Daily Market Commentary for June 4, 2012

The Paycheck Fairness Act - which seeks to shrink the pay gap between men and women - got a boost from President Obama on Monday when he urged Congress to pass the bill on a conference call with supporters. (read more at Millennium-Traders.Com)
http://www.millennium-traders.com/news/newscommentary.aspx

U.S. factories orders for goods produced decreased 0.6% in April, the Commerce Department reported Monday. Factory orders were revised lower by 2.1% in March, down from a prior estimate of a 1.5% decline. Orders for durable goods which is for products meant to last at least three years, remained flat during April and orders for nondurable goods moved lower by 1.1%.

According to a monthly labor-market report released Monday by the Conference Board, a gauge of employment trends rose in May, signaling that jobs growth may not slow further in coming months. The private research group reported its employment-trends index, which is designed to forecast turning points in employment, increased 0.29 % in May from the prior month. "Employers have been very cautious in hiring in the past two months, but at the moment, economic activity in the U.S. is just strong enough to require a modestly growing workforce," said Gad Levanon, macroeconomic research director at the Conference Board. Versus previous year, the index is 7.6% higher. The employment-trends index is made up of eight labor-market indicators, five of which made positive contributions in May, led by the percentage of firms with positions they are not able to fill right now.

The trustee leading the bankruptcy case for MF Global Holdings Ltd. (MFGLQ), James Giddens, is accusing the firm and its top management of a 'breach of fiduciary duty and negligence'. Giddens describes a brokerage with a 'lack of sufficient monitoring and systems' As refreshing and honest as Giddens’s claims are, the threat of a lawsuit won’t assuage investors burned by what seems to have been clear wrongdoing at the firm. To date, regulators, including the Commodities Futures Trading Commission and the Securities and Exchange Commission, continue to move slowly against MF Global and Corzine. The CFTC sued the clearing arm of MF Global in March. The SEC and CFTC have hinted that more 'enforcement' actions may be coming. Key point could be MF Global’s statement that it had strong liquidity just before it went bankrupt as it had $1.3 billion in book value but a $41 billion balance sheet. Like so many MF Global claims, that liquidity assertion looks patently false in the aftermath. Unless Corzine and his team are held accountable, no firm need view itself as required to make truthful claims.

On Tuesday, the G-7 finance ministers and central bank governors will hold a conference call on the European debt crisis, per a spokeswoman for Canadian Finance Minister Jim Flaherty on Monday. "I've been having discussions and I will have more discussions tomorrow morning and subsequently with my G-7 colleagues," Flaherty told reporters. "Those discussions also take place with some of the non-European members of the G20 ... who are concerned around the world outside of the euro zone with the potential consequences of a crisis in the euro zone, particularly a banking crisis," he added. A spokeswoman for the U.S. Treasury Department declined comment on the statement from Flaherty's office.

Immunogen Inc. (IMGN:NASDAQ said its investigational treatment for non-Hodgkin's lymphoma and other B-cell malignancies showed improved safety and performance under a modified dosing schedule. At the annual meeting of the American Society of Clinical Oncology, the company reported the data from an extension of a Phase I study. The data established the dosing schedule for clinical trials with partner Sanofi-Aventis SA (SNY:NYSE). As part of a broader collaboration, the compound--SAR3419--was developed by Immunogen and licensed to Sanofi. Immunogen technology is designed to deliver a cancer-fighting drug directly to the cancer cell, providing a stronger punch while limiting side-effects often associated with chemotherapy. The company reported that patients that were administered the treatment weekly for four weeks and then every two weeks for another four doses showed more improvement than patients dosed weekly. "We believe the findings reported today support that SAR3419 has the potential to become an important new therapy for key B-cell malignancies," said ImmunoGen President and Chief Executive Daniel Junius said. "These findings also add to the growing body of clinical data supporting that the utility of our TAP technology--and the depth of our product opportunities--extend well beyond any one compound to multiple types of cancers, antibodies, and product designs."


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Daily Market Commentary for May 17, 2012

And the whoopla of Facebook continues... if Facebook (FB:Nasdaq) prices at $41 a share or more, it will raise $19.861 billion and beat the previous record set by Visa (V:NYSE) which raised $19.65 billion when it went public March 18, 2008.
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http://www.millennium-traders.com/news/newscommentary.aspx


The U.S. Labor Department reported Thursday that the number of Americans who filed requests for jobless benefits was unchanged last week at 370,000. Jobless claims from two weeks ago were revised up to 370,000 from initial reading 367,000. The average number of new jobless claims over the past four weeks fell by 4,750 to 375,000. In week ended May 5, continuing jobless claims increased by 18,000 to a seasonally adjusted 3.27 million, with continuing claims reported with a one-week lag. Nearly 6.27 million people received some type of state or federal benefit in week ended April 28, down 149,759 from the prior week.

