Silicon Investor (SI) -- The First Internet Community

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

Strategies & Market Trends : Mish's Global Economic Trend Analysis -- Ignore unavailable to you. Want to Upgrade?

To: loantech who wrote (9300)	7/15/2004 1:44:08 PM
From: mishedlo	Read Replies (1) \| Respond to of 116555

Eric Fry, checking in from the Big Apple... - Once again, Americans burned through more oil than they stockpiled. The Energy Department reported a 2.1 million- barrel draw down in crude supplies for the week ended July 9, to a total of 302.9 million barrels. The American Petroleum Institute estimated an even larger draw down of 5.1 million barrels. Either way, we consumed a lot more oil than we stored. - The large inventory decline occurred in the face of massive crude oil imports. For the eighth straight week, U.S. imports topped 10 million barrels - "the longest such streak ever," according to the Government's report. The shockingly large drop in inventories sparked an explosive rally in crude oil. Over in the energy trading pits of the New York Mercantile Exchange, the price of crude jumped $1.53 to $40.97 a barrel - a new six-week high. - Despite record-high oil and gasoline prices, Americans continue to guzzle the stuff... but the nation's ever-rising energy bill is starting to take a big bite out of discretionary spending. Retail sales plummeted 1.1% in June - the biggest decline in 16 months - thanks largely to a 4.3% fall in auto sales. Apparently, we Americans are not buying quite as many things we don't need with the money we don't have. We've even curtailed our once-robust consumption of common stocks. - The major equity averages fell again yesterday, as the Dow lost 39 points to 10,209 and the Nasdaq slipped nearly 1% to 1,915. As stocks slipped, the dollar also weakened, falling half a percent to $1.238 per euro. The gold market made the most of the dollar's weakness by jumping $3.80 to $405.45 an ounce. - The stock market bulls say stocks should be higher. We say they SHOULD be lower, especially if $40-a-barrel crude oil keeps hanging around like an annoying party guest. The balance between supply and demand in the energy markets is delicate at best. As the world's developed countries continue to find new and ingenious ways to exhaust the earth's finite energy supplies, Chinese and Indian demand for fossil fuels is booming. - "Indian villagers, who account for more than 70 percent of the nation's 1 billion population, are spending on televisions, refrigerators and other goods at more than twice the pace of their urban counterparts," Bloomberg News report. "Demand for consumer products in India's 627,000 villages is expanding by 25% a year compared with growth of 10 percent in cities and towns, according to a survey by the Federation of Indian Chambers of Commerce and Industry." - All these new gadgets mean lots more demand for energy... and all the while that demand booms, the global oil supply struggles against the forces of inevitable depletion. What's more, the global balance between supply could become quickly imbalanced if terrorist attacks disrupt supplies. - Time Magazine reports that the FBI sent a classified intelligence bulletin to local law enforcement agencies last week warning of a potential terrorist threat to the U.S. energy infrastructure. Meanwhile, half a world away, Islamic militants continuously plot to disrupt the oil infrastructure within Saudi Arabia. - "An increasing number of Saudis who crossed the border into Iraq are returning home to plot attacks against the Saudi government and Western targets in the desert kingdom," the Washington Post Foreign Service reports. "Other Saudis are returning after spending time in newly established training camps across the Red Sea in remote parts of Sudan where central government influence is weak... some Western officials express fear that the homecoming will grow if Iraq stabilizes." - After the Iraq insurgency is over, 'there will be people who are freshly trained in the art of guerrilla warfare,' said a Western diplomat who spoke to the Post on condition of anonymity. 'It's a real concern.' - We could certainly imagine the oil price falling from current levels. But it's so much easier to imagine it rising. Hmmm... what would Britney say?

To: loantech who wrote (9300)	7/15/2004 1:57:03 PM
From: mishedlo	Read Replies (2) \| Respond to of 116555

Philly Fed phil.frb.org The Federal Reserve Bank of Philadelphia today released July's Business Outlook Survey. The survey participants report that expansion in the region's manufacturing sector continues. This month the manufacturers were asked about increases in wages made to attract or retain workers. Philadelphia Federal Reserve Senior Economic Analyst Mike Trebing summarized the survey: "Current indicators suggest that the region's manufacturing sector is continuing to improve. For the July survey, indexes for general activity, new orders, shipments, and employment were up from their June readings. Firms reported higher prices for inputs and for their own manufactured goods, although the index for input prices declined again this month. Manufacturing executives remain generally optimistic about continued growth in their sector over the next six months; expectations have moderated from their recent higher levels, however."