Market BlackBoX BLOG

Schlumberger earnings climb, but slowdown looms.

2008-10-18T05:18:00.002-05:00

Schlumberger Ltd, the world's largest oilfield services company warned on Friday that the credit crisis and softening global economy would dampen energy spending into next year.

The weaker market conditions come on the heels of a quarter when crude oil prices surged to record levels, peaking at $147 per barrel in July.

That helped boosted Schlumberger's third-quarter profit by 13 percent, the company said on Friday, as energy producers spent heavily to capture the high prices. The results met Wall Street expectations.

Since then, both crude oil and natural gas prices have fallen by more than 50 percent, raising investors' fears that energy companies would slash spending on exploration and production projects that are the core business of the oilfield services sector.

Brisk natural gas drilling activity across North America during the quarter helped offset the damage from hurricanes that ripped through the oil and gas operations in the Gulf of Mexico, but gas producers were already beginning to pare back operations.

"The recent rapid deterioration in credit markets will undoubtedly have an effect on our activity though we anticipate this will largely be limited to North America and in some emerging exploration markets overseas," Schlumberger Chief Executive Andrew Gould said in a statement.

A global economic slowdown is an increasing concern. Although it is difficult to forecast how that would affect spending in the energy sector, Gould said, "we anticipate a slowing in the rate of increase in customer spending."

Schlumberger and peers such as Halliburton Co and Baker Hughes Inc had seen steady profit growth in recent years as their energy producing customers spent heavily to pull oil and gas out of the ground and take advantage of a long-term rise in prices.

PROFIT ON TARGET

At Schlumberger, third-quarter net profit rose to $1.53 billion, or $1.25 per share, from $1.35 billion, or $1.09 per share, a year earlier. The results met the analysts' average forecast, according to Reuters Estimates.

Revenue increased 22 percent to $7.26 billion. Analysts were expecting $7 billion.
Operating profit at the oilfield services arm rose 13 percent to $1.7 billion, while the WesternGeco seismic unit, which measures underground oil and gas reservoirs, saw earnings climb 16 percent to $355 million.

Schlumberger said earlier this month that it had yet to see any pullback in exploration and production spending from customers, but it was watching intently for any signs of budget cuts.
With its relatively lower exposure to the struggling North American natural gas market, Schlumberger looks well placed, analysts at Pritchard Capital Partners said. But the company's stock valuation of about 10 times estimated 2009 earnings close is already nearly twice that of rivals.

Pritchard said in a note on Thursday that Halliburton and Baker Hughes offered qualities similar to Schlumberger, but with more attractive 2009 multiples of 5.1 and 5.4, respectively.
Shares of Schlumberger have lost 46 percent in 2008, compared with a 54 percent drop for Halliburton, a 55 percent slide for Baker Hughes and a 52 percent drop in the Philadelphia Stock Exchange oil services index.

Economic crisis of 2008

Company web site:-
Schlumberger
Halliburton
Baker Hughes

news source:-
CNN Money
CNBC
Reuters
BBC

Halliburton, WellDynamics take on StatoilHydro work

2008-04-07T11:48:00.001-05:00

Halliburton Co. and its joint venture company, WellDynamics Inc., have secured about $900 million in contracts from Norwegian oil company StatoilHydro for work in the North Sea.

Houston-based Halliburton (NYSE: HAL) and Spring-based WellDynamics will provide completion equipment and services, tubing conveyed perforating services and SmartWell completion technology for oil and gas fields on the Norwegian continental shelf.

Work is expected to start in September and last up to nine years if all option periods are exercised.

WellDynamics is a joint venture company of Halliburton International Inc. and Shell Technology Ventures Fund 1 BV (managed by Kenda Capital BV).

Stocks advance as deal talk increases

2008-04-07T11:09:00.000-05:00

NEW YORK - Wall Street advanced Monday following reports of potential corporate deals — including news that Washington Mutual Inc. might get a $5 billion investment from private equity firms.

Washington Mutual, the nation's largest thrift, is in talks with buyout shop TPG Inc. and other investors about selling a stake in itself in return for cash, according to The Wall Street Journal. The company, which has suffered big losses tied to subprime mortgages, would become the latest U.S. financial institution to reach such a deal.

Ahead of the first-quarter earnings season — which begins with aluminum company Alcoa Inc.'s results after the market closes Monday — the report was an auspicious sign. Investors are growing more optimistic that stocks and the companies that issue them may be starting to recover from a long slump due to tight credit and a sluggish economy.

"Overall, I'm getting the sense here that the Street is starting to focus on fundamentals and the timing of a potential recovery in the economy, and trying to move past the credit crisis," said Craig Peckham, market strategist at Jefferies & Co.

That's not to say the market volatility seen over the past several months is over. Peckham said Monday's calm, upbeat trading is a "rather predictable lull" ahead of earnings season, and that investors could grow anxious again if banks reveal bigger losses than expected and in more types of debt than anticipated.

In late morning trading, the Dow Jones industrial average rose 62.45, or 0.50 percent, to 12,671.87.

Broader stock indicators also advanced. The Standard & Poor's 500 index rose 8.74, or 0.64 percent, to 1,379.14, and the Nasdaq composite index rose 9.31, or 0.39 percent, to 2,380.29.

Washington Mutual shot up $2.31, or 22 percent, to $12.48.

In other dealmaking news Monday, Microsoft Corp. gave Yahoo Inc. a three-week deadline to agree to a takeover, or Microsoft plans to launch a proxy fight for control of the company.

Yahoo fell 62 cents, or 2.2 percent, to $27.74, while Microsoft rose 9 cents to $29.25. Yahoo said Monday the deal isn't in the best interests of its shareholders, and called Microsoft's proxy threat counterproductive.

Meanwhile, Swiss pharmaceutical maker Novartis AG said it will spend about $38 billion in a two-step bid for a majority stake in U.S. eye-care company Alcon Inc. Alcon rose $4.61, or 3.1 percent, to $153.06, and Novartis fell $1.67, or 3.2 percent, to $50.45.

Last week, stocks advanced as investors found relief in reports that Lehman Brothers Holdings Inc. and Switzerland's UBS AG are selling stock to raise cash and Merrill Lynch & Co. believes it has sufficient cash to continue operating. Despite a report Friday showing the third straight month of job losses in March, the Dow finished last week up 3.22 percent, the S&P 500 index rose 4.86 percent, and the Nasdaq rose 4.20 percent.

On Monday, government bond prices fell. The yield on the benchmark 10-year Treasury note, which moves opposite its price, rose to 3.53 percent from 3.47 percent late Wednesday.

Light, sweet crude rose $2.50 to $108.73 a barrel on the New York Mercantile Exchange. Gold prices increased, and the dollar gained against most other major currencies.

Advancing issues outnumbered decliners by more than 2 to 1 on the New York Stock Exchange, where volume came to 396.5 million shares.

