Since the day before Lehman Brothers’ bankruptcy, gold and oil have soared +15.4% and +20.2% respectively, and the $USD has plunged -4.0%. Interestingly the DJIA has dropped only from 11059 to 11015. What has happened is a massive rotation out of financials and into commodity beneficiary equities.

Yesterday, for instance, while the DJIA dropped -3.3%, the Financials (XLF -8.2%) and Consumer Discretionary (XLY -4.1%) were by far the worst sectors.

Meanwhile, as the Talking Heads of Mainstream Media are whipping the public into frenzy, traders are patiently awaiting this morning’s testimony of the Treasury Secretary Paulson. Behind the scenes, there are hard negotiations between politicians who are demanding pork in return for their acquiescence to Paulson’s demands for total authority in his open-ended, ie, trillion dollar plus, bail-out bill. Long-time observers are aghast at what has become a surreal situation in Washington.

Meanwhile, yesterday, the DJIA (-372.75 -3.27% to 11015.69), S&P 500 (-47.99 -3.82% to 1207.09), and NASDAQ Composite (-94.22 -4.17% to 2178.98) reflected the seriousness of the situation. In Canada, the Toronto Composite dropped -2.1% to 12638.1, but the Venture Board gained +1.7% to 1576.0.

Earlier today, Asia-Pacific equity markets dropped, but the losses were not extreme: Australia All-Ords (-1.83% to 4957.7), Shanghai Composite (-1.56% to 2201.5), Hong Kong Hang Seng (-3.87% to 18872.85), and India’s Sensex 30 (-3.03% to 13570.3). The Japanese Nikkei 225 was closed.

European bourses, at 7:22am ET, are down -1.96% for the French CAC, -1.03% for the German DAX, and -2.80% for the UK FTSE. The sell-off in Financials continues across Western Europe.

Within the industry groups in NY, the Banks ($BKX -10.5%), Broker-Dealers ($XBD -10.7%) and REITs ($DJR -8.9%) plunged. The broad market indexes are negative, but it is the Financials that are in crisis.

Among the stocks of Cara 100 companies, yesterday’s winners were commodity price beneficiaries: Goldcorp (GG +12.8%), Silver Wheaton (SLW +11.0%), and Barrick (ABX +8.7%). The losers were a mixed bag: Garmin (GRMN -8.1%), Whole Foods (WFMI (-8.0%), GOL Airlines (GOL -7.9%), and ICICI Bank (IBN -7.8%).

The US long bond ($USB) continues to plunge (-1.48% to 117.45), which directly relates to the bail-out. The day before the Lehman bankruptcy, which led to the Financial industry bail-out, the 30-year $USB was trading at 122.55. At the time, I opined it was time to sell. The loss in four sessions is -4.2%, which is huge.

Yields on the 30-, 10-, and 5-year US Treasury debt is now 4.407, 3.826, and 3.037 percent respectively. Traders are selling Financials out of concern these yields will rise. Other traders are buying the oil and gold because they believe that the Fed cannot raise rates because that would be politically unacceptable as well as economically damaging at this point. Choose your poison.

Yesterday, Crude Oil ($WTIC) lifted +6.62/bbl to 109.37 in wild trading. $GOLD futures soared +$44.30/oz to 909.00. That’s a gain of $128.50 in four sessions.

The morning futures (8:30am ET) for Euro, $USD, Crude Oil and DJIA are at: 147.32, 76.65, 108.12, and 11012.

Spot prices at 8:30am (compared to 6:30am in brackets) are for gold 888.16 (895.40), palladium 248.5 (252.0), platinum 1210 (1226), and silver 13.21 (13.38).

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Comments & Outlook

Henry Paulson will speak to the Senate Banking Committee in about one hour. Markets are nervous, but there has been a bit of strength in the $USD in the past two hours. I discount what will happen until after Paulson has been speaking for an hour or so. You see, in the background his aides will be in hard negotiation, and market prices will tell us how that process is going.

If Paulson speaks well and is better received than the face-slap people are expecting (it all looks good for voters at home who are furious), then the $USD will rally and gold will fall. That is a sign the Paulson Package is gaining traction.

Yes, I believe that after final approval of a bail-out package, the broad market will lift. The new Bull will arrive.

I believe some of the pressure on the Financials yesterday can be explained by: (i) Friends of Paulson giving him the ammo to punch through his bail-out package in Congress this week, (ii) trader fears of interest rates that will have to rise soon to begin to pay for this humungous bail-cost cost, and (iii) pre month-end liquidation of hedge funds and selling of hedge fund positions, especially Financials where they can no longer go short.

On Monday, the keepers of the Dow Jones Industrials Average (DJIA) index removed AIG, which recently had fallen from its standing as the world’s largest insurance company to being essentially bankrupt, needing a bail-out of $85 billion. AIG was replaced by Kraft Foods Inc (KFT).

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ADDENDUM

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Kraft Foods [GICS 30, Dow 30]
(KFT: Google Finance file)
(KFT: Yahoo Finance file)
(KFT: StockChart chart)
(KFT: Billcara2 chart)
(KFT: ADVFN Financial Data)
(KFT: Value Line Report Aug 1: next one is due Oct. 31)

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Kraft Foods is profiled by Value Line as the largest branded food and beverage company headquartered in the US and second largest worldwide. The company markets many of the world’s leading food brands, including Kraft cheese, Maxwell House coffee, Nabisco cookies and crackers, Philadelphia cream cheese, Oscar Mayer meats, and Post cereals. Its products are currently sold in more than 150 countries around the globe. North American sales accounted for 64% of ’07 total; International, 36%. Acquired Nabisco, 12/00. Has approximately 103,000 employees.

