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May 27, 2007
Week in Review #21 (2007-05-26)
These are busy days for the Humungous Bank & Broker crowd in the market as well as for 'retired' old me. There is clearly a different technical landscape unfolding here, but I am not yet convinced the Bulls have lost control. Soon maybe, but not quite yet.
Amidst all the talk of M&A, share buy-backs, higher dividends, and so forth, the leading story, in my eyes, is the rise in bond yields and the corresponding rally in dividend yields that comes from falling prices of (i) bonds, and (ii) the high dividend paying utility stocks.
The Dow Utility stocks, with one notable exception were slaughtered this week. What that story tells me is that nervous equity strategists are going to move their capital out of the big dividend payers and into the relative safety of high-yielding foreign bonds (like in Europe) and high cash flow energy and metals companies, for now.
But, having reached a juncture here, does anybody really know what road to take? A bump in the inflation-protected TIPS at the end of this week might be a tell.
The one thing that is really going unnoticed is that the venture markets are flying high. The promoters are "getting theirs". They have never had things so good. Reminds me of the Summer of '87, and we all know what followed in mid-October.
This time though, the world has Henry Paulson. I'd like to be a fly on the wall at his place. Since Henry, or Hank if you will, stepped into the Treasury seat, US bonds and dollars have suffered, but equities have been on a rip.
Fund managers who just held the broad market eqity indexes and kept their fingers off the Buy and Sell buttons have had wonderful year. Small cap stockpickers too.
We're all left wondering how long Hank can keep rolling the ball uphill?
Global Market Summary
International Equities: The international markets were mostly up this week, Canada and the UK being exceptions.
U.S. Equities : The broad US market, despite a strong Friday, started showing signs that money flow may be headed back to other markets. It hasn’t shown up in the $USD yet, but US bonds were weak.
Dow 30 : The DJIA dropped -50 points (-0.37 pct) to 13,507. Lots of debt being run up for buying back shares and issuing higher than normal dividend increases. Same old, same old, but I expect the broad market to sidetrack through the Summer.
U.S. Sector ETFs: Seven of 10 US sector ETF’s were down this week. All ten were up on Friday, but only Telcos, Industrials, and Healthcare ended up. With Telco’s it was mostly M&A talk. The Dow Utilities got hammered, with only WMB trying to hold the fort.
First segment: most influenced by global commodities, forex and capex spending
10: Energy (XLE): #4 (-0.1 pct); Big day Fri; but, $WTIC -2.4 pct hurt
15: Basic Materials (XLB): #5 (-0.1 pct); Big day Friday; but, PMs hurt
20: Industrials (XLI): #2 (+0.7 pct); BA & GE were strong; FDX was not
Second segment: most influenced by U.S. consumer spending and economic growth
25: Cons. Discretionary (XLY): #6 (-0.2 pct); Tickee from where?
30: Cons. Staples (XLP): #7 (-0.5 pct); ABV down; WFMI up
35: Healthcare (IYH): #3 (+0.2 pct); Glasko took a hit of -9.2 pct
Third segment: most influenced by U.S. interest rates and general economic health
40: Financial (XLF): #8 (-0.7 pct); DB, MER and GS all hurting
45: Tech (SMH chips): #9 (-2.4 pct); Second bad week; SNDK, QCOM, CTSH down
50: Telecom Service (IYZ): #1 (+1.4 pct); T & VZ were hurt though
55: Utilities (XLU): #10 (-4.0 pct); Ugly; only WMB stopped a bloodbath
Bonds: The US Bond market had another bad week. Yields up +3 to +6 bp, which was not like the horror show (+11 bp to +15 bp lift) of a week ago, but troublesome nonetheless.
Commodities: $CRB was losing all week, until Friday’s gain of +1.2 pct, closing the week flat. All the markets from forex to bonds to PMs seem to be at a cross-roads here. If there is going to be a rally in equities and commodities, I think the $USD and rates have to weaken some here.
Oil & Gas: Crude oil dropped -1.60/bbl this week, which doused the fire of the previous week. The $WTIC lost -2.4 pct to 64.38.
Gold: A week ago I wrote, “Metals and precious metals got hammered again this week, but not to worry; help is on the way. On Friday, the cavalry started to climb the hill. This is no Light Brigade.” More like a powder puff. Copper and Platinum especially were hammered. I think a lot of this has to do with positions on the London Metals Exchange, more than the economy per se.
Goldminers: The goldminers $XAU dropped -0.7 pct this week which wasn’t near as bad as the loss of -2.2 pct a week ago, or the loss of -1.5 pct the week before that. Maybe the cycle is bottoming? Do you think? A week ago, Friday, $XAU and GDX lifted +1.3 pct and +2.0 pct respectively. So, over the past six sessions, the goldminers have actually lifted.
Forex: The $USD lifted this week by +0.23 pct, and the Euro lost -0.42 pct. A four-week Dollar Rally has just about run out the clock, but I opined that masterpiece a week ago. Heads, tails, heads, tails…
Economic calendar for next week.
Sector ETF Summary
The tables I show are for ten (GICS) Sector Index Funds (ETF’s) only.
Seven of the ten sector ETF’s I follow here were DOWN this week. For two of the three gainers (Industrials XLI and IYH Healthcare), all of the gain was made on Friday. The other (Telco IYZ) leaves me wanting to tell a story, which I will cover in the report.
This table is sorted by price performance Week over Week (W/W), i.e. 1W%N.
Table 1: Cara ETF List
| Symbol | Close | 1Day Change |
1Day %Change |
1W %Change |
2W %Change |
4W %Change |
YTD %Change |
3M %Change |
6M %Change |
12M %Change |
You can do this table yourself by entering the following string into the Summary window at Billcara2.com and then clicking on the link for Performance. XLE XLB XLI XLY XLP IYH XLF SMH IYZ XLU . You can also add more ETF’s – up to 30 in total.
For a list of components to any ETF, simply go to the AMEX.com web site, and click on ETF’s. I do that frequently because the list of ETF’s growing incredibly fast.
10 (energy: XLE)
15 (basic materials: XLB)
20 (industrial: XLI)
25 (consumer discretionary: XLY)
30 (consumer staples: XLP)
35 (healthcare: IYH)
40 (financial: XLF)
45 (technology, semiconductor: SMH)
50 (telecom: IYZ)
55 (utilities: XLU)
Individual Sector ETF Review
Sector 10 (energy: XLE, IYE, VDE, OIH, PBW and IXC)
XLE had a terrific day Friday (+1.53 pct), which almost saved the week. But XLE lost -0.09 pct to close at 67.77, down 6 cents. Crude Oil on the NYMEX dropped 1.60/bbl (-2.42 pct) on the week, but was up +0.31 pct on Friday, so its not surprising that XLE lost ground, and tried to recover on Friday.
Here’s the XLE Monthly, Weekly and Daily data charts:
XLE Monthly data:
XLE Weekly data:
XLE Daily data:
Table 2: Senior oil & gas equities
| Symbol | Close | 1Day Change |
1Day %Change |
1W %Change |
2W %Change |
4W %Change |
YTD %Change |
3M %Change |
6M %Change |
12M %Change |
Oil & Gas Exploration & Production -Canada
CVX was a loser (-2.1 pct) on the week. Of the winners, Madam Wu was offshore drilling for deals in Washington, and China National Offshore (CEO) exhibited a remarkably similar pattern. CEO was down in the mouth until Hank Paulson put a smile on petroleum engineer Madam Wu’s face at the end of the week. CEO gained +1.7 pct on Friday, lifting it to a gain of +1.5 pct W/W.
This guy Paulson is really something. He steps into the job in June 2006 and 4 or 5 weeks later he’s off to visit his buddies (ie, Friends & Family) on the NYSE and CBOT trading floors in July. What I had thought was the start of the 2006+ Bear market (starting May 10-06) then turned out to be Paulson’s Pride.
I mean look at this chart and tell me Paulson didn’t light the fuse.
In ten months, the DJIA is up +26 pct. Unfortunately, the broad market was not materially under-valued in June-July 2006, and there has been no fundamental or economic reason for the market capitalization to have risen a full quarter of its value from all-time in just ten months.
So let’s call a spade a spade: this equity market is being driven by money that is being printed at a rate four times faster than the economy is growing in the US and well over twice as fast as the global number when you add in the most rapidly growing economies. That has led to a massive transfer of wealth out of North America and Western Europe and into the developing world, which in turn has led to inflation, speculation and corporate take-overs. At the end of the day, the global exchange rates are not stable, the global economy is not balanced, and the most threatening issues that Michael Panzner has outlined, at least in the US, are not being addressed – these being Debt, The Retirement System, Govt Guarantees, and Derivatives.
Our elected leadership are too busy empire building and not taking care of business at home. They are too involved in helping Friends & Family get theirs, which is not why the People elected them. This picture will not end nicely. I fear there will be increasing social, international trade and military conflict.
The persons responsible today will not be treated kindly in history by our future generations who will have to pick up the pieces.
Sector 15 (basic materials: IYM, XLB, IGE and VAW)
The Basic Materials ETF (XLB) gained +1.16 pct on Friday, but still lost -0.12 pct W/W to close at 40.25, which was only a wooden nickel.
Gold keeps getting hammered down. But that’s the thing with gold. It’s malleable, and recovers quickly. Particularly when inflation and speculation (and therefore interest rates) are on the rise.
Somebody asked me why it is that I believe the c.bankers are the culprits in whacking gold. I replied that the World Gold Council data tell you all you need to know. If governments didn’t sell, the price of gold would be through the roof because demand would far exceed the supply.
Speaking of real estate, which many of you are this weekend, we all know that the G-7 central bankers are motivated sellers of gold. So what do smart people do when they see a motivated seller selling? The buyers stand aside and let the prices drop. Then they step in and buy more of the stuff.
