Market Wrap-Up (2-11-2004)

FSO ^ | 2/11/2004 | Jim Puplava

[Orangedog]

Home  l  Broadcast  l  Market Monitor  l  Top 10  l  Storm Watch  l  Sitemap  l  About Us

 

Today's WrapUp by Jim Puplava 02.11.2004  Mon   Tue   Wed   Thu   Fri   Archive

"Appropriate"

Greenspan’s description of U.S. interest rates was in stark contrast with the theme made just two weeks ago. Today’s remarks boosted speculation U.S. yields will remain lower than in the euro region and other major economies such as the U.K., driving the U.S. Dollar to within a cent of a record low versus the euro. The testimony today before the House Financial Services Committee indicated that the dollar’s decline should eventually help contain our current account deficit and noted, “Looking forward, the prospects are good for the sustained expansion of the U.S. economy, however risks remain.” Plenty of sound bites for the market watchers to trade debt, dollars and commodities, and trade they did.

In the day’s biggest corporate development, cable leader Comcast made an unsolicited bid to buy Walt Disney for $54 billion plus the assumption of debt after failing to engage Disney chief Michael Eisner in private discussions of a potential merger, sending shares of the media giant up 14.6 percent. The bid by Comcast overshadowed Disney’s release of its first quarter earnings. The company said it earned 33 cents a share, up from 2 cents a share in the same quarter a year ago. The Thomson First Call average estimate was for earnings of 23 cents a share. Revenue climbed 19 percent to $8.549 billion from $7.170 billion. The bid from Comcast essentially rained on Michael Eisner and the board’s hopes of showing a turnaround in Disney’s financial performance.

In other earnings news, Dow component Coca-Cola reported its fourth quarter net income of 38 cents a share, with revenues of $5.18 billion, ahead of analyst forecasts of $5.03 billion. Corporate earnings continue to impress investors, however, one must be careful as many of the companies showing strong numbers are multination companies that have benefited greatly from the precipitous drop in the US Dollar versus foreign currencies, Coca-Cola included. Looking to tomorrow Dell reports their much anticipated and talked about earnings report.

Financial Markets

The Dow Jones Industrial Average ended the day up 123.85 points, or 1.2 percent, at 10,737.70 while the Nasdaq Composite Index lifted 14.33 points, or 0.7 percent to 2,089.66, their highest closes since June 2001. The S&P 500 lifted 12.22 points, or 1.1 percent to finish at 1,157.76. Advancing stocks outnumbered decliners 1,939 to 1,249 on the New York Stock Exchange and 1,647 to 1,443 on the Nasdaq. About 952 million shares had changed hands on the Big Board while volume stood at nearly 1.3 billion shares on the Nasdaq.

In the commodities market, gold futures gained more ground following Greenspan's comments. The April contract closed up $3.70 at $410.70 an ounce on the New York Mercantile Exchange. Crude for March delivery added 13 cents to close at $34 per barrel and the euro jumped more than 1 percent to 1.2811 in afternoon U.S. trading, while the greenback dropped 0.2 percent vs. the yen, changing hands at 105.36 yen.

Treasuries

U.S. Treasury prices turned higher after the Fed chief told lawmakers the central bank could be patient because inflation remains low. The benchmark 10-year Treasury note closed up 23/32 at 101 26/32 to yield 4.02 percent vs. 4.13 percent at the previous U.S. close.

European Markets

European stocks rose as the Dow Jones Stoxx 50 Index added 0.1 percent to 2730.24 after gaining as much as 0.5 percent and falling 0.4 percent. The Euro Stoxx 50, a measure for the 12 euro countries, advanced 0.3 percent. The Stoxx 600 increased 0.2 percent. Benchmark indexes rose in 13 of the 17 Western European markets. Germany's DAX Index and France's CAC 40 Index gained 0.3 percent, while the U.K.'s FTSE 100 Index lost 0.2 percent. March futures on the Euro Stoxx 50 advanced 0.1 percent.

Asian Markets

Asian stocks such as Samsung Electronics Co. may gain on optimism U.S. Federal Reserve Chairman Alan Greenspan will affirm expectations of stronger economic growth in Asia's biggest export market later today. Japan's stock market is closed today for a holiday. The Morgan Stanley Capital International Asia-Pacific Index yesterday added 0.1 percent to 89.05.

Scott Middleton

© 2004 Scott Middleton
February 11, 2004

Back to Top

Home  l  Broadcast  l  Market Monitor  l  Storm Watch  l  Sitemap  l  About Us  l  Contact Us

Copyright ©  James J. Puplava  Financial Sense™ is a Registered Trademark
P. O.  Box 503147 San Diego, CA 92150-3147 USA  858.487.3939

