Thursday, April 12, 2007

Friday Curtain Raiser

What has Jeff Immelt cooked up for tomorrow morning? Actually "cooked" is a bad word to use since its doubtful he will literally be cooking anything himself for breakfast (the hired help can do that for him), and we sure don't want to use the word "cooked" around something like an earnings report that's due from one of the biggest companies this side of the next star system. So bad choice of words on my part. GE is expected by the Wall Street cognoscenti to post earnings of 44 cents a share tomorrow morning. Will be get that famous and almost customary penny or two better than expected?

While Merck (MRK) is licking its Arcoxia FDA panel rejection wounds, it mustered some fight to pre-announce a strong 1st quarter.

While gold has been stuck in neutral at around $680/oz of late the after burners have been going on for the base metals, including a huge rally for nickel in recent weeks. In fact, thanks to to recent gains in copper and nickel, the melt value of the 5c U.S. nickel has actually reached a whopping 9-cents per coin, according to! Of course, the Feds recently decreed it illegal to melt down U.S. coin.

The economic calendar as some important data. At 8:30 ET we get the latest trade deficit figures. They're expected to show a trade gap of $60.3 bln in February. At the same time, the government will be release inflation data. The Producer Price Index is expected to show a jump of 7-tenths of a percent led by a surge in energy prices and higher food costs. Factor out food and energy and core PPI is expected to show a gain of .2%. The overall PPI figures have had some wild swings in recent months - sometimes more than 2 standard deviations beyond the norm so brace yourself for anything tomorrow morning.

At 10, the University of Michigan Consumer sentiment report is expected to show a dip in April to 87.5.

The dollar is lower again tonight in Pac Rim trading, falling further on concerns Friday's trade data will throw more gasoline on the trade tensions between the U.S. and China. This dollar index chart is looking butt ugly.

The dollar is now firmly in 2 year low territory not only against the Euro but the broader basket of currencies as gauged by the Dollar Index. What a shame that chart is as we witness the decline and prominence of the once mighty dollar. On my spring break trip we stopped into Mount Vernon to see Washington's beautiful home. I'm a Washington fanatic and read everything I can about the great man and walk in awe whenever I visit his estate to see it largely as he saw it and lived it and enjoyed it. There was surely nothing easy about life in the 18th century. There's always uncertainty about the future whether for those of us alive today, or for those alive 200 years ago - and no doubt there was greater uncertainty for those who lived 200 years ago merely because of how easy it was to get sick and die. It was merely a bad sore throat and the crude treatments of the time (blood letting) that suddenly killed Washington in December of 1799; people, especially children and the aged, dropped like flies in those days. But I've got to believe that amid all the uncertainty of 18th century life and death, a man like Washington hopefully had at least an inkling of a realization that he was at the start of a great nation with great upside ahead. That's in stark contrast to what the Dollar Index chart portrays today: that we're entering into the throes of what will be a rough period of decline.

By the way, if you're in the Washington DC area, a quick drive down Route 1 to Mount Vernon is well worth it. The new visitor center and museum is gorgeous. And walking through that house, knowing that George and Martha once lived there, is a great experience.

Yesterday I wondered if $2.17 for front month gasoline would be the top. Nope. Refinery outages and IEA concerns pushed energy even higher, especially gasoline.

National Mortgage News is quoting home builder economist David Seiders as saying the new home slump may last until 2011. But what a tease National Mortgage News is. They require a subscription, which is fine and I subscribed for $259 for one year, but I won't be getting a password until tomorrow. They also required that I receive paper copies of their publication, which I dislike because it means extra time playing around with the recycling bins on Wednesday mornings. But I'm told the publication is worth it, so I look forward to gaining electronic access tomorrow.

'I AM PLOTTING A NEW RUSSIAN REVOLUTION'; violent overthrow of Putin... No, those aren't my words, or my new goal in life - those are the words of a Russian tycoon and a reminder of the fun world in which we live.

Kids do say the darnedest things. My six year old son had big news about the arrival of the new principal at his elementary school. Among other things, he told me, "he's not a lady." LOL.

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