Dow Live Report

Dow Live Report week starts wednessday

elmaco — Mon, 08 Mar 2010 21:46:43 +0000

The week starts with a sideways crawl as investors await a number of reports coming in starting this wednessday. My take on this is that they may be weaker than expected. Time will tell.

On another note, AIG pushed financial shares higher on having closed a deal to let MetLife Inc aquire Alico for 15.5 billion dollars. This is part of the American International Group´s plan to tighten the belt, trim some fat and initiate repayments of up to 100 billion dollars it owes in TARP funds from the government.

The Fed is commencing sells of securities from its portfolio with an agreement to buy them back later. The reverse repurchase agreements were forst announced by The Fed in October 2009 and now that “the crisis is over” are coming to effect. A bit premature if you ask me.

Wednessday is the big day. Keep an eye on the wholesale and business inventories, retail sales and consumer sentiment that may have resounding impact on the market if the come in low.

Asia down oil up and Bernanke in congress

elmaco — Wed, 24 Feb 2010 06:40:04 +0000

The Dow and most markets have a faltering week as continued signals of recessive difficulties come to light. Tuesday saw Dow Jones Index be a bit stronger with a drop in barely 1 percent compared to S&P500 and Nasdaq stepping down around 1.3 percent.

Closing at 10.282 on Tuesday, The Dow remains close to the magic 10000 and the bearish sentiment is expected to continue. Asia has opened with drops, with Nikkei 255 leading the way at about a percent and a half. Toyota is a culprit but US consumer sentiment is also having an effect on Asian markets. Shanghai seems to moving against the trend.

We have been expecting a bumpy week and Ben Bernanke is back in the spotlight with the semiannual report to Congress. This is a biggie so keep an eye on that. Takes place today and Thursday.

We expect the Dow to continue sideways if not down.

Greece gets help from EU in more trouble

elmaco — Sun, 21 Feb 2010 11:07:20 +0000

EU is ready to support Geece with loans and guarantees such as from the German State-owned Development Bank Kreditanstalt fuer Wiederaufbau (KfW). Any support would come with strong conditions.

Greek Prime Minister George Papandreou, who in recent days met with European politicians, declared in London on Friday evening that the Greek government is planning to implement more austerity measures in accordance with the proposal from EU sources, in order to restore investor confidence in the Greek economy. He also understood that Greece also may need financial assistance, not only the political backing that was promised at a summit last week.

“Financial assistance, if needed,” Papandreou said, according to Reuters.

The Greek bond and stock markets have been unstable since the, by Papandreou newly appointed government, revealed that the deficit in the state budget is much larger than previously thought. It is more than four times as large as that which would be permitted for countries included in the European Monetary Union. Bottom line: Greece is today not up to the EU standards.

Long-term investors have been jumping ship. As reported in two Greek newspapers on Friday – Greek authorities have started to investigate speculative elements in the market identified as American and British brokerage firms as aggressive sellers of Greek bonds.

According to fresh data on Wednesday, Spain is also having bigger difficulties getting out of recession than other Western countries.

Keep a close look on EU during the end of this quarter because the clouds might be gathering again.

1 Trillion Gap in State Pension Funds

elmaco — Thu, 18 Feb 2010 09:20:58 +0000

Dow Live Report Just as we may be gaining strength more clouds gather on the horizon. Here´s a snippet from Market Watch today:

“A train wreck waiting to happen. That’s the only way to describe the mess that state pension systems are in right now, according to a report published today by the Pew Center on the States. According to Pew, there’s a $1 trillion gap between the $3.35 trillion in pension, health care and other retirement benefits states promised their current and retired workers as of fiscal year 2008 and the $2.35 trillion they have on hand to pay them.

What’s worse, the gap may be even higher given that the study was conducted prior to the market collapsing in 2008 and given the way most states allow for smoothing of investment gains and losses over time…”

Undeniably, the demographic profile of the national population becomes more senior for each year. The trend is recurrent in most western and developing regions and certainly also true for Asia. Herein lies the next economic challenge:

Should the state be a participant in financing the survival of the retired population?

How will the state finance the support of the aging retirees?

Should the retirement age be lowered to make more room on the employment scene?

BAC 45 billion Dollar check fails to calm state

EU will not help Greece

elmaco — Thu, 11 Feb 2010 13:56:09 +0000

The European Union has decided to not support Greece at this moment. The Eu will monitor Greek developments and has declared itself to be prepared to move in assets.

This will probably have a positive effect on the Dow together with positive Asian stock markets and a positive day in European markets also.

Dow Jones Industrial Average Sold to CME

elmaco — Wed, 10 Feb 2010 22:31:23 +0000

Pressrelease from CME:
CME Group, the world’s leading and most diverse derivatives marketplace, and Dow Jones & Company today announced that they have signed a definitive agreement in which CME Group will take a 90 percent ownership interest and Dow Jones will take a 10 percent ownership interest in a new joint venture that will own the Dow Jones Indexes, which includes The Dow Jones Industrial Average and approximately 130,000 index properties. Pending approval by regulators and completion of customary closing conditions, the transaction is expected to close during the first quarter of 2010.

“We are pleased to strengthen our partnership with Dow Jones,” said CME Group Executive Chairman Terry Duffy. “Joining the resources and expertise of one of the world’s leading marketplaces for equity index derivatives trading with a premier index provider is an exciting next step that will allow us to expand our index and market data offerings as well as to fuel growth opportunities in our equity index complex. We expect this transaction will allow us to further diversify our revenue streams, creating sustainable new value for our customers and shareholders.”

“Our majority interest in this venture represents an important new milestone in CME Group’s transformation into a global financial services company, further diversifying our global product development capabilities and allowing us to reach new customers in both the institutional and retail market segments,” said Craig Donohue, CME Group Chief Executive Officer. “We look forward to continuing the strong relationships that Dow Jones has developed with clients and other leading exchanges that offer exchange traded funds, equity index options and structured products which complement CME Group’s equity index contracts.”

Dow Jones & Company will contribute the Dow Jones Indexes business, valued at $675 million, to the joint venture. CME Group will contribute certain market data services, valued at $607.5 million, to the joint venture. The venture also will raise approximately $613 million in third-party debt which will be used to pay a $607.5 million distribution to Dow Jones..

The above is part of the CME pressrelease distributed today.

Dow stumbles on expected Bernanke statements

elmaco — Wed, 10 Feb 2010 16:42:14 +0000

Checking the live stats on the Dow shows a abrubt dip as Fed Cheairman Ben Bernanke starts to point towards a tighter monetary policy. We all knew it was comeing and so far the ractions are what you might expect. Bernanke´s statement comes at a time when a lot of factors are balancing on the edge and is more a result of the testimonial request of the House Financial Services Committee than of a immediate action-plan.

Of more immediate concern is the result of the thursday European Union summit agenda on the Greek economy. On cue for the event, Greece is hit by a civil servant strike that is closing schools, grounding air traffic and more.

So, will the EU dip into their pockets to bail out Greece?… What pockets would those be?

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elmaco — Wed, 10 Feb 2010 13:26:07 +0000

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