#1 FREE Swing Trading Strategy and Stock Picks for Day Traders

FREE 21000+ Articles Free Stock Charts SwingTracker StockScanPro MarketClub mobile.mrswing

MrSwing Contributors SwingTracker Authors

Browse ALL Sentiment Index Candle Charts Pivot Points Points & Figures SwingTracker

SwingTracker - Real Time Charts & Scanning the SwingTracker BLOG

You Can SCAN Stocks, Forex and Futures for 33 Cents a Day? Start Your FREE 30 Day Trial NOW!

MarketClub incl. Chart Portfolio - Smart Scan - Trade School - Streaming Chart Tools - News...

Free Trend Analysis

> Sign Up or Log In

You Are Here: Home > Articles > Contributors > U.S. Morning Call for Wednesday, July 16, 2008

U.S. Morning Call for Wednesday, July 16, 2008
Jul 16, 2008

Larry Swing

Font Size:

U.S. Preview

The European DJ Stoxx 50 index this morning is trading with a fairly sharp loss of -1.41% and Sep S&Ps are down -0.5%. The European banking sector is lower on concern about further losses and more capital raises. BMW is down -1.6% this morning and Damiler is down -1.4% on today's report of a -7.9% decline in June European auto sales. Asia-Pacific stocks today closed mixed: Japan +0.05%, Hong Kong +0.23%, China -3.76%, Taiwan -1.81%, Australia +1.14%, Singapore +0.16%, South Korea -0.27%, Bombay -0.79%.

The Euro-Zone June CPI rose to a 16-year high of +4.0% y/y from +3.7% y/y in May. The Euro-Zone June core CPI, which excludes food, energy and tobacco, rose to +1.8% from +1.7% in May.

Mortgage apps � This morning's MBA mortgage applications report was mixed with a +1.7% rise in the overall index, a +6.9% rise in the refinancing sub-index, and a -1.7% decline in the purchases sub-index. The indexes in last week's report rebounded higher but are still just mildly above their recent multi-year lows However, the refi index is still just mildly above its recent 7-year low and the purchases sub-index is still just mildly above its recent 5-1/2 year low. Rising mortgage rates have undercut refinancing activity. Very weak home sales activity has dampened the need for mortgages on home purchases. The 30-year mortgage rate in the latest week rose by +2 bp to 6.37%, which is just 5 bp below the 10-month high of 6.45% posted in the week ended June 26.

CPI � Today's June CPI report is expected to show another large increase of +0.7% m/m, adding to the +0.6% increase seen in May. The June core CPI is expected to show an increase of +0.2% m/m, matching the +0.2% m/m increase seen in May. On a year-on-year basis, the June CPI is expected to rise to +4.5% y/y from +4.2% y/y in May, which would be a new 2-3/4 year high. The June core CPI is expected to be unchanged from May at +2.3% y/y. The core CPI of +2.3% is only +0.3 points above the generally-accepted +2.0% ceiling for inflation and is well below the 12-1/2 year high of +2.9% posted in September 2006. While the core CPI is in decent shape, the Fed needs to pay more attention than usual to the overall CPI figure of +4.2% because the current surge in energy and food costs is likely to be sustained on a long-term basis and is not simply the result of a temporary supply shock.

Industrial production � Today's June industrial production report is expected to show a small increase of +0.1% following the 0.2% decline seen in May. The June capacity utilization rate is expected to be unchanged at 79.4% following the 0.2 point decline to 79.4% seen in May. The US manufacturing sector continues to hold up surprisingly considering the litany of shocks that have hit the sector including slower overseas growth, a sharp decline in US auto production, rising production costs, and generally negative business confidence. The ISM manufacturing index in June even rose +0.6 to 50.2, poking back above the boom-bust level of 50 for the first time in five months. However, the US manufacturing sector is likely to remain generally weak considering the overall weakness in (non-stimulus) consumer and business spending.

NAHB housing index � Today's July NAHB housing market index is expected to be unchanged at 18 following the 1 point decline to 18 seen in June. The index in June matched the record low of 18 originally posted in December 2007. The NAHB housing market index has been scraping along near record lows for the past 9 months, suggesting that sentiment can't get much worse among US homebuilders. At the same time, there is no near-term cause for optimism for homebuilders considering the massive supply of unsold homes and the continued decline in home prices

...thanks for the trust you've shown in me and my business.

by Larry Swing
larry@mrswing.com
May the swing be with you...