Index Indicators still Positive, But This has been a very difficult week for stocks and Thursday is looking to be another day of negative movement in the indexes. The index indicators are still showing a positive bias but with this weeks action they could signal a hold instead of a buy today or tomorrow. Oil, Gold and Commodities Oil (USO), gold (GLD), and other commodities such as coal (KOL) and grains (MOO) are doing well today as the dollar (UUP) has fallen. This is a problem for the stock market as the price of oil falling has led the markets higher recently despite not the best earnings news. Financials Again When everyone is hoping the credit crisis is behind us, it seems like the financial story will not end. Freddy ...

Let the games begin! In honor of the Olympic games in China, I’ve decided to stage my own “Special” Olympics based on financial events. I, like most people, have been astounded by the displays of physical prowess going on in Beijing. However, I’m equally impressed by other Herculean displays going on in the financial markets. After all, why should we merely applaud those who have developed their physical prowess to near superhuman levels? Shouldn’t we also applaud those who excel in other arenas of human effort… like backtracking, or blowing hot air, or flat-out incompetence? Personally, I’m as impressed by someone who can contradict themselves in front of the American public as I am by someone who can leap over a giant hurdle using a pole. Both activities require great focus, determination, and the ability to ignore glaring issues that would unnerve most ...

Stocks are falling today 08/19/08, after Producer Price Index numbers released this morning by the Labor Department, renewed inflation fears. The Producer Price Index, which measures the price of goods using the manufacturers’ wholesale prices, rose 1.2% in July, the biggest increase in 27 years. This was twice what was expected by forecasters.

Core PPI, which leaves out energy and food prices, rose .8%, versus the .2% rate that was expected. This was the biggest gain in twenty months.

The news was harsh on the stock market. Currently, the Dow is down 124.49 points or 1.08%, to 11348.63, The Nasdaq is 24.30 points or 1.01% to 2392.68 and the S&P 500 is down 12.92 points or 1.01% to 1265.68

Financials also continue to drag down the markets. AIG is down 7%, Lehman Brothers (LEH) is down 7.98%, Goldman Sachs (GS) is down .72% and Merrill Lynch (MER) is down 3.8%

 

...

There's nobody like an investment banker to deliver yesterday's news tomorrow, and charge you dearly for it. Goldman Sachs have turned bullish on the dollar, while Merrill Lynch are calling crude oil down to $80. If bandwagon jumping was an Olympic sport, these guys would have more gold medals than Michael Phelps. After pumping up the commodity and Euro bubbles all year, a whiff of a bear market and they shamelessly perform a high speed U-turn. Even more amusing is the sudden discovery by the CFTC, which bent over backwards to convince Congress that oil prices were set by fundamentals, that they underestimated the share of trading accounted for by financial speculators. You don't say. If a canny operator like Boone Pickens has lost $2bn in a month on oil futures, the odds of another Amaranth Advisors style blowup are worryingly high over coming weeks ...

We have several tier-1 firms out positive on Monsanto (NYSE:MON) this AM:- Merrill Lynch is raising their tgt to $165 from $155 (Reit Buy) noting that at its recent investor field event Monsanto indicated that fiscal 2009 biotech trait price increases will be above earlier expectations, particularly for triple stacked corn up 33% on average from 2008 versus June guidance of a 20% increase. MLCO's proprietary review of Monsanto’s just-issued price lists indicate that the trait increase approaches 50% for the premium product (VT triple) in the high-yield, high-rootworm pressure areas, but is roughly flat in lower-yielding, low rootworm pressure areas, which they believe will drive penetration rates. Second generation Roundup-tolerant soybeans will be priced $20/acre above first generation versus original expectations of $15. The first generation product will see a seed and trait increase of ~$12/acre, which will be largely offset by higher production costs.Firm ...