The Conference Board said Thursday that the economy is 'still struggling to gain momentum', though long-term trends remain expansionary as it reported that its index of leading economic indicators fell 0.1% in April striking the first decline since September. "Growth is slow, but choppy, and consumers, executives and investors are looking for more progress," said Ken Goldstein, economist at the Conference Board, a private research group. The LEI is a weighted gauge of 10 indicators that are designed to signal business cycle peaks and troughs. Among the 10 indicators that make up the LEI, led by building permits, four made negative contributions in April. The LEI rose 1.8% in the six months through April, compared with a gain of 0.1% in the prior six months.

The Federal Reserve Bank of Philadelphia reported Thursday that business conditions at manufacturing firms in the Philadelphia region worsened in May. The Philly Fed index fell to -5.8 from 8.5 in April, well below expectations. The new-orders index dropped to -1.2 from 2.7 in April and the employment index which is a gauge of hiring expectations, turned negative. Readings below zero indicate that more companies are contracting instead of expanding.

Wal-Mart Stores Inc. (WMT:NYSE) on Thursday reported its Q1 profit increased 10% to $3.74 billion or $1.09 a share, from $3.4 billion or 97 cents a share in the year-ago period. Total revenue rose 8.5% to $113 billion and sales increased 8.6% to $112.3 billion. Wal-Mart said it expects Q2 profit of $1.13 to $1.18 a share.

GameStop Corp. (GME:NYSE) reported Thursday its Q1 profit fell to $72.5 million or 54 cents a share, from $80.4 million or 56 cents a share, in the year-ago period. Sales fell to $2 billion from $2.3 billion and GameStop expects Q2 earnings of 10 cents to 18 cents a share.

In the run-up to this weekend's NATO summit in Chicago, 12 people have been arrested at protests and demonstrations, according to Chicago Police Superintendent Garry McCarthy. Of the dozen people arrested, 10 were taken into police custody in "voluntary" fashion, McCarthy said in remarks broadcast by the public-television station WTTW. One man from Los Angeles, was charged with a felony for physically attacking a police officer. Protest events that have taken place so far have been small relative to those scheduled for Friday and thereafter including, demonstrations in which 'black bloc' protesters are expected to be involved. The first full-scale NATO gathering in a U.S. city other than Washington, the main meetings at the summit are slated for Sunday and Monday at the McCormick Place convention center.


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Daily Market Commentary for April 17, 2012

Futures market provided a nice respite of consistent trading ranges for Futures traders Tuesday, especially the emini futures - YM, NQ and ES.
(read more at Millennium-Traders.Com)
http://www.millennium-traders.com/news/newscommentary.aspx

CME Group, the world's leading and most diverse derivatives exchange, released the following statement Tuesday regarding the Administration's proposal to increase oversight of energy markets: "CME Group agrees that manipulation is detrimental to markets and should be vigorously policed, as is currently being done. However, we caution against mistakenly categorizing speculation as a form of manipulation. Market makers and speculators, serve an important function in the market – allowing energy users and producers to manage oil price risk and providing the necessary liquidity to ensure effective price discovery and more efficient transfer of price risk. The Administration's proposal to use margin requirements to control cash prices is misplaced. The Administration must recognize that exchanges, as the operators of regulated energy markets, are in the best position to monitor volatility and manage margin requirements. Margins are based on volatility and cannot be used to manage cash prices. Rather, they serve as important tools for CME Group and other exchanges to use in managing the financial risks of the clearing houses we operate, which are a key component of the risk management policies being put into effect under Dodd Frank. Additionally, taking away from exchanges the ability to manage margins would make the markets less efficient, less tied to fundamentals and would create the potential to push the hedgers out of the market, which would make oil more expensive for all consumers."

