Archive - Feb 2010 - Story

The January Manufacturing ISM follows on the heels of the red-hot GDP number, and blows out all expectations, coming in at 58.4, higher than even the higher end of the range, which was between 53.5 and 58.0. As is well known, a reading above 50 indicates expansion. December Mfg ISM was revised down from 55.9 to 54.9 due to a index rebalancing. Every index in the January ISM report came out at a better reading than December.

The wild west days of social networking as a platform for stock tips and under the radar information exchange may be coming to an end. Or at least FINRA is finally realizing that there is more to stock manipulation than meets the eye, and in a radical change in policy (which up to now had been non-existent on the matter), FINRA will start policing and pouring through tweets, after announcing that "securities firms must keep copies of all business-related communications on social networks, whether those communications are official or from associated persons." Yet indicating just how woefully behind the times the SEC's much-feebler cousin is, FINRA has admitted that "the technology to grab those messages might not exist." The reason why FINRA should be concerned, as Securities Industry News highlights is that "Every Wall Street company – except possibly the smallest ones – have employees using social networks, creating potential liability problems for their employers, for whom they might not be speaking. However, many firms are also actively using these new platforms themselves, to reach out to customers, the general public, and potential new recruits."

RANsquawk 1st February US Morning Briefing - Stocks, Bonds, FX etc.

As we highlighted previously, any investors who had gone long the Brazilian Real (BRL) in January, funding this position with either USD or JPY shorts, had their face ripped off after a loss of anywhere between 7 and 9% in one month (don't annualize that). But instead of covering, here is Goldman with advice on why Einstein's definition of idiocy is for chums. The firm has just come out with a trading call (remember all that huddle stuff?) telling investors to go short $/BRL "on better macro data and hawkish BACEN February 1, 2010." Who knows, maybe mean reversion will work this month. Goldman's target: 1.75 and a stop above 1.94.

In a titanic call that the puking Charles Schwab E-Trade baby could probably make with its eyes closed, JP Morgan comes out this morning with the conclusion that investors should buy the market unless things turn bad. Isn't that kinda analogous to an analyst saying if the Dow is at 36,000 on December 31, you should have bought. And vice versa. At least JPM analysts Mislav Matejka and Emmanuel Cau admit that investor confidence is slipping. So in an attempt to prop it up, they present the following puff piece with content which everybody who has the pleasure of watching CNBC now and then, is all too aware of.

• A collosal failure of governance: the reappointment of Ben Bernanke (Baseline Scenario)
• As expected, Swiss National Bank interevened in CHF on Friday (FT)
• Following up on Euro-decline observations from the weekend, Euro proving no reserve asset as central banks shift (Bloomberg)
• $3.8 trillion budget to be released accounts for another $100 billion stimulus, proposes new record deficit (Bloomberg, Reuters, WSJ)
• Subpoena the Fed (Cumberland)
• Goldman monopolizing market flow information? No way... Front-running the markets and the sickness unto death (Jesse)
• A growing share of Americans' income comes from the government (Financial Armageddon)

• Annual inflation rate in 16 countries that use the euro rose to an 11-month high of 1%.
• Asian stocks fall as China manufacturing reports spur tightening concerns.
• Australian borrowing for home- buying fell to a five-year low last month on higher lending rates.
• China’s manufacturing expanded at second-fastest pace since 2008 in Jan, helped by exports.
• China's stocks slide to four-month low on tightening concern.
• Dubai world silence on debt standstill evaporates bailout rally.
• Euro proving no reserve alternative as Central Banks lead shift in assets.
• European stock markets started February on a negative note following Friday's US decline.

January 2010 is now over and we have a tightening PBOC, a Greek sovereign debt crisis, a rallying USD, declining risk assets, and risk aversion. Here's some macro insight filtered through some technical analysis for timing precision from your favorite college undergrad market analyst.

RANsquawk 1st February Morning Briefing - Stocks, Bonds, FX etc.