There’s nothing slated on the economic calendar for today that will move stocks and with the earnings season winding down, the only two noteworthy companies that are reporting earnings, are Lowes (LOW) and Trina Solar (TSL). So the markets will have to look for other drivers.

We expect oil to be a major factor and we are looking for some near term bounce in the price of crude oil, which may results in stocks trading down. Even if oil does end up dramatically lower in the next three to six months, the fact of the matter is, it won’t go down in a straight line. So look for that bounce and look for oil related stocks to move up nicely in the short term, on an up move in crude oil prices.

Some of the oil related stocks that we like based on a very near term bounce in oil prices

...

1. SunPower

a. Merrill Lynch Analyst Mark Heller says that recent deals with PG&E  and FPL Group suggest SunPower is making significant inroads into the U.S. utility market.

b. SunPower’s sales channels and geographic diversification place it at a competitive advantage relative to other c-Si PV (photovoltaic) vendors.

c. SunPower announced one of the largest single utility scale contracts in history; it will install 250MW of PV solar at a California plant using its tracking system technology, and the contract could be worth $1 billion to $1.5 billion.

c. $100 price target on the shares

Track Mark’s pick at:

http://trackthepros.com/categories.php?category_id=1495

a. Citigroup raises Analyst Deborah Weinswig says Kohl’s second-quarter EPS of 77 cents were well above her estimate and the Street consensus.

b. impressed by the company’s ability to report better-than-expected gross margin expansion in this environment.

c. company expects sales to increase sequentially throughout the second half of fiscal 2009 (Jan.), and raised its fiscal

...

08/08/08 The long-awaited Summer FINANCIAL Olympic Games has begun. Hosted by the August 2008 Elliott Wave Financial Forecast, this event showcases the world’s leading economic athletes as they compete in the race toward opportunity. Here are just a few of the event’s most show-stopping details:Diving into investment pools: The July 2006 Elliott Wave Financial Forecast warned against big banks diving headfirst into Collaterized Debt Obligations -- and wrote: “Banks will find themselves with a shared interest in broken down pools of defaulted mortgages and or other ‘synthetic’ CDO’s which will not be worth the paper they’re written on.” On July 28, 2008 Merrill Lynch joined the long line of battered, bulge-bracket firms by writing down 75% of its CDOs. Now, our analysts reveal what kind of “splash” asset-price deflation will make on the overall economy. Synchronized Stock-Market Swimming: The Dow ...

Merrill Lynch is out very positive on Research in Motion (NASDAQ:RIMM) reiterating their Buy rating and $170 PO on RIM, heading into a seasonally strong Sep-Dec period which also coincides with the contract renewal/device upgrade timeframe for the older Blackberry 8700 and Blackberry Pearl customers. Firm believes street expectations are low – especially for the November quarter that could feature 2 to 3 new product launches with multiple global carriers and couldbe a blow-out quarter for RIM. Valuation remains compelling at 26x CY09EPE, relative to expectations for 35%+ annual EPS growth rate for next 3-5 years.Currently consensus estimates are for RIM’s shipments to grow from 6.1mn units in F2Q09 (Aug) to ~7mn units in F3Q09 (Nov). This QoQ growth of ~0.9mn units is the same as last year’s growth in the same period, which seems extremely conservative as RIM could launch 3-4 new platforms (**) within F3Q09, AND ...

By Claus Vistesen Copenhagen

[Update: Brad Setser clarifies, in the comment section, his view on Sender's FT piece referenced below]

THE last week (or was that year?) has certainly been something of a ride hasn't? In fact, I thought it would be apt to reproduce this picture by the brilliant KAL who normally spices up the Economist with his imagery that lay serious claim to the adage that a picture tells more than a thousand words. This particular specimen and the ensuing headline were on the front cover in October 1997 when markets also took investors and observers for a roller-coaster ride. I think it is quite fitting in describing the feeling many a trader and market participant must have at the moment.

Even though it could only seem as a few days ago that the credit turmoil went global

...