM
INDEX: -8 -6 -2 BEARISH
SENTIMENT
INDEX: 1 2 +1 NEUTRAL
________________________________________________________________________
DOW
JONES INDUSTRIAL AVERAGES (DJIA) CLOSE:................ 9114.44
DJIA
POINT CHANGE FROM PRIOR WEEK:......................... 18.44
DJIA
PERCENTAGE CHANGE FROM PRIOR WEEK:.................... 0.20%
MARKET
POSTURE THIS WEEK:..................................MILD BEARISH
MARKET
POSTURE PRIOR WEEK:.................................MILD BEARISH
DJIA
TARGET:............................................... 8750
TIME
FRAME TO ACHIEVE TARGET:.............................. 29-May-98
DATE
CURRENT MARKET POSTURE FORMULATED:.................... 10-Apr-98
DJIA
CLOSE ON DATE CURRENT MARKET POSTURE FORMULATED:...... 8994.96
________________________________________________________________________
CYCLICAL
TREND INDEX (CTI).......... -4 CONNOTATION
________________________________________________________________________
29-May-98
(Projected) 7 BULLISH
05-Jun-98
(Projected) 7 BULLISH
12-Jun-98
(Projected) 7 BULLISH
19-Jun-98
(Projected) 7 BULLISH
26-Jun-98
(Projected) 7 BULLISH
________________________________________________________________________
MOMENTUM
INDEX...................... -8 % CHG CONNOTATION
________________________________________________________________________
1)
DJ Transportation Average 3390.59 +1.0% BEARISH
2)
S&P 500 Index 1108.25 -0.0% BEARISH
3)
NYSE Composite Index 574.58 0.0% BEARISH
4)
Advance-Decline Line -5505 BULLISH
5)
10 Day MA Advance-Decline Line 0.80 0.0% BEARISH
6)
AMEX Index 730.57 -0.9% BEARISH
7)
NASDAQ Composite Index 1802.72 -2.4% BEARISH
8)
DJ Utilities Index 280.06 0.1% BEARISH
9)
TRIN+10 Day Average 1.04 0.0% NEUTRAL
10)
NYSE New Highs-New Lows 251+137 NEUTRAL
11)
Zweig Breadth Indicator 0.40 BEARISH
12)
McClellan Oscillator -76 NEUTRAL
13)
McClellan Summation Index 628 BULLISH
14)
Unchanged Issue Index 0.17 BEARISH
________________________________________________________________________
SENTIMENT
INDEX..................... 1 % CHG CONNOTATION
________________________________________________________________________
1)
Odd Lot Short Ratio-5 Day Ave 5.03 0.0% BEARISH
2)
NYSE Short Interest Ratio 6.32 1.1% BULLISH
3)
Public-Specialist Short Ratio 0.89 0.0% BULLISH
4)
Put/Call Ratio+10 Day Ave(INDEX) 1.12 0.0% NEUTRAL
5)
Dividend-Yield Spread 5.10 0.0% BULLISH
6)
Mutual Fund Liquid Asset Ratio 4.60 0.0% BEARISH
7)
Bullish Investment Advisors 45.5 0.0% NEUTRAL
8)
Bearish Investment Advisors 25.2 0.0% NEUTRAL
9)
Bearish + Corrections Total 54.5 0.0% NEUTRAL
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Group Analysis
By
Isabelle Clary
NEW
YORK (Reuters) - Federal Reserve Chairman Alan Greenspan agreed at the
March meeting of Fed policy-makers to
reintroduce
a bias toward raising interest rates, appeasing anti-inflation hawks on
the panel and preserving consensus, sources
It
is important to remember that the major FED activity is NOT the federal
funds or discount rate but open market selling of bonds and repos to withdraw
liquid assets and increase reserves in the banking systems.
The bias gives
direction to day to day market activity which has more effect than the
discount rate changes. Real rates are below the 5.5 % target.
08:45
US 3-MONTH T-BILL DISCOUNT RATE DROPS 2 BASIS POINTS TO 4.90%.
08:44
US 6-MONTH T-BILL DISCOUNT RATE DROPS 1 BASIS POINT TO 5.09%.
The
effective discount rate ( the price of money to banks ) is LIBOR MAY98
94.32 London Inter bank loan rate at 5.68 % sets other bank loan rates
- the short term rate set by EURO $ JUN98 94.225 = 5.775 % is over the
target of 5.5 % and going up. So bias does matter more than the actual
official change is a minor rate - the federal funds ( over night ) discount
rate.
The cost of money is going up which might slow certain types of interest
sensitive economic activity. It is not that the fed does nothing but wait
and have meeting - but is very active every day in the market.
Dollar/mark
was unlikely to show major movement ahead of the weekend meetings of European
Union officials to decide the
countries
which will join the single currency from 1999, but the mark might receive
a boost subsequently, analysts said.
On
the foreign exchanges, the dollar was slightly firmer but trading was range-bound
partly because of a holiday in Japan and
as
the markets awaited a batch of speeches from central bank and finance officials.
---------------------------------------------------------------
MARKET
PRICES AT 1101 GMT
Mark
1.7972/77 Yen 132.18/28 Sterling 1.6686/96
Gold
$307.50/7.90 -0.75 (pvs PM fix) Brent $14.61 +0.01
FTSE
100 5818.0 +11.4 CAC 3756.49 -20.74 X-DAX 5125.71 +14.83
---------------------------------------------------------------
By
mid-session, London's blue-chip FTSE 100 index was 0.4 percent firmer,
rescued by bargain-hunters from earlier losses
and
Germany's Xetra DAX was up 0.4 percent.
The
Belgian, Dutch, Greek and Swiss markets were also amongst the gainers but
French, Italian and Spanish bourses were in
the
red, pausing for breath after Tuesday's gains amid nerves over Wall Street
and confusion over U.S. rates.
Friday
May 1, 10:50 am Eastern Time
US
Treasuries slip on talk Fed checks forex rates:
The
basics:
A
too fast growth rate, gives too much money in the system, plus the Asia
thing causes lower exports, higher inports, pressure on the dollar which
is falling.
A
listing of the main NAPM components follows:
April
March Feb Jan Dec Nov Oct Sept Aug
PMI
52.9 54.8 53.3 52.4 53.1 54.5 55.9 54.6 56.4
Production
53.4 57.6 55.3 53.3 55.8 58.5 59.6 58.4 61.2
New
Orders 56.8 57.3 55.9 55.2 53.9 55.1 58.4 56.1 60.4
Supplier
Del 52.3 53.4 52.1 52.0 54.0 55.2 55.0 55.5 55.6
Inventories
46.6 46.8 46.9 46.7 46.5 44.3 47.0 46.2 43.4
Employment
49.8 52.5 50.9 50.1 50.9 53.3 52.5 51.1 51.6
Prices
41.2 44.4 45.8 44.7 50.8 53.2 55.5 54.1 53.4
Export
Orders 49.7 48.0 47.9 45.0 50.6 52.6 51.9 51.2 55.1
Imports
56.3 53.4 51.2 53.9 55.4 52.6 51.7 53.1 53.9
US
Treasuries off post-NAPM highs in forex intervention fear. *Mkt talk Fed
checking forex rates, but Fed says ``no comment.'' *Impact greatest in
bills, 3-mo rates jump 5 bps in 45 mins. *Long end outperforming but off
highs, profit-taking seen. *Traders report foreign central bank selling.
Thursday
April 30, 8:56 am Eastern Time
U.S.
economy accelerated in Q1, inflation mute
Thursday
April 30, 8:56 am Eastern Time
WASHINGTON,
April 30 (Reuters) -
The U.S. economy unexpectedly picked up speed in the
first quarter of 1998, surging ahead at a brisk 4.2 percent annual rate
on booming consumer spending while inflation remained at its most muted
levels in 35 years, the Commerce Department said on Thursday.
It
was the sixth straight quarter in which Gross Domestic Product advanced
at an annual rate of 3 percent or more - well above the 2+1/4 percent target
range the Federal Reserve considers can be safely sustained without risking
a flareup in inflation pressures. First-quarter GDP growth handily outstripped
Wall Street economists' forecasts for a 3.3 percent rate of expansion as
it accelerated from last year's fourth-quarter 3.7 percent pace instead
of slowing.
A
chorus of U.S. central bank governors has warned recently that the economy
needs to soon show convincing evidence of a slowdown, unnerving financial
markets after reports the Fed has shifted to a position of increased willingness
to raise interest rates. Policymakers' concern that Asia's economic woes
were not enough to offset buoyant domestic demand appeared to be supported
by the first-quarter GDP report.
DOWN 40 or 50
to 1050
If
the news is "good", rapid growth that's "bad" because it implies inflation
and higher money costs. If the news is "bad", lower growth and earning
that's good- maybe. Labor costs are going to be higher but how high is
high ?
The chances are 2/3 down, 1/3 up - but the reactions to economic
news are not always what is expected.
Thursday:
April 30th
``If
the U.S. economic data are strong, fears of a rate rise will return, suggesting
dollar upside,'' said Sally Wilkinson, senior
economist
at Daiwa Europe in London.
--------------------------------------------------------------
MARKET
PRICES AT 0905 GMT
Mark
1.7937/42 Yen 132.05/15 Sterling 1.6686/96
Gold
$310.90/1.30 +2.65 (pvs PM fix) Brent $14.39 +0.14
FTSE
100 5843.7 +10.6 CAC 3746.61 +12.68 X-DAX 5101.43 +17.63
---------------------------------------------------------------
U.S.
Federal Reserve chairman Alan Greenspan is known to consider ECI figures
as an important indicator of inflationary
pressures
building in a robust U.S. economy.
Thursday
April 30, 4:14 am Eastern Time
Wall
St bubble risk looms,
but is Asia to blame?
By
Yoshiko Mori
TOKYO,
April 30 (Reuters) -
The U.S. stock market is being poisoned by a ``classic
bubble'' and the risk is looming of a
downward
correction of 10 to 20 percent, economists in Tokyo say.
``
The
current state of Wall Street is similar to what happened in Tokyo in 1987
when it was already apparent that the asset
market
bubbles were getting out of hand,'' said Richard Werner, Tokyo-based chief
economist and managing director of Profit Research Centre Ltd.
Excessive
capital created by the U.S. banking system and the Federal Reserve has
been the major cause of recent Wall Street
gains,
Werner said.
Excessive
credit creation is spurring financial and real estate transactions which
are pushing up asset prices -- ``the classic
bubble,''
Werner said.
Economists
said credit creation through loans by the U.S. banking system is expanding
at around 10 percent year-on-year, the highest growth rate since the 1980s.
``If
the U.S. economic data are strong, fears of a rate rise will return, suggesting
dollar upside,'' said Sally Wilkinson, senior
economist
at Daiwa Europe in London.
First
quarter U.S. employment cost index is expected to rise 0.9 percent from
one percent in the previous quarter.
An
advance estimate of quarter one U.S. gross domestic product is also expected
at 1230 GMT.
At
0835 GMT the dollar was at 1.7921/26 marks and 131.93/03 yen
Con't
on
News
and analysis GO TO
Money pages first
forecast.htm,
then
conditions.htm
Main page Flash.htm
----------
G
o to Wiredbrain's
ACTIVE-NEWS
PAGE
----------
Con't on money
PAGE TWO
----------
G
o to Wiredbrain's
Current up-dates
MSN now does the best search
Social
ergonomics
----------
G
o to Wiredbrain's
Current up-dates
To
see what we said this morning and last night, see
http://www.wiredbrain.net/short.htm
Alternative
site http://www.geocities.com/Yosemite/Trails/4333/flash.htm
News
and analysis GO TO
Money pages first
forecast.htm,
then
conditions.htm
Main page Flash.htm
----------
G
o to Wiredbrain's
PAGE TWO
Everyone
can be right ( and wrong) :
today,
packets.htm
The
second wave model was based on production, from farm and mines, to factories
- material produce that was stored in inventory, sold to wholesalers and
ended up in shops.
The third wave model, products are less important than
services. Systems of ideas match client demands within networks of OEM
( original equipment manufactures ) and direct sales to users.
The open
market in electric power with commodity prices distributed directly to
end users down networks uses an Asymmetric out of equilibrium algorithm
rather than seeking a mythological equilibrium at some sort of steady state.
Networks of material and service providers on a global scale certainly
changes forecasts of economic futures. (
The use of networks to find practical
paths has to do with the "traveling salesman problem". If the sales person
has to visit a large number of points there is no single shortest path
and the "best" solution is often counter-intuitive. )
The
irrational increase in stock prices is now being justified by blithe forecasts
of endless growth. People want to forget that economic change has loosers
that out number winners in the short run; the iceman, the candle makers
are gone.
The internet replaces many middle people, from bankers and travel
agents, to wholesalers and distributors.
The "endless growth" craze now
is being used politically to avoid hard or unpopular changes in entitlement
benefits.
The
bulls and the bears are both right and both wrong.
The business cycle has
not been repealed but changes from a material one to one of the mind and
spirit, SYNERGY where the whole is more than the sum of the parts.
The
factory is replaced by the production of trust and faith in paper, computer
digits, balances and transfers of insubstantial assets.
The over supply
is of faith - belief in a "blue sky" future that produces an over abundance
of paper money, credit, market booms and financial high flightiness.
The
devaluation started in South East Asia last June, spread to Korea and now
Japan, the unwinding of building booms, market booms, inflated prices,
currencies and hopes. So while the real economy does have a bright future,
the paper empires built on hope will tumble- someday.
The total equity
market is over 35 Trillion with 1/3 in the US, 20 % in Europe, 15 % in
Japan - and the other 1/3 spread around the world.
The Americans are adding
about 1 billion a day in new investments - or .003 % of the world market
or .01 % ( 2.5 % a year) of the American Market of 10 Trillion. Not enough
to substain a long term boom.
The Global equity was about 35 trillion,
last year, before the devaluations.
The US market has grown 20 % from 8
trillion to 10 trillion.
The US has gained 2 trillion, Europe a trillion
in paper profits while the rest of the world has loss 3 Trillion -
Global
players have increased the USA % of their investments as they retreat from
declining markets. Now the move is into Europe, back to parts of Asia,
Eastern Europe, Latin America where more double digit returns are possible.
We will be surprised if the Year-to-Year return from April 1 to March 30th
will be 5 % for the US Market - a rate that suggest short term bonds -
with currency risks - or ECU inflation protected utility bonds at 1.5 %
more, with a currency gain for $'s.
The
best buy is a basket of Asia's 30 % bonds - the currencies have hit bottom
and the rates have hit their tops. Triple gains, increase in bond prices
as rates decline, increases in exchange values, and real high interest
- and risk !
OUR
RECORD: check
money.htm,
stock.htm
for past calls, been damn good
Alliance
Global , Bear Stearns Emerg Mkts Debt A Ticker: EMDFX , Countrywide, Dreyfus
Global Bond Ticker: DGBDX, Federated Intl High Income, Franklin Templeton
High Inc Curr Ticker: ICHIX - Gt Global High-Income A Ticker: GHIAX Kemper
Global, Morgan Stanley Worldwide High-Inc A Ticker: : MSWAX - Oppenheimer
Intl Bond C Ticker: OIBCX - Phoenix Emerging Markets Bond B Ticker: : PEMBX
Prudential Interm Global Inc B Ticker: PBIBX T. Rowe Price, Van Kampen,
Vontobel
Wiredbrain's
Yahoo at wiredbrain password "synergy"
SYNERGY
Group's Excite Channel
Technologies
2X market
IXCO
SOX MSH PSE NDX
down more than market
Pause
in
Asia's DOWN and Europe's down
from record high ( US Germany France London )
Why
does one index so different from the other ? Could it be the effects of
INDEX trading?
Stocks,
dollar active ( down again) and bonds drifting down;
Asia
down, Europe down from new highs:
bonds
at
5.8 %
bonds
DOWN interest UP well off lows of 5.65 and off high of 6.2 on money
supply, oil prices near $16 Gold at $310
Currencies
(dollar)
DOWN from rally in a
tight range in a
Negative FX market - (on
scale from +15 to +15).
Bottom
Line:
Krugmann:
"
The Fed doesn't formally care about anything in particular. That way
you can't pin them
down.
Their nightmare: I know what keeps Alan Greenspan awake at nights. I don't
need any inside
information
to tell you this. He thinks about Japan 1990. ( Sic.. South East Asia in
1997 or the US in 1969 )
A
stock market that went to dizzying heights and there were lots of explanations;
everybody had a good theory about why that made sense and then it plunged.
And in the course of plunging, took the real economy down with it and it
never actually recovered. And although you can give all sorts of reasons
why the U.S. is different from that, the Fed is very concerned about that.
They are very concerned that we have a bubble economy, which is different
in detail, but the same general position as Japan before the big crash.
If they could figure out some way to deflate the bubble gently, they would."
Brancaccio:
"Sounds like you're a little worried about that scenario as well."
Krugmann:
"Oh, I'm scared to death! I look at the current level of the market. I
can't come up with a
reasonable
reason for it. I can give you a lot of standard arguments about why, even
if the market
MIT
economist Paul Krugmann's most recent book is called "Pop Internationalism."
NEW
YORK, May 7 (Reuters) - Earnings of companies in the Standard & Poor's
500 index are up 3.1 percent year-on-year in the first quarter with 91
percent, or 453 companies in the index, having reported, said First Call.
This
could rise to about 4.0 percent once all the retailers have reported, which
would be slightly better than Wall Street expected, said Chuck Hill, First
Call's director of research.
Analysts
had slashed their profit growth forecasts for the first quarter because
of Asia's turmoil.
But
even 4.0 percent would still be less than half the 9.0 percent year-on-year
growth in the fourth quarter of 1997, and would be well below the 10 percent
growth originally forecast for the first quarter.
Wall
Street is still betting
on backloaded
earnings growth this year.
First
Call said analysts forecast that S&P500 earnings will grow 8 percent
in the second quarter, 13 percent in the third quarter and 18 percent in
the final quarter. ( I wouldn't bet on it
)
These
forecasts may= WILL change over the coming months as more companies discuss
earnings with analysts, First Call said.
This
looks like a organized attempt to talk the market down:
You
don't have to shoot the charging bull between the eyes to try to slow it
down. You can use a number of less radical techniques to try to slow down
the ragging bull. You wave red flags, then the picadors poke at it, then
if all else fails you draw on more powerful weapons for the coup de grace'.
The
Fed won’t release this “directive,” crafted at the
end
of each committee meeting, until May 21.
The primary
significance
of the directive is to signal financial markets
which
way the Fed is leaning.
Officials
say Asia seems to be stabilizing, and
domestic
economic vigor appears to be offsetting the ill
effects
of Asian woes on U.S. exports. First-quarter
consumer
spending and housing construction was strong,
and
the economy appears to be awash in credit. So, in
public
speeches and interviews, Fed officials are beginning
to
prepare markets for a Fed move to brake the
economy-unless
it slows on its own soon.
The
Fed has been expecting a slowdown for months,
but
it hasn’t materialized. Most forecasters say the
economy
expanded at an annual rate of between 3% and
3.5%
in the first quarter, which would be the sixth quarter
of
better-than-3% growth.
Worries
about destabilizing fragile Asian financial markets could delay a Fed move,
but
some
Fed officials privately acknowledge that they would sleep better if the
stock market were less ebullient. Indeed, a decline in stock prices would
tend to slow the economy, which is precisely what the Fed would like to
see.
WSJ
Magic,
Science, the market, financial reporting and Beliefs systems such as Futures,
values, prices, rates and other Religions
(1948)
by Malinowski, Bronislaw
The
principle dialectic of the modern world is the dualism of science and magic.
The conflict starts with Newton who spent most of his life at numerical
alchemy.
In
a seminal article Malinowski suggests that "primitive" people use science
to control events they understand and can do something about, and magic
for forces of nature that are out of control.
They are very resonable about
fishing, farming, hunting and warfare when they find a pattern in events
- but magical thinking takes over when events seem out of control such
as storms, earthquakes, plagues, and other unexpected traumas.
Maclay,
Kubary, Malinowski: Archetypes from the Dreamtime of
Anthropology
The
dreamtime is explained in the "Last Wave" a film by Peter Weir - as a reality
that exists beyond the day to day that gives values, meaning to the "Law"
or customs of a people. In this way it is the origin of religion, which
the age of reason called a "superstition ".
Malinowski,
Bronislaw Kasper (1884+1942), British anthropologist,
regarded
as the founder of the "functional" school of anthropology,
which
maintains that human institutions should be examined in the
context
of the culture as a whole. He was born in Kraków, Poland. In
1914
he took part in an expedition to New Guinea and Melanesia and
spent
the next four years studying the peoples of the Trobriand Islands
of
the southwest Pacific. Malinowski became professor of social
anthropology
at the University of London in 1927. His further research
took
him to Africa, Latin America, and parts of the United States.
LAST
WEEK IN REVIEW:
For
historical interest, the market will look at the minutes of the March 31
U.S. Federal Open Market Committee meeting to be released on Thursday.
According
to Treasury Department data, foreigners owned 38 percent of the $3.4 trillion
in outstanding Treasury
debt
at the end of August.
The Japanese owned 25 percent of the foreign-held
debt, followed by Great Britain,
20
percent, and Germany, 6 percent.
Japanese
officials played down speculation this week of another wave of Treasury
securities selling to finance
a
$77 billion bailout of Japan's banking system.
In
addition to capital flows, Wednesday's Commerce Department release reported
the broadest measure of
U.S.
foreign trade, known as the current account. It shot up 11.4 percent to
$42.2 billion in the third quarter, the
The
current account measures not only trade in goods and services but also
the flow of investment income
between
countries and foreign aid.
08:44
US JUNE BOND FUTURE UP 13/32 TO 120-27.
08:44
US 30-YR TREASURY BOND UP 13/32 TO 103-02, YIELD AT 5.90%.
Thursday
May 21, 7:07 am Eastern Time
Markets
in France, Germany and parts of continental Europe were closed for Ascension
Day, reopening on Friday. Countries which operated normally reported lower-than-normal
volume.
---------------------------------------------------------------
MARKET
PRICES AT 1100 GMT
Mark
1.7646/51 Yen 135.19/29 Sterling 1.6270/80
Gold
$300.00/0.40 +0.59 (pvs PM fix) Brent $13.87 +0.15
FTSE
100 5968.9 +61.5
---------------------------------------------------------------
Benchmarks:
London
6,100 record high, Paris 4025* high, Frankfort 5,450 * high
The
UK's FTSE 100 index was up more than one pct as world markets celebrated
the Asian rally after Suharto quit and a late sprint by the Dow to close
116.83 points, or 1.3 percent, higher on Wednesday.
Sterling
had hit a seven-month low of 2.8763/73 against the mark from 2.8893/98
late Wednesday, after Bank of England Monetary Policy Committee member
Willem Buiter said the British economy is slowing and will slow further.
Some
dealers in U.S. stocks said minutes of the March 31 interest-rate setting
Federal Open Market Committee (FOMC) policy meeting, due for release at
1800 GMT, would be keenly awaited.
LONDON,
May 19 (Reuters) - European shares closed with steep gains on Tuesday,
lifted by a Wall Street rally and growing optimism that U.S. interest rates
would not be increased later in the day.
In
currencies, the yen lifted itself gingerly from its 6+1/2 year low against
the dollar after Indonesian President Suharto pledged to hold elections,
causing tentative rebounds in southeast Asian markets.
---------------------------------------------------------------
MARKET
PRICES AT 1550 GMT
Mark
1.7848/58 Yen 136.18/28
Sterling 1.6230/40
Gold
$300.00/0.50 -0.05 (pvs PM fix) Brent $14.47 +0.01
FTSE
100 5877.8 +51.6 CAC 3980.84 +35.53 X-DAX
5441.00 +97.34
---------------------------------------------------------------
THE NEXT
STEP FORWARD
Where
we go from here !
A few years
ago we talked about the potential of the internet -
Doc1
to Doc5
Then we
talked about the impact on the
social -
political
-
economic and general
future
Then we
talked about how the technology will develop
packets.htm
We talked
about the
network computer and how the information
utility will take shape.
Now what's
next ?
One way
or another - enough bandwidth will be provided to inexpensive and tough
enough boxes so that all the hard complex stuff will be pushed upstream
and voice, video, data and new applications can work the channels to provide
news, entertainment, communications, commerce in dramatically different
ways.
The big
question is how and by whom ?
By
John Sidgmore
May
5, 1998 - John Sidgmore
outlines
his vision for the
future
of global
telecommunication
in this
NetWorld+Interop
Keynote
speech
Global
tele-communications utilities linked by satellites, then ground stations,
then optic wires, cables, broad band, wide band, (A)DSL - a global backbone
providing service to all of humanity - with solar charged instruments from
anywhere to anywhere.
The first world has a billion ready clients,
the global market place has a million firms ready to go, the second and
third world can add a 100 million new clients a year and a million new
firms, local governments, missions and schools, gaming centers and market
players as fast as the bandwidth and prices allow.
The global requirements
are different from America and the European community. While part of the
world is wired - much of the world is not.
The Global
communications network must be based on wire-less standards - that will
work on wires but do not require them.
NOTICE:
SOUTHWINDNET = http://www.highspeedhosting.com/newsite/message.cfm
The
digital communications age has arrived. Still a little expensive - but
if the price - quality relationships hold - high speed connections should
be quite cheap in a year or so.
Then local NODES can provide high speed
wireless connections for EVERYTHING - internet with telephone, video and
real time data bases, BYE-BYE to MA bell, cable companies, TV networks
- as we know them.
The REAL impact will be all the way to China - the billions
- the majority of people on this planet who have almost no two-way telecommunications
- they can make the great leap forward...
The
site is in the process of upgrading service to
ViperLink.
VMC Virtual Marketing Corporation
The
ViperLink system uses a wireless access system to connect to an ATM
(
Asynchronous Transfer Mode (ATM) ATM is a packet switched technology capable
of carrying
voice,
video & data.)
backbone
at an astounding 90Mbps! Our Kentucky office has a full 2.0Mbps
(30%
bigger than a T+1) dedicated connection that is burstable to 6.0 Mbps (4
full
T+1s) if needed. If at any time, our web sites need additional bandwidth
–
they’ve
got it! Never again will there be a problem with not
having enough
bandwidth.
Ask how many providers can make that claim!
SAN
JOSE, Calif.--(BUSINESS WIRE)--May 11, 1998--
Verilink
Corp. (NASDAQ:VRLK - news) today announced that
Splitrock
Services, Inc., the U.S.-based provider of Internet access to Prodigy customers,
has selected Verilink to provide
Ramblings:
The doors to creative thinking and doing are in the narrow
places between large structures.
The
empires of the world and the mind dominate the landscape.
Vast historic structures obscure the
view of the horizon and our real location. Down narrow
lanes and in far fields we sometimes can
gain images that glimmer with reflections of a pale light,
far off.
Where theses narrow lanes and far field meet are the focal
points of new creations.
There is a container, connected to nodes, connected to
networks, creating a info-sphere of billions
living reproducing pathways and elements.
The bio-sphere
began and is still largely made up of
micro-organisms that share genetic information through
networks of co-option, cooperation and
communication that become organic wholes from simpler
to complex. Cells take in parts from
elsewhere and collect abilities of different genes.
The
biological and infomation packets are
coming together on a global scale.
One element basic to global networks are standards.
The
critical standard is digital information
which can be understood and act upon by all the other
members of the community.
The
information utility will operate on a common operational
language - such as HTTP, FTP, Java,
that will co=option functions from different places,
in words, pictures, sounds and video.
The
Microsoft issue is their desire to make MS-OS/ active
X the universal language for all future global
networks, software, operations, communications and services.
Netscape’s inter-operation open
arch-culture has a somewhat different vision of inter
and intra operability.
The global scope of
mega networks makes Microsoft’s vision unlikely but not
impossible.
Their moves into
communications, cable, satellites, broadcasting and services
should be taken as very important but
not as a given. Without outside intervention or meaningful
competition they could set NT/active X
type systems as the standard for most if not all inter-net
communications.
Gates to everone - "Look upon my works ye humble of the
earth and give
up."
But all empires lack vision and ability to change.
It’s not hardware, it’s not software, but it is service-ware.
Companies that
don’t sell machines or programs but universal services.
Sign-up and we
give you the container, the link, and all the services
you can think of and
many that you haven’t though of yet.
I soon will be able to pull down the word processing "service"
tied to voice and video "services". I
will be able to pull down interactive forms "service",
a search service, marketing services,
shopping service, broadcast and narrow cast services,
product design and production services,
travel, insurance, investment and banking services designed
and distributed by other services .
All these services we now called companies, producers,
distributors, stores and markets become
part of the services network.
The telephone company (
tele - sounds )is a service: television ( tele -
pictures ) networks and stations are service including
broadcast ( send sound and picture over a
wide area ): computers are not a machine or thing but
provide systems capacity to do something,
assign traits and store information and programs ( software
to help machines - do stuff ). All these
THINGS are becoming parts of a system of service with
nodes and terminals.
The core of the global service system is the operational
codes and languages. Everyone has to
understand ever one else and terminals need to talk to
nodes and servers need to communicate
with servers in common coded packets moving a mega-speeds
back and fourth.
These codes and
languages are extensions of Hyper Text Transfer Protocol
, ftp ( file transfer ) and operations such
as Java.
Saturday
May 9 8:05 AM EDT
ZANNY
MINTON BEDDOES: When we talk about a bubble, we talk about rising
fundamentals
would warrant, and they're going up because of some kind of speculative
frenzy,
to use a phrase, again, that Chairman Greenspan used, some kind of irrational
exuberance.
We're all feeling good. We're buying shares. Prices are going up not because
of
fundamental changes or not only because of fundamental changes, more because
there's
a kind of frenzied buying.
And
that's what we mean by a bubble, and we worry about it for two reasons.
We worry about it because
bubbles
tend to burst. Financial markets have had bubbles ever since finance started.
But the problem is that they
The other
problem is that if they--if
the
bubble continues, then this kind of inflation in asset prices--because
that's really what it is--can spill over into
ZANNY
MINTON BEDDOES: Well, I agree that there have been changes in the world
economy, and there
have
been changes in the U.S. economy.
The question is how big have these changes
been and do they justify
today's
prices, and I think one argument that is frequently made by the people
who believe in this new economy or
happened
in the last two years in the U.S. economy, we've grown far faster than
the trend growth, and we--than
economists
normally think the economy can grow--and that is because we've used more
people. Unemployment
The one
thing that does seem to be different is
that
as wages are rising, there isn't this immediate transfer into higher inflation.
Now,
there are--that could be because of some new rules. It could also be because
there
are
a lot of temporary factors which have actually influenced. One is that
benefits have
been
rising much more slowly than they used to.
The HMO revolution has meant
that its
employers
have been able to cut costs in areas where they traditionally weren't able
to cut
costs.
Secondly, the dollar is very strong. Now, the strength of the dollar
also dampens
inflation.
Thirdly, commodity prices are weak.
They're weak in part because
of the
problems
in Asia, but they're not--those are not structural changes.
They're temporary
things
that could change, and when they change, I think we'll see the old rules
coming back into play.
Are
stocks poised to flame out?
Friday
May 8th:
08:33
U.S. UNEMPLOYMENT RATE FALLS TO 4.3%, AVERAGE HOURLY EARNINGS UP 4C IN
APRIL, NEAR CONSENSUS.
08:32
RETAIL ADDS 44,000 JOBS.
08:32
CONSTRUCTION ADDS 35,000 JOBS.
08:32
SERVICES ADD 139,000 JOBS.
08:32
10,000 FACTORY JOBS LOST IN APRIL.
08:32
AVERAGE FACTORY WORKWEEK FALLS 1.1 HOURS TO 40.7.
08:32
AVERAGE WORKWEEK FALLS 0.3 HOURS TO 34.4.
08:32
HOURLY EARNINGS RISE 4 CENTS IN APRIL OR 0.3%.
08:32
4.3% JOBLESS RATE LOWEST SINCE FEB 1970.
08:32
262,000 JOBS CREATED IN APRIL; UNEMPLOYMENT RATE FALLS TO 4.3%.
08:31
U.S. 30-YR TREASURY UP SLIGHTLY ON UNEMPLOYMENT NEWS.
08:48
US JUNE BOND FUTURE DROPS 8/32 TO 120-03 ON JOBLESS DATA.
08:48
US 30-YR TREASURY BOND DROPS 12/32 TO 102-03, YIELD AT 5.99%.
08:48
US 10-YR TREASURY BOND DROPS 5/32 TO 98+14, YIELD AT 5.71%.
08:48
US 5-YR TREASURY BOND DROPS 4/32 TO 100+13, YIELD AT 5.65%.
08:48
US 3-YR TREASURY BOND DROPS 1/32 TO 99+11, YIELD AT 5.63%.
08:48
US 2-YR TREASURY BOND DROPS 2/32 TO 100-02, YIELD AT 5.58%.
08:48
US TREASURIES GO LOWER ON APRIL JOBLESS RATE.
08:48
US 1-YR T-BILL DISCOUNT RATE UP 2 BASIS POINTS TO 5.15%.
08:48
US 6-MONTH T-BILL DISCOUNT RATE UP 3 BASIS POINTS TO 5.13%.
08:48
US 3-MONTH T-BILL DISCOUNT RATE UP 2 BASIS POINTS TO 5.00%.
08:31
U.S. UNEMPLOYMENT RATE LOWEST SINCE FEB. 1970.
08:31
UNEMPLOYMENT RATE FALLS TO 4.3%, DOWN .4 PERCENTAGE POINTS.
08:31
APRIL NON-FARM PAYROLL UP 262,000, CONSENSUS 250,000.
07:20
BRITISH POUND 1.6403 DOWN .0071, OR -0.4%.
07:20
GERMAN DMARK 1.7718 UP .0034, OR +0.2%.
07:20
JAPAN YEN 132.56 DOWN .72, OR -0.5%.
07:20
U.S. 30-YR. BOND 5.948 UP 1 17/32, OR 0.1%.
07:20
FRANCE CAC 40 3906.36 UP 41.09, OR +1.04%.
07:20
GERMAN DAX 5260.56 UP 74.33, OR +1.43%.
07:20
LONDON FT 100 5965.5 UP 18.5, OR +0.5%.
07:12
FOREIGN STOCK MARKETS MOSTLY LOWER AUSTRALIAN MARKET 2780.50 DOWN 0.3,
OR -0.01%.
Korea
down - Asia mixed - London and Germany UP, France down
To
see what we said this morning and last night, see
http://www.wiredbrain.net/short.htm
..
The
news before it happens: Unemployment drops 4.2 % and new jobs increase
260,000 - adding to worries of rate increases :
The
government on Friday is scheduled to release the monthly employment data
for April, its first major reading on how the economy performed last month.
Analysts
surveyed by Reuters expect the unemployment rate to be unchanged at 4.7
percent with 259,000 new jobs created outside the farm sector. That compares
with the March rate of a decline of 36,000.
Last
month, the Conference Board put the help-wanted advertising index, which
tracks employment growth, at 92.0 in March, unchanged from February but
well above the March 1997 rate of 87.0, showing no drop in demand for labor.
The
feeling among the skeptics is that even if the employment figure is satisfactory,
there is no guarantee that the Fed is not
going
to tighten," Metz said.
Investors
appeared little reassured by Fed Vice Chairwoman Alice Rivlin who said
that a desire to rein in a high-flying stock
market
would not be a reason by itself for the central bank to raise interest
rates.
The
Fed was not considering changing margin requirements on stock trades, Rivlin
said.
There was no big risk of inflation
taking
off, she added.
Thursday
May 7th:
Editoral:
The
tradition is that good news = bad news because rapid growth = inflation.
Starrting in Nov. good news was good news because it = higher earning. Now
with a market well over any rational P/E the growth of earning and/or changes
of 1/4 % in a minor bank rate really can't make much difference. BUT when
prices are so high any excuse is a good excuse to sell - SO good news is
bad news again and bad news is bad news -
The employment number will be
up because the GDP was growing at a very high rate ( over 4 %) Wages are
going up in areas of demand but not in semi-skilled service jobs - as it
has been since 1969.
The problem is not wage inflation but a bubble - ready
to pop - in real estate - in stock prices - yo-yo land - the President
and Congress want to be popular. A reasonable slow down will be a lot better
than a CRASH ! And now, rather than close to an election.
The clients of
the Federal Central Bank - the World Banking System - need order in a time
of some real problems - and order means being able to add to the money
supply - which you can't do without great risk during a speculative bubble.
Fed
reminds Wall Street it is still top dog
By
Pierre Belec
NEW
YORK (Reuters) - Life is good on Wall Street. Consumer confidence is
the highest in some 30 years, inflation the lowest since the 1960s and
the stock market is soaring to the moon.
But
the Federal Reserve says trouble is bubbling in the economy.
Wall
Street was again reminded this week that the Fed is still the top dog.
The
secretive Fed leaked information that it had shifted monetary policy toward
a bias, which called for higher interest rates, because of concern that
the economy's robust growth may reignite inflation.
The
hint that the cost of borrowing may go up hit the market like a ton of
bricks, sending stocks into a tailspin at the beginning of the week as
investors pushed the panic button.
The
market had been betting that the central bank would not raise interest
rates and there was even speculation that lending rates would drop before
the end of the year.
But
by week's end, the market had roared back with a vengeance on a report
that inflation was still holding at the lowest level in some 30 years,
even though the economy grew at a fast pace in the first quarter.
Is
the Fed looking at the wrong radar screen?
Some
experts believe the central bank is actually more worried about the surge
in stock prices than any underlying inflation.
"
The
stock market is too speculative, exuberant and overvalued and there's the
risk that it could lead to financial asset inflation eventually causing
real sector inflation," said Hugh Johnson, chief investment officer for
First Albany Corp.
----------
G
o to Wiredbrain's
ACTIVE-NEWS
PAGE
----------
G
o to Wiredbrain's
PAGE TWO
----------
G
o to Wiredbrain's
Current up-dates
Wednesday:
Long bond at
5.84
Talking
the market down-``People are starting to talk about deflation,'' said David
Brickman, international economist at PaineWebber. "
The Fed's worried about
the economy overheating," said Farrell. "I think the Fed would be thrilled
if the financial sector took a deep breath. I think we all should be thrilled."
Federal
Reserve officials Alice Rivlin, Laurence Meyer, and Edward Gramlich, and
Atlanta Fed president Jack Guynn are all speaking later on Wednesday.
U.S. Deputy Treasury Secretary Lawrence Summers is also speaking.
Federal
Reserve Chairman Alan Greenspan speaks at 1615 GMT on Saturday to a meeting
of state bank supervisors.
Wednesday
April 29 6:57 AM EDT
Greenspan
preserved consensus with bias
Home
| Client Access | Contact Us | Help
Market
Letter
05/26/98
The
Market Posture was downgraded to Mildly Bearish the week ending
4/10/98
(DJIA - 8994.96). Initial downside price projection for the DJIA
is
8750. CTI readings should remain negative until late May 1998.
****Check
out "ON THE EDGE" - A monthly review of the markets****
________________________________________________________________________
CURRENT
PRIOR
MARKET
TIMING MODELS READING WEEK CHG CONNOTATION
________________________________________________________________________
CYCLICAL
TREND INDEX (CTI): -4 -4 0 BEARISH
MOMENTUM
INDEX: -8 -6 -2 BEARISH
SENTIMENT
INDEX: 1 2 +1 NEUTRAL
________________________________________________________________________
DOW
JONES INDUSTRIAL AVERAGES (DJIA) CLOSE:................ 9114.44
DJIA
POINT CHANGE FROM PRIOR WEEK:......................... 18.44
DJIA
PERCENTAGE CHANGE FROM PRIOR WEEK:.................... 0.20%
MARKET
POSTURE THIS WEEK:..................................MILD BEARISH
MARKET
POSTURE PRIOR WEEK:.................................MILD BEARISH
DJIA
TARGET:............................................... 8750
TIME
FRAME TO ACHIEVE TARGET:.............................. 29-May-98
DATE
CURRENT MARKET POSTURE FORMULATED:.................... 10-Apr-98
DJIA
CLOSE ON DATE CURRENT MARKET POSTURE FORMULATED:...... 8994.96
________________________________________________________________________
CYCLICAL
TREND INDEX (CTI).......... -4 CONNOTATION
________________________________________________________________________
29-May-98
(Projected) 7 BULLISH
05-Jun-98
(Projected) 7 BULLISH
12-Jun-98
(Projected) 7 BULLISH
19-Jun-98
(Projected) 7 BULLISH
26-Jun-98
(Projected) 7 BULLISH
________________________________________________________________________
MOMENTUM
INDEX...................... -8 % CHG CONNOTATION
________________________________________________________________________
1)
DJ Transportation Average 3390.59 +1.0% BEARISH
2)
S&P 500 Index 1108.25 -0.0% BEARISH
3)
NYSE Composite Index 574.58 0.0% BEARISH
4)
Advance-Decline Line -5505 BULLISH
5)
10 Day MA Advance-Decline Line 0.80 0.0% BEARISH
6)
AMEX Index 730.57 -0.9% BEARISH
7)
NASDAQ Composite Index 1802.72 -2.4% BEARISH
8)
DJ Utilities Index 280.06 0.1% BEARISH
9)
TRIN+10 Day Average 1.04 0.0% NEUTRAL
10)
NYSE New Highs-New Lows 251+137 NEUTRAL
11)
Zweig Breadth Indicator 0.40 BEARISH
12)
McClellan Oscillator -76 NEUTRAL
13)
McClellan Summation Index 628 BULLISH
14)
Unchanged Issue Index 0.17 BEARISH
________________________________________________________________________
SENTIMENT
INDEX..................... 1 % CHG CONNOTATION
________________________________________________________________________
1)
Odd Lot Short Ratio-5 Day Ave 5.03 0.0% BEARISH
2)
NYSE Short Interest Ratio 6.32 1.1% BULLISH
3)
Public-Specialist Short Ratio 0.89 0.0% BULLISH
4)
Put/Call Ratio+10 Day Ave(INDEX) 1.12 0.0% NEUTRAL
5)
Dividend-Yield Spread 5.10 0.0% BULLISH
6)
Mutual Fund Liquid Asset Ratio 4.60 0.0% BEARISH
7)
Bullish Investment Advisors 45.5 0.0% NEUTRAL
8)
Bearish Investment Advisors 25.2 0.0% NEUTRAL
9)
Bearish + Corrections Total 54.5 0.0% NEUTRAL
Home
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Group Analysis
By
Isabelle Clary
NEW
YORK (Reuters) - Federal Reserve Chairman Alan Greenspan agreed at the
March meeting of Fed policy-makers to
reintroduce
a bias toward raising interest rates, appeasing anti-inflation hawks on
the panel and preserving consensus, sources
It
is important to remember that the major FED activity is NOT the federal
funds or discount rate but open market selling of bonds and repos to withdraw
liquid assets and increase reserves in the banking systems.
The bias gives
direction to day to day market activity which has more effect than the
discount rate changes. Real rates are below the 5.5 % target.
08:45
US 3-MONTH T-BILL DISCOUNT RATE DROPS 2 BASIS POINTS TO 4.90%.
08:44
US 6-MONTH T-BILL DISCOUNT RATE DROPS 1 BASIS POINT TO 5.09%.
The
effective discount rate ( the price of money to banks ) is LIBOR MAY98
94.32 London Inter bank loan rate at 5.68 % sets other bank loan rates
- the short term rate set by EURO $ JUN98 94.225 = 5.775 % is over the
target of 5.5 % and going up. So bias does matter more than the actual
official change is a minor rate - the federal funds ( over night ) discount
rate.
The cost of money is going up which might slow certain types of interest
sensitive economic activity. It is not that the fed does nothing but wait
and have meeting - but is very active every day in the market.
Dollar/mark
was unlikely to show major movement ahead of the weekend meetings of European
Union officials to decide the
countries
which will join the single currency from 1999, but the mark might receive
a boost subsequently, analysts said.
On
the foreign exchanges, the dollar was slightly firmer but trading was range-bound
partly because of a holiday in Japan and
as
the markets awaited a batch of speeches from central bank and finance officials.
---------------------------------------------------------------
MARKET
PRICES AT 1101 GMT
Mark
1.7972/77 Yen 132.18/28 Sterling 1.6686/96
Gold
$307.50/7.90 -0.75 (pvs PM fix) Brent $14.61 +0.01
FTSE
100 5818.0 +11.4 CAC 3756.49 -20.74 X-DAX 5125.71 +14.83
---------------------------------------------------------------
By
mid-session, London's blue-chip FTSE 100 index was 0.4 percent firmer,
rescued by bargain-hunters from earlier losses
and
Germany's Xetra DAX was up 0.4 percent.
The
Belgian, Dutch, Greek and Swiss markets were also amongst the gainers but
French, Italian and Spanish bourses were in
the
red, pausing for breath after Tuesday's gains amid nerves over Wall Street
and confusion over U.S. rates.
Friday
May 1, 10:50 am Eastern Time
US
Treasuries slip on talk Fed checks forex rates:
The
basics:
A
too fast growth rate, gives too much money in the system, plus the Asia
thing causes lower exports, higher inports, pressure on the dollar which
is falling.
A
listing of the main NAPM components follows:
April
March Feb Jan Dec Nov Oct Sept Aug
PMI
52.9 54.8 53.3 52.4 53.1 54.5 55.9 54.6 56.4
Production
53.4 57.6 55.3 53.3 55.8 58.5 59.6 58.4 61.2
New
Orders 56.8 57.3 55.9 55.2 53.9 55.1 58.4 56.1 60.4
Supplier
Del 52.3 53.4 52.1 52.0 54.0 55.2 55.0 55.5 55.6
Inventories
46.6 46.8 46.9 46.7 46.5 44.3 47.0 46.2 43.4
Employment
49.8 52.5 50.9 50.1 50.9 53.3 52.5 51.1 51.6
Prices
41.2 44.4 45.8 44.7 50.8 53.2 55.5 54.1 53.4
Export
Orders 49.7 48.0 47.9 45.0 50.6 52.6 51.9 51.2 55.1
Imports
56.3 53.4 51.2 53.9 55.4 52.6 51.7 53.1 53.9
US
Treasuries off post-NAPM highs in forex intervention fear. *Mkt talk Fed
checking forex rates, but Fed says ``no comment.'' *Impact greatest in
bills, 3-mo rates jump 5 bps in 45 mins. *Long end outperforming but off
highs, profit-taking seen. *Traders report foreign central bank selling.
Thursday
April 30, 8:56 am Eastern Time
U.S.
economy accelerated in Q1, inflation mute
Thursday
April 30, 8:56 am Eastern Time
WASHINGTON,
April 30 (Reuters) -
The U.S. economy unexpectedly picked up speed in the
first quarter of 1998, surging ahead at a brisk 4.2 percent annual rate
on booming consumer spending while inflation remained at its most muted
levels in 35 years, the Commerce Department said on Thursday.
It
was the sixth straight quarter in which Gross Domestic Product advanced
at an annual rate of 3 percent or more - well above the 2+1/4 percent target
range the Federal Reserve considers can be safely sustained without risking
a flareup in inflation pressures. First-quarter GDP growth handily outstripped
Wall Street economists' forecasts for a 3.3 percent rate of expansion as
it accelerated from last year's fourth-quarter 3.7 percent pace instead
of slowing.
A
chorus of U.S. central bank governors has warned recently that the economy
needs to soon show convincing evidence of a slowdown, unnerving financial
markets after reports the Fed has shifted to a position of increased willingness
to raise interest rates. Policymakers' concern that Asia's economic woes
were not enough to offset buoyant domestic demand appeared to be supported
by the first-quarter GDP report.
DOWN 40 or 50
to 1050
If
the news is "good", rapid growth that's "bad" because it implies inflation
and higher money costs. If the news is "bad", lower growth and earning
that's good- maybe. Labor costs are going to be higher but how high is
high ?
The chances are 2/3 down, 1/3 up - but the reactions to economic
news are not always what is expected.
Thursday:
April 30th
``If
the U.S. economic data are strong, fears of a rate rise will return, suggesting
dollar upside,'' said Sally Wilkinson, senior
economist
at Daiwa Europe in London.
--------------------------------------------------------------
MARKET
PRICES AT 0905 GMT
Mark
1.7937/42 Yen 132.05/15 Sterling 1.6686/96
Gold
$310.90/1.30 +2.65 (pvs PM fix) Brent $14.39 +0.14
FTSE
100 5843.7 +10.6 CAC 3746.61 +12.68 X-DAX 5101.43 +17.63
---------------------------------------------------------------
U.S.
Federal Reserve chairman Alan Greenspan is known to consider ECI figures
as an important indicator of inflationary
pressures
building in a robust U.S. economy.
Thursday
April 30, 4:14 am Eastern Time
Wall
St bubble risk looms,
but is Asia to blame?
By
Yoshiko Mori
TOKYO,
April 30 (Reuters) -
The U.S. stock market is being poisoned by a ``classic
bubble'' and the risk is looming of a
downward
correction of 10 to 20 percent, economists in Tokyo say.
``
The
current state of Wall Street is similar to what happened in Tokyo in 1987
when it was already apparent that the asset
market
bubbles were getting out of hand,'' said Richard Werner, Tokyo-based chief
economist and managing director of Profit Research Centre Ltd.
Excessive
capital created by the U.S. banking system and the Federal Reserve has
been the major cause of recent Wall Street
gains,
Werner said.
Excessive
credit creation is spurring financial and real estate transactions which
are pushing up asset prices -- ``the classic
bubble,''
Werner said.
Economists
said credit creation through loans by the U.S. banking system is expanding
at around 10 percent year-on-year, the highest growth rate since the 1980s.
``If
the U.S. economic data are strong, fears of a rate rise will return, suggesting
dollar upside,'' said Sally Wilkinson, senior
economist
at Daiwa Europe in London.
First
quarter U.S. employment cost index is expected to rise 0.9 percent from
one percent in the previous quarter.
An
advance estimate of quarter one U.S. gross domestic product is also expected
at 1230 GMT.
At
0835 GMT the dollar was at 1.7921/26 marks and 131.93/03 yen
Con't
on
News
and analysis GO TO
Money pages first
forecast.htm,
then
conditions.htm
Main page Flash.htm
----------
G
o to Wiredbrain's
ACTIVE-NEWS
PAGE
----------
Con't on money
PAGE TWO
----------
G
o to Wiredbrain's
Current up-dates
---------- G
o to Wiredbrain's
Current up-dates
To
see what we said this morning and last night, see
http://www.wiredbrain.net/short.htm
Alternative
site http://www.geocities.com/Yosemite/Trails/4333/flash.htm
Alternative
site http://www.geocities.com/Yosemite/Trails/4333/flash.htm
News
and analysis GO TO
Money pages first
forecast.htm,
then
conditions.htm
Main page Flash.htm
----------
G
o to Wiredbrain's
PAGE TWO
Everyone
can be right ( and wrong) :
today,
packets.htm
The
second wave model was based on production, from farm and mines, to factories
- material produce that was stored in inventory, sold to wholesalers and
ended up in shops.
The third wave model, products are less important than
services. Systems of ideas match client demands within networks of OEM
( original equipment manufactures ) and direct sales to users.
The open
market in electric power with commodity prices distributed directly to
end users down networks uses an Asymmetric out of equilibrium algorithm
rather than seeking a mythological equilibrium at some sort of steady state.
Networks of material and service providers on a global scale certainly
changes forecasts of economic futures. (
The use of networks to find practical
paths has to do with the "traveling salesman problem". If the sales person
has to visit a large number of points there is no single shortest path
and the "best" solution is often counter-intuitive. )
The
irrational increase in stock prices is now being justified by blithe forecasts
of endless growth. People want to forget that economic change has loosers
that out number winners in the short run; the iceman, the candle makers
are gone.
The internet replaces many middle people, from bankers and travel
agents, to wholesalers and distributors.
The "endless growth" craze now
is being used politically to avoid hard or unpopular changes in entitlement
benefits.
The
bulls and the bears are both right and both wrong.
The business cycle has
not been repealed but changes from a material one to one of the mind and
spirit, SYNERGY where the whole is more than the sum of the parts.
The
factory is replaced by the production of trust and faith in paper, computer
digits, balances and transfers of insubstantial assets.
The over supply
is of faith - belief in a "blue sky" future that produces an over abundance
of paper money, credit, market booms and financial high flightiness.
The
devaluation started in South East Asia last June, spread to Korea and now
Japan, the unwinding of building booms, market booms, inflated prices,
currencies and hopes. So while the real economy does have a bright future,
the paper empires built on hope will tumble- someday.
The total equity
market is over 35 Trillion with 1/3 in the US, 20 % in Europe, 15 % in
Japan - and the other 1/3 spread around the world.
The Americans are adding
about 1 billion a day in new investments - or .003 % of the world market
or .01 % ( 2.5 % a year) of the American Market of 10 Trillion. Not enough
to substain a long term boom.
The Global equity was about 35 trillion,
last year, before the devaluations.
The US market has grown 20 % from 8
trillion to 10 trillion.
The US has gained 2 trillion, Europe a trillion
in paper profits while the rest of the world has loss 3 Trillion -
Global
players have increased the USA % of their investments as they retreat from
declining markets. Now the move is into Europe, back to parts of Asia,
Eastern Europe, Latin America where more double digit returns are possible.
We will be surprised if the Year-to-Year return from April 1 to March 30th
will be 5 % for the US Market - a rate that suggest short term bonds -
with currency risks - or ECU inflation protected utility bonds at 1.5 %
more, with a currency gain for $'s.
The
best buy is a basket of Asia's 30 % bonds - the currencies have hit bottom
and the rates have hit their tops. Triple gains, increase in bond prices
as rates decline, increases in exchange values, and real high interest
- and risk !
OUR
RECORD: check
money.htm,
stock.htm
for past calls, been damn good
Alliance
Global , Bear Stearns Emerg Mkts Debt A Ticker: EMDFX , Countrywide, Dreyfus
Global Bond Ticker: DGBDX, Federated Intl High Income, Franklin Templeton
High Inc Curr Ticker: ICHIX - Gt Global High-Income A Ticker: GHIAX Kemper
Global, Morgan Stanley Worldwide High-Inc A Ticker: : MSWAX - Oppenheimer
Intl Bond C Ticker: OIBCX - Phoenix Emerging Markets Bond B Ticker: : PEMBX
Prudential Interm Global Inc B Ticker: PBIBX T. Rowe Price, Van Kampen,
Vontobel
Wiredbrain's
Yahoo at wiredbrain password "synergy"
SYNERGY
Group's Excite Channel
Technologies
2X market
IXCO
SOX MSH PSE NDX
down more than market
Pause
in
Asia's DOWN and Europe's down
from record high ( US Germany France London )
Why
does one index so different from the other ? Could it be the effects of
INDEX trading?
Stocks,
dollar active ( down again) and bonds drifting down;
Asia
down, Europe down from new highs:
bonds
at
5.8 %
bonds
DOWN interest UP well off lows of 5.65 and off high of 6.2 on money
supply, oil prices near $16 Gold at $310
Currencies
(dollar)
DOWN from rally in a
tight range in a
Negative FX market - (on
scale from +15 to +15).
Bottom
Line:
Krugmann:
"
The Fed doesn't formally care about anything in particular. That way
you can't pin them
down.
Their nightmare: I know what keeps Alan Greenspan awake at nights. I don't
need any inside
information
to tell you this. He thinks about Japan 1990. ( Sic.. South East Asia in
1997 or the US in 1969 )
A
stock market that went to dizzying heights and there were lots of explanations;
everybody had a good theory about why that made sense and then it plunged.
And in the course of plunging, took the real economy down with it and it
never actually recovered. And although you can give all sorts of reasons
why the U.S. is different from that, the Fed is very concerned about that.
They are very concerned that we have a bubble economy, which is different
in detail, but the same general position as Japan before the big crash.
If they could figure out some way to deflate the bubble gently, they would."
Brancaccio:
"Sounds like you're a little worried about that scenario as well."
Krugmann:
"Oh, I'm scared to death! I look at the current level of the market. I
can't come up with a
reasonable
reason for it. I can give you a lot of standard arguments about why, even
if the market
MIT
economist Paul Krugmann's most recent book is called "Pop Internationalism."
NEW
YORK, May 7 (Reuters) - Earnings of companies in the Standard & Poor's
500 index are up 3.1 percent year-on-year in the first quarter with 91
percent, or 453 companies in the index, having reported, said First Call.
This
could rise to about 4.0 percent once all the retailers have reported, which
would be slightly better than Wall Street expected, said Chuck Hill, First
Call's director of research.
Analysts
had slashed their profit growth forecasts for the first quarter because
of Asia's turmoil.
But
even 4.0 percent would still be less than half the 9.0 percent year-on-year
growth in the fourth quarter of 1997, and would be well below the 10 percent
growth originally forecast for the first quarter.
Wall
Street is still betting
on backloaded
earnings growth this year.
First
Call said analysts forecast that S&P500 earnings will grow 8 percent
in the second quarter, 13 percent in the third quarter and 18 percent in
the final quarter. ( I wouldn't bet on it
)
These
forecasts may= WILL change over the coming months as more companies discuss
earnings with analysts, First Call said.
This
looks like a organized attempt to talk the market down:
You
don't have to shoot the charging bull between the eyes to try to slow it
down. You can use a number of less radical techniques to try to slow down
the ragging bull. You wave red flags, then the picadors poke at it, then
if all else fails you draw on more powerful weapons for the coup de grace'.
The
Fed won’t release this “directive,” crafted at the
end
of each committee meeting, until May 21.
The primary
significance
of the directive is to signal financial markets
which
way the Fed is leaning.
Officials
say Asia seems to be stabilizing, and
domestic
economic vigor appears to be offsetting the ill
effects
of Asian woes on U.S. exports. First-quarter
consumer
spending and housing construction was strong,
and
the economy appears to be awash in credit. So, in
public
speeches and interviews, Fed officials are beginning
to
prepare markets for a Fed move to brake the
economy-unless
it slows on its own soon.