Citing improved financial conditions and unwinding of the financial crisis on Tuesday, the International Monetary Fund raised its forecast for global economic growth in 2012 and 2013, but warned that the recovery remains fragile. In an update of its world economic outlook, the Washington-based institution said it expects global output to grow by 3.5% in 2012, up from a January forecast of 3.3%. Global output is expected to expand 4.1% in 2013, up from the previous forecast of 3.9%. The only major country that had its 2012 growth outlook cut by the IMF was Spain with expectations of a decline of 1.8% from the previous forecast of a 1.6% drop. After a mild recovery in early and mid-2011, the Bank of Spain said earlier Tuesday that the Spanish economy is back in recession. The IMF said the European Central bank has some room to further lower interest rates as inflation is expected to fall below the central bank's 2% inflation target.

The Commerce Department reported Tuesday that builders began construction on new U.S. homes at a slower pace in March, but permits jumped to the highest level since September 2008. Housing starts fell 5.8% last month to an annual rate of 654,000 from a slightly revised 694,000 in February with permits increasing 4.5% to 747,000 in March from a revised 715,000 in February. The move is mainly because of a spike in requests to construct multi-dwelling buildings with five units or more. With permits for new construction viewed as a gauge of future demand, the latest increase suggests builders are becoming more optimistic. As builders continue to face pressure from the flood of foreclosed homes on the market, permits for single-family homes fell 3.5% to 462,000 during March from 479,000 in the prior month. Single-family homes account for about three-quarters of the market for new housing. Over the past 12 months, housing starts are up 10.3%. In the South, new home construction sank nearly 16% accounting for the entire drop last month. In the North, housing starts surged higher by nearly 33%. In the Midwest , housing starts moved up slightly by 1% while starts remain unchanged in the West. Over the past 12 months, housing starts are higher by 10.3%.

The Federal Reserve reported Tuesday that industrial production remained unchanged for the second consecutive month, in March. While utilities output gained 1.5%, manufacturing output slipped 0.2% while mining output rose 0.2%. Capacity utilization ticked lower to 78.6% from an upwardly revised 78.7%. Industrial production rose at a annualized rate of 5.4% during Q1 2012.

A challenging lawsuit was filed Tuesday by the mutual fund lobby group, the Investment Company Institute along with the U.S. Chamber of Commerce against the Commodity Futures Trading Commission rule requiring mutual fund managers to come under the agency's oversight. The pair argue that the rule 'layers' the CFTC's regulatory regime onto one that already exists at the Securities and Exchange Commission. Additionally, the pair say the CFTC failed to weigh the costs or benefits of the rule and that it will also impose 'redundant regulations' on exchange-traded funds.


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Daily Market Commentary for April 11, 2012

The U.S. Justice Department filed an antitrust lawsuit accusing Apple Inc. as well as, five major publishers, of conspiring to fix the prices of e-books. (read more at Millennium-Traders.Com)
http://www.millennium-traders.com/news/newscommentary.aspx

The Federal Reserve said on Wednesday in the Feds Beige Book, that the U.S. economy continued to grow at a 'modest to moderate pace' over the last month. The term is the same adjective used to describe the economy in the prior two reports. Every region covered by the Fed's 12 districts grew, ranging from 'modest' in the Cleveland and St. Louis regions to a 'faster pace' in the Kansas City area.

The U.S. Treasury Department reported Wednesday that the U.S. government ran a budget deficit of $198 billion in March. The March figure pushed the deficit up to $779 billion for the first six months of fiscal 2012. The deficit for the first half of fiscal 2012 is lower than the one recorded in the same period in 2011, but the government remains on track to post another deficit of more than $1 trillion for the entire 2012 fiscal year

Boston Federal Reserve Bank President Eric Rosengren on Wednesday said prime money-market funds, which make up a big chunk of the $2.7 trillion industry, have structural problems that could amplify a future financial crisis if further reforms are not adopted. "Some prime funds have taken on significant credit risk - at times incurring losses that necessitated the support of the parent or sponsor of the fund, and in one case substantial government support," said Rosengren. The Securities and Exchange Commission may soon propose new capital restrictions on money funds, coupled with limitations or fees on redemptions by consumers or other money fund purchasers. Rosengren added that with 'appropriately calibrated' capital and redemption policies. the incentive for investors to run would be greatly reduced. The move would reduce the risk that investors would not receive the full value of their redemptions, he added. Comments from Rosengren come after Fed chairman Ben Bernanke on Monday evening reiterated his concerns about money funds.