Unlike residential real estate from these levels, I believe we will see a 100 pct to 250 pct move in gold within maybe eight to ten years. And when gold goes higher, OPEC will withhold their oil from the market because why take wooden nickels? These oil producing nations want to get paid either in gold or in higher prices of the depreciating currencies.
Then interest rates will soar and all that debt that has been building in the past five years at geometric rates of growth will implode. Creditors will simply be unable to pay their debts. But real estate and gold without encumbrances will always have value.
So, what I’m saying is that Basic Materials and Energy are still the places to be for the long-term until govts can figure a way to put a stop to debt expansion that is not linked directly to wealth creation.
And, remember, wars don’t create wealth. In the past 250 years or so, the financial data clearly links war to inflation and speculation, where the prices of energy and metals and precious metals have risen until policy changes by monetary authorities brings the cycle to a close.
Here’s the XLB Monthly, Weekly and Daily data charts:
XLB Monthly data:
XLB Weekly data:
XLB Daily data:
Table 3: Senior metals and steel equities:
| Symbol | Close | 1Day Change |
1Day %Change |
1W %Change |
2W %Change |
4W %Change |
YTD %Change |
3M %Change |
6M %Change |
12M %Change |
A week ago, heading into the G-8 c.banker and finance minister meeting, the base metal miners and the PM miners were hit hard. This week, nothing much happened until Friday with the base metals, while gold took it on the chin, then came Friday when the miners and steelers and pipemakers and alums shot the lights out.
RTP +4.9 pct W/W, but +4.9 pct on Friday.
PKX +3.8 pct W/W, but +2.1 pct on Friday.
AA and TS +2.9 pct W/W.
For leading goldminers: AUY (YRI in Canada) was down -5.1 pct W/W, but on Friday was up +2.4 pct. And GG (just G in Canada) was down -3.8 pct W/W, but up +1.7 pct on Friday.
All in all it was a terrible week for gold, but with Madam Wu in town, you can’t very well expect Hank Paulson to let his $USD down, do you? No, this meeting with the world’s most powerful woman -- let’s say hers is the long-grain and Washington has the short-grain, but they’re both pretty equal -- has been planned for quite a while. A crappy dollar would not look good to Her Excellency, so Paulson needed to save face.
Do you think selling another $100 billion in Treasury paper (which is what Treasury Secretaries do) is easy when the buyer buys at par, but gets repaid later at 0.5x par (after figuring the exchange rate differential). If I’m on commish, that is one sales job I’d surely pass up. Even the previous Treasury Secretary wasn’t up to the required “Snow”job.
So, in addition to pulling up Mr Market by the scruff of the neck, Hank Paulson, as I see it, is doing a heck of a job keeping that $USD from falling into the 70’s or lower.
I mean all his friends are spending $USD to buy China, and they are moving their factories there, and building the biggest casinos for fun-time in Macau, and all, so Hank has to convince Madam Wu that his Friends & Family are stupid people and that the Chinese would be smart people in buying up America.
And, you know, he says he got the job done this week! This guy must be superman.
Maybe he’s hoping Madam Wu never upgraded her suanpan with a Bloomberg? Do you think?
No, Paulson’s not that naïve. Dr Bernanke, maybe. Perhaps the good professor doesn’t see that Dr Joe (Xiao) in Beijing is preparing to depart his Governorship of the glorious PBOC, and that maybe Madam Wu was in Washington to grease the skids for his arrival at the Fed.
I mean, what with the Chinese Administration buying into Humungous Private Equity Corp with $3 billion in chump change, there may be some surprises ahead.
Sector 20 (industrial: IYJ, XLI, VIS, and IYT)
Industrials (XLI) were up +0.65 pct to 38.50 this week, which is five wooden nickels. The problem is that XLI gained +0.60 on Friday, so the rest of the week wasn’t that hot.
Of course, the rest of the week saw a Paulson-inspired USD, and when that sagged on Friday, the market boomed (thinking lower interest rates). But a lower Dollar helps the Industrials because, if that $USD drops to nil, the foreign buyers basically accept American goods and services as gifts.
Maybe that’s the plan. Take the $USD to 50 cents and foreigners can buy Dreamliners and washing machines, Fords and Chevies, and Montana pretty cheap.
Those sales commissions would be pretty good, though. And think of the hundred million dollar retirement pay packages the CEO’s would get. I mean, if the countries headed for bankruptcy, you might as well be “getting yours”.
I hope you see the point that a weak dollar is like mercury in a thermometer. It shows how sick the patient is. To do business properly, owners and managers need to plan ahead. They want a stable $USD – something close to par – maybe +/- 5 pct instead of the ridiculous +/- 30 pct that HB&B prop desk traders are forcing on us.
As it is, business cannot properly plan ahead, so cash is building in their treasuries, unlike Washington’s, who unfortunately are making too many plans of the wrong kind. And with all that cash around, Humungous Private Equity Corp (HPEC), among others, wants it. So the M&A game is keeping bonuses up on Wall Street. As an aside, tell me, why does HB&B have to rent their offices when they could buy the City.
Aha, it’s because they want to stay liquid. It takes a buck to make a buck, and all that stuff. They also need to keep a billion handy for every ten they lend to Friends & Family and HPEC.
For our students, that’s called the Reserve Requirement, which is important to know for exam time.
Just remember, US exporters are the ones who want the people in other countries to have a healthier economy than those at home.
Here’s the XLI Monthly, Weekly and Daily data charts:
XLI Monthly data:
XLI Weekly data:
XLI Daily data:
Senior capital goods makers and transportation:
| Symbol | Close | 1Day Change |
1Day %Change |
1W %Change |
2W %Change |
4W %Change |
YTD %Change |
3M %Change |
6M %Change |
12M %Change |
BA led the flight again. Last week +3.5 pct, and +1.7 pct this week.
Swiss corp ABB was up +3.0 pct.
But FDX was grounded -0.6 pct to $105.96. Not as bad at last week’s loss of -1.6 pct, but stumbling nonetheless. Over 52-weeks, FDX has lost -1.63 pct, and that’s -9.7 pct over 6 months and -12.4 pct over three months. Not to put too fine a point on it, but FDX is -12.73 pct off its 52-week high of $121.42 on Feb 26, 2007.
FDX, btw, carries packages for business. They make money for shareholders when business is good.
Back in the early Feb 5 report, I wrote this about the Dow Transports and Fedex: “I no longer consider Dow Theory because Transports were not even part of the original theory. Also, Dow Theory was originally a technical look at the US economy. But, globalization has skewed these numbers as Fedex ($114.89) is a major Transport component but is a global concern that has benefited most from growth in the emerging economies. So, what technical analysts need now is a Dow America Theory.”
On the morning of Feb 27, when FDX hit its high ($121.42), I wrote: “US Durable Goods Orders have plummeted (-7.8 pct). Refrigerators, automobiles, industrial machinery, electrical machinery, computers, and the like are not being ordered. They are not being manufactured, and they are not being shipped – in quantities you have been led to believe. The evidence is now coming through.”
It’s been a tough 3 months for Fedex. FDX, btw, is also called a market bellwhether. M&A and the rest of the financial games that are being played under Paulson’s watch are causing you to take your eye off the ball.
In the Week #9-07 report (Mar-3), I wrote, “Fedex (FDX) is no longer “carrying the freight, flying the Transports to a new high, keeping the Bull market technically stable.” Hahaha. No sirree, FDX skid landed this week, down -7.0 pct.”
Sector 25 (consumer discretionary: XLY, IYC and VCR)
The Consumer Discretionary sector ETF (XLY) gained +0.25 pct on Friday, but it still lost -0.23 pct W/W, closing at 39.63.
Who’s got ‘tickee’?
Here’s the XLY Monthly, Weekly and Daily data charts:
XLY Monthly data:
XLY Weekly data:
XLY Daily data:
Table 5: Senior consumer discretionary equities
| Symbol | Close | 1Day Change |
1Day %Change |
1W %Change |
2W %Change |
4W %Change |
YTD %Change |
3M %Change |
6M %Change |
12M %Change |
NKE (+1.9 pct) was running and CCL (+1.6 pct) still floating, but the spin cycle at WHR (-2.3 pct) evidently stopped, and TM (-1.5 pct) dropped into reverse.
A week ago, I wrote, “When the People find money (ie, disposable income) gets tight, one of the first cut-backs is a visit to the casino. I noticed that from July through the end of the year (2006) that casino stocks were in favor. Not so much at this point. This group can be a leading indicator of where equity markets are headed.”
Then I showed the following table, and wrote, “I do think MPEL will be a stock to watch, but I’ll keep my eye on it.” I have to keep my eye on it because I recently put Melco PBL Entertainment (the company, not the stock) into the Cara 100. I could have picked a better time.
Eight leading casino stocks to watch.
Maybe I could have looked at LVS too because Las Vegas Sands (another huge player in Macau) seems to be headed south as well.
Following this week, MPEL is now down -2.9 pct (1 week), -18.0 pct (2 weeks), -24.2 pct (4 weeks) and -37.1 pct YTD.
Hmmm.
Once a high-flyer, LVS is also down -0.2 pct (1 week), -3.7 pct (2 weeks), -13.9 pct (4 weeks) and -16.8 pct YTD.
Only MGM and PENN, on the backs of M&A deals, have thrived this year. When it’s the People’s money, I guess we don’t have tickee to gamble as much these days.
Sector 30 (consumer staples: XLP, VDC, RTH and IYK)
The Consumer Staples sector ETF (XLP) was up +0.69 on Friday, but still lost -0.54 pct W/W to close at $27.54.
