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Strategies & Market Trends : MDA - Market Direction Analysis -- Ignore unavailable to you. Want to Upgrade?

To: Les H who wrote (25351)	9/9/1999 1:15:00 PM
From: Challo Jeregy	Respond to of 99985

Les, boy what a dummy I am!!!!! I've never noticed that before. LOL. I saw the big descrepancy between the two and thought it was delayed timing or something! Sheesh . . .

To: Les H who wrote (25351)	9/9/1999 6:51:00 PM
From: Les H	Read Replies (1) \| Respond to of 99985

US DATA PREVIEW: STRONG AUG PPI RISE SEEN BUT CORE RATE TAME WASHINGTON (MktNews) - Producer prices in the United States are seen higher in August, as higher prices for food and fuels contribute to a higher overall reading, though including these two volatile components, PPI is seen increasing only modestly. The median of a Market News International survey of economists forecasts is for a 0.4% rise in total PPI within a range of unchanged to +0.5%, while the median core rate is for a 0.1% increase within a range of -0.1% to +0.2%. "Total finished good prices appear to have been boosted by another jump in energy prices, while food prices were probably close to flat," said JPMorgan economist James O'Sullivan. During August, crude oil prices stood at $21.30/bbl, a 5.6% increase over the previous month. At the same time, the NAPM index price component posted a 9.3% increase in August to 59.8 from 54.7, further suggesting a high PPI number. Farm prices received in August rose 3.2% after a decline of 4.1% in July. Following a 0.9% decline in July, food prices are seen recovering as the drought in the Northeast is seen pushing prices higher. "To the extent that this month's PPI report is largely an energy story, we doubt the Fed will be overly concerned by a 0.3% headline number, especially given the phenomenally benign core figure," according to economist Joseph Abate at Lehman Brothers.

To: Les H who wrote (25351)	9/9/1999 6:54:00 PM
From: Les H	Respond to of 99985

TALK FROM THE TRENCHES: COMMODITY PRICES, WAGES ON WATCH By Isobel Kennedy and Joe Plocek NEW YORK (MktNews) - U.S. Treasurys are at the lower end of a very tight range and activity is very subdued. There are still bulls and bears out there, but the fence sitters appear to be in charge. Prices got hurt overnight on Japan's surprisingly strong GDP report and the subsequent weakening dollar, but have largely ignored any other good or bad news that has come down the pike today. They shrugged it off when the European Central Bank left rates unchanged Thursday morning. Are they still brooding about yesterday's U.K. hike? The bulk of Fedspeak is over and the market has not budged. Fed Ferguson's comments put him squarely between the hawks and doves as he takes over as Vice Chair. Fed "Baby Bear" McDonough said the past two rate hikes were "just right" and got more attention for his comments about the dollar. He said the recent drop in the dollar was not significant for the U.S. economy. Some say the comment smacks of neglect. No wonder the dollar dropped below Y108. Oddly, Treasury players have not reacted to that either even though it brings up the question of importing inflation. Today, U.S. August import prices rose +1.0% all due to oil. Brent crude is up again and today's CRB gains are clearly being led by the energy sector. Moody's says to watch nickel prices, up 69.4% YOY, reflecting the bulk of the recent surge in industrial metals. Moody's economists also note the IMF's upward revisions for world growth projections mean U.S. exports will likely increase. For these reasons, tomorrow's producer price index will be watched for pipeline pressures. But next Wednesday's consumer price index is considered more important, most sources say. Some economists are starting to worry about wage negotiations. "Unions are having their way with management," one economist says, noting UAW saw a generous first round offer from GM and DaimlerChrysler (note that Ford is the strike target!). He notes Boeing got a 7% raise a year for three years. Northwest Air workers rejected a 25% salary hike over five years. When will these gains get into the general price level? Aug PPI and CPI may see overall spikes but tame cores. Good retail sales and record auto sales should propel Aug retail sales up -- the economist expects +1% overall. The fear of corporate supply dwindles by the day, sources say. Deals are trickling in, no where near the pace that would account for estimates of about $10 billion a week. And many treasury players seem to have turned from fearing the supply to missing the action it usually provides in their market. In the meantime, the bulls say the Fed is clearly on hold for the rest of the year due to Y2K. So why they wonder aren't more people getting ready to party into the new millennium as early as now? The bears think last Friday's rally was a dead-cat bounce. They fear the Fed and higher interest rates around the world. They are focusing on the weaker dollar and the possibility of world wide growth followed by inflation. But maybe it's just quiet because it's still 9/9/99. And after all this hype about Y2K, wouldn't it be a let down if the market behaves with the same apathy on Friday, December 31! By the way, we understand that George W. Bush is campaigning by passing out bottles of George W water with red, white and blue labels. NOTE: Talk From the Trenches is a daily compendium of chatter from Treasury trading rooms offered as a gauge of the mood in the financial markets. It is not hard, verified news.