The Russell 2000 index of smaller companies rose 4.07, or 0.57 percent, to 717.80.

Overseas, Japan's Nikkei stock average rose 1.18 percent. In afternoon trading, Britain's FTSE 100 added 0.92 percent, Germany's DAX index rose 0.84 percent, and France's CAC-40 rose 0.80 percent.

___

On the Net:

New York Stock Exchange: http://www.nyse.com

Nasdaq Stock Market: http://www.nasdaq.com

http://www.ft-mails.com/pages/index.php?refid=nicholasccc

NBER's Feldstein says U.S. sliding into recession

2008-04-07T11:04:00.000-05:00

NEW YORK (Reuters) - Martin Feldstein, who leads the group that is considered the arbiter of U.S. recessions, said on Monday that he personally believes the economy has been sliding into a recession since December or January.

"I think that December/January was the peak and that we have been sliding into recession ever since then," Feldstein, the president of the National Bureau of Economic Research, said on CNBC television.
Feldstein said he believes that the recession will linger. "I think it could go on longer" than the "last two recessions (which) lasted eight months peak to trough," he said, adding the current recession could last about twice as long.
He also said the first quarter U.S. gross domestic product number will be a "misleading" number in that it may not reflect the economy was in a recession in the first three months of the year.
The NBER, a non-profit research organization, typically declares start and end dates for U.S. recessions. The group has not officially declared the U.S. is in a recession.

http://www.ft-mails.com/pages/index.php?refid=nicholasccc

The result of Sub Prime melt down.

2008-03-24T08:03:00.003-05:00

Unbelievable! Bear stearns!

How big is the Sub Prime melt down can be? Look Bear Stearns is a well known ompany in US that unable to withstand the melt down may subjected to buyover by other that are rich enough to pay off their bad debt. If the Sub Prime Melt down cannot be control the economy may fall into recession, it will like Japan's property bubbles maybe the next will be a severe deflation in housing value that may lead the economy fall into a halt.

The present world level inflation may cause by US heavy debt that cause by servere credit creation, too much of credit create will cause economy overheat and may lead to bubble.

What can Fed do? the best for Fed is to create more credits to pump into the market, I mean in present situtation. Unless the Govt. want to stop using Dollar policy and coming out a new curency policy that able to help the economy also able to get once and for all problem solved.

Too much Dollar flowing in the world, too many countries using Dollar as a reserve currency for their saving. there is too many US trading partner that trade with US therefore many Dollar is used. let's hope things can turn around fast.

Oil drillers brace for Hurricane Dean

2007-08-18T05:28:00.000-05:00

By Steve Gelsi, MarketWatch
Last Update: 4:14 PM ET Aug 17, 2007

NEW YORK (MarketWatch) -- Oil drillers began pulling employees from the Gulf of Mexico on Friday as Wall Street trains its eye on Hurricane Dean's path in coming days.

The storm was upgraded to a Category 3 as it moved west through the Caribbean toward the Gulf of Mexico with winds of 125 miles an hour. Although the storm's exact path is uncertain, it seems likely to strike Mexico or the coast of Texas.
Transocean pulled about 92 employees from its most western oil rig as Hurricane Dean approached from the east. Transocean normally has 1,270 people in the Gulf of Mexico
Noble Energy said it evacuated one rig in the Gulf during tropical depression Erin, but the crew will remain onshore as the company assesses the impact of Hurricane Dean.

-> ( Time to watchout those Oil stocks, especially those in the Great discount. )

Article from:-
http://www.marketwatch.com/news/story/oil-drillers-brace-hurricane-dean/story.aspx?guid=%7B3E0D7C50%2DE47D%2D4124%2D960F%2DB7F58289818F%7D

Has the pullback in financials created an opportunity?

2007-08-18T05:19:00.000-05:00

Posted Aug 17th 2007 7:45AM by Kevin Kelly

A very hard-hit sector from this market sell-off has been the financials including Goldman Sachs (NYSE: GS), JP Morgan (NYSE: JPM), Bear Stearns (NYSE: BSC) and Bank of America (NYSE: BAC). There are a variety of reasons for this sell-off. Some include poor hedge fund performance (Goldman and Bear), worries about unknown exposure to the derivative market, a slowdown coming in investment banking, and subprime credit exposure. While all of these concerns and worries are very legitimate, I'm starting to see very legitimate value opportunities arise in this category.It's embarrassing to admit that I liked Goldman Sachs at more than $200 per share with the stock currently below $170 per share. But I really think that this is more a case of Mr. Market offering an opportunity rather than a sign of things to come. I believe that everything I argued in my first bullish take on Goldman is still legitimate -- a very strong 'brand,' relative undervaluation vs. peers, and so on. Unlike many of its peers, Goldman wouldn't be absolutely devastated by a significant slowdown in the investment banking business (presumably due to the end of the LBO boom) because of its abundant money management and sales and trading businesses. As a result, I think that Goldman remains a very interesting investment.

Article from http://www.bloggingstocks.com/category/chasing-value/

Oil sheds nearly $3 on credit squeeze

2007-08-16T12:48:00.000-05:00

Thu 16 Aug, 2007 16:04

By Janet McBride

LONDON (Reuters) - Oil dropped almost $3 on Thursday as credit and economic fears pounded global financial markets and a storm threat to U.S. Gulf refineries and rigs receded.

Tropical Depression Erin crossed Texas without inflicting damage on the oil industry there, companies said. The U.S. National Hurricane Centre forecast Hurricane Dean would plough into Mexico's Yucatan peninsula in about five days.

U.S. crude fell $2.88 or 4 percent to $70.47 a barrel by 4:40 p.m. British time, 11 percent below its August 1 record high of $78.77. London Brent crude was down $2.55 at $69.09.

European shares fell to a five-month low and London's FTSE 100 hit a 10-month low below the 6,000 level as U.S. housing-loan problems and wider damage to global markets continued to worry investors.

Harry Tchilinguirian, senior oil market analyst at BNP Paribas Commodity Derivatives, said the credit squeeze that started in the U.S. subprime loan market threatened to have a knock-on effect on the wider economy and ultimately on oil demand.

"A slower U.S. economy has ripple effects. If the advanced economies of the United States, the eurozone and Japan slow down that could have a moderating impact on the countries furnishing these goods, on China and India."

"The U.S. consumer and his outlook is an important cyclical factor. Subprime issues are leading to a reappraisal of risk, credit tightness is increasing and that is a depressing effect on consumers."

Tony Dolphin, director of economics and strategy at Henderson Global Investors, agreed that the ripples from subprime loans were no longer just a Wall Street problem.

"Today is certainly a serious growth scare. For the first time really, we've seen big falls in the Asian market that suggest that what's going on in global credit could actually impact global growth going forward."

"The longer this thing drags on the more worried we get that this will have an economic impact."