Here's the XLP Monthly, Weekly and Daily data charts:
XLP Monthly data:
XLP Weekly data:
XLP Daily data:
Table 6: Senior consumer staples equities
| Symbol | Close | 1Day Change |
1Day %Change |
1W %Change |
2W %Change |
4W %Change |
YTD %Change |
3M %Change |
6M %Change |
12M %Change |
A week ago, Companhia de Bebidas Das Americas (AMBEV) (ABV) rocketed to $67.42. This week it lost almost -$2.00.
Yes, Brazil’s AmBev (ABV) had really been on a rip -- up +10.7 pct a week ago. Since it’s a beer company, I suggested we might refer to it as a rip roaring drunk. No moderation there.
But a hang-over this week as ABV dropped -2.6 pct.
BUD, on the other hand, gained +1.7 pct.
It was interesting to me that many readers have focused on Whole Foods Market Inc (WFMI +1.74 pct W/W), not so much on its low stock price but over social connotations and the ills or threats in today’s economy.
Perhaps you’d like to delve into issues of plutocracy, which is the rule of the rich? This recent development in the letters and comments I have been receiving, together with the new survey software I acquired, has led me to a new concept, the Cara Roundtable.
I mean, if there can be a Business Roundtable for the Gnomes, why can’t there be a populist roundtable?
If this group of a few hundred people can claim to speak for 10 million employees, maybe we can get 10 million of us to speak for them. Maybe we can get into “Task Forces and Issues,” Special Initiatives” and “Publications” too?
Sector 35 (healthcare: IYH, XLV, VHT, IXJ, and IBB)
The IYH healthcare ETF was up +0.15 pct W/W, after being up +0.14 pct on Friday, to close at 72.25. A week ago, Friday (+0.73 pct) was a also good day, just like the Friday before that. Hmmm.
Here’s the IYH Monthly, Weekly and Daily data charts:
IYH Monthly data:
IYH Weekly data:
IYH Daily data:
Table 7: Senior healthcare equities
| Symbol | Close | 1Day Change |
1Day %Change |
1W %Change |
2W %Change |
4W %Change |
YTD %Change |
3M %Change |
6M %Change |
12M %Change |
Glasko became the big story this week, with its regulatory challenges, going down -9.2 pct W/W. UNH lifted +1.7 pct. AMGN recovered a bit (+0.9 pct), which is nothing compared to its recent performance.
Sector 40 (financial: IYG, IYF, XLF, VFH, IXG, VNQ, RWR, IYR, and ICF)
The Financials ETF (XLF) lost -0.69 pct to close at 37.56, which was 8th best performer out of 10 this week.
There was another effort to have Friday close strong, but it failed.
Here’s the XLF Monthly, Weekly and Daily data charts:
XLF Monthly data:
XLF Weekly data:
XLF Daily data:
Table 8: Senior financial company equities
| Symbol | Close | 1Day Change |
1Day %Change |
1W %Change |
2W %Change |
4W %Change |
YTD %Change |
3M %Change |
6M %Change |
12M %Change |
Some humungous losses for the world’s biggest banks this week. DB dropped -4.3 pct W/W, and MER and GS were down -2.5 pct and -2.1 pct respectively.
Sector 45 (technology: IGM, IGV, IGW, XLK, VGT, IYW, IGN, IXN, MTK and SMH)
A week ago, the Semiconductors (SMH) dropped -2.2 pct. This week despite a small rally Friday (+0.53 pct), SMH dropped -2.4 pct W/W.
Here’s the SMH Monthly, Weekly and Daily data charts:
SMH Monthly data:
SMH Weekly data:
SMH Daily data:
Table 9: Senior technology equities
| Symbol | Close | 1Day Change |
1Day %Change |
1W %Change |
2W %Change |
4W %Change |
YTD %Change |
3M %Change |
6M %Change |
12M %Change |
Adobe (+1.5 pct this week after +4.5 pct last), and SAP (+2.5 pct W/W) were leaders.
The losers were clearly SNDK (-4.9 pct), QCOM (-4.1 pct) and CTSH (-4.0 pct) this week.
Sector 50 (telecom: IYZ, VOX and IXP)
The U.S. telco sector ETF (IYZ) supposedly gained +1.44 pct W/W to close at 33.88, including a gain of +0.74 pct on Friday.
But, the biggest of the Big Bells, T (-0.83 pct W/W) and VZ (-0.21 pct) did not lead the way.
Here’s the IYZ Monthly, Weekly and Daily data charts:
IYZ Monthly data:
IYZ Weekly data:
IYZ Daily data:
A week ago, I gave you dozen Telco stocks to watch.
I showed you this chart.
So this week, to keep the game alive, HB&B managed a few upgrades and take-over talk. Time Warner Telecom (TWTC +3.61 pct), BCE (BCE +2.75 pct), Cincinnati Bell (CBB +2.66 pct), and Qwest Communications (Q +1.42 pct) all kept the full-court press on for the Gnomes and HB&B.
I say, if you want to play their game, then be prepared to get roughed up. These companies are basically dogs looking for sustenance, and… along came Hank… (let’s play the music… And, along came Hank…).
Musical chairs I say. Watch the distribution: Weekly RSI-7 for VZ is 83.2, and it’s 80.0 for BCE (they never had it so good as April-May), and 86.7 for Qwest, and 86.0 for Cinci Bell.
Sector 55 (utilities: IDU, XLU, and VPU)
The Utilities ETF (XLU) had a loss of -4.04 pct to close at 41.10.
A week ago, after a gain of +1.49 pct, I remarked: “but there were few pulling the rest.”
Here’s the XLU Monthly, Weekly and Daily data charts:
XLU Monthly data:
XLU Weekly data:
XLU Daily data:
Aha, last week I pointed you to the 10 Dow Utility stocks to watch.
Here was the table.
Here it is a week later. Do you notice the difference?
A week ago in this space, I wrote, “As soon as I can get around to it (unfortunately a week does not have eight days), I’m going to have BillCara2.com tie into Seeking Alpha and also create various trading system screens from the changing technical indicator data (see table below) that will give Cara Accumulation Zone/Distribution Zone and Buy/Sell Alerts. Why? Because everybody in life needs a fair shot.”
Did you see how M&A story-laden WMB was trying to hold the fort while the Gnomes were dumping piles of the other stuff.
You need to stick to quality companies. Very very few in this group. And if you are there for the dividend yield, think also about the concept “Total Return”.
Getting whacked doesn’t do much for your TR.
Bonds & Yields Review
The US Bond market dropped again this week. That’s what happens when the equity market turns to take-overs and speculation, and the US economy is looking more than a little fragile, what with military budgets and all.
US Treasury bond yields gained +4, +6, +6, and +3 basis points (not like +11, +13, +15, and +11 bp a week ago) but enough to take yields up to 4.98 pct, 4.84 pct, 4.77 pct and 4.83 pct respectively on the 30-year, 10-year, 5-year and 2-year instruments.
This is a little like $4 gasoline at the fuel pump. At some point, bondholders will be shouting, “I’m mad and not going to take it any more.”
It’s all consistent, folks, with the incredible rally in real estate prices into the Summer of 2005. This is called pay-back time.
The spread between the 2-year and 3-month Treasuries is now +12 bp. It’s +1 bp between the 10-year and 2-year, and +27 bp between the 30-year T-Bond and the short T-Bill. The slope is looking better as the capex story strengthens, but the threat is elsewhere now. The whole curve is rising. Even T-Bill yields popped from 4.66 to 4.71 pct.
That’s not good. Look at the charts. The market is soon to cross into Delta sector, which will not be pretty.
As I wrote before, “traders fled (the bond) market, fearing inflation numbers on the way. Actually, I think they smell speculation (‘animal spirits’) in the air, and a Fed that might not cool its jets, but actually have to raise rates to put out fires.”
The TLT a week ago lost -4.62 pct, so you’d think some relief rally might be on the way. Not so. This week, TLT dropped -0.64 pct, including -0.23 pct on Friday, to close at 86.37.
TLT was at almost 92 at year-end 2006, so long bond investors (ie, those who hold to maturity) have taken a serious beating this past few months. Some hedgies must be in tough!
On Friday, the TIPS lifted +0.14 pct as bond traders turned to these inflation protected instruments.
Interest rates and bond yields.
Interactive Daily data charts:
| Maturity | Yield | Yesterday | Last Week | Last Month |
|---|---|---|---|---|
| 3 Month | 4.71 | 4.74 | 4.66 | 4.80 |
| 6 Month | 4.74 | 4.76 | 4.74 | 4.80 |
| 2 Year | 4.83 | 4.82 | 4.80 | 4.61 |
| 3 Year | 4.78 | 4.76 | 4.72 | 4.53 |
| 5 Year | 4.77 | 4.75 | 4.71 | 4.53 |
| 10 Year | 4.84 | 4.82 | 4.78 | 4.63 |
| 30 Year | 4.98 | 4.97 | 4.94 | 4.81 |
| Maturity | Yield | Yesterday | Last Week | Last Month |
|---|---|---|---|---|
| 2yr AA | 3.66 | 3.70 | 3.62 | 3.65 |
| 2yr AAA | 3.61 | 3.61 | 3.56 | 3.59 |
| 2yr A | 3.65 | 3.67 | 3.64 | 3.62 |
| 5yr AAA | 3.69 | 3.66 | 3.62 | 3.58 |
| 5yr AA | 3.67 | 3.69 | 3.63 | 3.61 |
| 5yr A | 3.74 | 3.76 | 3.71 | 3.71 |
| 10yr AAA | 3.83 | 3.83 | 3.75 | 3.72 |
| 10yr AA | 3.80 | 3.81 | 3.72 | 3.71 |
| 10yr A | 4.10 | 4.11 | 4.03 | 4.00 |
| 20yr AAA | 4.38 | 4.36 | 4.32 | 4.13 |
| 20yr AA | 4.29 | 4.29 | 4.22 | 4.43 |
| 20yr A | 4.27 | 4.37 | 4.53 | 4.24 |
| Maturity | Yield | Yesterday | Last Week | Last Month |
|---|---|---|---|---|
| 2yr AA | 5.19 | 5.19 | 5.15 | 4.97 |
| 2yr A | 5.28 | 5.28 | 5.25 | 5.03 |
| 5yr AAA | 5.29 | 5.27 | 5.20 | 5.04 |
| 5yr AA | 5.32 | 5.31 | 5.27 | 5.11 |
| 5yr A | 5.41 | 5.38 | 5.33 | 5.11 |
| 10yr AAA | 5.79 | 5.86 | 5.55 | 5.38 |
| 10yr AA | 5.58 | 5.54 | 5.54 | 5.35 |
| 10yr A | 5.71 | 5.65 | 5.62 | 5.42 |
| 20yr AAA | 5.97 | 5.96 | 5.93 | 5.84 |
| 20yr AA | 5.92 | 5.90 | 5.87 | 5.80 |
| 20yr A | 6.11 | 6.10 | 6.07 | 5.98 |
Interactive Chart of Interest rates and bond yields.