The
Fed has been expecting a slowdown for months,
but
it hasn’t materialized. Most forecasters say the
economy
expanded at an annual rate of between 3% and
3.5%
in the first quarter, which would be the sixth quarter
of
better-than-3% growth.
Worries
about destabilizing fragile Asian financial markets could delay a Fed move,
but
some
Fed officials privately acknowledge that they would sleep better if the
stock market were less ebullient. Indeed, a decline in stock prices would
tend to slow the economy, which is precisely what the Fed would like to
see.
WSJ
Magic,
Science, the market, financial reporting and Beliefs systems such as Futures,
values, prices, rates and other Religions
(1948)
by Malinowski, Bronislaw
The
principle dialectic of the modern world is the dualism of science and magic.
The conflict starts with Newton who spent most of his life at numerical
alchemy.
In
a seminal article Malinowski suggests that "primitive" people use science
to control events they understand and can do something about, and magic
for forces of nature that are out of control.
They are very resonable about
fishing, farming, hunting and warfare when they find a pattern in events
- but magical thinking takes over when events seem out of control such
as storms, earthquakes, plagues, and other unexpected traumas.
Maclay,
Kubary, Malinowski: Archetypes from the Dreamtime of
Anthropology
The
dreamtime is explained in the "Last Wave" a film by Peter Weir - as a reality
that exists beyond the day to day that gives values, meaning to the "Law"
or customs of a people. In this way it is the origin of religion, which
the age of reason called a "superstition ".
Malinowski,
Bronislaw Kasper (1884+1942), British anthropologist,
regarded
as the founder of the "functional" school of anthropology,
which
maintains that human institutions should be examined in the
context
of the culture as a whole. He was born in Kraków, Poland. In
1914
he took part in an expedition to New Guinea and Melanesia and
spent
the next four years studying the peoples of the Trobriand Islands
of
the southwest Pacific. Malinowski became professor of social
anthropology
at the University of London in 1927. His further research
took
him to Africa, Latin America, and parts of the United States.
LAST
WEEK IN REVIEW:
For
historical interest, the market will look at the minutes of the March 31
U.S. Federal Open Market Committee meeting to be released on Thursday.
According
to Treasury Department data, foreigners owned 38 percent of the $3.4 trillion
in outstanding Treasury
debt
at the end of August.
The Japanese owned 25 percent of the foreign-held
debt, followed by Great Britain,
20
percent, and Germany, 6 percent.
Japanese
officials played down speculation this week of another wave of Treasury
securities selling to finance
a
$77 billion bailout of Japan's banking system.
In
addition to capital flows, Wednesday's Commerce Department release reported
the broadest measure of
U.S.
foreign trade, known as the current account. It shot up 11.4 percent to
$42.2 billion in the third quarter, the
The
current account measures not only trade in goods and services but also
the flow of investment income
between
countries and foreign aid.
08:44
US JUNE BOND FUTURE UP 13/32 TO 120-27.
08:44
US 30-YR TREASURY BOND UP 13/32 TO 103-02, YIELD AT 5.90%.
Thursday
May 21, 7:07 am Eastern Time
Markets
in France, Germany and parts of continental Europe were closed for Ascension
Day, reopening on Friday. Countries which operated normally reported lower-than-normal
volume.
---------------------------------------------------------------
MARKET
PRICES AT 1100 GMT
Mark
1.7646/51 Yen 135.19/29 Sterling 1.6270/80
Gold
$300.00/0.40 +0.59 (pvs PM fix) Brent $13.87 +0.15
FTSE
100 5968.9 +61.5
---------------------------------------------------------------
Benchmarks:
London
6,100 record high, Paris 4025* high, Frankfort 5,450 * high
The
UK's FTSE 100 index was up more than one pct as world markets celebrated
the Asian rally after Suharto quit and a late sprint by the Dow to close
116.83 points, or 1.3 percent, higher on Wednesday.
Sterling
had hit a seven-month low of 2.8763/73 against the mark from 2.8893/98
late Wednesday, after Bank of England Monetary Policy Committee member
Willem Buiter said the British economy is slowing and will slow further.
Some
dealers in U.S. stocks said minutes of the March 31 interest-rate setting
Federal Open Market Committee (FOMC) policy meeting, due for release at
1800 GMT, would be keenly awaited.
LONDON,
May 19 (Reuters) - European shares closed with steep gains on Tuesday,
lifted by a Wall Street rally and growing optimism that U.S. interest rates
would not be increased later in the day.
In
currencies, the yen lifted itself gingerly from its 6+1/2 year low against
the dollar after Indonesian President Suharto pledged to hold elections,
causing tentative rebounds in southeast Asian markets.
---------------------------------------------------------------
MARKET
PRICES AT 1550 GMT
Mark
1.7848/58 Yen 136.18/28
Sterling 1.6230/40
Gold
$300.00/0.50 -0.05 (pvs PM fix) Brent $14.47 +0.01
FTSE
100 5877.8 +51.6 CAC 3980.84 +35.53 X-DAX
5441.00 +97.34
---------------------------------------------------------------
THE NEXT
STEP FORWARD
Where
we go from here !
A few years
ago we talked about the potential of the internet -
Doc1
to Doc5
Then we
talked about the impact on the
social -
political
-
economic and general
future
Then we
talked about how the technology will develop
packets.htm
We talked
about the
network computer and how the information
utility will take shape.
Now what's
next ?
One way
or another - enough bandwidth will be provided to inexpensive and tough
enough boxes so that all the hard complex stuff will be pushed upstream
and voice, video, data and new applications can work the channels to provide
news, entertainment, communications, commerce in dramatically different
ways.
The big
question is how and by whom ?
By
John Sidgmore
May
5, 1998 - John Sidgmore
outlines
his vision for the
future
of global
telecommunication
in this
NetWorld+Interop
Keynote
speech
Global
tele-communications utilities linked by satellites, then ground stations,
then optic wires, cables, broad band, wide band, (A)DSL - a global backbone
providing service to all of humanity - with solar charged instruments from
anywhere to anywhere.
The first world has a billion ready clients,
the global market place has a million firms ready to go, the second and
third world can add a 100 million new clients a year and a million new
firms, local governments, missions and schools, gaming centers and market
players as fast as the bandwidth and prices allow.
The global requirements
are different from America and the European community. While part of the
world is wired - much of the world is not.
The Global
communications network must be based on wire-less standards - that will
work on wires but do not require them.
NOTICE:
SOUTHWINDNET = http://www.highspeedhosting.com/newsite/message.cfm
The
digital communications age has arrived. Still a little expensive - but
if the price - quality relationships hold - high speed connections should
be quite cheap in a year or so.
Then local NODES can provide high speed
wireless connections for EVERYTHING - internet with telephone, video and
real time data bases, BYE-BYE to MA bell, cable companies, TV networks
- as we know them.
The REAL impact will be all the way to China - the billions
- the majority of people on this planet who have almost no two-way telecommunications
- they can make the great leap forward...
The
site is in the process of upgrading service to
ViperLink.
VMC Virtual Marketing Corporation
The
ViperLink system uses a wireless access system to connect to an ATM
(
Asynchronous Transfer Mode (ATM) ATM is a packet switched technology capable
of carrying
voice,
video & data.)
backbone
at an astounding 90Mbps! Our Kentucky office has a full 2.0Mbps
(30%
bigger than a T+1) dedicated connection that is burstable to 6.0 Mbps (4
full
T+1s) if needed. If at any time, our web sites need additional bandwidth
–
they’ve
got it! Never again will there be a problem with not
having enough
bandwidth.
Ask how many providers can make that claim!
SAN
JOSE, Calif.--(BUSINESS WIRE)--May 11, 1998--
Verilink
Corp. (NASDAQ:VRLK - news) today announced that
Splitrock
Services, Inc., the U.S.-based provider of Internet access to Prodigy customers,
has selected Verilink to provide
Ramblings:
The doors to creative thinking and doing are in the narrow
places between large structures.
The
empires of the world and the mind dominate the landscape.
Vast historic structures obscure the
view of the horizon and our real location. Down narrow
lanes and in far fields we sometimes can
gain images that glimmer with reflections of a pale light,
far off.
Where theses narrow lanes and far field meet are the focal
points of new creations.
There is a container, connected to nodes, connected to
networks, creating a info-sphere of billions
living reproducing pathways and elements.
The bio-sphere
began and is still largely made up of
micro-organisms that share genetic information through
networks of co-option, cooperation and
communication that become organic wholes from simpler
to complex. Cells take in parts from
elsewhere and collect abilities of different genes.
The
biological and infomation packets are
coming together on a global scale.
One element basic to global networks are standards.
The
critical standard is digital information
which can be understood and act upon by all the other
members of the community.
The
information utility will operate on a common operational
language - such as HTTP, FTP, Java,
that will co=option functions from different places,
in words, pictures, sounds and video.
The
Microsoft issue is their desire to make MS-OS/ active
X the universal language for all future global
networks, software, operations, communications and services.
Netscape’s inter-operation open
arch-culture has a somewhat different vision of inter
and intra operability.
The global scope of
mega networks makes Microsoft’s vision unlikely but not
impossible.
Their moves into
communications, cable, satellites, broadcasting and services
should be taken as very important but
not as a given. Without outside intervention or meaningful
competition they could set NT/active X
type systems as the standard for most if not all inter-net
communications.
Gates to everone - "Look upon my works ye humble of the
earth and give
up."
But all empires lack vision and ability to change.
It’s not hardware, it’s not software, but it is service-ware.
Companies that
don’t sell machines or programs but universal services.
Sign-up and we
give you the container, the link, and all the services
you can think of and
many that you haven’t though of yet.
I soon will be able to pull down the word processing "service"
tied to voice and video "services". I
will be able to pull down interactive forms "service",
a search service, marketing services,
shopping service, broadcast and narrow cast services,
product design and production services,
travel, insurance, investment and banking services designed
and distributed by other services .
All these services we now called companies, producers,
distributors, stores and markets become
part of the services network.
The telephone company (
tele - sounds )is a service: television ( tele -
pictures ) networks and stations are service including
broadcast ( send sound and picture over a
wide area ): computers are not a machine or thing but
provide systems capacity to do something,
assign traits and store information and programs ( software
to help machines - do stuff ). All these
THINGS are becoming parts of a system of service with
nodes and terminals.
The core of the global service system is the operational
codes and languages. Everyone has to
understand ever one else and terminals need to talk to
nodes and servers need to communicate
with servers in common coded packets moving a mega-speeds
back and fourth.
These codes and
languages are extensions of Hyper Text Transfer Protocol
, ftp ( file transfer ) and operations such
as Java.
Saturday
May 9 8:05 AM EDT
ZANNY
MINTON BEDDOES: When we talk about a bubble, we talk about rising
fundamentals
would warrant, and they're going up because of some kind of speculative
frenzy,
to use a phrase, again, that Chairman Greenspan used, some kind of irrational
exuberance.
We're all feeling good. We're buying shares. Prices are going up not because
of
fundamental changes or not only because of fundamental changes, more because
there's
a kind of frenzied buying.
And
that's what we mean by a bubble, and we worry about it for two reasons.
We worry about it because
bubbles
tend to burst. Financial markets have had bubbles ever since finance started.
But the problem is that they
The other
problem is that if they--if
the
bubble continues, then this kind of inflation in asset prices--because
that's really what it is--can spill over into
ZANNY
MINTON BEDDOES: Well, I agree that there have been changes in the world
economy, and there
have
been changes in the U.S. economy.
The question is how big have these changes
been and do they justify
today's
prices, and I think one argument that is frequently made by the people
who believe in this new economy or
happened
in the last two years in the U.S. economy, we've grown far faster than
the trend growth, and we--than
economists
normally think the economy can grow--and that is because we've used more
people. Unemployment
The one
thing that does seem to be different is
that
as wages are rising, there isn't this immediate transfer into higher inflation.
Now,
there are--that could be because of some new rules. It could also be because
there
are
a lot of temporary factors which have actually influenced. One is that
benefits have
been
rising much more slowly than they used to.
The HMO revolution has meant
that its
employers
have been able to cut costs in areas where they traditionally weren't able
to cut
costs.
Secondly, the dollar is very strong. Now, the strength of the dollar
also dampens
inflation.
Thirdly, commodity prices are weak.
They're weak in part because
of the
problems
in Asia, but they're not--those are not structural changes.
They're temporary
things
that could change, and when they change, I think we'll see the old rules
coming back into play.
Are
stocks poised to flame out?
Friday
May 8th:
08:33
U.S. UNEMPLOYMENT RATE FALLS TO 4.3%, AVERAGE HOURLY EARNINGS UP 4C IN
APRIL, NEAR CONSENSUS.
08:32
RETAIL ADDS 44,000 JOBS.
08:32
CONSTRUCTION ADDS 35,000 JOBS.
08:32
SERVICES ADD 139,000 JOBS.
08:32
10,000 FACTORY JOBS LOST IN APRIL.
08:32
AVERAGE FACTORY WORKWEEK FALLS 1.1 HOURS TO 40.7.
08:32
AVERAGE WORKWEEK FALLS 0.3 HOURS TO 34.4.
08:32
HOURLY EARNINGS RISE 4 CENTS IN APRIL OR 0.3%.
08:32
4.3% JOBLESS RATE LOWEST SINCE FEB 1970.
08:32
262,000 JOBS CREATED IN APRIL; UNEMPLOYMENT RATE FALLS TO 4.3%.
08:31
U.S. 30-YR TREASURY UP SLIGHTLY ON UNEMPLOYMENT NEWS.
08:48
US JUNE BOND FUTURE DROPS 8/32 TO 120-03 ON JOBLESS DATA.
08:48
US 30-YR TREASURY BOND DROPS 12/32 TO 102-03, YIELD AT 5.99%.
08:48
US 10-YR TREASURY BOND DROPS 5/32 TO 98+14, YIELD AT 5.71%.
08:48
US 5-YR TREASURY BOND DROPS 4/32 TO 100+13, YIELD AT 5.65%.
08:48
US 3-YR TREASURY BOND DROPS 1/32 TO 99+11, YIELD AT 5.63%.
08:48
US 2-YR TREASURY BOND DROPS 2/32 TO 100-02, YIELD AT 5.58%.
08:48
US TREASURIES GO LOWER ON APRIL JOBLESS RATE.
08:48
US 1-YR T-BILL DISCOUNT RATE UP 2 BASIS POINTS TO 5.15%.
08:48
US 6-MONTH T-BILL DISCOUNT RATE UP 3 BASIS POINTS TO 5.13%.
08:48
US 3-MONTH T-BILL DISCOUNT RATE UP 2 BASIS POINTS TO 5.00%.
08:31
U.S. UNEMPLOYMENT RATE LOWEST SINCE FEB. 1970.
08:31
UNEMPLOYMENT RATE FALLS TO 4.3%, DOWN .4 PERCENTAGE POINTS.
08:31
APRIL NON-FARM PAYROLL UP 262,000, CONSENSUS 250,000.
07:20
BRITISH POUND 1.6403 DOWN .0071, OR -0.4%.
07:20
GERMAN DMARK 1.7718 UP .0034, OR +0.2%.
07:20
JAPAN YEN 132.56 DOWN .72, OR -0.5%.
07:20
U.S. 30-YR. BOND 5.948 UP 1 17/32, OR 0.1%.
07:20
FRANCE CAC 40 3906.36 UP 41.09, OR +1.04%.
07:20
GERMAN DAX 5260.56 UP 74.33, OR +1.43%.
07:20
LONDON FT 100 5965.5 UP 18.5, OR +0.5%.
07:12
FOREIGN STOCK MARKETS MOSTLY LOWER AUSTRALIAN MARKET 2780.50 DOWN 0.3,
OR -0.01%.
Korea
down - Asia mixed - London and Germany UP, France down
To
see what we said this morning and last night, see
http://www.wiredbrain.net/short.htm
..
The
news before it happens: Unemployment drops 4.2 % and new jobs increase
260,000 - adding to worries of rate increases :
The
government on Friday is scheduled to release the monthly employment data
for April, its first major reading on how the economy performed last month.
Analysts
surveyed by Reuters expect the unemployment rate to be unchanged at 4.7
percent with 259,000 new jobs created outside the farm sector. That compares
with the March rate of a decline of 36,000.
Last
month, the Conference Board put the help-wanted advertising index, which
tracks employment growth, at 92.0 in March, unchanged from February but
well above the March 1997 rate of 87.0, showing no drop in demand for labor.
The
feeling among the skeptics is that even if the employment figure is satisfactory,
there is no guarantee that the Fed is not
going
to tighten," Metz said.
Investors
appeared little reassured by Fed Vice Chairwoman Alice Rivlin who said
that a desire to rein in a high-flying stock
market
would not be a reason by itself for the central bank to raise interest
rates.
The
Fed was not considering changing margin requirements on stock trades, Rivlin
said.
There was no big risk of inflation
taking
off, she added.
Thursday
May 7th:
Editoral:
The
tradition is that good news = bad news because rapid growth = inflation.
Starrting in Nov. good news was good news because it = higher earning. Now
with a market well over any rational P/E the growth of earning and/or changes
of 1/4 % in a minor bank rate really can't make much difference. BUT when
prices are so high any excuse is a good excuse to sell - SO good news is
bad news again and bad news is bad news -
The employment number will be
up because the GDP was growing at a very high rate ( over 4 %) Wages are
going up in areas of demand but not in semi-skilled service jobs - as it
has been since 1969.
The problem is not wage inflation but a bubble - ready
to pop - in real estate - in stock prices - yo-yo land - the President
and Congress want to be popular. A reasonable slow down will be a lot better
than a CRASH ! And now, rather than close to an election.
The clients of
the Federal Central Bank - the World Banking System - need order in a time
of some real problems - and order means being able to add to the money
supply - which you can't do without great risk during a speculative bubble.
Fed
reminds Wall Street it is still top dog
By
Pierre Belec
NEW
YORK (Reuters) - Life is good on Wall Street. Consumer confidence is
the highest in some 30 years, inflation the lowest since the 1960s and
the stock market is soaring to the moon.
But
the Federal Reserve says trouble is bubbling in the economy.
Wall
Street was again reminded this week that the Fed is still the top dog.
The
secretive Fed leaked information that it had shifted monetary policy toward
a bias, which called for higher interest rates, because of concern that
the economy's robust growth may reignite inflation.
The
hint that the cost of borrowing may go up hit the market like a ton of
bricks, sending stocks into a tailspin at the beginning of the week as
investors pushed the panic button.
The
market had been betting that the central bank would not raise interest
rates and there was even speculation that lending rates would drop before
the end of the year.
But
by week's end, the market had roared back with a vengeance on a report
that inflation was still holding at the lowest level in some 30 years,
even though the economy grew at a fast pace in the first quarter.
Is
the Fed looking at the wrong radar screen?
Some
experts believe the central bank is actually more worried about the surge
in stock prices than any underlying inflation.
"
The
stock market is too speculative, exuberant and overvalued and there's the
risk that it could lead to financial asset inflation eventually causing
real sector inflation," said Hugh Johnson, chief investment officer for
First Albany Corp.
----------
G
o to Wiredbrain's
ACTIVE-NEWS
PAGE
----------
G
o to Wiredbrain's
PAGE TWO
----------
G
o to Wiredbrain's
Current up-dates
Wednesday:
Long bond at
5.84
Talking
the market down-``People are starting to talk about deflation,'' said David
Brickman, international economist at PaineWebber. "
The Fed's worried about
the economy overheating," said Farrell. "I think the Fed would be thrilled
if the financial sector took a deep breath. I think we all should be thrilled."
Federal
Reserve officials Alice Rivlin, Laurence Meyer, and Edward Gramlich, and
Atlanta Fed president Jack Guynn are all speaking later on Wednesday.
U.S. Deputy Treasury Secretary Lawrence Summers is also speaking.
Federal
Reserve Chairman Alan Greenspan speaks at 1615 GMT on Saturday to a meeting
of state bank supervisors.
Wednesday
April 29 6:57 AM EDT
Greenspan
preserved consensus with bias
Home
| Client Access | Contact Us | Help
Market
Letter
05/26/98
The
Market Posture was downgraded to Mildly Bearish the week ending
4/10/98
(DJIA - 8994.96). Initial downside price projection for the DJIA
is
8750. CTI readings should remain negative until late May 1998.
****Check
out "ON THE EDGE" - A monthly review of the markets****
________________________________________________________________________
CURRENT
PRIOR
MARKET
TIMING MODELS READING WEEK CHG CONNOTATION
________________________________________________________________________
CYCLICAL
TREND INDEX (CTI): -4 -4 0 BEARISH
MOMENTUM
INDEX: -8 -6 -2 BEARISH
SENTIMENT
INDEX: 1 2 +1 NEUTRAL
________________________________________________________________________
DOW
JONES INDUSTRIAL AVERAGES (DJIA) CLOSE:................ 9114.44
DJIA
POINT CHANGE FROM PRIOR WEEK:......................... 18.44
DJIA
PERCENTAGE CHANGE FROM PRIOR WEEK:.................... 0.20%
MARKET
POSTURE THIS WEEK:..................................MILD BEARISH
MARKET
POSTURE PRIOR WEEK:.................................MILD BEARISH
DJIA
TARGET:............................................... 8750
TIME
FRAME TO ACHIEVE TARGET:.............................. 29-May-98
DATE
CURRENT MARKET POSTURE FORMULATED:.................... 10-Apr-98
DJIA
CLOSE ON DATE CURRENT MARKET POSTURE FORMULATED:...... 8994.96
________________________________________________________________________
CYCLICAL
TREND INDEX (CTI).......... -4 CONNOTATION
________________________________________________________________________
29-May-98
(Projected) 7 BULLISH
05-Jun-98
(Projected) 7 BULLISH
12-Jun-98
(Projected) 7 BULLISH
19-Jun-98
(Projected) 7 BULLISH
26-Jun-98
(Projected) 7 BULLISH
________________________________________________________________________
MOMENTUM
INDEX...................... -8 % CHG CONNOTATION
________________________________________________________________________
1)
DJ Transportation Average 3390.59 +1.0% BEARISH
2)
S&P 500 Index 1108.25 -0.0% BEARISH
3)
NYSE Composite Index 574.58 0.0% BEARISH
4)
Advance-Decline Line -5505 BULLISH
5)
10 Day MA Advance-Decline Line 0.80 0.0% BEARISH
6)
AMEX Index 730.57 -0.9% BEARISH
7)
NASDAQ Composite Index 1802.72 -2.4% BEARISH
8)
DJ Utilities Index 280.06 0.1% BEARISH
9)
TRIN+10 Day Average 1.04 0.0% NEUTRAL
10)
NYSE New Highs-New Lows 251+137 NEUTRAL
11)
Zweig Breadth Indicator 0.40 BEARISH
12)
McClellan Oscillator -76 NEUTRAL
13)
McClellan Summation Index 628 BULLISH
14)
Unchanged Issue Index 0.17 BEARISH
________________________________________________________________________
SENTIMENT
INDEX..................... 1 % CHG CONNOTATION
________________________________________________________________________
1)
Odd Lot Short Ratio-5 Day Ave 5.03 0.0% BEARISH
2)
NYSE Short Interest Ratio 6.32 1.1% BULLISH
3)
Public-Specialist Short Ratio 0.89 0.0% BULLISH
4)
Put/Call Ratio+10 Day Ave(INDEX) 1.12 0.0% NEUTRAL
5)
Dividend-Yield Spread 5.10 0.0% BULLISH
6)
Mutual Fund Liquid Asset Ratio 4.60 0.0% BEARISH
7)
Bullish Investment Advisors 45.5 0.0% NEUTRAL
8)
Bearish Investment Advisors 25.2 0.0% NEUTRAL
9)
Bearish + Corrections Total 54.5 0.0% NEUTRAL
Home
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Group Analysis
By
Isabelle Clary
NEW
YORK (Reuters) - Federal Reserve Chairman Alan Greenspan agreed at the
March meeting of Fed policy-makers to
reintroduce
a bias toward raising interest rates, appeasing anti-inflation hawks on
the panel and preserving consensus, sources
It
is important to remember that the major FED activity is NOT the federal
funds or discount rate but open market selling of bonds and repos to withdraw
liquid assets and increase reserves in the banking systems.
The bias gives
direction to day to day market activity which has more effect than the
discount rate changes. Real rates are below the 5.5 % target.
08:45
US 3-MONTH T-BILL DISCOUNT RATE DROPS 2 BASIS POINTS TO 4.90%.
08:44
US 6-MONTH T-BILL DISCOUNT RATE DROPS 1 BASIS POINT TO 5.09%.
The
effective discount rate ( the price of money to banks ) is LIBOR MAY98
94.32 London Inter bank loan rate at 5.68 % sets other bank loan rates
- the short term rate set by EURO $ JUN98 94.225 = 5.775 % is over the
target of 5.5 % and going up. So bias does matter more than the actual
official change is a minor rate - the federal funds ( over night ) discount
rate.
The cost of money is going up which might slow certain types of interest
sensitive economic activity. It is not that the fed does nothing but wait
and have meeting - but is very active every day in the market.
Dollar/mark
was unlikely to show major movement ahead of the weekend meetings of European
Union officials to decide the
countries
which will join the single currency from 1999, but the mark might receive
a boost subsequently, analysts said.
On
the foreign exchanges, the dollar was slightly firmer but trading was range-bound
partly because of a holiday in Japan and
as
the markets awaited a batch of speeches from central bank and finance officials.
---------------------------------------------------------------
MARKET
PRICES AT 1101 GMT
Mark
1.7972/77 Yen 132.18/28 Sterling 1.6686/96
Gold
$307.50/7.90 -0.75 (pvs PM fix) Brent $14.61 +0.01
FTSE
100 5818.0 +11.4 CAC 3756.49 -20.74 X-DAX 5125.71 +14.83
---------------------------------------------------------------
By
mid-session, London's blue-chip FTSE 100 index was 0.4 percent firmer,
rescued by bargain-hunters from earlier losses
and
Germany's Xetra DAX was up 0.4 percent.
The
Belgian, Dutch, Greek and Swiss markets were also amongst the gainers but
French, Italian and Spanish bourses were in
the
red, pausing for breath after Tuesday's gains amid nerves over Wall Street
and confusion over U.S. rates.
Friday
May 1, 10:50 am Eastern Time
US
Treasuries slip on talk Fed checks forex rates:
The
basics:
A
too fast growth rate, gives too much money in the system, plus the Asia
thing causes lower exports, higher inports, pressure on the dollar which
is falling.
A
listing of the main NAPM components follows:
April
March Feb Jan Dec Nov Oct Sept Aug
PMI
52.9 54.8 53.3 52.4 53.1 54.5 55.9 54.6 56.4
Production
53.4 57.6 55.3 53.3 55.8 58.5 59.6 58.4 61.2
New
Orders 56.8 57.3 55.9 55.2 53.9 55.1 58.4 56.1 60.4
Supplier
Del 52.3 53.4 52.1 52.0 54.0 55.2 55.0 55.5 55.6
Inventories
46.6 46.8 46.9 46.7 46.5 44.3 47.0 46.2 43.4
Employment
49.8 52.5 50.9 50.1 50.9 53.3 52.5 51.1 51.6
Prices
41.2 44.4 45.8 44.7 50.8 53.2 55.5 54.1 53.4
Export
Orders 49.7 48.0 47.9 45.0 50.6 52.6 51.9 51.2 55.1
Imports
56.3 53.4 51.2 53.9 55.4 52.6 51.7 53.1 53.9
US
Treasuries off post-NAPM highs in forex intervention fear. *Mkt talk Fed
checking forex rates, but Fed says ``no comment.'' *Impact greatest in
bills, 3-mo rates jump 5 bps in 45 mins. *Long end outperforming but off
highs, profit-taking seen. *Traders report foreign central bank selling.
Thursday
April 30, 8:56 am Eastern Time
U.S.
economy accelerated in Q1, inflation mute
Thursday
April 30, 8:56 am Eastern Time
WASHINGTON,
April 30 (Reuters) -
The U.S. economy unexpectedly picked up speed in the
first quarter of 1998, surging ahead at a brisk 4.2 percent annual rate
on booming consumer spending while inflation remained at its most muted
levels in 35 years, the Commerce Department said on Thursday.
It
was the sixth straight quarter in which Gross Domestic Product advanced
at an annual rate of 3 percent or more - well above the 2+1/4 percent target
range the Federal Reserve considers can be safely sustained without risking
a flareup in inflation pressures. First-quarter GDP growth handily outstripped
Wall Street economists' forecasts for a 3.3 percent rate of expansion as
it accelerated from last year's fourth-quarter 3.7 percent pace instead
of slowing.
A
chorus of U.S. central bank governors has warned recently that the economy
needs to soon show convincing evidence of a slowdown, unnerving financial
markets after reports the Fed has shifted to a position of increased willingness
to raise interest rates. Policymakers' concern that Asia's economic woes
were not enough to offset buoyant domestic demand appeared to be supported
by the first-quarter GDP report.
DOWN 40 or 50
to 1050
If
the news is "good", rapid growth that's "bad" because it implies inflation
and higher money costs. If the news is "bad", lower growth and earning
that's good- maybe. Labor costs are going to be higher but how high is
high ?
The chances are 2/3 down, 1/3 up - but the reactions to economic
news are not always what is expected.
Thursday:
April 30th
``If
the U.S. economic data are strong, fears of a rate rise will return, suggesting
dollar upside,'' said Sally Wilkinson, senior
economist
at Daiwa Europe in London.
--------------------------------------------------------------
MARKET
PRICES AT 0905 GMT
Mark
1.7937/42 Yen 132.05/15 Sterling 1.6686/96
Gold
$310.90/1.30 +2.65 (pvs PM fix) Brent $14.39 +0.14
FTSE
100 5843.7 +10.6 CAC 3746.61 +12.68 X-DAX 5101.43 +17.63
---------------------------------------------------------------
U.S.
Federal Reserve chairman Alan Greenspan is known to consider ECI figures
as an important indicator of inflationary
pressures
building in a robust U.S. economy.
Thursday
April 30, 4:14 am Eastern Time
Wall
St bubble risk looms,
but is Asia to blame?
By
Yoshiko Mori
TOKYO,
April 30 (Reuters) -
The U.S. stock market is being poisoned by a ``classic
bubble'' and the risk is looming of a
downward
correction of 10 to 20 percent, economists in Tokyo say.
``
The
current state of Wall Street is similar to what happened in Tokyo in 1987
when it was already apparent that the asset
market
bubbles were getting out of hand,'' said Richard Werner, Tokyo-based chief
economist and managing director of Profit Research Centre Ltd.
Excessive
capital created by the U.S. banking system and the Federal Reserve has
been the major cause of recent Wall Street
gains,
Werner said.
Excessive
credit creation is spurring financial and real estate transactions which
are pushing up asset prices -- ``the classic
bubble,''
Werner said.
Economists
said credit creation through loans by the U.S. banking system is expanding
at around 10 percent year-on-year, the highest growth rate since the 1980s.
``If
the U.S. economic data are strong, fears of a rate rise will return, suggesting
dollar upside,'' said Sally Wilkinson, senior
economist
at Daiwa Europe in London.
First
quarter U.S. employment cost index is expected to rise 0.9 percent from
one percent in the previous quarter.
An
advance estimate of quarter one U.S. gross domestic product is also expected
at 1230 GMT.
At
0835 GMT the dollar was at 1.7921/26 marks and 131.93/03 yen
Con't
on
News
and analysis GO TO
Money pages first
forecast.htm,
then
conditions.htm
Main page Flash.htm
----------
G
o to Wiredbrain's
ACTIVE-NEWS
PAGE
----------
Con't on money
PAGE TWO
----------
G
o to Wiredbrain's
Current up-dates
News and analysis GO TO
Money pages firstforecast.htm,
then
conditions.htm
Main page Flash.htm
----------
G
o to Wiredbrain's
PAGE TWO
Everyone
can be right ( and wrong) :
today,
packets.htm
The
second wave model was based on production, from farm and mines, to factories
- material produce that was stored in inventory, sold to wholesalers and
ended up in shops.
The third wave model, products are less important than
services. Systems of ideas match client demands within networks of OEM
( original equipment manufactures ) and direct sales to users.
The open
market in electric power with commodity prices distributed directly to
end users down networks uses an Asymmetric out of equilibrium algorithm
rather than seeking a mythological equilibrium at some sort of steady state.
Networks of material and service providers on a global scale certainly
changes forecasts of economic futures. (
The use of networks to find practical
paths has to do with the "traveling salesman problem". If the sales person
has to visit a large number of points there is no single shortest path
and the "best" solution is often counter-intuitive. )
The
irrational increase in stock prices is now being justified by blithe forecasts
of endless growth. People want to forget that economic change has loosers
that out number winners in the short run; the iceman, the candle makers
are gone.
The internet replaces many middle people, from bankers and travel
agents, to wholesalers and distributors.
The "endless growth" craze now
is being used politically to avoid hard or unpopular changes in entitlement
benefits.
The
bulls and the bears are both right and both wrong.
The business cycle has
not been repealed but changes from a material one to one of the mind and
spirit, SYNERGY where the whole is more than the sum of the parts.
The
factory is replaced by the production of trust and faith in paper, computer
digits, balances and transfers of insubstantial assets.
The over supply
is of faith - belief in a "blue sky" future that produces an over abundance
of paper money, credit, market booms and financial high flightiness.
The
devaluation started in South East Asia last June, spread to Korea and now
Japan, the unwinding of building booms, market booms, inflated prices,
currencies and hopes. So while the real economy does have a bright future,
the paper empires built on hope will tumble- someday.
The total equity
market is over 35 Trillion with 1/3 in the US, 20 % in Europe, 15 % in
Japan - and the other 1/3 spread around the world.
The Americans are adding
about 1 billion a day in new investments - or .003 % of the world market
or .01 % ( 2.5 % a year) of the American Market of 10 Trillion. Not enough
to substain a long term boom.
The Global equity was about 35 trillion,
last year, before the devaluations.
The US market has grown 20 % from 8
trillion to 10 trillion.
The US has gained 2 trillion, Europe a trillion
in paper profits while the rest of the world has loss 3 Trillion -
Global
players have increased the USA % of their investments as they retreat from
declining markets. Now the move is into Europe, back to parts of Asia,
Eastern Europe, Latin America where more double digit returns are possible.
We will be surprised if the Year-to-Year return from April 1 to March 30th
will be 5 % for the US Market - a rate that suggest short term bonds -
with currency risks - or ECU inflation protected utility bonds at 1.5 %
more, with a currency gain for $'s.
The
best buy is a basket of Asia's 30 % bonds - the currencies have hit bottom
and the rates have hit their tops. Triple gains, increase in bond prices
as rates decline, increases in exchange values, and real high interest
- and risk !
OUR
RECORD: check
money.htm,
stock.htm
for past calls, been damn good
Alliance
Global , Bear Stearns Emerg Mkts Debt A Ticker: EMDFX , Countrywide, Dreyfus
Global Bond Ticker: DGBDX, Federated Intl High Income, Franklin Templeton
High Inc Curr Ticker: ICHIX - Gt Global High-Income A Ticker: GHIAX Kemper
Global, Morgan Stanley Worldwide High-Inc A Ticker: : MSWAX - Oppenheimer
Intl Bond C Ticker: OIBCX - Phoenix Emerging Markets Bond B Ticker: : PEMBX
Prudential Interm Global Inc B Ticker: PBIBX T. Rowe Price, Van Kampen,
Vontobel
Wiredbrain's
Yahoo at wiredbrain password "synergy"
SYNERGY
Group's Excite Channel
Technologies
2X market
IXCO
SOX MSH PSE NDX
down more than market
Pause
in
Asia's DOWN and Europe's down
from record high ( US Germany France London )
Why
does one index so different from the other ? Could it be the effects of
INDEX trading?
Stocks,
dollar active ( down again) and bonds drifting down;
Asia
down, Europe down from new highs:
bonds
at
5.8 %
bonds
DOWN interest UP well off lows of 5.65 and off high of 6.2 on money
supply, oil prices near $16 Gold at $310
Currencies
(dollar)
DOWN from rally in a
tight range in a
Negative FX market - (on
scale from +15 to +15).
Bottom
Line:
Krugmann:
"
The Fed doesn't formally care about anything in particular. That way
you can't pin them
down.
Their nightmare: I know what keeps Alan Greenspan awake at nights. I don't
need any inside
information
to tell you this. He thinks about Japan 1990. ( Sic.. South East Asia in
1997 or the US in 1969 )
A
stock market that went to dizzying heights and there were lots of explanations;
everybody had a good theory about why that made sense and then it plunged.
And in the course of plunging, took the real economy down with it and it
never actually recovered. And although you can give all sorts of reasons
why the U.S. is different from that, the Fed is very concerned about that.
They are very concerned that we have a bubble economy, which is different
in detail, but the same general position as Japan before the big crash.
If they could figure out some way to deflate the bubble gently, they would."
Brancaccio:
"Sounds like you're a little worried about that scenario as well."
Krugmann:
"Oh, I'm scared to death! I look at the current level of the market. I
can't come up with a
reasonable
reason for it. I can give you a lot of standard arguments about why, even
if the market
MIT
economist Paul Krugmann's most recent book is called "Pop Internationalism."
NEW
YORK, May 7 (Reuters) - Earnings of companies in the Standard & Poor's
500 index are up 3.1 percent year-on-year in the first quarter with 91
percent, or 453 companies in the index, having reported, said First Call.
This
could rise to about 4.0 percent once all the retailers have reported, which
would be slightly better than Wall Street expected, said Chuck Hill, First
Call's director of research.
Analysts
had slashed their profit growth forecasts for the first quarter because
of Asia's turmoil.
But
even 4.0 percent would still be less than half the 9.0 percent year-on-year
growth in the fourth quarter of 1997, and would be well below the 10 percent
growth originally forecast for the first quarter.
Wall
Street is still betting
on backloaded
earnings growth this year.
First
Call said analysts forecast that S&P500 earnings will grow 8 percent
in the second quarter, 13 percent in the third quarter and 18 percent in
the final quarter. ( I wouldn't bet on it
)
These
forecasts may= WILL change over the coming months as more companies discuss
earnings with analysts, First Call said.
This
looks like a organized attempt to talk the market down:
You
don't have to shoot the charging bull between the eyes to try to slow it
down. You can use a number of less radical techniques to try to slow down
the ragging bull. You wave red flags, then the picadors poke at it, then
if all else fails you draw on more powerful weapons for the coup de grace'.
The
Fed won’t release this “directive,” crafted at the
end
of each committee meeting, until May 21.
The primary
significance
of the directive is to signal financial markets
which
way the Fed is leaning.
Officials
say Asia seems to be stabilizing, and
domestic
economic vigor appears to be offsetting the ill
effects
of Asian woes on U.S. exports. First-quarter
consumer
spending and housing construction was strong,
and
the economy appears to be awash in credit. So, in
public
speeches and interviews, Fed officials are beginning
to
prepare markets for a Fed move to brake the
economy-unless
it slows on its own soon.
The
Fed has been expecting a slowdown for months,
but
it hasn’t materialized. Most forecasters say the
economy
expanded at an annual rate of between 3% and
3.5%
in the first quarter, which would be the sixth quarter
of
better-than-3% growth.
Worries
about destabilizing fragile Asian financial markets could delay a Fed move,
but
some
Fed officials privately acknowledge that they would sleep better if the
stock market were less ebullient. Indeed, a decline in stock prices would
tend to slow the economy, which is precisely what the Fed would like to
see.
WSJ
Magic,
Science, the market, financial reporting and Beliefs systems such as Futures,
values, prices, rates and other Religions
(1948)
by Malinowski, Bronislaw
The
principle dialectic of the modern world is the dualism of science and magic.
The conflict starts with Newton who spent most of his life at numerical
alchemy.
In
a seminal article Malinowski suggests that "primitive" people use science
to control events they understand and can do something about, and magic
for forces of nature that are out of control.
They are very resonable about
fishing, farming, hunting and warfare when they find a pattern in events
- but magical thinking takes over when events seem out of control such
as storms, earthquakes, plagues, and other unexpected traumas.
Maclay,
Kubary, Malinowski: Archetypes from the Dreamtime of
Anthropology
The
dreamtime is explained in the "Last Wave" a film by Peter Weir - as a reality
that exists beyond the day to day that gives values, meaning to the "Law"
or customs of a people. In this way it is the origin of religion, which
the age of reason called a "superstition ".
Malinowski,
Bronislaw Kasper (1884+1942), British anthropologist,
regarded
as the founder of the "functional" school of anthropology,
which
maintains that human institutions should be examined in the
context
of the culture as a whole. He was born in Kraków, Poland. In
1914
he took part in an expedition to New Guinea and Melanesia and
spent
the next four years studying the peoples of the Trobriand Islands
of
the southwest Pacific. Malinowski became professor of social
anthropology
at the University of London in 1927. His further research
took
him to Africa, Latin America, and parts of the United States.
LAST
WEEK IN REVIEW:
For
historical interest, the market will look at the minutes of the March 31
U.S. Federal Open Market Committee meeting to be released on Thursday.
According
to Treasury Department data, foreigners owned 38 percent of the $3.4 trillion
in outstanding Treasury
debt
at the end of August.
The Japanese owned 25 percent of the foreign-held
debt, followed by Great Britain,
20
percent, and Germany, 6 percent.
Japanese
officials played down speculation this week of another wave of Treasury
securities selling to finance
a
$77 billion bailout of Japan's banking system.
In
addition to capital flows, Wednesday's Commerce Department release reported
the broadest measure of
U.S.
foreign trade, known as the current account. It shot up 11.4 percent to
$42.2 billion in the third quarter, the
The
current account measures not only trade in goods and services but also
the flow of investment income
between
countries and foreign aid.
08:44
US JUNE BOND FUTURE UP 13/32 TO 120-27.
08:44
US 30-YR TREASURY BOND UP 13/32 TO 103-02, YIELD AT 5.90%.
Thursday
May 21, 7:07 am Eastern Time
Markets
in France, Germany and parts of continental Europe were closed for Ascension
Day, reopening on Friday. Countries which operated normally reported lower-than-normal
volume.
---------------------------------------------------------------
MARKET
PRICES AT 1100 GMT
Mark
1.7646/51 Yen 135.19/29 Sterling 1.6270/80
Gold
$300.00/0.40 +0.59 (pvs PM fix) Brent $13.87 +0.15
FTSE
100 5968.9 +61.5
---------------------------------------------------------------
Benchmarks:
London
6,100 record high, Paris 4025* high, Frankfort 5,450 * high
The
UK's FTSE 100 index was up more than one pct as world markets celebrated
the Asian rally after Suharto quit and a late sprint by the Dow to close
116.83 points, or 1.3 percent, higher on Wednesday.
Sterling
had hit a seven-month low of 2.8763/73 against the mark from 2.8893/98
late Wednesday, after Bank of England Monetary Policy Committee member
Willem Buiter said the British economy is slowing and will slow further.
Some
dealers in U.S. stocks said minutes of the March 31 interest-rate setting
Federal Open Market Committee (FOMC) policy meeting, due for release at
1800 GMT, would be keenly awaited.
LONDON,
May 19 (Reuters) - European shares closed with steep gains on Tuesday,
lifted by a Wall Street rally and growing optimism that U.S. interest rates
would not be increased later in the day.
In
currencies, the yen lifted itself gingerly from its 6+1/2 year low against
the dollar after Indonesian President Suharto pledged to hold elections,
causing tentative rebounds in southeast Asian markets.
---------------------------------------------------------------
MARKET
PRICES AT 1550 GMT
Mark
1.7848/58 Yen 136.18/28
Sterling 1.6230/40
Gold
$300.00/0.50 -0.05 (pvs PM fix) Brent $14.47 +0.01
FTSE
100 5877.8 +51.6 CAC 3980.84 +35.53 X-DAX
5441.00 +97.34
---------------------------------------------------------------
THE NEXT
STEP FORWARD
Where
we go from here !
A few years
ago we talked about the potential of the internet -
Doc1
to Doc5
Then we
talked about the impact on the
social -
political
-
economic and general
future
Then we
talked about how the technology will develop
packets.htm
We talked
about the
network computer and how the information
utility will take shape.
Now what's
next ?
One way
or another - enough bandwidth will be provided to inexpensive and tough
enough boxes so that all the hard complex stuff will be pushed upstream
and voice, video, data and new applications can work the channels to provide
news, entertainment, communications, commerce in dramatically different
ways.
The big
question is how and by whom ?
By
John Sidgmore
May
5, 1998 - John Sidgmore
outlines
his vision for the
future
of global
telecommunication
in this
NetWorld+Interop
Keynote
speech
Global
tele-communications utilities linked by satellites, then ground stations,
then optic wires, cables, broad band, wide band, (A)DSL - a global backbone
providing service to all of humanity - with solar charged instruments from
anywhere to anywhere.
The first world has a billion ready clients,
the global market place has a million firms ready to go, the second and
third world can add a 100 million new clients a year and a million new
firms, local governments, missions and schools, gaming centers and market
players as fast as the bandwidth and prices allow.
The global requirements
are different from America and the European community. While part of the
world is wired - much of the world is not.
The Global
communications network must be based on wire-less standards - that will
work on wires but do not require them.
NOTICE:
SOUTHWINDNET = http://www.highspeedhosting.com/newsite/message.cfm
The
digital communications age has arrived. Still a little expensive - but
if the price - quality relationships hold - high speed connections should
be quite cheap in a year or so.
Then local NODES can provide high speed
wireless connections for EVERYTHING - internet with telephone, video and
real time data bases, BYE-BYE to MA bell, cable companies, TV networks
- as we know them.
The REAL impact will be all the way to China - the billions
- the majority of people on this planet who have almost no two-way telecommunications
- they can make the great leap forward...
The
site is in the process of upgrading service to
ViperLink.
VMC Virtual Marketing Corporation
The
ViperLink system uses a wireless access system to connect to an ATM
(
Asynchronous Transfer Mode (ATM) ATM is a packet switched technology capable
of carrying
voice,
video & data.)
backbone
at an astounding 90Mbps! Our Kentucky office has a full 2.0Mbps
(30%
bigger than a T+1) dedicated connection that is burstable to 6.0 Mbps (4
full
T+1s) if needed. If at any time, our web sites need additional bandwidth
–
they’ve
got it! Never again will there be a problem with not
having enough
bandwidth.
Ask how many providers can make that claim!
SAN
JOSE, Calif.--(BUSINESS WIRE)--May 11, 1998--
Verilink
Corp. (NASDAQ:VRLK - news) today announced that
Splitrock
Services, Inc., the U.S.-based provider of Internet access to Prodigy customers,
has selected Verilink to provide
Ramblings:
The doors to creative thinking and doing are in the narrow
places between large structures.
The
empires of the world and the mind dominate the landscape.
Vast historic structures obscure the
view of the horizon and our real location. Down narrow
lanes and in far fields we sometimes can
gain images that glimmer with reflections of a pale light,
far off.
Where theses narrow lanes and far field meet are the focal
points of new creations.
There is a container, connected to nodes, connected to
networks, creating a info-sphere of billions
living reproducing pathways and elements.
The bio-sphere
began and is still largely made up of
micro-organisms that share genetic information through
networks of co-option, cooperation and
communication that become organic wholes from simpler
to complex. Cells take in parts from
elsewhere and collect abilities of different genes.
The
biological and infomation packets are
coming together on a global scale.
One element basic to global networks are standards.
The
critical standard is digital information
which can be understood and act upon by all the other
members of the community.
The
information utility will operate on a common operational
language - such as HTTP, FTP, Java,
that will co=option functions from different places,
in words, pictures, sounds and video.
The
Microsoft issue is their desire to make MS-OS/ active
X the universal language for all future global
networks, software, operations, communications and services.
Netscape’s inter-operation open
arch-culture has a somewhat different vision of inter
and intra operability.
The global scope of
mega networks makes Microsoft’s vision unlikely but not
impossible.
Their moves into
communications, cable, satellites, broadcasting and services
should be taken as very important but
not as a given. Without outside intervention or meaningful
competition they could set NT/active X
type systems as the standard for most if not all inter-net
communications.
Gates to everone - "Look upon my works ye humble of the
earth and give
up."
But all empires lack vision and ability to change.
It’s not hardware, it’s not software, but it is service-ware.
Companies that
don’t sell machines or programs but universal services.
Sign-up and we
give you the container, the link, and all the services
you can think of and
many that you haven’t though of yet.
I soon will be able to pull down the word processing "service"
tied to voice and video "services". I
will be able to pull down interactive forms "service",
a search service, marketing services,
shopping service, broadcast and narrow cast services,
product design and production services,
travel, insurance, investment and banking services designed
and distributed by other services .
All these services we now called companies, producers,
distributors, stores and markets become
part of the services network.
The telephone company (
tele - sounds )is a service: television ( tele -
pictures ) networks and stations are service including
broadcast ( send sound and picture over a
wide area ): computers are not a machine or thing but
provide systems capacity to do something,
assign traits and store information and programs ( software
to help machines - do stuff ). All these
THINGS are becoming parts of a system of service with
nodes and terminals.
The core of the global service system is the operational
codes and languages. Everyone has to
understand ever one else and terminals need to talk to
nodes and servers need to communicate
with servers in common coded packets moving a mega-speeds
back and fourth.
These codes and
languages are extensions of Hyper Text Transfer Protocol
, ftp ( file transfer ) and operations such
as Java.
Saturday
May 9 8:05 AM EDT
ZANNY
MINTON BEDDOES: When we talk about a bubble, we talk about rising
fundamentals
would warrant, and they're going up because of some kind of speculative
frenzy,
to use a phrase, again, that Chairman Greenspan used, some kind of irrational
exuberance.
We're all feeling good. We're buying shares. Prices are going up not because
of
fundamental changes or not only because of fundamental changes, more because
there's
a kind of frenzied buying.
And
that's what we mean by a bubble, and we worry about it for two reasons.
We worry about it because
bubbles
tend to burst. Financial markets have had bubbles ever since finance started.
But the problem is that they
The other
problem is that if they--if
the
bubble continues, then this kind of inflation in asset prices--because
that's really what it is--can spill over into
ZANNY
MINTON BEDDOES: Well, I agree that there have been changes in the world
economy, and there
have
been changes in the U.S. economy.
The question is how big have these changes
been and do they justify
today's
prices, and I think one argument that is frequently made by the people
who believe in this new economy or
happened
in the last two years in the U.S. economy, we've grown far faster than
the trend growth, and we--than
economists
normally think the economy can grow--and that is because we've used more
people. Unemployment
The one
thing that does seem to be different is
that
as wages are rising, there isn't this immediate transfer into higher inflation.
Now,
there are--that could be because of some new rules. It could also be because
there
are
a lot of temporary factors which have actually influenced. One is that
benefits have
been
rising much more slowly than they used to.
The HMO revolution has meant
that its
employers
have been able to cut costs in areas where they traditionally weren't able
to cut
costs.
Secondly, the dollar is very strong. Now, the strength of the dollar
also dampens
inflation.
Thirdly, commodity prices are weak.
They're weak in part because
of the
problems
in Asia, but they're not--those are not structural changes.
They're temporary
things
that could change, and when they change, I think we'll see the old rules
coming back into play.
Are
stocks poised to flame out?
Friday
May 8th:
08:33
U.S. UNEMPLOYMENT RATE FALLS TO 4.3%, AVERAGE HOURLY EARNINGS UP 4C IN
APRIL, NEAR CONSENSUS.
08:32
RETAIL ADDS 44,000 JOBS.
08:32
CONSTRUCTION ADDS 35,000 JOBS.
08:32
SERVICES ADD 139,000 JOBS.
08:32
10,000 FACTORY JOBS LOST IN APRIL.
08:32
AVERAGE FACTORY WORKWEEK FALLS 1.1 HOURS TO 40.7.
08:32
AVERAGE WORKWEEK FALLS 0.3 HOURS TO 34.4.
08:32
HOURLY EARNINGS RISE 4 CENTS IN APRIL OR 0.3%.
08:32
4.3% JOBLESS RATE LOWEST SINCE FEB 1970.
08:32
262,000 JOBS CREATED IN APRIL; UNEMPLOYMENT RATE FALLS TO 4.3%.
08:31
U.S. 30-YR TREASURY UP SLIGHTLY ON UNEMPLOYMENT NEWS.
08:48
US JUNE BOND FUTURE DROPS 8/32 TO 120-03 ON JOBLESS DATA.
08:48
US 30-YR TREASURY BOND DROPS 12/32 TO 102-03, YIELD AT 5.99%.
08:48
US 10-YR TREASURY BOND DROPS 5/32 TO 98+14, YIELD AT 5.71%.
08:48
US 5-YR TREASURY BOND DROPS 4/32 TO 100+13, YIELD AT 5.65%.
08:48
US 3-YR TREASURY BOND DROPS 1/32 TO 99+11, YIELD AT 5.63%.
08:48
US 2-YR TREASURY BOND DROPS 2/32 TO 100-02, YIELD AT 5.58%.
08:48
US TREASURIES GO LOWER ON APRIL JOBLESS RATE.
08:48
US 1-YR T-BILL DISCOUNT RATE UP 2 BASIS POINTS TO 5.15%.
08:48
US 6-MONTH T-BILL DISCOUNT RATE UP 3 BASIS POINTS TO 5.13%.
08:48
US 3-MONTH T-BILL DISCOUNT RATE UP 2 BASIS POINTS TO 5.00%.
08:31
U.S. UNEMPLOYMENT RATE LOWEST SINCE FEB. 1970.
08:31
UNEMPLOYMENT RATE FALLS TO 4.3%, DOWN .4 PERCENTAGE POINTS.
08:31
APRIL NON-FARM PAYROLL UP 262,000, CONSENSUS 250,000.
07:20
BRITISH POUND 1.6403 DOWN .0071, OR -0.4%.
07:20
GERMAN DMARK 1.7718 UP .0034, OR +0.2%.
07:20
JAPAN YEN 132.56 DOWN .72, OR -0.5%.
07:20
U.S. 30-YR. BOND 5.948 UP 1 17/32, OR 0.1%.
07:20
FRANCE CAC 40 3906.36 UP 41.09, OR +1.04%.
07:20
GERMAN DAX 5260.56 UP 74.33, OR +1.43%.
07:20
LONDON FT 100 5965.5 UP 18.5, OR +0.5%.
07:12
FOREIGN STOCK MARKETS MOSTLY LOWER AUSTRALIAN MARKET 2780.50 DOWN 0.3,
OR -0.01%.
Korea
down - Asia mixed - London and Germany UP, France down
To
see what we said this morning and last night, see
http://www.wiredbrain.net/short.htm
..
The
news before it happens: Unemployment drops 4.2 % and new jobs increase
260,000 - adding to worries of rate increases :
The
government on Friday is scheduled to release the monthly employment data
for April, its first major reading on how the economy performed last month.
Analysts
surveyed by Reuters expect the unemployment rate to be unchanged at 4.7
percent with 259,000 new jobs created outside the farm sector. That compares
with the March rate of a decline of 36,000.
Last
month, the Conference Board put the help-wanted advertising index, which
tracks employment growth, at 92.0 in March, unchanged from February but
well above the March 1997 rate of 87.0, showing no drop in demand for labor.
The
feeling among the skeptics is that even if the employment figure is satisfactory,
there is no guarantee that the Fed is not
going
to tighten," Metz said.
Investors
appeared little reassured by Fed Vice Chairwoman Alice Rivlin who said
that a desire to rein in a high-flying stock
market
would not be a reason by itself for the central bank to raise interest
rates.
The
Fed was not considering changing margin requirements on stock trades, Rivlin
said.
There was no big risk of inflation
taking
off, she added.
Thursday
May 7th:
Editoral:
The
tradition is that good news = bad news because rapid growth = inflation.
Starrting in Nov. good news was good news because it = higher earning. Now
with a market well over any rational P/E the growth of earning and/or changes
of 1/4 % in a minor bank rate really can't make much difference. BUT when
prices are so high any excuse is a good excuse to sell - SO good news is
bad news again and bad news is bad news -
The employment number will be
up because the GDP was growing at a very high rate ( over 4 %) Wages are
going up in areas of demand but not in semi-skilled service jobs - as it
has been since 1969.
The problem is not wage inflation but a bubble - ready
to pop - in real estate - in stock prices - yo-yo land - the President
and Congress want to be popular. A reasonable slow down will be a lot better
than a CRASH ! And now, rather than close to an election.
The clients of
the Federal Central Bank - the World Banking System - need order in a time
of some real problems - and order means being able to add to the money
supply - which you can't do without great risk during a speculative bubble.
Fed
reminds Wall Street it is still top dog
By
Pierre Belec
NEW
YORK (Reuters) - Life is good on Wall Street. Consumer confidence is
the highest in some 30 years, inflation the lowest since the 1960s and
the stock market is soaring to the moon.
But
the Federal Reserve says trouble is bubbling in the economy.
Wall
Street was again reminded this week that the Fed is still the top dog.
The
secretive Fed leaked information that it had shifted monetary policy toward
a bias, which called for higher interest rates, because of concern that
the economy's robust growth may reignite inflation.
The
hint that the cost of borrowing may go up hit the market like a ton of
bricks, sending stocks into a tailspin at the beginning of the week as
investors pushed the panic button.
The
market had been betting that the central bank would not raise interest
rates and there was even speculation that lending rates would drop before
the end of the year.
But
by week's end, the market had roared back with a vengeance on a report
that inflation was still holding at the lowest level in some 30 years,
even though the economy grew at a fast pace in the first quarter.
Is
the Fed looking at the wrong radar screen?
Some
experts believe the central bank is actually more worried about the surge
in stock prices than any underlying inflation.
"
The
stock market is too speculative, exuberant and overvalued and there's the
risk that it could lead to financial asset inflation eventually causing
real sector inflation," said Hugh Johnson, chief investment officer for
First Albany Corp.