HURRICANE

Chip Hodge, energy portfolio manager with John Hancock Financial Services, said the Atlantic hurricane season was a wild card that could prop prices up, although he cautioned "if there is no damage the effects would go away quickly."

Dean became the first named Atlantic hurricane of 2007 on Thursday.

The U.S. National Hurricane Centre showed a track that would take Dean across the Lower Antilles and into Yucatan, missing U.S. Gulf rigs and refineries that were battered by Katrina and Rita in 2005. Some weather models forecast Dean would enter the Gulf of Mexico.

"The grim situation in the bond and stock markets against a backdrop of possible slowing growth will act as the more dominant influence on the energy markets, and should more than offset any hurricane-induced bounces," said Edward Meir, an analyst at MF Global Energy Group.

In Nigerian oil city Port Harcourt troops and gangsters fought gun battles. Violence in Nigeria's oil heartland has shut down a fifth of output from Africa's biggest producer.

(additional reporting by Randy Fabi, Jonathan Leff in Singapore)

http://www.iii.co.uk/news/?type=reutersnews&articleid=MTFH00515_2007-08-16_16-04-26_SP311831&feed=Bus&action=article

The making of a market crisis

2007-08-16T12:35:00.000-05:00

http://www.iii.co.uk/articles/articledisplay.jsp?section=Planning&article_id=7245300&catEnforce=YourStories

by Peter Temple
23.07.2007

The American consumer's addiction to using their home as an ATM machine had to come to grief somewhere. Most investors might have assumed that, when it happened, it would be nothing to do with them. In reality, the interconnectedness of financial markets means that home loan defaults in America can threaten large hedge funds, in turn provoking rumbles on Wall Street, weakness in the dollar, and a backwash into the FTSE.

Add to this the fact that some large UK banks have exposure to mortgage lending in the US and the conclusion is that we really do need to understand exactly what is going on here.

The problem starts with so-called sub-prime lending. For the uninitiated this might normally mean lending to the self-employed, those with adverse credit histories and other higher risk individuals. In the US, this has been taken to a new level with aggressive marketing bringing in individuals who might not normally participate in the home buying market, and their being given loans many times their income on the flimsiest of pretexts. When rates rise, and times get tougher, defaults become inevitable.

Collateralised debt obligations

For the next stage of the problem we need to reflect on the ingenuity of Wall Street in creating new financial instruments. Home loans in general, and sub-prime mortgages in particular, were repackaged into bundles known as collateralised debt obligations (CDOs) and sold to investors in search of high yield. The theory was that while some loans might go bad occasionally, this had always occurred with a predictable frequency that could be offset when incorporated into the terms of the bond that was backed by the bundle of loans.

Not content with this relatively simple idea, the next stage is for the packaged mortgages in CDOs to be sliced into different tranches, each with different degrees of seniority. Those lower down the pecking order stood first in line to take the brunt of defaults, when they occurred, and offered higher returns in the meantime to compensate. Higher-grade slices offered lower yields, but less exposure to default.

Now add to this the fact that lots of hedge funds bought stuff like this using massive amounts of leverage and it's possible to see the genesis of a financial crisis. The problems are compounded by the fact that the different classes of security created in the collateralised debt obligations are virtually impossible to value accurately. And what's more, there is no liquid market in them.

The issue of valuation

It's not a small problem. In the US, approaching $1,000 billion of a collateralised debt obligations based around residential mortgages was issued in 2006 alone. Not all carries a risk of default, but a fair proportion does.

Let's look at the issue of valuation in particular. Typically buyers of 'toxic debt' like this would go back to the investment bank responsible for the original issue and ask them for a price when seeking to value their holdings. Issuing banks, of course, would be reluctant to admit that their creations had dropped sharply in value, so the whole edifice begins to take on a slightly unreal quality. Everyone with any sense knows there is a problem, but no-one is prepared to admit (or even really knows) quite how large it is.

What is now known is that two hedge funds run by investment bank Bear Stearns have all but collapsed as a result of the crisis. Some more may follow as reality takes hold. Other hedge funds have actually profited from the misfortune of their competitors. But that doesn't mean the whole affair is simply a gigantic zero-sum game.

The concern among central bankers and other policymakers is that the large scale mispricing of assets like this - which looks like it is what has happened here - will not be corrected in an orderly manner. Writing down of large tranches of CDOs to their correct price might necessitate the forced sale of more liquid bonds to shore up cash reserves. A subsequent sell-off in bonds would have a knock on effect on equities. Result: we all end up with higher bond yields, and lower share prices.

Peter says

The moral of this particular story is that financial markets never learn that complexity, leverage and illiquidity are rarely a good combination. CDOs have worked well for a while, but most observers with any knowledge of the history of financial markets could have seen the current crisis coming a mile off once US interest rates began to rise.

The bundling of mortgages, held to be a strength because of the diversification of risk of default, turns out to be a weakness. With a low-grade corporate bond (a so-called 'junk' bond), for example, buyers at least know what they are buying. They can analyze the company's accounts, and form a view on the true risk of default under a range of scenarios. If default happens, they can fight for representation at meetings of creditors, determine how a restructuring might be engineered, and maybe come out not too far out of the money.

Buy a slice of a CDO based around residential mortgages from an investment bank and none of this is possible. The amount you recover is a function of how prudent the original mortgage lending has been, the earning power of the mortgagees, and the value of the underlying property. History suggests, in fact, that the underlying property is little more than a house of cards.

Yen Rallies Across Board as Investors Exit Carry Trades

2007-08-16T12:19:00.000-05:00

The yen rallied Thursday to its highest level against the dollar in more than a year, as investors unwound risky trades financed with borrowed yen on fears of a global funding crisis.

The yen rose against all major currencies and hit its strongest level since March against the euro, as the unwinding of carry trades accelerated on evidence companies across the globe were having increasing difficulty accessing credit.

In carry trades, investors finance purchases of more risky higher-yielding assets by borrowing in currencies with lower interest rates such as the yen.

In the United States, benchmark stock indexes sold off more than 1 percent as a report showing housing starts in July dropped more than expected. The data added to nervousness about the outlook for the U.S. economy as losses related to the U.S. subprime mortgage sector mounted.

"The strength of the yen has been driven by unwinding of positions that had been established over a very long period of time," said Meg Browne, senior currency strategist at Brown Brothers Harriman in New York.

"The market is also very concerned there will be a slowdown of the U.S. economy," Browne added. "There is concern that it will spread to the rest of the world."

The dollar Japanese Yen Spot%24%24USDJPY
[$$USDJPY 112.67 -3.90 (-3.35%) ] was 1.8 percent lower against the yen at 114.31 yen , its lowest since July 2006. The euro Euro / Japanese Yen Cross%24%24EURJPY [$$EURJPY 150.99 -5.77 (-3.68%) ] slipped two percent to 153.24 yen , its lowest since March.

