Market News

[weatherweenie]

Consumer Prices rose 0.3% in December

 

[weatherweenie]

Consumer Prices Rose 0.3% in December, Core Rate Up 0.2%

 

[weatherweenie]

U.S. consumer prices rose a relatively modest 0.3 percent in December but for all of 2007
prices shot up at the fastest rate in seventeen years, largely because of soaring energy costs, the Labor Department reported on Wednesday.

The Consumer Price Index, the most broadly used gauge of inflation, rose 4.1 percent in 2007, well ahead of the 2.5 percent increase posted in 2006 and the largest 12-month rise since a 6.1 percent increase in 1990.
December's CPI rise followed a sharp 0.8 percent jump in November and was modestly ahead of Wall Street economists' forecasts for a 0.2 percent gain.
http://www.cnbc.com/id/22681001

 

[weatherweenie]

[BRIEFING.COM] S&P futures vs fair value: -8.8. Nasdaq futures vs fair value: -22.0. Futures gain a few points and then dip a bit on a modestly higher than expected CPI reading. December CPI rose 0.3% month-over-month, while core CPI rose 0.2%. Economists expected both CPI and core CPI to rise 0.2%. Year-over-year CPI was up 4.1%, and core CPI was up 2.4%. Wells Fargo (WFC) reported earnings that were in-line with expectations, and noted it is finding more opportunities for acquisitions. Ambac (ABK) announced a plan to strengthen its capital base by issuing at least $ 1 bln in equity and equity-linked securities and by cutting its dividend 66%.

 

[Birchtree]

The Fed doesn't see the self-reinforcing dynamics that lead to recession, such as in 2001, when it had to cut rates repeatedly. Rather, it sees the economy as sagging temporarily, as the pool of potential homeowners shrinks to match the tightened terms of credit and the inventory of unsold new homes is worked down, after which it expects growth will return to a normal rate. We don't have an inventory overhang in manufacturing and rates are coming lower to further force down the Libor rates. Exports will continue to offset the weaker consumer spending and GDP will come in around 3% - IMHO.

 

[weatherweenie]

Fed Beige Book: Economy Grew Modestly Through Mid-December. Holiday Spending Subdued.

 

[weatherweenie]

08:00 am : S&P futures vs fair value: -2.5. Nasdaq futures vs fair value: +2.3. Futures point to a mixed open, but are close to the flat line. The stock market was poised for a higher start, but a larger than expected loss at Merrill Lynch (MER) weighed on sentiment. Merrill lost $10.3 billion in the fourth quarter, or $12.57 per share, which fell well short of the expected loss of $4.93. The loss was largely due to a $11.5 billion write-down for subprime and CDO exposure and a $2.6 billion credit valuation adjustment related to hedges on U.S. ABS CDOs. On the economic front, the Jan. housing starts and weekly initial jobless claims reports are slated for release at 8:30 ET.

 

[weatherweenie]

8:32am ET
[BRIEFING.COM] S&P futures vs fair value: -2.6. Nasdaq futures vs fair value: +2.8. Futures shed a few points and then regain some ground on a better than expected jobless claims reading. Jobless claims for the week ended Jan. 12 fell to 301K, compared to the prior reading of 322K claims. Economists expected 331K claims. Separately, Dec. housing starts came in at 1006K and building permits came in at 1006K. Economists expected 1145K starts and 1135K permits.

 

[James48843]

Bush, Bernanke support stimulus package
By JEANNINE AVERSA, AP Economics Writer


President Bush and Federal Reserve Chairman Ben Bernanke on Thursday embraced calls for an economic stimulus package to avert recession. Bernanke said such a plan should be quickly implemented and temporary so that it won't complicate longer-term fiscal challenges.

The Fed chief, in testimony to the House Budget Committee, said efforts that involve "putting money into the hands of households and firms that would spend it in the near term" would be more effective than other provisions, such as making Bush's tax cut permanent.

"Again, I'm not taking a view one way or the other on the desirability of those long-term tax cuts being made permanent," he said.

While shying away from endorsing a specific plan, Bernanke made clear his support for the general concept of an economic rescue package. It is likely that any such package would include tax rebates.