US Bond Funds -- Interactive Monthly Data Charts
SHY Monthly data series chart:
IEF Monthly data series chart:
TLT Monthly data series chart:
AGG Monthly data series chart:
LQD Monthly data series chart:
TIP Monthly data series chart:
US Bond Funds -- Interactive Weekly Data Charts
SHY Weekly data series chart:
IEF Weekly data series chart:
TLT Weekly data series chart:
AGG Weekly data series chart:
LQD Weekly data series chart:
TIP Weekly data series chart:
US Bond Funds -- Interactive Daily Data Charts
SHY Daily data series chart:
IEF Daily data series chart:
TLT Daily data series chart:
AGG Daily data series chart:
LQD Daily data series chart:
TIP Daily data series chart:
Table 11: Interest-sensitive securities
| Symbol | Close | 1Day Change |
1Day %Change |
1W %Change |
2W %Change |
4W %Change |
YTD %Change |
3M %Change |
6M %Change |
12M %Change |
I put a link on the side bar to www.thehousingbubbleblog.com, “which offers insights as to what is happening across America with respect to housing and mortgages. I say this cancer will spread for several years, not resolve itself in a few weeks. The big losers here are the bondholders who bought this securitized bundle of Liar Loans.”
Consumer Finance -USA -- Interactive Weekly Data Charts
Consumer Finance -USA -- Interactive Daily Data Charts
Commodities Review
A week ago, I wrote in this space, “The Commodities Index ($CRB) looks Good to Go.” Well, it went well on Monday and Friday but Tues through Thurs was a different matter as Hank Paulson and Prof Bernanke were sprucing up the Greenback for Madam Wu. Trying to show a little power against power as it were.
This week, $CRB was almost flat (-0.02 pct), to close at 313.10. But it took a Friday rally (+1.18 pct), and the Wu delegation to leave town, to get the job done.
$CRB is still above the 50-day MA (312.22) and 200-day MA (309.87) lines, so that’s where the technical support lies, and it’s too close for comfort, what with the Administration controlling the Strategic Pete purchase orders and the Ft. Knox Gold sell orders.
These down-sloping trend lines are technical resistance, and it appears on the chart that $CRB respects the support (during the Bull phase) and the resistance (for the Bear phase) points.
As, I say, though, “The $CRB trend lines appear to be reversing course, with the 50-Day MA crossing up through the 200-Day MA. That’s good for the Commodity Bulls who have been hoping for higher commodity prices and some renewed $USD weakness. “
Interactive Chart of Weekly CRB Commodities Index:
Interactive Chart of Daily CRB Commodities Index:
Oil Review
This week $WTIC conveniently lost -1.60/bbl (-2.42 pct) to close at 64.38.
The People were getting restless, and Paulson needed to put on a good show for his visiting VIP’s from China, where they have enough money in the bank to buy XOM and CVX if Washington would let them.
The $WTIC 50-Day Moving Average (from StockCharts) is now 63.96 and the 200-Day MA is 62.04. Hence the current price (64.38) is close to technical support.
Interactive Chart of Weekly Crude Oil:
Interactive Chart of Daily Crude Oil:
The e-miNY June-07 Crude Oil contracts were very weak all week.
Gold & Precious Metals Review
$GOLD was hammered down further this week, -6.15 (-0.93 pct) to 655.85. As I say, “It seems to have found a friend in the 200-day MA though.”
For $GOLD, the 50-day MA is now at 674.45 and the more important 200-day MA is at 638.35. “So while a plunging $GOLD dropped through the 50-day MA, which is a bearish sign, there is hope yet.” I wrote that a week ago, but my hopes are still alive.
I really do not see a primary trend reversal in the market to become long-term bearish.
June Gold on NYMEX had a recovery at the end of the week, ie, from Thursday noon (ET).
Spot gold chart for the week
Interactive Chart of Weekly Gold EOD Continuous Contract Index:
Interactive Chart of Daily Gold EOD Continuous Contract Index:
Interactive chart of recent trading for the Gold Bullion index.
$SILVER dropped one wooden nickel -0.05 (-0.42 pct) to close at 12.95. That’s still a loss of 0.60 in three weeks. Ouch,
The 50-day MA is 13.48 and the 200-day MA at 12.90, so the current price at 12.95 is kind of locked in irons, adrift on the sea, with only a technically Bullish long-term pattern.
The price action this week has been quite violent as the Silver Bulls (led by Fleck) and the Dollar Bulls (led by an absent-minded professor) fought for control. If the professor could only print less money he might win the thing, but he has an Admin who won’t let him. “Read my lips; no new taxes. And, no return of the soldiers.”
Man, this is a tough social issue. There are no winners, intellectually. We can only pray the soldiers come home in good shape.
Spot silver chart for the week
Interactive Chart of Weekly Silver EOD Continuous Contract Index:
Interactive Chart of Daily Silver EOD Continuous Contract Index:
Interactive chart of the Silver Bullion index.
This week, the $PLAT Bears won another round, taking -37.70 out of the contract (-2.84 pct) to close at 1290.00. I’m noticing a hedge now between Platinum and other PM’s.
The 50-day MA is 1291.23 and the 200-day MA is 1202.03, so the current 1290 price is marginally underwater re the 50-day MA. The $PLAT Bulls are holding this line holds.
Spot platinum chart for the week
Interactive Chart of Weekly Platinum EOD Continuous Contract Index:
Interactive Chart of Daily Platinum EOD Continuous Contract Index:
Interactive chart of the Platinum metal index.
$PALL has been bullish since early October (290.88). It was again this week.
This week, $PALL gained +4.32 (+1.17 pct) to close at 372.48. The 50-day MA is 368.85 and the 200-day MA is 342.53. The 50-day MA support appears to be holding.
Spot palladium chart for the week
Interactive Chart of Weekly Palladium EOD Continuous Contract Index:
Interactive Chart of Daily Palladium EOD Continuous Contract Index:
Interactive chart of the Palladium metal index.
A week ago, $COPPER plunged -28.05 (-7.78 pct), following a drop of -4.11 pct the previous week. This week, $COPPER dropped a further 12.65 (-3.81 pct) to close at 319.70.
China is still in dire need of the red metal, so Madam Wu thanked the “G” Team profusely for their help.
The 50-day MA is 341.24 and the 200-day MA is 316.57, so there is some marginal technical support at this level. As I wrote in this space a week ago, “But that is quite a Sell button somebody owns. Yes, I hear China doesn’t need more copper. (NOT!)”
Interactive Chart of Weekly Copper EOD Continuous Contract Index:
Interactive Chart of Daily Copper EOD Continuous Contract Index:
Interactive chart of the Copper metal index.
Table 12: Senior gold equities
| Symbol | Close | 1Day Change |
1Day %Change |
1W %Change |
2W %Change |
4W %Change |
YTD %Change |
3M %Change |
6M %Change |
12M %Change |
This week $XAU lost -0.69.15 pct to close at 135.80. The 50-day MA (139.80) and 200-day MA (137.81) are now above the current price, which, I have said, is bearish any way you look at it.
But I am a Bear for punishment. Ahh yes, I still await the Summer Rally.
I mistakenly thought I saw it starting two weeks ago Friday. But, then came the c.bankers to the G-8, followed by Madam Wu with promises of spending billions in America. What a marvelous spark to the $USD.
It almost has a Rocky 99 element to it. Sly, where are you?
Miners, as I say, are hard rock people. No weak-willed c.banker is going to convince them that $USD are more valuable.
Now, you miners, if you look at the ground carefully, you will see that in the past six sessions $XAU has actually lifted (more than my spirits).
As I have been pointing out, the problem here is that ETF’s make a wonderful opportunity to smash a market down, just as when the tide turns, the same ETF’s can be used to juice the market. But, c.bankers, or is the term “monetary authorities”, have deep pockets. That’s why “Kaimu” advocates holding only gold and silver bullion bars and coins plus shares of cash and property rich junior PM explorers – the kind that don’t find their way into ETF’s – like VAL.V as an example.
And that is one of the reasons the penny dreadfuls (one beautiful expression) have been floating like a butterfly, stinging like a bee. (Wasn’t Laila simply terrific?)