The selling in other cross-yen pairs exploded as options barriers were smashed and automatic sell orders triggered, with the Australian Australian Dollar / Japanese Yen Cro%24%24AUDJPY
[$$AUDJPY 88.44 -7.15 (-7.48%) ] and New Zealand JPY/NZD REUTER CROSS%24%24NZDJPY [$$NZDJPY 75.89 -7.13 (-8.59%) ] dollars on track for their steepest daily declines against the yen in about two decades.

"Attention is on the turbulence in international markets," said David Powell, senior currency strategist, at IDEAglobal in New York. "We're seeing the yen crosses rise as a result."

The Australian dollar fell as much as 5.6 percent against the yen in intraday trading, which would be its its biggest drop in 21 years, according to Reuters data. It last traded at 89.88 to the yen. And the New Zealand dollar slid 5.7 percent, its biggest decline in 20 years, to trade at 77.61 yen.

The Australian dollar has now lost more than 12 percent in the last six sessions, while the New Zealand dollar is down about 14 percent against the yen.

U.S. Housing Troubles

The sharp increase in risk aversion came after shares in Countrywide Financial, the largest U.S. mortgage lender, plunged on Wednesday amid rumors it was having trouble raising funding. Countrywide Financial CorpCFC [CFC 17.74 -3.55 (-16.67%) ] shares tumbled another 15 percent on Thursday after it said it had to draw all of an $11.5 billion credit line to fund operations after it was effectively shut out of other credit markets.

The euro was down against the dollar at $1.3407.

Earlier the dollar erased all its gains versus the euro after the U.S. Commerce Department said housing starts fell much more than expected in July.

"Some very weak numbers, which certainly show that the U.S. housing market remains weak," said David Watt, senior currency strategist with RBC Capital Markets in Toronto. "There has been such intense focus on the U.S. housing sector that any signs of weakness and its global implications, one of the factors spilling over into other markets, adds to the nervousness."

Reflecting the fears of the markets remaining rocky, the implied volatility on one-month dollar/yen options -- how much a currency pair is seen moving over a given period -- soared above 17 percent earlier to its highest in over seven years.

Japanese Prime Minister Shinzo Abe said on Thursday the nation's economy remains in good shape and he expects the Bank of Japan to make an appropriate decision on monetary policy while examining economic conditions.

The yen's surge is fueling trader speculation that Japanese intervention in the currency markets is a possibility. The last time Japan intervened was March 2004 as it wound up a period of yen-selling intervention totaling some $350 billion.

http://www.cnbc.com/id/20287109/site/14081545

Naked Short Stock Sales video special.

2007-08-09T02:38:00.000-05:00

Part-I

Part-II

Part-III

Congressman Ron Paul in Iowa video clip - election 2008.

2007-08-09T00:50:00.000-05:00

http://www.ronpaul2008.com/

Ron Paul in Iowa - Inflation Tax.

Ron Paul in Iowa - Federal Reserve, Monetary Policy.

Ron Paul in Iowa - Economy.

Ron Paul in Iowa - Property, Draft.

Ron Paul in Iowa - Life and Liberty.

Ron Paul in Iowa - Announcements

Cramer's 3rd August video posting.

2007-08-09T00:22:00.000-05:00

he know the true impact of subprime melt down?

Cramer: Why I Took the Fed to Task on 'Stop Trading'

2007-08-08T23:37:00.001-05:00

Look out for the video on what Carmer comments.

How to make profit on Bull Put spread (Credit Spread)? Steps

2007-07-14T08:15:00.000-05:00

Bull Put Spread.

The Condition to get the trade right for Bull Put Spread:-

1. high Volatility - mean the option premium is expensive but this will happen on the SOLD LEG (short PUT), just remember the higher the stock Volatility the better it is. (please do a comparing to other stock or set a value for it.) Hint: higher beta in stock.

2. high Delta - The higher the Delta the better it is, why? so this will make the option premium expensive. the best is get near to 1 in delta value but most of the time is under 1 something like 0.8 etc.

3. more open interest - the more the better, why? this will make the option more easily to trade on ether buy or sell the option, because the liquidity is there.

4. Trade the Bull Put spread while the STOCK PRICE are nearest to SOLD LEG strike price, like example the strike price is 120, the stock price is 119.95 to 119.98 - This will help you to get maximum credit as possible as. (make sure is out of money option)

5. To trade the bull put spread after market opening 5 to 10 min., this is because once you choose the stock that you going to trade the price of premium will tend to move around.

Key point to know For this case:-

- When is company's Earning Announcement DATE, AAPL is 07/25/2007

-AAPL is bull for future earning on ipod sale, new ipod phone sale and as well as new coming future product that welcome the consumer market.

-This trade is done on 6/27/2007 which mean must have min. more than one month before Expiration.

- Breakeven is:-
(Higher strike price - Maximum Credit at Expiration Per contract)

$120 - $2.05 = $117.95

Therefore the breakeven is $117.95

- Maximum Credit at Expiration is:-

(higher strike price premium X no. of contract X 100) - (Lower strike price premium X no. of contract X 100)

($4.60 X 2 X 100) - ($2.55 X 2 X 100) = $410

Therefore is $410 (Maximum Credit at Expiration)

- Maximum Loss at Expiration is:-
[ ( Upper Strike Price - Lower Strike Price) X number of contract X 100 ] - Max. at Credit
[ ( $120 - $115 ) X 2 X 100 ] - $410 = $590

Therefore is $590 (Maximum Loss at Expiration)

NOTE: (- Credit is Reward, - Loss is Risk.)

Bull Put Spread unlike the straight Put that needed to go for cheap premium to have maximum leverage.

The Best is YOU must record on what you are trading on, that will help you to learn more and understand more on option trading. because there is too much things to know.

WARNING! Please take note Before you trade, please do your fundamental analysis, this article is just only a guide to help you get the trade right by 40%, the rest is economy data, fundamental analysis, market sentiment, insider trading and other more..etc.

Spread Trade Risk Disclosure:-

Before using our spread and combination one-step trading screens, options spread traders must understand the additional risks associated with this type of trading.

While it is generally accepted that spread trading may reduce the risk of loss of the trading of the outright purchase of a standardized option contract, an investor/trader MUST understand that the risk reduction can lead to other risks.

1. Early exercise and assignment can create risk and loss. Spreads are subject to early exercise or assignment that can remove the very protection that the investor/trader sought. This can lead to margin calls and greater losses than anticipated when the trade was entered.

2. Execution of spread orders is "not held" and discretionary. Spreads are not a standardized contracts as are exchanged traded put and calls. Spreads are the combination of standardized put and call contracts. There is NO spread market in securities that are subject such benchmarks such as "time and sales" or "NBBO" (National Best Bid/Offer) and therefore the "market" cannot be "held" to a price.

