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December 4, 2007
Cara's Daily Report and Commentary, Tues., Dec 4, 2007
Markets Re-cap
The Financials continue to weigh upon the equity market like an albatross. On Monday, the Dow (-57.15), S&P (-8.72), and Nasdaq (-23.83) were all down. This morning, Asian markets finished mixed, with Shanghai and Hong Kong up and Tokyo and Mumbai down. European stocks are struggling, down well over -1 pct at this point, as banking stocks are weak.
DJIA futures are indicating another day of losses, with a possibility of a steeper drop, thanks to more conservative earnings estimates by Nokia Corp (NOK) and Merck (MRK). Merck is guiding 2008 per-share earnings of $3.28 to $3.38, which is lower than the consensus $3.39. But, Nokia is now targeting an operating margin range of 16 to 17 pct within one to two years, up from the 15 pct target the company gave in November 2006.
The ICSC-UBS and Redbook Retail Sales index are to be released today.
December DJIA futures are presently (8:40am ET) down -68 at 13281.
After 3:00 am ET today, the Precious Metals have had a boost. Spot gold has bumped up from 787 to 797, presently about 796. Spot silver has run from 14.00 to 14.29, presently at 14.22.
This run-up started after the $USD became weak, dropping from a high of 76.082 after 3:00 am ET to a low of 75.624, presently at 75.689. Treasury yields are weak.
Taking a stab at it, I’d say the $USD will gain a little strength later today and the PM prices will drop back.
Comments & Outlook
Market conditions may start to change in the next fortnight as the G-7’s economic controllers (Fed, BoE, ECB and Bank of Canada) report their monetary policy decisions. Today at 9:00 am ET, the Bank of Canada kicks off the process. Early Thursday morning Dec 7, the Bank of England (7:00am ET) reports, followed by the European Central Bank at 7:45am ET. Then a week from now at 2:15 pm ET Dec 11 in Washington, the Federal Open Market Committee (FOMC), which is the US Federal Reserve Bank’s chief body for monetary policy-making, will take the lead.
I don’t think we will see extreme action in equity markets until these central bankers have their say.
Another important matter seems to be the playing out of the ridiculous Paulson Plan to let so-called disadvantaged US home-owners off the hook by freezing their teaser rates on mortgages, probably for five years. How this will be accepted by home-owners who dutifully completed their mortgage applications honestly and who have struggled to meet their mortgage obligations is simply beyond my comprehension. The whole affair smells of a plan by ex-HB&B Chairman Paulson to use his present position as US Treasury Secretary to rescue the banks at the expense of the public who will surely pay in higher interest rates in the future.
For those who don’t know, the FOMC members include the seven members of the Board of Governors and the 12 Reserve bank presidents. Prof. Ben Bernanke, the chairman of the FOMC, is also the chairman of the Board of Governors.
What happens is this: A senior official of the Federal Reserve Bank of New York discusses developments in the financial and foreign exchange markets, as well as activities of the New York Fed’s domestic and foreign trading desks. Staff from the Board of Governors then present their economic financial forecasts. In addition, the Board’s governors and all 12 Reserve Bank presidents offer their views on the economic outlook. There is then a discussion of the monetary policy options that would best promote US economic growth with stable prices, and then the members vote vote. The voting membership includes the seven governors, the president of the Federal Reserve Bank of New York and four of the other Reserve bank presidents, who serve one-year terms on a rotating basis.
Is this a good system? Well, I find it atrocious that after the FOMC last met Oct 30-31, the Minutes were not published until 2:00 pm ET Nov 20. That gave three weeks for backroom politics and deals, and ultimately apple-polishing a sales document. That’s deplorable. The American People deserve better; but it is what it is.
Yesterday, in this space, I opined that Gold would soon be the Buy of the Generation, that the market is being set up by HB&B, led by Goldman Sachs calling for a cycle bottom below $700/oz, perhaps to $600-650.