On Wednesday, Kansas City Fed President Esther George said the most important step in restoring market discipline to the financial system would be to eliminate too-big-to-fail policies, including taking advantage of a provision in the Gramm-Leach-Bliley Act that would force divestitures or termination of new activities within 180 days if a financial holding company isn't well managed or capitalized. George also said bank capital standards, in particular leverage requirements tied to equity capital, need to be strengthened as she fretted about the lengthy transition period of Basel III. Risk-based capital standards is a concern of George because banks are quick to arbitrage whatever standards there are and because it is hard to say risk weights have been accurate measures of risk. George supported the implementation of the Volcker Rule and added there may be more financial activities that are incompatible with public safety nets.

The U.S. Labor Department said Wednesday that the prices paid for goods imported into the U.S. climbed higher by 1.3% in March, mainly because of higher oil costs. Compared to a revised 0.1% decrease in February, import prices in February were originally reported up 0.4% and fuel costs surged higher by 4.3% as the price of oil soared. Excluding fuel prices, import prices rose by only 0.3% last month. The price of U.S.- made goods exported to other nations, rose 0.8% in March.

President Barack Obama on Wednesday touted the controversial and, in many quarters unpopular, 'Buffett rule' that would force the wealthiest Americans to pay taxes at the very least at the same rate as regular wage earners. In a twist aimed to needle conservative opposition, Obama said the principle was once supported by a 'wild-eyed socialist, tax-hiking, class warrior' named Ronald Reagan, who once said it was 'crazy' that loopholes allowed millionaires to avoid paying their share of taxes. Congress should approve the so-called Buffett Rule, President Barack Obama reiterated on Wednesday, keeping up a push for what he calls tax fairness. The rule, named after Berkshire Hathaway chairman Warren Buffett, would require millionaires to pay at least 30% of their income in taxes before charity. Speaking in Washington, Obama said a vote next week in Congress is an opportunity for lawmakers 'to stand up for the middle class and make the tax system fair'.

On Wednesday, Tim Fox, a judge in Arkansas, slapped Johnson & Johnson with a fine of more than $1.1 billion following a jury ruling that the company's Janssen subsidiary hid risks associated with Risperdal, an antipsychotic drug. Judge Fox found that Johnson & Johnson committed about 240,000 violations of the state's Medicaid fraud law, one for each Risperdal prescription issued to Medicaid patients over a 31/2-year period, with each violation carrying a $5,000 fine. Johnson & Johnson said it was 'disappointed' with the decision and plans to appeal.


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Daily Market Commentary for March 26, 2012

BATS Global Markets Inc.’s botched initial public offering Friday could be disastrous for the upstart electronic exchange.
(read more at Millennium-Traders.Com)
http://www.millennium-traders.com/news/newscommentary.aspx


National Association of Realtors reported pending home sales dipped slightly in February as its pending home sales index fell to 96.5% during March from a revised 97.0% in January, although it's still 9.2 percentage points above its year-ago level. "The spring home buying season looks bright because of an elevated level of contract offers so far this year. If activity is sustained near present levels, existing-home sales will see their best performance in five years," said Lawrence Yun, NAR's chief economist. By region pending home sales: rose 6.5%% in the Midwest, dropped 3.0% in the South, fell 2.6% in the West and fell 0.6% in the Northeast. A sale is listed as pending when the contract has been signed but the transaction has not closed while not all contracts lead to closings.

Federal Reserve Chairman Ben Bernanke said Monday improvement in the nation’s labor market since last fall may only be a reversal of large layoffs that hit during the recession, and further improvement may depend on faster economic growth. “We cannot yet be sure that the recent pace of improvement in the labor market will be sustained,” said Bernanke in a speech to the National Association of Business Economics. Fed Boss said that weak demand is the primary factor behind the weak labor market, not structural issues like lack of employment skills in the workforce. “What will lead to more hiring and, consequently, further declines in unemployment? The short answer is more-rapid economic growth,” Bernanke said. Bernanke and his allies at the Fed have said they expect rates to remain near zero until late in 2014 and while the drop in the unemployment rate was good news, it seemed somewhat out of sync with the overall pace of growth.

On Monday, the Securities and Exchange Commission charged medical device firm Biomet Inc. with violations of the Foreign Corrupt Practices Act for bribing public doctors in Argentina, Brazil, and China. The SEC said the company continued to break the law for about a decade and was designed to win it more business. Biomet will pay more than $22 million in order to settle the charges. "Biomet's compliance and internal audit functions failed to stop the payments to doctors even after learning about the illegal practices," the SEC said. The SEC alleges that employees and managers at all levels were involved in the scheme, along with its distributors.


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