US - Market Direction 01 (May 08 - Jul 08)

[-dol-]

k: Everyday is a bull market with your powerful images.

[kennynah]

dol :

there was, however, once when it felt like this





anyways, i oso wish for this rally to reengage...sian lah...every day see up lorry scenarios...

wish u huat huat !!!

[winston]

Bear Market Rally May End as Earnings Forecasts Dim
By Michael Tsang and Eric Martin

July 28 (Bloomberg) -- The predictions among Wall Street analysts that corporate earnings will be the catalyst for a bull market this year are losing credibility with the cascade of U.S. companies making bearish forecasts.

Black & Decker Corp., the largest maker of power tools, cut its 2008 estimate July 25, citing a slump in U.S. homebuilding that is lasting longer than analysts expected. Kimberly-Clark Corp. failed to anticipate pulp and oil costs that were twice its original projection. Of the 63 Standard & Poor's 500 Index companies that provided outlooks this quarter, 30 said profits will fall, data compiled by Bloomberg show.

The company announcements conflict with the advice investors are getting from Lehman Brothers Holdings Inc., JPMorgan Chase & Co. and UBS AG. The S&P 500 will rise 21 percent from its July 15 low to 1,473 this year, according to the average of nine strategists tracked by Bloomberg. While the index rose 3.5 percent since July 15, gains have proved short- lived 10 times during the four U.S. bear markets since 1973.

``It makes sense to me to get a rally off of the very depressed levels, but there are still these clouds overhanging the market,'' said Nick Sargen, 63, who oversees $30 billion as chief investment officer of Fort Washington Investment Advisors in Cincinnati. ``It smacks of a bear-market rally.''

Peabody, Novellus

The forecasts range from an almost eightfold gain at Peabody Energy Corp., the biggest U.S. coal producer, to a 98 percent drop at Novellus Systems Inc., a maker of equipment that turns silicon wafers into computer chips.

Black & Decker, a barometer of the U.S. housing market because its drills and saws are used in construction, said it may earn as little as $1.30 per share this quarter, down 18 percent from the year-earlier period. A decline would be the sixth in a row for the Towson, Maryland, toolmaker, the longest since the last bear market in 2002.

U.S. foreclosure filings more than doubled in the second quarter from a year earlier, according to RealtyTrac Inc., an Irvine, California-based provider of real estate data.

Novellus, based in San Jose, California, said it may earn as little as a penny this quarter. Chipmakers are putting off orders for machinery as an industry glut lowered the price of computer memory and flash chips used in phones and music players.

iPods, Huggies

Apple Inc., whose Macintosh computers and iPod music players boosted quarterly net income by at least 10 percent for five years, expects third-quarter profit to fall by 1 percent, hurt in part by lower overseas growth. Analysts said the Cupertino, California-based company would report a per-share gain of 24 percent.

Kimberly-Clark, the maker of Scott paper towels, Huggies diapers and Kleenex tissues, predicted per-share earnings of as little as 98 cents, or 8.2 percent less than a year earlier, the biggest decline for the Dallas-based company since the fourth quarter of 2001. Raw-material costs this year will probably increase to $900 million, twice its previous estimate.

The CRB Index, while down 11 percent in July, has climbed 15 this year.

The rise in commodity prices means higher profits for St. Louis-based Peabody. The company said profits may climb to 92 cents a share this quarter from 12 cents a year ago. Higher demand for coal in Asia and Eastern Europe, combined with production declines in China, Australia and South Africa, boosted prices to records this year.

Analysts Diverge

The company announcements are diverging from Wall Street, where the average estimates from almost 1,800 analysts surveyed by Bloomberg show earnings among S&P 500 companies may increase 7.3 percent in the third quarter and 48 percent in the fourth.

While lowering his prediction, Ian Scott, the London-based global strategist for Lehman Brothers Holdings Inc., said last week he still expects the S&P 500 to advance to 1,450 by year- end, a 19 percent rise from the July low, because stock valuations are cheap. Thomas Lee, the chief U.S. equity strategist at JPMorgan, has the same forecast.

David Bianco, 33, the top stock strategist at UBS in New York, expects the index to reach at least 1,600, a gain of 32 percent from its low. Binky Chadha, 48, chief U.S. equity strategist at Deutsche Bank AG in New York, predicts the index will rally 36 percent as credit losses abate.

The S&P 500, which tumbled 22 percent from its October peak, rose over the past two weeks, led by a 15 percent gain in shares of financial companies.

Fannie, Freddie

Stocks started to advance July 15 after Treasury Secretary Henry Paulson threw the weight of the government behind Fannie Mae and Freddie Mac, the largest U.S. mortgage-finance providers, and the Securities and Exchange Commission said it would limit bets on share declines in the biggest banks and brokerages.

The gains continued as Citigroup Inc., JPMorgan and Bank of America Corp., the biggest U.S. banks, reported second-quarter earnings that beat analysts' estimates. Citigroup and JPMorgan, located in New York, gained 20 percent and 21 percent, respectively. Charlotte, North Carolina-based Bank of America soared 52 percent.

William Stone, the chief investment strategist at PNC Wealth Management, which oversees $65 billion in Philadelphia, says the rally in financial stocks is a sign U.S. equities are on the verge of a second-half comeback.

`The Real Thing'

``We're hopeful this may be the real thing,'' said Stone, 39. ``You're seeing a glimmer of hope within the financials. People are finally willing to give them the benefit of the doubt.''

History suggests the optimism may be misplaced. In the four bear markets since 1973, rallies of 10 percent or more lasted an average of 54 days for a gain of 14.5 percent, according to data compiled by Birinyi Associates Inc., the Westport, Connecticut- based research and money management firm founded by Laszlo Birinyi, and Bespoke Investment Group LLC, a Harrison, New York- based firm that manages money for wealthy investors and provides financial research to institutions.

In every case, the S&P 500 fell again, dropping an average of 21.5 percent over 114 days. The same pattern this time would send the S&P 500 to a peak in September before giving way to a slump that would continue until the start of 2009. The S&P 500 would close 2008 at 1,091.61, a 30 percent decline from its record high of 1,565.15 on Oct. 9.

Today, the S&P 500 fell 1.9 percent to 1,234.37 as financial shares tumbled 4.6 percent.

Brian Barish, 40, whose $1.65 billion Cambiar Opportunity Fund has beaten 92 percent of 683 similar funds this year, says stocks will drop as inflation, especially for raw materials, erodes earnings. Cambiar Investors LLC is based in Denver.

Producer prices, which measure companies' input costs, surged by 9.2 percent last month to the highest since June 1981.

``It would not surprise me to see this latest rally prove to be pretty short,'' he said.

[kennynah]

true lah...must be cautious... afterall, trend is unclear still....

pawnshop always open for us to raise capital later when the coastline is clearer ...meanwhile, kichi kichi positons first lah...

[kennynah]

always very nice to see Green Futures

[LenaHuat]

Time to be optimistic 2nite.

[HengHeng]

agrees .. i think i say liaoz . until olympics at least until 7th august i'm bullish .. lol .. maybe then i will start to accumulate some insurance just in case.

[kennynah]

c'mon.....hold up hold up.....

((edited...after GR's post....add picture to balance ying and yang ))

...........

and now....sui liao....



huat huat all the way....

[blid2def]

You need Yoda lah. This one got fire will burn market.

[kennynah]

ok....i reserve Yoda for some critical times...meanwhile, his kah kngia more than powderful enough to hold the mkt indexes up