----------
G
o to Wiredbrain's
ACTIVE-NEWS
PAGE
----------
G
o to Wiredbrain's
PAGE TWO
----------
G
o to Wiredbrain's
Current up-dates
Wednesday:
Long bond at
5.84
Talking
the market down-``People are starting to talk about deflation,'' said David
Brickman, international economist at PaineWebber. "
The Fed's worried about
the economy overheating," said Farrell. "I think the Fed would be thrilled
if the financial sector took a deep breath. I think we all should be thrilled."
Federal
Reserve officials Alice Rivlin, Laurence Meyer, and Edward Gramlich, and
Atlanta Fed president Jack Guynn are all speaking later on Wednesday.
U.S. Deputy Treasury Secretary Lawrence Summers is also speaking.
Federal
Reserve Chairman Alan Greenspan speaks at 1615 GMT on Saturday to a meeting
of state bank supervisors.
Wednesday
April 29 6:57 AM EDT
Greenspan
preserved consensus with bias
Home
| Client Access | Contact Us | Help
Market
Letter
05/26/98
The
Market Posture was downgraded to Mildly Bearish the week ending
4/10/98
(DJIA - 8994.96). Initial downside price projection for the DJIA
is
8750. CTI readings should remain negative until late May 1998.
****Check
out "ON THE EDGE" - A monthly review of the markets****
________________________________________________________________________
CURRENT
PRIOR
MARKET
TIMING MODELS READING WEEK CHG CONNOTATION
________________________________________________________________________
CYCLICAL
TREND INDEX (CTI): -4 -4 0 BEARISH
MOMENTUM
INDEX: -8 -6 -2 BEARISH
SENTIMENT
INDEX: 1 2 +1 NEUTRAL
________________________________________________________________________
DOW
JONES INDUSTRIAL AVERAGES (DJIA) CLOSE:................ 9114.44
DJIA
POINT CHANGE FROM PRIOR WEEK:......................... 18.44
DJIA
PERCENTAGE CHANGE FROM PRIOR WEEK:.................... 0.20%
MARKET
POSTURE THIS WEEK:..................................MILD BEARISH
MARKET
POSTURE PRIOR WEEK:.................................MILD BEARISH
DJIA
TARGET:............................................... 8750
TIME
FRAME TO ACHIEVE TARGET:.............................. 29-May-98
DATE
CURRENT MARKET POSTURE FORMULATED:.................... 10-Apr-98
DJIA
CLOSE ON DATE CURRENT MARKET POSTURE FORMULATED:...... 8994.96
________________________________________________________________________
CYCLICAL
TREND INDEX (CTI).......... -4 CONNOTATION
________________________________________________________________________
29-May-98
(Projected) 7 BULLISH
05-Jun-98
(Projected) 7 BULLISH
12-Jun-98
(Projected) 7 BULLISH
19-Jun-98
(Projected) 7 BULLISH
26-Jun-98
(Projected) 7 BULLISH
________________________________________________________________________
MOMENTUM
INDEX...................... -8 % CHG CONNOTATION
________________________________________________________________________
1)
DJ Transportation Average 3390.59 +1.0% BEARISH
2)
S&P 500 Index 1108.25 -0.0% BEARISH
3)
NYSE Composite Index 574.58 0.0% BEARISH
4)
Advance-Decline Line -5505 BULLISH
5)
10 Day MA Advance-Decline Line 0.80 0.0% BEARISH
6)
AMEX Index 730.57 -0.9% BEARISH
7)
NASDAQ Composite Index 1802.72 -2.4% BEARISH
8)
DJ Utilities Index 280.06 0.1% BEARISH
9)
TRIN+10 Day Average 1.04 0.0% NEUTRAL
10)
NYSE New Highs-New Lows 251+137 NEUTRAL
11)
Zweig Breadth Indicator 0.40 BEARISH
12)
McClellan Oscillator -76 NEUTRAL
13)
McClellan Summation Index 628 BULLISH
14)
Unchanged Issue Index 0.17 BEARISH
________________________________________________________________________
SENTIMENT
INDEX..................... 1 % CHG CONNOTATION
________________________________________________________________________
1)
Odd Lot Short Ratio-5 Day Ave 5.03 0.0% BEARISH
2)
NYSE Short Interest Ratio 6.32 1.1% BULLISH
3)
Public-Specialist Short Ratio 0.89 0.0% BULLISH
4)
Put/Call Ratio+10 Day Ave(INDEX) 1.12 0.0% NEUTRAL
5)
Dividend-Yield Spread 5.10 0.0% BULLISH
6)
Mutual Fund Liquid Asset Ratio 4.60 0.0% BEARISH
7)
Bullish Investment Advisors 45.5 0.0% NEUTRAL
8)
Bearish Investment Advisors 25.2 0.0% NEUTRAL
9)
Bearish + Corrections Total 54.5 0.0% NEUTRAL
Home
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Group Analysis
By
Isabelle Clary
NEW
YORK (Reuters) - Federal Reserve Chairman Alan Greenspan agreed at the
March meeting of Fed policy-makers to
reintroduce
a bias toward raising interest rates, appeasing anti-inflation hawks on
the panel and preserving consensus, sources
It
is important to remember that the major FED activity is NOT the federal
funds or discount rate but open market selling of bonds and repos to withdraw
liquid assets and increase reserves in the banking systems.
The bias gives
direction to day to day market activity which has more effect than the
discount rate changes. Real rates are below the 5.5 % target.
08:45
US 3-MONTH T-BILL DISCOUNT RATE DROPS 2 BASIS POINTS TO 4.90%.
08:44
US 6-MONTH T-BILL DISCOUNT RATE DROPS 1 BASIS POINT TO 5.09%.
The
effective discount rate ( the price of money to banks ) is LIBOR MAY98
94.32 London Inter bank loan rate at 5.68 % sets other bank loan rates
- the short term rate set by EURO $ JUN98 94.225 = 5.775 % is over the
target of 5.5 % and going up. So bias does matter more than the actual
official change is a minor rate - the federal funds ( over night ) discount
rate.
The cost of money is going up which might slow certain types of interest
sensitive economic activity. It is not that the fed does nothing but wait
and have meeting - but is very active every day in the market.
Dollar/mark
was unlikely to show major movement ahead of the weekend meetings of European
Union officials to decide the
countries
which will join the single currency from 1999, but the mark might receive
a boost subsequently, analysts said.
On
the foreign exchanges, the dollar was slightly firmer but trading was range-bound
partly because of a holiday in Japan and
as
the markets awaited a batch of speeches from central bank and finance officials.
---------------------------------------------------------------
MARKET
PRICES AT 1101 GMT
Mark
1.7972/77 Yen 132.18/28 Sterling 1.6686/96
Gold
$307.50/7.90 -0.75 (pvs PM fix) Brent $14.61 +0.01
FTSE
100 5818.0 +11.4 CAC 3756.49 -20.74 X-DAX 5125.71 +14.83
---------------------------------------------------------------
By
mid-session, London's blue-chip FTSE 100 index was 0.4 percent firmer,
rescued by bargain-hunters from earlier losses
and
Germany's Xetra DAX was up 0.4 percent.
The
Belgian, Dutch, Greek and Swiss markets were also amongst the gainers but
French, Italian and Spanish bourses were in
the
red, pausing for breath after Tuesday's gains amid nerves over Wall Street
and confusion over U.S. rates.
Friday
May 1, 10:50 am Eastern Time
US
Treasuries slip on talk Fed checks forex rates:
The
basics:
A
too fast growth rate, gives too much money in the system, plus the Asia
thing causes lower exports, higher inports, pressure on the dollar which
is falling.
A
listing of the main NAPM components follows:
April
March Feb Jan Dec Nov Oct Sept Aug
PMI
52.9 54.8 53.3 52.4 53.1 54.5 55.9 54.6 56.4
Production
53.4 57.6 55.3 53.3 55.8 58.5 59.6 58.4 61.2
New
Orders 56.8 57.3 55.9 55.2 53.9 55.1 58.4 56.1 60.4
Supplier
Del 52.3 53.4 52.1 52.0 54.0 55.2 55.0 55.5 55.6
Inventories
46.6 46.8 46.9 46.7 46.5 44.3 47.0 46.2 43.4
Employment
49.8 52.5 50.9 50.1 50.9 53.3 52.5 51.1 51.6
Prices
41.2 44.4 45.8 44.7 50.8 53.2 55.5 54.1 53.4
Export
Orders 49.7 48.0 47.9 45.0 50.6 52.6 51.9 51.2 55.1
Imports
56.3 53.4 51.2 53.9 55.4 52.6 51.7 53.1 53.9
US
Treasuries off post-NAPM highs in forex intervention fear. *Mkt talk Fed
checking forex rates, but Fed says ``no comment.'' *Impact greatest in
bills, 3-mo rates jump 5 bps in 45 mins. *Long end outperforming but off
highs, profit-taking seen. *Traders report foreign central bank selling.
Thursday
April 30, 8:56 am Eastern Time
U.S.
economy accelerated in Q1, inflation mute
Thursday
April 30, 8:56 am Eastern Time
WASHINGTON,
April 30 (Reuters) -
The U.S. economy unexpectedly picked up speed in the
first quarter of 1998, surging ahead at a brisk 4.2 percent annual rate
on booming consumer spending while inflation remained at its most muted
levels in 35 years, the Commerce Department said on Thursday.
It
was the sixth straight quarter in which Gross Domestic Product advanced
at an annual rate of 3 percent or more - well above the 2+1/4 percent target
range the Federal Reserve considers can be safely sustained without risking
a flareup in inflation pressures. First-quarter GDP growth handily outstripped
Wall Street economists' forecasts for a 3.3 percent rate of expansion as
it accelerated from last year's fourth-quarter 3.7 percent pace instead
of slowing.
A
chorus of U.S. central bank governors has warned recently that the economy
needs to soon show convincing evidence of a slowdown, unnerving financial
markets after reports the Fed has shifted to a position of increased willingness
to raise interest rates. Policymakers' concern that Asia's economic woes
were not enough to offset buoyant domestic demand appeared to be supported
by the first-quarter GDP report.
DOWN 40 or 50
to 1050
If
the news is "good", rapid growth that's "bad" because it implies inflation
and higher money costs. If the news is "bad", lower growth and earning
that's good- maybe. Labor costs are going to be higher but how high is
high ?
The chances are 2/3 down, 1/3 up - but the reactions to economic
news are not always what is expected.
Thursday:
April 30th
``If
the U.S. economic data are strong, fears of a rate rise will return, suggesting
dollar upside,'' said Sally Wilkinson, senior
economist
at Daiwa Europe in London.
--------------------------------------------------------------
MARKET
PRICES AT 0905 GMT
Mark
1.7937/42 Yen 132.05/15 Sterling 1.6686/96
Gold
$310.90/1.30 +2.65 (pvs PM fix) Brent $14.39 +0.14
FTSE
100 5843.7 +10.6 CAC 3746.61 +12.68 X-DAX 5101.43 +17.63
---------------------------------------------------------------
U.S.
Federal Reserve chairman Alan Greenspan is known to consider ECI figures
as an important indicator of inflationary
pressures
building in a robust U.S. economy.
Thursday
April 30, 4:14 am Eastern Time
Wall
St bubble risk looms,
but is Asia to blame?
By
Yoshiko Mori
TOKYO,
April 30 (Reuters) -
The U.S. stock market is being poisoned by a ``classic
bubble'' and the risk is looming of a
downward
correction of 10 to 20 percent, economists in Tokyo say.
``
The
current state of Wall Street is similar to what happened in Tokyo in 1987
when it was already apparent that the asset
market
bubbles were getting out of hand,'' said Richard Werner, Tokyo-based chief
economist and managing director of Profit Research Centre Ltd.
Excessive
capital created by the U.S. banking system and the Federal Reserve has
been the major cause of recent Wall Street
gains,
Werner said.
Excessive
credit creation is spurring financial and real estate transactions which
are pushing up asset prices -- ``the classic
bubble,''
Werner said.
Economists
said credit creation through loans by the U.S. banking system is expanding
at around 10 percent year-on-year, the highest growth rate since the 1980s.
``If
the U.S. economic data are strong, fears of a rate rise will return, suggesting
dollar upside,'' said Sally Wilkinson, senior
economist
at Daiwa Europe in London.
First
quarter U.S. employment cost index is expected to rise 0.9 percent from
one percent in the previous quarter.
An
advance estimate of quarter one U.S. gross domestic product is also expected
at 1230 GMT.
At
0835 GMT the dollar was at 1.7921/26 marks and 131.93/03 yen
Con't
on
News
and analysis GO TO
Money pages first
forecast.htm,
then
conditions.htm
Main page Flash.htm
----------
G
o to Wiredbrain's
ACTIVE-NEWS
PAGE
----------
Con't on money
PAGE TWO
----------
G
o to Wiredbrain's
Current up-dates
Main page Flash.htm
----------
G
o to Wiredbrain's
PAGE TWO
Everyone
can be right ( and wrong) :
today,
packets.htm
The
second wave model was based on production, from farm and mines, to factories
- material produce that was stored in inventory, sold to wholesalers and
ended up in shops.
The third wave model, products are less important than
services. Systems of ideas match client demands within networks of OEM
( original equipment manufactures ) and direct sales to users.
The open
market in electric power with commodity prices distributed directly to
end users down networks uses an Asymmetric out of equilibrium algorithm
rather than seeking a mythological equilibrium at some sort of steady state.
Networks of material and service providers on a global scale certainly
changes forecasts of economic futures. (
The use of networks to find practical
paths has to do with the "traveling salesman problem". If the sales person
has to visit a large number of points there is no single shortest path
and the "best" solution is often counter-intuitive. )
The
irrational increase in stock prices is now being justified by blithe forecasts
of endless growth. People want to forget that economic change has loosers
that out number winners in the short run; the iceman, the candle makers
are gone.
The internet replaces many middle people, from bankers and travel
agents, to wholesalers and distributors.
The "endless growth" craze now
is being used politically to avoid hard or unpopular changes in entitlement
benefits.
The
bulls and the bears are both right and both wrong.
The business cycle has
not been repealed but changes from a material one to one of the mind and
spirit, SYNERGY where the whole is more than the sum of the parts.
The
factory is replaced by the production of trust and faith in paper, computer
digits, balances and transfers of insubstantial assets.
The over supply
is of faith - belief in a "blue sky" future that produces an over abundance
of paper money, credit, market booms and financial high flightiness.
The
devaluation started in South East Asia last June, spread to Korea and now
Japan, the unwinding of building booms, market booms, inflated prices,
currencies and hopes. So while the real economy does have a bright future,
the paper empires built on hope will tumble- someday.
The total equity
market is over 35 Trillion with 1/3 in the US, 20 % in Europe, 15 % in
Japan - and the other 1/3 spread around the world.
The Americans are adding
about 1 billion a day in new investments - or .003 % of the world market
or .01 % ( 2.5 % a year) of the American Market of 10 Trillion. Not enough
to substain a long term boom.
The Global equity was about 35 trillion,
last year, before the devaluations.
The US market has grown 20 % from 8
trillion to 10 trillion.
The US has gained 2 trillion, Europe a trillion
in paper profits while the rest of the world has loss 3 Trillion -
Global
players have increased the USA % of their investments as they retreat from
declining markets. Now the move is into Europe, back to parts of Asia,
Eastern Europe, Latin America where more double digit returns are possible.
We will be surprised if the Year-to-Year return from April 1 to March 30th
will be 5 % for the US Market - a rate that suggest short term bonds -
with currency risks - or ECU inflation protected utility bonds at 1.5 %
more, with a currency gain for $'s.
The
best buy is a basket of Asia's 30 % bonds - the currencies have hit bottom
and the rates have hit their tops. Triple gains, increase in bond prices
as rates decline, increases in exchange values, and real high interest
- and risk !
OUR
RECORD: check
money.htm,
stock.htm
for past calls, been damn good
Alliance
Global , Bear Stearns Emerg Mkts Debt A Ticker: EMDFX , Countrywide, Dreyfus
Global Bond Ticker: DGBDX, Federated Intl High Income, Franklin Templeton
High Inc Curr Ticker: ICHIX - Gt Global High-Income A Ticker: GHIAX Kemper
Global, Morgan Stanley Worldwide High-Inc A Ticker: : MSWAX - Oppenheimer
Intl Bond C Ticker: OIBCX - Phoenix Emerging Markets Bond B Ticker: : PEMBX
Prudential Interm Global Inc B Ticker: PBIBX T. Rowe Price, Van Kampen,
Vontobel
Wiredbrain's
Yahoo at wiredbrain password "synergy"
SYNERGY
Group's Excite Channel
Technologies
2X market
IXCO
SOX MSH PSE NDX
down more than market
Pause
in
Asia's DOWN and Europe's down
from record high ( US Germany France London )
Why
does one index so different from the other ? Could it be the effects of
INDEX trading?
Stocks,
dollar active ( down again) and bonds drifting down;
Asia
down, Europe down from new highs:
bonds
at
5.8 %
bonds
DOWN interest UP well off lows of 5.65 and off high of 6.2 on money
supply, oil prices near $16 Gold at $310
Currencies
(dollar)
DOWN from rally in a
tight range in a
Negative FX market - (on
scale from +15 to +15).
Bottom
Line:
Krugmann:
"
The Fed doesn't formally care about anything in particular. That way
you can't pin them
down.
Their nightmare: I know what keeps Alan Greenspan awake at nights. I don't
need any inside
information
to tell you this. He thinks about Japan 1990. ( Sic.. South East Asia in
1997 or the US in 1969 )
A
stock market that went to dizzying heights and there were lots of explanations;
everybody had a good theory about why that made sense and then it plunged.
And in the course of plunging, took the real economy down with it and it
never actually recovered. And although you can give all sorts of reasons
why the U.S. is different from that, the Fed is very concerned about that.
They are very concerned that we have a bubble economy, which is different
in detail, but the same general position as Japan before the big crash.
If they could figure out some way to deflate the bubble gently, they would."
Brancaccio:
"Sounds like you're a little worried about that scenario as well."
Krugmann:
"Oh, I'm scared to death! I look at the current level of the market. I
can't come up with a
reasonable
reason for it. I can give you a lot of standard arguments about why, even
if the market
MIT
economist Paul Krugmann's most recent book is called "Pop Internationalism."
NEW
YORK, May 7 (Reuters) - Earnings of companies in the Standard & Poor's
500 index are up 3.1 percent year-on-year in the first quarter with 91
percent, or 453 companies in the index, having reported, said First Call.
This
could rise to about 4.0 percent once all the retailers have reported, which
would be slightly better than Wall Street expected, said Chuck Hill, First
Call's director of research.
Analysts
had slashed their profit growth forecasts for the first quarter because
of Asia's turmoil.
But
even 4.0 percent would still be less than half the 9.0 percent year-on-year
growth in the fourth quarter of 1997, and would be well below the 10 percent
growth originally forecast for the first quarter.
Wall
Street is still betting
on backloaded
earnings growth this year.
First
Call said analysts forecast that S&P500 earnings will grow 8 percent
in the second quarter, 13 percent in the third quarter and 18 percent in
the final quarter. ( I wouldn't bet on it
)
These
forecasts may= WILL change over the coming months as more companies discuss
earnings with analysts, First Call said.
This
looks like a organized attempt to talk the market down:
You
don't have to shoot the charging bull between the eyes to try to slow it
down. You can use a number of less radical techniques to try to slow down
the ragging bull. You wave red flags, then the picadors poke at it, then
if all else fails you draw on more powerful weapons for the coup de grace'.
The
Fed won’t release this “directive,” crafted at the
end
of each committee meeting, until May 21.
The primary
significance
of the directive is to signal financial markets
which
way the Fed is leaning.
Officials
say Asia seems to be stabilizing, and
domestic
economic vigor appears to be offsetting the ill
effects
of Asian woes on U.S. exports. First-quarter
consumer
spending and housing construction was strong,
and
the economy appears to be awash in credit. So, in
public
speeches and interviews, Fed officials are beginning
to
prepare markets for a Fed move to brake the
economy-unless
it slows on its own soon.
The
Fed has been expecting a slowdown for months,
but
it hasn’t materialized. Most forecasters say the
economy
expanded at an annual rate of between 3% and
3.5%
in the first quarter, which would be the sixth quarter
of
better-than-3% growth.
Worries
about destabilizing fragile Asian financial markets could delay a Fed move,
but
some
Fed officials privately acknowledge that they would sleep better if the
stock market were less ebullient. Indeed, a decline in stock prices would
tend to slow the economy, which is precisely what the Fed would like to
see.
WSJ
Magic,
Science, the market, financial reporting and Beliefs systems such as Futures,
values, prices, rates and other Religions
(1948)
by Malinowski, Bronislaw
The
principle dialectic of the modern world is the dualism of science and magic.
The conflict starts with Newton who spent most of his life at numerical
alchemy.
In
a seminal article Malinowski suggests that "primitive" people use science
to control events they understand and can do something about, and magic
for forces of nature that are out of control.
They are very resonable about
fishing, farming, hunting and warfare when they find a pattern in events
- but magical thinking takes over when events seem out of control such
as storms, earthquakes, plagues, and other unexpected traumas.
Maclay,
Kubary, Malinowski: Archetypes from the Dreamtime of
Anthropology
The
dreamtime is explained in the "Last Wave" a film by Peter Weir - as a reality
that exists beyond the day to day that gives values, meaning to the "Law"
or customs of a people. In this way it is the origin of religion, which
the age of reason called a "superstition ".
Malinowski,
Bronislaw Kasper (1884+1942), British anthropologist,
regarded
as the founder of the "functional" school of anthropology,
which
maintains that human institutions should be examined in the
context
of the culture as a whole. He was born in Kraków, Poland. In
1914
he took part in an expedition to New Guinea and Melanesia and
spent
the next four years studying the peoples of the Trobriand Islands
of
the southwest Pacific. Malinowski became professor of social
anthropology
at the University of London in 1927. His further research
took
him to Africa, Latin America, and parts of the United States.
LAST
WEEK IN REVIEW:
For
historical interest, the market will look at the minutes of the March 31
U.S. Federal Open Market Committee meeting to be released on Thursday.
According
to Treasury Department data, foreigners owned 38 percent of the $3.4 trillion
in outstanding Treasury
debt
at the end of August.
The Japanese owned 25 percent of the foreign-held
debt, followed by Great Britain,
20
percent, and Germany, 6 percent.
Japanese
officials played down speculation this week of another wave of Treasury
securities selling to finance
a
$77 billion bailout of Japan's banking system.
In
addition to capital flows, Wednesday's Commerce Department release reported
the broadest measure of
U.S.
foreign trade, known as the current account. It shot up 11.4 percent to
$42.2 billion in the third quarter, the
The
current account measures not only trade in goods and services but also
the flow of investment income
between
countries and foreign aid.
08:44
US JUNE BOND FUTURE UP 13/32 TO 120-27.
08:44
US 30-YR TREASURY BOND UP 13/32 TO 103-02, YIELD AT 5.90%.
Thursday
May 21, 7:07 am Eastern Time
Markets
in France, Germany and parts of continental Europe were closed for Ascension
Day, reopening on Friday. Countries which operated normally reported lower-than-normal
volume.
---------------------------------------------------------------
MARKET
PRICES AT 1100 GMT
Mark
1.7646/51 Yen 135.19/29 Sterling 1.6270/80
Gold
$300.00/0.40 +0.59 (pvs PM fix) Brent $13.87 +0.15
FTSE
100 5968.9 +61.5
---------------------------------------------------------------
Benchmarks:
London
6,100 record high, Paris 4025* high, Frankfort 5,450 * high
The
UK's FTSE 100 index was up more than one pct as world markets celebrated
the Asian rally after Suharto quit and a late sprint by the Dow to close
116.83 points, or 1.3 percent, higher on Wednesday.
Sterling
had hit a seven-month low of 2.8763/73 against the mark from 2.8893/98
late Wednesday, after Bank of England Monetary Policy Committee member
Willem Buiter said the British economy is slowing and will slow further.
Some
dealers in U.S. stocks said minutes of the March 31 interest-rate setting
Federal Open Market Committee (FOMC) policy meeting, due for release at
1800 GMT, would be keenly awaited.
LONDON,
May 19 (Reuters) - European shares closed with steep gains on Tuesday,
lifted by a Wall Street rally and growing optimism that U.S. interest rates
would not be increased later in the day.
In
currencies, the yen lifted itself gingerly from its 6+1/2 year low against
the dollar after Indonesian President Suharto pledged to hold elections,
causing tentative rebounds in southeast Asian markets.
---------------------------------------------------------------
MARKET
PRICES AT 1550 GMT
Mark
1.7848/58 Yen 136.18/28
Sterling 1.6230/40
Gold
$300.00/0.50 -0.05 (pvs PM fix) Brent $14.47 +0.01
FTSE
100 5877.8 +51.6 CAC 3980.84 +35.53 X-DAX
5441.00 +97.34
---------------------------------------------------------------
THE NEXT
STEP FORWARD
Where
we go from here !
A few years
ago we talked about the potential of the internet -
Doc1
to Doc5
Then we
talked about the impact on the
social -
political
-
economic and general
future
Then we
talked about how the technology will develop
packets.htm
We talked
about the
network computer and how the information
utility will take shape.
Now what's
next ?
One way
or another - enough bandwidth will be provided to inexpensive and tough
enough boxes so that all the hard complex stuff will be pushed upstream
and voice, video, data and new applications can work the channels to provide
news, entertainment, communications, commerce in dramatically different
ways.
The big
question is how and by whom ?
By
John Sidgmore
May
5, 1998 - John Sidgmore
outlines
his vision for the
future
of global
telecommunication
in this
NetWorld+Interop
Keynote
speech
Global
tele-communications utilities linked by satellites, then ground stations,
then optic wires, cables, broad band, wide band, (A)DSL - a global backbone
providing service to all of humanity - with solar charged instruments from
anywhere to anywhere.
The first world has a billion ready clients,
the global market place has a million firms ready to go, the second and
third world can add a 100 million new clients a year and a million new
firms, local governments, missions and schools, gaming centers and market
players as fast as the bandwidth and prices allow.
The global requirements
are different from America and the European community. While part of the
world is wired - much of the world is not.
The Global
communications network must be based on wire-less standards - that will
work on wires but do not require them.
NOTICE:
SOUTHWINDNET = http://www.highspeedhosting.com/newsite/message.cfm
The
digital communications age has arrived. Still a little expensive - but
if the price - quality relationships hold - high speed connections should
be quite cheap in a year or so.
Then local NODES can provide high speed
wireless connections for EVERYTHING - internet with telephone, video and
real time data bases, BYE-BYE to MA bell, cable companies, TV networks
- as we know them.
The REAL impact will be all the way to China - the billions
- the majority of people on this planet who have almost no two-way telecommunications
- they can make the great leap forward...
The
site is in the process of upgrading service to
ViperLink.
VMC Virtual Marketing Corporation
The
ViperLink system uses a wireless access system to connect to an ATM
(
Asynchronous Transfer Mode (ATM) ATM is a packet switched technology capable
of carrying
voice,
video & data.)
backbone
at an astounding 90Mbps! Our Kentucky office has a full 2.0Mbps
(30%
bigger than a T+1) dedicated connection that is burstable to 6.0 Mbps (4
full
T+1s) if needed. If at any time, our web sites need additional bandwidth
–
they’ve
got it! Never again will there be a problem with not
having enough
bandwidth.
Ask how many providers can make that claim!
SAN
JOSE, Calif.--(BUSINESS WIRE)--May 11, 1998--
Verilink
Corp. (NASDAQ:VRLK - news) today announced that
Splitrock
Services, Inc., the U.S.-based provider of Internet access to Prodigy customers,
has selected Verilink to provide
Ramblings:
The doors to creative thinking and doing are in the narrow
places between large structures.
The
empires of the world and the mind dominate the landscape.
Vast historic structures obscure the
view of the horizon and our real location. Down narrow
lanes and in far fields we sometimes can
gain images that glimmer with reflections of a pale light,
far off.
Where theses narrow lanes and far field meet are the focal
points of new creations.
There is a container, connected to nodes, connected to
networks, creating a info-sphere of billions
living reproducing pathways and elements.
The bio-sphere
began and is still largely made up of
micro-organisms that share genetic information through
networks of co-option, cooperation and
communication that become organic wholes from simpler
to complex. Cells take in parts from
elsewhere and collect abilities of different genes.
The
biological and infomation packets are
coming together on a global scale.
One element basic to global networks are standards.
The
critical standard is digital information
which can be understood and act upon by all the other
members of the community.
The
information utility will operate on a common operational
language - such as HTTP, FTP, Java,
that will co=option functions from different places,
in words, pictures, sounds and video.
The
Microsoft issue is their desire to make MS-OS/ active
X the universal language for all future global
networks, software, operations, communications and services.
Netscape’s inter-operation open
arch-culture has a somewhat different vision of inter
and intra operability.
The global scope of
mega networks makes Microsoft’s vision unlikely but not
impossible.
Their moves into
communications, cable, satellites, broadcasting and services
should be taken as very important but
not as a given. Without outside intervention or meaningful
competition they could set NT/active X
type systems as the standard for most if not all inter-net
communications.
Gates to everone - "Look upon my works ye humble of the
earth and give
up."
But all empires lack vision and ability to change.
It’s not hardware, it’s not software, but it is service-ware.
Companies that
don’t sell machines or programs but universal services.
Sign-up and we
give you the container, the link, and all the services
you can think of and
many that you haven’t though of yet.
I soon will be able to pull down the word processing "service"
tied to voice and video "services". I
will be able to pull down interactive forms "service",
a search service, marketing services,
shopping service, broadcast and narrow cast services,
product design and production services,
travel, insurance, investment and banking services designed
and distributed by other services .
All these services we now called companies, producers,
distributors, stores and markets become
part of the services network.
The telephone company (
tele - sounds )is a service: television ( tele -
pictures ) networks and stations are service including
broadcast ( send sound and picture over a
wide area ): computers are not a machine or thing but
provide systems capacity to do something,
assign traits and store information and programs ( software
to help machines - do stuff ). All these
THINGS are becoming parts of a system of service with
nodes and terminals.
The core of the global service system is the operational
codes and languages. Everyone has to
understand ever one else and terminals need to talk to
nodes and servers need to communicate
with servers in common coded packets moving a mega-speeds
back and fourth.
These codes and
languages are extensions of Hyper Text Transfer Protocol
, ftp ( file transfer ) and operations such
as Java.
Saturday
May 9 8:05 AM EDT
ZANNY
MINTON BEDDOES: When we talk about a bubble, we talk about rising
fundamentals
would warrant, and they're going up because of some kind of speculative
frenzy,
to use a phrase, again, that Chairman Greenspan used, some kind of irrational
exuberance.
We're all feeling good. We're buying shares. Prices are going up not because
of
fundamental changes or not only because of fundamental changes, more because
there's
a kind of frenzied buying.
And
that's what we mean by a bubble, and we worry about it for two reasons.
We worry about it because
bubbles
tend to burst. Financial markets have had bubbles ever since finance started.
But the problem is that they
The other
problem is that if they--if
the
bubble continues, then this kind of inflation in asset prices--because
that's really what it is--can spill over into
ZANNY
MINTON BEDDOES: Well, I agree that there have been changes in the world
economy, and there
have
been changes in the U.S. economy.
The question is how big have these changes
been and do they justify
today's
prices, and I think one argument that is frequently made by the people
who believe in this new economy or
happened
in the last two years in the U.S. economy, we've grown far faster than
the trend growth, and we--than
economists
normally think the economy can grow--and that is because we've used more
people. Unemployment
The one
thing that does seem to be different is
that
as wages are rising, there isn't this immediate transfer into higher inflation.
Now,
there are--that could be because of some new rules. It could also be because
there
are
a lot of temporary factors which have actually influenced. One is that
benefits have
been
rising much more slowly than they used to.
The HMO revolution has meant
that its
employers
have been able to cut costs in areas where they traditionally weren't able
to cut
costs.
Secondly, the dollar is very strong. Now, the strength of the dollar
also dampens
inflation.
Thirdly, commodity prices are weak.
They're weak in part because
of the
problems
in Asia, but they're not--those are not structural changes.
They're temporary
things
that could change, and when they change, I think we'll see the old rules
coming back into play.
Are
stocks poised to flame out?
Friday
May 8th:
08:33
U.S. UNEMPLOYMENT RATE FALLS TO 4.3%, AVERAGE HOURLY EARNINGS UP 4C IN
APRIL, NEAR CONSENSUS.
08:32
RETAIL ADDS 44,000 JOBS.
08:32
CONSTRUCTION ADDS 35,000 JOBS.
08:32
SERVICES ADD 139,000 JOBS.
08:32
10,000 FACTORY JOBS LOST IN APRIL.
08:32
AVERAGE FACTORY WORKWEEK FALLS 1.1 HOURS TO 40.7.
08:32
AVERAGE WORKWEEK FALLS 0.3 HOURS TO 34.4.
08:32
HOURLY EARNINGS RISE 4 CENTS IN APRIL OR 0.3%.
08:32
4.3% JOBLESS RATE LOWEST SINCE FEB 1970.
08:32
262,000 JOBS CREATED IN APRIL; UNEMPLOYMENT RATE FALLS TO 4.3%.
08:31
U.S. 30-YR TREASURY UP SLIGHTLY ON UNEMPLOYMENT NEWS.
08:48
US JUNE BOND FUTURE DROPS 8/32 TO 120-03 ON JOBLESS DATA.
08:48
US 30-YR TREASURY BOND DROPS 12/32 TO 102-03, YIELD AT 5.99%.
08:48
US 10-YR TREASURY BOND DROPS 5/32 TO 98+14, YIELD AT 5.71%.
08:48
US 5-YR TREASURY BOND DROPS 4/32 TO 100+13, YIELD AT 5.65%.
08:48
US 3-YR TREASURY BOND DROPS 1/32 TO 99+11, YIELD AT 5.63%.
08:48
US 2-YR TREASURY BOND DROPS 2/32 TO 100-02, YIELD AT 5.58%.
08:48
US TREASURIES GO LOWER ON APRIL JOBLESS RATE.
08:48
US 1-YR T-BILL DISCOUNT RATE UP 2 BASIS POINTS TO 5.15%.
08:48
US 6-MONTH T-BILL DISCOUNT RATE UP 3 BASIS POINTS TO 5.13%.
08:48
US 3-MONTH T-BILL DISCOUNT RATE UP 2 BASIS POINTS TO 5.00%.
08:31
U.S. UNEMPLOYMENT RATE LOWEST SINCE FEB. 1970.
08:31
UNEMPLOYMENT RATE FALLS TO 4.3%, DOWN .4 PERCENTAGE POINTS.
08:31
APRIL NON-FARM PAYROLL UP 262,000, CONSENSUS 250,000.
07:20
BRITISH POUND 1.6403 DOWN .0071, OR -0.4%.
07:20
GERMAN DMARK 1.7718 UP .0034, OR +0.2%.
07:20
JAPAN YEN 132.56 DOWN .72, OR -0.5%.
07:20
U.S. 30-YR. BOND 5.948 UP 1 17/32, OR 0.1%.
07:20
FRANCE CAC 40 3906.36 UP 41.09, OR +1.04%.
07:20
GERMAN DAX 5260.56 UP 74.33, OR +1.43%.
07:20
LONDON FT 100 5965.5 UP 18.5, OR +0.5%.
07:12
FOREIGN STOCK MARKETS MOSTLY LOWER AUSTRALIAN MARKET 2780.50 DOWN 0.3,
OR -0.01%.
Korea
down - Asia mixed - London and Germany UP, France down
To
see what we said this morning and last night, see
http://www.wiredbrain.net/short.htm
..
The
news before it happens: Unemployment drops 4.2 % and new jobs increase
260,000 - adding to worries of rate increases :
The
government on Friday is scheduled to release the monthly employment data
for April, its first major reading on how the economy performed last month.
Analysts
surveyed by Reuters expect the unemployment rate to be unchanged at 4.7
percent with 259,000 new jobs created outside the farm sector. That compares
with the March rate of a decline of 36,000.
Last
month, the Conference Board put the help-wanted advertising index, which
tracks employment growth, at 92.0 in March, unchanged from February but
well above the March 1997 rate of 87.0, showing no drop in demand for labor.
The
feeling among the skeptics is that even if the employment figure is satisfactory,
there is no guarantee that the Fed is not
going
to tighten," Metz said.
Investors
appeared little reassured by Fed Vice Chairwoman Alice Rivlin who said
that a desire to rein in a high-flying stock
market
would not be a reason by itself for the central bank to raise interest
rates.
The
Fed was not considering changing margin requirements on stock trades, Rivlin
said.
There was no big risk of inflation
taking
off, she added.
Thursday
May 7th:
Editoral:
The
tradition is that good news = bad news because rapid growth = inflation.
Starrting in Nov. good news was good news because it = higher earning. Now
with a market well over any rational P/E the growth of earning and/or changes
of 1/4 % in a minor bank rate really can't make much difference. BUT when
prices are so high any excuse is a good excuse to sell - SO good news is
bad news again and bad news is bad news -
The employment number will be
up because the GDP was growing at a very high rate ( over 4 %) Wages are
going up in areas of demand but not in semi-skilled service jobs - as it
has been since 1969.
The problem is not wage inflation but a bubble - ready
to pop - in real estate - in stock prices - yo-yo land - the President
and Congress want to be popular. A reasonable slow down will be a lot better
than a CRASH ! And now, rather than close to an election.
The clients of
the Federal Central Bank - the World Banking System - need order in a time
of some real problems - and order means being able to add to the money
supply - which you can't do without great risk during a speculative bubble.
Fed
reminds Wall Street it is still top dog
By
Pierre Belec
NEW
YORK (Reuters) - Life is good on Wall Street. Consumer confidence is
the highest in some 30 years, inflation the lowest since the 1960s and
the stock market is soaring to the moon.
But
the Federal Reserve says trouble is bubbling in the economy.
Wall
Street was again reminded this week that the Fed is still the top dog.
The
secretive Fed leaked information that it had shifted monetary policy toward
a bias, which called for higher interest rates, because of concern that
the economy's robust growth may reignite inflation.
The
hint that the cost of borrowing may go up hit the market like a ton of
bricks, sending stocks into a tailspin at the beginning of the week as
investors pushed the panic button.
The
market had been betting that the central bank would not raise interest
rates and there was even speculation that lending rates would drop before
the end of the year.
But
by week's end, the market had roared back with a vengeance on a report
that inflation was still holding at the lowest level in some 30 years,
even though the economy grew at a fast pace in the first quarter.
Is
the Fed looking at the wrong radar screen?
Some
experts believe the central bank is actually more worried about the surge
in stock prices than any underlying inflation.
"
The
stock market is too speculative, exuberant and overvalued and there's the
risk that it could lead to financial asset inflation eventually causing
real sector inflation," said Hugh Johnson, chief investment officer for
First Albany Corp.
----------
G
o to Wiredbrain's
ACTIVE-NEWS
PAGE
----------
G
o to Wiredbrain's
PAGE TWO
----------
G
o to Wiredbrain's
Current up-dates
Wednesday:
Long bond at
5.84
Talking
the market down-``People are starting to talk about deflation,'' said David
Brickman, international economist at PaineWebber. "
The Fed's worried about
the economy overheating," said Farrell. "I think the Fed would be thrilled
if the financial sector took a deep breath. I think we all should be thrilled."
Federal
Reserve officials Alice Rivlin, Laurence Meyer, and Edward Gramlich, and
Atlanta Fed president Jack Guynn are all speaking later on Wednesday.
U.S. Deputy Treasury Secretary Lawrence Summers is also speaking.
Federal
Reserve Chairman Alan Greenspan speaks at 1615 GMT on Saturday to a meeting
of state bank supervisors.
Wednesday
April 29 6:57 AM EDT
Greenspan
preserved consensus with bias
Home
| Client Access | Contact Us | Help
Market
Letter
05/26/98
The
Market Posture was downgraded to Mildly Bearish the week ending
4/10/98
(DJIA - 8994.96). Initial downside price projection for the DJIA
is
8750. CTI readings should remain negative until late May 1998.
****Check
out "ON THE EDGE" - A monthly review of the markets****
________________________________________________________________________
CURRENT
PRIOR
MARKET
TIMING MODELS READING WEEK CHG CONNOTATION
________________________________________________________________________
CYCLICAL
TREND INDEX (CTI): -4 -4 0 BEARISH
MOMENTUM
INDEX: -8 -6 -2 BEARISH
SENTIMENT
INDEX: 1 2 +1 NEUTRAL
________________________________________________________________________
DOW
JONES INDUSTRIAL AVERAGES (DJIA) CLOSE:................ 9114.44
DJIA
POINT CHANGE FROM PRIOR WEEK:......................... 18.44
DJIA
PERCENTAGE CHANGE FROM PRIOR WEEK:.................... 0.20%
MARKET
POSTURE THIS WEEK:..................................MILD BEARISH
MARKET
POSTURE PRIOR WEEK:.................................MILD BEARISH
DJIA
TARGET:............................................... 8750
TIME
FRAME TO ACHIEVE TARGET:.............................. 29-May-98
DATE
CURRENT MARKET POSTURE FORMULATED:.................... 10-Apr-98
DJIA
CLOSE ON DATE CURRENT MARKET POSTURE FORMULATED:...... 8994.96
________________________________________________________________________
CYCLICAL
TREND INDEX (CTI).......... -4 CONNOTATION
________________________________________________________________________
29-May-98
(Projected) 7 BULLISH
05-Jun-98
(Projected) 7 BULLISH
12-Jun-98
(Projected) 7 BULLISH
19-Jun-98
(Projected) 7 BULLISH
26-Jun-98
(Projected) 7 BULLISH
________________________________________________________________________
MOMENTUM
INDEX...................... -8 % CHG CONNOTATION
________________________________________________________________________
1)
DJ Transportation Average 3390.59 +1.0% BEARISH
2)
S&P 500 Index 1108.25 -0.0% BEARISH
3)
NYSE Composite Index 574.58 0.0% BEARISH
4)
Advance-Decline Line -5505 BULLISH
5)
10 Day MA Advance-Decline Line 0.80 0.0% BEARISH
6)
AMEX Index 730.57 -0.9% BEARISH
7)
NASDAQ Composite Index 1802.72 -2.4% BEARISH
8)
DJ Utilities Index 280.06 0.1% BEARISH
9)
TRIN+10 Day Average 1.04 0.0% NEUTRAL
10)
NYSE New Highs-New Lows 251+137 NEUTRAL
11)
Zweig Breadth Indicator 0.40 BEARISH
12)
McClellan Oscillator -76 NEUTRAL
13)
McClellan Summation Index 628 BULLISH
14)
Unchanged Issue Index 0.17 BEARISH
________________________________________________________________________
SENTIMENT
INDEX..................... 1 % CHG CONNOTATION
________________________________________________________________________
1)
Odd Lot Short Ratio-5 Day Ave 5.03 0.0% BEARISH
2)
NYSE Short Interest Ratio 6.32 1.1% BULLISH
3)
Public-Specialist Short Ratio 0.89 0.0% BULLISH
4)
Put/Call Ratio+10 Day Ave(INDEX) 1.12 0.0% NEUTRAL
5)
Dividend-Yield Spread 5.10 0.0% BULLISH
6)
Mutual Fund Liquid Asset Ratio 4.60 0.0% BEARISH
7)
Bullish Investment Advisors 45.5 0.0% NEUTRAL
8)
Bearish Investment Advisors 25.2 0.0% NEUTRAL
9)
Bearish + Corrections Total 54.5 0.0% NEUTRAL
Home
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Group Analysis
By
Isabelle Clary
NEW
YORK (Reuters) - Federal Reserve Chairman Alan Greenspan agreed at the
March meeting of Fed policy-makers to
reintroduce
a bias toward raising interest rates, appeasing anti-inflation hawks on
the panel and preserving consensus, sources
It
is important to remember that the major FED activity is NOT the federal
funds or discount rate but open market selling of bonds and repos to withdraw
liquid assets and increase reserves in the banking systems.
The bias gives
direction to day to day market activity which has more effect than the
discount rate changes. Real rates are below the 5.5 % target.
08:45
US 3-MONTH T-BILL DISCOUNT RATE DROPS 2 BASIS POINTS TO 4.90%.
08:44
US 6-MONTH T-BILL DISCOUNT RATE DROPS 1 BASIS POINT TO 5.09%.
The
effective discount rate ( the price of money to banks ) is LIBOR MAY98
94.32 London Inter bank loan rate at 5.68 % sets other bank loan rates
- the short term rate set by EURO $ JUN98 94.225 = 5.775 % is over the
target of 5.5 % and going up. So bias does matter more than the actual
official change is a minor rate - the federal funds ( over night ) discount
rate.
The cost of money is going up which might slow certain types of interest
sensitive economic activity. It is not that the fed does nothing but wait
and have meeting - but is very active every day in the market.
Dollar/mark
was unlikely to show major movement ahead of the weekend meetings of European
Union officials to decide the
countries
which will join the single currency from 1999, but the mark might receive
a boost subsequently, analysts said.
On
the foreign exchanges, the dollar was slightly firmer but trading was range-bound
partly because of a holiday in Japan and
as
the markets awaited a batch of speeches from central bank and finance officials.
---------------------------------------------------------------
MARKET
PRICES AT 1101 GMT
Mark
1.7972/77 Yen 132.18/28 Sterling 1.6686/96
Gold
$307.50/7.90 -0.75 (pvs PM fix) Brent $14.61 +0.01
FTSE
100 5818.0 +11.4 CAC 3756.49 -20.74 X-DAX 5125.71 +14.83
---------------------------------------------------------------
By
mid-session, London's blue-chip FTSE 100 index was 0.4 percent firmer,
rescued by bargain-hunters from earlier losses
and
Germany's Xetra DAX was up 0.4 percent.
The
Belgian, Dutch, Greek and Swiss markets were also amongst the gainers but
French, Italian and Spanish bourses were in
the
red, pausing for breath after Tuesday's gains amid nerves over Wall Street
and confusion over U.S. rates.
Friday
May 1, 10:50 am Eastern Time
US
Treasuries slip on talk Fed checks forex rates:
The
basics:
A
too fast growth rate, gives too much money in the system, plus the Asia
thing causes lower exports, higher inports, pressure on the dollar which
is falling.
A
listing of the main NAPM components follows:
April
March Feb Jan Dec Nov Oct Sept Aug
PMI
52.9 54.8 53.3 52.4 53.1 54.5 55.9 54.6 56.4
Production
53.4 57.6 55.3 53.3 55.8 58.5 59.6 58.4 61.2
New
Orders 56.8 57.3 55.9 55.2 53.9 55.1 58.4 56.1 60.4
Supplier
Del 52.3 53.4 52.1 52.0 54.0 55.2 55.0 55.5 55.6
Inventories
46.6 46.8 46.9 46.7 46.5 44.3 47.0 46.2 43.4
Employment
49.8 52.5 50.9 50.1 50.9 53.3 52.5 51.1 51.6
Prices
41.2 44.4 45.8 44.7 50.8 53.2 55.5 54.1 53.4
Export
Orders 49.7 48.0 47.9 45.0 50.6 52.6 51.9 51.2 55.1
Imports
56.3 53.4 51.2 53.9 55.4 52.6 51.7 53.1 53.9
US
Treasuries off post-NAPM highs in forex intervention fear. *Mkt talk Fed
checking forex rates, but Fed says ``no comment.'' *Impact greatest in
bills, 3-mo rates jump 5 bps in 45 mins. *Long end outperforming but off
highs, profit-taking seen. *Traders report foreign central bank selling.
Thursday
April 30, 8:56 am Eastern Time
U.S.
economy accelerated in Q1, inflation mute
Thursday
April 30, 8:56 am Eastern Time
WASHINGTON,
April 30 (Reuters) -
The U.S. economy unexpectedly picked up speed in the
first quarter of 1998, surging ahead at a brisk 4.2 percent annual rate
on booming consumer spending while inflation remained at its most muted
levels in 35 years, the Commerce Department said on Thursday.
It
was the sixth straight quarter in which Gross Domestic Product advanced
at an annual rate of 3 percent or more - well above the 2+1/4 percent target
range the Federal Reserve considers can be safely sustained without risking
a flareup in inflation pressures. First-quarter GDP growth handily outstripped
Wall Street economists' forecasts for a 3.3 percent rate of expansion as
it accelerated from last year's fourth-quarter 3.7 percent pace instead
of slowing.
A
chorus of U.S. central bank governors has warned recently that the economy
needs to soon show convincing evidence of a slowdown, unnerving financial
markets after reports the Fed has shifted to a position of increased willingness
to raise interest rates. Policymakers' concern that Asia's economic woes
were not enough to offset buoyant domestic demand appeared to be supported
by the first-quarter GDP report.
DOWN 40 or 50
to 1050
If
the news is "good", rapid growth that's "bad" because it implies inflation
and higher money costs. If the news is "bad", lower growth and earning
that's good- maybe. Labor costs are going to be higher but how high is
high ?
The chances are 2/3 down, 1/3 up - but the reactions to economic
news are not always what is expected.
Thursday:
April 30th
``If
the U.S. economic data are strong, fears of a rate rise will return, suggesting
dollar upside,'' said Sally Wilkinson, senior
economist
at Daiwa Europe in London.
--------------------------------------------------------------
MARKET
PRICES AT 0905 GMT
Mark
1.7937/42 Yen 132.05/15 Sterling 1.6686/96
Gold
$310.90/1.30 +2.65 (pvs PM fix) Brent $14.39 +0.14
FTSE
100 5843.7 +10.6 CAC 3746.61 +12.68 X-DAX 5101.43 +17.63
---------------------------------------------------------------
U.S.
Federal Reserve chairman Alan Greenspan is known to consider ECI figures
as an important indicator of inflationary
pressures
building in a robust U.S. economy.
Thursday
April 30, 4:14 am Eastern Time
Wall
St bubble risk looms,
but is Asia to blame?
By
Yoshiko Mori
TOKYO,
April 30 (Reuters) -
The U.S. stock market is being poisoned by a ``classic
bubble'' and the risk is looming of a
downward
correction of 10 to 20 percent, economists in Tokyo say.
``
The
current state of Wall Street is similar to what happened in Tokyo in 1987
when it was already apparent that the asset
market
bubbles were getting out of hand,'' said Richard Werner, Tokyo-based chief
economist and managing director of Profit Research Centre Ltd.
Excessive
capital created by the U.S. banking system and the Federal Reserve has
been the major cause of recent Wall Street
gains,
Werner said.
Excessive
credit creation is spurring financial and real estate transactions which
are pushing up asset prices -- ``the classic
bubble,''
Werner said.
Economists
said credit creation through loans by the U.S. banking system is expanding
at around 10 percent year-on-year, the highest growth rate since the 1980s.
``If
the U.S. economic data are strong, fears of a rate rise will return, suggesting
dollar upside,'' said Sally Wilkinson, senior
economist
at Daiwa Europe in London.
First
quarter U.S. employment cost index is expected to rise 0.9 percent from
one percent in the previous quarter.
An
advance estimate of quarter one U.S. gross domestic product is also expected
at 1230 GMT.
At
0835 GMT the dollar was at 1.7921/26 marks and 131.93/03 yen
Con't
on
News
and analysis GO TO
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forecast.htm,
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Current up-dates
PAGE TWO
today,
packets.htm
The
second wave model was based on production, from farm and mines, to factories
- material produce that was stored in inventory, sold to wholesalers and
ended up in shops.
The third wave model, products are less important than
services. Systems of ideas match client demands within networks of OEM
( original equipment manufactures ) and direct sales to users.
The open
market in electric power with commodity prices distributed directly to
end users down networks uses an Asymmetric out of equilibrium algorithm
rather than seeking a mythological equilibrium at some sort of steady state.
Networks of material and service providers on a global scale certainly
changes forecasts of economic futures. (
The use of networks to find practical
paths has to do with the "traveling salesman problem". If the sales person
has to visit a large number of points there is no single shortest path
and the "best" solution is often counter-intuitive. )
The
irrational increase in stock prices is now being justified by blithe forecasts
of endless growth. People want to forget that economic change has loosers
that out number winners in the short run; the iceman, the candle makers
are gone.
The internet replaces many middle people, from bankers and travel
agents, to wholesalers and distributors.
The "endless growth" craze now
is being used politically to avoid hard or unpopular changes in entitlement
benefits.
The
bulls and the bears are both right and both wrong.
The business cycle has
not been repealed but changes from a material one to one of the mind and
spirit, SYNERGY where the whole is more than the sum of the parts.
The
factory is replaced by the production of trust and faith in paper, computer
digits, balances and transfers of insubstantial assets.
The over supply
is of faith - belief in a "blue sky" future that produces an over abundance
of paper money, credit, market booms and financial high flightiness.
The
devaluation started in South East Asia last June, spread to Korea and now
Japan, the unwinding of building booms, market booms, inflated prices,
currencies and hopes. So while the real economy does have a bright future,
the paper empires built on hope will tumble- someday.
The total equity
market is over 35 Trillion with 1/3 in the US, 20 % in Europe, 15 % in
Japan - and the other 1/3 spread around the world.
The Americans are adding
about 1 billion a day in new investments - or .003 % of the world market
or .01 % ( 2.5 % a year) of the American Market of 10 Trillion. Not enough
to substain a long term boom.
The Global equity was about 35 trillion,
last year, before the devaluations.
The US market has grown 20 % from 8
trillion to 10 trillion.
The US has gained 2 trillion, Europe a trillion
in paper profits while the rest of the world has loss 3 Trillion -
Global
players have increased the USA % of their investments as they retreat from
declining markets. Now the move is into Europe, back to parts of Asia,
Eastern Europe, Latin America where more double digit returns are possible.
We will be surprised if the Year-to-Year return from April 1 to March 30th
will be 5 % for the US Market - a rate that suggest short term bonds -
with currency risks - or ECU inflation protected utility bonds at 1.5 %
more, with a currency gain for $'s.
The
best buy is a basket of Asia's 30 % bonds - the currencies have hit bottom
and the rates have hit their tops. Triple gains, increase in bond prices
as rates decline, increases in exchange values, and real high interest
- and risk !
OUR
RECORD: check
money.htm,
stock.htm
for past calls, been damn good
Alliance
Global , Bear Stearns Emerg Mkts Debt A Ticker: EMDFX , Countrywide, Dreyfus
Global Bond Ticker: DGBDX, Federated Intl High Income, Franklin Templeton
High Inc Curr Ticker: ICHIX - Gt Global High-Income A Ticker: GHIAX Kemper
Global, Morgan Stanley Worldwide High-Inc A Ticker: : MSWAX - Oppenheimer
Intl Bond C Ticker: OIBCX - Phoenix Emerging Markets Bond B Ticker: : PEMBX
Prudential Interm Global Inc B Ticker: PBIBX T. Rowe Price, Van Kampen,
Vontobel
Wiredbrain's
Yahoo at wiredbrain password "synergy"
SYNERGY
Group's Excite Channel
Technologies
2X market
IXCO
SOX MSH PSE NDX
down more than market
Pause
in
Asia's DOWN and Europe's down
from record high ( US Germany France London )
Why
does one index so different from the other ? Could it be the effects of
INDEX trading?
Stocks,
dollar active ( down again) and bonds drifting down;
Asia
down, Europe down from new highs:
bonds
at
5.8 %
bonds
DOWN interest UP well off lows of 5.65 and off high of 6.2 on money
supply, oil prices near $16 Gold at $310
Currencies
(dollar)
DOWN from rally in a
tight range in a
Negative FX market - (on
scale from +15 to +15).
Bottom
Line:
Krugmann:
"
The Fed doesn't formally care about anything in particular. That way
you can't pin them
down.
Their nightmare: I know what keeps Alan Greenspan awake at nights. I don't
need any inside
information
to tell you this. He thinks about Japan 1990. ( Sic.. South East Asia in
1997 or the US in 1969 )
A
stock market that went to dizzying heights and there were lots of explanations;
everybody had a good theory about why that made sense and then it plunged.
And in the course of plunging, took the real economy down with it and it
never actually recovered. And although you can give all sorts of reasons
why the U.S. is different from that, the Fed is very concerned about that.
They are very concerned that we have a bubble economy, which is different
in detail, but the same general position as Japan before the big crash.
If they could figure out some way to deflate the bubble gently, they would."
Brancaccio:
"Sounds like you're a little worried about that scenario as well."
Krugmann:
"Oh, I'm scared to death! I look at the current level of the market. I
can't come up with a
reasonable
reason for it. I can give you a lot of standard arguments about why, even
if the market
MIT
economist Paul Krugmann's most recent book is called "Pop Internationalism."
NEW
YORK, May 7 (Reuters) - Earnings of companies in the Standard & Poor's
500 index are up 3.1 percent year-on-year in the first quarter with 91
percent, or 453 companies in the index, having reported, said First Call.
This
could rise to about 4.0 percent once all the retailers have reported, which
would be slightly better than Wall Street expected, said Chuck Hill, First
Call's director of research.
Analysts
had slashed their profit growth forecasts for the first quarter because
of Asia's turmoil.
But
even 4.0 percent would still be less than half the 9.0 percent year-on-year
growth in the fourth quarter of 1997, and would be well below the 10 percent
growth originally forecast for the first quarter.
Wall
Street is still betting
on backloaded
earnings growth this year.
First
Call said analysts forecast that S&P500 earnings will grow 8 percent
in the second quarter, 13 percent in the third quarter and 18 percent in
the final quarter. ( I wouldn't bet on it
)
These
forecasts may= WILL change over the coming months as more companies discuss
earnings with analysts, First Call said.
This
looks like a organized attempt to talk the market down:
You
don't have to shoot the charging bull between the eyes to try to slow it
down. You can use a number of less radical techniques to try to slow down
the ragging bull. You wave red flags, then the picadors poke at it, then
if all else fails you draw on more powerful weapons for the coup de grace'.
The
Fed won’t release this “directive,” crafted at the
end
of each committee meeting, until May 21.