To watch the moves in precious metal miners, you will have to monitor the individual stock charts, preferably in real-time, as follows:
NEM ABX AU GFI GG HMY AUY KGC BVN
Interactive Daily data
Interactive Weekly data
MDG LIHRY AEM BGO IAG EGO RGLD GOLD CDE GRS
Interactive Daily data
Interactive Weekly data
CBJ SSRI SIL NG KRY UXG GRZ TSE_HRG TSE_GUY TSE_AGI
Interactive Daily data
Interactive Weekly data
NXG GSS MNG DROOY MFN RNO RANGY MRB CLG
Interactive Daily data
Interactive Weekly data
Here are the key Silver miners and the SLV ETF:
SLV SIL CDE HL PAAS SSRI SLW MGN
Interactive Daily data
Interactive Weekly data
Here are the Weekly and Daily Data charts of the indexes:
Interactive Chart of Weekly U.S. Goldminers Index:
Interactive Chart of Daily U.S. Goldminers Index:
The U.S. goldminer share trust ETF trades under the ticker symbol GDX.
Here are the U.S. Goldminer ETF (GDX) index Weekly and Daily data charts:
GDX Weekly data:
GDX Daily data:
The Toronto Exchange-listed goldminer iUnits S&P/TSX Capped Gold Index ETF trades under the ticker symbol TSE:XGD.
Here are the Weekly and Daily data charts for the TSX Goldshares (XGD) index:
Interactive Chart of XGD Weekly data:
Interactive Chart of XGD Daily data:
Forex Review
The $USD closed at 82.36, a gain of +0.23 pct W/W, although it did pull back a bit on Friday.
The $USD 50-Day MA is now 82.32, and the 200-Day MA is 84.23, so the current price (82.36) is technically bearish, but much less so after four straight weeks of gains with all these c.banker threats and announcements.
Here is the chart of the end of the week trading:
The following data requires your attention: M3 update as of the past week.
M3 continues to grow at an excessive rate.
The world’s money supply is growing at multiples of the global economy. Bankers are banking on the hope that credit derivatives will solve their growing risk issue. NOT!
I mean the BMO cannot even solve its primary relationship issues, losing close to a billion dollars to a man who just came out of prison – twice in recent years. And NYMEX is almost as guilty of negligence too. So, please don’t tell me that HB&B risk management systems are the first and last line of an impregnable defense.
Interactive Chart of Weekly U.S. Dollar Index:
Interactive Chart of Daily U.S. U.S. Dollar Index:
The Euro (priced in USD) had another losing week, going down -0.42 pct W/W, closing Friday at 134.52. On Friday there was another gain of +0.09 pct, just like the previous week.
The $XEU 50-Day MA is 134.79, and the 200-Day MA is 130.58, so the current price (134.52) is bullish, but barely. Its trying to hang on the 50-day MA support.
Interactive Chart of Weekly Euro Dollar Index, priced in USD:
Interactive Chart of Daily Euro Dollar Index, priced in USD:
The British Pound gained +0.49 pct W/W to close at 198.46, which makes me think there are Pound:Euro hedge games being played.
The $XBP 50-Day MA is 198.08, and the 200-Day MA is 193.65, so the current price (198.46) is barely bullish.
Like the Euro, we are at a critical point. Will the USD break through to higher ground and sink the PM group here? Will the US economy strengthen? Has the past ten months in the US equity market been a forecaster of great things to come?
Your guess is as good as mine. I just know that, like well-located and fairly priced real-estate, gold is not going out of favor. It costs the miners close to $600 (all costs in) to mine the stuff. Shut down these mines, and c.bankers had better be prepared to meet all the market demand.
Weekly British Pound Index:
Daily British Pound Index:
The Japanese Yen $XJY lost -0.47 pct, closing at 82.16. Again, I say, “That is a lot, and underlines my concern for the Japanese equity market.”
The 50-Day MA is 83.84, and the 200-Day MA is 84.44, so the current price (82.16) is extremely bearish, and in need of help. Is the exporting industry there that bad off?
I continue to say, “this is a function, I think, of the Japanese Administration and central bank trying to help domestic exporters (but) I also think that it could be that the carry trade will be coming to a close soon as the BoJ may start to raise rates. Something to consider as the end of the carry trade will mean a big negative for global stock prices, I think. Maybe the Carry Trade unwinding process doesn’t start until 3Q?”
But that’s just a few weeks away? And we are late, not early, in the game.
Weekly Japanese Yen Index:
Daily Japanese Yen Index:
Weekly Canadian Dollar Index:
Daily Canadian Dollar Index:
The Canadian Dollar $CDW had another monster week, gaining +0.78 pct) close at 92.56. If only this was an economy-based success. NOT! This reaching for parity with the $USD has a lot to do with foreigners buying IMO, AA, and the like.
The $CDW 50-Day MA is 88.79, and the 200-Day MA is 87.72, so the current price (92.56) is technically so bullish you could call it a “hot” Dollar.
But is it burning a hole in your pocket Johnny Canuck?
That Cdn Heat should be left for the Senators of Ottawa, however, if the NHL decides to start the Stanley Cup finals before July.
I gather Ottawa pols would like that because with such a hot Dollar, Cdn tourism this summer is going to be hurt. Money from LA (Anaheim they make you say in the hockey world) is more than welcome.
But Toronto and Leaf Nation will always be the center of the hockey universe. (LOL)
International Equities Review
Some interesting observations. We all know that the USD-denominated and HB&B-traded foreign country ETF’s are not identical to the foreign country stock exchange indexes, right? But, you’d think they might be moving in the same direction. NOT always.
This week, the Toronto Exchange Composite Index dropped from 14105.34 to 14024.07, but the EWC increased from 29.69 to 29.80. Could the holiday period have affected that?
Well the Chinese FXI dropped from 114.84 to 112.08 while the Shanghai Composite rallied from 4030.26 to 4179.78.
So, I don’t know. Maybe somebody has a better perspective.
Asia-Pacific indices (Interactive link)
Here’s how the week closed for the Asia-Pacific markets.
European indices (Interactive link)
Here’s how the week closed for the bourses of Europe.
Americas indices (Interactive link)
Here’s how the week closed for the Americas markets.
Table 13: International equities perspective
| Symbol | Close | 1Day Change |
1Day %Change |
1W %Change |
2W %Change |
4W %Change |
YTD %Change |
3M %Change |
6M %Change |
12M %Change |
Japanese equity market ETF: EWJ
Japan’s EWJ (which is a USD-denominated NYSE-traded ETF) gained +0.42 pct W/W to close at 14.31.
The Nikkei 225 closed at 17,481.2, up from 14,399.6 over the week.
I continue to believe that Japan will lead global equities south because I am fearful that the Yen is being dropped in order to compete with a Yuan that the PBOC will not let loose. After that happens, Chinese exporters will have a free market support to increase trade with China vs this point where the Japanese BoJ authorities have to manipulate the Yen south in hopes their exporters can compete.
Forcing your nation’s currency so low is not going to help the long-term picture.
Here is the Japanese (EWJ) equity market ETF Monthly, Weekly and Daily data charts:
U.K. equity market ETF: EWU
The EWU (UK market ETF trading in the US in USD) lost -0.63 pct, despite a gain on Friday of +0.72 pct, and despite a gain on the week in the FTSE.
EWU now stands at 25.33.
On the week, the FTSE 100 moved from 6640.9 to close at 6570.5.
Here is the United Kingdom (EWU) equity market ETF Monthly, Weekly and Daily data charts:
EWU Daily data:
Canadian equity market ETF: EWC
EWC (priced in USD) had another gain (+0.37 pct on the week) to close at 29.80, but it took a gain on Friday of +1.19 pct to get the job done.
As I say, the Beaver never had it so good.
The TSX Composite, however, closed Friday at 14,024.07, down from 14,105.3.
Btw, a week ago I noted that the Report On Business of the Globe & Mail is doing a splendid job of reportage, and lo and behold I had some kind remarks by their senior writer Rob Carrick who says that trading blogs offer good nuggets. Yes, indeed.
Here is the Canadian (EWC) equity market ETF Monthly, Weekly and Daily data charts:
US Equity Markets Review
This week, the Russell small cap 2000 index rallied +0.76 pct W/W after getting a goose of +0.74 pct on Friday.
The rest of the broad market had problems getting up. The DJIA dropped -0.37 pct, the S&P 500 dropped -0.46 pct and the NASDAQ lost -0.05 pct W/W after gaining +0.76 pct on Friday.
A dozen NYSE DJIA stocks to watch.
NASDAQ Composite (interactive) chart
A dozen NASDAQ stocks to watch.
I still say, “The M&A game being played between Bankers and Gnomes is really quite stunning. Apparently there is no size corporation that couldn’t be taken out. The price is never right, but nobody seems to question it.”
When you look at Table 14 (below) you’ll see what’s really going on. This week there were 18 Dow stocks down and 1 up.
Here is the Monthly data chart of the Interactive Chart of Nasdaq Composite, S&P 500, Dow30, and Russell 2000 (small cap) indexes.
Here is the Weekly data chart of the Interactive Chart of Nasdaq Composite, S&P 500, Dow30, and Russell 2000 (small cap) indexes.
Here is the Daily data chart of the Interactive Chart of Nasdaq Composite, S&P 500, Dow30, and Russell 2000 (small cap) indexes.
Table 14: Dow 30 List
| Symbol | Close | 1Day Change |
1Day %Change |
1W %Change |
2W %Change |
4W %Change |
YTD %Change |
3M %Change |
6M %Change |
12M %Change |
You can do this table yourself by entering the following string into the Summaries window at www.billcara2.com and then clicking on the link for Performance.