The material on this website has no regard to the specific investment objectives, financial situation, or particular needs of any visitor. It is published solely for informational purposes and is not to be construed as a solicitation or an offer to buy or sell any securities or related financial instruments. References made to third parties are based on information obtained from sources believed to be reliable but are not guaranteed as being accurate. Visitors should not regard it as a substitute for the exercise of their own judgment. Any opinions expressed in this site are subject to change without notice and Financial Sense is not under any obligation to update or keep current the information contained herein. PFS Group and its respective officers and associates or clients may have an interest in the securities or derivatives of any entities referred to in this material. In addition, PFS Group may make purchases and/or sales as principal or agent. PFS Group accepts no liability whatsoever for any loss or damage of any kind arising out of the use of all or any part of this material. Our comments are an expression of opinion. While we believe our statements to be true, they always depend on the reliability of our own credible sources. We recommend that you consult with a licensed, qualified investment advisor before making any investment decisions. DISCLAIMER

[Orangedog]

A couple of hours of Greenspan's momotone droning and the world seemed to lose all touch with reality. The Dow was up, the Nasdaq was up, the S&P was up...but so were Treasuries, gold, silver, oil. In short, if it was being traded, it was up. That is, everything except the dollar, but then what's new there?

It just doesn't make any sense for EVERYTHING to move up at the same time.

[Orangedog]

OK, anyone want to take a crack at trying to figure out what it means when every damned class of investment moves in the same direction...even the ones that are supposed to move against other counter to others?

[RightWhale]

Everything moved up except the currency? Inflation?

[Steven W.]

sellers dried up

[lelio]

Can someone explain to me what will happen to gas prices if OPEC decides to price their oil in Euros vs Dollars? IE if the euro / dollar price moves 10% will gas price move a similiar amount (and in which way)? Why would OPEC want to do this?

[ambrose]

More buyers than sellers..

[Rokke]

It means it's getting one hell of a lot harder to be a doom and gloomer.

[norwaypinesavage]

"More buyers than sellers"

It can't possibly be that simple.

It's a giant conspiracy and we're ALL GOING TO DIE!

[superloser]

Can someone explain to me what will happen to gas prices if OPEC decides to price their oil in Euros vs Dollars?

Since currencies compete with each other in the marketplace, less demand for dollars would mean they would be worth less on the open market and therefore oil would be more expensive in terms of dollars.

If oil were priced in Euros, buyers would have to secure Euros rather than dollars to purchase oil, thereby driving the Euro up (demand for Euros) -- causing oil to be more expensive as dollars are sold to purchase Euros to purchase oil.

The Dollar, as the world's reserve currency and the currency most commodities are priced in enjoys a special place and is in high demand as a result of that special status. Remove that special status and it will sink quite a bit, then stabilize (we hope).

Its a simple story of supply and demand - there is a huge supply of dollars, but if demand slows for them...well...draw your own conclusions.

At least, that's how I see it. What say you folks? Am I all wet here?

[Orangedog]

sellers dried up

For everything except the dollar?!

[superloser]

It just doesn't make any sense for EVERYTHING to move up at the same time.

Sure it does, if you twist your mind around a bit. Think of all the money sloshing around the world right now seeking a home. It needs to find a home, right?

If you'll permit me to borrow from the Mogambo Guru -- Its INFLATION! -- too much cash chasing too few goods. In this instance, its not consumer goods, but investment goods.

[Orangedog]

It means it's getting one hell of a lot harder to be a doom and gloomer.

Or easier. Everything moves up and down, but it's not normal for everything to move the same direction at the same time.

[Orangedog]

Sure it does, if you twist your mind around a bit. Think of all the money sloshing around the world right now seeking a home. It needs to find a home, right?

If you'll permit me to borrow from the Mogambo Guru -- Its INFLATION! -- too much cash chasing too few goods. In this instance, its not consumer goods, but investment goods.

DING DING DING! "Johny, tell him what he's won!"

There are some types of investments that are supposed to move counter to others. That is, unless something is thowing the whole system out of whack.

[wardaddy]

but it's not normal for everything to move the same direction at the same time.

Amen to that.

[lelio]

Since currencies compete with each other in the marketplace, less demand for dollars would mean they would be worth less on the open market

So then the current price of $1.30 for a euro would increase as more euro demand (need to buy oil) would cause the price to go up? How much higher can it go, the price has already gone up 30% in four months?

[ambrose]

Life becomes much simpler when you accept that law of supply and demand for why stocks go up and down.

[superloser]

It means it's getting one hell of a lot harder to be a doom and gloomer.

Just remember, the crash comes when the last bear gives it up and becomes a bull and everyone is on the same side! Historically, that seems to be accurate...

Of course, for me, with the record bullish sentiment, it makes it easier for me to look carefully over my shoulder with my finger hovering over the 'eject' button.

[B4Ranch]

I think the Fed would let the dollar float as did Canada. Then perhaps lock it when it is at a peak. Who knows for sure what would happen.

If the oil sellers did demand Euro's it sure would knock America off of the high post, wouldn't it? Who would step up to take the position?

[lelio]

That is, unless something is thowing the whole system out of whack.

Personally I'm waiting for the government to come up with a non-laughable explaination on how unemployment can remain around 5% while at the same time we need to create 50-75k more jobs a month just to absorb the people in the job market. Its like I'm in one of those holodeck episodes of Star Trek.

Did anyone catch Greenspan's responce to a question about the Chinese holding a lot of US government debt? He brushed it off saying that the market's too big for one player to make much of a difference.

[B4Ranch]

There is always a Bull market somewhere in the world, just as there is always a Bear market.