The primary
significance
of the directive is to signal financial markets
which
way the Fed is leaning.
Officials
say Asia seems to be stabilizing, and
domestic
economic vigor appears to be offsetting the ill
effects
of Asian woes on U.S. exports. First-quarter
consumer
spending and housing construction was strong,
and
the economy appears to be awash in credit. So, in
public
speeches and interviews, Fed officials are beginning
to
prepare markets for a Fed move to brake the
economy-unless
it slows on its own soon.
The
Fed has been expecting a slowdown for months,
but
it hasn’t materialized. Most forecasters say the
economy
expanded at an annual rate of between 3% and
3.5%
in the first quarter, which would be the sixth quarter
of
better-than-3% growth.
Worries
about destabilizing fragile Asian financial markets could delay a Fed move,
but
some
Fed officials privately acknowledge that they would sleep better if the
stock market were less ebullient. Indeed, a decline in stock prices would
tend to slow the economy, which is precisely what the Fed would like to
see.
WSJ
Magic,
Science, the market, financial reporting and Beliefs systems such as Futures,
values, prices, rates and other Religions
(1948)
by Malinowski, Bronislaw
The
principle dialectic of the modern world is the dualism of science and magic.
The conflict starts with Newton who spent most of his life at numerical
alchemy.
In
a seminal article Malinowski suggests that "primitive" people use science
to control events they understand and can do something about, and magic
for forces of nature that are out of control.
They are very resonable about
fishing, farming, hunting and warfare when they find a pattern in events
- but magical thinking takes over when events seem out of control such
as storms, earthquakes, plagues, and other unexpected traumas.
Maclay,
Kubary, Malinowski: Archetypes from the Dreamtime of
Anthropology
The
dreamtime is explained in the "Last Wave" a film by Peter Weir - as a reality
that exists beyond the day to day that gives values, meaning to the "Law"
or customs of a people. In this way it is the origin of religion, which
the age of reason called a "superstition ".
Malinowski,
Bronislaw Kasper (1884+1942), British anthropologist,
regarded
as the founder of the "functional" school of anthropology,
which
maintains that human institutions should be examined in the
context
of the culture as a whole. He was born in Kraków, Poland. In
1914
he took part in an expedition to New Guinea and Melanesia and
spent
the next four years studying the peoples of the Trobriand Islands
of
the southwest Pacific. Malinowski became professor of social
anthropology
at the University of London in 1927. His further research
took
him to Africa, Latin America, and parts of the United States.
LAST
WEEK IN REVIEW:
For
historical interest, the market will look at the minutes of the March 31
U.S. Federal Open Market Committee meeting to be released on Thursday.
According
to Treasury Department data, foreigners owned 38 percent of the $3.4 trillion
in outstanding Treasury
debt
at the end of August.
The Japanese owned 25 percent of the foreign-held
debt, followed by Great Britain,
20
percent, and Germany, 6 percent.
Japanese
officials played down speculation this week of another wave of Treasury
securities selling to finance
a
$77 billion bailout of Japan's banking system.
In
addition to capital flows, Wednesday's Commerce Department release reported
the broadest measure of
U.S.
foreign trade, known as the current account. It shot up 11.4 percent to
$42.2 billion in the third quarter, the
The
current account measures not only trade in goods and services but also
the flow of investment income
between
countries and foreign aid.
08:44
US JUNE BOND FUTURE UP 13/32 TO 120-27.
08:44
US 30-YR TREASURY BOND UP 13/32 TO 103-02, YIELD AT 5.90%.
Thursday
May 21, 7:07 am Eastern Time
Markets
in France, Germany and parts of continental Europe were closed for Ascension
Day, reopening on Friday. Countries which operated normally reported lower-than-normal
volume.
---------------------------------------------------------------
MARKET
PRICES AT 1100 GMT
Mark
1.7646/51 Yen 135.19/29 Sterling 1.6270/80
Gold
$300.00/0.40 +0.59 (pvs PM fix) Brent $13.87 +0.15
FTSE
100 5968.9 +61.5
---------------------------------------------------------------
Benchmarks:
London
6,100 record high, Paris 4025* high, Frankfort 5,450 * high
The
UK's FTSE 100 index was up more than one pct as world markets celebrated
the Asian rally after Suharto quit and a late sprint by the Dow to close
116.83 points, or 1.3 percent, higher on Wednesday.
Sterling
had hit a seven-month low of 2.8763/73 against the mark from 2.8893/98
late Wednesday, after Bank of England Monetary Policy Committee member
Willem Buiter said the British economy is slowing and will slow further.
Some
dealers in U.S. stocks said minutes of the March 31 interest-rate setting
Federal Open Market Committee (FOMC) policy meeting, due for release at
1800 GMT, would be keenly awaited.
LONDON,
May 19 (Reuters) - European shares closed with steep gains on Tuesday,
lifted by a Wall Street rally and growing optimism that U.S. interest rates
would not be increased later in the day.
In
currencies, the yen lifted itself gingerly from its 6+1/2 year low against
the dollar after Indonesian President Suharto pledged to hold elections,
causing tentative rebounds in southeast Asian markets.
---------------------------------------------------------------
MARKET
PRICES AT 1550 GMT
Mark
1.7848/58 Yen 136.18/28
Sterling 1.6230/40
Gold
$300.00/0.50 -0.05 (pvs PM fix) Brent $14.47 +0.01
FTSE
100 5877.8 +51.6 CAC 3980.84 +35.53 X-DAX
5441.00 +97.34
---------------------------------------------------------------
THE NEXT
STEP FORWARD
Where
we go from here !
A few years
ago we talked about the potential of the internet -
Doc1
to Doc5
Then we
talked about the impact on the
social -
political
-
economic and general
future
Then we
talked about how the technology will develop
packets.htm
We talked
about the
network computer and how the information
utility will take shape.
Now what's
next ?
One way
or another - enough bandwidth will be provided to inexpensive and tough
enough boxes so that all the hard complex stuff will be pushed upstream
and voice, video, data and new applications can work the channels to provide
news, entertainment, communications, commerce in dramatically different
ways.
The big
question is how and by whom ?
By
John Sidgmore
May
5, 1998 - John Sidgmore
outlines
his vision for the
future
of global
telecommunication
in this
NetWorld+Interop
Keynote
speech
Global
tele-communications utilities linked by satellites, then ground stations,
then optic wires, cables, broad band, wide band, (A)DSL - a global backbone
providing service to all of humanity - with solar charged instruments from
anywhere to anywhere.
The first world has a billion ready clients,
the global market place has a million firms ready to go, the second and
third world can add a 100 million new clients a year and a million new
firms, local governments, missions and schools, gaming centers and market
players as fast as the bandwidth and prices allow.
The global requirements
are different from America and the European community. While part of the
world is wired - much of the world is not.
The Global
communications network must be based on wire-less standards - that will
work on wires but do not require them.
NOTICE:
SOUTHWINDNET = http://www.highspeedhosting.com/newsite/message.cfm
The
digital communications age has arrived. Still a little expensive - but
if the price - quality relationships hold - high speed connections should
be quite cheap in a year or so.
Then local NODES can provide high speed
wireless connections for EVERYTHING - internet with telephone, video and
real time data bases, BYE-BYE to MA bell, cable companies, TV networks
- as we know them.
The REAL impact will be all the way to China - the billions
- the majority of people on this planet who have almost no two-way telecommunications
- they can make the great leap forward...
The
site is in the process of upgrading service to
ViperLink.
VMC Virtual Marketing Corporation
The
ViperLink system uses a wireless access system to connect to an ATM
(
Asynchronous Transfer Mode (ATM) ATM is a packet switched technology capable
of carrying
voice,
video & data.)
backbone
at an astounding 90Mbps! Our Kentucky office has a full 2.0Mbps
(30%
bigger than a T+1) dedicated connection that is burstable to 6.0 Mbps (4
full
T+1s) if needed. If at any time, our web sites need additional bandwidth
–
they’ve
got it! Never again will there be a problem with not
having enough
bandwidth.
Ask how many providers can make that claim!
SAN
JOSE, Calif.--(BUSINESS WIRE)--May 11, 1998--
Verilink
Corp. (NASDAQ:VRLK - news) today announced that
Splitrock
Services, Inc., the U.S.-based provider of Internet access to Prodigy customers,
has selected Verilink to provide
Ramblings:
The doors to creative thinking and doing are in the narrow
places between large structures.
The
empires of the world and the mind dominate the landscape.
Vast historic structures obscure the
view of the horizon and our real location. Down narrow
lanes and in far fields we sometimes can
gain images that glimmer with reflections of a pale light,
far off.
Where theses narrow lanes and far field meet are the focal
points of new creations.
There is a container, connected to nodes, connected to
networks, creating a info-sphere of billions
living reproducing pathways and elements.
The bio-sphere
began and is still largely made up of
micro-organisms that share genetic information through
networks of co-option, cooperation and
communication that become organic wholes from simpler
to complex. Cells take in parts from
elsewhere and collect abilities of different genes.
The
biological and infomation packets are
coming together on a global scale.
One element basic to global networks are standards.
The
critical standard is digital information
which can be understood and act upon by all the other
members of the community.
The
information utility will operate on a common operational
language - such as HTTP, FTP, Java,
that will co=option functions from different places,
in words, pictures, sounds and video.
The
Microsoft issue is their desire to make MS-OS/ active
X the universal language for all future global
networks, software, operations, communications and services.
Netscape’s inter-operation open
arch-culture has a somewhat different vision of inter
and intra operability.
The global scope of
mega networks makes Microsoft’s vision unlikely but not
impossible.
Their moves into
communications, cable, satellites, broadcasting and services
should be taken as very important but
not as a given. Without outside intervention or meaningful
competition they could set NT/active X
type systems as the standard for most if not all inter-net
communications.
Gates to everone - "Look upon my works ye humble of the
earth and give
up."
But all empires lack vision and ability to change.
It’s not hardware, it’s not software, but it is service-ware.
Companies that
don’t sell machines or programs but universal services.
Sign-up and we
give you the container, the link, and all the services
you can think of and
many that you haven’t though of yet.
I soon will be able to pull down the word processing "service"
tied to voice and video "services". I
will be able to pull down interactive forms "service",
a search service, marketing services,
shopping service, broadcast and narrow cast services,
product design and production services,
travel, insurance, investment and banking services designed
and distributed by other services .
All these services we now called companies, producers,
distributors, stores and markets become
part of the services network.
The telephone company (
tele - sounds )is a service: television ( tele -
pictures ) networks and stations are service including
broadcast ( send sound and picture over a
wide area ): computers are not a machine or thing but
provide systems capacity to do something,
assign traits and store information and programs ( software
to help machines - do stuff ). All these
THINGS are becoming parts of a system of service with
nodes and terminals.
The core of the global service system is the operational
codes and languages. Everyone has to
understand ever one else and terminals need to talk to
nodes and servers need to communicate
with servers in common coded packets moving a mega-speeds
back and fourth.
These codes and
languages are extensions of Hyper Text Transfer Protocol
, ftp ( file transfer ) and operations such
as Java.
Saturday
May 9 8:05 AM EDT
ZANNY
MINTON BEDDOES: When we talk about a bubble, we talk about rising
fundamentals
would warrant, and they're going up because of some kind of speculative
frenzy,
to use a phrase, again, that Chairman Greenspan used, some kind of irrational
exuberance.
We're all feeling good. We're buying shares. Prices are going up not because
of
fundamental changes or not only because of fundamental changes, more because
there's
a kind of frenzied buying.
And
that's what we mean by a bubble, and we worry about it for two reasons.
We worry about it because
bubbles
tend to burst. Financial markets have had bubbles ever since finance started.
But the problem is that they
The other
problem is that if they--if
the
bubble continues, then this kind of inflation in asset prices--because
that's really what it is--can spill over into
ZANNY
MINTON BEDDOES: Well, I agree that there have been changes in the world
economy, and there
have
been changes in the U.S. economy.
The question is how big have these changes
been and do they justify
today's
prices, and I think one argument that is frequently made by the people
who believe in this new economy or
happened
in the last two years in the U.S. economy, we've grown far faster than
the trend growth, and we--than
economists
normally think the economy can grow--and that is because we've used more
people. Unemployment
The one
thing that does seem to be different is
that
as wages are rising, there isn't this immediate transfer into higher inflation.
Now,
there are--that could be because of some new rules. It could also be because
there
are
a lot of temporary factors which have actually influenced. One is that
benefits have
been
rising much more slowly than they used to.
The HMO revolution has meant
that its
employers
have been able to cut costs in areas where they traditionally weren't able
to cut
costs.
Secondly, the dollar is very strong. Now, the strength of the dollar
also dampens
inflation.
Thirdly, commodity prices are weak.
They're weak in part because
of the
problems
in Asia, but they're not--those are not structural changes.
They're temporary
things
that could change, and when they change, I think we'll see the old rules
coming back into play.
Are
stocks poised to flame out?
Friday
May 8th:
08:33
U.S. UNEMPLOYMENT RATE FALLS TO 4.3%, AVERAGE HOURLY EARNINGS UP 4C IN
APRIL, NEAR CONSENSUS.
08:32
RETAIL ADDS 44,000 JOBS.
08:32
CONSTRUCTION ADDS 35,000 JOBS.
08:32
SERVICES ADD 139,000 JOBS.
08:32
10,000 FACTORY JOBS LOST IN APRIL.
08:32
AVERAGE FACTORY WORKWEEK FALLS 1.1 HOURS TO 40.7.
08:32
AVERAGE WORKWEEK FALLS 0.3 HOURS TO 34.4.
08:32
HOURLY EARNINGS RISE 4 CENTS IN APRIL OR 0.3%.
08:32
4.3% JOBLESS RATE LOWEST SINCE FEB 1970.
08:32
262,000 JOBS CREATED IN APRIL; UNEMPLOYMENT RATE FALLS TO 4.3%.
08:31
U.S. 30-YR TREASURY UP SLIGHTLY ON UNEMPLOYMENT NEWS.
08:48
US JUNE BOND FUTURE DROPS 8/32 TO 120-03 ON JOBLESS DATA.
08:48
US 30-YR TREASURY BOND DROPS 12/32 TO 102-03, YIELD AT 5.99%.
08:48
US 10-YR TREASURY BOND DROPS 5/32 TO 98+14, YIELD AT 5.71%.
08:48
US 5-YR TREASURY BOND DROPS 4/32 TO 100+13, YIELD AT 5.65%.
08:48
US 3-YR TREASURY BOND DROPS 1/32 TO 99+11, YIELD AT 5.63%.
08:48
US 2-YR TREASURY BOND DROPS 2/32 TO 100-02, YIELD AT 5.58%.
08:48
US TREASURIES GO LOWER ON APRIL JOBLESS RATE.
08:48
US 1-YR T-BILL DISCOUNT RATE UP 2 BASIS POINTS TO 5.15%.
08:48
US 6-MONTH T-BILL DISCOUNT RATE UP 3 BASIS POINTS TO 5.13%.
08:48
US 3-MONTH T-BILL DISCOUNT RATE UP 2 BASIS POINTS TO 5.00%.
08:31
U.S. UNEMPLOYMENT RATE LOWEST SINCE FEB. 1970.
08:31
UNEMPLOYMENT RATE FALLS TO 4.3%, DOWN .4 PERCENTAGE POINTS.
08:31
APRIL NON-FARM PAYROLL UP 262,000, CONSENSUS 250,000.
07:20
BRITISH POUND 1.6403 DOWN .0071, OR -0.4%.
07:20
GERMAN DMARK 1.7718 UP .0034, OR +0.2%.
07:20
JAPAN YEN 132.56 DOWN .72, OR -0.5%.
07:20
U.S. 30-YR. BOND 5.948 UP 1 17/32, OR 0.1%.
07:20
FRANCE CAC 40 3906.36 UP 41.09, OR +1.04%.
07:20
GERMAN DAX 5260.56 UP 74.33, OR +1.43%.
07:20
LONDON FT 100 5965.5 UP 18.5, OR +0.5%.
07:12
FOREIGN STOCK MARKETS MOSTLY LOWER AUSTRALIAN MARKET 2780.50 DOWN 0.3,
OR -0.01%.
Korea
down - Asia mixed - London and Germany UP, France down
To
see what we said this morning and last night, see
http://www.wiredbrain.net/short.htm
..
The
news before it happens: Unemployment drops 4.2 % and new jobs increase
260,000 - adding to worries of rate increases :
The
government on Friday is scheduled to release the monthly employment data
for April, its first major reading on how the economy performed last month.
Analysts
surveyed by Reuters expect the unemployment rate to be unchanged at 4.7
percent with 259,000 new jobs created outside the farm sector. That compares
with the March rate of a decline of 36,000.
Last
month, the Conference Board put the help-wanted advertising index, which
tracks employment growth, at 92.0 in March, unchanged from February but
well above the March 1997 rate of 87.0, showing no drop in demand for labor.
The
feeling among the skeptics is that even if the employment figure is satisfactory,
there is no guarantee that the Fed is not
going
to tighten," Metz said.
Investors
appeared little reassured by Fed Vice Chairwoman Alice Rivlin who said
that a desire to rein in a high-flying stock
market
would not be a reason by itself for the central bank to raise interest
rates.
The
Fed was not considering changing margin requirements on stock trades, Rivlin
said.
There was no big risk of inflation
taking
off, she added.
Thursday
May 7th:
Editoral:
The
tradition is that good news = bad news because rapid growth = inflation.
Starrting in Nov. good news was good news because it = higher earning. Now
with a market well over any rational P/E the growth of earning and/or changes
of 1/4 % in a minor bank rate really can't make much difference. BUT when
prices are so high any excuse is a good excuse to sell - SO good news is
bad news again and bad news is bad news -
The employment number will be
up because the GDP was growing at a very high rate ( over 4 %) Wages are
going up in areas of demand but not in semi-skilled service jobs - as it
has been since 1969.
The problem is not wage inflation but a bubble - ready
to pop - in real estate - in stock prices - yo-yo land - the President
and Congress want to be popular. A reasonable slow down will be a lot better
than a CRASH ! And now, rather than close to an election.
The clients of
the Federal Central Bank - the World Banking System - need order in a time
of some real problems - and order means being able to add to the money
supply - which you can't do without great risk during a speculative bubble.
Fed
reminds Wall Street it is still top dog
By
Pierre Belec
NEW
YORK (Reuters) - Life is good on Wall Street. Consumer confidence is
the highest in some 30 years, inflation the lowest since the 1960s and
the stock market is soaring to the moon.
But
the Federal Reserve says trouble is bubbling in the economy.
Wall
Street was again reminded this week that the Fed is still the top dog.
The
secretive Fed leaked information that it had shifted monetary policy toward
a bias, which called for higher interest rates, because of concern that
the economy's robust growth may reignite inflation.
The
hint that the cost of borrowing may go up hit the market like a ton of
bricks, sending stocks into a tailspin at the beginning of the week as
investors pushed the panic button.
The
market had been betting that the central bank would not raise interest
rates and there was even speculation that lending rates would drop before
the end of the year.
But
by week's end, the market had roared back with a vengeance on a report
that inflation was still holding at the lowest level in some 30 years,
even though the economy grew at a fast pace in the first quarter.
Is
the Fed looking at the wrong radar screen?
Some
experts believe the central bank is actually more worried about the surge
in stock prices than any underlying inflation.
"
The
stock market is too speculative, exuberant and overvalued and there's the
risk that it could lead to financial asset inflation eventually causing
real sector inflation," said Hugh Johnson, chief investment officer for
First Albany Corp.
----------
G
o to Wiredbrain's
ACTIVE-NEWS
PAGE
----------
G
o to Wiredbrain's
PAGE TWO
----------
G
o to Wiredbrain's
Current up-dates
Wednesday:
Long bond at
5.84
Talking
the market down-``People are starting to talk about deflation,'' said David
Brickman, international economist at PaineWebber. "
The Fed's worried about
the economy overheating," said Farrell. "I think the Fed would be thrilled
if the financial sector took a deep breath. I think we all should be thrilled."
Federal
Reserve officials Alice Rivlin, Laurence Meyer, and Edward Gramlich, and
Atlanta Fed president Jack Guynn are all speaking later on Wednesday.
U.S. Deputy Treasury Secretary Lawrence Summers is also speaking.
Federal
Reserve Chairman Alan Greenspan speaks at 1615 GMT on Saturday to a meeting
of state bank supervisors.
Wednesday
April 29 6:57 AM EDT
Greenspan
preserved consensus with bias
Home
| Client Access | Contact Us | Help
Market
Letter
05/26/98
The
Market Posture was downgraded to Mildly Bearish the week ending
4/10/98
(DJIA - 8994.96). Initial downside price projection for the DJIA
is
8750. CTI readings should remain negative until late May 1998.
****Check
out "ON THE EDGE" - A monthly review of the markets****
________________________________________________________________________
CURRENT
PRIOR
MARKET
TIMING MODELS READING WEEK CHG CONNOTATION
________________________________________________________________________
CYCLICAL
TREND INDEX (CTI): -4 -4 0 BEARISH
MOMENTUM
INDEX: -8 -6 -2 BEARISH
SENTIMENT
INDEX: 1 2 +1 NEUTRAL
________________________________________________________________________
DOW
JONES INDUSTRIAL AVERAGES (DJIA) CLOSE:................ 9114.44
DJIA
POINT CHANGE FROM PRIOR WEEK:......................... 18.44
DJIA
PERCENTAGE CHANGE FROM PRIOR WEEK:.................... 0.20%
MARKET
POSTURE THIS WEEK:..................................MILD BEARISH
MARKET
POSTURE PRIOR WEEK:.................................MILD BEARISH
DJIA
TARGET:............................................... 8750
TIME
FRAME TO ACHIEVE TARGET:.............................. 29-May-98
DATE
CURRENT MARKET POSTURE FORMULATED:.................... 10-Apr-98
DJIA
CLOSE ON DATE CURRENT MARKET POSTURE FORMULATED:...... 8994.96
________________________________________________________________________
CYCLICAL
TREND INDEX (CTI).......... -4 CONNOTATION
________________________________________________________________________
29-May-98
(Projected) 7 BULLISH
05-Jun-98
(Projected) 7 BULLISH
12-Jun-98
(Projected) 7 BULLISH
19-Jun-98
(Projected) 7 BULLISH
26-Jun-98
(Projected) 7 BULLISH
________________________________________________________________________
MOMENTUM
INDEX...................... -8 % CHG CONNOTATION
________________________________________________________________________
1)
DJ Transportation Average 3390.59 +1.0% BEARISH
2)
S&P 500 Index 1108.25 -0.0% BEARISH
3)
NYSE Composite Index 574.58 0.0% BEARISH
4)
Advance-Decline Line -5505 BULLISH
5)
10 Day MA Advance-Decline Line 0.80 0.0% BEARISH
6)
AMEX Index 730.57 -0.9% BEARISH
7)
NASDAQ Composite Index 1802.72 -2.4% BEARISH
8)
DJ Utilities Index 280.06 0.1% BEARISH
9)
TRIN+10 Day Average 1.04 0.0% NEUTRAL
10)
NYSE New Highs-New Lows 251+137 NEUTRAL
11)
Zweig Breadth Indicator 0.40 BEARISH
12)
McClellan Oscillator -76 NEUTRAL
13)
McClellan Summation Index 628 BULLISH
14)
Unchanged Issue Index 0.17 BEARISH
________________________________________________________________________
SENTIMENT
INDEX..................... 1 % CHG CONNOTATION
________________________________________________________________________
1)
Odd Lot Short Ratio-5 Day Ave 5.03 0.0% BEARISH
2)
NYSE Short Interest Ratio 6.32 1.1% BULLISH
3)
Public-Specialist Short Ratio 0.89 0.0% BULLISH
4)
Put/Call Ratio+10 Day Ave(INDEX) 1.12 0.0% NEUTRAL
5)
Dividend-Yield Spread 5.10 0.0% BULLISH
6)
Mutual Fund Liquid Asset Ratio 4.60 0.0% BEARISH
7)
Bullish Investment Advisors 45.5 0.0% NEUTRAL
8)
Bearish Investment Advisors 25.2 0.0% NEUTRAL
9)
Bearish + Corrections Total 54.5 0.0% NEUTRAL
Home
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Opinion | Personal Stock Watch | Trading Ideas | Pick 6 Filter | Point/Figure
Breakouts | Point/Figure Early Alerts
Special
Situations | Market Analysis | Market Letter | Stock Analysis | Industry
Group Analysis
By
Isabelle Clary
NEW
YORK (Reuters) - Federal Reserve Chairman Alan Greenspan agreed at the
March meeting of Fed policy-makers to
reintroduce
a bias toward raising interest rates, appeasing anti-inflation hawks on
the panel and preserving consensus, sources
It
is important to remember that the major FED activity is NOT the federal
funds or discount rate but open market selling of bonds and repos to withdraw
liquid assets and increase reserves in the banking systems.
The bias gives
direction to day to day market activity which has more effect than the
discount rate changes. Real rates are below the 5.5 % target.
08:45
US 3-MONTH T-BILL DISCOUNT RATE DROPS 2 BASIS POINTS TO 4.90%.
08:44
US 6-MONTH T-BILL DISCOUNT RATE DROPS 1 BASIS POINT TO 5.09%.
The
effective discount rate ( the price of money to banks ) is LIBOR MAY98
94.32 London Inter bank loan rate at 5.68 % sets other bank loan rates
- the short term rate set by EURO $ JUN98 94.225 = 5.775 % is over the
target of 5.5 % and going up. So bias does matter more than the actual
official change is a minor rate - the federal funds ( over night ) discount
rate.
The cost of money is going up which might slow certain types of interest
sensitive economic activity. It is not that the fed does nothing but wait
and have meeting - but is very active every day in the market.
Dollar/mark
was unlikely to show major movement ahead of the weekend meetings of European
Union officials to decide the
countries
which will join the single currency from 1999, but the mark might receive
a boost subsequently, analysts said.
On
the foreign exchanges, the dollar was slightly firmer but trading was range-bound
partly because of a holiday in Japan and
as
the markets awaited a batch of speeches from central bank and finance officials.
---------------------------------------------------------------
MARKET
PRICES AT 1101 GMT
Mark
1.7972/77 Yen 132.18/28 Sterling 1.6686/96
Gold
$307.50/7.90 -0.75 (pvs PM fix) Brent $14.61 +0.01
FTSE
100 5818.0 +11.4 CAC 3756.49 -20.74 X-DAX 5125.71 +14.83
---------------------------------------------------------------
By
mid-session, London's blue-chip FTSE 100 index was 0.4 percent firmer,
rescued by bargain-hunters from earlier losses
and
Germany's Xetra DAX was up 0.4 percent.
The
Belgian, Dutch, Greek and Swiss markets were also amongst the gainers but
French, Italian and Spanish bourses were in
the
red, pausing for breath after Tuesday's gains amid nerves over Wall Street
and confusion over U.S. rates.
Friday
May 1, 10:50 am Eastern Time
US
Treasuries slip on talk Fed checks forex rates:
The
basics:
A
too fast growth rate, gives too much money in the system, plus the Asia
thing causes lower exports, higher inports, pressure on the dollar which
is falling.
A
listing of the main NAPM components follows:
April
March Feb Jan Dec Nov Oct Sept Aug
PMI
52.9 54.8 53.3 52.4 53.1 54.5 55.9 54.6 56.4
Production
53.4 57.6 55.3 53.3 55.8 58.5 59.6 58.4 61.2
New
Orders 56.8 57.3 55.9 55.2 53.9 55.1 58.4 56.1 60.4
Supplier
Del 52.3 53.4 52.1 52.0 54.0 55.2 55.0 55.5 55.6
Inventories
46.6 46.8 46.9 46.7 46.5 44.3 47.0 46.2 43.4
Employment
49.8 52.5 50.9 50.1 50.9 53.3 52.5 51.1 51.6
Prices
41.2 44.4 45.8 44.7 50.8 53.2 55.5 54.1 53.4
Export
Orders 49.7 48.0 47.9 45.0 50.6 52.6 51.9 51.2 55.1
Imports
56.3 53.4 51.2 53.9 55.4 52.6 51.7 53.1 53.9
US
Treasuries off post-NAPM highs in forex intervention fear. *Mkt talk Fed
checking forex rates, but Fed says ``no comment.'' *Impact greatest in
bills, 3-mo rates jump 5 bps in 45 mins. *Long end outperforming but off
highs, profit-taking seen. *Traders report foreign central bank selling.
Thursday
April 30, 8:56 am Eastern Time
U.S.
economy accelerated in Q1, inflation mute
Thursday
April 30, 8:56 am Eastern Time
WASHINGTON,
April 30 (Reuters) -
The U.S. economy unexpectedly picked up speed in the
first quarter of 1998, surging ahead at a brisk 4.2 percent annual rate
on booming consumer spending while inflation remained at its most muted
levels in 35 years, the Commerce Department said on Thursday.
It
was the sixth straight quarter in which Gross Domestic Product advanced
at an annual rate of 3 percent or more - well above the 2+1/4 percent target
range the Federal Reserve considers can be safely sustained without risking
a flareup in inflation pressures. First-quarter GDP growth handily outstripped
Wall Street economists' forecasts for a 3.3 percent rate of expansion as
it accelerated from last year's fourth-quarter 3.7 percent pace instead
of slowing.
A
chorus of U.S. central bank governors has warned recently that the economy
needs to soon show convincing evidence of a slowdown, unnerving financial
markets after reports the Fed has shifted to a position of increased willingness
to raise interest rates. Policymakers' concern that Asia's economic woes
were not enough to offset buoyant domestic demand appeared to be supported
by the first-quarter GDP report.
DOWN 40 or 50
to 1050
If
the news is "good", rapid growth that's "bad" because it implies inflation
and higher money costs. If the news is "bad", lower growth and earning
that's good- maybe. Labor costs are going to be higher but how high is
high ?
The chances are 2/3 down, 1/3 up - but the reactions to economic
news are not always what is expected.
Thursday:
April 30th
``If
the U.S. economic data are strong, fears of a rate rise will return, suggesting
dollar upside,'' said Sally Wilkinson, senior
economist
at Daiwa Europe in London.
--------------------------------------------------------------
MARKET
PRICES AT 0905 GMT
Mark
1.7937/42 Yen 132.05/15 Sterling 1.6686/96
Gold
$310.90/1.30 +2.65 (pvs PM fix) Brent $14.39 +0.14
FTSE
100 5843.7 +10.6 CAC 3746.61 +12.68 X-DAX 5101.43 +17.63
---------------------------------------------------------------
U.S.
Federal Reserve chairman Alan Greenspan is known to consider ECI figures
as an important indicator of inflationary
pressures
building in a robust U.S. economy.
Thursday
April 30, 4:14 am Eastern Time
Wall
St bubble risk looms,
but is Asia to blame?
By
Yoshiko Mori
TOKYO,
April 30 (Reuters) -
The U.S. stock market is being poisoned by a ``classic
bubble'' and the risk is looming of a
downward
correction of 10 to 20 percent, economists in Tokyo say.
``
The
current state of Wall Street is similar to what happened in Tokyo in 1987
when it was already apparent that the asset
market
bubbles were getting out of hand,'' said Richard Werner, Tokyo-based chief
economist and managing director of Profit Research Centre Ltd.
Excessive
capital created by the U.S. banking system and the Federal Reserve has
been the major cause of recent Wall Street
gains,
Werner said.
Excessive
credit creation is spurring financial and real estate transactions which
are pushing up asset prices -- ``the classic
bubble,''
Werner said.
Economists
said credit creation through loans by the U.S. banking system is expanding
at around 10 percent year-on-year, the highest growth rate since the 1980s.
``If
the U.S. economic data are strong, fears of a rate rise will return, suggesting
dollar upside,'' said Sally Wilkinson, senior
economist
at Daiwa Europe in London.
First
quarter U.S. employment cost index is expected to rise 0.9 percent from
one percent in the previous quarter.
An
advance estimate of quarter one U.S. gross domestic product is also expected
at 1230 GMT.
At
0835 GMT the dollar was at 1.7921/26 marks and 131.93/03 yen
Con't
on
News
and analysis GO TO
Money pages first
forecast.htm,
then
conditions.htm
Main page Flash.htm
----------
G
o to Wiredbrain's
ACTIVE-NEWS
PAGE
----------
Con't on money
PAGE TWO
----------
G
o to Wiredbrain's
Current up-dates
The
second wave model was based on production, from farm and mines, to factories
- material produce that was stored in inventory, sold to wholesalers and
ended up in shops.
The third wave model, products are less important than
services. Systems of ideas match client demands within networks of OEM
( original equipment manufactures ) and direct sales to users.
The open
market in electric power with commodity prices distributed directly to
end users down networks uses an Asymmetric out of equilibrium algorithm
rather than seeking a mythological equilibrium at some sort of steady state.
Networks of material and service providers on a global scale certainly
changes forecasts of economic futures. (
The use of networks to find practical
paths has to do with the "traveling salesman problem". If the sales person
has to visit a large number of points there is no single shortest path
and the "best" solution is often counter-intuitive. )
The open
market in electric power with commodity prices distributed directly to
end users down networks uses an Asymmetric out of equilibrium algorithm
rather than seeking a mythological equilibrium at some sort of steady state.
Networks of material and service providers on a global scale certainly
changes forecasts of economic futures. (
The use of networks to find practical
paths has to do with the "traveling salesman problem". If the sales person
has to visit a large number of points there is no single shortest path
and the "best" solution is often counter-intuitive. )
The
irrational increase in stock prices is now being justified by blithe forecasts
of endless growth. People want to forget that economic change has loosers
that out number winners in the short run; the iceman, the candle makers
are gone.
The internet replaces many middle people, from bankers and travel
agents, to wholesalers and distributors.
The "endless growth" craze now
is being used politically to avoid hard or unpopular changes in entitlement
benefits.
The "endless growth" craze now
is being used politically to avoid hard or unpopular changes in entitlement
benefits.
The
bulls and the bears are both right and both wrong.
The business cycle has
not been repealed but changes from a material one to one of the mind and
spirit, SYNERGY where the whole is more than the sum of the parts.
The
factory is replaced by the production of trust and faith in paper, computer
digits, balances and transfers of insubstantial assets.
The over supply
is of faith - belief in a "blue sky" future that produces an over abundance
of paper money, credit, market booms and financial high flightiness.
The
factory is replaced by the production of trust and faith in paper, computer
digits, balances and transfers of insubstantial assets.
The over supply
is of faith - belief in a "blue sky" future that produces an over abundance
of paper money, credit, market booms and financial high flightiness.
The
devaluation started in South East Asia last June, spread to Korea and now
Japan, the unwinding of building booms, market booms, inflated prices,
currencies and hopes. So while the real economy does have a bright future,
the paper empires built on hope will tumble- someday.
The total equity
market is over 35 Trillion with 1/3 in the US, 20 % in Europe, 15 % in
Japan - and the other 1/3 spread around the world.
The Americans are adding
about 1 billion a day in new investments - or .003 % of the world market
or .01 % ( 2.5 % a year) of the American Market of 10 Trillion. Not enough
to substain a long term boom.
The Global equity was about 35 trillion,
last year, before the devaluations.
The US market has grown 20 % from 8
trillion to 10 trillion.
The US has gained 2 trillion, Europe a trillion
in paper profits while the rest of the world has loss 3 Trillion -
The Americans are adding
about 1 billion a day in new investments - or .003 % of the world market
or .01 % ( 2.5 % a year) of the American Market of 10 Trillion. Not enough
to substain a long term boom.
The Global equity was about 35 trillion,
last year, before the devaluations.
The US market has grown 20 % from 8
trillion to 10 trillion.
The US has gained 2 trillion, Europe a trillion
in paper profits while the rest of the world has loss 3 Trillion -
The US market has grown 20 % from 8
trillion to 10 trillion.
The US has gained 2 trillion, Europe a trillion
in paper profits while the rest of the world has loss 3 Trillion -
The
best buy is a basket of Asia's 30 % bonds - the currencies have hit bottom
and the rates have hit their tops. Triple gains, increase in bond prices
as rates decline, increases in exchange values, and real high interest
- and risk !
OUR
RECORD: check
money.htm,
stock.htm
for past calls, been damn good
stock.htm
for past calls, been damn good
Wiredbrain's
Yahoo at wiredbrain password "synergy"
SYNERGY
Group's Excite Channel
Technologies
2X market
IXCO
SOX MSH PSE NDX
down more than market
Pause
in
Asia's DOWN and Europe's down
from record high ( US Germany France London )
Why
does one index so different from the other ? Could it be the effects of
INDEX trading?
Stocks,
dollar active ( down again) and bonds drifting down;
Asia
down, Europe down from new highs:
bonds
at
5.8 %
bonds
DOWN interest UP well off lows of 5.65 and off high of 6.2 on money
supply, oil prices near $16 Gold at $310
Currencies
(dollar)
DOWN from rally in a
tight range in a
Negative FX market - (on
scale from +15 to +15).
Bottom
Line:
Krugmann:
"
The Fed doesn't formally care about anything in particular. That way
you can't pin them
down.
Their nightmare: I know what keeps Alan Greenspan awake at nights. I don't
need any inside
information
to tell you this. He thinks about Japan 1990. ( Sic.. South East Asia in
1997 or the US in 1969 )
A
stock market that went to dizzying heights and there were lots of explanations;
everybody had a good theory about why that made sense and then it plunged.
And in the course of plunging, took the real economy down with it and it
never actually recovered. And although you can give all sorts of reasons
why the U.S. is different from that, the Fed is very concerned about that.
They are very concerned that we have a bubble economy, which is different
in detail, but the same general position as Japan before the big crash.
If they could figure out some way to deflate the bubble gently, they would."
Brancaccio:
"Sounds like you're a little worried about that scenario as well."
Krugmann:
"Oh, I'm scared to death! I look at the current level of the market. I
can't come up with a
reasonable
reason for it. I can give you a lot of standard arguments about why, even
if the market
MIT
economist Paul Krugmann's most recent book is called "Pop Internationalism."
NEW
YORK, May 7 (Reuters) - Earnings of companies in the Standard & Poor's
500 index are up 3.1 percent year-on-year in the first quarter with 91
percent, or 453 companies in the index, having reported, said First Call.
This
could rise to about 4.0 percent once all the retailers have reported, which
would be slightly better than Wall Street expected, said Chuck Hill, First
Call's director of research.
Analysts
had slashed their profit growth forecasts for the first quarter because
of Asia's turmoil.
But
even 4.0 percent would still be less than half the 9.0 percent year-on-year
growth in the fourth quarter of 1997, and would be well below the 10 percent
growth originally forecast for the first quarter.
Wall
Street is still betting
on backloaded
earnings growth this year.
First
Call said analysts forecast that S&P500 earnings will grow 8 percent
in the second quarter, 13 percent in the third quarter and 18 percent in
the final quarter. ( I wouldn't bet on it
)
These
forecasts may= WILL change over the coming months as more companies discuss
earnings with analysts, First Call said.
This
looks like a organized attempt to talk the market down:
You
don't have to shoot the charging bull between the eyes to try to slow it
down. You can use a number of less radical techniques to try to slow down
the ragging bull. You wave red flags, then the picadors poke at it, then
if all else fails you draw on more powerful weapons for the coup de grace'.
The
Fed won’t release this “directive,” crafted at the
end
of each committee meeting, until May 21.
The primary
significance
of the directive is to signal financial markets
which
way the Fed is leaning.
Officials
say Asia seems to be stabilizing, and
domestic
economic vigor appears to be offsetting the ill
effects
of Asian woes on U.S. exports. First-quarter
consumer
spending and housing construction was strong,
and
the economy appears to be awash in credit. So, in
public
speeches and interviews, Fed officials are beginning
to
prepare markets for a Fed move to brake the
economy-unless
it slows on its own soon.
The
Fed has been expecting a slowdown for months,
but
it hasn’t materialized. Most forecasters say the
economy
expanded at an annual rate of between 3% and
3.5%
in the first quarter, which would be the sixth quarter
of
better-than-3% growth.
Worries
about destabilizing fragile Asian financial markets could delay a Fed move,
but
some
Fed officials privately acknowledge that they would sleep better if the
stock market were less ebullient. Indeed, a decline in stock prices would
tend to slow the economy, which is precisely what the Fed would like to
see.
WSJ
Magic,
Science, the market, financial reporting and Beliefs systems such as Futures,
values, prices, rates and other Religions
(1948)
by Malinowski, Bronislaw
The
principle dialectic of the modern world is the dualism of science and magic.
The conflict starts with Newton who spent most of his life at numerical
alchemy.
In
a seminal article Malinowski suggests that "primitive" people use science
to control events they understand and can do something about, and magic
for forces of nature that are out of control.
They are very resonable about
fishing, farming, hunting and warfare when they find a pattern in events
- but magical thinking takes over when events seem out of control such
as storms, earthquakes, plagues, and other unexpected traumas.
Maclay,
Kubary, Malinowski: Archetypes from the Dreamtime of
Anthropology
The
dreamtime is explained in the "Last Wave" a film by Peter Weir - as a reality
that exists beyond the day to day that gives values, meaning to the "Law"
or customs of a people. In this way it is the origin of religion, which
the age of reason called a "superstition ".
Malinowski,
Bronislaw Kasper (1884+1942), British anthropologist,
regarded
as the founder of the "functional" school of anthropology,
which
maintains that human institutions should be examined in the
context
of the culture as a whole. He was born in Kraków, Poland. In
1914
he took part in an expedition to New Guinea and Melanesia and
spent
the next four years studying the peoples of the Trobriand Islands
of
the southwest Pacific. Malinowski became professor of social
anthropology
at the University of London in 1927. His further research
took
him to Africa, Latin America, and parts of the United States.
LAST
WEEK IN REVIEW:
For
historical interest, the market will look at the minutes of the March 31
U.S. Federal Open Market Committee meeting to be released on Thursday.
According
to Treasury Department data, foreigners owned 38 percent of the $3.4 trillion
in outstanding Treasury
debt
at the end of August.
The Japanese owned 25 percent of the foreign-held
debt, followed by Great Britain,
20
percent, and Germany, 6 percent.
Japanese
officials played down speculation this week of another wave of Treasury
securities selling to finance
a
$77 billion bailout of Japan's banking system.
In
addition to capital flows, Wednesday's Commerce Department release reported
the broadest measure of
U.S.
foreign trade, known as the current account. It shot up 11.4 percent to
$42.2 billion in the third quarter, the
The
current account measures not only trade in goods and services but also
the flow of investment income
between
countries and foreign aid.
08:44
US JUNE BOND FUTURE UP 13/32 TO 120-27.
08:44
US 30-YR TREASURY BOND UP 13/32 TO 103-02, YIELD AT 5.90%.
Thursday
May 21, 7:07 am Eastern Time
Markets
in France, Germany and parts of continental Europe were closed for Ascension
Day, reopening on Friday. Countries which operated normally reported lower-than-normal
volume.
---------------------------------------------------------------
MARKET
PRICES AT 1100 GMT
Mark
1.7646/51 Yen 135.19/29 Sterling 1.6270/80
Gold
$300.00/0.40 +0.59 (pvs PM fix) Brent $13.87 +0.15
FTSE
100 5968.9 +61.5
---------------------------------------------------------------
Benchmarks:
London
6,100 record high, Paris 4025* high, Frankfort 5,450 * high
The
UK's FTSE 100 index was up more than one pct as world markets celebrated
the Asian rally after Suharto quit and a late sprint by the Dow to close
116.83 points, or 1.3 percent, higher on Wednesday.
Sterling
had hit a seven-month low of 2.8763/73 against the mark from 2.8893/98
late Wednesday, after Bank of England Monetary Policy Committee member
Willem Buiter said the British economy is slowing and will slow further.
Some
dealers in U.S. stocks said minutes of the March 31 interest-rate setting
Federal Open Market Committee (FOMC) policy meeting, due for release at
1800 GMT, would be keenly awaited.
LONDON,
May 19 (Reuters) - European shares closed with steep gains on Tuesday,
lifted by a Wall Street rally and growing optimism that U.S. interest rates
would not be increased later in the day.
In
currencies, the yen lifted itself gingerly from its 6+1/2 year low against
the dollar after Indonesian President Suharto pledged to hold elections,
causing tentative rebounds in southeast Asian markets.
---------------------------------------------------------------
MARKET
PRICES AT 1550 GMT
Mark
1.7848/58 Yen 136.18/28
Sterling 1.6230/40
Gold
$300.00/0.50 -0.05 (pvs PM fix) Brent $14.47 +0.01
FTSE
100 5877.8 +51.6 CAC 3980.84 +35.53 X-DAX
5441.00 +97.34
---------------------------------------------------------------
THE NEXT
STEP FORWARD
Where
we go from here !
A few years
ago we talked about the potential of the internet -
Doc1
to Doc5
Then we
talked about the impact on the
social -
political
-
economic and general
future
Then we
talked about how the technology will develop
packets.htm
We talked
about the
network computer and how the information
utility will take shape.
Now what's
next ?
One way
or another - enough bandwidth will be provided to inexpensive and tough
enough boxes so that all the hard complex stuff will be pushed upstream
and voice, video, data and new applications can work the channels to provide
news, entertainment, communications, commerce in dramatically different
ways.
The big
question is how and by whom ?
By
John Sidgmore
May
5, 1998 - John Sidgmore
outlines
his vision for the
future
of global
telecommunication
in this
NetWorld+Interop
Keynote
speech
Global
tele-communications utilities linked by satellites, then ground stations,
then optic wires, cables, broad band, wide band, (A)DSL - a global backbone
providing service to all of humanity - with solar charged instruments from
anywhere to anywhere.
The first world has a billion ready clients,
the global market place has a million firms ready to go, the second and
third world can add a 100 million new clients a year and a million new
firms, local governments, missions and schools, gaming centers and market
players as fast as the bandwidth and prices allow.
The global requirements
are different from America and the European community. While part of the
world is wired - much of the world is not.
The Global
communications network must be based on wire-less standards - that will
work on wires but do not require them.
NOTICE:
SOUTHWINDNET = http://www.highspeedhosting.com/newsite/message.cfm
The
digital communications age has arrived. Still a little expensive - but
if the price - quality relationships hold - high speed connections should
be quite cheap in a year or so.
Then local NODES can provide high speed
wireless connections for EVERYTHING - internet with telephone, video and
real time data bases, BYE-BYE to MA bell, cable companies, TV networks
- as we know them.
The REAL impact will be all the way to China - the billions
- the majority of people on this planet who have almost no two-way telecommunications
- they can make the great leap forward...
The
site is in the process of upgrading service to
ViperLink.
VMC Virtual Marketing Corporation
The
ViperLink system uses a wireless access system to connect to an ATM
(
Asynchronous Transfer Mode (ATM) ATM is a packet switched technology capable
of carrying
voice,
video & data.)
backbone
at an astounding 90Mbps! Our Kentucky office has a full 2.0Mbps
(30%
bigger than a T+1) dedicated connection that is burstable to 6.0 Mbps (4
full
T+1s) if needed. If at any time, our web sites need additional bandwidth
–
they’ve
got it! Never again will there be a problem with not
having enough
bandwidth.
Ask how many providers can make that claim!
SAN
JOSE, Calif.--(BUSINESS WIRE)--May 11, 1998--
Verilink
Corp. (NASDAQ:VRLK - news) today announced that
Splitrock
Services, Inc., the U.S.-based provider of Internet access to Prodigy customers,
has selected Verilink to provide
Ramblings:
The doors to creative thinking and doing are in the narrow
places between large structures.
The
empires of the world and the mind dominate the landscape.
Vast historic structures obscure the
view of the horizon and our real location. Down narrow
lanes and in far fields we sometimes can
gain images that glimmer with reflections of a pale light,
far off.
Where theses narrow lanes and far field meet are the focal
points of new creations.
There is a container, connected to nodes, connected to
networks, creating a info-sphere of billions
living reproducing pathways and elements.
The bio-sphere
began and is still largely made up of
micro-organisms that share genetic information through
networks of co-option, cooperation and
communication that become organic wholes from simpler
to complex. Cells take in parts from
elsewhere and collect abilities of different genes.
The
biological and infomation packets are
coming together on a global scale.
One element basic to global networks are standards.
The
critical standard is digital information
which can be understood and act upon by all the other
members of the community.
The
information utility will operate on a common operational
language - such as HTTP, FTP, Java,
that will co=option functions from different places,
in words, pictures, sounds and video.
The
Microsoft issue is their desire to make MS-OS/ active
X the universal language for all future global
networks, software, operations, communications and services.
Netscape’s inter-operation open
arch-culture has a somewhat different vision of inter
and intra operability.
The global scope of
mega networks makes Microsoft’s vision unlikely but not
impossible.
Their moves into
communications, cable, satellites, broadcasting and services
should be taken as very important but
not as a given. Without outside intervention or meaningful
competition they could set NT/active X
type systems as the standard for most if not all inter-net
communications.
Gates to everone - "Look upon my works ye humble of the
earth and give
up."
But all empires lack vision and ability to change.
It’s not hardware, it’s not software, but it is service-ware.
Companies that
don’t sell machines or programs but universal services.
Sign-up and we
give you the container, the link, and all the services
you can think of and
many that you haven’t though of yet.
I soon will be able to pull down the word processing "service"
tied to voice and video "services". I
will be able to pull down interactive forms "service",
a search service, marketing services,
shopping service, broadcast and narrow cast services,
product design and production services,
travel, insurance, investment and banking services designed
and distributed by other services .
All these services we now called companies, producers,
distributors, stores and markets become
part of the services network.
The telephone company (
tele - sounds )is a service: television ( tele -
pictures ) networks and stations are service including
broadcast ( send sound and picture over a
wide area ): computers are not a machine or thing but
provide systems capacity to do something,
assign traits and store information and programs ( software
to help machines - do stuff ). All these
THINGS are becoming parts of a system of service with
nodes and terminals.
The core of the global service system is the operational
codes and languages. Everyone has to
understand ever one else and terminals need to talk to
nodes and servers need to communicate
with servers in common coded packets moving a mega-speeds
back and fourth.
These codes and
languages are extensions of Hyper Text Transfer Protocol
, ftp ( file transfer ) and operations such
as Java.
Saturday
May 9 8:05 AM EDT
ZANNY
MINTON BEDDOES: When we talk about a bubble, we talk about rising
fundamentals
would warrant, and they're going up because of some kind of speculative
frenzy,
to use a phrase, again, that Chairman Greenspan used, some kind of irrational
exuberance.
We're all feeling good. We're buying shares. Prices are going up not because
of
fundamental changes or not only because of fundamental changes, more because
there's
a kind of frenzied buying.
And
that's what we mean by a bubble, and we worry about it for two reasons.
We worry about it because
bubbles
tend to burst. Financial markets have had bubbles ever since finance started.
But the problem is that they
The other
problem is that if they--if
the
bubble continues, then this kind of inflation in asset prices--because
that's really what it is--can spill over into
ZANNY
MINTON BEDDOES: Well, I agree that there have been changes in the world
economy, and there
have
been changes in the U.S. economy.
The question is how big have these changes
been and do they justify
today's
prices, and I think one argument that is frequently made by the people
who believe in this new economy or
happened
in the last two years in the U.S. economy, we've grown far faster than
the trend growth, and we--than
economists
normally think the economy can grow--and that is because we've used more
people. Unemployment
The one
thing that does seem to be different is
that
as wages are rising, there isn't this immediate transfer into higher inflation.
Now,
there are--that could be because of some new rules. It could also be because
there
are
a lot of temporary factors which have actually influenced. One is that
benefits have
been
rising much more slowly than they used to.
The HMO revolution has meant
that its
employers
have been able to cut costs in areas where they traditionally weren't able
to cut
costs.
Secondly, the dollar is very strong. Now, the strength of the dollar
also dampens
inflation.
Thirdly, commodity prices are weak.
They're weak in part because
of the
problems
in Asia, but they're not--those are not structural changes.
They're temporary
things
that could change, and when they change, I think we'll see the old rules
coming back into play.
Are
stocks poised to flame out?
Friday
May 8th:
08:33
U.S. UNEMPLOYMENT RATE FALLS TO 4.3%, AVERAGE HOURLY EARNINGS UP 4C IN
APRIL, NEAR CONSENSUS.
08:32
RETAIL ADDS 44,000 JOBS.
08:32
CONSTRUCTION ADDS 35,000 JOBS.
08:32
SERVICES ADD 139,000 JOBS.
08:32
10,000 FACTORY JOBS LOST IN APRIL.
08:32
AVERAGE FACTORY WORKWEEK FALLS 1.1 HOURS TO 40.7.
08:32
AVERAGE WORKWEEK FALLS 0.3 HOURS TO 34.4.
08:32
HOURLY EARNINGS RISE 4 CENTS IN APRIL OR 0.3%.
08:32
4.3% JOBLESS RATE LOWEST SINCE FEB 1970.
08:32
262,000 JOBS CREATED IN APRIL; UNEMPLOYMENT RATE FALLS TO 4.3%.
08:31
U.S. 30-YR TREASURY UP SLIGHTLY ON UNEMPLOYMENT NEWS.
08:48
US JUNE BOND FUTURE DROPS 8/32 TO 120-03 ON JOBLESS DATA.
08:48
US 30-YR TREASURY BOND DROPS 12/32 TO 102-03, YIELD AT 5.99%.
08:48
US 10-YR TREASURY BOND DROPS 5/32 TO 98+14, YIELD AT 5.71%.
08:48
US 5-YR TREASURY BOND DROPS 4/32 TO 100+13, YIELD AT 5.65%.
08:48
US 3-YR TREASURY BOND DROPS 1/32 TO 99+11, YIELD AT 5.63%.
08:48
US 2-YR TREASURY BOND DROPS 2/32 TO 100-02, YIELD AT 5.58%.
08:48
US TREASURIES GO LOWER ON APRIL JOBLESS RATE.
08:48
US 1-YR T-BILL DISCOUNT RATE UP 2 BASIS POINTS TO 5.15%.
08:48
US 6-MONTH T-BILL DISCOUNT RATE UP 3 BASIS POINTS TO 5.13%.
08:48
US 3-MONTH T-BILL DISCOUNT RATE UP 2 BASIS POINTS TO 5.00%.
08:31
U.S. UNEMPLOYMENT RATE LOWEST SINCE FEB. 1970.
08:31
UNEMPLOYMENT RATE FALLS TO 4.3%, DOWN .4 PERCENTAGE POINTS.
08:31
APRIL NON-FARM PAYROLL UP 262,000, CONSENSUS 250,000.
07:20
BRITISH POUND 1.6403 DOWN .0071, OR -0.4%.
07:20
GERMAN DMARK 1.7718 UP .0034, OR +0.2%.
07:20
JAPAN YEN 132.56 DOWN .72, OR -0.5%.
07:20
U.S. 30-YR. BOND 5.948 UP 1 17/32, OR 0.1%.
07:20
FRANCE CAC 40 3906.36 UP 41.09, OR +1.04%.
07:20
GERMAN DAX 5260.56 UP 74.33, OR +1.43%.
07:20
LONDON FT 100 5965.5 UP 18.5, OR +0.5%.
07:12
FOREIGN STOCK MARKETS MOSTLY LOWER AUSTRALIAN MARKET 2780.50 DOWN 0.3,
OR -0.01%.
Korea
down - Asia mixed - London and Germany UP, France down
To
see what we said this morning and last night, see
http://www.wiredbrain.net/short.htm
..
The
news before it happens: Unemployment drops 4.2 % and new jobs increase
260,000 - adding to worries of rate increases :
The
government on Friday is scheduled to release the monthly employment data
for April, its first major reading on how the economy performed last month.
Analysts
surveyed by Reuters expect the unemployment rate to be unchanged at 4.7
percent with 259,000 new jobs created outside the farm sector. That compares
with the March rate of a decline of 36,000.
Last
month, the Conference Board put the help-wanted advertising index, which
tracks employment growth, at 92.0 in March, unchanged from February but
well above the March 1997 rate of 87.0, showing no drop in demand for labor.
The
feeling among the skeptics is that even if the employment figure is satisfactory,
there is no guarantee that the Fed is not
going
to tighten," Metz said.
Investors
appeared little reassured by Fed Vice Chairwoman Alice Rivlin who said
that a desire to rein in a high-flying stock
market
would not be a reason by itself for the central bank to raise interest
rates.
The
Fed was not considering changing margin requirements on stock trades, Rivlin
said.
There was no big risk of inflation
taking
off, she added.
Thursday
May 7th:
Editoral:
The
tradition is that good news = bad news because rapid growth = inflation.
Starrting in Nov. good news was good news because it = higher earning. Now
with a market well over any rational P/E the growth of earning and/or changes
of 1/4 % in a minor bank rate really can't make much difference. BUT when
prices are so high any excuse is a good excuse to sell - SO good news is
bad news again and bad news is bad news -
The employment number will be
up because the GDP was growing at a very high rate ( over 4 %) Wages are
going up in areas of demand but not in semi-skilled service jobs - as it
has been since 1969.
The problem is not wage inflation but a bubble - ready
to pop - in real estate - in stock prices - yo-yo land - the President
and Congress want to be popular. A reasonable slow down will be a lot better
than a CRASH ! And now, rather than close to an election.
The clients of
the Federal Central Bank - the World Banking System - need order in a time
of some real problems - and order means being able to add to the money
supply - which you can't do without great risk during a speculative bubble.
Fed
reminds Wall Street it is still top dog
By
Pierre Belec
NEW
YORK (Reuters) - Life is good on Wall Street. Consumer confidence is
the highest in some 30 years, inflation the lowest since the 1960s and
the stock market is soaring to the moon.
But
the Federal Reserve says trouble is bubbling in the economy.
Wall
Street was again reminded this week that the Fed is still the top dog.
The
secretive Fed leaked information that it had shifted monetary policy toward
a bias, which called for higher interest rates, because of concern that
the economy's robust growth may reignite inflation.
The
hint that the cost of borrowing may go up hit the market like a ton of
bricks, sending stocks into a tailspin at the beginning of the week as
investors pushed the panic button.