"Fiscal action could be helpful in principle" and may provide "broader support for the economy" than the Fed can furnish alone through reductions in interest rates, Bernanke said. However, "the design and implementation of the fiscal program are critically important," he said.

Bernanke forecast slower growth in 2008 but not a recession.

When asked by lawmakers about the potential economic effect of a fiscal stimulus package totaling around $100 billion, Bernanke said that the economic effects could be "significant" and not "window dressing."

At the White House, spokesman Tony Fratto said, "The president does believe that over the short term, to deal with the softening of the economy, that some boost is necessary." That marked the first White House confirmation that Bush, confronting a deepening economic crises that has shaken much of the nation, supports government intervention. Until now, the White House said the president was just considering some type of short-term boost.

Fratto would not divulge the details or what the stimulus would look like, other than to say all options are being considered.

 

[FUTURESTRADER]

shewww..finally got Bernanke outta there..maybe get a little rebound

 

[FUTURESTRADER]

uhhgg..he's still in there

 

[weatherweenie]

I hope nobody owns this:
bond insurer Ambac (ABK 6.48, -6.49) has been absolutely hammered today after Moody's announced this morning it is putting Ambac's Aaa credit rating under review for a downgrade. Yesterday, Ambac announced it is cutting its dividend, and is planning to raise $1 billion to offset its $5.4 billion pretax write-down. The fear is that if bond insurers lose their credit rating, it would spur another wave of write-downs from financial companies.

 

[weatherweenie]

Briefing.com
1:00 pm : The major indices are slowly paring their losses, but continue to trade substantially in the red. Reuters reports the White House is getting closer to proposing a stimulus that it wants to pass quickly, according to an official.
The S&P 500 is underperforming the other major indices this session with 387 of the 500 stocks trading lower. Agriculture company Monsanto (MON 101.18, -11.52) is one of the main laggards largely on a note from UBS which a potential shift in acres this year away from corn. Conglomerate PPG Industries (PPG 64.33, +2.76) is the best-performing S&P 500 stock, after the company topped earnings expectations.

 

[weatherweenie]

IBM Forecasts Strong 2008 Earnings, Says International Business Good

BOSTON (AP) -- International Business Machines Corp. on Thursday told Wall Street to raise its 2008 estimates, further boosting a stock that was already buoyed by strong fourth-quarter earnings.

http://biz.yahoo.com/ap/080117/earns_ibm.html?.v=10

 

[Rod]

IBM Forecasts Strong 2008 Earnings, Says International Business Good

BOSTON (AP) -- International Business Machines Corp. on Thursday told Wall Street to raise its 2008 estimates, further boosting a stock that was already buoyed by strong fourth-quarter earnings.

http://biz.yahoo.com/ap/080117/earns_ibm.html?.v=10

That should at least boost early morning trades.

 

[GUCHI]

how do you dca in and buy shares at a lower price when you are alreadey all in right now ??????

 

[Rod]

how do you dca in and buy shares at a lower price when you are alreadey all in right now ??????

Using your new contributions.

Hopefully you have your new contributions going into (G).

Just DCA out from there.

 

[GUCHI]

i am 50% I 50% L2040, so technically i am buying in low on that situation correct ????

 

[weatherweenie]

Bush to outline economic stimulus Friday, White House says
Posted: 04:32 PM ET
WASHINGTON (CNN) — President Bush will outline a new attempt to boost economic growth and avert a feared recession in a speech Friday, the White House announced.
The president held talks with Democratic and Republican leaders of Congress on Thursday as Ben Bernanke, the chairman of the Federal Reserve, warned lawmakers to waste no time enacting a fiscal stimulus package to help beleaguered consumers.
White House spokeswoman Dana Perino said Bush concluded during his recent trip to the Middle East that a stimulus package is needed, and said Friday’s remarks will lay out “the principles for what an effective growth package would look like, and what would be ineffective.”

 

[weatherweenie]

Briefing.com
The S&P 500 is trading at its lowest level since September 2006 and is down 16.6% from its all-time November 2007 high.