AA AIG AXP BA C CAT DD DIS GE GM HD HON HPQ IBM INTC JNJ JPM KO MCD MMM MO MRK MSFT PFE PG T UTX VZ WMT XOM
Here are the links to interactive Dow charts from Billcara2.com that I broke into groups of ten, which you can add technical indicators for as well. (list one) (list two) (list three)
Value Line Dow 30 Report(s) published on Friday
American International Group [GICS 40, Dow 30]
(AIG: Value Line Report May 25)
American Express [GICS 40, Dow 30]
(AXP: Value Line Report May 25)
Citigroup [GICS 40, Dow 30, Cara 100]
JP Morgan [GICS 40, Dow 30]
(JPM: Value Line Report May 25)
Microsoft [GICS 45, Dow 30]
(MSFT: Value Line Report May 25)
Dow 30 Company links
Alcoa [GICS 15, Dow 30]
(AA: Yahoo Finance file)
(AA: StockChart chart)
(AA: Billcara2 chart)
(AA: ADVFN Financial Data)
(AA: Value Line Report Apr. 20: next one is due Jul. 20)
Altria Group Inc [GICS 30, Dow 30]
(MO: Yahoo Finance file)
(MO: StockChart chart)
(MO: Billcara2 chart)
(MO: ADVFN Financial Data)
(MO: Value Line Report May. 4: next one is due Aug. 3)
American International Group [GICS 40, Dow 30]
(AIG: Yahoo Finance file)
(AIG: StockChart chart)
(AIG: Billcara2 chart)
(AIG: ADVFN Financial Data)
(AIG: Value Line Report May 25: next one is due Aug. 24)
American Express [GICS 40, Dow 30]
(AXP: Yahoo Finance file)
(AXP: StockChart chart)
(AXP: Billcara2 chart)
(AXP: ADVFN Financial Data)
(AXP: Value Line Report May 25: next one is due Aug. 24)
AT&T [GICS 50, Dow 30]
(T: Yahoo Finance file)
(T: StockChart chart)
(T: Billcara2 chart)
(T: ADVFN Financial Data)
(T: Value Line Report Mar. 30: next one is due Jun. 29)
Boeing Co [GICS 20, Dow 30. Cara 100]
(BA: Yahoo Finance file)
(BA: StockChart chart)
(BA: Billcara2 chart)
(BA: ADVFN Financial Data)
(BA: Value Line Report Mar. 23: next one is due Jun. 22)
Caterpillar [GICS 20, Dow 30]
(CAT: Yahoo Finance file)
(CAT: StockChart chart)
(CAT: Billcara2 chart)
(CAT: ADVFN Financial Data)
(CAT: Value Line Report Jan. 26: next one is due Apr. 27)
Citigroup [GICS 40, Dow 30, Cara 100]
(C: Yahoo Finance file)
(C: StockChart chart)
(C: Billcara2 chart)
(C: ADVFN Financial Data)
(C: Value Line Report May 25: next one is due Aug. 24)
Coca Cola [GICS 30, Dow 30]
(KO: Yahoo Finance file)
(KO: StockChart chart)
(KO: Billcara2 chart)
(KO: ADVFN Financial Data)
(KO: Value Line Report May. 4: next one is due Aug. 3)
Disney [GICS 25, Dow 30, Cara 100]
(DIS: Yahoo Finance file)
(DIS: StockChart chart)
(DIS: Billcara2 chart)
(DIS: ADVFN Financial Data)
(DIS: Value Line Report May 18: next one is due Aug. 17)
Dupont [GICS 15, Dow 30]
(DD: Yahoo Finance file)
(DD: StockChart chart)
(DD: Billcara2 chart)
(DD: ADVFN Financial Data)
(DD: Value Line Report Apr. 20: next one is due Jul. 20)
ExxonMobil [GICS 10, Dow 30, Cara 100]
(XOM: Yahoo Finance file)
(XOM: StockChart chart)
(XOM: Billcara2 chart)
(XOM: ADVFN Financial Data)
(XOM: Value Line Report Mar. 16: next one is due Jun. 15)
General Electric [GICS 20, Dow 30, Cara 100]
(GE: Yahoo Finance file)
(GE: StockChart chart)
(GE: Billcara2 chart)
(GE: ADVFN Financial Data)
(GE: Value Line Report Apr. 13: next one is due Jul. 13)
General Motors [GICS 25, Dow 30]
(GM: Yahoo Finance file)
(GM: StockChart chart)
(GM: Billcara2 chart)
(GM: ADVFN Financial Data)
(GM: Value Line Report Mar. 2: next one is due Jun. 1)
Hewlett-Packard [GICS 45, Dow 30]
(HPQ: Yahoo Finance file)
(HPQ: StockChart chart)
(HPQ: Billcara2 chart)
(HPQ: ADVFN Financial Data)
(HPQ: Value Line Report Apr. 13: next one is due Jul. 13)
Home Depot [GICS 25, Dow 30]
(HD: Yahoo Finance file)
(HD: StockChart chart)
(HD: Billcara2 chart)
(HD: ADVFN Financial Data)
(HD: Value Line Report Apr. 6: next one is due Jul. 6)
Honeywell [GICS 20, Dow 30]
(HON: Yahoo Finance file)
(HON: StockChart chart)
(HON: Billcara2 chart)
(HON: ADVFN Financial Data)
(HON: Value Line Report Jan. 26: next one is due Apr. 27)
IBM [GICS 45, Dow 30]
(IBM: Yahoo Finance file)
(IBM: StockChart chart)
(IBM: Billcara2 chart)
(IBM: ADVFN Financial Data)
(IBM: Value Line Report Apr. 13: next one is due Jul. 13)
Intel [GICS 45, Dow 30, Cara 100]
(INTC: Yahoo Finance file)
(INTC: StockChart chart)
(INTC: Billcara2 chart)
(INTC: ADVFN Financial Data)
(INTC: Value Line Report Apr. 13: next one is due Jul. 13)
Johnson & Johnson [GICS 35, Dow 30, Cara 100]
(JNJ: Yahoo Finance file)
(JNJ: StockChart chart)
(JNJ: Billcara2 chart)
(JNJ: ADVFN Financial Data)
(JNJ: Value Line Report Mar. 2: next one is due Jun. 1)
JP Morgan [GICS 40, Dow 30]
(JPM: Yahoo Finance file)
(JPM: StockChart chart)
(JPM: Billcara2 chart)
(JPM: ADVFN Financial Data)
(JPM: Value Line Report May 25: next one is due Aug. 24)
McDonalds [GICS 30, Dow 30]
(MCD: Yahoo Finance file)
(MCD: StockChart chart)
(MCD: Billcara2 chart)
(MCD: ADVFN Financial Data)
(MCD: Value Line Report Mar. 9: next one is due Jun. 8)
3M Company [GICS 20, Dow 30, Cara US 100 June 25-06]
(MMM: Yahoo Finance file)
(MMM: StockChart chart)
(MMM: Billcara2 chart)
(MMM: ADVFN Financial Data)
(MMM: Value Line Report May 18: next one is due Aug. 17)
Merck [GICS 35, Dow 30]
(MRK: Yahoo Finance file)
(MRK: StockChart chart)
(MRK: Billcara2 chart)
(MRK: ADVFN Financial Data)
(MRK: Value Line Report Apr. 20: next one is due Jul. 20)
Microsoft [GICS 45, Dow 30]
(MSFT: Yahoo Finance file)
(MSFT: StockChart chart)
(MSFT: Billcara2 chart)
(MSFT: ADVFN Financial Data)
(MSFT: Value Line Report May 25: next one is due Aug. 24)
Pfizer [GICS 35, Dow 30]
(PFE: Yahoo Finance file)
(PFE: StockChart chart)
(PFE: Billcara2 chart)
(PFE: ADVFN Financial Data)
(PFE: Value Line Report Apr. 20: next one is due Jul. 20)
Procter & Gamble Co. [GICS 30, Dow 30, Cara 100]
(PG: Yahoo Finance file)
(PG: StockChart chart)
(PG: Billcara2 chart)
(PG: ADVFN Financial Data)
(PG: Value Line Report Apr. 6: next one is due Jul. 6)
United Technologies [GICS 20, Dow 30, Cara 100]
(UTX: Yahoo Finance file)
(UTX: StockChart chart)
(UTX: Billcara2 chart)
(UTX: ADVFN Financial Data)
(UTX: Value Line Report Jan. 26: next one is due Apr. 27)
Verizon [GICS 50, Dow 30]
(VZ: Yahoo Finance file)
(VZ: StockChart chart)
(VZ: Billcara2 chart)
(VZ: ADVFN Financial Data)
(VZ: Value Line Report Mar. 30: next one is due Jun. 29)
Wal-Mart [GICS 30, Dow 30, Cara 100]
(WMT: Yahoo Finance file)
(WMT: StockChart chart)
(WMT: Billcara2 chart)
(WMT: ADVFN Financial Data)
(WMT: Value Line Report May 11: next one is due Aug 10)
Wrap up:
There was a really important news development this week. It happens to involve Wal-Mart’s former advertising exec Julie Roehm, who was fired earlier this year, who is now firing back.
Now, I don’t see this as a Wal-Mart story as much as a reflection on the principles and values of corporate VIP’s these days. Perhaps the Business Roundtable will look into it; and maybe if the Cara Roundtable does the same, we’ll come up with a different perspective.
You see, we all live in glass houses, but if you allow some of us to be self-regulator, you can guess who will be the ones continuing to throw stones, or if you will, steal assets from the rest of us.
We the People are getting fed up with the leadership these VIP’s are showing. It’s time these issues were studied.
Have a great week. I know that wherever you are in the world, we are connected somehow. It’s a small Web. People like Julie Roehm are proving it every day.
Posted by Posted by Bill Cara on May 27, 2007 11:50:41 AM | Category: Cara Week in Review
Discourse
Thanks for another great write-up Bill. I really appreciate the time you spend.