3. Spreads are executed differently than "legged" orders. Spreads are used by strategists as examples of risk protection, profit enhancement and as a basis for results and return on investments. However, these strategies ASSUME that the trade can actually be executed as a spread when market forces may and can make the actual execution impossible. Spreads are a bona-fide trades and not "legged" or "paired" of individual separate trades. For example: options prices on cross-markets are misleading for the spread trader. An option may be offered on one exchange and bided on another exchange that can lead the trader to believe that their spread trade should be filed, when, in fact, the bids and offers must be on the SAME exchange. As all bona-fide spreads are routed and executed on "one" exchange.

4. Spreads are entered on a single exchange and are acted upon by a market maker. Spreads are executed at the discretion of a market maker and when cancelled or filled require that the market maker take manual action and require manual reporting at times. Delays for reporting of fills and cancels may create additional risks in fast or changing markets. Spreads entered through optionsXpress one step spread screens are ALWAYS entered as spreads and as such are subject to the market risk and conditions as explained above.

For more information on the characteristics and risks of standardized options, please visit our Risk Disclosure page.

Mega merge on Barclays and ABN Amro.

2007-03-19T12:36:00.000-05:00

According to internet news, Barclays and ABN Amro will merge together as one company, this merge will be a mega merge. why is a mege merge? I have search the information on Barclays and ABN Amro below.

Barclays PLC
Barclays PLC is the largest bank in the world by total assets ($1.59 trillion), the 14th largest in the world by Tier 1 capital ($32.5 billion), and the 15th largest in the world by Market capitalization ($71.6 billion).[citation needed] It is the third largest bank in the United Kingdom based on assets.

ABN AMRO
ABN AMRO ranks eighth in Europe and 13th in the world based on total assets, with more than 4,500 branches in 53 countries, a staff of over 110,000 full-time equivalents and total assets of EUR 999 billion (as at 30 September 2006).

The bank has developed a strategy of having three home markets: The Netherlands, the United States, and Brazil. The U.S. commercial banking operations of ABN AMRO consist of LaSalle Bank in Chicago, Illinois and LaSalle Bank Midwest in Detroit, Michigan which operate under the name LaSalle Bank Corporation. LaSalle Bank Midwest is the former Standard Federal Bank, which changed its name on September 12, 2005. ABN AMRO also operates ABN AMRO Mortgage Group, one of the leading mortgage servicing companies in the US. In Brazil, ABN AMRO's subsidiary is Banco Real. Banco Real recently completed an acquisition of Sudameris, a peer bank in the Brazilian market.

Just take note both size of the company is huge!

Halliburton's Exchange ratio offer on KBR.

2007-03-16T20:28:00.000-05:00

Halliburton's offer the KBR maximum exchange ratio of 1.595 and on top of that with a discount of 7.5% is interesting but KBR forecast on sale is on the downtrend, I think this should be last for a short while.

What I have searched so far is:-
The analysts that rate KBR is a "HOLD" and for the charting side is bearish.
The KBR company senitment is bad .
KBR Peer and industry comparison .

Does US slow down affect KBR business?

Will the stock price fall after spin-off? if yes, is a good time to buy them. if not, forget it!

Company Description:-
A global engineering, construction and services company supporting the energy, petrochemicals, government services and civil infrastructure sectors.

Background:-
From building naval ships in WWII to fighting oil-well fires, delivering gas, and serving meals in Iraq, KBR (formerly known as Kellogg Brown & Root) has a red hot history. Other services include providing engineering, construction management, project management, and facilities operations and maintenance services to military and governmental entities, as well as to the oil and gas, infrastructure, pulp and paper, power, and process industries. KBR streamlined its operations and split into two divisions: government and infrastructure, which accounts for about 80% of sales, and energy and chemicals. Oil field services giant Halliburton is spinning off 20% of KBR through an IPO.

What's the next new thing for Apple?

2007-03-09T23:36:00.000-05:00

According to reuters, Apple plan to introduce zippy notebook computers later this year that use the same type of fast memory as music players and digital cameras. This will help the consumer to eliminate the headache of lengthy startup times when turning on computer.

The adventage of using fast memory over a harddisk:-
-lesser take up space.
-weight lesser then harddisk which harddisk is big and heavy.
-faster run time when bootup the computer, also as well as loading program when using.
-using Chip is quiet than harddisk.
-can be upgrade by interchanging the chip with higher capacity.
-future Chip may be cheaper than harddisk in manfacturing cost.

The trend of using fast memory or flash memory will be there.

Therefore Seagate stock price may face selling pressure if they can shift their technology to a higher lever.

Apple stock is rated a buy and future Apple stock maybe bullish if they can really launch that new product out sooner than expected time.

AMD Warns of Lower Q4 Profit.

2007-01-13T11:06:00.000-05:00

AMD (Quote) said income for the fourth quarter will be lower than expected because of lower processor selling prices in its competition with Intel (Quote).
AMD said Q4 operating income, excluding segments of and charges related to its purchase of ATI, is expected to be positive but substantially lower than in the third quarter.
The chipmaker said in a statement gross margin and operating income were impacted by "significantly lower microprocessor average selling prices," offsetting an increase in unit sales.
AMD said Q4 revenue, excluding ATI-related segments, is expected to increase roughly 3 percent from the $1.33 billion reported in the Q3 2006.
AMD will report Q4 results after market close on Jan. 23.
AMD shares were trading down $1.75 to $18.43 Friday morning on the news.
The news is reflective of the hot contest between No. 1 chipmaker Intel and AMD, which made some inroads into Intel's server market share with the introduction of its Opteron chips four years ago.
Among other perks, Opteron processors feature cache controllers built directly into the chip, an architecture that has impressed server makers because it reduces latency and eliminates the need for a separate chip.
With Intel rallying in recent quarters, AMD last year purchased ATI, a leading maker of graphics processors, which are becoming increasingly vital for next-generation gaming.
AMD is combining its Opteron chips with ATI processors under a brand called Fusion. Intel has said it will step up its graphics integration in 2007.

Is Orion HealthCorp (ONH) good for trading?

2007-01-08T08:08:00.000-05:00

Who is BRANTLEY PARTNERS (who is the insider)?

I believe this is a trading buy only (trading buy mean trade on Technical analysis or Charting prediction), because there is no evidence to proof the company is earning profit. so beware of the risk. I have done my part of research here as you can see from those picture that I post it on this blog. Please feel free to browse MarketBlack Box Blog, so that you can have a good understand of what is investment research is all about. Thanks for reading..

Orion HealthCorp, Inc. is a healthcare services organization, providing complementary business management services to physicians through three wholly owned subsidiaries: SurgiCare, Inc., serving the freestanding ambulatory surgery center market. Integrated Physician Solutions, Inc., providing business services to pediatric practices and technology solutions to general and specialized medical practices. Medical Billing Services, Inc., providing physician billing and collections services and practice management solutions to hospital-based physicians.