The
market had been betting that the central bank would not raise interest
rates and there was even speculation that lending rates would drop before
the end of the year.
But
by week's end, the market had roared back with a vengeance on a report
that inflation was still holding at the lowest level in some 30 years,
even though the economy grew at a fast pace in the first quarter.
Is
the Fed looking at the wrong radar screen?
Some
experts believe the central bank is actually more worried about the surge
in stock prices than any underlying inflation.
"
The
stock market is too speculative, exuberant and overvalued and there's the
risk that it could lead to financial asset inflation eventually causing
real sector inflation," said Hugh Johnson, chief investment officer for
First Albany Corp.
----------
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Current up-dates
Wednesday:
Long bond at
5.84
Talking
the market down-``People are starting to talk about deflation,'' said David
Brickman, international economist at PaineWebber. "
The Fed's worried about
the economy overheating," said Farrell. "I think the Fed would be thrilled
if the financial sector took a deep breath. I think we all should be thrilled."
Federal
Reserve officials Alice Rivlin, Laurence Meyer, and Edward Gramlich, and
Atlanta Fed president Jack Guynn are all speaking later on Wednesday.
U.S. Deputy Treasury Secretary Lawrence Summers is also speaking.
Federal
Reserve Chairman Alan Greenspan speaks at 1615 GMT on Saturday to a meeting
of state bank supervisors.
Wednesday
April 29 6:57 AM EDT
Greenspan
preserved consensus with bias
Home
| Client Access | Contact Us | Help
Market
Letter
05/26/98
The
Market Posture was downgraded to Mildly Bearish the week ending
4/10/98
(DJIA - 8994.96). Initial downside price projection for the DJIA
is
8750. CTI readings should remain negative until late May 1998.
****Check
out "ON THE EDGE" - A monthly review of the markets****
________________________________________________________________________
CURRENT
PRIOR
MARKET
TIMING MODELS READING WEEK CHG CONNOTATION
________________________________________________________________________
CYCLICAL
TREND INDEX (CTI): -4 -4 0 BEARISH
MOMENTUM
INDEX: -8 -6 -2 BEARISH
SENTIMENT
INDEX: 1 2 +1 NEUTRAL
________________________________________________________________________
DOW
JONES INDUSTRIAL AVERAGES (DJIA) CLOSE:................ 9114.44
DJIA
POINT CHANGE FROM PRIOR WEEK:......................... 18.44
DJIA
PERCENTAGE CHANGE FROM PRIOR WEEK:.................... 0.20%
MARKET
POSTURE THIS WEEK:..................................MILD BEARISH
MARKET
POSTURE PRIOR WEEK:.................................MILD BEARISH
DJIA
TARGET:............................................... 8750
TIME
FRAME TO ACHIEVE TARGET:.............................. 29-May-98
DATE
CURRENT MARKET POSTURE FORMULATED:.................... 10-Apr-98
DJIA
CLOSE ON DATE CURRENT MARKET POSTURE FORMULATED:...... 8994.96
________________________________________________________________________
CYCLICAL
TREND INDEX (CTI).......... -4 CONNOTATION
________________________________________________________________________
29-May-98
(Projected) 7 BULLISH
05-Jun-98
(Projected) 7 BULLISH
12-Jun-98
(Projected) 7 BULLISH
19-Jun-98
(Projected) 7 BULLISH
26-Jun-98
(Projected) 7 BULLISH
________________________________________________________________________
MOMENTUM
INDEX...................... -8 % CHG CONNOTATION
________________________________________________________________________
1)
DJ Transportation Average 3390.59 +1.0% BEARISH
2)
S&P 500 Index 1108.25 -0.0% BEARISH
3)
NYSE Composite Index 574.58 0.0% BEARISH
4)
Advance-Decline Line -5505 BULLISH
5)
10 Day MA Advance-Decline Line 0.80 0.0% BEARISH
6)
AMEX Index 730.57 -0.9% BEARISH
7)
NASDAQ Composite Index 1802.72 -2.4% BEARISH
8)
DJ Utilities Index 280.06 0.1% BEARISH
9)
TRIN+10 Day Average 1.04 0.0% NEUTRAL
10)
NYSE New Highs-New Lows 251+137 NEUTRAL
11)
Zweig Breadth Indicator 0.40 BEARISH
12)
McClellan Oscillator -76 NEUTRAL
13)
McClellan Summation Index 628 BULLISH
14)
Unchanged Issue Index 0.17 BEARISH
________________________________________________________________________
SENTIMENT
INDEX..................... 1 % CHG CONNOTATION
________________________________________________________________________
1)
Odd Lot Short Ratio-5 Day Ave 5.03 0.0% BEARISH
2)
NYSE Short Interest Ratio 6.32 1.1% BULLISH
3)
Public-Specialist Short Ratio 0.89 0.0% BULLISH
4)
Put/Call Ratio+10 Day Ave(INDEX) 1.12 0.0% NEUTRAL
5)
Dividend-Yield Spread 5.10 0.0% BULLISH
6)
Mutual Fund Liquid Asset Ratio 4.60 0.0% BEARISH
7)
Bullish Investment Advisors 45.5 0.0% NEUTRAL
8)
Bearish Investment Advisors 25.2 0.0% NEUTRAL
9)
Bearish + Corrections Total 54.5 0.0% NEUTRAL
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Group Analysis
By
Isabelle Clary
NEW
YORK (Reuters) - Federal Reserve Chairman Alan Greenspan agreed at the
March meeting of Fed policy-makers to
reintroduce
a bias toward raising interest rates, appeasing anti-inflation hawks on
the panel and preserving consensus, sources
It
is important to remember that the major FED activity is NOT the federal
funds or discount rate but open market selling of bonds and repos to withdraw
liquid assets and increase reserves in the banking systems.
The bias gives
direction to day to day market activity which has more effect than the
discount rate changes. Real rates are below the 5.5 % target.
08:45
US 3-MONTH T-BILL DISCOUNT RATE DROPS 2 BASIS POINTS TO 4.90%.
08:44
US 6-MONTH T-BILL DISCOUNT RATE DROPS 1 BASIS POINT TO 5.09%.
The
effective discount rate ( the price of money to banks ) is LIBOR MAY98
94.32 London Inter bank loan rate at 5.68 % sets other bank loan rates
- the short term rate set by EURO $ JUN98 94.225 = 5.775 % is over the
target of 5.5 % and going up. So bias does matter more than the actual
official change is a minor rate - the federal funds ( over night ) discount
rate.
The cost of money is going up which might slow certain types of interest
sensitive economic activity. It is not that the fed does nothing but wait
and have meeting - but is very active every day in the market.
Dollar/mark
was unlikely to show major movement ahead of the weekend meetings of European
Union officials to decide the
countries
which will join the single currency from 1999, but the mark might receive
a boost subsequently, analysts said.
On
the foreign exchanges, the dollar was slightly firmer but trading was range-bound
partly because of a holiday in Japan and
as
the markets awaited a batch of speeches from central bank and finance officials.
---------------------------------------------------------------
MARKET
PRICES AT 1101 GMT
Mark
1.7972/77 Yen 132.18/28 Sterling 1.6686/96
Gold
$307.50/7.90 -0.75 (pvs PM fix) Brent $14.61 +0.01
FTSE
100 5818.0 +11.4 CAC 3756.49 -20.74 X-DAX 5125.71 +14.83
---------------------------------------------------------------
By
mid-session, London's blue-chip FTSE 100 index was 0.4 percent firmer,
rescued by bargain-hunters from earlier losses
and
Germany's Xetra DAX was up 0.4 percent.
The
Belgian, Dutch, Greek and Swiss markets were also amongst the gainers but
French, Italian and Spanish bourses were in
the
red, pausing for breath after Tuesday's gains amid nerves over Wall Street
and confusion over U.S. rates.
Friday
May 1, 10:50 am Eastern Time
US
Treasuries slip on talk Fed checks forex rates:
The
basics:
A
too fast growth rate, gives too much money in the system, plus the Asia
thing causes lower exports, higher inports, pressure on the dollar which
is falling.
A
listing of the main NAPM components follows:
April
March Feb Jan Dec Nov Oct Sept Aug
PMI
52.9 54.8 53.3 52.4 53.1 54.5 55.9 54.6 56.4
Production
53.4 57.6 55.3 53.3 55.8 58.5 59.6 58.4 61.2
New
Orders 56.8 57.3 55.9 55.2 53.9 55.1 58.4 56.1 60.4
Supplier
Del 52.3 53.4 52.1 52.0 54.0 55.2 55.0 55.5 55.6
Inventories
46.6 46.8 46.9 46.7 46.5 44.3 47.0 46.2 43.4
Employment
49.8 52.5 50.9 50.1 50.9 53.3 52.5 51.1 51.6
Prices
41.2 44.4 45.8 44.7 50.8 53.2 55.5 54.1 53.4
Export
Orders 49.7 48.0 47.9 45.0 50.6 52.6 51.9 51.2 55.1
Imports
56.3 53.4 51.2 53.9 55.4 52.6 51.7 53.1 53.9
US
Treasuries off post-NAPM highs in forex intervention fear. *Mkt talk Fed
checking forex rates, but Fed says ``no comment.'' *Impact greatest in
bills, 3-mo rates jump 5 bps in 45 mins. *Long end outperforming but off
highs, profit-taking seen. *Traders report foreign central bank selling.
Thursday
April 30, 8:56 am Eastern Time
U.S.
economy accelerated in Q1, inflation mute
Thursday
April 30, 8:56 am Eastern Time
WASHINGTON,
April 30 (Reuters) -
The U.S. economy unexpectedly picked up speed in the
first quarter of 1998, surging ahead at a brisk 4.2 percent annual rate
on booming consumer spending while inflation remained at its most muted
levels in 35 years, the Commerce Department said on Thursday.
It
was the sixth straight quarter in which Gross Domestic Product advanced
at an annual rate of 3 percent or more - well above the 2+1/4 percent target
range the Federal Reserve considers can be safely sustained without risking
a flareup in inflation pressures. First-quarter GDP growth handily outstripped
Wall Street economists' forecasts for a 3.3 percent rate of expansion as
it accelerated from last year's fourth-quarter 3.7 percent pace instead
of slowing.
A
chorus of U.S. central bank governors has warned recently that the economy
needs to soon show convincing evidence of a slowdown, unnerving financial
markets after reports the Fed has shifted to a position of increased willingness
to raise interest rates. Policymakers' concern that Asia's economic woes
were not enough to offset buoyant domestic demand appeared to be supported
by the first-quarter GDP report.
DOWN 40 or 50
to 1050
If
the news is "good", rapid growth that's "bad" because it implies inflation
and higher money costs. If the news is "bad", lower growth and earning
that's good- maybe. Labor costs are going to be higher but how high is
high ?
The chances are 2/3 down, 1/3 up - but the reactions to economic
news are not always what is expected.
Thursday:
April 30th
``If
the U.S. economic data are strong, fears of a rate rise will return, suggesting
dollar upside,'' said Sally Wilkinson, senior
economist
at Daiwa Europe in London.
--------------------------------------------------------------
MARKET
PRICES AT 0905 GMT
Mark
1.7937/42 Yen 132.05/15 Sterling 1.6686/96
Gold
$310.90/1.30 +2.65 (pvs PM fix) Brent $14.39 +0.14
FTSE
100 5843.7 +10.6 CAC 3746.61 +12.68 X-DAX 5101.43 +17.63
---------------------------------------------------------------
U.S.
Federal Reserve chairman Alan Greenspan is known to consider ECI figures
as an important indicator of inflationary
pressures
building in a robust U.S. economy.
Thursday
April 30, 4:14 am Eastern Time
Wall
St bubble risk looms,
but is Asia to blame?
By
Yoshiko Mori
TOKYO,
April 30 (Reuters) -
The U.S. stock market is being poisoned by a ``classic
bubble'' and the risk is looming of a
downward
correction of 10 to 20 percent, economists in Tokyo say.
``
The
current state of Wall Street is similar to what happened in Tokyo in 1987
when it was already apparent that the asset
market
bubbles were getting out of hand,'' said Richard Werner, Tokyo-based chief
economist and managing director of Profit Research Centre Ltd.
Excessive
capital created by the U.S. banking system and the Federal Reserve has
been the major cause of recent Wall Street
gains,
Werner said.
Excessive
credit creation is spurring financial and real estate transactions which
are pushing up asset prices -- ``the classic
bubble,''
Werner said.
Economists
said credit creation through loans by the U.S. banking system is expanding
at around 10 percent year-on-year, the highest growth rate since the 1980s.
``If
the U.S. economic data are strong, fears of a rate rise will return, suggesting
dollar upside,'' said Sally Wilkinson, senior
economist
at Daiwa Europe in London.
First
quarter U.S. employment cost index is expected to rise 0.9 percent from
one percent in the previous quarter.
An
advance estimate of quarter one U.S. gross domestic product is also expected
at 1230 GMT.
At
0835 GMT the dollar was at 1.7921/26 marks and 131.93/03 yen
Con't
on
News
and analysis GO TO
Money pages first
forecast.htm,
then
conditions.htm
Main page Flash.htm
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Current up-dates
Technologies
2X market
IXCO
SOX MSH PSE NDX
down more than market
Pause
in
Asia's DOWN and Europe's down
from record high ( US Germany France London )
Why
does one index so different from the other ? Could it be the effects of
INDEX trading?
Stocks,
dollar active ( down again) and bonds drifting down;
Asia
down, Europe down from new highs:
bonds
at
5.8 %
bonds
DOWN interest UP well off lows of 5.65 and off high of 6.2 on money
supply, oil prices near $16 Gold at $310
SOX MSH PSE NDX
down more than market
Pause
in
Asia's DOWN and Europe's down
from record high ( US Germany France London )
Asia's DOWN and Europe's down
from record high ( US Germany France London )
Why
does one index so different from the other ? Could it be the effects of
INDEX trading?
Stocks,
dollar active ( down again) and bonds drifting down;
Asia
down, Europe down from new highs:
bonds
at
5.8 %
bonds
DOWN interest UP well off lows of 5.65 and off high of 6.2 on money
supply, oil prices near $16 Gold at $310
bonds
DOWN interest UP well off lows of 5.65 and off high of 6.2 on money
supply, oil prices near $16 Gold at $310
Currencies
(dollar)
DOWN from rally in a
tight range in a
Negative FX market - (on
scale from +15 to +15).
Bottom
Line:
Krugmann:
"
The Fed doesn't formally care about anything in particular. That way
you can't pin them
down.
Their nightmare: I know what keeps Alan Greenspan awake at nights. I don't
need any inside
information
to tell you this. He thinks about Japan 1990. ( Sic.. South East Asia in
1997 or the US in 1969 )
A
stock market that went to dizzying heights and there were lots of explanations;
everybody had a good theory about why that made sense and then it plunged.
And in the course of plunging, took the real economy down with it and it
never actually recovered. And although you can give all sorts of reasons
why the U.S. is different from that, the Fed is very concerned about that.
They are very concerned that we have a bubble economy, which is different
in detail, but the same general position as Japan before the big crash.
If they could figure out some way to deflate the bubble gently, they would."
Brancaccio:
"Sounds like you're a little worried about that scenario as well."
Krugmann:
"Oh, I'm scared to death! I look at the current level of the market. I
can't come up with a
reasonable
reason for it. I can give you a lot of standard arguments about why, even
if the market
MIT
economist Paul Krugmann's most recent book is called "Pop Internationalism."
NEW
YORK, May 7 (Reuters) - Earnings of companies in the Standard & Poor's
500 index are up 3.1 percent year-on-year in the first quarter with 91
percent, or 453 companies in the index, having reported, said First Call.
This
could rise to about 4.0 percent once all the retailers have reported, which
would be slightly better than Wall Street expected, said Chuck Hill, First
Call's director of research.
Analysts
had slashed their profit growth forecasts for the first quarter because
of Asia's turmoil.
But
even 4.0 percent would still be less than half the 9.0 percent year-on-year
growth in the fourth quarter of 1997, and would be well below the 10 percent
growth originally forecast for the first quarter.
Wall
Street is still betting
on backloaded
earnings growth this year.
First
Call said analysts forecast that S&P500 earnings will grow 8 percent
in the second quarter, 13 percent in the third quarter and 18 percent in
the final quarter. ( I wouldn't bet on it
)
These
forecasts may= WILL change over the coming months as more companies discuss
earnings with analysts, First Call said.
This
looks like a organized attempt to talk the market down:
You
don't have to shoot the charging bull between the eyes to try to slow it
down. You can use a number of less radical techniques to try to slow down
the ragging bull. You wave red flags, then the picadors poke at it, then
if all else fails you draw on more powerful weapons for the coup de grace'.
The
Fed won’t release this “directive,” crafted at the
end
of each committee meeting, until May 21.
The primary
significance
of the directive is to signal financial markets
which
way the Fed is leaning.
Officials
say Asia seems to be stabilizing, and
domestic
economic vigor appears to be offsetting the ill
effects
of Asian woes on U.S. exports. First-quarter
consumer
spending and housing construction was strong,
and
the economy appears to be awash in credit. So, in
public
speeches and interviews, Fed officials are beginning
to
prepare markets for a Fed move to brake the
economy-unless
it slows on its own soon.
The
Fed has been expecting a slowdown for months,
but
it hasn’t materialized. Most forecasters say the
economy
expanded at an annual rate of between 3% and
3.5%
in the first quarter, which would be the sixth quarter
of
better-than-3% growth.
Worries
about destabilizing fragile Asian financial markets could delay a Fed move,
but
some
Fed officials privately acknowledge that they would sleep better if the
stock market were less ebullient. Indeed, a decline in stock prices would
tend to slow the economy, which is precisely what the Fed would like to
see.
WSJ
Magic,
Science, the market, financial reporting and Beliefs systems such as Futures,
values, prices, rates and other Religions
(1948)
by Malinowski, Bronislaw
The
principle dialectic of the modern world is the dualism of science and magic.
The conflict starts with Newton who spent most of his life at numerical
alchemy.
In
a seminal article Malinowski suggests that "primitive" people use science
to control events they understand and can do something about, and magic
for forces of nature that are out of control.
They are very resonable about
fishing, farming, hunting and warfare when they find a pattern in events
- but magical thinking takes over when events seem out of control such
as storms, earthquakes, plagues, and other unexpected traumas.
Maclay,
Kubary, Malinowski: Archetypes from the Dreamtime of
Anthropology
The
dreamtime is explained in the "Last Wave" a film by Peter Weir - as a reality
that exists beyond the day to day that gives values, meaning to the "Law"
or customs of a people. In this way it is the origin of religion, which
the age of reason called a "superstition ".
Malinowski,
Bronislaw Kasper (1884+1942), British anthropologist,
regarded
as the founder of the "functional" school of anthropology,
which
maintains that human institutions should be examined in the
context
of the culture as a whole. He was born in Kraków, Poland. In
1914
he took part in an expedition to New Guinea and Melanesia and
spent
the next four years studying the peoples of the Trobriand Islands
of
the southwest Pacific. Malinowski became professor of social
anthropology
at the University of London in 1927. His further research
took
him to Africa, Latin America, and parts of the United States.
LAST
WEEK IN REVIEW:
For
historical interest, the market will look at the minutes of the March 31
U.S. Federal Open Market Committee meeting to be released on Thursday.
According
to Treasury Department data, foreigners owned 38 percent of the $3.4 trillion
in outstanding Treasury
debt
at the end of August.
The Japanese owned 25 percent of the foreign-held
debt, followed by Great Britain,
20
percent, and Germany, 6 percent.
Japanese
officials played down speculation this week of another wave of Treasury
securities selling to finance
a
$77 billion bailout of Japan's banking system.
In
addition to capital flows, Wednesday's Commerce Department release reported
the broadest measure of
U.S.
foreign trade, known as the current account. It shot up 11.4 percent to
$42.2 billion in the third quarter, the
The
current account measures not only trade in goods and services but also
the flow of investment income
between
countries and foreign aid.
08:44
US JUNE BOND FUTURE UP 13/32 TO 120-27.
08:44
US 30-YR TREASURY BOND UP 13/32 TO 103-02, YIELD AT 5.90%.
Thursday
May 21, 7:07 am Eastern Time
Markets
in France, Germany and parts of continental Europe were closed for Ascension
Day, reopening on Friday. Countries which operated normally reported lower-than-normal
volume.
---------------------------------------------------------------
MARKET
PRICES AT 1100 GMT
Mark
1.7646/51 Yen 135.19/29 Sterling 1.6270/80
Gold
$300.00/0.40 +0.59 (pvs PM fix) Brent $13.87 +0.15
FTSE
100 5968.9 +61.5
---------------------------------------------------------------
Benchmarks:
London
6,100 record high, Paris 4025* high, Frankfort 5,450 * high
The
UK's FTSE 100 index was up more than one pct as world markets celebrated
the Asian rally after Suharto quit and a late sprint by the Dow to close
116.83 points, or 1.3 percent, higher on Wednesday.
Sterling
had hit a seven-month low of 2.8763/73 against the mark from 2.8893/98
late Wednesday, after Bank of England Monetary Policy Committee member
Willem Buiter said the British economy is slowing and will slow further.
Some
dealers in U.S. stocks said minutes of the March 31 interest-rate setting
Federal Open Market Committee (FOMC) policy meeting, due for release at
1800 GMT, would be keenly awaited.
LONDON,
May 19 (Reuters) - European shares closed with steep gains on Tuesday,
lifted by a Wall Street rally and growing optimism that U.S. interest rates
would not be increased later in the day.
In
currencies, the yen lifted itself gingerly from its 6+1/2 year low against
the dollar after Indonesian President Suharto pledged to hold elections,
causing tentative rebounds in southeast Asian markets.
---------------------------------------------------------------
MARKET
PRICES AT 1550 GMT
Mark
1.7848/58 Yen 136.18/28
Sterling 1.6230/40
Gold
$300.00/0.50 -0.05 (pvs PM fix) Brent $14.47 +0.01
FTSE
100 5877.8 +51.6 CAC 3980.84 +35.53 X-DAX
5441.00 +97.34
---------------------------------------------------------------
THE NEXT
STEP FORWARD
Where
we go from here !
A few years
ago we talked about the potential of the internet -
Doc1
to Doc5
Then we
talked about the impact on the
social -
political
-
economic and general
future
Then we
talked about how the technology will develop
packets.htm
We talked
about the
network computer and how the information
utility will take shape.
Now what's
next ?
One way
or another - enough bandwidth will be provided to inexpensive and tough
enough boxes so that all the hard complex stuff will be pushed upstream
and voice, video, data and new applications can work the channels to provide
news, entertainment, communications, commerce in dramatically different
ways.
The big
question is how and by whom ?
By
John Sidgmore
May
5, 1998 - John Sidgmore
outlines
his vision for the
future
of global
telecommunication
in this
NetWorld+Interop
Keynote
speech
Global
tele-communications utilities linked by satellites, then ground stations,
then optic wires, cables, broad band, wide band, (A)DSL - a global backbone
providing service to all of humanity - with solar charged instruments from
anywhere to anywhere.
The first world has a billion ready clients,
the global market place has a million firms ready to go, the second and
third world can add a 100 million new clients a year and a million new
firms, local governments, missions and schools, gaming centers and market
players as fast as the bandwidth and prices allow.
The global requirements
are different from America and the European community. While part of the
world is wired - much of the world is not.
The Global
communications network must be based on wire-less standards - that will
work on wires but do not require them.
NOTICE:
SOUTHWINDNET = http://www.highspeedhosting.com/newsite/message.cfm
The
digital communications age has arrived. Still a little expensive - but
if the price - quality relationships hold - high speed connections should
be quite cheap in a year or so.
Then local NODES can provide high speed
wireless connections for EVERYTHING - internet with telephone, video and
real time data bases, BYE-BYE to MA bell, cable companies, TV networks
- as we know them.
The REAL impact will be all the way to China - the billions
- the majority of people on this planet who have almost no two-way telecommunications
- they can make the great leap forward...
The
site is in the process of upgrading service to
ViperLink.
VMC Virtual Marketing Corporation
The
ViperLink system uses a wireless access system to connect to an ATM
(
Asynchronous Transfer Mode (ATM) ATM is a packet switched technology capable
of carrying
voice,
video & data.)
backbone
at an astounding 90Mbps! Our Kentucky office has a full 2.0Mbps
(30%
bigger than a T+1) dedicated connection that is burstable to 6.0 Mbps (4
full
T+1s) if needed. If at any time, our web sites need additional bandwidth
–
they’ve
got it! Never again will there be a problem with not
having enough
bandwidth.
Ask how many providers can make that claim!
SAN
JOSE, Calif.--(BUSINESS WIRE)--May 11, 1998--
Verilink
Corp. (NASDAQ:VRLK - news) today announced that
Splitrock
Services, Inc., the U.S.-based provider of Internet access to Prodigy customers,
has selected Verilink to provide
Ramblings:
The doors to creative thinking and doing are in the narrow
places between large structures.
The
empires of the world and the mind dominate the landscape.
Vast historic structures obscure the
view of the horizon and our real location. Down narrow
lanes and in far fields we sometimes can
gain images that glimmer with reflections of a pale light,
far off.
Where theses narrow lanes and far field meet are the focal
points of new creations.
There is a container, connected to nodes, connected to
networks, creating a info-sphere of billions
living reproducing pathways and elements.
The bio-sphere
began and is still largely made up of
micro-organisms that share genetic information through
networks of co-option, cooperation and
communication that become organic wholes from simpler
to complex. Cells take in parts from
elsewhere and collect abilities of different genes.
The
biological and infomation packets are
coming together on a global scale.
One element basic to global networks are standards.
The
critical standard is digital information
which can be understood and act upon by all the other
members of the community.
The
information utility will operate on a common operational
language - such as HTTP, FTP, Java,
that will co=option functions from different places,
in words, pictures, sounds and video.
The
Microsoft issue is their desire to make MS-OS/ active
X the universal language for all future global
networks, software, operations, communications and services.
Netscape’s inter-operation open
arch-culture has a somewhat different vision of inter
and intra operability.
The global scope of
mega networks makes Microsoft’s vision unlikely but not
impossible.
Their moves into
communications, cable, satellites, broadcasting and services
should be taken as very important but
not as a given. Without outside intervention or meaningful
competition they could set NT/active X
type systems as the standard for most if not all inter-net
communications.
Gates to everone - "Look upon my works ye humble of the
earth and give
up."
But all empires lack vision and ability to change.
It’s not hardware, it’s not software, but it is service-ware.
Companies that
don’t sell machines or programs but universal services.
Sign-up and we
give you the container, the link, and all the services
you can think of and
many that you haven’t though of yet.
I soon will be able to pull down the word processing "service"
tied to voice and video "services". I
will be able to pull down interactive forms "service",
a search service, marketing services,
shopping service, broadcast and narrow cast services,
product design and production services,
travel, insurance, investment and banking services designed
and distributed by other services .
All these services we now called companies, producers,
distributors, stores and markets become
part of the services network.
The telephone company (
tele - sounds )is a service: television ( tele -
pictures ) networks and stations are service including
broadcast ( send sound and picture over a
wide area ): computers are not a machine or thing but
provide systems capacity to do something,
assign traits and store information and programs ( software
to help machines - do stuff ). All these
THINGS are becoming parts of a system of service with
nodes and terminals.
The core of the global service system is the operational
codes and languages. Everyone has to
understand ever one else and terminals need to talk to
nodes and servers need to communicate
with servers in common coded packets moving a mega-speeds
back and fourth.
These codes and
languages are extensions of Hyper Text Transfer Protocol
, ftp ( file transfer ) and operations such
as Java.
Saturday
May 9 8:05 AM EDT
ZANNY
MINTON BEDDOES: When we talk about a bubble, we talk about rising
fundamentals
would warrant, and they're going up because of some kind of speculative
frenzy,
to use a phrase, again, that Chairman Greenspan used, some kind of irrational
exuberance.
We're all feeling good. We're buying shares. Prices are going up not because
of
fundamental changes or not only because of fundamental changes, more because
there's
a kind of frenzied buying.
And
that's what we mean by a bubble, and we worry about it for two reasons.
We worry about it because
bubbles
tend to burst. Financial markets have had bubbles ever since finance started.
But the problem is that they
The other
problem is that if they--if
the
bubble continues, then this kind of inflation in asset prices--because
that's really what it is--can spill over into
ZANNY
MINTON BEDDOES: Well, I agree that there have been changes in the world
economy, and there
have
been changes in the U.S. economy.
The question is how big have these changes
been and do they justify
today's
prices, and I think one argument that is frequently made by the people
who believe in this new economy or
happened
in the last two years in the U.S. economy, we've grown far faster than
the trend growth, and we--than
economists
normally think the economy can grow--and that is because we've used more
people. Unemployment
The one
thing that does seem to be different is
that
as wages are rising, there isn't this immediate transfer into higher inflation.
Now,
there are--that could be because of some new rules. It could also be because
there
are
a lot of temporary factors which have actually influenced. One is that
benefits have
been
rising much more slowly than they used to.
The HMO revolution has meant
that its
employers
have been able to cut costs in areas where they traditionally weren't able
to cut
costs.
Secondly, the dollar is very strong. Now, the strength of the dollar
also dampens
inflation.
Thirdly, commodity prices are weak.
They're weak in part because
of the
problems
in Asia, but they're not--those are not structural changes.
They're temporary
things
that could change, and when they change, I think we'll see the old rules
coming back into play.
Are
stocks poised to flame out?
Friday
May 8th:
08:33
U.S. UNEMPLOYMENT RATE FALLS TO 4.3%, AVERAGE HOURLY EARNINGS UP 4C IN
APRIL, NEAR CONSENSUS.
08:32
RETAIL ADDS 44,000 JOBS.
08:32
CONSTRUCTION ADDS 35,000 JOBS.
08:32
SERVICES ADD 139,000 JOBS.
08:32
10,000 FACTORY JOBS LOST IN APRIL.
08:32
AVERAGE FACTORY WORKWEEK FALLS 1.1 HOURS TO 40.7.
08:32
AVERAGE WORKWEEK FALLS 0.3 HOURS TO 34.4.
08:32
HOURLY EARNINGS RISE 4 CENTS IN APRIL OR 0.3%.
08:32
4.3% JOBLESS RATE LOWEST SINCE FEB 1970.
08:32
262,000 JOBS CREATED IN APRIL; UNEMPLOYMENT RATE FALLS TO 4.3%.
08:31
U.S. 30-YR TREASURY UP SLIGHTLY ON UNEMPLOYMENT NEWS.
08:48
US JUNE BOND FUTURE DROPS 8/32 TO 120-03 ON JOBLESS DATA.
08:48
US 30-YR TREASURY BOND DROPS 12/32 TO 102-03, YIELD AT 5.99%.
08:48
US 10-YR TREASURY BOND DROPS 5/32 TO 98+14, YIELD AT 5.71%.
08:48
US 5-YR TREASURY BOND DROPS 4/32 TO 100+13, YIELD AT 5.65%.
08:48
US 3-YR TREASURY BOND DROPS 1/32 TO 99+11, YIELD AT 5.63%.
08:48
US 2-YR TREASURY BOND DROPS 2/32 TO 100-02, YIELD AT 5.58%.
08:48
US TREASURIES GO LOWER ON APRIL JOBLESS RATE.
08:48
US 1-YR T-BILL DISCOUNT RATE UP 2 BASIS POINTS TO 5.15%.
08:48
US 6-MONTH T-BILL DISCOUNT RATE UP 3 BASIS POINTS TO 5.13%.
08:48
US 3-MONTH T-BILL DISCOUNT RATE UP 2 BASIS POINTS TO 5.00%.
08:31
U.S. UNEMPLOYMENT RATE LOWEST SINCE FEB. 1970.
08:31
UNEMPLOYMENT RATE FALLS TO 4.3%, DOWN .4 PERCENTAGE POINTS.
08:31
APRIL NON-FARM PAYROLL UP 262,000, CONSENSUS 250,000.
07:20
BRITISH POUND 1.6403 DOWN .0071, OR -0.4%.
07:20
GERMAN DMARK 1.7718 UP .0034, OR +0.2%.
07:20
JAPAN YEN 132.56 DOWN .72, OR -0.5%.
07:20
U.S. 30-YR. BOND 5.948 UP 1 17/32, OR 0.1%.
07:20
FRANCE CAC 40 3906.36 UP 41.09, OR +1.04%.
07:20
GERMAN DAX 5260.56 UP 74.33, OR +1.43%.
07:20
LONDON FT 100 5965.5 UP 18.5, OR +0.5%.
07:12
FOREIGN STOCK MARKETS MOSTLY LOWER AUSTRALIAN MARKET 2780.50 DOWN 0.3,
OR -0.01%.
Korea
down - Asia mixed - London and Germany UP, France down
To
see what we said this morning and last night, see
http://www.wiredbrain.net/short.htm
..
The
news before it happens: Unemployment drops 4.2 % and new jobs increase
260,000 - adding to worries of rate increases :
The
government on Friday is scheduled to release the monthly employment data
for April, its first major reading on how the economy performed last month.
Analysts
surveyed by Reuters expect the unemployment rate to be unchanged at 4.7
percent with 259,000 new jobs created outside the farm sector. That compares
with the March rate of a decline of 36,000.
Last
month, the Conference Board put the help-wanted advertising index, which
tracks employment growth, at 92.0 in March, unchanged from February but
well above the March 1997 rate of 87.0, showing no drop in demand for labor.
The
feeling among the skeptics is that even if the employment figure is satisfactory,
there is no guarantee that the Fed is not
going
to tighten," Metz said.
Investors
appeared little reassured by Fed Vice Chairwoman Alice Rivlin who said
that a desire to rein in a high-flying stock
market
would not be a reason by itself for the central bank to raise interest
rates.
The
Fed was not considering changing margin requirements on stock trades, Rivlin
said.
There was no big risk of inflation
taking
off, she added.
Thursday
May 7th:
Editoral:
The
tradition is that good news = bad news because rapid growth = inflation.
Starrting in Nov. good news was good news because it = higher earning. Now
with a market well over any rational P/E the growth of earning and/or changes
of 1/4 % in a minor bank rate really can't make much difference. BUT when
prices are so high any excuse is a good excuse to sell - SO good news is
bad news again and bad news is bad news -
The employment number will be
up because the GDP was growing at a very high rate ( over 4 %) Wages are
going up in areas of demand but not in semi-skilled service jobs - as it
has been since 1969.
The problem is not wage inflation but a bubble - ready
to pop - in real estate - in stock prices - yo-yo land - the President
and Congress want to be popular. A reasonable slow down will be a lot better
than a CRASH ! And now, rather than close to an election.
The clients of
the Federal Central Bank - the World Banking System - need order in a time
of some real problems - and order means being able to add to the money
supply - which you can't do without great risk during a speculative bubble.
Fed
reminds Wall Street it is still top dog
By
Pierre Belec
NEW
YORK (Reuters) - Life is good on Wall Street. Consumer confidence is
the highest in some 30 years, inflation the lowest since the 1960s and
the stock market is soaring to the moon.
But
the Federal Reserve says trouble is bubbling in the economy.
Wall
Street was again reminded this week that the Fed is still the top dog.
The
secretive Fed leaked information that it had shifted monetary policy toward
a bias, which called for higher interest rates, because of concern that
the economy's robust growth may reignite inflation.
The
hint that the cost of borrowing may go up hit the market like a ton of
bricks, sending stocks into a tailspin at the beginning of the week as
investors pushed the panic button.
The
market had been betting that the central bank would not raise interest
rates and there was even speculation that lending rates would drop before
the end of the year.
But
by week's end, the market had roared back with a vengeance on a report
that inflation was still holding at the lowest level in some 30 years,
even though the economy grew at a fast pace in the first quarter.
Is
the Fed looking at the wrong radar screen?
Some
experts believe the central bank is actually more worried about the surge
in stock prices than any underlying inflation.
"
The
stock market is too speculative, exuberant and overvalued and there's the
risk that it could lead to financial asset inflation eventually causing
real sector inflation," said Hugh Johnson, chief investment officer for
First Albany Corp.
----------
G
o to Wiredbrain's
ACTIVE-NEWS
PAGE
----------
G
o to Wiredbrain's
PAGE TWO
----------
G
o to Wiredbrain's
Current up-dates
Wednesday:
Long bond at
5.84
Talking
the market down-``People are starting to talk about deflation,'' said David
Brickman, international economist at PaineWebber. "
The Fed's worried about
the economy overheating," said Farrell. "I think the Fed would be thrilled
if the financial sector took a deep breath. I think we all should be thrilled."
Federal
Reserve officials Alice Rivlin, Laurence Meyer, and Edward Gramlich, and
Atlanta Fed president Jack Guynn are all speaking later on Wednesday.
U.S. Deputy Treasury Secretary Lawrence Summers is also speaking.
Federal
Reserve Chairman Alan Greenspan speaks at 1615 GMT on Saturday to a meeting
of state bank supervisors.
Wednesday
April 29 6:57 AM EDT
Greenspan
preserved consensus with bias
Home
| Client Access | Contact Us | Help
Market
Letter
05/26/98
The
Market Posture was downgraded to Mildly Bearish the week ending
4/10/98
(DJIA - 8994.96). Initial downside price projection for the DJIA
is
8750. CTI readings should remain negative until late May 1998.
****Check
out "ON THE EDGE" - A monthly review of the markets****
________________________________________________________________________
CURRENT
PRIOR
MARKET
TIMING MODELS READING WEEK CHG CONNOTATION
________________________________________________________________________
CYCLICAL
TREND INDEX (CTI): -4 -4 0 BEARISH
MOMENTUM
INDEX: -8 -6 -2 BEARISH
SENTIMENT
INDEX: 1 2 +1 NEUTRAL
________________________________________________________________________
DOW
JONES INDUSTRIAL AVERAGES (DJIA) CLOSE:................ 9114.44
DJIA
POINT CHANGE FROM PRIOR WEEK:......................... 18.44
DJIA
PERCENTAGE CHANGE FROM PRIOR WEEK:.................... 0.20%
MARKET
POSTURE THIS WEEK:..................................MILD BEARISH
MARKET
POSTURE PRIOR WEEK:.................................MILD BEARISH
DJIA
TARGET:............................................... 8750
TIME
FRAME TO ACHIEVE TARGET:.............................. 29-May-98
DATE
CURRENT MARKET POSTURE FORMULATED:.................... 10-Apr-98
DJIA
CLOSE ON DATE CURRENT MARKET POSTURE FORMULATED:...... 8994.96
________________________________________________________________________
CYCLICAL
TREND INDEX (CTI).......... -4 CONNOTATION
________________________________________________________________________
29-May-98
(Projected) 7 BULLISH
05-Jun-98
(Projected) 7 BULLISH
12-Jun-98
(Projected) 7 BULLISH
19-Jun-98
(Projected) 7 BULLISH
26-Jun-98
(Projected) 7 BULLISH
________________________________________________________________________
MOMENTUM
INDEX...................... -8 % CHG CONNOTATION
________________________________________________________________________
1)
DJ Transportation Average 3390.59 +1.0% BEARISH
2)
S&P 500 Index 1108.25 -0.0% BEARISH
3)
NYSE Composite Index 574.58 0.0% BEARISH
4)
Advance-Decline Line -5505 BULLISH
5)
10 Day MA Advance-Decline Line 0.80 0.0% BEARISH
6)
AMEX Index 730.57 -0.9% BEARISH
7)
NASDAQ Composite Index 1802.72 -2.4% BEARISH
8)
DJ Utilities Index 280.06 0.1% BEARISH
9)
TRIN+10 Day Average 1.04 0.0% NEUTRAL
10)
NYSE New Highs-New Lows 251+137 NEUTRAL
11)
Zweig Breadth Indicator 0.40 BEARISH
12)
McClellan Oscillator -76 NEUTRAL
13)
McClellan Summation Index 628 BULLISH
14)
Unchanged Issue Index 0.17 BEARISH
________________________________________________________________________
SENTIMENT
INDEX..................... 1 % CHG CONNOTATION
________________________________________________________________________
1)
Odd Lot Short Ratio-5 Day Ave 5.03 0.0% BEARISH
2)
NYSE Short Interest Ratio 6.32 1.1% BULLISH
3)
Public-Specialist Short Ratio 0.89 0.0% BULLISH
4)
Put/Call Ratio+10 Day Ave(INDEX) 1.12 0.0% NEUTRAL
5)
Dividend-Yield Spread 5.10 0.0% BULLISH
6)
Mutual Fund Liquid Asset Ratio 4.60 0.0% BEARISH
7)
Bullish Investment Advisors 45.5 0.0% NEUTRAL
8)
Bearish Investment Advisors 25.2 0.0% NEUTRAL
9)
Bearish + Corrections Total 54.5 0.0% NEUTRAL
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By
Isabelle Clary
NEW
YORK (Reuters) - Federal Reserve Chairman Alan Greenspan agreed at the
March meeting of Fed policy-makers to
reintroduce
a bias toward raising interest rates, appeasing anti-inflation hawks on
the panel and preserving consensus, sources
It
is important to remember that the major FED activity is NOT the federal
funds or discount rate but open market selling of bonds and repos to withdraw
liquid assets and increase reserves in the banking systems.
The bias gives
direction to day to day market activity which has more effect than the
discount rate changes. Real rates are below the 5.5 % target.
08:45
US 3-MONTH T-BILL DISCOUNT RATE DROPS 2 BASIS POINTS TO 4.90%.
08:44
US 6-MONTH T-BILL DISCOUNT RATE DROPS 1 BASIS POINT TO 5.09%.
The
effective discount rate ( the price of money to banks ) is LIBOR MAY98
94.32 London Inter bank loan rate at 5.68 % sets other bank loan rates
- the short term rate set by EURO $ JUN98 94.225 = 5.775 % is over the
target of 5.5 % and going up. So bias does matter more than the actual
official change is a minor rate - the federal funds ( over night ) discount
rate.
The cost of money is going up which might slow certain types of interest
sensitive economic activity. It is not that the fed does nothing but wait
and have meeting - but is very active every day in the market.
Dollar/mark
was unlikely to show major movement ahead of the weekend meetings of European
Union officials to decide the
countries
which will join the single currency from 1999, but the mark might receive
a boost subsequently, analysts said.
On
the foreign exchanges, the dollar was slightly firmer but trading was range-bound
partly because of a holiday in Japan and
as
the markets awaited a batch of speeches from central bank and finance officials.
---------------------------------------------------------------
MARKET
PRICES AT 1101 GMT
Mark
1.7972/77 Yen 132.18/28 Sterling 1.6686/96
Gold
$307.50/7.90 -0.75 (pvs PM fix) Brent $14.61 +0.01
FTSE
100 5818.0 +11.4 CAC 3756.49 -20.74 X-DAX 5125.71 +14.83
---------------------------------------------------------------
By
mid-session, London's blue-chip FTSE 100 index was 0.4 percent firmer,
rescued by bargain-hunters from earlier losses
and
Germany's Xetra DAX was up 0.4 percent.
The
Belgian, Dutch, Greek and Swiss markets were also amongst the gainers but
French, Italian and Spanish bourses were in
the
red, pausing for breath after Tuesday's gains amid nerves over Wall Street
and confusion over U.S. rates.
Friday
May 1, 10:50 am Eastern Time
US
Treasuries slip on talk Fed checks forex rates:
The
basics:
A
too fast growth rate, gives too much money in the system, plus the Asia
thing causes lower exports, higher inports, pressure on the dollar which
is falling.
A
listing of the main NAPM components follows:
April
March Feb Jan Dec Nov Oct Sept Aug
PMI
52.9 54.8 53.3 52.4 53.1 54.5 55.9 54.6 56.4
Production
53.4 57.6 55.3 53.3 55.8 58.5 59.6 58.4 61.2
New
Orders 56.8 57.3 55.9 55.2 53.9 55.1 58.4 56.1 60.4
Supplier
Del 52.3 53.4 52.1 52.0 54.0 55.2 55.0 55.5 55.6
Inventories
46.6 46.8 46.9 46.7 46.5 44.3 47.0 46.2 43.4
Employment
49.8 52.5 50.9 50.1 50.9 53.3 52.5 51.1 51.6
Prices
41.2 44.4 45.8 44.7 50.8 53.2 55.5 54.1 53.4
Export
Orders 49.7 48.0 47.9 45.0 50.6 52.6 51.9 51.2 55.1
Imports
56.3 53.4 51.2 53.9 55.4 52.6 51.7 53.1 53.9
US
Treasuries off post-NAPM highs in forex intervention fear. *Mkt talk Fed
checking forex rates, but Fed says ``no comment.'' *Impact greatest in
bills, 3-mo rates jump 5 bps in 45 mins. *Long end outperforming but off
highs, profit-taking seen. *Traders report foreign central bank selling.
Thursday
April 30, 8:56 am Eastern Time
U.S.
economy accelerated in Q1, inflation mute
Thursday
April 30, 8:56 am Eastern Time
WASHINGTON,
April 30 (Reuters) -
The U.S. economy unexpectedly picked up speed in the
first quarter of 1998, surging ahead at a brisk 4.2 percent annual rate
on booming consumer spending while inflation remained at its most muted
levels in 35 years, the Commerce Department said on Thursday.
It
was the sixth straight quarter in which Gross Domestic Product advanced
at an annual rate of 3 percent or more - well above the 2+1/4 percent target
range the Federal Reserve considers can be safely sustained without risking
a flareup in inflation pressures. First-quarter GDP growth handily outstripped
Wall Street economists' forecasts for a 3.3 percent rate of expansion as
it accelerated from last year's fourth-quarter 3.7 percent pace instead
of slowing.
A
chorus of U.S. central bank governors has warned recently that the economy
needs to soon show convincing evidence of a slowdown, unnerving financial
markets after reports the Fed has shifted to a position of increased willingness
to raise interest rates. Policymakers' concern that Asia's economic woes
were not enough to offset buoyant domestic demand appeared to be supported
by the first-quarter GDP report.
DOWN 40 or 50
to 1050
If
the news is "good", rapid growth that's "bad" because it implies inflation
and higher money costs. If the news is "bad", lower growth and earning
that's good- maybe. Labor costs are going to be higher but how high is
high ?
The chances are 2/3 down, 1/3 up - but the reactions to economic
news are not always what is expected.
Thursday:
April 30th
``If
the U.S. economic data are strong, fears of a rate rise will return, suggesting
dollar upside,'' said Sally Wilkinson, senior
economist
at Daiwa Europe in London.
--------------------------------------------------------------
MARKET
PRICES AT 0905 GMT
Mark
1.7937/42 Yen 132.05/15 Sterling 1.6686/96
Gold
$310.90/1.30 +2.65 (pvs PM fix) Brent $14.39 +0.14
FTSE
100 5843.7 +10.6 CAC 3746.61 +12.68 X-DAX 5101.43 +17.63
---------------------------------------------------------------
U.S.
Federal Reserve chairman Alan Greenspan is known to consider ECI figures
as an important indicator of inflationary
pressures
building in a robust U.S. economy.
Thursday
April 30, 4:14 am Eastern Time
Wall
St bubble risk looms,
but is Asia to blame?
By
Yoshiko Mori
TOKYO,
April 30 (Reuters) -
The U.S. stock market is being poisoned by a ``classic
bubble'' and the risk is looming of a
downward
correction of 10 to 20 percent, economists in Tokyo say.
``
The
current state of Wall Street is similar to what happened in Tokyo in 1987
when it was already apparent that the asset
market
bubbles were getting out of hand,'' said Richard Werner, Tokyo-based chief
economist and managing director of Profit Research Centre Ltd.
Excessive
capital created by the U.S. banking system and the Federal Reserve has
been the major cause of recent Wall Street
gains,
Werner said.
Excessive
credit creation is spurring financial and real estate transactions which
are pushing up asset prices -- ``the classic
bubble,''
Werner said.
Economists
said credit creation through loans by the U.S. banking system is expanding
at around 10 percent year-on-year, the highest growth rate since the 1980s.
``If
the U.S. economic data are strong, fears of a rate rise will return, suggesting
dollar upside,'' said Sally Wilkinson, senior
economist
at Daiwa Europe in London.
First
quarter U.S. employment cost index is expected to rise 0.9 percent from
one percent in the previous quarter.
An
advance estimate of quarter one U.S. gross domestic product is also expected
at 1230 GMT.
At
0835 GMT the dollar was at 1.7921/26 marks and 131.93/03 yen
Con't
on
News
and analysis GO TO
Money pages first
forecast.htm,
then
conditions.htm
Main page Flash.htm
----------
G
o to Wiredbrain's
ACTIVE-NEWS
PAGE
----------
Con't on money
PAGE TWO
----------
G
o to Wiredbrain's
Current up-dates
(on
scale from +15 to +15).
Bottom
Line:
Krugmann:
"
The Fed doesn't formally care about anything in particular. That way
you can't pin them
down.
Their nightmare: I know what keeps Alan Greenspan awake at nights. I don't
need any inside
information
to tell you this. He thinks about Japan 1990. ( Sic.. South East Asia in
1997 or the US in 1969 )
A
stock market that went to dizzying heights and there were lots of explanations;
everybody had a good theory about why that made sense and then it plunged.
And in the course of plunging, took the real economy down with it and it
never actually recovered. And although you can give all sorts of reasons
why the U.S. is different from that, the Fed is very concerned about that.
They are very concerned that we have a bubble economy, which is different
in detail, but the same general position as Japan before the big crash.
If they could figure out some way to deflate the bubble gently, they would."
Brancaccio:
"Sounds like you're a little worried about that scenario as well."
Krugmann:
"Oh, I'm scared to death! I look at the current level of the market. I
can't come up with a
reasonable
reason for it. I can give you a lot of standard arguments about why, even
if the market
MIT
economist Paul Krugmann's most recent book is called "Pop Internationalism."
NEW
YORK, May 7 (Reuters) - Earnings of companies in the Standard & Poor's
500 index are up 3.1 percent year-on-year in the first quarter with 91
percent, or 453 companies in the index, having reported, said First Call.
This
could rise to about 4.0 percent once all the retailers have reported, which
would be slightly better than Wall Street expected, said Chuck Hill, First
Call's director of research.
Analysts
had slashed their profit growth forecasts for the first quarter because
of Asia's turmoil.
But
even 4.0 percent would still be less than half the 9.0 percent year-on-year
growth in the fourth quarter of 1997, and would be well below the 10 percent
growth originally forecast for the first quarter.
Wall
Street is still betting
on backloaded
earnings growth this year.
First
Call said analysts forecast that S&P500 earnings will grow 8 percent
in the second quarter, 13 percent in the third quarter and 18 percent in
the final quarter. ( I wouldn't bet on it
)
These
forecasts may= WILL change over the coming months as more companies discuss
earnings with analysts, First Call said.
This
looks like a organized attempt to talk the market down:
You
don't have to shoot the charging bull between the eyes to try to slow it
down. You can use a number of less radical techniques to try to slow down
the ragging bull. You wave red flags, then the picadors poke at it, then
if all else fails you draw on more powerful weapons for the coup de grace'.
The
Fed won’t release this “directive,” crafted at the
end
of each committee meeting, until May 21.
The primary
significance
of the directive is to signal financial markets
which
way the Fed is leaning.
Officials
say Asia seems to be stabilizing, and
domestic
economic vigor appears to be offsetting the ill
effects
of Asian woes on U.S. exports. First-quarter
consumer
spending and housing construction was strong,
and
the economy appears to be awash in credit. So, in
public
speeches and interviews, Fed officials are beginning
to
prepare markets for a Fed move to brake the
economy-unless
it slows on its own soon.
The
Fed has been expecting a slowdown for months,
but
it hasn’t materialized. Most forecasters say the
economy
expanded at an annual rate of between 3% and
3.5%
in the first quarter, which would be the sixth quarter
of
better-than-3% growth.
Worries
about destabilizing fragile Asian financial markets could delay a Fed move,
but
some
Fed officials privately acknowledge that they would sleep better if the
stock market were less ebullient. Indeed, a decline in stock prices would
tend to slow the economy, which is precisely what the Fed would like to
see.
WSJ
Magic,
Science, the market, financial reporting and Beliefs systems such as Futures,
values, prices, rates and other Religions
(1948)
by Malinowski, Bronislaw
The
principle dialectic of the modern world is the dualism of science and magic.
The conflict starts with Newton who spent most of his life at numerical
alchemy.
In
a seminal article Malinowski suggests that "primitive" people use science
to control events they understand and can do something about, and magic
for forces of nature that are out of control.
They are very resonable about
fishing, farming, hunting and warfare when they find a pattern in events
- but magical thinking takes over when events seem out of control such
as storms, earthquakes, plagues, and other unexpected traumas.
Maclay,
Kubary, Malinowski: Archetypes from the Dreamtime of
Anthropology
The
dreamtime is explained in the "Last Wave" a film by Peter Weir - as a reality
that exists beyond the day to day that gives values, meaning to the "Law"
or customs of a people. In this way it is the origin of religion, which
the age of reason called a "superstition ".
Malinowski,
Bronislaw Kasper (1884+1942), British anthropologist,
regarded
as the founder of the "functional" school of anthropology,
which
maintains that human institutions should be examined in the
context
of the culture as a whole. He was born in Kraków, Poland. In
1914
he took part in an expedition to New Guinea and Melanesia and
spent
the next four years studying the peoples of the Trobriand Islands
of
the southwest Pacific. Malinowski became professor of social
anthropology
at the University of London in 1927. His further research
took
him to Africa, Latin America, and parts of the United States.
LAST
WEEK IN REVIEW:
For
historical interest, the market will look at the minutes of the March 31
U.S. Federal Open Market Committee meeting to be released on Thursday.
According
to Treasury Department data, foreigners owned 38 percent of the $3.4 trillion
in outstanding Treasury
debt
at the end of August.
The Japanese owned 25 percent of the foreign-held
debt, followed by Great Britain,
20
percent, and Germany, 6 percent.
Japanese
officials played down speculation this week of another wave of Treasury
securities selling to finance
a
$77 billion bailout of Japan's banking system.
In
addition to capital flows, Wednesday's Commerce Department release reported
the broadest measure of
U.S.
foreign trade, known as the current account. It shot up 11.4 percent to
$42.2 billion in the third quarter, the
The
current account measures not only trade in goods and services but also
the flow of investment income
between
countries and foreign aid.
08:44
US JUNE BOND FUTURE UP 13/32 TO 120-27.
08:44
US 30-YR TREASURY BOND UP 13/32 TO 103-02, YIELD AT 5.90%.
Thursday
May 21, 7:07 am Eastern Time
Markets
in France, Germany and parts of continental Europe were closed for Ascension
Day, reopening on Friday. Countries which operated normally reported lower-than-normal
volume.
---------------------------------------------------------------
MARKET
PRICES AT 1100 GMT
Mark
1.7646/51 Yen 135.19/29 Sterling 1.6270/80
Gold
$300.00/0.40 +0.59 (pvs PM fix) Brent $13.87 +0.15
FTSE
100 5968.9 +61.5
---------------------------------------------------------------
Benchmarks:
London
6,100 record high, Paris 4025* high, Frankfort 5,450 * high
The
UK's FTSE 100 index was up more than one pct as world markets celebrated
the Asian rally after Suharto quit and a late sprint by the Dow to close
116.83 points, or 1.3 percent, higher on Wednesday.
Sterling
had hit a seven-month low of 2.8763/73 against the mark from 2.8893/98
late Wednesday, after Bank of England Monetary Policy Committee member
Willem Buiter said the British economy is slowing and will slow further.
Some
dealers in U.S. stocks said minutes of the March 31 interest-rate setting
Federal Open Market Committee (FOMC) policy meeting, due for release at
1800 GMT, would be keenly awaited.
LONDON,
May 19 (Reuters) - European shares closed with steep gains on Tuesday,
lifted by a Wall Street rally and growing optimism that U.S. interest rates
would not be increased later in the day.
In
currencies, the yen lifted itself gingerly from its 6+1/2 year low against
the dollar after Indonesian President Suharto pledged to hold elections,
causing tentative rebounds in southeast Asian markets.
---------------------------------------------------------------
MARKET
PRICES AT 1550 GMT
Mark
1.7848/58 Yen 136.18/28
Sterling 1.6230/40
Gold
$300.00/0.50 -0.05 (pvs PM fix) Brent $14.47 +0.01
FTSE
100 5877.8 +51.6 CAC 3980.84 +35.53 X-DAX
5441.00 +97.34
---------------------------------------------------------------
THE NEXT
STEP FORWARD
Where
we go from here !
A few years
ago we talked about the potential of the internet -
Doc1
to Doc5
Then we
talked about the impact on the
social -
political
-
economic and general
future
Then we
talked about how the technology will develop
packets.htm
We talked
about the
network computer and how the information
utility will take shape.
Now what's
next ?
One way
or another - enough bandwidth will be provided to inexpensive and tough
enough boxes so that all the hard complex stuff will be pushed upstream
and voice, video, data and new applications can work the channels to provide
news, entertainment, communications, commerce in dramatically different
ways.
The big
question is how and by whom ?
By
John Sidgmore
May
5, 1998 - John Sidgmore
outlines
his vision for the
future
of global
telecommunication
in this
NetWorld+Interop
Keynote
speech
Global
tele-communications utilities linked by satellites, then ground stations,
then optic wires, cables, broad band, wide band, (A)DSL - a global backbone
providing service to all of humanity - with solar charged instruments from
anywhere to anywhere.
The first world has a billion ready clients,
the global market place has a million firms ready to go, the second and
third world can add a 100 million new clients a year and a million new
firms, local governments, missions and schools, gaming centers and market
players as fast as the bandwidth and prices allow.
The global requirements
are different from America and the European community. While part of the
world is wired - much of the world is not.
The Global
communications network must be based on wire-less standards - that will
work on wires but do not require them.
NOTICE:
SOUTHWINDNET = http://www.highspeedhosting.com/newsite/message.cfm
The
digital communications age has arrived. Still a little expensive - but
if the price - quality relationships hold - high speed connections should
be quite cheap in a year or so.
