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Morning Notes For September 29th 2010 at Trader’s Narrative

Morning Notes For September 29th 2010

The following is a guest post by a buy-side analyst working in a US asset management firm. The author’s comments are in italics. I welcome your feedback in the comments:

  • Former President Jimmy Carter has been hospitalized in Cleveland, the Associated Press reports. Carter became ill while traveling to Cleveland on a commercial flight. – WP
  • For the fourth straight year, the majority of Americans say they have little or no trust in the mass media to report the news fully, accurately, and fairly — now 57%, a record high by one percentage point. Perceptions of media bias persist, with 48% saying the media are too liberal and 15% saying they are too conservative. – Gallup
  • The American Trucking Associations’ advance seasonally adjusted (SA) For-Hire Truck Tonnage Index fell 2.7 percent in August, which was the largest month-to-month decrease since March 2009. ATA Chief Economist Bob Costello said that August’s data highlights that the economy, while still growing, is slowing. “We fully anticipate sluggish economic growth for the remainder of this year and the latest tonnage numbers are reflecting that slowdown.” However, Costello believes that the trucking environment has changed dramatically. “While I’d much rather see better tonnage figures, motor carriers can now do better with small increases in demand since so much supply left the industry during the recession.” – American Trucking Association
  • ATA truck tonnage index Sep 2010

  • Will the ‘Brilliant Comrade’ Run North Korea? - Hours before a landmark Workers’ Party meeting in Pyongyang, North Korea’s leader, Kim Jong-Il, secured the promotions of his youngest son, Kim Jong-un, and sister, Kim Kyong-hui, as four-star generals of the People’s Army. The move supports the dominant theory that power will eventually transfer to the son. It remains to be seen if the transition will lead to a more collective leadership situation based on formal institutions within the Workers’ Party, a renewed cult of personality based on a supreme leader or a winner-takes-all battle for power. – Roubini Global Economics (RGE) – that is really, really, really bad news for about 22,665,345 people (CIA)
  • RGE Strategy Flash by David Nowakowski and Dayna Goodwin: Though there is truth to the conventional wisdom that “the U.S. needs to deleverage,” large-cap U.S. equities look remarkably good from a credit perspective. Earnings are robust, increasing already-high cash levels, and most credit metrics are improving and in line with their long-term averages. Debt rose at an unsustainable rate before 2008, especially in financials. – RGE – that is what we see also.
  • ECB 3-month auction demand less than expected (being viewed as a positive) - The ECB said it will lend banks 104 billion euros ($141 billion) for three months as some 225 billion euros of long-term loans mature tomorrow. – Bloomberg
  • Fed’s Lockhart says more Fed easing not a done deal; after the Tues WSJ article, latest sign of Fed officials trying to temper expectations; “There is growing sentiment that further accommodation through large asset purchases is coming….For me, at this moment it’s not a foregone conclusion that we need to go there.” – Reuters – from what I see, it appears the market is assuming another round of QE is a done deal. That alone is reason to be cautious.
  • Hedge funds and other speculators are adding to short positions in Chinese financial and materials companies that trade on U.S. exchanges. The short interest ratio of Chinese companies with American Depositary Receipts in these industries is almost twice as high as for their S&P 500 counterparts. – Bloomberg
  • materials financials short interest ratio Sep 2010.png
    Solid lines are Short Interest ratios in China, dotted lines are for S&P 500

  • Reds clinch NL Central…sending them to the post season for the first time in 15 years. –
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    One Response to “Morning Notes For September 29th 2010”  

    1. 1 Tom

      I have been away for a while. Would like to know if anyone can tell me by email if possible and also share here on the board what the Mutual Fund Industry Cash Ratio is right now. Heard Prechter a few days ago on CNBS say that it was at an all time low. Cannot find it on the Web and I used to check it once in a while and forgot where it can be looked up. Just want to verify what he said. Thanks

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