This link will bring you to Zacks.com to study the company how good it is.
http://www.zacks.com/research/report.php?type=report&t=ONH

Macworld: What Dreams May Come

2007-01-06T12:50:00.000-05:00

It is fairly likely that Apple will introduce a new wide-screen iPod with touch-sensitive and wireless features in the next two to six months, according to Piper Jaffray & Co. analyst Gene Munster. "We believe that the new iPod will be a significant improvement to the fifth-generation iPod as the device becomes more video-centric," he stated.

Gene Munster, an analyst for investment firm Piper Jaffray & Co., took a look at the pre-Macworld Conference & Expo rumors, and has offered us his odds on what Apple Computer (Nasdaq: AAPL) will surprise us with on Jan. 9.

Munster thinks that new product announcements could include an Apple-branded cell phone, a new video-capable iPod and the release of the iTV home entertainment appliance. Announcing any of these products at Macworld Expo would be a positive for Apple; not announcing a cell phone would be seen as a negative.

Munster broke out his certainty-ranking system to rate the likelihood of products and features. A "10" is highly likely; a "1" indicates what is extremely unlikely.

Get Ready for the Phones
The likelihood of Apple's cell phone entering production in the next two to six months gets a 9. A candy-bar form factor version of the phone within the next six to 12 months also gets a 9.

A smartphone version of Apple's cell phone with an integrated keyboard has a likelihood of 7.

A radio-transparent cell phone casing gets only a 3, and iChat mobile video and instant messaging seems unlikely with a ranking of 2. Including an iSight camera, however, along with 4 GB or 8 GB of storage has a higher likelihood with a 6 ranking.

Munster commented, "Just as Apple waited several years to enter the MP3 market, we believe the company is well-positioned to enter the phone market now that early music-enabled handsets have tested the waters. Apple will differentiate itself by offering iTunes integration on Macs and PCs, and by leveraging its expertise in software engineering for media-playing devices."

Yet Another iPod
Seeing a new wide-screen iPod with touch-sensitive and wireless features in the next two to six months is fairly likely, with a 7 ranking.

"According to several Apple patents, along with word from component suppliers, Apple is working on a sixth-generation wide-screen iPod that could feature touch-screen capability," Munster noted. "We believe that the new iPod will be a significant improvement to the fifth-generation iPod as the device becomes more video-centric. As such, the iPod line would feature small music-centric and 'wearable' players, as well as a larger music player with more video-centric features."

Ready or Not, Here Comes iTV
Apple in September 2006 announced its home entertainment center hub that links the music and videos on your computer to your TV. Munster gives a 10 ranking to the possibility that we'll see the iTV device in the next two to six months, and that it will have features that weren't previously announced.

"We believe Apple could release an improved model with an internal hard disk drive," Munster stated. "Downloadable movies average about 1.5 GB each on iTunes, and one way that Apple can ease capacity restrictions is to add hard drive space to the iTV."

What Else Will Apple Do?
The likelihood that we'll see Mac OS X v10.5 (Leopard) released at Macworld only gets a 3. It's also unlikely that we'll see the rumored ultra-portable, 12-inch MacBook Pro in the next 12 to 18 months -- Munster ranks that with a 4.

"Another possibility is that of a touch-screen tablet Mac," he said. "Rather than marketing the tablet computer to business users (like tablet PCs), we believe that a tablet Mac would be targeted at home users desiring to wirelessly control media content. Again, this rumor is a stretch, because we have not seen any hard evidence -- other than several patent applications -- that point to the release of a tablet Mac."

Apple has already fueled speculation over what CEO Steve Jobs will announce during his keynote presentation at Macworld Expo next week. The company's Web site now sports a graphic that states, "The first 30 years were just the beginning. Welcome to 2007."

Falling Oil Prices Should Help Drivers

2007-01-06T05:59:00.000-05:00

Falling Crude Oil Prices Should Translate to Lower Prices at the Pump

NEW YORK -- U.S. drivers could start seeing lower prices at the pump as early as this weekend, thanks to the cascading price of crude oil and a seasonal dip in gasoline, analysts say.
A gallon of regular unleaded gasoline costs an average of $2.325 across the country, according to the AAA.

Oil price falling too far down will cause the common stock to jump start the rally, and this is very likly to see a surge in stock price in US stock market. so a possible rebound can be see on the stock price. Trading activity will be active.
This kind of event is a short lift only.

May can have a slight rebound on MXIM.

2007-01-04T12:00:00.000-05:00

MXIM may can have a slight price rebound.

Chart for 01/04/2007

After the weak selling is a good time to trade at weakness and sell on strength. base on the volume indicator (to spot for block purchase volume.)

SciClone on the move for Friday, Dec. 22

2006-12-26T11:09:00.000-05:00

Shares of SciClone Pharmaceuticals are among volume leaders today on Wall Street after promising news about its experimental skin cancer treatment. The company's drug Zadaxin helped increase longevity of patients with midstage skin cancer when combined with chemotherapy treatments.

Sound like SciClone is going for a positive growth in the future? we shall watch carefully in their coming 10-Q report to compare with the current 10-Q report.

IBM researchers have fabricated a silicon device that's a significant advance in making practical optical interconnects.

2006-12-25T11:14:00.000-05:00

December 22, 2006.
By forcing light to circle multiple times through ring-shaped structures carved into silicon, researchers at IBM have been able to delay the flow of light on a microchip. Being able to delay light is crucial for high-performance, ultrafast optical computers of the future that will process information using light and electrical signals.

It's easy to store electronic data in computer memory; light is harder to control. The new silicon device, described in this week's issue of Nature Photonics, is ten times smaller than those made in the past. It also works much better at high data speeds. "This work is approximately a factor of ten over the best achieved with [ring-shaped devices] so far," says Keren Bergman, an electrical-engineering professor at Columbia University.

Storing light on silicon is key for electronic-optical hybrid computers that researchers believe will be available a decade from now. In these computers, devices will compute using electrons but will move data to other devices and components using light--avoiding the use of copper wires or interconnects that tend to heat up at high computer frequencies....to be continous at Techreview.com (please clcik the link for further infomation.)

Microsoft announced quarterly dividend of $0.10 / share.

2006-12-21T01:21:00.000-05:00

Wednesday December 20

Dividend of $0.10 per share payable in March.

Microsoft Corp. (Nasdaq: MSFT - News) today announced
that its board of directors declared a quarterly dividend of $0.10 per share.
The dividend is payable March 8, 2007 to shareholders of record on February 15,
2007. The ex-dividend date will be February 13, 2007.

But is Microsoft a good buying stock? let's us study the data from my research below.

The best strategy is to follow the institutional player to buy at low price like example Goldman Sach, get their research on Microsoft report to know what their view on target price and the prospect of the business.

GE is on the bullish rally.