Then local NODES can provide high speed
wireless connections for EVERYTHING - internet with telephone, video and
real time data bases, BYE-BYE to MA bell, cable companies, TV networks
- as we know them.
The REAL impact will be all the way to China - the billions
- the majority of people on this planet who have almost no two-way telecommunications
- they can make the great leap forward...
The
site is in the process of upgrading service to
ViperLink.
VMC Virtual Marketing Corporation
The
ViperLink system uses a wireless access system to connect to an ATM
(
Asynchronous Transfer Mode (ATM) ATM is a packet switched technology capable
of carrying
voice,
video & data.)
backbone
at an astounding 90Mbps! Our Kentucky office has a full 2.0Mbps
(30%
bigger than a T+1) dedicated connection that is burstable to 6.0 Mbps (4
full
T+1s) if needed. If at any time, our web sites need additional bandwidth
–
they’ve
got it! Never again will there be a problem with not
having enough
bandwidth.
Ask how many providers can make that claim!
SAN
JOSE, Calif.--(BUSINESS WIRE)--May 11, 1998--
Verilink
Corp. (NASDAQ:VRLK - news) today announced that
Splitrock
Services, Inc., the U.S.-based provider of Internet access to Prodigy customers,
has selected Verilink to provide
Ramblings:
The doors to creative thinking and doing are in the narrow
places between large structures.
The
empires of the world and the mind dominate the landscape.
Vast historic structures obscure the
view of the horizon and our real location. Down narrow
lanes and in far fields we sometimes can
gain images that glimmer with reflections of a pale light,
far off.
Where theses narrow lanes and far field meet are the focal
points of new creations.
There is a container, connected to nodes, connected to
networks, creating a info-sphere of billions
living reproducing pathways and elements.
The bio-sphere
began and is still largely made up of
micro-organisms that share genetic information through
networks of co-option, cooperation and
communication that become organic wholes from simpler
to complex. Cells take in parts from
elsewhere and collect abilities of different genes.
The
biological and infomation packets are
coming together on a global scale.
One element basic to global networks are standards.
The
critical standard is digital information
which can be understood and act upon by all the other
members of the community.
The
information utility will operate on a common operational
language - such as HTTP, FTP, Java,
that will co=option functions from different places,
in words, pictures, sounds and video.
The
Microsoft issue is their desire to make MS-OS/ active
X the universal language for all future global
networks, software, operations, communications and services.
Netscape’s inter-operation open
arch-culture has a somewhat different vision of inter
and intra operability.
The global scope of
mega networks makes Microsoft’s vision unlikely but not
impossible.
Their moves into
communications, cable, satellites, broadcasting and services
should be taken as very important but
not as a given. Without outside intervention or meaningful
competition they could set NT/active X
type systems as the standard for most if not all inter-net
communications.
Gates to everone - "Look upon my works ye humble of the
earth and give
up."
But all empires lack vision and ability to change.
It’s not hardware, it’s not software, but it is service-ware.
Companies that
don’t sell machines or programs but universal services.
Sign-up and we
give you the container, the link, and all the services
you can think of and
many that you haven’t though of yet.
I soon will be able to pull down the word processing "service"
tied to voice and video "services". I
will be able to pull down interactive forms "service",
a search service, marketing services,
shopping service, broadcast and narrow cast services,
product design and production services,
travel, insurance, investment and banking services designed
and distributed by other services .
All these services we now called companies, producers,
distributors, stores and markets become
part of the services network.
The telephone company (
tele - sounds )is a service: television ( tele -
pictures ) networks and stations are service including
broadcast ( send sound and picture over a
wide area ): computers are not a machine or thing but
provide systems capacity to do something,
assign traits and store information and programs ( software
to help machines - do stuff ). All these
THINGS are becoming parts of a system of service with
nodes and terminals.
The core of the global service system is the operational
codes and languages. Everyone has to
understand ever one else and terminals need to talk to
nodes and servers need to communicate
with servers in common coded packets moving a mega-speeds
back and fourth.
These codes and
languages are extensions of Hyper Text Transfer Protocol
, ftp ( file transfer ) and operations such
as Java.
Saturday
May 9 8:05 AM EDT
ZANNY
MINTON BEDDOES: When we talk about a bubble, we talk about rising
fundamentals
would warrant, and they're going up because of some kind of speculative
frenzy,
to use a phrase, again, that Chairman Greenspan used, some kind of irrational
exuberance.
We're all feeling good. We're buying shares. Prices are going up not because
of
fundamental changes or not only because of fundamental changes, more because
there's
a kind of frenzied buying.
And
that's what we mean by a bubble, and we worry about it for two reasons.
We worry about it because
bubbles
tend to burst. Financial markets have had bubbles ever since finance started.
But the problem is that they
The other
problem is that if they--if
the
bubble continues, then this kind of inflation in asset prices--because
that's really what it is--can spill over into
ZANNY
MINTON BEDDOES: Well, I agree that there have been changes in the world
economy, and there
have
been changes in the U.S. economy.
The question is how big have these changes
been and do they justify
today's
prices, and I think one argument that is frequently made by the people
who believe in this new economy or
happened
in the last two years in the U.S. economy, we've grown far faster than
the trend growth, and we--than
economists
normally think the economy can grow--and that is because we've used more
people. Unemployment
The one
thing that does seem to be different is
that
as wages are rising, there isn't this immediate transfer into higher inflation.
Now,
there are--that could be because of some new rules. It could also be because
there
are
a lot of temporary factors which have actually influenced. One is that
benefits have
been
rising much more slowly than they used to.
The HMO revolution has meant
that its
employers
have been able to cut costs in areas where they traditionally weren't able
to cut
costs.
Secondly, the dollar is very strong. Now, the strength of the dollar
also dampens
inflation.
Thirdly, commodity prices are weak.
They're weak in part because
of the
problems
in Asia, but they're not--those are not structural changes.
They're temporary
things
that could change, and when they change, I think we'll see the old rules
coming back into play.
Are
stocks poised to flame out?
Friday
May 8th:
08:33
U.S. UNEMPLOYMENT RATE FALLS TO 4.3%, AVERAGE HOURLY EARNINGS UP 4C IN
APRIL, NEAR CONSENSUS.
08:32
RETAIL ADDS 44,000 JOBS.
08:32
CONSTRUCTION ADDS 35,000 JOBS.
08:32
SERVICES ADD 139,000 JOBS.
08:32
10,000 FACTORY JOBS LOST IN APRIL.
08:32
AVERAGE FACTORY WORKWEEK FALLS 1.1 HOURS TO 40.7.
08:32
AVERAGE WORKWEEK FALLS 0.3 HOURS TO 34.4.
08:32
HOURLY EARNINGS RISE 4 CENTS IN APRIL OR 0.3%.
08:32
4.3% JOBLESS RATE LOWEST SINCE FEB 1970.
08:32
262,000 JOBS CREATED IN APRIL; UNEMPLOYMENT RATE FALLS TO 4.3%.
08:31
U.S. 30-YR TREASURY UP SLIGHTLY ON UNEMPLOYMENT NEWS.
08:48
US JUNE BOND FUTURE DROPS 8/32 TO 120-03 ON JOBLESS DATA.
08:48
US 30-YR TREASURY BOND DROPS 12/32 TO 102-03, YIELD AT 5.99%.
08:48
US 10-YR TREASURY BOND DROPS 5/32 TO 98+14, YIELD AT 5.71%.
08:48
US 5-YR TREASURY BOND DROPS 4/32 TO 100+13, YIELD AT 5.65%.
08:48
US 3-YR TREASURY BOND DROPS 1/32 TO 99+11, YIELD AT 5.63%.
08:48
US 2-YR TREASURY BOND DROPS 2/32 TO 100-02, YIELD AT 5.58%.
08:48
US TREASURIES GO LOWER ON APRIL JOBLESS RATE.
08:48
US 1-YR T-BILL DISCOUNT RATE UP 2 BASIS POINTS TO 5.15%.
08:48
US 6-MONTH T-BILL DISCOUNT RATE UP 3 BASIS POINTS TO 5.13%.
08:48
US 3-MONTH T-BILL DISCOUNT RATE UP 2 BASIS POINTS TO 5.00%.
08:31
U.S. UNEMPLOYMENT RATE LOWEST SINCE FEB. 1970.
08:31
UNEMPLOYMENT RATE FALLS TO 4.3%, DOWN .4 PERCENTAGE POINTS.
08:31
APRIL NON-FARM PAYROLL UP 262,000, CONSENSUS 250,000.
07:20
BRITISH POUND 1.6403 DOWN .0071, OR -0.4%.
07:20
GERMAN DMARK 1.7718 UP .0034, OR +0.2%.
07:20
JAPAN YEN 132.56 DOWN .72, OR -0.5%.
07:20
U.S. 30-YR. BOND 5.948 UP 1 17/32, OR 0.1%.
07:20
FRANCE CAC 40 3906.36 UP 41.09, OR +1.04%.
07:20
GERMAN DAX 5260.56 UP 74.33, OR +1.43%.
07:20
LONDON FT 100 5965.5 UP 18.5, OR +0.5%.
07:12
FOREIGN STOCK MARKETS MOSTLY LOWER AUSTRALIAN MARKET 2780.50 DOWN 0.3,
OR -0.01%.
Korea
down - Asia mixed - London and Germany UP, France down
To
see what we said this morning and last night, see
http://www.wiredbrain.net/short.htm
..
The
news before it happens: Unemployment drops 4.2 % and new jobs increase
260,000 - adding to worries of rate increases :
The
government on Friday is scheduled to release the monthly employment data
for April, its first major reading on how the economy performed last month.
Analysts
surveyed by Reuters expect the unemployment rate to be unchanged at 4.7
percent with 259,000 new jobs created outside the farm sector. That compares
with the March rate of a decline of 36,000.
Last
month, the Conference Board put the help-wanted advertising index, which
tracks employment growth, at 92.0 in March, unchanged from February but
well above the March 1997 rate of 87.0, showing no drop in demand for labor.
The
feeling among the skeptics is that even if the employment figure is satisfactory,
there is no guarantee that the Fed is not
going
to tighten," Metz said.
Investors
appeared little reassured by Fed Vice Chairwoman Alice Rivlin who said
that a desire to rein in a high-flying stock
market
would not be a reason by itself for the central bank to raise interest
rates.
The
Fed was not considering changing margin requirements on stock trades, Rivlin
said.
There was no big risk of inflation
taking
off, she added.
Thursday
May 7th:
Editoral:
The
tradition is that good news = bad news because rapid growth = inflation.
Starrting in Nov. good news was good news because it = higher earning. Now
with a market well over any rational P/E the growth of earning and/or changes
of 1/4 % in a minor bank rate really can't make much difference. BUT when
prices are so high any excuse is a good excuse to sell - SO good news is
bad news again and bad news is bad news -
The employment number will be
up because the GDP was growing at a very high rate ( over 4 %) Wages are
going up in areas of demand but not in semi-skilled service jobs - as it
has been since 1969.
The problem is not wage inflation but a bubble - ready
to pop - in real estate - in stock prices - yo-yo land - the President
and Congress want to be popular. A reasonable slow down will be a lot better
than a CRASH ! And now, rather than close to an election.
The clients of
the Federal Central Bank - the World Banking System - need order in a time
of some real problems - and order means being able to add to the money
supply - which you can't do without great risk during a speculative bubble.
Fed
reminds Wall Street it is still top dog
By
Pierre Belec
NEW
YORK (Reuters) - Life is good on Wall Street. Consumer confidence is
the highest in some 30 years, inflation the lowest since the 1960s and
the stock market is soaring to the moon.
But
the Federal Reserve says trouble is bubbling in the economy.
Wall
Street was again reminded this week that the Fed is still the top dog.
The
secretive Fed leaked information that it had shifted monetary policy toward
a bias, which called for higher interest rates, because of concern that
the economy's robust growth may reignite inflation.
The
hint that the cost of borrowing may go up hit the market like a ton of
bricks, sending stocks into a tailspin at the beginning of the week as
investors pushed the panic button.
The
market had been betting that the central bank would not raise interest
rates and there was even speculation that lending rates would drop before
the end of the year.
But
by week's end, the market had roared back with a vengeance on a report
that inflation was still holding at the lowest level in some 30 years,
even though the economy grew at a fast pace in the first quarter.
Is
the Fed looking at the wrong radar screen?
Some
experts believe the central bank is actually more worried about the surge
in stock prices than any underlying inflation.
"
The
stock market is too speculative, exuberant and overvalued and there's the
risk that it could lead to financial asset inflation eventually causing
real sector inflation," said Hugh Johnson, chief investment officer for
First Albany Corp.
----------
G
o to Wiredbrain's
ACTIVE-NEWS
PAGE
----------
G
o to Wiredbrain's
PAGE TWO
----------
G
o to Wiredbrain's
Current up-dates
Wednesday:
Long bond at
5.84
Talking
the market down-``People are starting to talk about deflation,'' said David
Brickman, international economist at PaineWebber. "
The Fed's worried about
the economy overheating," said Farrell. "I think the Fed would be thrilled
if the financial sector took a deep breath. I think we all should be thrilled."
Federal
Reserve officials Alice Rivlin, Laurence Meyer, and Edward Gramlich, and
Atlanta Fed president Jack Guynn are all speaking later on Wednesday.
U.S. Deputy Treasury Secretary Lawrence Summers is also speaking.
Federal
Reserve Chairman Alan Greenspan speaks at 1615 GMT on Saturday to a meeting
of state bank supervisors.
Wednesday
April 29 6:57 AM EDT
Greenspan
preserved consensus with bias
Home
| Client Access | Contact Us | Help
Market
Letter
05/26/98
The
Market Posture was downgraded to Mildly Bearish the week ending
4/10/98
(DJIA - 8994.96). Initial downside price projection for the DJIA
is
8750. CTI readings should remain negative until late May 1998.
****Check
out "ON THE EDGE" - A monthly review of the markets****
________________________________________________________________________
CURRENT
PRIOR
MARKET
TIMING MODELS READING WEEK CHG CONNOTATION
________________________________________________________________________
CYCLICAL
TREND INDEX (CTI): -4 -4 0 BEARISH
MOMENTUM
INDEX: -8 -6 -2 BEARISH
SENTIMENT
INDEX: 1 2 +1 NEUTRAL
________________________________________________________________________
DOW
JONES INDUSTRIAL AVERAGES (DJIA) CLOSE:................ 9114.44
DJIA
POINT CHANGE FROM PRIOR WEEK:......................... 18.44
DJIA
PERCENTAGE CHANGE FROM PRIOR WEEK:.................... 0.20%
MARKET
POSTURE THIS WEEK:..................................MILD BEARISH
MARKET
POSTURE PRIOR WEEK:.................................MILD BEARISH
DJIA
TARGET:............................................... 8750
TIME
FRAME TO ACHIEVE TARGET:.............................. 29-May-98
DATE
CURRENT MARKET POSTURE FORMULATED:.................... 10-Apr-98
DJIA
CLOSE ON DATE CURRENT MARKET POSTURE FORMULATED:...... 8994.96
________________________________________________________________________
CYCLICAL
TREND INDEX (CTI).......... -4 CONNOTATION
________________________________________________________________________
29-May-98
(Projected) 7 BULLISH
05-Jun-98
(Projected) 7 BULLISH
12-Jun-98
(Projected) 7 BULLISH
19-Jun-98
(Projected) 7 BULLISH
26-Jun-98
(Projected) 7 BULLISH
________________________________________________________________________
MOMENTUM
INDEX...................... -8 % CHG CONNOTATION
________________________________________________________________________
1)
DJ Transportation Average 3390.59 +1.0% BEARISH
2)
S&P 500 Index 1108.25 -0.0% BEARISH
3)
NYSE Composite Index 574.58 0.0% BEARISH
4)
Advance-Decline Line -5505 BULLISH
5)
10 Day MA Advance-Decline Line 0.80 0.0% BEARISH
6)
AMEX Index 730.57 -0.9% BEARISH
7)
NASDAQ Composite Index 1802.72 -2.4% BEARISH
8)
DJ Utilities Index 280.06 0.1% BEARISH
9)
TRIN+10 Day Average 1.04 0.0% NEUTRAL
10)
NYSE New Highs-New Lows 251+137 NEUTRAL
11)
Zweig Breadth Indicator 0.40 BEARISH
12)
McClellan Oscillator -76 NEUTRAL
13)
McClellan Summation Index 628 BULLISH
14)
Unchanged Issue Index 0.17 BEARISH
________________________________________________________________________
SENTIMENT
INDEX..................... 1 % CHG CONNOTATION
________________________________________________________________________
1)
Odd Lot Short Ratio-5 Day Ave 5.03 0.0% BEARISH
2)
NYSE Short Interest Ratio 6.32 1.1% BULLISH
3)
Public-Specialist Short Ratio 0.89 0.0% BULLISH
4)
Put/Call Ratio+10 Day Ave(INDEX) 1.12 0.0% NEUTRAL
5)
Dividend-Yield Spread 5.10 0.0% BULLISH
6)
Mutual Fund Liquid Asset Ratio 4.60 0.0% BEARISH
7)
Bullish Investment Advisors 45.5 0.0% NEUTRAL
8)
Bearish Investment Advisors 25.2 0.0% NEUTRAL
9)
Bearish + Corrections Total 54.5 0.0% NEUTRAL
Home
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Opinion | Personal Stock Watch | Trading Ideas | Pick 6 Filter | Point/Figure
Breakouts | Point/Figure Early Alerts
Special
Situations | Market Analysis | Market Letter | Stock Analysis | Industry
Group Analysis
By
Isabelle Clary
NEW
YORK (Reuters) - Federal Reserve Chairman Alan Greenspan agreed at the
March meeting of Fed policy-makers to
reintroduce
a bias toward raising interest rates, appeasing anti-inflation hawks on
the panel and preserving consensus, sources
It
is important to remember that the major FED activity is NOT the federal
funds or discount rate but open market selling of bonds and repos to withdraw
liquid assets and increase reserves in the banking systems.
The bias gives
direction to day to day market activity which has more effect than the
discount rate changes. Real rates are below the 5.5 % target.
08:45
US 3-MONTH T-BILL DISCOUNT RATE DROPS 2 BASIS POINTS TO 4.90%.
08:44
US 6-MONTH T-BILL DISCOUNT RATE DROPS 1 BASIS POINT TO 5.09%.
The
effective discount rate ( the price of money to banks ) is LIBOR MAY98
94.32 London Inter bank loan rate at 5.68 % sets other bank loan rates
- the short term rate set by EURO $ JUN98 94.225 = 5.775 % is over the
target of 5.5 % and going up. So bias does matter more than the actual
official change is a minor rate - the federal funds ( over night ) discount
rate.
The cost of money is going up which might slow certain types of interest
sensitive economic activity. It is not that the fed does nothing but wait
and have meeting - but is very active every day in the market.
Dollar/mark
was unlikely to show major movement ahead of the weekend meetings of European
Union officials to decide the
countries
which will join the single currency from 1999, but the mark might receive
a boost subsequently, analysts said.
On
the foreign exchanges, the dollar was slightly firmer but trading was range-bound
partly because of a holiday in Japan and
as
the markets awaited a batch of speeches from central bank and finance officials.
---------------------------------------------------------------
MARKET
PRICES AT 1101 GMT
Mark
1.7972/77 Yen 132.18/28 Sterling 1.6686/96
Gold
$307.50/7.90 -0.75 (pvs PM fix) Brent $14.61 +0.01
FTSE
100 5818.0 +11.4 CAC 3756.49 -20.74 X-DAX 5125.71 +14.83
---------------------------------------------------------------
By
mid-session, London's blue-chip FTSE 100 index was 0.4 percent firmer,
rescued by bargain-hunters from earlier losses
and
Germany's Xetra DAX was up 0.4 percent.
The
Belgian, Dutch, Greek and Swiss markets were also amongst the gainers but
French, Italian and Spanish bourses were in
the
red, pausing for breath after Tuesday's gains amid nerves over Wall Street
and confusion over U.S. rates.
Friday
May 1, 10:50 am Eastern Time
US
Treasuries slip on talk Fed checks forex rates:
The
basics:
A
too fast growth rate, gives too much money in the system, plus the Asia
thing causes lower exports, higher inports, pressure on the dollar which
is falling.
A
listing of the main NAPM components follows:
April
March Feb Jan Dec Nov Oct Sept Aug
PMI
52.9 54.8 53.3 52.4 53.1 54.5 55.9 54.6 56.4
Production
53.4 57.6 55.3 53.3 55.8 58.5 59.6 58.4 61.2
New
Orders 56.8 57.3 55.9 55.2 53.9 55.1 58.4 56.1 60.4
Supplier
Del 52.3 53.4 52.1 52.0 54.0 55.2 55.0 55.5 55.6
Inventories
46.6 46.8 46.9 46.7 46.5 44.3 47.0 46.2 43.4
Employment
49.8 52.5 50.9 50.1 50.9 53.3 52.5 51.1 51.6
Prices
41.2 44.4 45.8 44.7 50.8 53.2 55.5 54.1 53.4
Export
Orders 49.7 48.0 47.9 45.0 50.6 52.6 51.9 51.2 55.1
Imports
56.3 53.4 51.2 53.9 55.4 52.6 51.7 53.1 53.9
US
Treasuries off post-NAPM highs in forex intervention fear. *Mkt talk Fed
checking forex rates, but Fed says ``no comment.'' *Impact greatest in
bills, 3-mo rates jump 5 bps in 45 mins. *Long end outperforming but off
highs, profit-taking seen. *Traders report foreign central bank selling.
Thursday
April 30, 8:56 am Eastern Time
U.S.
economy accelerated in Q1, inflation mute
Thursday
April 30, 8:56 am Eastern Time
WASHINGTON,
April 30 (Reuters) -
The U.S. economy unexpectedly picked up speed in the
first quarter of 1998, surging ahead at a brisk 4.2 percent annual rate
on booming consumer spending while inflation remained at its most muted
levels in 35 years, the Commerce Department said on Thursday.
It
was the sixth straight quarter in which Gross Domestic Product advanced
at an annual rate of 3 percent or more - well above the 2+1/4 percent target
range the Federal Reserve considers can be safely sustained without risking
a flareup in inflation pressures. First-quarter GDP growth handily outstripped
Wall Street economists' forecasts for a 3.3 percent rate of expansion as
it accelerated from last year's fourth-quarter 3.7 percent pace instead
of slowing.
A
chorus of U.S. central bank governors has warned recently that the economy
needs to soon show convincing evidence of a slowdown, unnerving financial
markets after reports the Fed has shifted to a position of increased willingness
to raise interest rates. Policymakers' concern that Asia's economic woes
were not enough to offset buoyant domestic demand appeared to be supported
by the first-quarter GDP report.
DOWN 40 or 50
to 1050
If
the news is "good", rapid growth that's "bad" because it implies inflation
and higher money costs. If the news is "bad", lower growth and earning
that's good- maybe. Labor costs are going to be higher but how high is
high ?
The chances are 2/3 down, 1/3 up - but the reactions to economic
news are not always what is expected.
Thursday:
April 30th
``If
the U.S. economic data are strong, fears of a rate rise will return, suggesting
dollar upside,'' said Sally Wilkinson, senior
economist
at Daiwa Europe in London.
--------------------------------------------------------------
MARKET
PRICES AT 0905 GMT
Mark
1.7937/42 Yen 132.05/15 Sterling 1.6686/96
Gold
$310.90/1.30 +2.65 (pvs PM fix) Brent $14.39 +0.14
FTSE
100 5843.7 +10.6 CAC 3746.61 +12.68 X-DAX 5101.43 +17.63
---------------------------------------------------------------
U.S.
Federal Reserve chairman Alan Greenspan is known to consider ECI figures
as an important indicator of inflationary
pressures
building in a robust U.S. economy.
Thursday
April 30, 4:14 am Eastern Time
Wall
St bubble risk looms,
but is Asia to blame?
By
Yoshiko Mori
TOKYO,
April 30 (Reuters) -
The U.S. stock market is being poisoned by a ``classic
bubble'' and the risk is looming of a
downward
correction of 10 to 20 percent, economists in Tokyo say.
``
The
current state of Wall Street is similar to what happened in Tokyo in 1987
when it was already apparent that the asset
market
bubbles were getting out of hand,'' said Richard Werner, Tokyo-based chief
economist and managing director of Profit Research Centre Ltd.
Excessive
capital created by the U.S. banking system and the Federal Reserve has
been the major cause of recent Wall Street
gains,
Werner said.
Excessive
credit creation is spurring financial and real estate transactions which
are pushing up asset prices -- ``the classic
bubble,''
Werner said.
Economists
said credit creation through loans by the U.S. banking system is expanding
at around 10 percent year-on-year, the highest growth rate since the 1980s.
``If
the U.S. economic data are strong, fears of a rate rise will return, suggesting
dollar upside,'' said Sally Wilkinson, senior
economist
at Daiwa Europe in London.
First
quarter U.S. employment cost index is expected to rise 0.9 percent from
one percent in the previous quarter.
An
advance estimate of quarter one U.S. gross domestic product is also expected
at 1230 GMT.
At
0835 GMT the dollar was at 1.7921/26 marks and 131.93/03 yen
Con't
on
News
and analysis GO TO
Money pages first
forecast.htm,
then
conditions.htm
Main page Flash.htm
----------
G
o to Wiredbrain's
ACTIVE-NEWS
PAGE
----------
Con't on money
PAGE TWO
----------
G
o to Wiredbrain's
Current up-dates
Bottom
Line:
Krugmann:
"
The Fed doesn't formally care about anything in particular. That way
you can't pin them
They are very concerned that we have a bubble economy, which is different
in detail, but the same general position as Japan before the big crash.
If they could figure out some way to deflate the bubble gently, they would."
betting
on backloaded earnings growth this year.I wouldn't bet on it
) These
forecasts may= WILL change over the coming months as more companies discuss
earnings with analysts, First Call said.
This
looks like a organized attempt to talk the market down:
You
don't have to shoot the charging bull between the eyes to try to slow it
down. You can use a number of less radical techniques to try to slow down
the ragging bull. You wave red flags, then the picadors poke at it, then
if all else fails you draw on more powerful weapons for the coup de grace'.
The
Fed won’t release this “directive,” crafted at the
The
Fed won’t release this “directive,” crafted at the
end
of each committee meeting, until May 21.
The primary
The primary
significance
of the directive is to signal financial markets
which
way the Fed is leaning.
Officials
say Asia seems to be stabilizing, and
domestic
economic vigor appears to be offsetting the ill
effects
of Asian woes on U.S. exports. First-quarter
consumer
spending and housing construction was strong,
and
the economy appears to be awash in credit. So, in
public
speeches and interviews, Fed officials are beginning
to
prepare markets for a Fed move to brake the
economy-unless
it slows on its own soon.
The
Fed has been expecting a slowdown for months,
but
it hasn’t materialized. Most forecasters say the
economy
expanded at an annual rate of between 3% and
3.5%
in the first quarter, which would be the sixth quarter
of
better-than-3% growth.
Worries
about destabilizing fragile Asian financial markets could delay a Fed move,
but
some
Fed officials privately acknowledge that they would sleep better if the
stock market were less ebullient. Indeed, a decline in stock prices would
tend to slow the economy, which is precisely what the Fed would like to
see.
WSJ
WSJ
Magic,
Science, the market, financial reporting and Beliefs systems such as Futures,
values, prices, rates and other Religions
(1948)
by Malinowski, Bronislaw
The
principle dialectic of the modern world is the dualism of science and magic.
The conflict starts with Newton who spent most of his life at numerical
alchemy.
The conflict starts with Newton who spent most of his life at numerical
alchemy.
In
a seminal article Malinowski suggests that "primitive" people use science
to control events they understand and can do something about, and magic
for forces of nature that are out of control.
They are very resonable about
fishing, farming, hunting and warfare when they find a pattern in events
- but magical thinking takes over when events seem out of control such
as storms, earthquakes, plagues, and other unexpected traumas.
Maclay,
Kubary, Malinowski: Archetypes from the Dreamtime of
Anthropology
The
dreamtime is explained in the "Last Wave" a film by Peter Weir - as a reality
that exists beyond the day to day that gives values, meaning to the "Law"
or customs of a people. In this way it is the origin of religion, which
the age of reason called a "superstition ".
Malinowski,
Bronislaw Kasper (1884+1942), British anthropologist,
regarded
as the founder of the "functional" school of anthropology,
which
maintains that human institutions should be examined in the
context
of the culture as a whole. He was born in Kraków, Poland. In
1914
he took part in an expedition to New Guinea and Melanesia and
spent
the next four years studying the peoples of the Trobriand Islands
of
the southwest Pacific. Malinowski became professor of social
anthropology
at the University of London in 1927. His further research
took
him to Africa, Latin America, and parts of the United States.
LAST
WEEK IN REVIEW:
For
historical interest, the market will look at the minutes of the March 31
U.S. Federal Open Market Committee meeting to be released on Thursday.
According
to Treasury Department data, foreigners owned 38 percent of the $3.4 trillion
in outstanding Treasury
debt
at the end of August. The Japanese owned 25 percent of the foreign-held
debt, followed by Great Britain,
20
percent, and Germany, 6 percent.Japanese
officials played down speculation this week of another wave of Treasury
securities selling to finance
a
$77 billion bailout of Japan's banking system.In
addition to capital flows, Wednesday's Commerce Department release reported
the broadest measure of
U.S.
foreign trade, known as the current account. It shot up 11.4 percent to
$42.2 billion in the third quarter, the
The
current account measures not only trade in goods and services but also
the flow of investment income
between
countries and foreign aid.08:44
US JUNE BOND FUTURE UP 13/32 TO 120-27.
08:44
US 30-YR TREASURY BOND UP 13/32 TO 103-02, YIELD AT 5.90%.
Thursday
May 21, 7:07 am Eastern Time
Markets
in France, Germany and parts of continental Europe were closed for Ascension
Day, reopening on Friday. Countries which operated normally reported lower-than-normal
volume.
---------------------------------------------------------------
MARKET
PRICES AT 1100 GMT
Mark
1.7646/51 Yen 135.19/29 Sterling 1.6270/80
Gold
$300.00/0.40 +0.59 (pvs PM fix) Brent $13.87 +0.15
FTSE
100 5968.9 +61.5
---------------------------------------------------------------
Benchmarks:
London
6,100 record high, Paris 4025* high, Frankfort 5,450 * high
The
UK's FTSE 100 index was up more than one pct as world markets celebrated
the Asian rally after Suharto quit and a late sprint by the Dow to close
116.83 points, or 1.3 percent, higher on Wednesday.
Sterling
had hit a seven-month low of 2.8763/73 against the mark from 2.8893/98
late Wednesday, after Bank of England Monetary Policy Committee member
Willem Buiter said the British economy is slowing and will slow further.
Some
dealers in U.S. stocks said minutes of the March 31 interest-rate setting
Federal Open Market Committee (FOMC) policy meeting, due for release at
1800 GMT, would be keenly awaited.
LONDON,
May 19 (Reuters) - European shares closed with steep gains on Tuesday,
lifted by a Wall Street rally and growing optimism that U.S. interest rates
would not be increased later in the day.
In
currencies, the yen lifted itself gingerly from its 6+1/2 year low against
the dollar after Indonesian President Suharto pledged to hold elections,
causing tentative rebounds in southeast Asian markets.
---------------------------------------------------------------
MARKET
PRICES AT 1550 GMT
Mark
1.7848/58 Yen 136.18/28
Sterling 1.6230/40
Gold
$300.00/0.50 -0.05 (pvs PM fix) Brent $14.47 +0.01
FTSE
100 5877.8 +51.6 CAC 3980.84 +35.53 X-DAX
5441.00 +97.34
---------------------------------------------------------------
THE NEXT
STEP FORWARD
Where
we go from here !
A few years
ago we talked about the potential of the internet -
Doc1
to Doc5
Then we
talked about the impact on the
social -
political
-
economic and general
future
social -
political
-
economic and general
future
economic and general
future
Then we
talked about how the technology will develop
packets.htm
packets.htm
We talked
about the
network computer and how the information
utility will take shape.
Now what's
next ?
One way
or another - enough bandwidth will be provided to inexpensive and tough
enough boxes so that all the hard complex stuff will be pushed upstream
and voice, video, data and new applications can work the channels to provide
news, entertainment, communications, commerce in dramatically different
ways.
The big
question is how and by whom ?
The big
question is how and by whom ?
By
John Sidgmore
May
5, 1998 - John Sidgmore
outlines
his vision for the
future
of global
telecommunication
in this
NetWorld+Interop
Keynote
speech
Global
tele-communications utilities linked by satellites, then ground stations,
then optic wires, cables, broad band, wide band, (A)DSL - a global backbone
providing service to all of humanity - with solar charged instruments from
anywhere to anywhere.
The first world has a billion ready clients,
the global market place has a million firms ready to go, the second and
third world can add a 100 million new clients a year and a million new
firms, local governments, missions and schools, gaming centers and market
players as fast as the bandwidth and prices allow.
The global requirements
are different from America and the European community. While part of the
world is wired - much of the world is not.
The global requirements
are different from America and the European community. While part of the
world is wired - much of the world is not.
The Global
communications network must be based on wire-less standards - that will
work on wires but do not require them.
NOTICE:
SOUTHWINDNET = http://www.highspeedhosting.com/newsite/message.cfm
The
digital communications age has arrived. Still a little expensive - but
if the price - quality relationships hold - high speed connections should
be quite cheap in a year or so.
Then local NODES can provide high speed
wireless connections for EVERYTHING - internet with telephone, video and
real time data bases, BYE-BYE to MA bell, cable companies, TV networks
- as we know them.
The REAL impact will be all the way to China - the billions
- the majority of people on this planet who have almost no two-way telecommunications
- they can make the great leap forward...
Then local NODES can provide high speed
wireless connections for EVERYTHING - internet with telephone, video and
real time data bases, BYE-BYE to MA bell, cable companies, TV networks
- as we know them.
The REAL impact will be all the way to China - the billions
- the majority of people on this planet who have almost no two-way telecommunications
- they can make the great leap forward...
The
site is in the process of upgrading service to
ViperLink.
VMC Virtual Marketing Corporation
ViperLink.
VMC Virtual Marketing Corporation
The
ViperLink system uses a wireless access system to connect to an ATM
(
Asynchronous Transfer Mode (ATM) ATM is a packet switched technology capable
of carrying
voice,
video & data.)
backbone
at an astounding 90Mbps! Our Kentucky office has a full 2.0Mbps
(30%
bigger than a T+1) dedicated connection that is burstable to 6.0 Mbps (4
full
T+1s) if needed. If at any time, our web sites need additional bandwidth
–
they’ve
got it! Never again will there be a problem with not
having enough
bandwidth.
Ask how many providers can make that claim!
SAN
JOSE, Calif.--(BUSINESS WIRE)--May 11, 1998--
Verilink
Corp. (NASDAQ:VRLK - news) today announced that
Splitrock
Services, Inc., the U.S.-based provider of Internet access to Prodigy customers,
has selected Verilink to provideRamblings:
The doors to creative thinking and doing are in the narrow
places between large structures.
The
empires of the world and the mind dominate the landscape.
Vast historic structures obscure the
view of the horizon and our real location. Down narrow
lanes and in far fields we sometimes can
gain images that glimmer with reflections of a pale light,
far off.
Where theses narrow lanes and far field meet are the focal
points of new creations.
There is a container, connected to nodes, connected to
networks, creating a info-sphere of billions
living reproducing pathways and elements.
The bio-sphere
began and is still largely made up of
micro-organisms that share genetic information through
networks of co-option, cooperation and
communication that become organic wholes from simpler
to complex. Cells take in parts from
elsewhere and collect abilities of different genes.
The
biological and infomation packets are
coming together on a global scale.
One element basic to global networks are standards.
The
critical standard is digital information
which can be understood and act upon by all the other
members of the community.
The
information utility will operate on a common operational
language - such as HTTP, FTP, Java,
that will co=option functions from different places,
in words, pictures, sounds and video.
The
Microsoft issue is their desire to make MS-OS/ active
X the universal language for all future global
networks, software, operations, communications and services.
Netscape’s inter-operation open
arch-culture has a somewhat different vision of inter
and intra operability.
The global scope of
mega networks makes Microsoft’s vision unlikely but not
impossible.
Their moves into
communications, cable, satellites, broadcasting and services
should be taken as very important but
not as a given. Without outside intervention or meaningful
competition they could set NT/active X
type systems as the standard for most if not all inter-net
communications.
Gates to everone - "Look upon my works ye humble of the
earth and give
up."
But all empires lack vision and ability to change.
It’s not hardware, it’s not software, but it is service-ware.
Companies that
don’t sell machines or programs but universal services.
Sign-up and we
give you the container, the link, and all the services
you can think of and
many that you haven’t though of yet.
I soon will be able to pull down the word processing "service"
tied to voice and video "services". I
will be able to pull down interactive forms "service",
a search service, marketing services,
shopping service, broadcast and narrow cast services,
product design and production services,
travel, insurance, investment and banking services designed
and distributed by other services .
All these services we now called companies, producers,
distributors, stores and markets become
part of the services network.
The telephone company (
tele - sounds )is a service: television ( tele -
pictures ) networks and stations are service including
broadcast ( send sound and picture over a
wide area ): computers are not a machine or thing but
provide systems capacity to do something,
assign traits and store information and programs ( software
to help machines - do stuff ). All these
THINGS are becoming parts of a system of service with
nodes and terminals.
The core of the global service system is the operational
codes and languages. Everyone has to
understand ever one else and terminals need to talk to
nodes and servers need to communicate
with servers in common coded packets moving a mega-speeds
back and fourth.
These codes and
languages are extensions of Hyper Text Transfer Protocol
, ftp ( file transfer ) and operations such
as Java.
Saturday
May 9 8:05 AM EDT
ZANNY
MINTON BEDDOES: When we talk about a bubble, we talk about rising
fundamentals
would warrant, and they're going up because of some kind of speculative
frenzy,
to use a phrase, again, that Chairman Greenspan used, some kind of irrational
exuberance.
We're all feeling good. We're buying shares. Prices are going up not because
of
fundamental changes or not only because of fundamental changes, more because
there's
a kind of frenzied buying.
And
that's what we mean by a bubble, and we worry about it for two reasons.
We worry about it because
bubbles
tend to burst. Financial markets have had bubbles ever since finance started.
But the problem is that they
The other
problem is that if they--if
the
bubble continues, then this kind of inflation in asset prices--because
that's really what it is--can spill over into
ZANNY
MINTON BEDDOES: Well, I agree that there have been changes in the world
economy, and there
have
been changes in the U.S. economy.
The question is how big have these changes
been and do they justify
today's
prices, and I think one argument that is frequently made by the people
who believe in this new economy or
happened
in the last two years in the U.S. economy, we've grown far faster than
the trend growth, and we--than
economists
normally think the economy can grow--and that is because we've used more
people. Unemployment
The one
thing that does seem to be different is
that
as wages are rising, there isn't this immediate transfer into higher inflation.
Now,
there are--that could be because of some new rules. It could also be because
there
are
a lot of temporary factors which have actually influenced. One is that
benefits have
been
rising much more slowly than they used to.
The HMO revolution has meant
that its
employers
have been able to cut costs in areas where they traditionally weren't able
to cut
costs.
Secondly, the dollar is very strong. Now, the strength of the dollar
also dampens
inflation.
Thirdly, commodity prices are weak.
They're weak in part because
of the
problems
in Asia, but they're not--those are not structural changes.
They're temporary
things
that could change, and when they change, I think we'll see the old rules
coming back into play.
Are
stocks poised to flame out?
Friday
May 8th:
08:33
U.S. UNEMPLOYMENT RATE FALLS TO 4.3%, AVERAGE HOURLY EARNINGS UP 4C IN
APRIL, NEAR CONSENSUS.
08:32
RETAIL ADDS 44,000 JOBS.
08:32
CONSTRUCTION ADDS 35,000 JOBS.
08:32
SERVICES ADD 139,000 JOBS.
08:32
10,000 FACTORY JOBS LOST IN APRIL.
08:32
AVERAGE FACTORY WORKWEEK FALLS 1.1 HOURS TO 40.7.
08:32
AVERAGE WORKWEEK FALLS 0.3 HOURS TO 34.4.
08:32
HOURLY EARNINGS RISE 4 CENTS IN APRIL OR 0.3%.
08:32
4.3% JOBLESS RATE LOWEST SINCE FEB 1970.
08:32
262,000 JOBS CREATED IN APRIL; UNEMPLOYMENT RATE FALLS TO 4.3%.
08:31
U.S. 30-YR TREASURY UP SLIGHTLY ON UNEMPLOYMENT NEWS.
08:48
US JUNE BOND FUTURE DROPS 8/32 TO 120-03 ON JOBLESS DATA.
08:48
US 30-YR TREASURY BOND DROPS 12/32 TO 102-03, YIELD AT 5.99%.
08:48
US 10-YR TREASURY BOND DROPS 5/32 TO 98+14, YIELD AT 5.71%.
08:48
US 5-YR TREASURY BOND DROPS 4/32 TO 100+13, YIELD AT 5.65%.
08:48
US 3-YR TREASURY BOND DROPS 1/32 TO 99+11, YIELD AT 5.63%.
08:48
US 2-YR TREASURY BOND DROPS 2/32 TO 100-02, YIELD AT 5.58%.
08:48
US TREASURIES GO LOWER ON APRIL JOBLESS RATE.
08:48
US 1-YR T-BILL DISCOUNT RATE UP 2 BASIS POINTS TO 5.15%.
08:48
US 6-MONTH T-BILL DISCOUNT RATE UP 3 BASIS POINTS TO 5.13%.
08:48
US 3-MONTH T-BILL DISCOUNT RATE UP 2 BASIS POINTS TO 5.00%.
08:31
U.S. UNEMPLOYMENT RATE LOWEST SINCE FEB. 1970.
08:31
UNEMPLOYMENT RATE FALLS TO 4.3%, DOWN .4 PERCENTAGE POINTS.
08:31
APRIL NON-FARM PAYROLL UP 262,000, CONSENSUS 250,000.
07:20
BRITISH POUND 1.6403 DOWN .0071, OR -0.4%.
07:20
GERMAN DMARK 1.7718 UP .0034, OR +0.2%.
07:20
JAPAN YEN 132.56 DOWN .72, OR -0.5%.
07:20
U.S. 30-YR. BOND 5.948 UP 1 17/32, OR 0.1%.
07:20
FRANCE CAC 40 3906.36 UP 41.09, OR +1.04%.
07:20
GERMAN DAX 5260.56 UP 74.33, OR +1.43%.
07:20
LONDON FT 100 5965.5 UP 18.5, OR +0.5%.
07:12
FOREIGN STOCK MARKETS MOSTLY LOWER AUSTRALIAN MARKET 2780.50 DOWN 0.3,
OR -0.01%.
Korea
down - Asia mixed - London and Germany UP, France down
To
see what we said this morning and last night, see
http://www.wiredbrain.net/short.htm
..
The
news before it happens: Unemployment drops 4.2 % and new jobs increase
260,000 - adding to worries of rate increases :
The
government on Friday is scheduled to release the monthly employment data
for April, its first major reading on how the economy performed last month.
Analysts
surveyed by Reuters expect the unemployment rate to be unchanged at 4.7
percent with 259,000 new jobs created outside the farm sector. That compares
with the March rate of a decline of 36,000.
Last
month, the Conference Board put the help-wanted advertising index, which
tracks employment growth, at 92.0 in March, unchanged from February but
well above the March 1997 rate of 87.0, showing no drop in demand for labor.
The
feeling among the skeptics is that even if the employment figure is satisfactory,
there is no guarantee that the Fed is not
going
to tighten," Metz said.
Investors
appeared little reassured by Fed Vice Chairwoman Alice Rivlin who said
that a desire to rein in a high-flying stock
market
would not be a reason by itself for the central bank to raise interest
rates.
The
Fed was not considering changing margin requirements on stock trades, Rivlin
said.
There was no big risk of inflation
taking
off, she added.
Thursday
May 7th:
Editoral:
The
tradition is that good news = bad news because rapid growth = inflation.
Starrting in Nov. good news was good news because it = higher earning. Now
with a market well over any rational P/E the growth of earning and/or changes
of 1/4 % in a minor bank rate really can't make much difference. BUT when
prices are so high any excuse is a good excuse to sell - SO good news is
bad news again and bad news is bad news -
The employment number will be
up because the GDP was growing at a very high rate ( over 4 %) Wages are
going up in areas of demand but not in semi-skilled service jobs - as it
has been since 1969.
The problem is not wage inflation but a bubble - ready
to pop - in real estate - in stock prices - yo-yo land - the President
and Congress want to be popular. A reasonable slow down will be a lot better
than a CRASH ! And now, rather than close to an election.
The clients of
the Federal Central Bank - the World Banking System - need order in a time
of some real problems - and order means being able to add to the money
supply - which you can't do without great risk during a speculative bubble.
Fed
reminds Wall Street it is still top dog
By
Pierre Belec
NEW
YORK (Reuters) - Life is good on Wall Street. Consumer confidence is
the highest in some 30 years, inflation the lowest since the 1960s and
the stock market is soaring to the moon.
But
the Federal Reserve says trouble is bubbling in the economy.
Wall
Street was again reminded this week that the Fed is still the top dog.
The
secretive Fed leaked information that it had shifted monetary policy toward
a bias, which called for higher interest rates, because of concern that
the economy's robust growth may reignite inflation.
The
hint that the cost of borrowing may go up hit the market like a ton of
bricks, sending stocks into a tailspin at the beginning of the week as
investors pushed the panic button.
The
market had been betting that the central bank would not raise interest
rates and there was even speculation that lending rates would drop before
the end of the year.
But
by week's end, the market had roared back with a vengeance on a report
that inflation was still holding at the lowest level in some 30 years,
even though the economy grew at a fast pace in the first quarter.
Is
the Fed looking at the wrong radar screen?
Some
experts believe the central bank is actually more worried about the surge
in stock prices than any underlying inflation.
"
The
stock market is too speculative, exuberant and overvalued and there's the
risk that it could lead to financial asset inflation eventually causing
real sector inflation," said Hugh Johnson, chief investment officer for
First Albany Corp.
----------
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ACTIVE-NEWS
PAGE
----------
G
o to Wiredbrain's
PAGE TWO
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o to Wiredbrain's
Current up-dates
Wednesday:
Long bond at
5.84
Talking
the market down-``People are starting to talk about deflation,'' said David
Brickman, international economist at PaineWebber. "
The Fed's worried about
the economy overheating," said Farrell. "I think the Fed would be thrilled
if the financial sector took a deep breath. I think we all should be thrilled."
Federal
Reserve officials Alice Rivlin, Laurence Meyer, and Edward Gramlich, and
Atlanta Fed president Jack Guynn are all speaking later on Wednesday.
U.S. Deputy Treasury Secretary Lawrence Summers is also speaking.
Federal
Reserve Chairman Alan Greenspan speaks at 1615 GMT on Saturday to a meeting
of state bank supervisors.
Wednesday
April 29 6:57 AM EDT
Greenspan
preserved consensus with bias
Home
| Client Access | Contact Us | Help
Market
Letter
05/26/98
The
Market Posture was downgraded to Mildly Bearish the week ending
4/10/98
(DJIA - 8994.96). Initial downside price projection for the DJIA
is
8750. CTI readings should remain negative until late May 1998.
****Check
out "ON THE EDGE" - A monthly review of the markets****
________________________________________________________________________
CURRENT
PRIOR
MARKET
TIMING MODELS READING WEEK CHG CONNOTATION
________________________________________________________________________
CYCLICAL
TREND INDEX (CTI): -4 -4 0 BEARISH
MOMENTUM
INDEX: -8 -6 -2 BEARISH
SENTIMENT
INDEX: 1 2 +1 NEUTRAL
________________________________________________________________________
DOW
JONES INDUSTRIAL AVERAGES (DJIA) CLOSE:................ 9114.44
DJIA
POINT CHANGE FROM PRIOR WEEK:......................... 18.44
DJIA
PERCENTAGE CHANGE FROM PRIOR WEEK:.................... 0.20%
MARKET
POSTURE THIS WEEK:..................................MILD BEARISH
MARKET
POSTURE PRIOR WEEK:.................................MILD BEARISH
DJIA
TARGET:............................................... 8750
TIME
FRAME TO ACHIEVE TARGET:.............................. 29-May-98
DATE
CURRENT MARKET POSTURE FORMULATED:.................... 10-Apr-98
DJIA
CLOSE ON DATE CURRENT MARKET POSTURE FORMULATED:...... 8994.96
________________________________________________________________________
CYCLICAL
TREND INDEX (CTI).......... -4 CONNOTATION
________________________________________________________________________
29-May-98
(Projected) 7 BULLISH
05-Jun-98
(Projected) 7 BULLISH
12-Jun-98
(Projected) 7 BULLISH
19-Jun-98
(Projected) 7 BULLISH
26-Jun-98
(Projected) 7 BULLISH
________________________________________________________________________
MOMENTUM
INDEX...................... -8 % CHG CONNOTATION
________________________________________________________________________
1)
DJ Transportation Average 3390.59 +1.0% BEARISH
2)
S&P 500 Index 1108.25 -0.0% BEARISH
3)
NYSE Composite Index 574.58 0.0% BEARISH
4)
Advance-Decline Line -5505 BULLISH
5)
10 Day MA Advance-Decline Line 0.80 0.0% BEARISH
6)
AMEX Index 730.57 -0.9% BEARISH
7)
NASDAQ Composite Index 1802.72 -2.4% BEARISH
8)
DJ Utilities Index 280.06 0.1% BEARISH
9)
TRIN+10 Day Average 1.04 0.0% NEUTRAL
10)
NYSE New Highs-New Lows 251+137 NEUTRAL
11)
Zweig Breadth Indicator 0.40 BEARISH
12)
McClellan Oscillator -76 NEUTRAL
13)
McClellan Summation Index 628 BULLISH
14)
Unchanged Issue Index 0.17 BEARISH
________________________________________________________________________
SENTIMENT
INDEX..................... 1 % CHG CONNOTATION
________________________________________________________________________
1)
Odd Lot Short Ratio-5 Day Ave 5.03 0.0% BEARISH
2)
NYSE Short Interest Ratio 6.32 1.1% BULLISH
3)
Public-Specialist Short Ratio 0.89 0.0% BULLISH
4)
Put/Call Ratio+10 Day Ave(INDEX) 1.12 0.0% NEUTRAL
5)
Dividend-Yield Spread 5.10 0.0% BULLISH
6)
Mutual Fund Liquid Asset Ratio 4.60 0.0% BEARISH
7)
Bullish Investment Advisors 45.5 0.0% NEUTRAL
8)
Bearish Investment Advisors 25.2 0.0% NEUTRAL
9)
Bearish + Corrections Total 54.5 0.0% NEUTRAL
Home
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Second
Opinion | Personal Stock Watch | Trading Ideas | Pick 6 Filter | Point/Figure
Breakouts | Point/Figure Early Alerts
Special
Situations | Market Analysis | Market Letter | Stock Analysis | Industry
Group Analysis
By
Isabelle Clary
NEW
YORK (Reuters) - Federal Reserve Chairman Alan Greenspan agreed at the
March meeting of Fed policy-makers to
reintroduce
a bias toward raising interest rates, appeasing anti-inflation hawks on
the panel and preserving consensus, sources
It
is important to remember that the major FED activity is NOT the federal
funds or discount rate but open market selling of bonds and repos to withdraw
liquid assets and increase reserves in the banking systems.
The bias gives
direction to day to day market activity which has more effect than the
discount rate changes. Real rates are below the 5.5 % target.
08:45
US 3-MONTH T-BILL DISCOUNT RATE DROPS 2 BASIS POINTS TO 4.90%.
08:44
US 6-MONTH T-BILL DISCOUNT RATE DROPS 1 BASIS POINT TO 5.09%.
The
effective discount rate ( the price of money to banks ) is LIBOR MAY98
94.32 London Inter bank loan rate at 5.68 % sets other bank loan rates
- the short term rate set by EURO $ JUN98 94.225 = 5.775 % is over the
target of 5.5 % and going up. So bias does matter more than the actual
official change is a minor rate - the federal funds ( over night ) discount
rate.
The cost of money is going up which might slow certain types of interest
sensitive economic activity. It is not that the fed does nothing but wait
and have meeting - but is very active every day in the market.
Dollar/mark
was unlikely to show major movement ahead of the weekend meetings of European
Union officials to decide the
countries
which will join the single currency from 1999, but the mark might receive
a boost subsequently, analysts said.
On
the foreign exchanges, the dollar was slightly firmer but trading was range-bound
partly because of a holiday in Japan and
as
the markets awaited a batch of speeches from central bank and finance officials.
---------------------------------------------------------------
MARKET
PRICES AT 1101 GMT
Mark
1.7972/77 Yen 132.18/28 Sterling 1.6686/96
Gold
$307.50/7.90 -0.75 (pvs PM fix) Brent $14.61 +0.01
FTSE
100 5818.0 +11.4 CAC 3756.49 -20.74 X-DAX 5125.71 +14.83
---------------------------------------------------------------
By
mid-session, London's blue-chip FTSE 100 index was 0.4 percent firmer,
rescued by bargain-hunters from earlier losses
and
Germany's Xetra DAX was up 0.4 percent.
The
Belgian, Dutch, Greek and Swiss markets were also amongst the gainers but
French, Italian and Spanish bourses were in
the
red, pausing for breath after Tuesday's gains amid nerves over Wall Street
and confusion over U.S. rates.
Friday
May 1, 10:50 am Eastern Time
US
Treasuries slip on talk Fed checks forex rates:
The
basics:
A
too fast growth rate, gives too much money in the system, plus the Asia
thing causes lower exports, higher inports, pressure on the dollar which
is falling.
A
listing of the main NAPM components follows:
April
March Feb Jan Dec Nov Oct Sept Aug
PMI
52.9 54.8 53.3 52.4 53.1 54.5 55.9 54.6 56.4
Production
53.4 57.6 55.3 53.3 55.8 58.5 59.6 58.4 61.2
New
Orders 56.8 57.3 55.9 55.2 53.9 55.1 58.4 56.1 60.4
Supplier
Del 52.3 53.4 52.1 52.0 54.0 55.2 55.0 55.5 55.6
Inventories
46.6 46.8 46.9 46.7 46.5 44.3 47.0 46.2 43.4
Employment
49.8 52.5 50.9 50.1 50.9 53.3 52.5 51.1 51.6
Prices
41.2 44.4 45.8 44.7 50.8 53.2 55.5 54.1 53.4
Export
Orders 49.7 48.0 47.9 45.0 50.6 52.6 51.9 51.2 55.1
Imports
56.3 53.4 51.2 53.9 55.4 52.6 51.7 53.1 53.9
US
Treasuries off post-NAPM highs in forex intervention fear. *Mkt talk Fed
checking forex rates, but Fed says ``no comment.'' *Impact greatest in
bills, 3-mo rates jump 5 bps in 45 mins. *Long end outperforming but off
highs, profit-taking seen. *Traders report foreign central bank selling.
Thursday
April 30, 8:56 am Eastern Time
U.S.
economy accelerated in Q1, inflation mute
Thursday
April 30, 8:56 am Eastern Time
WASHINGTON,
April 30 (Reuters) -
The U.S. economy unexpectedly picked up speed in the
first quarter of 1998, surging ahead at a brisk 4.2 percent annual rate
on booming consumer spending while inflation remained at its most muted
levels in 35 years, the Commerce Department said on Thursday.
It
was the sixth straight quarter in which Gross Domestic Product advanced
at an annual rate of 3 percent or more - well above the 2+1/4 percent target
range the Federal Reserve considers can be safely sustained without risking
a flareup in inflation pressures. First-quarter GDP growth handily outstripped
Wall Street economists' forecasts for a 3.3 percent rate of expansion as
it accelerated from last year's fourth-quarter 3.7 percent pace instead
of slowing.
A
chorus of U.S. central bank governors has warned recently that the economy
needs to soon show convincing evidence of a slowdown, unnerving financial
markets after reports the Fed has shifted to a position of increased willingness
to raise interest rates. Policymakers' concern that Asia's economic woes
were not enough to offset buoyant domestic demand appeared to be supported
by the first-quarter GDP report.
DOWN 40 or 50
to 1050
If
the news is "good", rapid growth that's "bad" because it implies inflation
and higher money costs. If the news is "bad", lower growth and earning
that's good- maybe. Labor costs are going to be higher but how high is
high ?
The chances are 2/3 down, 1/3 up - but the reactions to economic
news are not always what is expected.
Thursday:
April 30th
``If
the U.S. economic data are strong, fears of a rate rise will return, suggesting
dollar upside,'' said Sally Wilkinson, senior
economist
at Daiwa Europe in London.
--------------------------------------------------------------
MARKET
PRICES AT 0905 GMT
Mark
1.7937/42 Yen 132.05/15 Sterling 1.6686/96
Gold
$310.90/1.30 +2.65 (pvs PM fix) Brent $14.39 +0.14
FTSE
100 5843.7 +10.6 CAC 3746.61 +12.68 X-DAX 5101.43 +17.63
---------------------------------------------------------------
U.S.
Federal Reserve chairman Alan Greenspan is known to consider ECI figures
as an important indicator of inflationary
pressures
building in a robust U.S. economy.
Thursday
April 30, 4:14 am Eastern Time
Wall
St bubble risk looms,
but is Asia to blame?
By
Yoshiko Mori
TOKYO,
April 30 (Reuters) -
The U.S. stock market is being poisoned by a ``classic
bubble'' and the risk is looming of a
downward
correction of 10 to 20 percent, economists in Tokyo say.
``
The
current state of Wall Street is similar to what happened in Tokyo in 1987
when it was already apparent that the asset
market
bubbles were getting out of hand,'' said Richard Werner, Tokyo-based chief
economist and managing director of Profit Research Centre Ltd.
