Budget & Trade Deficit; Initial Claims; Observations 08/10/06

In our top story tonight, the leader of al-Qaida in Iraq, Abu Musab al-Zarqawi, is STILL dead and someone else has taken his place.

U.K and U.S. raise terror alerts and airline threat to highest level after plot to blow up to 9 US bound airliners with liquid explosives in carry on luggage was purportedly foiled overnight.

21 alledgedly linked to Al-Qaeda were arrested and thousands of travelers left stranded with major flight cancellations.

Oil dropped to $74 and select airline stocks tanked on the anticipation that less people will be traveling and petroleum demand should pull back. Carry on luggage has been banned in both the US & UK.

Yesterday, sub prime lender Countrywide Financial -8.6% after reporting that loan fundings plunged in July. Homebuilder Toll Brothers -6.8% after cutting its Q4 delivery outlook. Housing is getting cooler.

$10B 30 year note auction: a weak bid to cover 1.77, and disappointing indirect bid 32.8%, high yield 5.08%.

Initial Claims +7K to 319K
Full Report

Inside the number: Number of people collecting benefits +48K from the preceding week's revised level of 2,432M.

July Treasury Budget -$33.2B vs prior YOY -$53.4B

Inside the number: Surplus of $20.5B; YTD Interest payments +14.6%; for the 1st 10 months of the fiscal year the budget deficit narrowed from $302.8B last year to $239.7B; OMB projects deficit to be 2.3% of GDP.

June Trade Deficit -$64.5B vs prior -$63.8B
Full Report

Inside the number: A large upward revision in May number caused June to narrow from expected.

Exports of goods +3% as the U.S. exported a record amount of agricultural products, industrial supplies and capital goods.

Imports of goods +1.2% as the U.S. imported a record amount of consumer goods and June imports of autos and auto parts and petroleum products were the 2nd highest on record.

Petroleum deficit $24.7B, 2nd highest on record. The U.S. trade deficit with China $19.7B, 2nd highest on record.

Today's anti terrorist rally was shortlived. The quarterly refinancing is over and options expiration is next week along with the CPI & PPI. The market is in stasis and somethings gotta give soon.
.
Keep it tween da ditches, we take it day by day and keep our eyes peeled to the sky, because it could be a name brand that pancakes us. Just my opinion, I could be wrong, this is The Nattering Naybob and your NOT!!!

Comments