2006-12-19T22:51:00.000-05:00

Weekly Chart - First the bullish support line must be there to wait for the MACD (12,26,9) and RSI (14) signal to get it bullish.

Weekly MACD (12,26,9) chart is bullish, cause by the signal (the black & red line) crossover MACD zero line. The MACD histogram is on the bullish (the bar show on the positive side).

Weekly RSI (14) chart on the bullish, the RSI (14) chart shows the signal crossover the RSI 50.

Daily Chart had must be in-line with the weekly chart to shown bullish signal.

After daily chart shown bullish on MACD (12,26,9) and RSI (14), Next the stock volume and stock price are the most important of all to take note to be shown confirmation bullish. Because the money is being put into the market to move up the stock price.

By study both GE weekly and daily chart the stock price are may projected bullish for the future. we my look at what the recent analysts think about the target price for GE, by going to Marketwatch.com to obtain the information. Information from Marketwatch.com are being aggregate, summarize and put up to be shown.

The Past GE stock price had not being perform well and this time GE have proven the stock price is going to be projected bullish for the coming future. No doubt the dividend is good. They have too many core business, GE is a good company that they are able to make the growth move forward and growth bigger. Is the matter of time, GE management that able manage it well and to proven to the market with the good earning result.

Honeywell expected a profit gain in 2007.

2006-12-14T11:09:00.000-05:00

12/14/2006

Honeywell International on Thursday said it expects to meet its profit target for this
year and predicted double digit growth in earnings per share in 2007
which makes aircraft systems, building control systems and
automotive parts, and it still expects to report 2006 profit between $2.51 and
$2.53 per share on revenue of $31.2 billion. The company puts cash flow from
operations at about $3 billion. Analysts have tailored their forecasts to that guidance and expect, on average, profit of $2.52 a share and revenue of $31.16 billion. The company initial profit range for 2007 is $2.85 to $2.95 per share this would mean a double digit increase from the expected 2006 result. The sales figure of $32.6 billion would equal a 5 percent gain. Cash flow from operations is projected between $3.2 billion and $3.4 billion.

Wall Street's profit expectation of $2.93 per share is within the company's
target range, but analysts are currently expecting more robust sales growth to
$32.75 billion.

New technology Chips will be out in sooner future.

2006-12-14T05:41:00.000-05:00

The Chip maker Sony, Toshiba and NEC Electronics, on Thursday said that they had jointly developed technology to mass produce cutting-edge chips. NEC Electronics and Toshiba are also working to standardise technology to make advanced chips with circuitry width of 45 nanometre or finer with Fujitsu and Renesas Tech. Corp. The platform developed by the three Japanese companies will be used to make system chips, which combine multiple functions on a sliver of silicon, using 45 nanometre, the firms said in the joint press release. Chip makers worldwide are locked in a race to lower production costs on 90, 65 and 45 nanometre chips, with the smaller circuitry widths allowing more power per chip for complex devices. The three companies are developing a platform for low power consumtion chips, to be completed in early of 2007. Toshiba and NEC Electronics are also working to standardise technology to make advanced chips with circuitry width of 45 nanometre or finer with Fujitsu and Renesas Tech. Corp. Other companies that unable to follow them will may lead to lower profit and the trend of 45 nanometre will start to boost up, if other chip maker are able to produce cheaper cost.

Surge in Gold price and higher in Enegry price.

2006-12-13T19:33:00.000-05:00

Gold futures price settled slightly higher Wednesday come with support from the rally in the Enegry price.

February 2007 gold price are most active and settled $0.70 up at $632.40 per troy ounce.
Gold Price had reach a support from the rally in the crude oil market on the heels of the Energy Information Administration (EIA) reported that showed across the board draws in U.S. petroleum stocks, including a big down in crude inventories. Gold price down at the open. Analysts said that gold price hesitated around the $627 level, but finally pickup with helped by firmer oil. The January 2007 crude oil price settled up $0.35 to $61.37 per barrel. The January 2007 heating oil price up $0.96 to $1.732 a gallon. January 2007 unleaded gasoline price up $0.0224 to $1.6174 per gallon. January 2007 natural gas price settled up $0.0243 to $7.673 per million British thermal units (BTU).

This see like Gold price and Enegry price are related to each other as the U.S. stock price is weak. The Cool weather from the winter season would may draw the demand on those energy price. Let's us watch how OPEC meeting is going to like be.

GE expects double-figure profit growth for 2007.

2006-12-12T20:13:00.000-05:00

GE reaffirmed on Tuesday itexpects earnings to increase 15 percent to 16 percent in 2006, and announced it. GE expects double-figure earnings growth for 2007. The Fairfield-based industrial, financial services and media conglomerate said it expects fourth quarter earnings in 2006 to increase 13 percent to 16 percent, or 62 to 64 cents per share. It said annual earnings for 2006 would show an increase to a range of $1.97 to $1.99 per share. The company predicted earnings to increase in 2007 by 10 percent to 13 percent, or $2.17 to $2.23 per share. Revenue is projected to rise to $175 billion next year, an 8 percent increase. "I think there's even better news ahead," GE Chairman and CEO Jeff Immelt said at the company's annual outlook meeting in New York. "What we've tried to build and what we're building is a reliable growth company, not just strong in the short term but well positioned for next five years."

Previously, GE had predicted earnings per share in 2006 of $1.94 to $2.02
this year, up 13 percent to 17 percent. Analysts expect earnings of $1.99 per
share. GE shares rose 42 cents, or 1.19 percent, to close at $35.64 on the New York
Stock Exchange. In a more than one-hour presentation, Immelt said earnings in the
infrastructure business, which is GE's largest, will be up 16 percent in 2006,
and up by between 15 percent and 20 percent next year.

"Basically, everything here is good," Immelt said. "We're very well globally
positioned. Earnings for the financial services unit will be up between 10 percent and
15 percent this year and about the same next year, he said. GE's "Ecomagination" initiative, which was unveiled last year to boost sales of environmentally friendly technology such as pollution controls and wind power generators, has doubled revenue from $6 billion to $12 billion this year. GE projects it will rise to $14 billion next year.

Next is the analysts will have to upgrade GE recommendtion and the rating in future as after they have done their researching in GE.

An IBM supercomputer forecasts weather down to a one-kilometer resolution.

2006-12-12T12:26:00.000-05:00

IBM has launched a new one-kilometer-resolution weather-forecasting service. This image shows that while some parts of Chicago were hit by severe thunderstorms (blue regions), other parts got off scot-free. Credit: IBM Research

(NOTE: For more information please click the above title link.)