Excessive
capital created by the U.S. banking system and the Federal Reserve has
been the major cause of recent Wall Street
gains,
Werner said.
Excessive
credit creation is spurring financial and real estate transactions which
are pushing up asset prices -- ``the classic
bubble,''
Werner said.
Economists
said credit creation through loans by the U.S. banking system is expanding
at around 10 percent year-on-year, the highest growth rate since the 1980s.
``If
the U.S. economic data are strong, fears of a rate rise will return, suggesting
dollar upside,'' said Sally Wilkinson, senior
economist
at Daiwa Europe in London.
First
quarter U.S. employment cost index is expected to rise 0.9 percent from
one percent in the previous quarter.
An
advance estimate of quarter one U.S. gross domestic product is also expected
at 1230 GMT.
At
0835 GMT the dollar was at 1.7921/26 marks and 131.93/03 yen
Con't
on
News
and analysis GO TO
Money pages first
forecast.htm,
then
conditions.htm
Main page Flash.htm
----------
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o to Wiredbrain's
ACTIVE-NEWS
PAGE
----------
Con't on money
PAGE TWO
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o to Wiredbrain's
Current up-dates
The doors to creative thinking and doing are in the narrow
places between large structures.
The
empires of the world and the mind dominate the landscape. Vast historic structures obscure the
view of the horizon and our real location. Down narrow lanes and in far fields we sometimes can
gain images that glimmer with reflections of a pale light, far off.
Where theses narrow lanes and far field meet are the focal
points of new creations.
There is a container, connected to nodes, connected to
networks, creating a info-sphere of billions
living reproducing pathways and elements.
The bio-sphere
began and is still largely made up of
micro-organisms that share genetic information through
networks of co-option, cooperation and
communication that become organic wholes from simpler
to complex. Cells take in parts from
elsewhere and collect abilities of different genes.
The
biological and infomation packets are
coming together on a global scale.
One element basic to global networks are standards.
The
critical standard is digital information
which can be understood and act upon by all the other
members of the community.
The
information utility will operate on a common operational
language - such as HTTP, FTP, Java,
that will co=option functions from different places,
in words, pictures, sounds and video.
The
Microsoft issue is their desire to make MS-OS/ active
X the universal language for all future global
networks, software, operations, communications and services.
Netscape’s inter-operation open
arch-culture has a somewhat different vision of inter
and intra operability.
The global scope of
mega networks makes Microsoft’s vision unlikely but not
impossible.
Their moves into
communications, cable, satellites, broadcasting and services
should be taken as very important but
not as a given. Without outside intervention or meaningful
competition they could set NT/active X
type systems as the standard for most if not all inter-net
communications.
Gates to everone - "Look upon my works ye humble of the
earth and give
up."
But all empires lack vision and ability to change.
It’s not hardware, it’s not software, but it is service-ware.
Companies that
don’t sell machines or programs but universal services.
Sign-up and we
give you the container, the link, and all the services
you can think of and
many that you haven’t though of yet.
I soon will be able to pull down the word processing "service"
tied to voice and video "services". I
will be able to pull down interactive forms "service",
a search service, marketing services,
shopping service, broadcast and narrow cast services,
product design and production services,
travel, insurance, investment and banking services designed
and distributed by other services .
All these services we now called companies, producers,
distributors, stores and markets become
part of the services network.
The telephone company (
tele - sounds )is a service: television ( tele -
pictures ) networks and stations are service including
broadcast ( send sound and picture over a
wide area ): computers are not a machine or thing but
provide systems capacity to do something,
assign traits and store information and programs ( software
to help machines - do stuff ). All these
THINGS are becoming parts of a system of service with
nodes and terminals.
The core of the global service system is the operational
codes and languages. Everyone has to
understand ever one else and terminals need to talk to
nodes and servers need to communicate
with servers in common coded packets moving a mega-speeds
back and fourth.
These codes and
languages are extensions of Hyper Text Transfer Protocol
, ftp ( file transfer ) and operations such
as Java.
Saturday
May 9 8:05 AM EDT
ZANNY
MINTON BEDDOES: When we talk about a bubble, we talk about rising
fundamentals
would warrant, and they're going up because of some kind of speculative
frenzy,
to use a phrase, again, that Chairman Greenspan used, some kind of irrational
exuberance.
We're all feeling good. We're buying shares. Prices are going up not because
of
fundamental changes or not only because of fundamental changes, more because
there's
a kind of frenzied buying.
And
that's what we mean by a bubble, and we worry about it for two reasons.
We worry about it because
bubbles
tend to burst. Financial markets have had bubbles ever since finance started.
But the problem is that they
The other
problem is that if they--if
the
bubble continues, then this kind of inflation in asset prices--because
that's really what it is--can spill over into
ZANNY
MINTON BEDDOES: Well, I agree that there have been changes in the world
economy, and there
have
been changes in the U.S. economy.
The question is how big have these changes
been and do they justify
today's
prices, and I think one argument that is frequently made by the people
who believe in this new economy or
happened
in the last two years in the U.S. economy, we've grown far faster than
the trend growth, and we--than
economists
normally think the economy can grow--and that is because we've used more
people. Unemployment
The one
thing that does seem to be different is
that
as wages are rising, there isn't this immediate transfer into higher inflation.
Now,
there are--that could be because of some new rules. It could also be because
there
are
a lot of temporary factors which have actually influenced. One is that
benefits have
been
rising much more slowly than they used to.
The HMO revolution has meant
that its
employers
have been able to cut costs in areas where they traditionally weren't able
to cut
costs.
Secondly, the dollar is very strong. Now, the strength of the dollar
also dampens
inflation.
Thirdly, commodity prices are weak.
They're weak in part because
of the
problems
in Asia, but they're not--those are not structural changes.
They're temporary
things
that could change, and when they change, I think we'll see the old rules
coming back into play.
Are
stocks poised to flame out?
Friday
May 8th:
08:33
U.S. UNEMPLOYMENT RATE FALLS TO 4.3%, AVERAGE HOURLY EARNINGS UP 4C IN
APRIL, NEAR CONSENSUS.
08:32
RETAIL ADDS 44,000 JOBS.
08:32
CONSTRUCTION ADDS 35,000 JOBS.
08:32
SERVICES ADD 139,000 JOBS.
08:32
10,000 FACTORY JOBS LOST IN APRIL.
08:32
AVERAGE FACTORY WORKWEEK FALLS 1.1 HOURS TO 40.7.
08:32
AVERAGE WORKWEEK FALLS 0.3 HOURS TO 34.4.
08:32
HOURLY EARNINGS RISE 4 CENTS IN APRIL OR 0.3%.
08:32
4.3% JOBLESS RATE LOWEST SINCE FEB 1970.
08:32
262,000 JOBS CREATED IN APRIL; UNEMPLOYMENT RATE FALLS TO 4.3%.
08:31
U.S. 30-YR TREASURY UP SLIGHTLY ON UNEMPLOYMENT NEWS.
08:48
US JUNE BOND FUTURE DROPS 8/32 TO 120-03 ON JOBLESS DATA.
08:48
US 30-YR TREASURY BOND DROPS 12/32 TO 102-03, YIELD AT 5.99%.
08:48
US 10-YR TREASURY BOND DROPS 5/32 TO 98+14, YIELD AT 5.71%.
08:48
US 5-YR TREASURY BOND DROPS 4/32 TO 100+13, YIELD AT 5.65%.
08:48
US 3-YR TREASURY BOND DROPS 1/32 TO 99+11, YIELD AT 5.63%.
08:48
US 2-YR TREASURY BOND DROPS 2/32 TO 100-02, YIELD AT 5.58%.
08:48
US TREASURIES GO LOWER ON APRIL JOBLESS RATE.
08:48
US 1-YR T-BILL DISCOUNT RATE UP 2 BASIS POINTS TO 5.15%.
08:48
US 6-MONTH T-BILL DISCOUNT RATE UP 3 BASIS POINTS TO 5.13%.
08:48
US 3-MONTH T-BILL DISCOUNT RATE UP 2 BASIS POINTS TO 5.00%.
08:31
U.S. UNEMPLOYMENT RATE LOWEST SINCE FEB. 1970.
08:31
UNEMPLOYMENT RATE FALLS TO 4.3%, DOWN .4 PERCENTAGE POINTS.
08:31
APRIL NON-FARM PAYROLL UP 262,000, CONSENSUS 250,000.
07:20
BRITISH POUND 1.6403 DOWN .0071, OR -0.4%.
07:20
GERMAN DMARK 1.7718 UP .0034, OR +0.2%.
07:20
JAPAN YEN 132.56 DOWN .72, OR -0.5%.
07:20
U.S. 30-YR. BOND 5.948 UP 1 17/32, OR 0.1%.
07:20
FRANCE CAC 40 3906.36 UP 41.09, OR +1.04%.
07:20
GERMAN DAX 5260.56 UP 74.33, OR +1.43%.
07:20
LONDON FT 100 5965.5 UP 18.5, OR +0.5%.
07:12
FOREIGN STOCK MARKETS MOSTLY LOWER AUSTRALIAN MARKET 2780.50 DOWN 0.3,
OR -0.01%.
Korea
down - Asia mixed - London and Germany UP, France down
To
see what we said this morning and last night, see
http://www.wiredbrain.net/short.htm
..
The
news before it happens: Unemployment drops 4.2 % and new jobs increase
260,000 - adding to worries of rate increases :
The
government on Friday is scheduled to release the monthly employment data
for April, its first major reading on how the economy performed last month.
Analysts
surveyed by Reuters expect the unemployment rate to be unchanged at 4.7
percent with 259,000 new jobs created outside the farm sector. That compares
with the March rate of a decline of 36,000.
Last
month, the Conference Board put the help-wanted advertising index, which
tracks employment growth, at 92.0 in March, unchanged from February but
well above the March 1997 rate of 87.0, showing no drop in demand for labor.
The
feeling among the skeptics is that even if the employment figure is satisfactory,
there is no guarantee that the Fed is not
going
to tighten," Metz said.
Investors
appeared little reassured by Fed Vice Chairwoman Alice Rivlin who said
that a desire to rein in a high-flying stock
market
would not be a reason by itself for the central bank to raise interest
rates.
The
Fed was not considering changing margin requirements on stock trades, Rivlin
said.
There was no big risk of inflation
taking
off, she added.
Thursday
May 7th:
Editoral:
The
tradition is that good news = bad news because rapid growth = inflation.
Starrting in Nov. good news was good news because it = higher earning. Now
with a market well over any rational P/E the growth of earning and/or changes
of 1/4 % in a minor bank rate really can't make much difference. BUT when
prices are so high any excuse is a good excuse to sell - SO good news is
bad news again and bad news is bad news -
The employment number will be
up because the GDP was growing at a very high rate ( over 4 %) Wages are
going up in areas of demand but not in semi-skilled service jobs - as it
has been since 1969.
The problem is not wage inflation but a bubble - ready
to pop - in real estate - in stock prices - yo-yo land - the President
and Congress want to be popular. A reasonable slow down will be a lot better
than a CRASH ! And now, rather than close to an election.
The clients of
the Federal Central Bank - the World Banking System - need order in a time
of some real problems - and order means being able to add to the money
supply - which you can't do without great risk during a speculative bubble.
Fed
reminds Wall Street it is still top dog
By
Pierre Belec
NEW
YORK (Reuters) - Life is good on Wall Street. Consumer confidence is
the highest in some 30 years, inflation the lowest since the 1960s and
the stock market is soaring to the moon.
But
the Federal Reserve says trouble is bubbling in the economy.
Wall
Street was again reminded this week that the Fed is still the top dog.
The
secretive Fed leaked information that it had shifted monetary policy toward
a bias, which called for higher interest rates, because of concern that
the economy's robust growth may reignite inflation.
The
hint that the cost of borrowing may go up hit the market like a ton of
bricks, sending stocks into a tailspin at the beginning of the week as
investors pushed the panic button.
The
market had been betting that the central bank would not raise interest
rates and there was even speculation that lending rates would drop before
the end of the year.
But
by week's end, the market had roared back with a vengeance on a report
that inflation was still holding at the lowest level in some 30 years,
even though the economy grew at a fast pace in the first quarter.
Is
the Fed looking at the wrong radar screen?
Some
experts believe the central bank is actually more worried about the surge
in stock prices than any underlying inflation.
"
The
stock market is too speculative, exuberant and overvalued and there's the
risk that it could lead to financial asset inflation eventually causing
real sector inflation," said Hugh Johnson, chief investment officer for
First Albany Corp.
----------
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ACTIVE-NEWS
PAGE
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G
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PAGE TWO
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Current up-dates
Wednesday:
Long bond at
5.84
Talking
the market down-``People are starting to talk about deflation,'' said David
Brickman, international economist at PaineWebber. "
The Fed's worried about
the economy overheating," said Farrell. "I think the Fed would be thrilled
if the financial sector took a deep breath. I think we all should be thrilled."
Federal
Reserve officials Alice Rivlin, Laurence Meyer, and Edward Gramlich, and
Atlanta Fed president Jack Guynn are all speaking later on Wednesday.
U.S. Deputy Treasury Secretary Lawrence Summers is also speaking.
Federal
Reserve Chairman Alan Greenspan speaks at 1615 GMT on Saturday to a meeting
of state bank supervisors.
Wednesday
April 29 6:57 AM EDT
Greenspan
preserved consensus with bias
Home
| Client Access | Contact Us | Help
Market
Letter
05/26/98
The
Market Posture was downgraded to Mildly Bearish the week ending
4/10/98
(DJIA - 8994.96). Initial downside price projection for the DJIA
is
8750. CTI readings should remain negative until late May 1998.
****Check
out "ON THE EDGE" - A monthly review of the markets****
________________________________________________________________________
CURRENT
PRIOR
MARKET
TIMING MODELS READING WEEK CHG CONNOTATION
________________________________________________________________________
CYCLICAL
TREND INDEX (CTI): -4 -4 0 BEARISH
MOMENTUM
INDEX: -8 -6 -2 BEARISH
SENTIMENT
INDEX: 1 2 +1 NEUTRAL
________________________________________________________________________
DOW
JONES INDUSTRIAL AVERAGES (DJIA) CLOSE:................ 9114.44
DJIA
POINT CHANGE FROM PRIOR WEEK:......................... 18.44
DJIA
PERCENTAGE CHANGE FROM PRIOR WEEK:.................... 0.20%
MARKET
POSTURE THIS WEEK:..................................MILD BEARISH
MARKET
POSTURE PRIOR WEEK:.................................MILD BEARISH
DJIA
TARGET:............................................... 8750
TIME
FRAME TO ACHIEVE TARGET:.............................. 29-May-98
DATE
CURRENT MARKET POSTURE FORMULATED:.................... 10-Apr-98
DJIA
CLOSE ON DATE CURRENT MARKET POSTURE FORMULATED:...... 8994.96
________________________________________________________________________
CYCLICAL
TREND INDEX (CTI).......... -4 CONNOTATION
________________________________________________________________________
29-May-98
(Projected) 7 BULLISH
05-Jun-98
(Projected) 7 BULLISH
12-Jun-98
(Projected) 7 BULLISH
19-Jun-98
(Projected) 7 BULLISH
26-Jun-98
(Projected) 7 BULLISH
________________________________________________________________________
MOMENTUM
INDEX...................... -8 % CHG CONNOTATION
________________________________________________________________________
1)
DJ Transportation Average 3390.59 +1.0% BEARISH
2)
S&P 500 Index 1108.25 -0.0% BEARISH
3)
NYSE Composite Index 574.58 0.0% BEARISH
4)
Advance-Decline Line -5505 BULLISH
5)
10 Day MA Advance-Decline Line 0.80 0.0% BEARISH
6)
AMEX Index 730.57 -0.9% BEARISH
7)
NASDAQ Composite Index 1802.72 -2.4% BEARISH
8)
DJ Utilities Index 280.06 0.1% BEARISH
9)
TRIN+10 Day Average 1.04 0.0% NEUTRAL
10)
NYSE New Highs-New Lows 251+137 NEUTRAL
11)
Zweig Breadth Indicator 0.40 BEARISH
12)
McClellan Oscillator -76 NEUTRAL
13)
McClellan Summation Index 628 BULLISH
14)
Unchanged Issue Index 0.17 BEARISH
________________________________________________________________________
SENTIMENT
INDEX..................... 1 % CHG CONNOTATION
________________________________________________________________________
1)
Odd Lot Short Ratio-5 Day Ave 5.03 0.0% BEARISH
2)
NYSE Short Interest Ratio 6.32 1.1% BULLISH
3)
Public-Specialist Short Ratio 0.89 0.0% BULLISH
4)
Put/Call Ratio+10 Day Ave(INDEX) 1.12 0.0% NEUTRAL
5)
Dividend-Yield Spread 5.10 0.0% BULLISH
6)
Mutual Fund Liquid Asset Ratio 4.60 0.0% BEARISH
7)
Bullish Investment Advisors 45.5 0.0% NEUTRAL
8)
Bearish Investment Advisors 25.2 0.0% NEUTRAL
9)
Bearish + Corrections Total 54.5 0.0% NEUTRAL
Home
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Situations | Market Analysis | Market Letter | Stock Analysis | Industry
Group Analysis
By
Isabelle Clary
NEW
YORK (Reuters) - Federal Reserve Chairman Alan Greenspan agreed at the
March meeting of Fed policy-makers to
reintroduce
a bias toward raising interest rates, appeasing anti-inflation hawks on
the panel and preserving consensus, sources
It
is important to remember that the major FED activity is NOT the federal
funds or discount rate but open market selling of bonds and repos to withdraw
liquid assets and increase reserves in the banking systems.
The bias gives
direction to day to day market activity which has more effect than the
discount rate changes. Real rates are below the 5.5 % target.
08:45
US 3-MONTH T-BILL DISCOUNT RATE DROPS 2 BASIS POINTS TO 4.90%.
08:44
US 6-MONTH T-BILL DISCOUNT RATE DROPS 1 BASIS POINT TO 5.09%.
The
effective discount rate ( the price of money to banks ) is LIBOR MAY98
94.32 London Inter bank loan rate at 5.68 % sets other bank loan rates
- the short term rate set by EURO $ JUN98 94.225 = 5.775 % is over the
target of 5.5 % and going up. So bias does matter more than the actual
official change is a minor rate - the federal funds ( over night ) discount
rate.
The cost of money is going up which might slow certain types of interest
sensitive economic activity. It is not that the fed does nothing but wait
and have meeting - but is very active every day in the market.
Dollar/mark
was unlikely to show major movement ahead of the weekend meetings of European
Union officials to decide the
countries
which will join the single currency from 1999, but the mark might receive
a boost subsequently, analysts said.
On
the foreign exchanges, the dollar was slightly firmer but trading was range-bound
partly because of a holiday in Japan and
as
the markets awaited a batch of speeches from central bank and finance officials.
---------------------------------------------------------------
MARKET
PRICES AT 1101 GMT
Mark
1.7972/77 Yen 132.18/28 Sterling 1.6686/96
Gold
$307.50/7.90 -0.75 (pvs PM fix) Brent $14.61 +0.01
FTSE
100 5818.0 +11.4 CAC 3756.49 -20.74 X-DAX 5125.71 +14.83
---------------------------------------------------------------
By
mid-session, London's blue-chip FTSE 100 index was 0.4 percent firmer,
rescued by bargain-hunters from earlier losses
and
Germany's Xetra DAX was up 0.4 percent.
The
Belgian, Dutch, Greek and Swiss markets were also amongst the gainers but
French, Italian and Spanish bourses were in
the
red, pausing for breath after Tuesday's gains amid nerves over Wall Street
and confusion over U.S. rates.
Friday
May 1, 10:50 am Eastern Time
US
Treasuries slip on talk Fed checks forex rates:
The
basics:
A
too fast growth rate, gives too much money in the system, plus the Asia
thing causes lower exports, higher inports, pressure on the dollar which
is falling.
A
listing of the main NAPM components follows:
April
March Feb Jan Dec Nov Oct Sept Aug
PMI
52.9 54.8 53.3 52.4 53.1 54.5 55.9 54.6 56.4
Production
53.4 57.6 55.3 53.3 55.8 58.5 59.6 58.4 61.2
New
Orders 56.8 57.3 55.9 55.2 53.9 55.1 58.4 56.1 60.4
Supplier
Del 52.3 53.4 52.1 52.0 54.0 55.2 55.0 55.5 55.6
Inventories
46.6 46.8 46.9 46.7 46.5 44.3 47.0 46.2 43.4
Employment
49.8 52.5 50.9 50.1 50.9 53.3 52.5 51.1 51.6
Prices
41.2 44.4 45.8 44.7 50.8 53.2 55.5 54.1 53.4
Export
Orders 49.7 48.0 47.9 45.0 50.6 52.6 51.9 51.2 55.1
Imports
56.3 53.4 51.2 53.9 55.4 52.6 51.7 53.1 53.9
US
Treasuries off post-NAPM highs in forex intervention fear. *Mkt talk Fed
checking forex rates, but Fed says ``no comment.'' *Impact greatest in
bills, 3-mo rates jump 5 bps in 45 mins. *Long end outperforming but off
highs, profit-taking seen. *Traders report foreign central bank selling.
Thursday
April 30, 8:56 am Eastern Time
U.S.
economy accelerated in Q1, inflation mute
Thursday
April 30, 8:56 am Eastern Time
WASHINGTON,
April 30 (Reuters) -
The U.S. economy unexpectedly picked up speed in the
first quarter of 1998, surging ahead at a brisk 4.2 percent annual rate
on booming consumer spending while inflation remained at its most muted
levels in 35 years, the Commerce Department said on Thursday.
It
was the sixth straight quarter in which Gross Domestic Product advanced
at an annual rate of 3 percent or more - well above the 2+1/4 percent target
range the Federal Reserve considers can be safely sustained without risking
a flareup in inflation pressures. First-quarter GDP growth handily outstripped
Wall Street economists' forecasts for a 3.3 percent rate of expansion as
it accelerated from last year's fourth-quarter 3.7 percent pace instead
of slowing.
A
chorus of U.S. central bank governors has warned recently that the economy
needs to soon show convincing evidence of a slowdown, unnerving financial
markets after reports the Fed has shifted to a position of increased willingness
to raise interest rates. Policymakers' concern that Asia's economic woes
were not enough to offset buoyant domestic demand appeared to be supported
by the first-quarter GDP report.
DOWN 40 or 50
to 1050
If
the news is "good", rapid growth that's "bad" because it implies inflation
and higher money costs. If the news is "bad", lower growth and earning
that's good- maybe. Labor costs are going to be higher but how high is
high ?
The chances are 2/3 down, 1/3 up - but the reactions to economic
news are not always what is expected.
Thursday:
April 30th
``If
the U.S. economic data are strong, fears of a rate rise will return, suggesting
dollar upside,'' said Sally Wilkinson, senior
economist
at Daiwa Europe in London.
--------------------------------------------------------------
MARKET
PRICES AT 0905 GMT
Mark
1.7937/42 Yen 132.05/15 Sterling 1.6686/96
Gold
$310.90/1.30 +2.65 (pvs PM fix) Brent $14.39 +0.14
FTSE
100 5843.7 +10.6 CAC 3746.61 +12.68 X-DAX 5101.43 +17.63
---------------------------------------------------------------
U.S.
Federal Reserve chairman Alan Greenspan is known to consider ECI figures
as an important indicator of inflationary
pressures
building in a robust U.S. economy.
Thursday
April 30, 4:14 am Eastern Time
Wall
St bubble risk looms,
but is Asia to blame?
By
Yoshiko Mori
TOKYO,
April 30 (Reuters) -
The U.S. stock market is being poisoned by a ``classic
bubble'' and the risk is looming of a
downward
correction of 10 to 20 percent, economists in Tokyo say.
``
The
current state of Wall Street is similar to what happened in Tokyo in 1987
when it was already apparent that the asset
market
bubbles were getting out of hand,'' said Richard Werner, Tokyo-based chief
economist and managing director of Profit Research Centre Ltd.
Excessive
capital created by the U.S. banking system and the Federal Reserve has
been the major cause of recent Wall Street
gains,
Werner said.
Excessive
credit creation is spurring financial and real estate transactions which
are pushing up asset prices -- ``the classic
bubble,''
Werner said.
Economists
said credit creation through loans by the U.S. banking system is expanding
at around 10 percent year-on-year, the highest growth rate since the 1980s.
``If
the U.S. economic data are strong, fears of a rate rise will return, suggesting
dollar upside,'' said Sally Wilkinson, senior
economist
at Daiwa Europe in London.
First
quarter U.S. employment cost index is expected to rise 0.9 percent from
one percent in the previous quarter.
An
advance estimate of quarter one U.S. gross domestic product is also expected
at 1230 GMT.
At
0835 GMT the dollar was at 1.7921/26 marks and 131.93/03 yen
Con't
on
News
and analysis GO TO
Money pages first
forecast.htm,
then
conditions.htm
Main page Flash.htm
----------
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o to Wiredbrain's
ACTIVE-NEWS
PAGE
----------
Con't on money
PAGE TWO
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o to Wiredbrain's
Current up-dates
There is a container, connected to nodes, connected to networks, creating a info-sphere of billions
living reproducing pathways and elements.
The bio-sphere began and is still largely made up of
micro-organisms that share genetic information through networks of co-option, cooperation and
communication that become organic wholes from simpler to complex. Cells take in parts from
elsewhere and collect abilities of different genes.
The biological and infomation packets are
coming together on a global scale.
One element basic to global networks are standards.
The
critical standard is digital information
which can be understood and act upon by all the other
members of the community.
The
information utility will operate on a common operational
language - such as HTTP, FTP, Java,
that will co=option functions from different places,
in words, pictures, sounds and video.
The
Microsoft issue is their desire to make MS-OS/ active
X the universal language for all future global
networks, software, operations, communications and services.
Netscape’s inter-operation open
arch-culture has a somewhat different vision of inter
and intra operability.
The global scope of
mega networks makes Microsoft’s vision unlikely but not
impossible.
Their moves into
communications, cable, satellites, broadcasting and services
should be taken as very important but
not as a given. Without outside intervention or meaningful
competition they could set NT/active X
type systems as the standard for most if not all inter-net
communications.
Gates to everone - "Look upon my works ye humble of the
earth and give
up."
But all empires lack vision and ability to change.
It’s not hardware, it’s not software, but it is service-ware.
Companies that
don’t sell machines or programs but universal services.
Sign-up and we
give you the container, the link, and all the services
you can think of and
many that you haven’t though of yet.
I soon will be able to pull down the word processing "service"
tied to voice and video "services". I
will be able to pull down interactive forms "service",
a search service, marketing services,
shopping service, broadcast and narrow cast services,
product design and production services,
travel, insurance, investment and banking services designed
and distributed by other services .
All these services we now called companies, producers,
distributors, stores and markets become
part of the services network.
The telephone company (
tele - sounds )is a service: television ( tele -
pictures ) networks and stations are service including
broadcast ( send sound and picture over a
wide area ): computers are not a machine or thing but
provide systems capacity to do something,
assign traits and store information and programs ( software
to help machines - do stuff ). All these
THINGS are becoming parts of a system of service with
nodes and terminals.
The core of the global service system is the operational
codes and languages. Everyone has to
understand ever one else and terminals need to talk to
nodes and servers need to communicate
with servers in common coded packets moving a mega-speeds
back and fourth.
These codes and
languages are extensions of Hyper Text Transfer Protocol
, ftp ( file transfer ) and operations such
as Java.
Saturday
May 9 8:05 AM EDT
ZANNY
MINTON BEDDOES: When we talk about a bubble, we talk about rising
fundamentals
would warrant, and they're going up because of some kind of speculative
frenzy,
to use a phrase, again, that Chairman Greenspan used, some kind of irrational
exuberance.
We're all feeling good. We're buying shares. Prices are going up not because
of
fundamental changes or not only because of fundamental changes, more because
there's
a kind of frenzied buying.
And
that's what we mean by a bubble, and we worry about it for two reasons.
We worry about it because
bubbles
tend to burst. Financial markets have had bubbles ever since finance started.
But the problem is that they
The other
problem is that if they--if
the
bubble continues, then this kind of inflation in asset prices--because
that's really what it is--can spill over into
ZANNY
MINTON BEDDOES: Well, I agree that there have been changes in the world
economy, and there
have
been changes in the U.S. economy.
The question is how big have these changes
been and do they justify
today's
prices, and I think one argument that is frequently made by the people
who believe in this new economy or
happened
in the last two years in the U.S. economy, we've grown far faster than
the trend growth, and we--than
economists
normally think the economy can grow--and that is because we've used more
people. Unemployment
The one
thing that does seem to be different is
that
as wages are rising, there isn't this immediate transfer into higher inflation.
Now,
there are--that could be because of some new rules. It could also be because
there
are
a lot of temporary factors which have actually influenced. One is that
benefits have
been
rising much more slowly than they used to.
The HMO revolution has meant
that its
employers
have been able to cut costs in areas where they traditionally weren't able
to cut
costs.
Secondly, the dollar is very strong. Now, the strength of the dollar
also dampens
inflation.
Thirdly, commodity prices are weak.
They're weak in part because
of the
problems
in Asia, but they're not--those are not structural changes.
They're temporary
things
that could change, and when they change, I think we'll see the old rules
coming back into play.
Are
stocks poised to flame out?
Friday
May 8th:
08:33
U.S. UNEMPLOYMENT RATE FALLS TO 4.3%, AVERAGE HOURLY EARNINGS UP 4C IN
APRIL, NEAR CONSENSUS.
08:32
RETAIL ADDS 44,000 JOBS.
08:32
CONSTRUCTION ADDS 35,000 JOBS.
08:32
SERVICES ADD 139,000 JOBS.
08:32
10,000 FACTORY JOBS LOST IN APRIL.
08:32
AVERAGE FACTORY WORKWEEK FALLS 1.1 HOURS TO 40.7.
08:32
AVERAGE WORKWEEK FALLS 0.3 HOURS TO 34.4.
08:32
HOURLY EARNINGS RISE 4 CENTS IN APRIL OR 0.3%.
08:32
4.3% JOBLESS RATE LOWEST SINCE FEB 1970.
08:32
262,000 JOBS CREATED IN APRIL; UNEMPLOYMENT RATE FALLS TO 4.3%.
08:31
U.S. 30-YR TREASURY UP SLIGHTLY ON UNEMPLOYMENT NEWS.
08:48
US JUNE BOND FUTURE DROPS 8/32 TO 120-03 ON JOBLESS DATA.
08:48
US 30-YR TREASURY BOND DROPS 12/32 TO 102-03, YIELD AT 5.99%.
08:48
US 10-YR TREASURY BOND DROPS 5/32 TO 98+14, YIELD AT 5.71%.
08:48
US 5-YR TREASURY BOND DROPS 4/32 TO 100+13, YIELD AT 5.65%.
08:48
US 3-YR TREASURY BOND DROPS 1/32 TO 99+11, YIELD AT 5.63%.
08:48
US 2-YR TREASURY BOND DROPS 2/32 TO 100-02, YIELD AT 5.58%.
08:48
US TREASURIES GO LOWER ON APRIL JOBLESS RATE.
08:48
US 1-YR T-BILL DISCOUNT RATE UP 2 BASIS POINTS TO 5.15%.
08:48
US 6-MONTH T-BILL DISCOUNT RATE UP 3 BASIS POINTS TO 5.13%.
08:48
US 3-MONTH T-BILL DISCOUNT RATE UP 2 BASIS POINTS TO 5.00%.
08:31
U.S. UNEMPLOYMENT RATE LOWEST SINCE FEB. 1970.
08:31
UNEMPLOYMENT RATE FALLS TO 4.3%, DOWN .4 PERCENTAGE POINTS.
08:31
APRIL NON-FARM PAYROLL UP 262,000, CONSENSUS 250,000.
07:20
BRITISH POUND 1.6403 DOWN .0071, OR -0.4%.
07:20
GERMAN DMARK 1.7718 UP .0034, OR +0.2%.
07:20
JAPAN YEN 132.56 DOWN .72, OR -0.5%.
07:20
U.S. 30-YR. BOND 5.948 UP 1 17/32, OR 0.1%.
07:20
FRANCE CAC 40 3906.36 UP 41.09, OR +1.04%.
07:20
GERMAN DAX 5260.56 UP 74.33, OR +1.43%.
07:20
LONDON FT 100 5965.5 UP 18.5, OR +0.5%.
07:12
FOREIGN STOCK MARKETS MOSTLY LOWER AUSTRALIAN MARKET 2780.50 DOWN 0.3,
OR -0.01%.
Korea
down - Asia mixed - London and Germany UP, France down
To
see what we said this morning and last night, see
http://www.wiredbrain.net/short.htm
..
The
news before it happens: Unemployment drops 4.2 % and new jobs increase
260,000 - adding to worries of rate increases :
The
government on Friday is scheduled to release the monthly employment data
for April, its first major reading on how the economy performed last month.
Analysts
surveyed by Reuters expect the unemployment rate to be unchanged at 4.7
percent with 259,000 new jobs created outside the farm sector. That compares
with the March rate of a decline of 36,000.
Last
month, the Conference Board put the help-wanted advertising index, which
tracks employment growth, at 92.0 in March, unchanged from February but
well above the March 1997 rate of 87.0, showing no drop in demand for labor.
The
feeling among the skeptics is that even if the employment figure is satisfactory,
there is no guarantee that the Fed is not
going
to tighten," Metz said.
Investors
appeared little reassured by Fed Vice Chairwoman Alice Rivlin who said
that a desire to rein in a high-flying stock
market
would not be a reason by itself for the central bank to raise interest
rates.
The
Fed was not considering changing margin requirements on stock trades, Rivlin
said.
There was no big risk of inflation
taking
off, she added.
Thursday
May 7th:
Editoral:
The
tradition is that good news = bad news because rapid growth = inflation.
Starrting in Nov. good news was good news because it = higher earning. Now
with a market well over any rational P/E the growth of earning and/or changes
of 1/4 % in a minor bank rate really can't make much difference. BUT when
prices are so high any excuse is a good excuse to sell - SO good news is
bad news again and bad news is bad news -
The employment number will be
up because the GDP was growing at a very high rate ( over 4 %) Wages are
going up in areas of demand but not in semi-skilled service jobs - as it
has been since 1969.
The problem is not wage inflation but a bubble - ready
to pop - in real estate - in stock prices - yo-yo land - the President
and Congress want to be popular. A reasonable slow down will be a lot better
than a CRASH ! And now, rather than close to an election.
The clients of
the Federal Central Bank - the World Banking System - need order in a time
of some real problems - and order means being able to add to the money
supply - which you can't do without great risk during a speculative bubble.
Fed
reminds Wall Street it is still top dog
By
Pierre Belec
NEW
YORK (Reuters) - Life is good on Wall Street. Consumer confidence is
the highest in some 30 years, inflation the lowest since the 1960s and
the stock market is soaring to the moon.
But
the Federal Reserve says trouble is bubbling in the economy.
Wall
Street was again reminded this week that the Fed is still the top dog.
The
secretive Fed leaked information that it had shifted monetary policy toward
a bias, which called for higher interest rates, because of concern that
the economy's robust growth may reignite inflation.
The
hint that the cost of borrowing may go up hit the market like a ton of
bricks, sending stocks into a tailspin at the beginning of the week as
investors pushed the panic button.
The
market had been betting that the central bank would not raise interest
rates and there was even speculation that lending rates would drop before
the end of the year.
But
by week's end, the market had roared back with a vengeance on a report
that inflation was still holding at the lowest level in some 30 years,
even though the economy grew at a fast pace in the first quarter.
Is
the Fed looking at the wrong radar screen?
Some
experts believe the central bank is actually more worried about the surge
in stock prices than any underlying inflation.
"
The
stock market is too speculative, exuberant and overvalued and there's the
risk that it could lead to financial asset inflation eventually causing
real sector inflation," said Hugh Johnson, chief investment officer for
First Albany Corp.
----------
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o to Wiredbrain's
ACTIVE-NEWS
PAGE
----------
G
o to Wiredbrain's
PAGE TWO
----------
G
o to Wiredbrain's
Current up-dates
Wednesday:
Long bond at
5.84
Talking
the market down-``People are starting to talk about deflation,'' said David
Brickman, international economist at PaineWebber. "
The Fed's worried about
the economy overheating," said Farrell. "I think the Fed would be thrilled
if the financial sector took a deep breath. I think we all should be thrilled."
Federal
Reserve officials Alice Rivlin, Laurence Meyer, and Edward Gramlich, and
Atlanta Fed president Jack Guynn are all speaking later on Wednesday.
U.S. Deputy Treasury Secretary Lawrence Summers is also speaking.
Federal
Reserve Chairman Alan Greenspan speaks at 1615 GMT on Saturday to a meeting
of state bank supervisors.
Wednesday
April 29 6:57 AM EDT
Greenspan
preserved consensus with bias
Home
| Client Access | Contact Us | Help
Market
Letter
05/26/98
The
Market Posture was downgraded to Mildly Bearish the week ending
4/10/98
(DJIA - 8994.96). Initial downside price projection for the DJIA
is
8750. CTI readings should remain negative until late May 1998.
****Check
out "ON THE EDGE" - A monthly review of the markets****
________________________________________________________________________
CURRENT
PRIOR
MARKET
TIMING MODELS READING WEEK CHG CONNOTATION
________________________________________________________________________
CYCLICAL
TREND INDEX (CTI): -4 -4 0 BEARISH
MOMENTUM
INDEX: -8 -6 -2 BEARISH
SENTIMENT
INDEX: 1 2 +1 NEUTRAL
________________________________________________________________________
DOW
JONES INDUSTRIAL AVERAGES (DJIA) CLOSE:................ 9114.44
DJIA
POINT CHANGE FROM PRIOR WEEK:......................... 18.44
DJIA
PERCENTAGE CHANGE FROM PRIOR WEEK:.................... 0.20%
MARKET
POSTURE THIS WEEK:..................................MILD BEARISH
MARKET
POSTURE PRIOR WEEK:.................................MILD BEARISH
DJIA
TARGET:............................................... 8750
TIME
FRAME TO ACHIEVE TARGET:.............................. 29-May-98
DATE
CURRENT MARKET POSTURE FORMULATED:.................... 10-Apr-98
DJIA
CLOSE ON DATE CURRENT MARKET POSTURE FORMULATED:...... 8994.96
________________________________________________________________________
CYCLICAL
TREND INDEX (CTI).......... -4 CONNOTATION
________________________________________________________________________
29-May-98
(Projected) 7 BULLISH
05-Jun-98
(Projected) 7 BULLISH
12-Jun-98
(Projected) 7 BULLISH
19-Jun-98
(Projected) 7 BULLISH
26-Jun-98
(Projected) 7 BULLISH
________________________________________________________________________
MOMENTUM
INDEX...................... -8 % CHG CONNOTATION
________________________________________________________________________
1)
DJ Transportation Average 3390.59 +1.0% BEARISH
2)
S&P 500 Index 1108.25 -0.0% BEARISH
3)
NYSE Composite Index 574.58 0.0% BEARISH
4)
Advance-Decline Line -5505 BULLISH
5)
10 Day MA Advance-Decline Line 0.80 0.0% BEARISH
6)
AMEX Index 730.57 -0.9% BEARISH
7)
NASDAQ Composite Index 1802.72 -2.4% BEARISH
8)
DJ Utilities Index 280.06 0.1% BEARISH
9)
TRIN+10 Day Average 1.04 0.0% NEUTRAL
10)
NYSE New Highs-New Lows 251+137 NEUTRAL
11)
Zweig Breadth Indicator 0.40 BEARISH
12)
McClellan Oscillator -76 NEUTRAL
13)
McClellan Summation Index 628 BULLISH
14)
Unchanged Issue Index 0.17 BEARISH
________________________________________________________________________
SENTIMENT
INDEX..................... 1 % CHG CONNOTATION
________________________________________________________________________
1)
Odd Lot Short Ratio-5 Day Ave 5.03 0.0% BEARISH
2)
NYSE Short Interest Ratio 6.32 1.1% BULLISH
3)
Public-Specialist Short Ratio 0.89 0.0% BULLISH
4)
Put/Call Ratio+10 Day Ave(INDEX) 1.12 0.0% NEUTRAL
5)
Dividend-Yield Spread 5.10 0.0% BULLISH
6)
Mutual Fund Liquid Asset Ratio 4.60 0.0% BEARISH
7)
Bullish Investment Advisors 45.5 0.0% NEUTRAL
8)
Bearish Investment Advisors 25.2 0.0% NEUTRAL
9)
Bearish + Corrections Total 54.5 0.0% NEUTRAL
Home
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Opinion | Personal Stock Watch | Trading Ideas | Pick 6 Filter | Point/Figure
Breakouts | Point/Figure Early Alerts
Special
Situations | Market Analysis | Market Letter | Stock Analysis | Industry
Group Analysis
By
Isabelle Clary
NEW
YORK (Reuters) - Federal Reserve Chairman Alan Greenspan agreed at the
March meeting of Fed policy-makers to
reintroduce
a bias toward raising interest rates, appeasing anti-inflation hawks on
the panel and preserving consensus, sources
It
is important to remember that the major FED activity is NOT the federal
funds or discount rate but open market selling of bonds and repos to withdraw
liquid assets and increase reserves in the banking systems.
The bias gives
direction to day to day market activity which has more effect than the
discount rate changes. Real rates are below the 5.5 % target.
08:45
US 3-MONTH T-BILL DISCOUNT RATE DROPS 2 BASIS POINTS TO 4.90%.
08:44
US 6-MONTH T-BILL DISCOUNT RATE DROPS 1 BASIS POINT TO 5.09%.
The
effective discount rate ( the price of money to banks ) is LIBOR MAY98
94.32 London Inter bank loan rate at 5.68 % sets other bank loan rates
- the short term rate set by EURO $ JUN98 94.225 = 5.775 % is over the
target of 5.5 % and going up. So bias does matter more than the actual
official change is a minor rate - the federal funds ( over night ) discount
rate.
The cost of money is going up which might slow certain types of interest
sensitive economic activity. It is not that the fed does nothing but wait
and have meeting - but is very active every day in the market.
Dollar/mark
was unlikely to show major movement ahead of the weekend meetings of European
Union officials to decide the
countries
which will join the single currency from 1999, but the mark might receive
a boost subsequently, analysts said.
On
the foreign exchanges, the dollar was slightly firmer but trading was range-bound
partly because of a holiday in Japan and
as
the markets awaited a batch of speeches from central bank and finance officials.
---------------------------------------------------------------
MARKET
PRICES AT 1101 GMT
Mark
1.7972/77 Yen 132.18/28 Sterling 1.6686/96
Gold
$307.50/7.90 -0.75 (pvs PM fix) Brent $14.61 +0.01
FTSE
100 5818.0 +11.4 CAC 3756.49 -20.74 X-DAX 5125.71 +14.83
---------------------------------------------------------------
By
mid-session, London's blue-chip FTSE 100 index was 0.4 percent firmer,
rescued by bargain-hunters from earlier losses
and
Germany's Xetra DAX was up 0.4 percent.
The
Belgian, Dutch, Greek and Swiss markets were also amongst the gainers but
French, Italian and Spanish bourses were in
the
red, pausing for breath after Tuesday's gains amid nerves over Wall Street
and confusion over U.S. rates.
Friday
May 1, 10:50 am Eastern Time
US
Treasuries slip on talk Fed checks forex rates:
The
basics:
A
too fast growth rate, gives too much money in the system, plus the Asia
thing causes lower exports, higher inports, pressure on the dollar which
is falling.
A
listing of the main NAPM components follows:
April
March Feb Jan Dec Nov Oct Sept Aug
PMI
52.9 54.8 53.3 52.4 53.1 54.5 55.9 54.6 56.4
Production
53.4 57.6 55.3 53.3 55.8 58.5 59.6 58.4 61.2
New
Orders 56.8 57.3 55.9 55.2 53.9 55.1 58.4 56.1 60.4
Supplier
Del 52.3 53.4 52.1 52.0 54.0 55.2 55.0 55.5 55.6
Inventories
46.6 46.8 46.9 46.7 46.5 44.3 47.0 46.2 43.4
Employment
49.8 52.5 50.9 50.1 50.9 53.3 52.5 51.1 51.6
Prices
41.2 44.4 45.8 44.7 50.8 53.2 55.5 54.1 53.4
Export
Orders 49.7 48.0 47.9 45.0 50.6 52.6 51.9 51.2 55.1
Imports
56.3 53.4 51.2 53.9 55.4 52.6 51.7 53.1 53.9
US
Treasuries off post-NAPM highs in forex intervention fear. *Mkt talk Fed
checking forex rates, but Fed says ``no comment.'' *Impact greatest in
bills, 3-mo rates jump 5 bps in 45 mins. *Long end outperforming but off
highs, profit-taking seen. *Traders report foreign central bank selling.
Thursday
April 30, 8:56 am Eastern Time
U.S.
economy accelerated in Q1, inflation mute
Thursday
April 30, 8:56 am Eastern Time
WASHINGTON,
April 30 (Reuters) -
The U.S. economy unexpectedly picked up speed in the
first quarter of 1998, surging ahead at a brisk 4.2 percent annual rate
on booming consumer spending while inflation remained at its most muted
levels in 35 years, the Commerce Department said on Thursday.
It
was the sixth straight quarter in which Gross Domestic Product advanced
at an annual rate of 3 percent or more - well above the 2+1/4 percent target
range the Federal Reserve considers can be safely sustained without risking
a flareup in inflation pressures. First-quarter GDP growth handily outstripped
Wall Street economists' forecasts for a 3.3 percent rate of expansion as
it accelerated from last year's fourth-quarter 3.7 percent pace instead
of slowing.
A
chorus of U.S. central bank governors has warned recently that the economy
needs to soon show convincing evidence of a slowdown, unnerving financial
markets after reports the Fed has shifted to a position of increased willingness
to raise interest rates. Policymakers' concern that Asia's economic woes
were not enough to offset buoyant domestic demand appeared to be supported
by the first-quarter GDP report.
DOWN 40 or 50
to 1050
If
the news is "good", rapid growth that's "bad" because it implies inflation
and higher money costs. If the news is "bad", lower growth and earning
that's good- maybe. Labor costs are going to be higher but how high is
high ?
The chances are 2/3 down, 1/3 up - but the reactions to economic
news are not always what is expected.
Thursday:
April 30th
``If
the U.S. economic data are strong, fears of a rate rise will return, suggesting
dollar upside,'' said Sally Wilkinson, senior
economist
at Daiwa Europe in London.
--------------------------------------------------------------
MARKET
PRICES AT 0905 GMT
Mark
1.7937/42 Yen 132.05/15 Sterling 1.6686/96
Gold
$310.90/1.30 +2.65 (pvs PM fix) Brent $14.39 +0.14
FTSE
100 5843.7 +10.6 CAC 3746.61 +12.68 X-DAX 5101.43 +17.63
---------------------------------------------------------------
U.S.
Federal Reserve chairman Alan Greenspan is known to consider ECI figures
as an important indicator of inflationary
pressures
building in a robust U.S. economy.
Thursday
April 30, 4:14 am Eastern Time
Wall
St bubble risk looms,
but is Asia to blame?
By
Yoshiko Mori
TOKYO,
April 30 (Reuters) -
The U.S. stock market is being poisoned by a ``classic
bubble'' and the risk is looming of a
downward
correction of 10 to 20 percent, economists in Tokyo say.
``
The
current state of Wall Street is similar to what happened in Tokyo in 1987
when it was already apparent that the asset
market
bubbles were getting out of hand,'' said Richard Werner, Tokyo-based chief
economist and managing director of Profit Research Centre Ltd.
Excessive
capital created by the U.S. banking system and the Federal Reserve has
been the major cause of recent Wall Street
gains,
Werner said.
Excessive
credit creation is spurring financial and real estate transactions which
are pushing up asset prices -- ``the classic
bubble,''
Werner said.
Economists
said credit creation through loans by the U.S. banking system is expanding
at around 10 percent year-on-year, the highest growth rate since the 1980s.
``If
the U.S. economic data are strong, fears of a rate rise will return, suggesting
dollar upside,'' said Sally Wilkinson, senior
economist
at Daiwa Europe in London.
First
quarter U.S. employment cost index is expected to rise 0.9 percent from
one percent in the previous quarter.
An
advance estimate of quarter one U.S. gross domestic product is also expected
at 1230 GMT.
At
0835 GMT the dollar was at 1.7921/26 marks and 131.93/03 yen
Con't
on
News
and analysis GO TO
Money pages first
forecast.htm,
then
conditions.htm
Main page Flash.htm
----------
G
o to Wiredbrain's
ACTIVE-NEWS
PAGE
----------
Con't on money
PAGE TWO
----------
G
o to Wiredbrain's
Current up-dates
up."
But all empires lack vision and ability to change.
It’s not hardware, it’s not software, but it is service-ware.
Companies that
don’t sell machines or programs but universal services.
Sign-up and we
give you the container, the link, and all the services
you can think of and
many that you haven’t though of yet.
I soon will be able to pull down the word processing "service"
tied to voice and video "services". I
will be able to pull down interactive forms "service",
a search service, marketing services,
shopping service, broadcast and narrow cast services,
product design and production services,
travel, insurance, investment and banking services designed
and distributed by other services .
All these services we now called companies, producers,
distributors, stores and markets become
part of the services network.
The telephone company (
tele - sounds )is a service: television ( tele -
pictures ) networks and stations are service including
broadcast ( send sound and picture over a
wide area ): computers are not a machine or thing but
provide systems capacity to do something,
assign traits and store information and programs ( software
to help machines - do stuff ). All these
THINGS are becoming parts of a system of service with
nodes and terminals.
The core of the global service system is the operational
codes and languages. Everyone has to
understand ever one else and terminals need to talk to
nodes and servers need to communicate
with servers in common coded packets moving a mega-speeds
back and fourth.
These codes and
languages are extensions of Hyper Text Transfer Protocol
, ftp ( file transfer ) and operations such
as Java.
Saturday
May 9 8:05 AM EDT
ZANNY
MINTON BEDDOES: When we talk about a bubble, we talk about rising
fundamentals
would warrant, and they're going up because of some kind of speculative
frenzy,
to use a phrase, again, that Chairman Greenspan used, some kind of irrational
exuberance.
We're all feeling good. We're buying shares. Prices are going up not because
of
fundamental changes or not only because of fundamental changes, more because
there's
a kind of frenzied buying.
And
that's what we mean by a bubble, and we worry about it for two reasons.
We worry about it because
bubbles
tend to burst. Financial markets have had bubbles ever since finance started.
But the problem is that they
The other
problem is that if they--if
the
bubble continues, then this kind of inflation in asset prices--because
that's really what it is--can spill over into
ZANNY
MINTON BEDDOES: Well, I agree that there have been changes in the world
economy, and there
have
been changes in the U.S. economy.
The question is how big have these changes
been and do they justify
today's
prices, and I think one argument that is frequently made by the people
who believe in this new economy or
happened
in the last two years in the U.S. economy, we've grown far faster than
the trend growth, and we--than
economists
normally think the economy can grow--and that is because we've used more
people. Unemployment
The one
thing that does seem to be different is
that
as wages are rising, there isn't this immediate transfer into higher inflation.
Now,
there are--that could be because of some new rules. It could also be because
there
are
a lot of temporary factors which have actually influenced. One is that
benefits have
been
rising much more slowly than they used to.
The HMO revolution has meant
that its
employers
have been able to cut costs in areas where they traditionally weren't able
to cut
costs.
Secondly, the dollar is very strong. Now, the strength of the dollar
also dampens
inflation.
Thirdly, commodity prices are weak.
They're weak in part because
of the
problems
in Asia, but they're not--those are not structural changes.
They're temporary
things
that could change, and when they change, I think we'll see the old rules
coming back into play.
Are
stocks poised to flame out?
Friday
May 8th:
08:33
U.S. UNEMPLOYMENT RATE FALLS TO 4.3%, AVERAGE HOURLY EARNINGS UP 4C IN
APRIL, NEAR CONSENSUS.
08:32
RETAIL ADDS 44,000 JOBS.
08:32
CONSTRUCTION ADDS 35,000 JOBS.
08:32
SERVICES ADD 139,000 JOBS.
08:32
10,000 FACTORY JOBS LOST IN APRIL.
08:32
AVERAGE FACTORY WORKWEEK FALLS 1.1 HOURS TO 40.7.
08:32
AVERAGE WORKWEEK FALLS 0.3 HOURS TO 34.4.
08:32
HOURLY EARNINGS RISE 4 CENTS IN APRIL OR 0.3%.
08:32
4.3% JOBLESS RATE LOWEST SINCE FEB 1970.
08:32
262,000 JOBS CREATED IN APRIL; UNEMPLOYMENT RATE FALLS TO 4.3%.
08:31
U.S. 30-YR TREASURY UP SLIGHTLY ON UNEMPLOYMENT NEWS.
08:48
US JUNE BOND FUTURE DROPS 8/32 TO 120-03 ON JOBLESS DATA.
08:48
US 30-YR TREASURY BOND DROPS 12/32 TO 102-03, YIELD AT 5.99%.
08:48
US 10-YR TREASURY BOND DROPS 5/32 TO 98+14, YIELD AT 5.71%.
08:48
US 5-YR TREASURY BOND DROPS 4/32 TO 100+13, YIELD AT 5.65%.
08:48
US 3-YR TREASURY BOND DROPS 1/32 TO 99+11, YIELD AT 5.63%.
08:48
US 2-YR TREASURY BOND DROPS 2/32 TO 100-02, YIELD AT 5.58%.
08:48
US TREASURIES GO LOWER ON APRIL JOBLESS RATE.
08:48
US 1-YR T-BILL DISCOUNT RATE UP 2 BASIS POINTS TO 5.15%.
08:48
US 6-MONTH T-BILL DISCOUNT RATE UP 3 BASIS POINTS TO 5.13%.
08:48
US 3-MONTH T-BILL DISCOUNT RATE UP 2 BASIS POINTS TO 5.00%.
08:31
U.S. UNEMPLOYMENT RATE LOWEST SINCE FEB. 1970.
08:31
UNEMPLOYMENT RATE FALLS TO 4.3%, DOWN .4 PERCENTAGE POINTS.
08:31
APRIL NON-FARM PAYROLL UP 262,000, CONSENSUS 250,000.
07:20
BRITISH POUND 1.6403 DOWN .0071, OR -0.4%.
07:20
GERMAN DMARK 1.7718 UP .0034, OR +0.2%.
07:20
JAPAN YEN 132.56 DOWN .72, OR -0.5%.
07:20
U.S. 30-YR. BOND 5.948 UP 1 17/32, OR 0.1%.
07:20
FRANCE CAC 40 3906.36 UP 41.09, OR +1.04%.
07:20
GERMAN DAX 5260.56 UP 74.33, OR +1.43%.
07:20
LONDON FT 100 5965.5 UP 18.5, OR +0.5%.
07:12
FOREIGN STOCK MARKETS MOSTLY LOWER AUSTRALIAN MARKET 2780.50 DOWN 0.3,
OR -0.01%.
Korea
down - Asia mixed - London and Germany UP, France down
To
see what we said this morning and last night, see
http://www.wiredbrain.net/short.htm
..
The
news before it happens: Unemployment drops 4.2 % and new jobs increase
260,000 - adding to worries of rate increases :
The
government on Friday is scheduled to release the monthly employment data
for April, its first major reading on how the economy performed last month.
Analysts
surveyed by Reuters expect the unemployment rate to be unchanged at 4.7
percent with 259,000 new jobs created outside the farm sector. That compares
with the March rate of a decline of 36,000.
Last
month, the Conference Board put the help-wanted advertising index, which
tracks employment growth, at 92.0 in March, unchanged from February but
well above the March 1997 rate of 87.0, showing no drop in demand for labor.
The
feeling among the skeptics is that even if the employment figure is satisfactory,
there is no guarantee that the Fed is not
going
to tighten," Metz said.
Investors
appeared little reassured by Fed Vice Chairwoman Alice Rivlin who said
that a desire to rein in a high-flying stock
market
would not be a reason by itself for the central bank to raise interest
rates.
The
Fed was not considering changing margin requirements on stock trades, Rivlin
said.
There was no big risk of inflation
taking
off, she added.
Thursday
May 7th:
Editoral:
The
tradition is that good news = bad news because rapid growth = inflation.
Starrting in Nov. good news was good news because it = higher earning. Now
with a market well over any rational P/E the growth of earning and/or changes
of 1/4 % in a minor bank rate really can't make much difference. BUT when
prices are so high any excuse is a good excuse to sell - SO good news is
bad news again and bad news is bad news -
The employment number will be
up because the GDP was growing at a very high rate ( over 4 %) Wages are
going up in areas of demand but not in semi-skilled service jobs - as it
has been since 1969.
The problem is not wage inflation but a bubble - ready
to pop - in real estate - in stock prices - yo-yo land - the President
and Congress want to be popular. A reasonable slow down will be a lot better
than a CRASH ! And now, rather than close to an election.
The clients of
the Federal Central Bank - the World Banking System - need order in a time
of some real problems - and order means being able to add to the money
supply - which you can't do without great risk during a speculative bubble.
Fed
reminds Wall Street it is still top dog
By
Pierre Belec
NEW
YORK (Reuters) - Life is good on Wall Street. Consumer confidence is
the highest in some 30 years, inflation the lowest since the 1960s and
the stock market is soaring to the moon.
But
the Federal Reserve says trouble is bubbling in the economy.
Wall
Street was again reminded this week that the Fed is still the top dog.
The
secretive Fed leaked information that it had shifted monetary policy toward
a bias, which called for higher interest rates, because of concern that
the economy's robust growth may reignite inflation.
The
hint that the cost of borrowing may go up hit the market like a ton of
bricks, sending stocks into a tailspin at the beginning of the week as
investors pushed the panic button.
