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Strategies & Market Trends : Can you beat 50% per month? -- Ignore unavailable to you. Want to Upgrade?

To: Smiling Bob who wrote (9951)	5/12/2006 1:09:04 PM
From: Smiling Bob	Respond to of 19256

ZLC - this should help. I'm trying to pick some mall based chains that I come across overpaying for rent that will suffer as traffic thins Mall REITS as well Consumer mood buckles under high gas prices Friday May 12, 1:00 pm ET By Ros Krasny CHICAGO (Reuters) - Consumer optimism in the United States buckled in May to its lowest since Hurricane Katrina, a survey showed on Friday, hit by $3 per gallon gasoline, rising mortgage interest rates and a souring political climate. Earlier, the government offered some positive news on the economy as the U.S. trade deficit narrowed unexpectedly in March based on a surge in export demand -- but rising import prices kept alive jitters about inflation. The University of Michigan's closely-watched sentiment survey slumped to 79.0 in May from April's final 87.4, far below the median Wall Street forecast for a reading of 86.1. The report stirred worries that many Americans will stay away from the shopping malls over the next few months as they spend more to fill up their cars -- although the link between consumer sentiment and actual spending is often tenuous. "If sentiment stays at this level -- it might even decline further -- you should expect a serious slowing in second quarter and third quarter consumption," said Ian Shepherdson, chief U.S. economist with High Frequency Economics. The dollar fell on news of weakening consumer sentiment, while U.S. stock indexes (^DJI - News; ^SPX - News; NasdaqSC:^IXIC - News) slipped on the jump in import prices and worries about higher interest rates. U.S. Treasury debt yields were up, but off highs because of weak consumer optimism. The benchmark 10-year Treasury note (US10YT=RR) was down 9/32 in price, to yield 5.18 percent, up from 5.16 percent on Thursday. The Michigan reading was the lowest since 1993, excluding a one-month plunge in October after Hurricane Katrina. Both elements of the report -- current conditions and expectations -- tumbled in May based on a survey of about 500 households. The median inflation expectation also rose, suggesting that respondents were worried about higher prices eroding their financial well-being. "Job security is holding up reasonably well. But expectations on housing, stocks and gasoline are looking pretty harmful for consumers," said Richard Iley, senior economist, North America, at BNP Paribas in New York. "Underneath the surface, it (consumer confidence) is pretty brittle." The report was consistent with ideas on Wall Street that the Federal Reserve will end its almost two-year run of interest rate increases in June to brace for a slowdown in economic growth from the torrid first-quarter pace. The housing sector -- notable now for stagnant prices and bulging inventories -- is likely to lead the way. Analysts suspect extremely low job approval rates for President Bush are also eating into confidence. A new Harris Interactive poll on Friday in The Wall Street Journal Online showed Bush's job approval rating fell to a new low of 29 percent from 35 percent in April. TRADE DEFICIT FALLS AS U.S. EXPORTS JUMP Earlier, the Commerce Department said record high exports pushed the U.S. trade deficit down to $62 billion in March, its lowest since August and a second straight month of narrowing. Exports, including to China, climbed to new highs, suggesting a weaker dollar is boosting demand for U.S. goods. Wall Street analysts had expected the gap to widen to about $67 billion on the back of higher oil import volumes. "The trade gap is definitely better than expected, which is good any way you look at it," said David Wyss, chief economist at Standard and Poor's Ratings Services in New York. U.S. exports of $114.7 billion in March included record shipments to Canada, Mexico, the European Union, China and South and Central America. Exports were especially strong for industrial supplies and materials, such as petroleum products and plastics, and capital goods, which include industrial machines and computers. Analysts said the data could prompt an upward revision in estimates of first-quarter U.S. economic growth, previously reported at a 4.8 percent annual rate. Still, the overall U.S. trade deficit for the first quarter of 2006 was $196.2 billion, on a pace to exceed the record of $723.6 billion for the whole of 2005. The politically sensitive trade gap with China, which hit a record $202 billion in 2005, widened in March to $15.6 billion. U.S. exports to China were a record $5 billion, while imports from that country were $20.5 billion. The Labor Department reported on Friday that the cost of imported petroleum jumped 11.5 percent in April, the biggest gain since March 2005. The increase boosted overall U.S. import prices by an unexpectedly sharp 2.1 percent in April, although nonpetroleum prices were flat, the report showed. The import price report suggests a prolonged decline in the value of the dollar is beginning to show up in higher prices on imported goods, said Kevin Flanagan, fixed income strategist with Global Wealth Management at Morgan Stanley. "I feel that is something we need to pay more attention to," Flanagan said. (Additional reporting by Doug Palmer in Washington and Chris Reese in New York)