STOCK MARKET WATCH, Wednesday 18 February (#1)

[ozymandius]

Wednesday February 18, 2004

COUNTING THE DAYS
DAYS REMAINING IN THE * REGIME 341
REICH-WING RUBBERSTAMP-Congress = DAY...
DAYS SINCE DEMOCRACY DIED (12/12/00) 3 YEARS, 68 DAYS
WHERE'S OSAMA BIN-LADEN? 2 YEARS, 120 DAYS
WHERE ARE SADDAM'S WMD? - DAY 332
DAYS SINCE ENRON COLLAPSE = 816
Number of Enron Execs in handcuffs = 17
ENRON EXECS CONVICTED = 2
Other Arrests of Execs = 53

U.S. FUTURES & MARKETS INDICATORS
NASDAQ FUTURES-----------------------------S&P FUTURES




AT THE CLOSING BELL ON February 17, 2004

Dow... 10,714.88 +87.03 (+0.82%)
Nasdaq... 2,080.35 +26.79 (+1.30%)
S&P 500... 1,156.99 +11.18 (+0.98%)
10-Yr Bond... 4.05% UNCH (UNCH)
Gold future... 416.50 +5.70 (+1.39%)

DOW..........................NASDAQ.......................S&P

||


GOLD, EURO, YEN and Dollars


~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~
PIEHOLE ALERT

Heads Up!
Preliminary info on appearances by Bush & Co. throughout the country. Details & links are added as they become available so check back. And if you know more, are organizing something, or would like to, contact [e-mail]

For information on protests and other actions Citizens For Legitimate Government

~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~

[ozymandius]

1. WrapUp by Ike Iossif - weekly charts

"Weekly Charts"

Last week (2-6-04) I said: "We did get the additional 2% loss in NASDAQ, but the SP held above the critical 1122 level, while all indicators got near the bottom of their range. Last week's action was identical to the action that we have seen over and over since March of last year. We got a sharp internal correction, while giving up very little in terms of price, suggesting that the bull is alive and well. The only element of difference in this latest corrective episode was the total absence of concern, or bearishness on behalf of market participants, no increase in the assets of the Rydex Bear Index funds, no spike in the put/call ratios. Strictly speaking from a technical point of view, since the SP held above trend-line support at 1122, and given the strong breadth that accompanied Friday's rally (over 2000 net advancing issues), in combination with the rising Thrust Oscillators, the odds favoring continuation are better than even! Consequently, as I said last week, we ought to trade on the long side with a stop loss at the support levels indicated in the table below. We got two concerns going forward, one is the lack of total concern among market participants, the other is the fact that the McClellan Oscillator got to the -200 zone for the NYSE. Usually when it gets to that level, we get a rally up to the zero line, and then it turns back down again. In summary, the technicals and the price action are telling us to be bullish. At the same time, the action by the McClellan Oscillator, and the lack of bearishness on behalf of market participants also suggest that we need to keep trailing stops on long positions."

(Current for week of 2-17-04) The indices did rally as I had expected--even though NASDAQ lagged badly--and as soon as the McClellan Oscillators got back up to the zero line, the markets, and the Oscillators turned down. Does this action mean that the rally has failed, or does it mean that the indices are simply consolidating and they will continue higher? Given that all indicators are near their respective zero lines, it means that as of Friday's close the overall technical condition of the markets is NEUTRAL, and for the short term, the odds are almost even between a rally failure, and a continuation. So, what are the signs that will tell us which way the balance is shifting?

<cut>If the markets rally over the next 4-5 days, then these ratios will be back where they were 2 weeks ago, which means in all likelihood the markets will stall again. Therefore, do not get too enamored with long positions.


http://www.financialsense.com/Market/wrapup.htm

[ozymandius]

2. Just how bad is the world's derivative habit? - by Paul Tustain

This article includes the official figures which show the mind-boggling extent of the commercial world's derivative habit. They illustrate why Warren Buffett calls derivatives 'Financial Weapons of Mass Destruction'.

