Tuesday's Brew - Oct 3
Enjoy your fresh morning coffee with our summary of the market outlook for the day and a medley of important information you should find useful today. Stock futures lack significant conviction in either direction across the board in pre-market activity, after small declines in the Dow, S&P 500 and NASDAQ to start Q4 yesterday.
Monday's ISM manufacturing data indicated growth had slowed to its weakest level in 16 months. In related news today, announced layoffs in September increased to 100,315 jobs, compared to 65,278 in August and 37,178 in July, according the Challenger, Gray & Christmas Inc., an employment consulting firm. We point blame toward U.S. auto industry weakness and the effects of restructuring at General Motors and Ford. The auto industry accounted for 33,745 job losses in September, 34% of total losses. Year-to-date, layoffs are actually 18% lower than the first nine months of '05. So, in our view manufacturing and layoffs are skewed by the effects of expensive oil, the poor competitive position of the auto industry and its efforts to revive itself.
We do not read broadly into the manufacturing data, and do not see an impact from housing and consumer spending yet. Home sales and construction figures suggested a less abrupt decline in the housing sector than many experts had foreseen. The index of pending home sales rose 4.3 percent in August, the first increase since May. However, we expect a housing impact on consumers is pending as well.
Crude oil prices extended their decline of yesterday today overseas, and are testing the $60 level. Talking heads are pointing toward near-term inventory strength as the cause, but we believe a significant factor is the unwinding of a great degree of speculation in energy investments. Merrill Lynch reacted to declining prices by cutting the energy sector to "underweight".
Chip producer Marvell Technology Group Ltd. (MVRL) is restating results due to faulty options grants, but more importantly, it warned its revenues for Q3 would likely be down approximately 10% from Q2. We would not read broadly into this or yesterday's Apple Computer downgrade.
Tuesday is light on economic news release and South Korea's market was closed. On tap for today, the big three auto makers will announce vehicle sales for September. Also, Kansas City Fed President Thomas Hoenig will speak about the "2006 National Economic Outlook" in New Mexico. We hope you enjoyed "Today's Morning Coffee" and wish you a good day. (disclosure)
Monday's ISM manufacturing data indicated growth had slowed to its weakest level in 16 months. In related news today, announced layoffs in September increased to 100,315 jobs, compared to 65,278 in August and 37,178 in July, according the Challenger, Gray & Christmas Inc., an employment consulting firm. We point blame toward U.S. auto industry weakness and the effects of restructuring at General Motors and Ford. The auto industry accounted for 33,745 job losses in September, 34% of total losses. Year-to-date, layoffs are actually 18% lower than the first nine months of '05. So, in our view manufacturing and layoffs are skewed by the effects of expensive oil, the poor competitive position of the auto industry and its efforts to revive itself.
We do not read broadly into the manufacturing data, and do not see an impact from housing and consumer spending yet. Home sales and construction figures suggested a less abrupt decline in the housing sector than many experts had foreseen. The index of pending home sales rose 4.3 percent in August, the first increase since May. However, we expect a housing impact on consumers is pending as well.
Crude oil prices extended their decline of yesterday today overseas, and are testing the $60 level. Talking heads are pointing toward near-term inventory strength as the cause, but we believe a significant factor is the unwinding of a great degree of speculation in energy investments. Merrill Lynch reacted to declining prices by cutting the energy sector to "underweight".
Chip producer Marvell Technology Group Ltd. (MVRL) is restating results due to faulty options grants, but more importantly, it warned its revenues for Q3 would likely be down approximately 10% from Q2. We would not read broadly into this or yesterday's Apple Computer downgrade.
Tuesday is light on economic news release and South Korea's market was closed. On tap for today, the big three auto makers will announce vehicle sales for September. Also, Kansas City Fed President Thomas Hoenig will speak about the "2006 National Economic Outlook" in New Mexico. We hope you enjoyed "Today's Morning Coffee" and wish you a good day. (disclosure)
posted by The Greek | 8:19 AM
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