On the economic front, Monday and Tuesday of this week are the calm before a storm of reports with market-moving potential hits on Wednesday.
The biggest news in the first two days of the week is the June Empire Manufacturing Index, a survey of manufacturers in New York State, conducted by the Federal Reserve of New York. If you think that’s a ho-hum event, you’re absolutely right.
But the pace of news—and the importance of individual reports, ratchets up on Wednesday.
That day the Census Bureau releases the May numbers on housing starts and building permits. Everyone wants to know if the winding down of Federal subsidies for home purchases will slow construction activity and by how much. The May data will be the first indication of how much the end of subsidies at the end of April hurt construction activity.
The same day brings reports on industrial production and capacity utilization. After the very disappointing data on May jobs—the private sector created just 41,000 jobs in the month—this data takes on greater significance. Wall Street will be watching to see if the economy is showing enough growth so that the pace of job creation might pick up in June and July.
Wednesday’s final report is a sneak peak at Thursday’s report on consumer inflation—Wednesday’s Producer Price Index measures price changes at the wholesale level. On Thursday the Consumer Price Index (CPI) is expected to come in close to flat, showing that inflation isn’t any danger right now and that the Federal Reserve won’t feel any great pressure to raise interest rates any time soon.
I wouldn’t be surprised to see stocks go into a holding pattern on Tuesday as traders decide to sit on their money until they know what the data shows.
marsdson1201; P.S. This will not work on fewer than a couple hundred share lots, your commisions will eat up any profit. My STD will let me go now with $100, had been down almost $700 couple weeks ago, will hold for the div, or $500, whichever comes first. NYB, PGN, & WIN are running away from me. Will keep my ayes open. Do the same.
marsdon1201; I am a fairly simple sort, don’t really understand what some of these posters are doing, although I appreciate reading their posts. I have come to realize that we can find 3 or 4 dividend paying paying stocks for any month of the year. Need not be in same business either. Then, jump in & out, consider your buy/sell commissions of course. You might “get stuck” with one, thus preventing multiple divs, so you may actually hold a div paying stock that you had chosen, for 4 months, to collect 6 months worth of divs. Sounds too simple, but hey, I am a simple sort. Keep posting.
nocnurzfred, thx. for the info on other div. inc. stocks. Yes, alot are near 52 wk. highs.
STL-
Other than STD, watching/waiting on CPL & CEL, with slant on emerging mrkt stocks, per Jim’s comments
Mardson; I too play the dividend thing. Bought STD @ 11.80 & 8.85, close to break even now. UIL will ex div 6/15 for me, also bought & sold same UIL twice in past 2 weeks for much more than the div would have paid. Looking to sell UIL [again], will look at NYB, PGN, WIN as possible div plays. Too bad most are near 52 week highs.
Mardson…
I jumped in at 10.26 for STD, then watched it fall and wondered why I didn’t buy more??
Any other suggestions on good dividend paying stocks??
Marsdon1201,
http://online.wsj.com/article/BT-CO-20100611-704251.html?mod=WSJ_latestheadlines
Googled: Banco Santandar (News Search).
Ogowan,
where did u get that info., what link? Been following STD, being a dividend income follower, and it’s been tracking higher lately. Waiting for a pull back to jump in.
CallofdutyFan
“Now they will blame us for knowing this 7 years ahead of time and invading their country to take their resources. Don’t you love conspiracy?”
Sounds like you got your own conspiracy going on.
@lakesider
Now they will blame us for knowing this 7 years ahead of time and invading their country to take their resources. Don’t you love conspiracy theorists? 9/11, the Bamiyan Buddhas, oppression of Sikhs and other non-muslims, none of that will count.
Off Topic:
Dividends; The head of STD came out and said earning for 2010 will be same as 2009, that the dividend is safe and Brasil not Spain will be their major growth market.
Not everyone believes him !
