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Strategies & Market Trends : January Effect 2003 -- Ignore unavailable to you. Want to Upgrade?

To: Londo who wrote (305)	4/9/2003 4:21:35 AM
From: RockyBalboa	Read Replies (1) \| Respond to of 666

As predicted - the war hype fades and now: >>>>>>>>>>>>>>>> Stocks Fall as Focus Shifts to Economy Wednesday April 9, 3:41 am ET By Nigel Stephenson LONDON (Reuters) - Stocks fell in Europe and Asia on Wednesday and the dollar lost ground as investors looked beyond the war in Iraq to the outlook for the global economy. Investors kept a close eye on the fighting in Iraq, as thousands of U.S. troops swept through the suburbs of Baghdad, but worries about the post-war U.S. economy outweighed expectations of a quick end to the war. Oil prices, which have been falling in anticipation of a quick end to the war, rose on the possibility of an output cut by the OPEC (News - Websites)producers group. Safe-haven assets such as government debt and bonds gained on anxiety about the economic outlook. "The end of Saddam Hussein's regime in Iraq is clearly near and the market's focus has thus shifted to the global economy," said Yoshinobu Hara, general manager at Resona Asset Management. European shares opened lower. The FTSE Eurotop 300 index of pan-European blue chips was down 1.26 percent by 0815 GMT while the narrower DJ Euro STOXX 50 index was off 1.4 percent. Asian stocks closed lower on anxiety over the economic outlook and the impact of the deadly SARS virus. Tokyo stocks fell for a second successive session. The Nikkei average closed down 0.91 percent while the broader TOPIX index was off 0.18 percent. U.S. stocks slipped on Tuesday as disappointing profit outlooks offset expectations for a rapid end to the war. Investors began to look beyond the war to the economy and gloomy outlook for earnings. The Dow Jones Industrial average closed down 0.02 percent and the tech-dominated Nasdaq Composite index ended 0.47 percent lower. U.S. stock index futures were lower in early European trade, suggesting a negative start on Wall Street later on Wednesday. DOLLAR, OIL, BONDS, GOLD The dollar struggled against most major currencies. "The market has started pricing in the post-war economic situation in the United States and many are seeing the dollar's downside," said Naoya Murata, vice president at the forex dealing group at UFJ Bank. Two surveys released on Tuesday offered evidence Americans were less gloomy in early April but wholesale inventories remained very lean, suggesting businesses were not betting on a shopping spree just yet. Against the euro, the dollar was down 0.3 percent at $1.0746. It was steady against the yen at 119.87 yen and down 0.2 percent against the Swiss franc at 1.3835. Oil prices rose on expectations OPEC producers would curb production to avoid a potential price collapse. Crude prices rose in the run-up to war on fears of supply disruption. However, a Gulf source familiar with Saudi thinking said on Tuesday the Organisation of the Petroleum Exporting Countries would do whatever it takes to keep world oil prices near $25 a barrel. "I expect OPEC to announce a more prudent production policy to accommodate rising production from Venezuela and Nigeria and Iraq in the next three to four months," said oil and gas analyst Gordon Kwan at HSBC in Hong Kong. U.S. light crude for May was up 35 cents a barrel at $28.35 and Brent crude was up 43 cents at $25.03 a barrel. Yields on safe-haven euro zone government bonds fell. Yields fall as prices rise. The two-year German Schatz note was yielding 2.49 percent, down 4.9 basis points. The benchmark 10-year German Bund yield was also down 4.9 basis points at 4.18 percent. U.S. Treasury yields also fell. The 10-year note was yielding 3.92 percent, down 1.7 basis points. The price of gold rose, on dollar weakness and investor anxiety over the state of the U.S. economy. Spot gold was last at $323.80/324.30, compared with $323.70/324.20 at Tuesday's New York close.

To: Londo who wrote (305)	4/9/2003 4:57:23 AM
From: RockyBalboa	Respond to of 666

And here is the relentless buyer of Treasuries - the agencies evidently need to hedge more with longer durations. Note the remark that the prepayments "taper off after April, May" when rates rise. Perhaps then a big reason for the treasury to keep up falls away. >>>>>>>>>>>>>>>>> U.S. mortgage bonds prepayments fast in March Monday April 7, 11:18 am ET NEW YORK, April 7 (Reuters) - U.S. mortgage-backed securities were prepaid quickly in March in line with expectations, as massive numbers of homeowners took advantage of rock-bottom interest rates and closed on loans they were refinancing, analysts said on Monday. ADVERTISEMENT Prepayments are likely to increase in April and May, and then taper off, reflecting record-low rates in March and subsequent rate increases, said Pankaj Jha, prepayment analyst at J.P. Morgan in New York. Freddie Mac (NYSE:FRE - News), Fannie Mae (NYSE:FNM - News), and Ginnie Mae each reported their prepayment speeds for March after the market close on Friday and before the open on Monday. Prepayments in March reflect the mortgage rate environment for January and February. The 30-year rates for those months were, respectively, 5.92 percent and 5.84 percent, according to Freddie Mac. The average mortgage rate fell to 5.75 percent in March, but rates are heading higher with the war with Iraq apparently near an end. The 30-year rate last week was 5.79 percent, Freddie Mac said. On average, the prepayment speeds for 30-year mortgage bonds bearing 6 percent coupons issued in the last several years rose by about 10 percentage points on a CPR, or constant prepayment rate, basis, according to Bear Stearns analysts. For example, a 30-year Fannie Mae mortgage bond sold in 2002 with a 6 percent coupon prepaid at 37.1 percent CPR in March, up from 26.3 percent CPR the previous month, Bear Stearns analysts said. Those same bonds should prepay at 43 CPR in April and 50 CPR in May, according to J.P. Morgan's forecasts. A CPR is an annualized number representing the percentage of the balance of the pool of mortgage loans, beyond regular amortization, that would get paid off over the course of the year at current speeds of payment.

To: Londo who wrote (305)	4/9/2003 11:42:15 AM
From: RockyBalboa	Read Replies (1) \| Respond to of 666

Treasury of course recovered its initial dip... DJ lost its enarly 100 point gain easily, and battles with the 8300,... I'm carefully eyeing this small hammer (or red candle, from 85 downto 83) making a nice double top, as well as its next support which is only 80, then 75. , Awful technical outlook. On the other hand, though... there is a hardly visible trending channel which needs to be pierced thoroughly first. finance.yahoo.com^DJI&d=c&k=c1&a=v&p=s&t=3m&l=on&z=m&q=c