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Strategies & Market Trends : LastShadow's Position Trading -- Ignore unavailable to you. Want to Upgrade?

To: LastShadow who wrote (15025)	6/1/1999 8:06:00 AM
From: LastShadow	Read Replies (1) \| Respond to of 43080

Napalm Two big reports are coming out -- the May National Association of Purchasing Management index (affectionately called the Napalm by bond traders) on Tuesday and the May employment report on Friday -- and they could determine the tone of things for weeks to come. "The market," said Tony Crescenzi, Treasury market strategist at Miller Tabak Hirsch, "what it will do next week is frame what it believes is the Fed's decision June 30." If you want to get a read on how things are with American manufacturers, the NAPM, an index based on a survey of purchasing executives at roughly 300 industrial companies, is a good place to start. For a while manufacturing was the sore spot in a booming American economy, but lately it's been showing signs of life. Manufacturers are beginning to see a bit of demand for their wares and that's giving them something they haven't had in a long time -- pricing power. From pricing power proceeds inflation. But though it has been moving higher since its bottom last fall, the May NAPM shouldn't be all that frighteningly strong. Friday, the Chicago Purchasing Managers Index -- a NAPM for Chicago-area manufacturers -- got released, and it showed a decline from its bell-ringing April level. "About 90% of the time, the Chicago Index has been above the NAPM," pointed out Crescenzi. On average, the NAPM has been about 3.6 points below the Chicago Index, he said, which suggests the NAPM should come in at about 54.3, or right about where economists expect it. So with luck the NAPM won't do anything to hurt the market. But unless the NAPM comes in ridiculously low, it's unlikely that it will lay any fears to rest. The employment report, on the other hand, could lay those fears to rest. The only problem is, it could just as easily do the same thing to a lot of people's portfolios. A big jobs report, said Crescenzi, and the market will throw in the towel on hoping the Fed won't raise rates at its June meeting. A big jobs report, and people start talking about how the Fed's going to hike them 0.5 percentage points, or about how the Fed's going to hike and then hike again in August. For stocks, all of this comes at a shaky time. For one thing, we are entering warnings season, a period when companies that aren't going to make their numbers come clean. As always, there will be some big companies stepping into the confessional, and as always they will talk about how their problems are industrywide and will hit their entire sector, even if that's not really true. And as always, there will be rumors floating around about how some big company's earnings are going to stink. Even if that's not really true.

To: LastShadow who wrote (15025)	6/1/1999 8:43:00 AM
From: LastShadow	Respond to of 43080

08:34 ET Market Indication : Broader market indicated lower. Current level of S&P futures suggests Dow retreat of approximately 45 points lower at the open... Barron's trashes Amazon.com... E*Trade acquires Telebank PreOpen shows AMZN down 8 Look for a 10:00-10:15 am bounce if it is to occur PaineWebber To Be Added To S&P 500 Standard & Poor's announced last night that securities firm PaineWebber Group Inc. (NYSE:PWJ) will replace Bankers Trust Corp. (NYSE:BT) in the S&P 500 Index after the close of business on Friday, June 4. Bearish economists are warning investors that the recent decline in inflation oriented indicators has been marginal and will do little to change the Fed's inclination toward raising interest rates. These economists believe that the economy's strong growth so far this year shows the Fed that all of last year's 0.75% rate cut is not necessary to maintain a healthy expansion. The Fed is therefore able to take back part of the rate cut without having to worry about the fallout. Next week will be important in ultimately predicting what the Fed will do at its June meeting, with the NAPM Index due on Tuesday and the May employment data due Friday. lastshadow