So they found huge metals deposits in Afghanistan! No near-term impact, but the future could look as bright as a new copper penny. To bad they didn’t find it in Greece.
http://www.nytimes.com/2010/06/14/world/asia/14minerals.html
I think they will get crazy and make it happen some way…. Bernanke knows the damage it would do
I agree with your point at this time we aren’t doing anything serious…. Or banks are still tight which is very deflationary. The fact you see it forming now doesn’t mean others do (but it will help you make a lot of money:)).
Good news is savings rate is going up which might create a great bull market in 2015 or so:)
grindy2424,
Shorting is easy. Just think of it as a long position in reverse. 😉
Seriously, the U.S. government has not shown any kind of seriousness in fighting deflation. Printing more money while consumer demand is light is pointless (unless they actually hand the money to the consumers, but that is only a short term fix).
Do the inflation pressures in developing economies show any signs of easing?…
http://news.yahoo.com/s/ap/20100614/ap_on_bi_ge/as_india_inflation
Ed,
I don’t think there is anyway Greece makes it out without a default (or serious long term damage to the rest of the EU).
If you look at their economy they are much like the US (without the power to print money). I work extensively in this area and Turkey supplies most of the goods in the region. No real reason to start factories in Greece when you have extremely low cost labor right next door.
Jim has correctly outlined that Greece keeps extending the day of reckoning. I would say the wild card in this would be to watch the strength of the Turkish Lira. The longer it stays closer to 2 the worst Greece’s problems are going to get.
Ed,
Have much better understanding of commodities than shorting!
Watching the same data. I don’t think it shows up yet…. I’m working off the theory it actually shows up in numbers about 12 months from now (looking to sell metals in the next 6 months and get prepared to short).
I think the other reason I don’t want to short is we can’t put it past the government to print more money. Especially with leading indicators coming out negative.
I see the long term drop as you do because decreasing M3 and the fed starting to pull liquidity out. Commodities looked like they had this priced in already. Now we seeing a rally on expectations. If we see mediocre data data (not too bad/good) this may play out quicker.
Yep, we knew it, the market showed (so far) little reaction compared to past outings. The afternoon is young though.
Greece’s bonds are now officially junk bonds. But we knew that, right?
http://www.reuters.com/article/idUSTRE65D46W20100614?feedType=RSS&feedName=businessNews&utm_source=feedburner&utm_medium=feed&utm_campaign=Feed%3A+reuters%2FbusinessNews+%28News+%2F+US+%2F+Business+News%29
grindy2424,
That was why I didn’t buy the leveraged short. This is a long term call, although we may see some signs as early as this week, specifically watch the PPI and CPI. If both of those come in negative, then we are definitely in a deflationary economy.
Ed,
I’m with you. Very long term bearish with the Euro. I think we will see some rallies but there are fundamental issues with the Euro.
Same thoughts with your metals shorts. I think this is a great medium term play, but short term we will see metals pop, dependent on what we see out of China and US data. At some point in the next 12 months this short could make a lot of money (we probably just have different opinions “when” this will happen).
grindy2424,
It’s funny you ask. I sold my EUO and kept my DRR. They both basically do the same thing, so I just cut down on my position there. I still think the euro will drop in the long term, but there’s no point in holding it if there is a temporary rise due to increased export activity from Europe.
Besides being one of the most overcrowded trades, it makes absoultely no Cents to short the Euro. Just look to China for guidance. They cannot afford to have the Euro fall, so while they may not be net buyers of their debt, they have been investing billions of $ in projects, most notably the port in Pareus, Greece…soon to be the Rotterdam of southern Europe.
Oh and not to mention, inflation has been and continues to be lower in Europe than here!!! Unsubstantiated fear is the only thing working in the short Euro’s favor.
Ed,
Still leaving drr open or close it out?
Still not great news, just I think the absence of really bad news
Setting interest rates for p[rice stability [avoiding inflation / deflation] is half of the Fed’s duty. It is also part of its mandate to maintain full employment. I think that is more what the Fed is looking at right now, and that it will be when unemployment gets dow to say 7 – 8% that interest rate hikes will come back on the radar. Well into 2011.