Posted by: chas ![[TypeKey Profile Page]](http://www.billcara.com/nav-commenters.gif)
at
May 27, 2007 12:50 PM [link]
Adam Hamilston has posted an illuminating article about CoT futures data in relation to trading gold stocks: http://tinyurl.com/2svu43
A slide show presenting a sobering assessment of global energy resources is available at http://tinyurl.com/2ld2fd
Posted by: johojo at
May 27, 2007 12:52 PM [link]
It's mixing apples WITH oranges, duh.
This story from yesterday has me worries about investor confidence in Venezuela and it's implications for the stock price of the great little KRY. The stock you love to hate and hate to love.
CARACAS (Reuters) - Tens of thousands of Venezuelan protesters marched on Saturday to the Caracas headquarters of an anti-government television station, which is being forced off the air after President Hugo Chavez's administration refused to renew its broadcasting license.
Waving flags with the logo of RCTV, demonstrators packed the streets of the capital where news anchors and soap opera stars slammed the imminent closure of the opposition channel.
"What is happening here is simply the silencing of a television station," shouted soap opera actress Gledys Ibarra.
Reuters Pictures
Editors Choice: Best pictures
from the last 24 hours.
View Slideshow
The government is not renewing RCTV's license after 53 years on the air because of accusations that the broadcaster participated in a bungled 2002 coup against Chavez, incited violent demonstrations and aired immoral programming.
On Friday Venezuela's top court ordered the military to seize control of some of the TV station's installations and equipment in a show of force that included mobilization of anti-riot vehicles to prevent protests from turning violent.
Critics condemned the closure for silencing an influential opposition voice and called the move evidence that Chavez's self-styled socialist revolution is concentrating power and muzzling the opposition.
Late on Friday a group of demonstrators shouting pro-Chavez slogans spray-painted the headquarters of news channel Globovision, the country's last openly anti-government station, which Chavez has also threatened to take off the air for its critical coverage.
The closure of RCTV drew heavy international criticism including a U.S. Senate resolution last week unanimously condemning "transgression of freedom of thought and expression" in Venezuela. Continued...
Posted by: shark_attack at
May 27, 2007 12:55 PM [link]
I've been keeping up with the blog every day but haven't had much time to post. So here goes.
I echo the thoughts of many on this board regarding general stock market conditions. Even as we keep "melting up" conditions seem tougher for me than they have over the last year. My portfolio has been treading water lately (Mar-present) when I feel I should have been tallying up some nice gains, right?!? Between July '06 and March '07 the odds felt securely in my favor - like running the house black jack table. Since the FEB correction, I feel like I'm on the other side of the table....making some big wins but losing most of it before I make it back to the hotel safe! I am moving to take some off the table and get away for a bit....until the casino hires me back.
I have taken an interest in this Cara Micro-Cap 100 project and have been looking for companies that I really feel could have some explosive growth over the next 3-5 years.
While talking with a friend and fellow tech-junkie, we got to talking about my RSA SecurID key chain that generates random numbers to allow me to log in to my office computer. He tells me he read that soon, credit cards all over the world would be required to use random number generation to verify transactions. After doing some digging I stumbled upon Innovative Card Technologies (INVC). They make the credit cards that are imbedded with number generation. Also of note they were endorsed by Verisign recently and will begin shipping these cards in Q3. This co is very speculative in that they have not generated significant revenue yet and I am uncertain how protected their technology is. $150 M USD market cap roughly.
I am always interested to get opinions on such small spec plays. Thanks in advance for your ideas.
Posted by: BillySundance at
May 27, 2007 1:03 PM [link]
I don't really see how that has much to do with KRY, seeing how they are doing their best to cooperate with the government. In fact, wouldn't you deny a permit to a TV station that helped attempt a coup against you?
Posted by: chas at
May 27, 2007 1:11 PM [link]
2nd-ave. Every classroom needs a stern Chinese lady teacher. In my 20 year working career I can safely say of all the ethnic groups that I had work for me the Chinese stood head and shoulders above all else. Madame Wu is indeed the most powerful woman in the world and has a brilliant mind. (She does not live in Hollywood). She knows what China wants and how to play the game. I was recently in China and one thing is very clear is that China has a serious clean water problem.
She and others are on a mission to get it cleaned up within 10 years and China has opened its door wide open to the best Water oprerators in the world to get it done. This is going to be the case for all projects going forward. Mrs. Wu knows China can't get it done by themselves and this is great news for foreign investment. In return she needs to seek out places to put China's money into minerals and she is eying South America and Africa very closely.
Posted by: Horatio at
May 27, 2007 1:32 PM [link]
Chas -
Precisely! FT referred to Radio Caracas reporting as strongly partisan and they're no friend of Chavez. FT also reports 70% of Venezuelans are against the closing of the station. I think it's an individual case. Chavez really didn't appreciate Radio Caracas' role in fomenting the coup, and he's determined to have his revenge. Don't think this per se has anything to say about the future of KRY or GRZ.
Chas -
Also, the replacement station is NOT taking over the transmitters or studios of Radio Caracas. In taking over oil installations, Chavez seems to be compensating former owners for assets. He apparently DID pay less for the phone company than Carlos Slim had been offering, but paid within reason. Someone is advising Chavez to stay generally within bounds on shareholder issues, and he seems to be listening. Key to understanding himi is that he is a military guy with a command&control mentality, but that he has tempered this in both economics and politics. He has won handily every election, and has effected institutional changes within the rules. Henry Kissinger must be SO pissed that the US can't do to Chavez what Kissinger did to Allende!
Two quick things,
Regarding VZ, when the interests of business are denied access to voice their opinion, it makes other business people in other parts of the world wary.
Regarding residential housing, my case wasn't very strongly made for a wait and see approach, here is is.
You have
A) Record levels of market participation, iteslf a contrary indicator
B) Unnaturally low interest rates compliments of MR. Bubble himslef, which induced above buyers in the first place, thereby
C) At the very least absorbing years worth of future demand immediately for immediate short term economic reasons that only Mr. Bubble knows for sure.
I also happen to be fairly bearish on future buyers ability to pony up, while at the same time many current homeowners will seek to cash out, thereby setting up a possible protraced period of weakness in residential real estate lasting potentially for decades. If the government decides to bail out housing with special home-only low interest rates, kind of like last time, all bets are off. But I am actually quite bearish most residential real estate for the forseeable. Fantastic neighborhoods and huge propeties are another thing. So is Hawaii (Aloha brother!)
Chris
Posted by: shark_attack at
May 27, 2007 2:12 PM [link]
RE,
In my small gated neighborhood of seventy-two homes in North San Diego County, all on two acres, 7 are up for sale. 1.45 million to 2.4 million dollars. Most of them have been up for many months. One recently has an "in escrow" sign up. Our selling season here is short since most of the buyers are from other counties and they want to get their children situated in front of the coming school year. So May thru August is about it. Usually anyone that has wanted to sell did so in that time frame in the past. It does not look good this year. stk
Posted by: stktrader at
May 27, 2007 3:09 PM [link]
The phrase "gated neighborhood" sounds like a contradiction to my ears. But then, I just saw a car ad for the "Buick Enclave" ... I guess I had better get with the times. LOL
Horatio, re Asian water issues:
One I've been following in this space is WTS. China is only 4% of sales right now, but growing at over 80% yearly. Not just export sales - it actually has 3 factories in China.
However, in the US, highly exposed to the housing market. Overexposed, specifically, to the Lowe's chain for its sales.
I see some bullish RSI, MACD, Money Flow divergences forming up here at the 36 level if it holds. Maybe a good place to put on a taste when the stochastics cross down low.
Posted by: ZackAttack at
May 27, 2007 6:31 PM [link]
Chavez has had an issue with this TV station for some time as one might imagine, considering the history. He has promised to shut it down, and I guess he just has. This is nothing new or unexpected. This is pure politics, and Hugo exercising his new found power. It has nothing to do with KRY or GRZ.
Come on people, stop buying into our country's media spin on Hugo the Terrible.
In the end he puts his pants on the same way you and I do every morning, and a mountan of gold still makes that process more difficult.
If you get my drift.
Posted by: Rigdon at
May 27, 2007 6:54 PM [link]
I actually signed on to post: thanks, Bill, that has to be one of your greatest all time WIR, and has me buzzing with ideas.
Posted by: Rigdon at
May 27, 2007 6:58 PM [link]
Hugo Chaves is having a field day with the West. He loves getting under everyones skin. What sets him apart from the others is " He has the Gold and he makes the rules". He does not want his people watching Springer, Paris Hilton, Rosie, Pink, Dog, Dobbs, Beck etc. and every other idiotic show flowing into his airwaves from America.
Posted by: Horatio at
May 27, 2007 9:39 PM [link]
ZackAttack. Another company I admire in the water business is Veolia. VE. Nyse. They are doing a fabulous job around the world. Might we wothh a look. They are big in China.
Posted by: Horatio at
May 27, 2007 9:52 PM [link]
You missed one of the other benefits of a rising Canadian dollar - it allows RIM billionaires to buy hockey teams without having to worry about exchange rates and your Maple Leafs could soon be the third best team in Ontario!
Posted by: bb at
May 27, 2007 11:01 PM [link]
i am truly sad the markets are closed in u.s tomorrow. hope everyone had a safe weekend. re kry and rctv, they are non related; rctv is a vz property. one that aided in his coup attempt. if that happened in america the network would have faced a much harsher blow. i will end with quoting Bill from Friday...
"Is an ounce of gold in Venezuela less than an ounce of gold further down the Guiana Shield in Guyana, a couple hundred miles away? Do you
really believe that Chavez will not permit foreigners to mine there and repatriate profits and pay bills, and so forth? If you do, that's
fine. Trade something else"
Posted by: NYUgrad at
May 28, 2007 1:52 AM [link]
Bill why would any foreigner in their right mind buy low-yield, dollar-denominated debt? Talk about negative returns...