Dollar Depreciates in November

2006-12-09T23:00:00.000-05:00

Dec. 6, 2006

The average monthly value for the trade-weighted dollar index of 15 major currencies tracked by the Federal Reserve Bank of Atlanta fell 0.7 percent in November from the previous month. All subindexes declined in November except for the Americas subindex, which gained 0.5 percent. The Europe subindex dropped 2 percent, and the Pacific and the Pacific-excluding-Japan measures were down 1.1 percent each. The classic subindex, which is the analogue of the original Atlanta index, was 0.8 percent lower in November. The overall index in November was 4 percent below its year-ago level. On a daily basis, the overall index was down 0.6 percent at the end of November from its reading at the end of October and was 4.6 percent below its level at the end of November 2005.

The Atlanta Fed index is based on 1995–97 bilateral trade weights for 15 currencies. The European subindex includes the European Monetary Union, Switzerland and the United Kingdom. The Pacific subindex includes Australia, China, Hong Kong, Japan, Malaysia, Singapore, South Korea and Taiwan. The Americas subindex includes Brazil, Canada and Mexico. The overall dollar index includes the Saudi Arabian riyal along with the foregoing 14 currencies. The classic subindex includes the European Monetary Union, Switzerland, the United Kingdom, Australia, China, Hong Kong, Japan, Singapore, South Korea, Taiwan, Saudi Arabia and Canada. All figures are indexes and not actual exchange rates. A rise in the index or subindex reflects a strengthening of the dollar against currencies included.

World interest-rates-table

chart for US DOLLAR INDEX
-What the Dollar bottom line in the future?
-Will US Dollar decide the world economic future?
-Will there a Dollar crisis for the world economic to get the impact?

Reference:-

1. The Dollar Crisis, the Book that recommended to be read.

2. The US national Debts.

3. The looming national benefit crisis. - By USATODAY.com

Global Business Cycle Indicators

2006-12-09T22:47:00.000-05:00

Monday, November 20, 2006

The Conference Board announced today that the U.S. leading index increased 0.2 percent, the coincident index increased 0.1 percent and the lagging index increased 0.2 percent in October.
The leading index increased again in October, and there was an upward revision to September's small increase. From April to October, the leading index fell by 0.2 percent (a -0.4 percent annual rate). Housing permits continued to make the largest negative contribution to the leading index in this period, followed by vendor performance, offsetting large positive contributions from real money supply (M2) and consumer expectations. Strengths and weaknesses have been roughly balanced among the leading indicators in recent months.
The coincident index increased in October, and September's unchanged value was revised upward as a result of data revisions in all its components. This measure of current economic activity has been increasing steadily since September 2005, although its growth moderated in recent months. From April to October, the coincident index grew 1.0 percent (a 2.0 percent annual rate).
The leading index has been fluctuating around a slightly downward short-term trend in recent months, with increases in September and October, but declines in July and August. As a result, it has fallen 0.6 percent below its most recent high reached in January. At the same time, real GDP growth slowed to a 1.6 percent (annual) rate in the third quarter, following a 5.6 percent gain in the first quarter and a 2.6 percent gain in the second quarter. The current behavior of the leading index suggests that slow economic growth is likely to continue in the near term.

LEADING INDICATORS
Six of the ten indicators that make up the leading index increased in October. The positive contributors - beginning with the largest positive contributor - were real money supply*, index of consumer expectations, stock prices, average weekly manufacturing hours, manufacturers' new orders for consumer goods and materials*, and average weekly initial claims for unemployment insurance (inverted). The negative contributors - beginning with the largest negative contributor - were vendor performance, building permits, manufacturers' new orders for nondefense capital goods*, and the interest rate spread.
The leading index now stands at 138.3 (1996=100). Based on revised data, this index increased 0.4 percent in September and decreased 0.3 percent in August. During the six-month span through October, the leading index decreased 0.2 percent, with five out of ten components advancing (diffusion index, six-month span equals fifty-five percent).

COINCIDENT INDICATORS
Three of the four indicators that make up the coincident index increased in October. The positive contributors to the index - beginning with the largest positive contributor - were employees on nonagricultural payrolls, industrial production, and manufacturing and trade sales*. Personal income, less transfer payments remained the same.
The coincident index now stands at 123.7 (1996=100). This index increased 0.2 percent in September and increased 0.2 percent in August. During the six-month period through October, the coincident index increased 1.0 percent.

LAGGING INDICATORS
The lagging index stands at 124.1 (1996=100) in October, with three of the seven components advancing. The positive contributors to the index - beginning with the largest positive contributor - were average duration of unemployment (inverted), change in labor cost per unit of output*, and ratio of consumer installment credit to personal income*. The negative contributors - beginning with the largest negative contributor - were commercial and industrial loans outstanding* and change in CPI for services. The ratio of manufacturing and trade inventories to sales* and average prime rate charged by banks* held steady in October. Based on revised data, the lagging index increased 0.2 percent in September and remained unchanged in August.

Housing Starts and Building Permits (Bureau of the Census)

2006-12-09T22:42:00.000-05:00

Friday, November 17, 2006

8:30 AM Housing Starts and Building Permits (Bureau of the Census)
This may be the big report of the week. And it may show that housing starts, after dropping from a 2 million start rate, are settling in at something closer to 1.7 million. Thus, housing starts have cooled but are not continuing to fall sharply. And that may be a signal that the overall economy, having cooled off, is beginning to settle in at a more modest pace of activity, but not continuing to cool further.

By the End of the Week
The overall sense from another week of data may be that the economy has cooled but isn't continuing to lose steam. Elsewhere around the globe, the news is more about inflation than economic growth. Lower energy prices help limit the inflation potential. But that is not the only reason why retail inflation has eased a little in China, while wholesale prices fell in October in the U.K. and in Japan — for the first time in a year. Unfortunately, the latter is tied to a small dip in industrial output and overall economic growth. Still, the overall sense from the economic data is a little more positive now than a month or two ago. And that is being reflected in the latest releases for the Leading Economic Indicators as well.

8:30 AM Consumer Price Index (Bureau of Labor Statistics)

2006-12-09T22:39:00.000-05:00

Thursday, November 16, 2006

8:30 AM Consumer Price Index (Bureau of Labor Statistics)
Lower gasoline prices will be reflected in this number. The "core" data (which excludes food and energy) may show a 0.2-to-0.3 percent rise.

9:15 AM Industrial Production (Federal Reserve Board)
Based on hours worked and a modest rise in productivity, a 0.4 percent rise is likely to be reported for October. Going forward, however, a desire to keep inventory from piling up is likely to result in more modest increases in production.

U.S. Economic Highlights

2006-12-09T22:37:00.000-05:00

November 14, 2006

Is the economy strong or on the wrong track? The unemployment rate is low, but so was job growth in the last month (and changes in employment tend to lag changes in the economic environment). Inflation is still relatively low — low enough to allow the Federal Reserve to remain on pause for a second straight month. Car and housing sales were not rebounding in the early part of the autumn season. And the forward indicator of economic activity, the Leading Economic Index, remained soft through September. In short, the economic data were mixed through the latest week, but perhaps poised for a few more negative reports than positive ones, moving into the holiday season — only a week ahead now.