'Credit' has an almost religious quality for consumers, which parallels its genuinely religious relatives 'credo' and ‘creed’ – both from the same linguistic root. Yet like cocaine it comes in lines and is a powerfully habit-forming stimulant; a much less attractive imagery.

<cut>
Nowadays access to credit is a human right. It is available to consumers through personal loans at the bank, credit cards by direct mail, and store-cards at the till. Its mail-based advertising single-handedly sustains the postal service. So important is it that the British government even intends creating a publicly owned state bank to grant it to those unfortunates unfairly excluded by the prejudice of a private banking sector which reckons these prospective customers most unlikely ever to have the means to pay anything back. (Wise of the banks; unusually dim even for a government.)

<cut>
Here - under the disguise of clever financial management - they underwrite financial contracts for fantastic amounts of money and generate small profits on large but improbable risks. These derivatives are just like insurance, only the risk that is being insured is not a fire, or a flood, but the equally low risk financial equivalent - something like "the yield on 10 year US Treasury bonds, less the yield on 5 year Japanese government bonds, divided by the yen/dollar exchange rate will not exceed 5% before the end of 2004." They are always confusing and in the end rather unlikely to go wrong.

more here

[54anickel]

13. Great article. Derivatives are still one of those hard to understand

mysteries for many people.

I used to listen to NPR each morning while getting ready for work and then during the commute. There was a guy who would call in going off on the evils of derivatives during any show that had to do with the economy. The host would tend to blow him off, this went on for years.

Then with the dot.com boom and bust the term got more press and the host would at least give the guy the time of day. He just couldn't articulate and explain how derivatives worked very well. The caller finally came up with the name of someone (can't remember who) to have as a guest.

That guest explained it all so that even I finally got it. I'm pretty sure that's where I had gotten the phrase of "our money is being transformed from wealth, to debt to speculative investments".

[54anickel]

32. Hmmm, Seems Mr Greenspin is all for derivatives.

Sorry for the late entry. Came across this article with links to Greenspin speeches and didn't want to loose it.

http://csf.colorado.edu/forums/pkt/2003I/msg00554.html

snip>
Buried in the bootom of page 14 of the C Section: Business Day, of the March 8 (Sat)NY Times was the Bloomberg report on Greenspan's rebuttal to Buffet and Gross on the imminent danger of derivatives. Greenspan repeated his arguement that derivatives "flatten" the business cycle and moderate "extraordinary shocks" and "dramatic declines" in share prices. He ignores the fact that this is achieved by transfering unit risk to systemic risk. There was a time when the Fed was supposed to worry about systemic instability by keeping unit errors from accumulating into systemic problems. But the new monetarism seems to be swimming in a different ocean.


Also, Greeenspan appeared thankful that "cash out" refinancing of home mortgages is holding up the "non-bubble" of the hosuing sector. He conviniently forgets that refinancing is fatal to CMOs which is a large part of the derivative market, as well as interest rates swaps. Most economists know that there is no free lunch, that life, including economics and finance, is always a trade off. Greenspan's whistle in the dark confidence about fear of derivatives as WMD is based on the knowledge that he can bail out the system easier than he can bail out GE.

The problem is that we are fast approaching a scale where it would be too big even for the Fed. That point has already been reached in the foreign exchange market, and it is on the verge in the interest rate market.

Greenspan is looking like a suicide bomber more everyday.

[UpInArms]

3. daily dollar watch

http://quotes.ino.com/chart/?s=NYBOT_DXY0

Last trade 85.00 Change -0.02 (-0.02%)

the low during overnight trading was 84.56, so it seems that the BoJ has continued to intervene.

related article

http://www.iht.com/cgi-bin/generic.cgi?template=articleprint.tmplh&ArticleId=130120

(I believe 54anickel posted the Japan GDP increase of 7% yesterday)

excerpt:

To keep exports affordable to Americans and Europeans, Japan's government has intervened on a large scale in the currency markets, buying $172 billion of foreign currency last year to keep the strong yen from strengthening even further. Last month, it bought $67 billion more.

