Market briefing---Bob (fast)
NYSE---Deb (fast)
Currency:
Barclays Capital---Englander, Steven--Chief Forex Strategist
guidance for 2003 and 2004 after their stock was under heavy pressure not only yesterday but they saw pressure again in today’s session. one of the things that countrywide financial is talking about, though, that seasonally, this is not a great time of the year for the real estate markets, but mortgage companies, that was one of the headline news stories in the session today. they were falling once again. after the fed, what we heard from the fed yesterday, we’re expecting the fed to be increasing rates somewhere down the road. the indication now is the middle of next year. as we look at those increasing rates, that is a concern as mortgage applications and the mortgage bankers association saying today that they fell to their lowest level in more than a year and that leads us into home builders, some of the worst performers, homebuilders giving back as mortgage lenders were lower, as well. that leads us into retail stocks . some of the home improvement retail stocks , some of the worst performers. home depot now down for seven days in a row. if you have people that are refinancing less, they have less money to do home improvements. also credit card companies lower in today’s session. we’ve been seeing that, as well, over the past few days, along with some of the mortgage companies. credit card companies, if you have people spending less at retail stores, maybe the credit card companies may not have their earnings up to snuff, either. back to you in the studio.
>> thank you, deborah kostroun. general motors’ shares trading at their highest level in more than 15 months after the company said it may eliminate its pension deficit by year’s end in an upgrade yesterday by goldman sachs. g.m. plans to rede release details on its pension funds on friday. >> the investment community is growing more optimistic about g.m.’s pension costs and auto sales now that the world’s largest auto maker is getting a handle on pension investment. the argus research analyst kevin tynan says during friday’s conference call, investors will learn whether the pension increases will help g.m. to make money 5.
>4.>> g.m. has made strides in addressing the underfunded status and that money can go into other parts of the business.
>> u.b.s.’s analyst says it’s important to know what g.m. has done with the $13.5 billion it raised mid year and whether or not it changed the way it manages its pension money. g.m.’s pension fund has gone from having the biggest deficit last year to possibly being fully funded by the end of this year. goldman sachs’s analyst writes that the financial markets have probably bailed out g.m. more than investors think. another fund manager said he started buying g.m. stock last year when the pension problems knocked the stock down to the mid 30’s. izenbarth says he’s holding his position, believing the stock will gain at least 12 more stocks . today, tynan at argus research raised his ratinting at g.m. from buy to sell and says you can’t expect great returns immediately given the concerns. he says says the risk is now on the automotive side, facing tough foreign competition.
>> g.m. has set market share goals which i don’t think they will attain for the year so that challenge is there. their numbers were good in the third quarter but as a bank. there is still concern on the automotive side and the automotive operations.
>> that said, though, tynan believes g.m. is on the right road by concentrating on product development such as revitaling the the cadillac and reintroduction of the pontiac g.t.o., i’m sure you remember that car.
>> indeed.let’s get to the numbers as they finished on this wednesday afternoon, the dow jones industrial average finished down about 1.5 points for the day to 9921. on the close. the s&p 500 down a humble one point, down to 1059. and the nasdaq down a little over three points at 1904 on the day. volume on the nyse -- the dollar strengthened today, unlike the general trend. those changes are as of seven minutes ago, but the main thing to look at is the yen, 108.46 yen per dollar and the euro at $1.22, still a high euro against the dollar. japan sold its currency to protect exports, that part of the currency story today. the bank of japan has sold record amounts of yen this year. a trader at a bank that deals with the b.o.j. says the bank bought dollars in london. joining us to discuss the day’s markets and foreign exchange is steve englander, chief foreign exchange strategist at barclays capital joining me from new york. thank you for being on the program. the newspaper in japan reports the bank of japan sold as much as $1 trillion yen today, that would be over $9 billion. what do you make of the move?
>> it spooked the market a little bit that even after they appeared to be out of the market, you didn’t see the dollar-yen fall back the way it had after previous, more tepid kinds of interventions. the other thing i think that’s really important is that given how much they appear to have spent, the fact that we’re only one big figure higher and a bit of change higher than the dollar-yen’s lows, suggests there is still a lot of pressure for the yen to go down and if the bank of japan does withdraw, the yen will strengthen substantially.
>> was there a big impact from yesterday’s fed statement on the dollar?
>> not really. i think that, obviously, when the bond market backed up because of the fed indication that may be the tide was turning although they gave no sense of timing, markets were a little nervous and typically what you find is that if bond yields back up not because the economy is showing strength or because the equity market is showing strength but because of bond-specific or fixed income-specific concerns, the dollar doesn’t trade strong off that. i think today the market sort of became a little more balanced in its assessment of the fed’s statement.
>> where do you see the trend in the dollar, heading lower still?
>> definitely. and i would say that with the tankan coming out at the end of this week in japan, the survey of business confidence, nobody would have expected a couple of months ago that we’d see a stronger tankan with the yen trading in 107, 108 type of handle so it may give the market more confidence in going against the bank of japan and buying yen.
>> we’re out of time. thanks to steve englander, chief foreign exchange strategist.
