Market News

[weatherweenie]

08:35 am : S&P futures vs fair value: -8.4. Nasdaq futures vs fair value: -9.0. Futures dip a bit on two disappointing economic readings. Fourth quarter preliminary GDP matched the advance reading of 0.6%. This was less than the expectations of 0.8% rise. Also, personal consumption was revised downward to 1.9% from 2.0%. Separetely, the weekly initial jobless claims rose to 373,000. Economists expected 350,000 claims.

 

[weatherweenie]

[BRIEFING.COM] S&P futures vs fair value: -11.4. Nasdaq futures vs fair value: -6.2. Futures are trading modestly above their worst levels. They continue to point to a negative start. Crude oil has recovered some of yesterday's losses, and is now above the $100 per barrel mark.

 

[weatherweenie]

Briefing.com:
When Bernanke was asked if the economic outlook is worse than eight years ago, Bernanke said it is fair to say that policy makers face more challenges now. He said during the 2001 recession weighed more on corporate investment, while this time the consumer is taking the brunt.
Bernanke expects oil prices will remain high, and not retreat to pre-2007 levels, when prices rose 57%. If prices stabilize--not even fall--it will be sufficient to bring inflation down, according to Bernanke.

 

[weatherweenie]

7:57AM S&P futures vs fair value: -17.4. Nasdaq futures vs fair value: -29.5. : Futures suggest the stock market is going to extend yesterday's losses. Cautious comments from Dell (DELL) and a $5.3 billion fourth quarter loss from AIG (AIG) is fuelling the selling pressure. A CNBC commentator said the bailout of bond insurer Ambac (ABK) has hit a fairly significant snag over the amount of capital the consortium of banks are willing to put up, which is also weighing on sentiment. The commentator said this does not mean the situation is dead. The January personal income and spending report is set for release at 8:30 ET.

 

[weatherweenie]

Personal Income Rose 0.3% in January, While Personal Spending Rose 0.4%

 

[weatherweenie]

Core Price Index Climbs 0.3%.

 

[weatherweenie]

[BRIEFING.COM] S&P futures vs fair value: -15.4. Nasdaq futures vs fair value: -30.0. Futures don't get much of boost after better than expected income and spending numbers. January personal income increased by 0.3% month over month (consensus +0.2%), spending increased by 0.4% (consensus +0.2%) and core PCE rose by 0.3% (consensus +0.3%). December's spending reading was revised higher to 0.3% from 0.2%.​

 

[weatherweenie]

Plans for sweeping federal programs that would aid troubled mortgage borrowers would bring unfair relief to speculators and reward investors who made bad bets, U.S. Treasury Secretary Henry Paulson said Thursday.

"Most proposals I've seen would do more harm than good," he said in a speech to the Economic Club of Chicago.

http://www.cnbc.com/id/23403547

 

[weatherweenie]

Punk Ziegel lowered its earnings estimates for the first quarter and full year on several financial institutions in the US including Goldman Sachs, Merrill Lynch and Citigroup, to reflect higher loan losses underpinned by the weaker economy.
"Economic reports and management statements suggest that the economic environment has weakened in the past month. Therefore, the loan loss provisions for each of the companies has been dramatically increased to reflect the changing economic environment," analyst Richard Bove said in a note to clients.

http://www.cnbc.com/id/23405859

 

[weatherweenie]

[BRIEFING.COM] S&P futures vs fair value: -13.2. Nasdaq futures vs fair value: -26.0. Futures contine to point to a negative start, but have climbed off their worst levels. UBS said financial companies are likely to have at least $600 billion in write-downs, according to Bloomberg.com. This is far more than the current total of write-downs, which stands at more than $160 billion.

 

[weatherweenie]

Briefing.com
The February Chicago PMI came in at 44.5, lower than the consensus estimate that stood at 49.5. It reflects a contraction in manufacturing in the Chicago region because the reading is below 50. It is the lowest number since December 2001.

 

[weatherweenie]

Treasuries are rallying for the second straight day as weaker than expected economic data prompted traders to up their bets on the size of the March 18 fed funds rate cut. Fed funds futures now suggest a 62% chance of a 75 basis point cut, with a 50 basis point cut fully priced in. Last week there was only a 2% chance of a 75 basis point cut.

 

[weatherweenie]

If the S&P finishes this month in the red, it would mark its first four month consecutive losing streak since April 2002 to July 2002.

 

[weatherweenie]

Ambac (ABK 11.23, -0.57) is lower after CNBC reported that its bailout plan has stalled over the amount of capital the consortium of banks are willing to put up. Also weighing on Ambac and fellow bond insurer MBIA (MBI 13.33, -0.73) is news that leveraged buyout mogul Wilbur Ross chose to invest up to $1 billion in Assured Guaranty (AGO 25.24, +2.46). Ross believes Assured is better positioned to flourish than MBIA and Ambac, according to Reuters.

 

[Intrepid_Timer]

Our worst nightmare has come true!!!!

http://finance.yahoo.com/q?s=^RUT

 

[Intrepid_Timer]

Our worst nightmare has come true!!!!

http://finance.yahoo.com/q?s=^RUT

Oops, they just changed it. They had the Russell down to 69.46 for a loss of 90-something percent. :nuts:

 

[weatherweenie]

Moody's said it is continue to review Ambac (ABK 11.30, -0.37) for a possible downgrade, but believes Ambac's capital exceeds the minimum Aaa standard, but falls below the Aaa target level. The ratings firm expects Amac will hit the target level if capital efforts succeed.

 

[Weather_n_Leather]

Treasuries are rallying for the second straight day as weaker than expected economic data prompted traders to up their bets on the size of the March 18 fed funds rate cut. Fed funds futures now suggest a 62% chance of a 75 basis point cut, with a 50 basis point cut fully priced in. Last week there was only a 2% chance of a 75 basis point cut.

What does everything think about the upcoming rate cut? I have read that cutting the rate too much often leads to inflation (which appears to be what is already happening). Wouldn't cutting the rate by 75 basis point cut result in even more inflation?

 

[Weather_n_Leather]

I was watching a show on CNBC today where they were talking about the weakness of the dollar. They said a large part of the weakness was a result of the Fed's monetary policy when compared to what some of the European Banks are doing. Evidently some of the European Banks are holding fast on cutting interest rates while the Fed continues to cut.

If rate cuts result in a weakening dollar and inflation, why is the Fed stuck on their policy of continued cutting? From what I have seen, it also appears that all the Fed had to do is talk about cutting rates and the dollar gets weaker.

One last question: If the dollar continues to weaken and commodities, such as oil, begin to be valued in Euros, what will happen to the dollar? Will it become a secondary currency?

:notrust:

 

[Birchtree]

Many of our industries that export product are benefiting from our weak dollar. The euro zone folks are complaining their currency is too strong and impedes their competitiveness. But they are coming here using that strength to buy land and other investments.