According to the U.S. Treasury Department, Japanese investors accounted for about half the purchases of Treasury bonds in 2003, with net purchases about four times that the previous year.

The currency interventions limited the dollar's drop against the yen to 12 percent in the last year. Even so, the yen is trading here at a rate around 105 to the dollar, a 3 and a half year low.

Beyond the yen, other threats loom for Japan's economy. While many big companies have restructured to regain profitability, the government has done little to cut spending or to close the budget deficit, now around 8 percent of the gross domestic product. By comparison, the American deficit was recently projected at $521 billion in an economy of more than $11 trillion, or 4.7 percent.

There seems to be some concern regarding how long the BoJ can continue its intervention methods - I will not even hazard a guess on this issue - but will only say that "things that do not seem to be able to last forever, usually don't".

[ozymandius]

4. Good morning UIA and all!

:donut: :donut: :donut: :donut: :donut: :donut:

Japan's (in)ability to intervene in support of the dollar was all the buzz late yesterday. As this is the type of news that tends to trickle out, like pinholes appearing in the surface of a dam, I am waiting for the next batch of news perhaps to substantiate the likely ramifications of Japan's precarious position in relation to everyone involved.

[UpInArms]

6. Good Morning Ozy!

Do you think that the economic reports are going to affect the market today?

U.S. housing starts fall 7.9 pct in January

http://www.forbes.com/markets/commodities/newswire/2004/02/18/rtr1265363.html

WASHINGTON (Reuters) - U.S. housing starts fell more sharply than expected in January to the lowest level since August in a sign the housing boom may finally be losing steam, a government report showed on Wednesday.

Residential construction starts tumbled 7.9 percent last month to a seasonally adjusted 1.903 million annual rate from a downwardly revised 2.067 million rate in December, the Commerce Department said. December housing starts had been at the highest level since February 1984.

Analysts polled by Reuters were expecting starts to cool to a 2.0 million rate in January.

...more...{/i]

:donut:

[54anickel]

20. That final paragraph raises some interesting questions.

Japan's budget deficit is 8% of GDP. How much of that was for currency intervention? If a large amount of it is, is it not still fairly liquid, meaning they could just sell their holdings and reduce the deficit rather quickly, even if they were to sell at a loss?

It may be a silly question and my thinking may be all wrong. But it seems that while they spent a fortune in intervention, it's not like the money is completely gone unlike our own tax cut, defense spending, discretionary spending deficit.

And hey, if deficits really don't matter as Cheney says :eyes: what's the big deal? Especially if they are experiencing REAL growth.
:shrug:

[Frodo]

5. Today's economic reports - Housing permits/starts

Permits down slightly to 1.899M (expected 1.91M)
Housing starts down a fair bit more to 1.9M (expected 2.0M)



Chart will update in a bit.

[ozymandius]

7. Let Markets Solve Jobs Issue-Bush Adviser

WASHINGTON (Reuters) - President Bush (news - web sites)'s top economic adviser, in hot water for remarks about outsourcing jobs abroad, said on Tuesday the government should not hinder foreign competition to protect U.S. employment.

"What new jobs will be created? That question is best answered by market forces," Gregory Mankiw, head of the Council of Economic Advisers, told the National Economists Club.

<cut>
The chairman of the House Small Business Committee, Illinois Republican Rep. Donald Manzullo, has asked Mankiw to appear at a hearing with people whose jobs have been sent overseas so he can hear their stories first hand.

Manzullo has called for Mankiw to step down. But an aide said on Tuesday the congressman had put on hold plans to circulate a letter on Capitol Hill urging his resignation.

story

[UpInArms]

9. these imbeciles know less than my dog

But he (Mankiw) urged that such fears not be used as an argument for trade protectionism and the best protection for jobs was stick with Bush plans to make tax cuts permanent and boost growth.

these people (term loosely used) make me want to :puke:

[ozymandius]

8. shmarket is open

9:32
Dow 10,702.07 -12.81 (-0.12%)
Nasdaq 2,083.10 +2.75 (+0.13%)
S&P 500 1,156.54 -0.45 (-0.04%)
10-Yr Bond 4.000% -0.048

[54anickel]

10. Strange, buck and gold moving in same direction - DOWN

[JNelson6563]

11. Treasuries smiling though

Looks like Treasuries may be the preferred flight to quality today. I think copper, silver, gold and the like are still things to watch.