In the August 22 report, Value Line analyst Justin Hellman summarized KFT as such: “Defensive-minded investors with a long-term view would do well to consider this quality issue. Annual sharenet advances in the 5%-8% range are likely over the next 3 to 5 years, even if operating conditions remain challenging.”

From my perspective, the company is a work in progress as it attempts to restructure. It is very slow grower with little hope of capital growth prospects. But, for very conservative, income-oriented accounts, there is a high dividend, which with overwriting of puts that increase one’s income from thi source, KFT might return a stable, but fairly low, return on capital invested. I’ll pass, but I think it could be an attractive issue for some of you.

It’s interesting to me that the keepers of the Dow Jones indexes, rejected a Financial company and added a very defensive Consumer Staples company. In a sense, I think that’s the way America will come out of its current economic and financial problems; by moving to safer, higher-dividend payers. Kraft will be positioned as similar to the listed income trust companies in Canada.

As I say, I am not too interested. Kraft will not make the Cara 100.

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Links & Charts

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International Economics Review

US Economic Calendar.

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Knobias Cara100 Tables

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Cara 100 Daily RSI-7 Charts

At least one RSI value >70:

At least one RSI value <30:

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International Equity Markets Review

Europe

Here is the latest session data for the bourses of Europe.

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Here is the latest session data for the London stock exchange FTSE.

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Here is the latest session data for the German DAX.

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Here is the latest session data for the French CAC 40.

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Here is the latest session data for the Milan Italy stock exchange MIBTEL.

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Here is the latest session data for the Swiss market index.

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Asia-Pacific

Here is the latest session data for the Asia-Pacific stock exchanges.

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Here is the latest chart for the Japanese Nikkei 225 index.

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Here is the latest chart for the Singapore index .

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Here is the latest chart for the Shanghai Composite index .

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Here is the latest chart for the Hong Kong Hang Seng index .

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Here is the latest chart for the India BSE 30 index .

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Here is the latest chart for the Australian All Ordinaries index .

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US Equity Markets Review

DJIA (interactive) chart

NASDAQ Composite (interactive) chart

Table 15: Dow 30 List

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)

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The Americas

Here is the latest session data for the exchanges of the Americas.

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Here is the latest chart for the Brazilian Bovespa stock exchange in Sao Paulo.

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Here is the latest session data for the Toronto Stock Exchange composite index.

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Sector ETF Summary for the US equity market

The tables I show in this section 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

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 XLK SPY . 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.

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10 (energy: XLE)

Table 2: Senior oil & gas equities

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15 (basic materials: XLB)

Table 3: Senior metals and steel equities

Table 13: Senior gold equities

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20 (industrial: XLI)

Table 4: Senior capital goods makers and transportation

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25 (consumer discretionary: XLY)

Table 5: Senior consumer discretionary equities

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30 (consumer staples: XLP)

Table 6: Senior consumer staples equities

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35 (healthcare: IYH)

Table 7: Senior healthcare equities

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40 (financial: XLF)

Table 8: Senior financial company equities

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45 (technology, semiconductor: SMH)

Table 9: Senior technology equities

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50 (telecom: IYZ)

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55 (utilities: XLU)

Table 12: US Utilities

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International Equity Market USD-denominated ETF Review

Table 14: International equities perspective

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Japanese equity market ETF: EWJ

Here is the Japanese (EWJ) equity market ETF Daily data charts:

Interactive EWJ Daily data:

Interactive EWJ Weekly data:

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U.K. equity market ETF

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

Interactive EWU Daily data:

EWU Daily data:

Interactive EWU Weekly data:

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Canada's equity market

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

Interactive EWC Daily data:

Interactive EWC Weekly data:

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Bonds & Yields Review

Table 10: Yahoo Finance U.S. Treasury Debt, Municipal and Corporate Bond Yields

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Here is the $USB 30-year Treasury Bond chart.

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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:

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Table 11: Interest-sensitive securities

Consumer Finance -USA -- Interactive Daily Data Charts

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Commodities Review

$CRB Index

Open Futures Contracts

Interactive Chart of Daily CRB Commodities Index:

Interactive Chart of Weekly CRB Commodities Index:

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Oil Review

Here is the e-miNY Mar-08 Crude Oil chart.

Interactive Chart of Daily Crude Oil:

Interactive Chart of Weekly Crude Oil:

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Gold & Precious Metals Review

Spot gold chart for the week

Interactive Chart of Daily Gold EOD Continuous Contract Index:

Interactive Chart of Weekly Gold EOD Continuous Contract Index:

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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:

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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.

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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.

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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.

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Table 13: Senior gold equities

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

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Here are the key Silver miners and the SLV ETF:

SLV SIL CDE HL PAAS SSRI SLW MGN

Interactive Daily data
Interactive Weekly data

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Here are the Weekly and Daily Data charts of the indexes:

Interactive Chart of Daily U.S. Goldminers Index:

Weekly U.S. Goldminers Index:

Interactive Chart of Weekly U.S. Goldminers Index:

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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:

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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:

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Forex Review

Here is the chart of the week's trading in the $USD.

Interactive Chart of Daily U.S. Dollar Index:

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

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Daily British Pound Index:

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Daily Japanese Yen Index:

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Daily Canadian Dollar Index:

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Wrap-up