The
market had been betting that the central bank would not raise interest
rates and there was even speculation that lending rates would drop before
the end of the year.
But
by week's end, the market had roared back with a vengeance on a report
that inflation was still holding at the lowest level in some 30 years,
even though the economy grew at a fast pace in the first quarter.
Is
the Fed looking at the wrong radar screen?
Some
experts believe the central bank is actually more worried about the surge
in stock prices than any underlying inflation.
"
The
stock market is too speculative, exuberant and overvalued and there's the
risk that it could lead to financial asset inflation eventually causing
real sector inflation," said Hugh Johnson, chief investment officer for
First Albany Corp.
----------
G
o to Wiredbrain's
ACTIVE-NEWS
PAGE
----------
G
o to Wiredbrain's
PAGE TWO
----------
G
o to Wiredbrain's
Current up-dates
Wednesday:
Long bond at
5.84
Talking
the market down-``People are starting to talk about deflation,'' said David
Brickman, international economist at PaineWebber. "
The Fed's worried about
the economy overheating," said Farrell. "I think the Fed would be thrilled
if the financial sector took a deep breath. I think we all should be thrilled."
Federal
Reserve officials Alice Rivlin, Laurence Meyer, and Edward Gramlich, and
Atlanta Fed president Jack Guynn are all speaking later on Wednesday.
U.S. Deputy Treasury Secretary Lawrence Summers is also speaking.
Federal
Reserve Chairman Alan Greenspan speaks at 1615 GMT on Saturday to a meeting
of state bank supervisors.
Wednesday
April 29 6:57 AM EDT
Greenspan
preserved consensus with bias
Home
| Client Access | Contact Us | Help
Market
Letter
05/26/98
The
Market Posture was downgraded to Mildly Bearish the week ending
4/10/98
(DJIA - 8994.96). Initial downside price projection for the DJIA
is
8750. CTI readings should remain negative until late May 1998.
****Check
out "ON THE EDGE" - A monthly review of the markets****
________________________________________________________________________
CURRENT
PRIOR
MARKET
TIMING MODELS READING WEEK CHG CONNOTATION
________________________________________________________________________
CYCLICAL
TREND INDEX (CTI): -4 -4 0 BEARISH
MOMENTUM
INDEX: -8 -6 -2 BEARISH
SENTIMENT
INDEX: 1 2 +1 NEUTRAL
________________________________________________________________________
DOW
JONES INDUSTRIAL AVERAGES (DJIA) CLOSE:................ 9114.44
DJIA
POINT CHANGE FROM PRIOR WEEK:......................... 18.44
DJIA
PERCENTAGE CHANGE FROM PRIOR WEEK:.................... 0.20%
MARKET
POSTURE THIS WEEK:..................................MILD BEARISH
MARKET
POSTURE PRIOR WEEK:.................................MILD BEARISH
DJIA
TARGET:............................................... 8750
TIME
FRAME TO ACHIEVE TARGET:.............................. 29-May-98
DATE
CURRENT MARKET POSTURE FORMULATED:.................... 10-Apr-98
DJIA
CLOSE ON DATE CURRENT MARKET POSTURE FORMULATED:...... 8994.96
________________________________________________________________________
CYCLICAL
TREND INDEX (CTI).......... -4 CONNOTATION
________________________________________________________________________
29-May-98
(Projected) 7 BULLISH
05-Jun-98
(Projected) 7 BULLISH
12-Jun-98
(Projected) 7 BULLISH
19-Jun-98
(Projected) 7 BULLISH
26-Jun-98
(Projected) 7 BULLISH
________________________________________________________________________
MOMENTUM
INDEX...................... -8 % CHG CONNOTATION
________________________________________________________________________
1)
DJ Transportation Average 3390.59 +1.0% BEARISH
2)
S&P 500 Index 1108.25 -0.0% BEARISH
3)
NYSE Composite Index 574.58 0.0% BEARISH
4)
Advance-Decline Line -5505 BULLISH
5)
10 Day MA Advance-Decline Line 0.80 0.0% BEARISH
6)
AMEX Index 730.57 -0.9% BEARISH
7)
NASDAQ Composite Index 1802.72 -2.4% BEARISH
8)
DJ Utilities Index 280.06 0.1% BEARISH
9)
TRIN+10 Day Average 1.04 0.0% NEUTRAL
10)
NYSE New Highs-New Lows 251+137 NEUTRAL
11)
Zweig Breadth Indicator 0.40 BEARISH
12)
McClellan Oscillator -76 NEUTRAL
13)
McClellan Summation Index 628 BULLISH
14)
Unchanged Issue Index 0.17 BEARISH
________________________________________________________________________
SENTIMENT
INDEX..................... 1 % CHG CONNOTATION
________________________________________________________________________
1)
Odd Lot Short Ratio-5 Day Ave 5.03 0.0% BEARISH
2)
NYSE Short Interest Ratio 6.32 1.1% BULLISH
3)
Public-Specialist Short Ratio 0.89 0.0% BULLISH
4)
Put/Call Ratio+10 Day Ave(INDEX) 1.12 0.0% NEUTRAL
5)
Dividend-Yield Spread 5.10 0.0% BULLISH
6)
Mutual Fund Liquid Asset Ratio 4.60 0.0% BEARISH
7)
Bullish Investment Advisors 45.5 0.0% NEUTRAL
8)
Bearish Investment Advisors 25.2 0.0% NEUTRAL
9)
Bearish + Corrections Total 54.5 0.0% NEUTRAL
Home
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Second
Opinion | Personal Stock Watch | Trading Ideas | Pick 6 Filter | Point/Figure
Breakouts | Point/Figure Early Alerts
Special
Situations | Market Analysis | Market Letter | Stock Analysis | Industry
Group Analysis
By
Isabelle Clary
NEW
YORK (Reuters) - Federal Reserve Chairman Alan Greenspan agreed at the
March meeting of Fed policy-makers to
reintroduce
a bias toward raising interest rates, appeasing anti-inflation hawks on
the panel and preserving consensus, sources
It
is important to remember that the major FED activity is NOT the federal
funds or discount rate but open market selling of bonds and repos to withdraw
liquid assets and increase reserves in the banking systems.
The bias gives
direction to day to day market activity which has more effect than the
discount rate changes. Real rates are below the 5.5 % target.
08:45
US 3-MONTH T-BILL DISCOUNT RATE DROPS 2 BASIS POINTS TO 4.90%.
08:44
US 6-MONTH T-BILL DISCOUNT RATE DROPS 1 BASIS POINT TO 5.09%.
The
effective discount rate ( the price of money to banks ) is LIBOR MAY98
94.32 London Inter bank loan rate at 5.68 % sets other bank loan rates
- the short term rate set by EURO $ JUN98 94.225 = 5.775 % is over the
target of 5.5 % and going up. So bias does matter more than the actual
official change is a minor rate - the federal funds ( over night ) discount
rate.
The cost of money is going up which might slow certain types of interest
sensitive economic activity. It is not that the fed does nothing but wait
and have meeting - but is very active every day in the market.
Dollar/mark
was unlikely to show major movement ahead of the weekend meetings of European
Union officials to decide the
countries
which will join the single currency from 1999, but the mark might receive
a boost subsequently, analysts said.
On
the foreign exchanges, the dollar was slightly firmer but trading was range-bound
partly because of a holiday in Japan and
as
the markets awaited a batch of speeches from central bank and finance officials.
---------------------------------------------------------------
MARKET
PRICES AT 1101 GMT
Mark
1.7972/77 Yen 132.18/28 Sterling 1.6686/96
Gold
$307.50/7.90 -0.75 (pvs PM fix) Brent $14.61 +0.01
FTSE
100 5818.0 +11.4 CAC 3756.49 -20.74 X-DAX 5125.71 +14.83
---------------------------------------------------------------
By
mid-session, London's blue-chip FTSE 100 index was 0.4 percent firmer,
rescued by bargain-hunters from earlier losses
and
Germany's Xetra DAX was up 0.4 percent.
The
Belgian, Dutch, Greek and Swiss markets were also amongst the gainers but
French, Italian and Spanish bourses were in
the
red, pausing for breath after Tuesday's gains amid nerves over Wall Street
and confusion over U.S. rates.
Friday
May 1, 10:50 am Eastern Time
US
Treasuries slip on talk Fed checks forex rates:
The
basics:
A
too fast growth rate, gives too much money in the system, plus the Asia
thing causes lower exports, higher inports, pressure on the dollar which
is falling.
A
listing of the main NAPM components follows:
April
March Feb Jan Dec Nov Oct Sept Aug
PMI
52.9 54.8 53.3 52.4 53.1 54.5 55.9 54.6 56.4
Production
53.4 57.6 55.3 53.3 55.8 58.5 59.6 58.4 61.2
New
Orders 56.8 57.3 55.9 55.2 53.9 55.1 58.4 56.1 60.4
Supplier
Del 52.3 53.4 52.1 52.0 54.0 55.2 55.0 55.5 55.6
Inventories
46.6 46.8 46.9 46.7 46.5 44.3 47.0 46.2 43.4
Employment
49.8 52.5 50.9 50.1 50.9 53.3 52.5 51.1 51.6
Prices
41.2 44.4 45.8 44.7 50.8 53.2 55.5 54.1 53.4
Export
Orders 49.7 48.0 47.9 45.0 50.6 52.6 51.9 51.2 55.1
Imports
56.3 53.4 51.2 53.9 55.4 52.6 51.7 53.1 53.9
US
Treasuries off post-NAPM highs in forex intervention fear. *Mkt talk Fed
checking forex rates, but Fed says ``no comment.'' *Impact greatest in
bills, 3-mo rates jump 5 bps in 45 mins. *Long end outperforming but off
highs, profit-taking seen. *Traders report foreign central bank selling.
Thursday
April 30, 8:56 am Eastern Time
U.S.
economy accelerated in Q1, inflation mute
Thursday
April 30, 8:56 am Eastern Time
WASHINGTON,
April 30 (Reuters) -
The U.S. economy unexpectedly picked up speed in the
first quarter of 1998, surging ahead at a brisk 4.2 percent annual rate
on booming consumer spending while inflation remained at its most muted
levels in 35 years, the Commerce Department said on Thursday.
It
was the sixth straight quarter in which Gross Domestic Product advanced
at an annual rate of 3 percent or more - well above the 2+1/4 percent target
range the Federal Reserve considers can be safely sustained without risking
a flareup in inflation pressures. First-quarter GDP growth handily outstripped
Wall Street economists' forecasts for a 3.3 percent rate of expansion as
it accelerated from last year's fourth-quarter 3.7 percent pace instead
of slowing.
A
chorus of U.S. central bank governors has warned recently that the economy
needs to soon show convincing evidence of a slowdown, unnerving financial
markets after reports the Fed has shifted to a position of increased willingness
to raise interest rates. Policymakers' concern that Asia's economic woes
were not enough to offset buoyant domestic demand appeared to be supported
by the first-quarter GDP report.
DOWN 40 or 50
to 1050
If
the news is "good", rapid growth that's "bad" because it implies inflation
and higher money costs. If the news is "bad", lower growth and earning
that's good- maybe. Labor costs are going to be higher but how high is
high ?
The chances are 2/3 down, 1/3 up - but the reactions to economic
news are not always what is expected.
Thursday:
April 30th
``If
the U.S. economic data are strong, fears of a rate rise will return, suggesting
dollar upside,'' said Sally Wilkinson, senior
economist
at Daiwa Europe in London.
--------------------------------------------------------------
MARKET
PRICES AT 0905 GMT
Mark
1.7937/42 Yen 132.05/15 Sterling 1.6686/96
Gold
$310.90/1.30 +2.65 (pvs PM fix) Brent $14.39 +0.14
FTSE
100 5843.7 +10.6 CAC 3746.61 +12.68 X-DAX 5101.43 +17.63
---------------------------------------------------------------
U.S.
Federal Reserve chairman Alan Greenspan is known to consider ECI figures
as an important indicator of inflationary
pressures
building in a robust U.S. economy.
Thursday
April 30, 4:14 am Eastern Time
Wall
St bubble risk looms,
but is Asia to blame?
By
Yoshiko Mori
TOKYO,
April 30 (Reuters) -
The U.S. stock market is being poisoned by a ``classic
bubble'' and the risk is looming of a
downward
correction of 10 to 20 percent, economists in Tokyo say.
``
The
current state of Wall Street is similar to what happened in Tokyo in 1987
when it was already apparent that the asset
market
bubbles were getting out of hand,'' said Richard Werner, Tokyo-based chief
economist and managing director of Profit Research Centre Ltd.
Excessive
capital created by the U.S. banking system and the Federal Reserve has
been the major cause of recent Wall Street
gains,
Werner said.
Excessive
credit creation is spurring financial and real estate transactions which
are pushing up asset prices -- ``the classic
bubble,''
Werner said.
Economists
said credit creation through loans by the U.S. banking system is expanding
at around 10 percent year-on-year, the highest growth rate since the 1980s.
``If
the U.S. economic data are strong, fears of a rate rise will return, suggesting
dollar upside,'' said Sally Wilkinson, senior
economist
at Daiwa Europe in London.
First
quarter U.S. employment cost index is expected to rise 0.9 percent from
one percent in the previous quarter.
An
advance estimate of quarter one U.S. gross domestic product is also expected
at 1230 GMT.
At
0835 GMT the dollar was at 1.7921/26 marks and 131.93/03 yen
Con't
on
News
and analysis GO TO
Money pages first
forecast.htm,
then
conditions.htm
Main page Flash.htm
----------
G
o to Wiredbrain's
ACTIVE-NEWS
PAGE
----------
Con't on money
PAGE TWO
----------
G
o to Wiredbrain's
Current up-dates
don’t sell machines or programs but universal services. Sign-up and we
give you the container, the link, and all the services you can think of and
many that you haven’t though of yet.
I soon will be able to pull down the word processing "service"
tied to voice and video "services". I
will be able to pull down interactive forms "service",
a search service, marketing services,
shopping service, broadcast and narrow cast services,
product design and production services,
travel, insurance, investment and banking services designed
and distributed by other services .
All these services we now called companies, producers,
distributors, stores and markets become
part of the services network.
The telephone company (
tele - sounds )is a service: television ( tele -
pictures ) networks and stations are service including
broadcast ( send sound and picture over a
wide area ): computers are not a machine or thing but
provide systems capacity to do something,
assign traits and store information and programs ( software
to help machines - do stuff ). All these
THINGS are becoming parts of a system of service with
nodes and terminals.
The core of the global service system is the operational
codes and languages. Everyone has to
understand ever one else and terminals need to talk to
nodes and servers need to communicate
with servers in common coded packets moving a mega-speeds
back and fourth.
These codes and
languages are extensions of Hyper Text Transfer Protocol
, ftp ( file transfer ) and operations such
as Java.
Saturday
May 9 8:05 AM EDT
ZANNY
MINTON BEDDOES: When we talk about a bubble, we talk about rising
fundamentals
would warrant, and they're going up because of some kind of speculative
frenzy,
to use a phrase, again, that Chairman Greenspan used, some kind of irrational
exuberance.
We're all feeling good. We're buying shares. Prices are going up not because
of
fundamental changes or not only because of fundamental changes, more because
there's
a kind of frenzied buying.
And
that's what we mean by a bubble, and we worry about it for two reasons.
We worry about it because
bubbles
tend to burst. Financial markets have had bubbles ever since finance started.
But the problem is that they
The other
problem is that if they--if
the
bubble continues, then this kind of inflation in asset prices--because
that's really what it is--can spill over into
ZANNY
MINTON BEDDOES: Well, I agree that there have been changes in the world
economy, and there
have
been changes in the U.S. economy.
The question is how big have these changes
been and do they justify
today's
prices, and I think one argument that is frequently made by the people
who believe in this new economy or
happened
in the last two years in the U.S. economy, we've grown far faster than
the trend growth, and we--than
economists
normally think the economy can grow--and that is because we've used more
people. Unemployment
The one
thing that does seem to be different is
that
as wages are rising, there isn't this immediate transfer into higher inflation.
Now,
there are--that could be because of some new rules. It could also be because
there
are
a lot of temporary factors which have actually influenced. One is that
benefits have
been
rising much more slowly than they used to.
The HMO revolution has meant
that its
employers
have been able to cut costs in areas where they traditionally weren't able
to cut
costs.
Secondly, the dollar is very strong. Now, the strength of the dollar
also dampens
inflation.
Thirdly, commodity prices are weak.
They're weak in part because
of the
problems
in Asia, but they're not--those are not structural changes.
They're temporary
things
that could change, and when they change, I think we'll see the old rules
coming back into play.
Are
stocks poised to flame out?
Friday
May 8th:
08:33
U.S. UNEMPLOYMENT RATE FALLS TO 4.3%, AVERAGE HOURLY EARNINGS UP 4C IN
APRIL, NEAR CONSENSUS.
08:32
RETAIL ADDS 44,000 JOBS.
08:32
CONSTRUCTION ADDS 35,000 JOBS.
08:32
SERVICES ADD 139,000 JOBS.
08:32
10,000 FACTORY JOBS LOST IN APRIL.
08:32
AVERAGE FACTORY WORKWEEK FALLS 1.1 HOURS TO 40.7.
08:32
AVERAGE WORKWEEK FALLS 0.3 HOURS TO 34.4.
08:32
HOURLY EARNINGS RISE 4 CENTS IN APRIL OR 0.3%.
08:32
4.3% JOBLESS RATE LOWEST SINCE FEB 1970.
08:32
262,000 JOBS CREATED IN APRIL; UNEMPLOYMENT RATE FALLS TO 4.3%.
08:31
U.S. 30-YR TREASURY UP SLIGHTLY ON UNEMPLOYMENT NEWS.
08:48
US JUNE BOND FUTURE DROPS 8/32 TO 120-03 ON JOBLESS DATA.
08:48
US 30-YR TREASURY BOND DROPS 12/32 TO 102-03, YIELD AT 5.99%.
08:48
US 10-YR TREASURY BOND DROPS 5/32 TO 98+14, YIELD AT 5.71%.
08:48
US 5-YR TREASURY BOND DROPS 4/32 TO 100+13, YIELD AT 5.65%.
08:48
US 3-YR TREASURY BOND DROPS 1/32 TO 99+11, YIELD AT 5.63%.
08:48
US 2-YR TREASURY BOND DROPS 2/32 TO 100-02, YIELD AT 5.58%.
08:48
US TREASURIES GO LOWER ON APRIL JOBLESS RATE.
08:48
US 1-YR T-BILL DISCOUNT RATE UP 2 BASIS POINTS TO 5.15%.
08:48
US 6-MONTH T-BILL DISCOUNT RATE UP 3 BASIS POINTS TO 5.13%.
08:48
US 3-MONTH T-BILL DISCOUNT RATE UP 2 BASIS POINTS TO 5.00%.
08:31
U.S. UNEMPLOYMENT RATE LOWEST SINCE FEB. 1970.
08:31
UNEMPLOYMENT RATE FALLS TO 4.3%, DOWN .4 PERCENTAGE POINTS.
08:31
APRIL NON-FARM PAYROLL UP 262,000, CONSENSUS 250,000.
07:20
BRITISH POUND 1.6403 DOWN .0071, OR -0.4%.
07:20
GERMAN DMARK 1.7718 UP .0034, OR +0.2%.
07:20
JAPAN YEN 132.56 DOWN .72, OR -0.5%.
07:20
U.S. 30-YR. BOND 5.948 UP 1 17/32, OR 0.1%.
07:20
FRANCE CAC 40 3906.36 UP 41.09, OR +1.04%.
07:20
GERMAN DAX 5260.56 UP 74.33, OR +1.43%.
07:20
LONDON FT 100 5965.5 UP 18.5, OR +0.5%.
07:12
FOREIGN STOCK MARKETS MOSTLY LOWER AUSTRALIAN MARKET 2780.50 DOWN 0.3,
OR -0.01%.
Korea
down - Asia mixed - London and Germany UP, France down
To
see what we said this morning and last night, see
http://www.wiredbrain.net/short.htm
..
The
news before it happens: Unemployment drops 4.2 % and new jobs increase
260,000 - adding to worries of rate increases :
The
government on Friday is scheduled to release the monthly employment data
for April, its first major reading on how the economy performed last month.
Analysts
surveyed by Reuters expect the unemployment rate to be unchanged at 4.7
percent with 259,000 new jobs created outside the farm sector. That compares
with the March rate of a decline of 36,000.
Last
month, the Conference Board put the help-wanted advertising index, which
tracks employment growth, at 92.0 in March, unchanged from February but
well above the March 1997 rate of 87.0, showing no drop in demand for labor.
The
feeling among the skeptics is that even if the employment figure is satisfactory,
there is no guarantee that the Fed is not
going
to tighten," Metz said.
Investors
appeared little reassured by Fed Vice Chairwoman Alice Rivlin who said
that a desire to rein in a high-flying stock
market
would not be a reason by itself for the central bank to raise interest
rates.
The
Fed was not considering changing margin requirements on stock trades, Rivlin
said.
There was no big risk of inflation
taking
off, she added.
Thursday
May 7th:
Editoral:
The
tradition is that good news = bad news because rapid growth = inflation.
Starrting in Nov. good news was good news because it = higher earning. Now
with a market well over any rational P/E the growth of earning and/or changes
of 1/4 % in a minor bank rate really can't make much difference. BUT when
prices are so high any excuse is a good excuse to sell - SO good news is
bad news again and bad news is bad news -
The employment number will be
up because the GDP was growing at a very high rate ( over 4 %) Wages are
going up in areas of demand but not in semi-skilled service jobs - as it
has been since 1969.
The problem is not wage inflation but a bubble - ready
to pop - in real estate - in stock prices - yo-yo land - the President
and Congress want to be popular. A reasonable slow down will be a lot better
than a CRASH ! And now, rather than close to an election.
The clients of
the Federal Central Bank - the World Banking System - need order in a time
of some real problems - and order means being able to add to the money
supply - which you can't do without great risk during a speculative bubble.
Fed
reminds Wall Street it is still top dog
By
Pierre Belec
NEW
YORK (Reuters) - Life is good on Wall Street. Consumer confidence is
the highest in some 30 years, inflation the lowest since the 1960s and
the stock market is soaring to the moon.
But
the Federal Reserve says trouble is bubbling in the economy.
Wall
Street was again reminded this week that the Fed is still the top dog.
The
secretive Fed leaked information that it had shifted monetary policy toward
a bias, which called for higher interest rates, because of concern that
the economy's robust growth may reignite inflation.
The
hint that the cost of borrowing may go up hit the market like a ton of
bricks, sending stocks into a tailspin at the beginning of the week as
investors pushed the panic button.
The
market had been betting that the central bank would not raise interest
rates and there was even speculation that lending rates would drop before
the end of the year.
But
by week's end, the market had roared back with a vengeance on a report
that inflation was still holding at the lowest level in some 30 years,
even though the economy grew at a fast pace in the first quarter.
Is
the Fed looking at the wrong radar screen?
Some
experts believe the central bank is actually more worried about the surge
in stock prices than any underlying inflation.
"
The
stock market is too speculative, exuberant and overvalued and there's the
risk that it could lead to financial asset inflation eventually causing
real sector inflation," said Hugh Johnson, chief investment officer for
First Albany Corp.
----------
G
o to Wiredbrain's
ACTIVE-NEWS
PAGE
----------
G
o to Wiredbrain's
PAGE TWO
----------
G
o to Wiredbrain's
Current up-dates
Wednesday:
Long bond at
5.84
Talking
the market down-``People are starting to talk about deflation,'' said David
Brickman, international economist at PaineWebber. "
The Fed's worried about
the economy overheating," said Farrell. "I think the Fed would be thrilled
if the financial sector took a deep breath. I think we all should be thrilled."
Federal
Reserve officials Alice Rivlin, Laurence Meyer, and Edward Gramlich, and
Atlanta Fed president Jack Guynn are all speaking later on Wednesday.
U.S. Deputy Treasury Secretary Lawrence Summers is also speaking.
Federal
Reserve Chairman Alan Greenspan speaks at 1615 GMT on Saturday to a meeting
of state bank supervisors.
Wednesday
April 29 6:57 AM EDT
Greenspan
preserved consensus with bias
Home
| Client Access | Contact Us | Help
Market
Letter
05/26/98
The
Market Posture was downgraded to Mildly Bearish the week ending
4/10/98
(DJIA - 8994.96). Initial downside price projection for the DJIA
is
8750. CTI readings should remain negative until late May 1998.
****Check
out "ON THE EDGE" - A monthly review of the markets****
________________________________________________________________________
CURRENT
PRIOR
MARKET
TIMING MODELS READING WEEK CHG CONNOTATION
________________________________________________________________________
CYCLICAL
TREND INDEX (CTI): -4 -4 0 BEARISH
MOMENTUM
INDEX: -8 -6 -2 BEARISH
SENTIMENT
INDEX: 1 2 +1 NEUTRAL
________________________________________________________________________
DOW
JONES INDUSTRIAL AVERAGES (DJIA) CLOSE:................ 9114.44
DJIA
POINT CHANGE FROM PRIOR WEEK:......................... 18.44
DJIA
PERCENTAGE CHANGE FROM PRIOR WEEK:.................... 0.20%
MARKET
POSTURE THIS WEEK:..................................MILD BEARISH
MARKET
POSTURE PRIOR WEEK:.................................MILD BEARISH
DJIA
TARGET:............................................... 8750
TIME
FRAME TO ACHIEVE TARGET:.............................. 29-May-98
DATE
CURRENT MARKET POSTURE FORMULATED:.................... 10-Apr-98
DJIA
CLOSE ON DATE CURRENT MARKET POSTURE FORMULATED:...... 8994.96
________________________________________________________________________
CYCLICAL
TREND INDEX (CTI).......... -4 CONNOTATION
________________________________________________________________________
29-May-98
(Projected) 7 BULLISH
05-Jun-98
(Projected) 7 BULLISH
12-Jun-98
(Projected) 7 BULLISH
19-Jun-98
(Projected) 7 BULLISH
26-Jun-98
(Projected) 7 BULLISH
________________________________________________________________________
MOMENTUM
INDEX...................... -8 % CHG CONNOTATION
________________________________________________________________________
1)
DJ Transportation Average 3390.59 +1.0% BEARISH
2)
S&P 500 Index 1108.25 -0.0% BEARISH
3)
NYSE Composite Index 574.58 0.0% BEARISH
4)
Advance-Decline Line -5505 BULLISH
5)
10 Day MA Advance-Decline Line 0.80 0.0% BEARISH
6)
AMEX Index 730.57 -0.9% BEARISH
7)
NASDAQ Composite Index 1802.72 -2.4% BEARISH
8)
DJ Utilities Index 280.06 0.1% BEARISH
9)
TRIN+10 Day Average 1.04 0.0% NEUTRAL
10)
NYSE New Highs-New Lows 251+137 NEUTRAL
11)
Zweig Breadth Indicator 0.40 BEARISH
12)
McClellan Oscillator -76 NEUTRAL
13)
McClellan Summation Index 628 BULLISH
14)
Unchanged Issue Index 0.17 BEARISH
________________________________________________________________________
SENTIMENT
INDEX..................... 1 % CHG CONNOTATION
________________________________________________________________________
1)
Odd Lot Short Ratio-5 Day Ave 5.03 0.0% BEARISH
2)
NYSE Short Interest Ratio 6.32 1.1% BULLISH
3)
Public-Specialist Short Ratio 0.89 0.0% BULLISH
4)
Put/Call Ratio+10 Day Ave(INDEX) 1.12 0.0% NEUTRAL
5)
Dividend-Yield Spread 5.10 0.0% BULLISH
6)
Mutual Fund Liquid Asset Ratio 4.60 0.0% BEARISH
7)
Bullish Investment Advisors 45.5 0.0% NEUTRAL
8)
Bearish Investment Advisors 25.2 0.0% NEUTRAL
9)
Bearish + Corrections Total 54.5 0.0% NEUTRAL
Home
| Contact Us | Help | Technical Support | Symbol Directory
Second
Opinion | Personal Stock Watch | Trading Ideas | Pick 6 Filter | Point/Figure
Breakouts | Point/Figure Early Alerts
Special
Situations | Market Analysis | Market Letter | Stock Analysis | Industry
Group Analysis
By
Isabelle Clary
NEW
YORK (Reuters) - Federal Reserve Chairman Alan Greenspan agreed at the
March meeting of Fed policy-makers to
reintroduce
a bias toward raising interest rates, appeasing anti-inflation hawks on
the panel and preserving consensus, sources
It
is important to remember that the major FED activity is NOT the federal
funds or discount rate but open market selling of bonds and repos to withdraw
liquid assets and increase reserves in the banking systems.
The bias gives
direction to day to day market activity which has more effect than the
discount rate changes. Real rates are below the 5.5 % target.
08:45
US 3-MONTH T-BILL DISCOUNT RATE DROPS 2 BASIS POINTS TO 4.90%.
08:44
US 6-MONTH T-BILL DISCOUNT RATE DROPS 1 BASIS POINT TO 5.09%.
The
effective discount rate ( the price of money to banks ) is LIBOR MAY98
94.32 London Inter bank loan rate at 5.68 % sets other bank loan rates
- the short term rate set by EURO $ JUN98 94.225 = 5.775 % is over the
target of 5.5 % and going up. So bias does matter more than the actual
official change is a minor rate - the federal funds ( over night ) discount
rate.
The cost of money is going up which might slow certain types of interest
sensitive economic activity. It is not that the fed does nothing but wait
and have meeting - but is very active every day in the market.
Dollar/mark
was unlikely to show major movement ahead of the weekend meetings of European
Union officials to decide the
countries
which will join the single currency from 1999, but the mark might receive
a boost subsequently, analysts said.
On
the foreign exchanges, the dollar was slightly firmer but trading was range-bound
partly because of a holiday in Japan and
as
the markets awaited a batch of speeches from central bank and finance officials.
---------------------------------------------------------------
MARKET
PRICES AT 1101 GMT
Mark
1.7972/77 Yen 132.18/28 Sterling 1.6686/96
Gold
$307.50/7.90 -0.75 (pvs PM fix) Brent $14.61 +0.01
FTSE
100 5818.0 +11.4 CAC 3756.49 -20.74 X-DAX 5125.71 +14.83
---------------------------------------------------------------
By
mid-session, London's blue-chip FTSE 100 index was 0.4 percent firmer,
rescued by bargain-hunters from earlier losses
and
Germany's Xetra DAX was up 0.4 percent.
The
Belgian, Dutch, Greek and Swiss markets were also amongst the gainers but
French, Italian and Spanish bourses were in
the
red, pausing for breath after Tuesday's gains amid nerves over Wall Street
and confusion over U.S. rates.
Friday
May 1, 10:50 am Eastern Time
US
Treasuries slip on talk Fed checks forex rates:
The
basics:
A
too fast growth rate, gives too much money in the system, plus the Asia
thing causes lower exports, higher inports, pressure on the dollar which
is falling.
A
listing of the main NAPM components follows:
April
March Feb Jan Dec Nov Oct Sept Aug
PMI
52.9 54.8 53.3 52.4 53.1 54.5 55.9 54.6 56.4
Production
53.4 57.6 55.3 53.3 55.8 58.5 59.6 58.4 61.2
New
Orders 56.8 57.3 55.9 55.2 53.9 55.1 58.4 56.1 60.4
Supplier
Del 52.3 53.4 52.1 52.0 54.0 55.2 55.0 55.5 55.6
Inventories
46.6 46.8 46.9 46.7 46.5 44.3 47.0 46.2 43.4
Employment
49.8 52.5 50.9 50.1 50.9 53.3 52.5 51.1 51.6
Prices
41.2 44.4 45.8 44.7 50.8 53.2 55.5 54.1 53.4
Export
Orders 49.7 48.0 47.9 45.0 50.6 52.6 51.9 51.2 55.1
Imports
56.3 53.4 51.2 53.9 55.4 52.6 51.7 53.1 53.9
US
Treasuries off post-NAPM highs in forex intervention fear. *Mkt talk Fed
checking forex rates, but Fed says ``no comment.'' *Impact greatest in
bills, 3-mo rates jump 5 bps in 45 mins. *Long end outperforming but off
highs, profit-taking seen. *Traders report foreign central bank selling.
Thursday
April 30, 8:56 am Eastern Time
U.S.
economy accelerated in Q1, inflation mute
Thursday
April 30, 8:56 am Eastern Time
WASHINGTON,
April 30 (Reuters) -
The U.S. economy unexpectedly picked up speed in the
first quarter of 1998, surging ahead at a brisk 4.2 percent annual rate
on booming consumer spending while inflation remained at its most muted
levels in 35 years, the Commerce Department said on Thursday.
It
was the sixth straight quarter in which Gross Domestic Product advanced
at an annual rate of 3 percent or more - well above the 2+1/4 percent target
range the Federal Reserve considers can be safely sustained without risking
a flareup in inflation pressures. First-quarter GDP growth handily outstripped
Wall Street economists' forecasts for a 3.3 percent rate of expansion as
it accelerated from last year's fourth-quarter 3.7 percent pace instead
of slowing.
A
chorus of U.S. central bank governors has warned recently that the economy
needs to soon show convincing evidence of a slowdown, unnerving financial
markets after reports the Fed has shifted to a position of increased willingness
to raise interest rates. Policymakers' concern that Asia's economic woes
were not enough to offset buoyant domestic demand appeared to be supported
by the first-quarter GDP report.
DOWN 40 or 50
to 1050
If
the news is "good", rapid growth that's "bad" because it implies inflation
and higher money costs. If the news is "bad", lower growth and earning
that's good- maybe. Labor costs are going to be higher but how high is
high ?
The chances are 2/3 down, 1/3 up - but the reactions to economic
news are not always what is expected.
Thursday:
April 30th
``If
the U.S. economic data are strong, fears of a rate rise will return, suggesting
dollar upside,'' said Sally Wilkinson, senior
economist
at Daiwa Europe in London.
--------------------------------------------------------------
MARKET
PRICES AT 0905 GMT
Mark
1.7937/42 Yen 132.05/15 Sterling 1.6686/96
Gold
$310.90/1.30 +2.65 (pvs PM fix) Brent $14.39 +0.14
FTSE
100 5843.7 +10.6 CAC 3746.61 +12.68 X-DAX 5101.43 +17.63
---------------------------------------------------------------
U.S.
Federal Reserve chairman Alan Greenspan is known to consider ECI figures
as an important indicator of inflationary
pressures
building in a robust U.S. economy.
Thursday
April 30, 4:14 am Eastern Time
Wall
St bubble risk looms,
but is Asia to blame?
By
Yoshiko Mori
TOKYO,
April 30 (Reuters) -
The U.S. stock market is being poisoned by a ``classic
bubble'' and the risk is looming of a
downward
correction of 10 to 20 percent, economists in Tokyo say.
``
The
current state of Wall Street is similar to what happened in Tokyo in 1987
when it was already apparent that the asset
market
bubbles were getting out of hand,'' said Richard Werner, Tokyo-based chief
economist and managing director of Profit Research Centre Ltd.
Excessive
capital created by the U.S. banking system and the Federal Reserve has
been the major cause of recent Wall Street
gains,
Werner said.
Excessive
credit creation is spurring financial and real estate transactions which
are pushing up asset prices -- ``the classic
bubble,''
Werner said.
Economists
said credit creation through loans by the U.S. banking system is expanding
at around 10 percent year-on-year, the highest growth rate since the 1980s.
``If
the U.S. economic data are strong, fears of a rate rise will return, suggesting
dollar upside,'' said Sally Wilkinson, senior
economist
at Daiwa Europe in London.
First
quarter U.S. employment cost index is expected to rise 0.9 percent from
one percent in the previous quarter.
An
advance estimate of quarter one U.S. gross domestic product is also expected
at 1230 GMT.
At
0835 GMT the dollar was at 1.7921/26 marks and 131.93/03 yen
Con't
on
News
and analysis GO TO
Money pages first
forecast.htm,
then
conditions.htm
Main page Flash.htm
----------
G
o to Wiredbrain's
ACTIVE-NEWS
PAGE
----------
Con't on money
PAGE TWO
----------
G
o to Wiredbrain's
Current up-dates
part of the services network.
The telephone company ( tele - sounds )is a service: television ( tele -
pictures ) networks and stations are service including broadcast ( send sound and picture over a
wide area ): computers are not a machine or thing but provide systems capacity to do something,
assign traits and store information and programs ( software to help machines - do stuff ). All these
THINGS are becoming parts of a system of service with nodes and terminals.
The core of the global service system is the operational
codes and languages. Everyone has to
understand ever one else and terminals need to talk to
nodes and servers need to communicate
with servers in common coded packets moving a mega-speeds
back and fourth.
These codes and
languages are extensions of Hyper Text Transfer Protocol
, ftp ( file transfer ) and operations such
as Java.
Saturday
May 9 8:05 AM EDT
ZANNY
MINTON BEDDOES: When we talk about a bubble, we talk about rising
fundamentals
would warrant, and they're going up because of some kind of speculative
frenzy,
to use a phrase, again, that Chairman Greenspan used, some kind of irrational
exuberance.
We're all feeling good. We're buying shares. Prices are going up not because
of
fundamental changes or not only because of fundamental changes, more because
there's
a kind of frenzied buying.
And
that's what we mean by a bubble, and we worry about it for two reasons.
We worry about it because
bubbles
tend to burst. Financial markets have had bubbles ever since finance started.
But the problem is that they
The other
problem is that if they--if
the
bubble continues, then this kind of inflation in asset prices--because
that's really what it is--can spill over into
ZANNY
MINTON BEDDOES: Well, I agree that there have been changes in the world
economy, and there
have
been changes in the U.S. economy.
The question is how big have these changes
been and do they justify
today's
prices, and I think one argument that is frequently made by the people
who believe in this new economy or
happened
in the last two years in the U.S. economy, we've grown far faster than
the trend growth, and we--than
economists
normally think the economy can grow--and that is because we've used more
people. Unemployment
The one
thing that does seem to be different is
that
as wages are rising, there isn't this immediate transfer into higher inflation.
Now,
there are--that could be because of some new rules. It could also be because
there
are
a lot of temporary factors which have actually influenced. One is that
benefits have
been
rising much more slowly than they used to.
The HMO revolution has meant
that its
employers
have been able to cut costs in areas where they traditionally weren't able
to cut
costs.
Secondly, the dollar is very strong. Now, the strength of the dollar
also dampens
inflation.
Thirdly, commodity prices are weak.
They're weak in part because
of the
problems
in Asia, but they're not--those are not structural changes.
They're temporary
things
that could change, and when they change, I think we'll see the old rules
coming back into play.
Are
stocks poised to flame out?
Friday
May 8th:
08:33
U.S. UNEMPLOYMENT RATE FALLS TO 4.3%, AVERAGE HOURLY EARNINGS UP 4C IN
APRIL, NEAR CONSENSUS.
08:32
RETAIL ADDS 44,000 JOBS.
08:32
CONSTRUCTION ADDS 35,000 JOBS.
08:32
SERVICES ADD 139,000 JOBS.
08:32
10,000 FACTORY JOBS LOST IN APRIL.
08:32
AVERAGE FACTORY WORKWEEK FALLS 1.1 HOURS TO 40.7.
08:32
AVERAGE WORKWEEK FALLS 0.3 HOURS TO 34.4.
08:32
HOURLY EARNINGS RISE 4 CENTS IN APRIL OR 0.3%.
08:32
4.3% JOBLESS RATE LOWEST SINCE FEB 1970.
08:32
262,000 JOBS CREATED IN APRIL; UNEMPLOYMENT RATE FALLS TO 4.3%.
08:31
U.S. 30-YR TREASURY UP SLIGHTLY ON UNEMPLOYMENT NEWS.
08:48
US JUNE BOND FUTURE DROPS 8/32 TO 120-03 ON JOBLESS DATA.
08:48
US 30-YR TREASURY BOND DROPS 12/32 TO 102-03, YIELD AT 5.99%.
08:48
US 10-YR TREASURY BOND DROPS 5/32 TO 98+14, YIELD AT 5.71%.
08:48
US 5-YR TREASURY BOND DROPS 4/32 TO 100+13, YIELD AT 5.65%.
08:48
US 3-YR TREASURY BOND DROPS 1/32 TO 99+11, YIELD AT 5.63%.
08:48
US 2-YR TREASURY BOND DROPS 2/32 TO 100-02, YIELD AT 5.58%.
08:48
US TREASURIES GO LOWER ON APRIL JOBLESS RATE.
08:48
US 1-YR T-BILL DISCOUNT RATE UP 2 BASIS POINTS TO 5.15%.
08:48
US 6-MONTH T-BILL DISCOUNT RATE UP 3 BASIS POINTS TO 5.13%.
08:48
US 3-MONTH T-BILL DISCOUNT RATE UP 2 BASIS POINTS TO 5.00%.
08:31
U.S. UNEMPLOYMENT RATE LOWEST SINCE FEB. 1970.
08:31
UNEMPLOYMENT RATE FALLS TO 4.3%, DOWN .4 PERCENTAGE POINTS.
08:31
APRIL NON-FARM PAYROLL UP 262,000, CONSENSUS 250,000.
07:20
BRITISH POUND 1.6403 DOWN .0071, OR -0.4%.
07:20
GERMAN DMARK 1.7718 UP .0034, OR +0.2%.
07:20
JAPAN YEN 132.56 DOWN .72, OR -0.5%.
07:20
U.S. 30-YR. BOND 5.948 UP 1 17/32, OR 0.1%.
07:20
FRANCE CAC 40 3906.36 UP 41.09, OR +1.04%.
07:20
GERMAN DAX 5260.56 UP 74.33, OR +1.43%.
07:20
LONDON FT 100 5965.5 UP 18.5, OR +0.5%.
07:12
FOREIGN STOCK MARKETS MOSTLY LOWER AUSTRALIAN MARKET 2780.50 DOWN 0.3,
OR -0.01%.
Korea
down - Asia mixed - London and Germany UP, France down
To
see what we said this morning and last night, see
http://www.wiredbrain.net/short.htm
..
The
news before it happens: Unemployment drops 4.2 % and new jobs increase
260,000 - adding to worries of rate increases :
The
government on Friday is scheduled to release the monthly employment data
for April, its first major reading on how the economy performed last month.
Analysts
surveyed by Reuters expect the unemployment rate to be unchanged at 4.7
percent with 259,000 new jobs created outside the farm sector. That compares
with the March rate of a decline of 36,000.
Last
month, the Conference Board put the help-wanted advertising index, which
tracks employment growth, at 92.0 in March, unchanged from February but
well above the March 1997 rate of 87.0, showing no drop in demand for labor.
The
feeling among the skeptics is that even if the employment figure is satisfactory,
there is no guarantee that the Fed is not
going
to tighten," Metz said.
Investors
appeared little reassured by Fed Vice Chairwoman Alice Rivlin who said
that a desire to rein in a high-flying stock
market
would not be a reason by itself for the central bank to raise interest
rates.
The
Fed was not considering changing margin requirements on stock trades, Rivlin
said.
There was no big risk of inflation
taking
off, she added.
Thursday
May 7th:
Editoral:
The
tradition is that good news = bad news because rapid growth = inflation.
Starrting in Nov. good news was good news because it = higher earning. Now
with a market well over any rational P/E the growth of earning and/or changes
of 1/4 % in a minor bank rate really can't make much difference. BUT when
prices are so high any excuse is a good excuse to sell - SO good news is
bad news again and bad news is bad news -
The employment number will be
up because the GDP was growing at a very high rate ( over 4 %) Wages are
going up in areas of demand but not in semi-skilled service jobs - as it
has been since 1969.
The problem is not wage inflation but a bubble - ready
to pop - in real estate - in stock prices - yo-yo land - the President
and Congress want to be popular. A reasonable slow down will be a lot better
than a CRASH ! And now, rather than close to an election.
The clients of
the Federal Central Bank - the World Banking System - need order in a time
of some real problems - and order means being able to add to the money
supply - which you can't do without great risk during a speculative bubble.
Fed
reminds Wall Street it is still top dog
By
Pierre Belec
NEW
YORK (Reuters) - Life is good on Wall Street. Consumer confidence is
the highest in some 30 years, inflation the lowest since the 1960s and
the stock market is soaring to the moon.
But
the Federal Reserve says trouble is bubbling in the economy.
Wall
Street was again reminded this week that the Fed is still the top dog.
The
secretive Fed leaked information that it had shifted monetary policy toward
a bias, which called for higher interest rates, because of concern that
the economy's robust growth may reignite inflation.
The
hint that the cost of borrowing may go up hit the market like a ton of
bricks, sending stocks into a tailspin at the beginning of the week as
investors pushed the panic button.
The
market had been betting that the central bank would not raise interest
rates and there was even speculation that lending rates would drop before
the end of the year.
But
by week's end, the market had roared back with a vengeance on a report
that inflation was still holding at the lowest level in some 30 years,
even though the economy grew at a fast pace in the first quarter.
Is
the Fed looking at the wrong radar screen?
Some
experts believe the central bank is actually more worried about the surge
in stock prices than any underlying inflation.
"
The
stock market is too speculative, exuberant and overvalued and there's the
risk that it could lead to financial asset inflation eventually causing
real sector inflation," said Hugh Johnson, chief investment officer for
First Albany Corp.
----------
G
o to Wiredbrain's
ACTIVE-NEWS
PAGE
----------
G
o to Wiredbrain's
PAGE TWO
----------
G
o to Wiredbrain's
Current up-dates
Wednesday:
Long bond at
5.84
Talking
the market down-``People are starting to talk about deflation,'' said David
Brickman, international economist at PaineWebber. "
The Fed's worried about
the economy overheating," said Farrell. "I think the Fed would be thrilled
if the financial sector took a deep breath. I think we all should be thrilled."
Federal
Reserve officials Alice Rivlin, Laurence Meyer, and Edward Gramlich, and
Atlanta Fed president Jack Guynn are all speaking later on Wednesday.
U.S. Deputy Treasury Secretary Lawrence Summers is also speaking.
Federal
Reserve Chairman Alan Greenspan speaks at 1615 GMT on Saturday to a meeting
of state bank supervisors.
Wednesday
April 29 6:57 AM EDT
Greenspan
preserved consensus with bias
Home
| Client Access | Contact Us | Help
Market
Letter
05/26/98
The
Market Posture was downgraded to Mildly Bearish the week ending
4/10/98
(DJIA - 8994.96). Initial downside price projection for the DJIA
is
8750. CTI readings should remain negative until late May 1998.
****Check
out "ON THE EDGE" - A monthly review of the markets****
________________________________________________________________________
CURRENT
PRIOR
MARKET
TIMING MODELS READING WEEK CHG CONNOTATION
________________________________________________________________________
CYCLICAL
TREND INDEX (CTI): -4 -4 0 BEARISH
MOMENTUM
INDEX: -8 -6 -2 BEARISH
SENTIMENT
INDEX: 1 2 +1 NEUTRAL
________________________________________________________________________
DOW
JONES INDUSTRIAL AVERAGES (DJIA) CLOSE:................ 9114.44
DJIA
POINT CHANGE FROM PRIOR WEEK:......................... 18.44
DJIA
PERCENTAGE CHANGE FROM PRIOR WEEK:.................... 0.20%
MARKET
POSTURE THIS WEEK:..................................MILD BEARISH
MARKET
POSTURE PRIOR WEEK:.................................MILD BEARISH
DJIA
TARGET:............................................... 8750
TIME
FRAME TO ACHIEVE TARGET:.............................. 29-May-98
DATE
CURRENT MARKET POSTURE FORMULATED:.................... 10-Apr-98
DJIA
CLOSE ON DATE CURRENT MARKET POSTURE FORMULATED:...... 8994.96
________________________________________________________________________
CYCLICAL
TREND INDEX (CTI).......... -4 CONNOTATION
________________________________________________________________________
29-May-98
(Projected) 7 BULLISH
05-Jun-98
(Projected) 7 BULLISH
12-Jun-98
(Projected) 7 BULLISH
19-Jun-98
(Projected) 7 BULLISH
26-Jun-98
(Projected) 7 BULLISH
________________________________________________________________________
MOMENTUM
INDEX...................... -8 % CHG CONNOTATION
________________________________________________________________________
1)
DJ Transportation Average 3390.59 +1.0% BEARISH
2)
S&P 500 Index 1108.25 -0.0% BEARISH
3)
NYSE Composite Index 574.58 0.0% BEARISH
4)
Advance-Decline Line -5505 BULLISH
5)
10 Day MA Advance-Decline Line 0.80 0.0% BEARISH
6)
AMEX Index 730.57 -0.9% BEARISH
7)
NASDAQ Composite Index 1802.72 -2.4% BEARISH
8)
DJ Utilities Index 280.06 0.1% BEARISH
9)
TRIN+10 Day Average 1.04 0.0% NEUTRAL
10)
NYSE New Highs-New Lows 251+137 NEUTRAL
11)
Zweig Breadth Indicator 0.40 BEARISH
12)
McClellan Oscillator -76 NEUTRAL
13)
McClellan Summation Index 628 BULLISH
14)
Unchanged Issue Index 0.17 BEARISH
________________________________________________________________________
SENTIMENT
INDEX..................... 1 % CHG CONNOTATION
________________________________________________________________________
1)
Odd Lot Short Ratio-5 Day Ave 5.03 0.0% BEARISH
2)
NYSE Short Interest Ratio 6.32 1.1% BULLISH
3)
Public-Specialist Short Ratio 0.89 0.0% BULLISH
4)
Put/Call Ratio+10 Day Ave(INDEX) 1.12 0.0% NEUTRAL
5)
Dividend-Yield Spread 5.10 0.0% BULLISH
6)
Mutual Fund Liquid Asset Ratio 4.60 0.0% BEARISH
7)
Bullish Investment Advisors 45.5 0.0% NEUTRAL
8)
Bearish Investment Advisors 25.2 0.0% NEUTRAL
9)
Bearish + Corrections Total 54.5 0.0% NEUTRAL
Home
| Contact Us | Help | Technical Support | Symbol Directory
Second
Opinion | Personal Stock Watch | Trading Ideas | Pick 6 Filter | Point/Figure
Breakouts | Point/Figure Early Alerts
Special
Situations | Market Analysis | Market Letter | Stock Analysis | Industry
Group Analysis
By
Isabelle Clary
NEW
YORK (Reuters) - Federal Reserve Chairman Alan Greenspan agreed at the
March meeting of Fed policy-makers to
reintroduce
a bias toward raising interest rates, appeasing anti-inflation hawks on
the panel and preserving consensus, sources
It
is important to remember that the major FED activity is NOT the federal
funds or discount rate but open market selling of bonds and repos to withdraw
liquid assets and increase reserves in the banking systems.
The bias gives
direction to day to day market activity which has more effect than the
discount rate changes. Real rates are below the 5.5 % target.
08:45
US 3-MONTH T-BILL DISCOUNT RATE DROPS 2 BASIS POINTS TO 4.90%.
08:44
US 6-MONTH T-BILL DISCOUNT RATE DROPS 1 BASIS POINT TO 5.09%.
The
effective discount rate ( the price of money to banks ) is LIBOR MAY98
94.32 London Inter bank loan rate at 5.68 % sets other bank loan rates
- the short term rate set by EURO $ JUN98 94.225 = 5.775 % is over the
target of 5.5 % and going up. So bias does matter more than the actual
official change is a minor rate - the federal funds ( over night ) discount
rate.
The cost of money is going up which might slow certain types of interest
sensitive economic activity. It is not that the fed does nothing but wait
and have meeting - but is very active every day in the market.
Dollar/mark
was unlikely to show major movement ahead of the weekend meetings of European
Union officials to decide the
countries
which will join the single currency from 1999, but the mark might receive
a boost subsequently, analysts said.
On
the foreign exchanges, the dollar was slightly firmer but trading was range-bound
partly because of a holiday in Japan and
as
the markets awaited a batch of speeches from central bank and finance officials.
---------------------------------------------------------------
MARKET
PRICES AT 1101 GMT
Mark
1.7972/77 Yen 132.18/28 Sterling 1.6686/96
Gold
$307.50/7.90 -0.75 (pvs PM fix) Brent $14.61 +0.01
FTSE
100 5818.0 +11.4 CAC 3756.49 -20.74 X-DAX 5125.71 +14.83
---------------------------------------------------------------
By
mid-session, London's blue-chip FTSE 100 index was 0.4 percent firmer,
rescued by bargain-hunters from earlier losses
and
Germany's Xetra DAX was up 0.4 percent.
The
Belgian, Dutch, Greek and Swiss markets were also amongst the gainers but
French, Italian and Spanish bourses were in
the
red, pausing for breath after Tuesday's gains amid nerves over Wall Street
and confusion over U.S. rates.
Friday
May 1, 10:50 am Eastern Time
US
Treasuries slip on talk Fed checks forex rates:
The
basics:
A
too fast growth rate, gives too much money in the system, plus the Asia
thing causes lower exports, higher inports, pressure on the dollar which
is falling.
A
listing of the main NAPM components follows:
April
March Feb Jan Dec Nov Oct Sept Aug
PMI
52.9 54.8 53.3 52.4 53.1 54.5 55.9 54.6 56.4
Production
53.4 57.6 55.3 53.3 55.8 58.5 59.6 58.4 61.2
New
Orders 56.8 57.3 55.9 55.2 53.9 55.1 58.4 56.1 60.4
Supplier
Del 52.3 53.4 52.1 52.0 54.0 55.2 55.0 55.5 55.6
Inventories
46.6 46.8 46.9 46.7 46.5 44.3 47.0 46.2 43.4
Employment
49.8 52.5 50.9 50.1 50.9 53.3 52.5 51.1 51.6
Prices
41.2 44.4 45.8 44.7 50.8 53.2 55.5 54.1 53.4
Export
Orders 49.7 48.0 47.9 45.0 50.6 52.6 51.9 51.2 55.1
Imports
56.3 53.4 51.2 53.9 55.4 52.6 51.7 53.1 53.9
US
Treasuries off post-NAPM highs in forex intervention fear. *Mkt talk Fed
checking forex rates, but Fed says ``no comment.'' *Impact greatest in
bills, 3-mo rates jump 5 bps in 45 mins. *Long end outperforming but off
highs, profit-taking seen. *Traders report foreign central bank selling.
Thursday
April 30, 8:56 am Eastern Time
U.S.
economy accelerated in Q1, inflation mute
Thursday
April 30, 8:56 am Eastern Time
WASHINGTON,
April 30 (Reuters) -
The U.S. economy unexpectedly picked up speed in the
first quarter of 1998, surging ahead at a brisk 4.2 percent annual rate
on booming consumer spending while inflation remained at its most muted
levels in 35 years, the Commerce Department said on Thursday.
It
was the sixth straight quarter in which Gross Domestic Product advanced
at an annual rate of 3 percent or more - well above the 2+1/4 percent target
range the Federal Reserve considers can be safely sustained without risking
a flareup in inflation pressures. First-quarter GDP growth handily outstripped
Wall Street economists' forecasts for a 3.3 percent rate of expansion as
it accelerated from last year's fourth-quarter 3.7 percent pace instead
of slowing.
A
chorus of U.S. central bank governors has warned recently that the economy
needs to soon show convincing evidence of a slowdown, unnerving financial
markets after reports the Fed has shifted to a position of increased willingness
to raise interest rates. Policymakers' concern that Asia's economic woes
were not enough to offset buoyant domestic demand appeared to be supported
by the first-quarter GDP report.
DOWN 40 or 50
to 1050
If
the news is "good", rapid growth that's "bad" because it implies inflation
and higher money costs. If the news is "bad", lower growth and earning
that's good- maybe. Labor costs are going to be higher but how high is
high ?
The chances are 2/3 down, 1/3 up - but the reactions to economic
news are not always what is expected.
Thursday:
April 30th
``If
the U.S. economic data are strong, fears of a rate rise will return, suggesting
dollar upside,'' said Sally Wilkinson, senior
economist
at Daiwa Europe in London.
--------------------------------------------------------------
MARKET
PRICES AT 0905 GMT
Mark
1.7937/42 Yen 132.05/15 Sterling 1.6686/96
Gold
$310.90/1.30 +2.65 (pvs PM fix) Brent $14.39 +0.14
FTSE
100 5843.7 +10.6 CAC 3746.61 +12.68 X-DAX 5101.43 +17.63
---------------------------------------------------------------
U.S.
Federal Reserve chairman Alan Greenspan is known to consider ECI figures
as an important indicator of inflationary
pressures
building in a robust U.S. economy.
Thursday
April 30, 4:14 am Eastern Time
Wall
St bubble risk looms,
but is Asia to blame?
By
Yoshiko Mori
TOKYO,
April 30 (Reuters) -
The U.S. stock market is being poisoned by a ``classic
bubble'' and the risk is looming of a
downward
correction of 10 to 20 percent, economists in Tokyo say.
``
The
current state of Wall Street is similar to what happened in Tokyo in 1987
when it was already apparent that the asset
market
bubbles were getting out of hand,'' said Richard Werner, Tokyo-based chief
economist and managing director of Profit Research Centre Ltd.
Excessive
capital created by the U.S. banking system and the Federal Reserve has
been the major cause of recent Wall Street
gains,
Werner said.
Excessive
credit creation is spurring financial and real estate transactions which
are pushing up asset prices -- ``the classic
bubble,''
Werner said.
Economists
said credit creation through loans by the U.S. banking system is expanding
at around 10 percent year-on-year, the highest growth rate since the 1980s.
``If
the U.S. economic data are strong, fears of a rate rise will return, suggesting
dollar upside,'' said Sally Wilkinson, senior
economist
at Daiwa Europe in London.
First
quarter U.S. employment cost index is expected to rise 0.9 percent from
one percent in the previous quarter.
An
advance estimate of quarter one U.S. gross domestic product is also expected
at 1230 GMT.
At
0835 GMT the dollar was at 1.7921/26 marks and 131.93/03 yen
Con't
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and analysis GO TO
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forecast.htm,
then
conditions.htm
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