Looks like the employment situation may finally be playing into housing starts eh? Hmmm.

Here's how things look for the moment:


9:47

Dow 10,699.55 -15.33 (-0.14%)
Nasdaq 2,079.65 -0.70 (-0.03%)
S&P 500 1,155.10 -1.89 (-0.16%)
10-Yr Bond 4.000% -0.048

Julie

[ozymandius]

12. no 10am bounce and all is red

However, I have thought that perhaps bond values should be represented with black ink since, there, a negative actually denotes positive cashflow.


Dow 10,700.22 -14.66 (-0.14%)
Nasdaq 2,079.66 -0.69 (-0.03%)
S&P 500 1,155.34 -1.65 (-0.14%)
10-Yr Bond 4.003% -0.045

[ozymandius]

14. Here's some blather.

Weak start for U.S. stocks

NEW YORK (CBS.MW) - U.S. stocks slipped Wednesday as an extended swoon in SBC Communications and depressing data on the housing market weighed on the Dow. The Nasdaq was off fractionally. <cut>

The stock sold off Tuesday on news of its mega-deal to acquire AT&T Wireless with Cingular partner BellSouth.

In the broad market, encouraging comments from chip giant Intel, and indications of a stronger business outlook from Broadcom was set against a slide in new construction in the U.S. over the past month.

story

[Coventina]

15. The "I Ching" on today's market

Hello everyone!

I'm here for one of my increasingly rare appearances. :-(

But, at least I can give you a humdinger of a reading for today!!
It is CRITICAL MASS with NO changing lines!

Here is a very interesting quote: "In social or business affairs make a rapid assessment of your situation. Your environment is rapidly becoming a meeting ground for many of the major circumstances affecting you. These things will take up a great deal of your time, space, and energy. More and more of your attention will be demanded by these very real imperatives. The situation is excessive and may reach Critical Mass soon. LOOK FOR AN AVENUE OF ESCAPE. (caps mine) Prepare to make decisions about your next move."

Yikes!
Be careful out there!

I'm going to predict a down day for the markets. Possibly WAY down.

on edit: typo and :hi: Ozy!

[ozymandius]

16. Thank you Coventina!

Frighteningly good read. Critical mass appears to be developing in Japan. We are just waiting for the next shoe to drop. Stay tuned.

[UpInArms]

18. thanks Coventina -

you are a font of insight as always :)

critical mass sums up the situation quite well -

(trying to keep my world out of the winds and looking for shelter)

[ozymandius]

17. Checking out for awhile.

It's a gorgeous day in Atlanta. So the boy and I are getting out. I'll check back later if time allows.

Have a wonderful day Marketeers! :hi:

Ozymandius

[Petrodollar Warfare]

19. Very interesting article on OPEC and dollar vs. euro oil pricing..

(I posted this in the econ forum, but this is interesting enough news that I felt obligated to post here too)

The below article makes the important point that OPEC has begun in some ways tacitly pricing oil in euros, but not actually invoicing oil in the euro (which would require that one of the 3 crude markers, WTI, Brent or Dubai re-denomiate in euros - my guess is Norway/Brent crude marker will do this by 2007-2009, but Sweden is the precursor to Norway's acension to the euro). Moreover, this data shows that 20 to 25% of the US trade deficit is due to oil/energy imports. So, if OPEC continues their effort to 'maintain their purchasing power' by tacitly pricing oil in the more stable euro currency, the weaker dollar will never come even remotely close to reducing the trade deficit, given that our oil imports are going up every year. (Not that I had any belief about closing the trade gap by even 20%, but this is interesting stuff, as reducing the trade gap appears to be impossible given current energy realities). Indeed, almost $100 billion of last years $400 billion trade deficit was oil imports.