I believe the cycle bottom will be reached in the $720-740 level, but we have to be watching the price to see the bottom unfold. I do know that at $600-650 gold price, very few miners will be economic. Many will have to shut down. Although supply will drop off, investment demand will continue to increase in order to hedge against depreciating currency values due to the uncurtailed increases in global money supply. As demand outstrips supply, either the central bankers of the world must sell the balance of their gold holdings or the price will escalate. It is only a matter of time. The total amount of available money in the world today far outstrips the total central bank holdings of gold, and inflation is certain to continue, particularly where government, insurance, education, travel, resource development, etc, is involved.
So the price of gold will continue to rise for many years, or it will rise suddenly to a new level and remain there for many years, as currencies, interest rates and prices of goods and services find their new level around which they can stabilize.
Keeping an eye on international economics is an important task for traders today. In that regard, I find that Anne Picker, Chief Economist at Econoday, covers a lot of ground in her Weekly Perspective report (see link below).
This will be a very busy week on the economics calendar.
International Economics Review
Econoday International Perspective.
International Equity Markets Review
Europe
Here is the latest session data for the bourses of Europe.
Here is the latest session data for the London stock exchange FTSE.
Here is the latest session data for the German DAX.
Here is the latest session data for the French CAC 40.
Here is the latest session data for the Milan Italy stock exchange MIBTEL.
Here is the latest session data for the Swiss market index.
Asia-Pacific
Here is the latest session data for the Asia-Pacific stock exchanges.
Here is the latest chart for the Japanese Nikkei 225 index.
Here is the latest chart for the Singapore index .
Here is the latest chart for the Shanghai Composite index .
Here is the latest chart for the Hong Kong Hang Seng index .
Here is the latest chart for the India BSE 30 index .
Here is the latest chart for the Australian All Ordinaries index .
US and the Americas
Here is the latest session data for the exchanges of the Americas.
Here is the latest chart for the Brazilian Bovespa stock exchange in Sao Paulo.
Here is the latest session data for the Toronto Stock Exchange composite index.
US Equity Markets Review
NASDAQ Composite (interactive) chart
Cara 100 Daily RSI-7 Charts
International Equity Markets Review
Europe
Here is the latest session data for the bourses of Europe.
Here is the latest session data for the London stock exchange FTSE.
Here is the latest session data for the German DAX.
Here is the latest session data for the French CAC 40.
Here is the latest session data for the Milan Italy stock exchange MIBTEL.
Here is the latest session data for the Swiss market index.
Asia-Pacific
Here is the latest session data for the Asia-Pacific stock exchanges.
Here is the latest chart for the Japanese Nikkei 225 index.
Here is the latest chart for the Singapore index .
Here is the latest chart for the Shanghai Composite index .
Here is the latest chart for the Hong Kong Hang Seng index .
Here is the latest chart for the India BSE 30 index .
Here is the latest chart for the Australian All Ordinaries index .
US Equity Markets Review
NASDAQ Composite (interactive) chart
Table: 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)
The Americas
Here is the latest session data for the exchanges of the Americas.
Here is the latest chart for the Brazilian Bovespa stock exchange in Sao Paulo.
Here is the latest session data for the Toronto Stock Exchange composite index.
Sector ETF Summary for the US equity market
The tables I show in this section 2007_12_03 are for ten (GICS) Sector Index Funds (ETF’s) only, but they cover the full spectrum of the US equity market.
Table 1: Cara ETF List is sorted by price performance Week over Week (W/W), i.e. 1W%N.
| 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, go to the AMEX.com web site, and click on ETF’s.
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)

