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Strategies & Market Trends : The Thread Formerly Known as No Rest For The Wicked -- Ignore unavailable to you. Want to Upgrade?

To: JeffA who wrote (47212)	6/1/1999 8:52:00 AM
From: kathyh	Respond to of 90042

something to watch for this am... napm #'s out at 10:00 et... kathy :) NAPM Release Hanging Over U.S. Stocks By Justin Lahart Senior Writer 6/1/99 8:29 AM ET Investors who play in the first half-hour of trading today are either very sure of themselves or very foolish. That's because the May National Association of Purchasing Management index comes out at 10 a.m. EDT. NAPM will be the first major piece of economic data the market's seen since the Consumer Price Index two weeks ago, and it could very well determine the market's course for the next three days. For some time now, the one cylinder that hasn't been firing in the U.S. economy has been the manufacturing sector. Lately, though, there have been some signs that it's been recovering, and strength in the NAPM would reinforce that sense. It would be seen as a sign that manufacturers are starting to get a little pricing power and that wage inflation -- manufacturing employees are highly paid -- is picking up. Economists expect the NAPM to come in at 53.3. At 8:10 a.m., U.S. stocks were cued for a slow start. The S&P 500 futures were up 4, leaving them more than 3 below fair value. The 30-year Treasury was off 4/32 to 91 21/32, lifting the yield to 5.85%. A report in an obscure stock market daily that the Japanese government is considering suspending the consumption tax sent Tokyo stocks sharply higher. The Nikkan Toshi Shimbun said Prime Minister Keizo Obuchi would end the tax -- which many hold responsible for the lengthening of Japan's economic sorrows -- this month. That's highly unlikely. Although the upping of the tax to 5% from 3% snuffed out a recovery in consumer demand, at this point it is not clear that removing the tax would bring demand back. In fact, in the period before implementation of the tax cut, demand could dry up as consumers held off on buying big-ticket items. Despite denials by a number of officials, the rumor of a cut was enough to send the Nikkei up 296.85, or 1.8%, to 16,408.5. The strength in Tokyo and lower interbank rates helped Hong Kong stocks continue their rally off 12,000. The Hang Seng added 216.44, or 1.8%, to finish at 12,363.56. Europe's major bourses were in positive territory. In Frankfurt, the Dax was up 10.4 to 5080.23. In Paris, the CAC was up 18.21 to 4369.5. And in London, the FTSE was up 94, or 1.5%, to 6320.2. A Word on the Fed Lately there has been some speculation that the Federal Open Market Committee will move to raise rates before its next meeting. At least partly culpable is a vocabulary mix-up. Thursday, a hedge-fund adviser, Richard Medley, wrote in his vastly expensive newsletter that the FOMC was considering a pre-emptive move on interest rates. Pre-emptive, when it comes to the Fed, does not mean an intrameeting move. It means raising rates when there are inflationary pressures, but there isn't inflation yet -- basically kicking the beast in the teeth before it gets up off the floor. Unfortunately, some people in the stock market have been hopelessly mixing things up, using "pre-emptive" to describe an intrameeting rate hike, while economists and bond traders continue to use it to describe an early move against inflation. -------------------------------------------------------------------------------- Amazon.com (AMZN:Nasdaq), or "Amazon.bomb," as Barron's put it, was the financial weekly's cover story this week. TSC's James J. Cramer explored the issue this morning. AmSouth Bancorp (ASO:NYSE) is acquiring First American (FAM:NYSE) in a stock swap valued at around $6.3 billion. First American shareholders will receive 1.871 AmSouth common shares for each First American common share. The staff of the Federal Trade Commission has concluded that Barnes & Noble's (BKS:NYSE) proposed $600 million acquisition of Ingram Book Group violates antitrust law. The staff will recommend that the full commission reject the deal, according to published reports. ETrade (EGRP:Nasdaq) is buying Telebanc Financial (TBFC:Nasdaq) in a deal valued at $1.8 billion in stock. Telebanc shareholders will receive 2.1 ETrade common shares for each Telebanc common share. Liberty Media (LMG.A:NYSE) is buying Associated Group (AGRPA:Nasdaq) for about $3 billion. Merrill Lynch (MER:NYSE) said it will offer online trading to clients, with a basic charge of $29.95 per trade for U.S. equities, starting in December. --Brian Louis thestreet.com