What does this mean to US consumers? Well, if the dollar continues is downward trajectory in 2004 similar to 2003, which seems most likely, the price of a barrel of oil will become about $40 or more, and if the euro goes to 1.40 to dollar, we might be paying $3 per gallon of gas at the end of this year, while the europeans keep paying their current rate (about $4 to $5 US). Expect to see more bumper stickers "Bomb their ass and take their gas"

I really thought last week's OPEC meeting could have concluded with a "basket of currencies" pricing mechanism annoucement, but it looks like they are going to delay that for a little longer. However, I did not realize until now that OPEC's $22-28 US dollar pricing band has quietly but effectively been replaced with what appears to be a €24 euro pricing band of sorts, at least from 2001-2003. Will they formalize this arrangement? - with signicant adverse impact to the dollar? My guess? By the end of 2004 they will make a formal annoucment about about a currency basket...but I think Russia will do this too. (BTW, these hypotheticals are in my upcoming book)

http://goldmoney.com/en/commentary.php#current

'OPEC Has Already Turned to the Euro' (Feb 18, 2003)

"It has been suggested that OPEC may begin pricing crude oil in terms of the euro, and further, that OPEC may actually begin invoicing its crude oil exports in terms of euros. This latter step would require shifting out of dollars, with OPEC receiving euros in payment.

These possibilities have been scoffed at by many whose interests are tied to the fate of the dollar, but it seems that OPEC has already taken the first step - it appears to be pricing crude oil in terms of the euro. This conclusion is apparent from the following table. The import data is from the Department of Commerce report entitled U.S. International Trade in Goods and Services. The source for the euro exchange rate is the Federal Reserve, and I have calculated the euro's average exchange rate to the dollar for each year based on daily data.

US Imports of Crude oil
(1) (2) (3) (4) (5) (6)
Year Quantity (thousands of barrels) Value (thousands of US dollars) Unit price (US dollars) Average daily US$ per € exchange rate Unit price (euros)
2001 3,471,066 74,292,894 $ 21.40 0.8952 € 23.91
2002 3,418,021 77,283,329 $ 22.61 0.9454 € 23.92
2003 3,673,596 99,094,675 $ 26.97 1.1321 € 23.82

We can see from column (4) in the above table that in 2001, each barrel of imported crude oil cost $21.40 on average for that year. But by 2003 the average price of a barrel of crude oil had risen 26.0% to $26.97 per barrel. However, the important point is shown in column (6). Note that the price of crude oil in terms of euros is essentially unchanged throughout this 3-year period.

As the dollar has fallen, the dollar price of crude oil has risen. But the euro price of crude oil remains essentially unchanged throughout this 3-year period. It does not seem logical that this result is pure coincidence."

.."The above table is also interesting for another reason. Column (3) shows that the import cost of crude oil has risen by approximately $25 billion from 2001 to 2003. This increase has directly added to the trade deficit. Therefore, the dollar has entered a vicious circle. As the dollar declines, the oil exporters raise the cost of their oil to protect them from a loss of purchasing power, and this rise in the price of crude oil further worsens the trade deficit, which causes the dollar to weaken further and the oil exporters to raise prices yet again."

(on edit, that chart looks a lot more legible on the link)

Any thoughts?

[JNelson6563]

21. Dean drops out; markets plummet

B-)

2:17 and here's what we're lookin' at:


Dow 10,676.44 -38.44 (-0.36%)
Nasdaq 2,076.00 -4.35 (-0.21%)
S&P 500 1,152.42 -4.57 (-0.39%)
10-Yr Bond 4.032% -0.016


Julie

[54anickel]

24. I just KNEW there had to be a logical reason.

[54anickel]

22. 2:15 numbers and blather (Why'd they change to the 30 year bond?)