International Equity Market USD-denominated ETF Review
Table 13: International equities via the USD-denominated ETF 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
Here is the Japanese (EWJ) equity market ETF Daily data charts:


U.K. equity market ETF
Here is the United Kingdom (EWU) equity market ETF Daily data charts:
EWU Daily data:


Canada’s equity market
Here is the Canadian (EWC) equity market ETF Daily data charts:


Bonds & Yields Review
Table 10: US Treasury Yields
| Maturity | Yield | Yesterday | Last Week | Last Month |
|---|---|---|---|---|
| 3 Month | 2.86 | 3.05 | 2.99 | 3.45 |
| 6 Month | 3.11 | 3.23 | 3.14 | 3.61 |
| 2 Year | 2.85 | 3.01 | 2.88 | 3.68 |
| 3 Year | 2.83 | 2.96 | 2.81 | 3.65 |
| 5 Year | 3.24 | 3.39 | 3.20 | 3.95 |
| 10 Year | 3.85 | 3.94 | 3.83 | 4.32 |
| 30 Year | 4.32 | 4.38 | 4.29 | 4.61 |
| Maturity | Yield | Yesterday | Last Week | Last Month |
|---|---|---|---|---|
| 2yr AA | 3.18 | 3.19 | 3.15 | 3.29 |
| 2yr AAA | 3.20 | 3.26 | 3.22 | 3.30 |
| 2yr A | 3.32 | 3.38 | 3.34 | 3.32 |
| 5yr AAA | 3.34 | 3.35 | 3.29 | 3.42 |
| 5yr AA | 3.37 | 3.35 | 3.24 | 3.42 |
| 5yr A | 3.45 | 3.46 | 3.40 | 3.53 |
| 10yr AAA | 3.74 | 3.71 | 3.78 | 3.79 |
| 10yr AA | 3.54 | 3.56 | 3.75 | 3.69 |
| 10yr A | 3.97 | 3.93 | 4.01 | 4.02 |
| 20yr AAA | 4.40 | 4.41 | 4.39 | 4.39 |
| 20yr AA | 4.19 | 4.20 | 4.79 | 4.58 |
| 20yr A | 4.76 | 4.83 | 4.70 | 4.39 |
| Maturity | Yield | Yesterday | Last Week | Last Month |
|---|---|---|---|---|
| 2yr AA | 4.12 | 4.22 | 4.05 | 4.54 |
| 2yr A | 4.30 | 4.35 | 4.30 | 4.71 |
| 5yr AAA | 4.47 | 4.53 | 4.38 | 4.72 |
| 5yr AA | 4.61 | 4.70 | 4.61 | 5.01 |
| 5yr A | 4.56 | 4.59 | 4.42 | 5.00 |
| 10yr AAA | 4.99 | 5.03 | 4.91 | 5.17 |
| 10yr AA | 5.24 | 5.32 | 5.36 | 5.60 |
| 10yr A | 5.45 | 5.39 | 5.52 | 5.79 |
| 20yr AAA | 5.58 | 5.65 | 5.40 | 5.02 |
| 20yr AA | 5.68 | 5.75 | 5.59 | 5.86 |
| 20yr A | 6.03 | 6.11 | 5.86 | 6.05 |
Here is the $USB 30-year Treasury Bond 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 |
Consumer Finance -USA -- Interactive Daily Data Charts
Commodities Review
Interactive Chart of Daily CRB Commodities Index:

Interactive Chart of Weekly CRB Commodities Index:

Oil Review
Here is the e-miNY Jan-08 Crude Oil chart.
Interactive Chart of Daily Crude Oil:

Interactive Chart of Weekly Crude Oil:

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 |
Gold & Precious Metals Review
Interactive Chart of Daily Gold EOD Continuous Contract Index:

Interactive Chart of Weekly Gold EOD Continuous Contract Index:

Spot silver chart for the week
Interactive daily data
Interactive Chart of Daily Silver EOD Continuous Contract Index:

Interactive chart of the Silver Bullion index.
Interactive Chart of Weekly Silver EOD Continuous Contract Index:

Spot platinum chart for the past three days
Interactive Chart of Daily Platinum EOD Continuous Contract Index:

Interactive Chart of Weekly Platinum EOD Continuous Contract Index:

Interactive chart of the Platinum metal index.
Spot palladium chart for the week
Interactive Chart of Daily Palladium EOD Continuous Contract Index:

Interactive Chart of Weekly Palladium EOD Continuous Contract Index:

Interactive chart of the Palladium metal index.
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 |
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 Daily U.S. Goldminers Index:

Interactive Chart of Weekly 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 Daily data:

GDX Weekly data:

The Toronto Exchange-listed goldminer iUnits S&P/TSX Capped Gold Index ETF trades under the ticker symbol TSE:XGD. Yes, just like GDX on the AMEX, you can trade XGD on Toronto.
Here are the Weekly and Daily data charts for the TSX Goldshares (XGD) index:
Interactive Chart of XGD Daily data:

Interactive Chart of XGD Weekly data:

Forex Review
Here is the chart of the week’s trading in the $USD.
Interactive Chart of Daily U.S. Dollar Index:

Interactive Chart of Daily Euro Dollar Index, priced in USD:

Daily British Pound Index:

Daily Japanese Yen Index:

Daily Canadian Dollar Index:

Wrap up:
There are a lot of cross-currents in the market today, but that is expected as central bankers are meeting to discuss how to get out of the mess that HB&B has placed the economies of North America and Europe.
After the dust has settled, I do believe that we all will see that this period is just one of long-term trend reversal, a natural process of moving from Bull to Bear.
In the near future, with respect to this website/blog, the first level changes and additions will be made, and I would appreciate constructive criticism so that we can stay on a roll, improving it by the week.
Thanks and have a great day.
Posted by Posted by Bill Cara on December 4, 2007 09:09:32 AM | Category: Cara Today in the Market