To manage their currency exchange rate... folks like the Chinese could burn the dollars instead... effects the same thing as long as their export engine continues to grow.
We need to understand their motivation. They don't care about the RETURN on the investment they care about the number of jobs the exports create.
They will stop buying our 'investments' when we stop being the consumer of last resort. That is why you will never see real protectionism aimed at the Chinese aside from token squak in an election year; not as long as the dollars flow back to fund our debt. Hope we can get back to the
$ 600 level for Gold; thats where the rubber meets the road! Keep or fingers crossed the ten-year can sport a "5-handle" so as to bring some big boyz off the sidelines.
Posted by: Rick45 at
May 28, 2007 3:47 AM [link]
ALOHA !!
While it is true that China depends on foreign markets to buy their exports(for now)it is also true that China depends on foreign corporations to generate a majority of their export products. To be exact ... foreign corporations operating factories within China using Chinese labor made up 90% of Chinese exports in 2006. Chinese national corporations only made up less than 10%. Seems the Chinese industrialization is now mainly dependant on foreigners and not the Chinese. Of course the Chinese government could care less since they benefit by higher employment which translates to less riots and more prosperity!
Link: http://www.nowandfutures.com/download/china_exports(foreign_vs_local)(from_La_Caixa_bank).png
(from_La_Caixa_bank).png){kind=link}
It follows that it is foreign corporations consuming the majority of commodities being imported to China.
It is obvious that the only motive for foreign corporations to operate in China is higher profit margins via lower labor costs(aka:no unions, no benefits,no rights). That's what drives outsourcing.
Seems as if the USA is not the only superpower that depends on foreigners. How long will the Communist Chinese government allow this? I believe that in the not too distant future China will nationalize foreign factories starting with the collapse of the US Dollar. I do not believe that the Chinese government can be bought by the Rockefellers and Rothchilds as easily as the US and Euro governments have been. Nor do I believe that NATO or the US military would ever attack China to defend their corporate masters. The Chinese have a deep distrust of foreigners ever since Marco Polo ... Am I out to lunch? Time will tell ...
Posted by: kaimu at
May 28, 2007 5:37 AM [link]
Canada's oil sands, or tar sands, as the goo is known, are outsized in every way. They contain 174 billion barrels of oil that can be recovered profitably, and another 141 billion that might be worth exploiting if the oil price rises or the costs of extraction decrease—enough to give Canada bigger oil reserves than Saudi Arabia
..so costs C$20-25 ($18-23) per barrel of output in operating expenses alone. Analysts at Citibank reckon the oil price needs to remain above $40 a barrel to make the development of the oil sands worthwhile.
Meanwhile, the province of Alberta is reviewing the tax regime. Back in the 1990s, when there was little interest in the oil sands, it sought to lure investment by setting a nominal royalty of just 1% of revenues until investment costs were recovered. Today, although production is booming, the province's revenue from royalties is actually falling, as oil firms take advantage of that and other tax breaks.
But the biggest uncertainty is over the environment. Extracting oil from oil sands produces two or three times as much carbon dioxide as pumping it out of a normal well, according to the Pembina Institute, an environmental group. Yet the Canadian government has vowed to reduce Canada's emissions. To that end, it will soon require oil-sands projects to reduce the ratio of emissions to oil produced by 2% a year.
http://www.economist.com/business/displaystory.cfm?story_id=9231894
Posted by: jmf at
May 28, 2007 10:26 AM [link]
i´m a long term holder of suncor / su.
has anybody knowledge on how heated the discussion regarding higher royalties/taxes is right now in canada?
from the economist
Canada's oil sands, or tar sands, as the goo is known, are outsized in every way. They contain 174 billion barrels of oil that can be recovered profitably, and another 141 billion that might be worth exploiting if the oil price rises or the costs of extraction decrease—enough to give Canada bigger oil reserves than Saudi Arabia
..so costs C$20-25 ($18-23) per barrel of output in operating expenses alone. Analysts at Citibank reckon the oil price needs to remain above $40 a barrel to make the development of the oil sands worthwhile.
Meanwhile, the province of Alberta is reviewing the tax regime. Back in the 1990s, when there was little interest in the oil sands, it sought to lure investment by setting a nominal royalty of just 1% of revenues until investment costs were recovered. Today, although production is booming, the province's revenue from royalties is actually falling, as oil firms take advantage of that and other tax breaks.....
But the biggest uncertainty is over the environment. Extracting oil from oil sands produces two or three times as much carbon dioxide as pumping it out of a normal well, according to the Pembina Institute, an environmental group. Yet the Canadian government has vowed to reduce Canada's emissions. To that end, it will soon require oil-sands projects to reduce the ratio of emissions to oil produced by 2% a year.
Posted by: jmf at
May 28, 2007 10:34 AM [link]
2nd_Ave:
The Japanese were buying Rockefeller Center and Hollywood at that time, ending up selling it for half price back to the Americans. Lol.
Kaimu:
Foreign direct investment has been a preferred option for growth in many developing countries, compared to borrowing external funds. Since foreign direct investment does not leave the country liable to default risk, and it supposedly allows modern management skills/technology to easily enter a country(though how much can be learnt is debateable. I've heard that Singapore cannot build an oil rig themselves without help from MNCs.). For example, Singapore. I heard that without MNCs in it, Singapore would not be able to make most of what it produces.
Utilities crashing, bonds weakening are all bearish for equities, while it is interesting to note that short interest is at highs. Hmm.
http://yahoo.reuters.com/news/articlehybrid .aspx?storyID=urn:newsml:reuters.com:20070521:MTFH11927_2007-05-21_20-10-58_N21352510&type=comktNews&rpc=44
Posted by: FirstConsul at
May 28, 2007 10:42 AM [link]
jmf. Nothing will happen with the royalty issue. There will be a bit of squealing and hot steam blown off but Alberta and the oil barons know how to get along. Canadian are not known to get their knickers in a knot over minor issues unless their hockey teams don't win the Stanley Cup. After all Canada is the most admired country in the world as ranked by its peers and we don't get too excited. You are in good hands with SU.
Posted by: Horatio at
May 28, 2007 10:53 AM [link]
Horatio/ZackAttack
Re water clean up plays, a player I've followed in the past is Hyflux out of Singapore. Haven't checked on them lately, but know they are in China, accepted and looking to expand there as well as other locales. Trades on the Singapore exchange and did have a pink sheet listing at one time, but unsure now. No position.
Like both VE and SZE as large caps with waste water management in China as well as elsewhere. No position.
Re: VZ shutdown of station was well known in advance as license was not renewed, expired yesterday. Some media make it sound as if it was a snap just decided action carried out this weekend. Agree with Jock and others it is not relevant to KRY.
BTW, thanks Jock for the Saturday heat map.
Posted by: Seamus at
May 28, 2007 11:32 AM [link]
thanks horatio
i´ve heard from the canadian passion for hockey.... :-)
Posted by: jmf at
May 28, 2007 11:46 AM [link]
The Japanese did buy a number of over-priced landmark properties in the US in 1990 (they loved that kind of stuff, and I really believe you have to consider those purchases a collective act of hubris brought on by the outperformance of the Nikke) only to second-guess themselves when real estate turned down. Pebble Beach was a big topic when a Japanese developer bought it for over $800m in 1990. He sold it at a big loss to Sumitomo for $500m in 1992. When it returned to US ownership I think the price tag was around $1b. If they had hung on, Rockefeller Center and Hollywood would have paid off also.
When the time comes, the Chinese won't be any more immune to hubris than anyone else. China right now is closer to the Japan of the 1960s and would like nothing better than to become the next global exporting giant. I'll be watching the next generation of Chinese automotive and electronics products closely. They won't be looking to collect real estate trophies in the US anytime soon. But distressed properties? No doubt. A large increase in the number of Americans on the payrolls of foreign companies (Japan, Dubai, and eventually China) is a foregone conclusion.
Posted by: 2nd_ave at
May 28, 2007 12:34 PM [link]
Anyone know why there has only been 300 shares traded for GRZ on TSX today? is my data wrong? maybe someone can experiment and buy 1 share and see what happens.
Posted by: NYUgrad at
May 28, 2007 12:45 PM [link]
FXI is closely tied into ADRs at US and HongKong traded Chinese shares. Chinese mainland stock index is based on A-shares, which usually have more than 30% premium over ADRs and same companies' shares traded on HongKong exchange. FXI therefore does not really correspond to Chinese mainland index. India ADRs traded at US usually have significant permium/discount over same companies traded at India exchange too.
Posted by: yc32 at
May 28, 2007 3:05 PM [link]
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Why wouldn't the Chinese want to be buying into the US right now? With the USD down and headed lower, and real estate prices starting to drop, it looks like a good time. With Blackstone it has access to expertise in global markets and the identification and evaluation of distressed securities. I think it's good positioning ahead of what may come.
With the Nikkei at 40,000 in 1990, I recall the Japanese buying into the US. Was that good timing?
Regardless of what the Central Banks are doing, I also have no doubt the Chinese government is stocking up on gold.
Speaking of the suanpan, or abacus: I sat in for an hour on a class my wife and I were considering enrolling our 5 year old in last summer. The teacher was a stern older lady from China who spoke only Mandarin. She had the kids on the edge of their seats the entire time, shouting out questions with endless drills. I can see how many Chinese kids end up being math whizzes. What did we decide? Well, our little guy speaks no Chinese and couldn't sit still, so I saw no point in traumatizing him (LOL).
Posted by: 2nd_ave![[TypeKey Profile Page]](http://www.billcara.com/nav-commenters.gif)
at
May 27, 2007 12:43 PM [link]