Dow 10,673.99 -40.89 (-0.38%)
Nasdaq 2,076.64 -3.71 (-0.18%)
S&P 500 1,152.68 -4.31 (-0.37%)
30-yr Bond 4.894% -0.023

2:00PM: The market maintains its indecisive trade, highlighted by range-bound action, moderate at best volume, and unconvincing breadth figures... Contributing to the volatility is Friday's options expirations, which has a tendency to influence the trade in several preceding sessions... Like their large-cap counterparts, the small- and mid-cap averages are hugging the flat line, with the S&P 400 down 0.07% and the Russell 2000 up only 0.01%...
Generally speaking, though, keeping in mind yesterday's rally, a bit of profit-taking is only natural, especially considering the fact that the Dow and the S&P 500 are trading within only a short distance of their respective 52-week highs... NYSE Adv/Dec 1499/1732, Nasdaq Adv/Dec 1486/1609

[54anickel]

23. More players in the currency games?

http://www.forbes.com/home_asia/newswire/2004/02/18/rtr1265886.html

snip>
"There's been a rally in the dollar against the euro because comments coming out of Europe raise the specter of intervention by the ECB," said Shaun Osborne, chief currency strategist at Scotia Capital in Toronto.

snip>
On Friday, markets were spooked by speculation the ECB may have intervened after traders saw a major European commercial bank sell 2 billion euros for dollars. The huge order accelerated the euro's losses against the greenback despite weaker-than-expected U.S. trade and consumer sentiment numbers.

Traders could not confirm the ECB was in the market.

more...

[aneerkoinos]

26. Interesting

I think it's just BoJ, intervening upto 107 and giving daytraders their usual candy. Maybe just hoping that ECB don't go grazy like the rest of the world, any case today pound (getting ready for the nice and round 2.00) and euro (after kissing the now magical 1.29) have been dropping against dollar in unison, now starting to pull back for a new battle tomorrow(?).

The big deal seems to be that dollar is putting up fierce resistance at 85, under that has been a no-no land now for a month or so. And yet the only real question is, how long... and what happens after the (last?) defense line is broken...

PS. Here's a site I recently bumped into, for real currency addicts:
http://www.dailyfx.com/

[54anickel]

27. Hi Aneerkoinos,

Hard to tell what's going on. I think there is and will continue to be a lot of jawboning. I'm with you I hope the ECB holds out. My guess for today's big rise in the US Dollar would be BoJ from what I've been able to gather in the news. Must admit I haven't spent much time researching todays currency moves yet. I saw one article mentioning BoJ intervention protecting 105 again. Only other thing I know is that the US$ is at 85.98 after an overnight low of 84.56 and most of the gains have come since 6:00am.

Think I'm going to need to dig up the old "Magic 8 Ball".

:hi:

[54anickel]

29. Add Turkey to today's list

http://www.zaman.com/?bl=economy&alt=&trh=20040218&hn=5541

snip>
In order to prevent the Turkish Lira from becoming even more overvalued because of exuberant optimism, the Central Bank (CB) bought up US$850 million which effectively drove the exchange rate down slightly to TL 1.328 million TL to the dollar.

[54anickel]

25. 04 to be a "Stock Pickers" market? (IPOs and M&As)

http://www.forbes.com/home_asia/newswire/2004/02/18/rtr1265886.html

snip>
Jeffrey Kleintop, chief investment strategist with PNC Advisors, told CBS MarketWatch that the latest earnings period may have taxed investor optimism, but he believes this level is a good resting place for equities.

"We've just gone through what perhaps may be the peak in terms of year-over-year earnings growth for this cycle," he said. "And this may have investors just a little bit disappointed with the outlook of slowing earnings growth, and not really feeling inspired to put more money to work"

He added that this feeling, coupled with the additional supply created by the recent IPO activity, may have created a situation where there's just more equity supply than demand.

Kleintop thinks the market is pretty close to fairly valued at current levels, and that appreciation from here may have to chase evidence of earnings growth. This would make it more of a stock pickers market than 2003, when the indexes rose so uniformly, he said, citing the financials as a sector with a number of opportunities.

This sentiment was similar to that of Morgan Stanley analyst Byron Wien, who commented on the potential for a corrective phase before the bell. He said the significant pick-up in IPO and merger activity is "disconcerting" although neither trend has reached "truly alarming levels."

Noting the market's momentum is "very powerful," Wien said he believes any correction will be a "temporary pullback after which the market can resume its climb to higher highs."

more....

[54anickel]

28. U.S. Treasuries slip as dollar rallies

http://www.forbes.com/home_asia/newswire/2004/02/18/rtr1266182.html

NEW YORK, Feb 18 (Reuters) - Treasuries erased early gains and slipped into minus territory on Wednesday after a rally in the U.S. dollar muted speculation that Asian central banks would remain big buyers of U.S. debt.

Those banks have been major purchasers of U.S. government securities with dollars bought in an effort to restrain their own currencies' rise versus a sliding dollar.

The dollar's rally at least briefly hinted that those large intervention-related purchases might be a less-than-permanent feature of the bond market's calculations.

The dollar rose 1 percent against the yen on Wednesday as investors took profits in the Japanese currency, analysts said. By mid-afternoon in New York, the dollar rose to session highs around 106.84 yen<JPY=>, up more than 1 percent on the day.

snip>
"It's become the focus of the day trader who has nothing else to focus on," said Stiles. "The question is, without that buying by foreign central banks, 'Where do Treasury yields really belong?' I would be worried if I were a speculative long here and this was happening."


more...

[54anickel]

30. U.S. Treasuries count on Japan as captive customer

http://www.forbes.com/markets/newswire/2004/02/18/rtr1265867.html

snip>
Traders spotted the Bank of Japan buying five- and 10-year Treasuries in Tokyo time amid talk it was intervening to sell yen for dollars. The effort seemed to work as the dollar had since bounced back above 106.00 yen.

snip>
"It's like having a captive customer who doesn't care what the price is," said one awed trader of the BOJ. "This guy is the single biggest buyer of Treasuries in the world and shows no sign of stopping. He's almost holding the market up on his own."

snip>
They were also cautious about reading too much into the ABCNews/Money Magazine consumer comfort index which dived seven points to -13, equaling its biggest weekly drop on record. That mirrored a sharp fall in the University of Michigan confidence index reported last week and stirred speculation that concerns over jobs could crimp spending.

Analysts emphasized that in recent years there has been almost no correlation whatsoever between surveys of sentiment and actual consumption. Indeed, the latest figures on weekly chain store sales showed considerable strength, with consumers not at all shy to buy for Valentine's Day.

"Through it all, what we are likely to learn above all else is that people will continue to spend money no matter how they feel," noted Drew Matus, U.S. financial markets economist at Lehman Brothers.

[54anickel]

31. Closing numbers and blather

Dow 10,671.99 -42.89 (-0.40%)
Nasdaq 2,076.47 -3.88 (-0.19%)
S&P 500 1,151.82 -5.17 (-0.45%)
30-yr Bond 4.915% -0.002


Close: Behind today's mildly negative close lies a choppy, spiritless session, which occurred in the midst of modest volume and unconvincing breadth figures... The indecision is not entirely surprising in the face of the market's rally in yesterday's session and the blue-chip indices' positioning within a short reach of their respective 52-week highs, as well as Friday's options expiration, which has a tendency to exaggerate the level of volatility in preceding sessions...

While sector leadership remained scarce through most of the session, laggards of note included the integrated telecom, internet, gold, healthcare, oil & gas services, paper, transportation, and natural gas groups... Among the leaders to the upside were the computer storage & peripherals, biotech, and semiconductor equipment sectors... Today's economic news went largely unnoticed, with the Housing Starts and Building Permits reports checking in at 1.903 mln and 1.899 mln, respectively... Although below the consensus, these reports were telling of a housing sector that remains strong and had little effect on the broader market, although they boosted the bond market...

Nevertheless, the bond market weakened toward the end of the session in the midst of light volume and a strengthening dollar against the euro, closing with the 10-year note down 1/32, bringing its yield up to 4.04%...