Market briefing---Matt (slow)
NYSE---Deb (fast)
Nasdaq---Anthony (slow)
Currency
Interview: Investors Bank and Trust---Mazanec, Tim---Currency Strategist
closing out the year, though, big gains in the major sexes and averages. the major indexes and averages. it was interesting, though, down to the final minute of trade today. deborah kostroun joins us from the new york stock exchange telling us what was going on there today.
>> we did see a bump up that helped out the averages for the month as we closed out. the dow had a pretty good month. looking at how we closed out, i believe it was up 6.7%, marking its biggest monthly gain since 1991. 6.8%, i was off by .1%. and the s&p and nasdaq were higher this month, but not enough to catch up with the dow. it was really the economically sensitive stocks with a lot to do with that to push the dow to the top of the performance charts and the nasdaq lagged as we saw rotation out of the momentum stocks , into some of those value stocks . we also saw a very broad snap back this year after the three-year bear market that touched nearly every part of the market. we saw 25 out of the 30 stocks in the dow jones industrial average posting gains this year and in the s&p 500, 91% of the stocks surging and all 10 economic groups were higher. of the 100 largest stocks in the nasdaq, 97 rallied. comparing that to last year, only 31 of the nasdaq 100 stocks rose. definitely a banner year and a banner year for homebuilders like pulte and hovnanian as home sales rose to record levels with seven million homes sold this year. also, the s&p home building index nearly doubled this year as it soared to a record high but many of the homebuilders did rise to all-time highs today as you saw a drop across the board in stocks like d.r. horton, pulte and hovnanian. they were all down and that was concern as the mortgage bankers association saying that mortgage applications are down 9%. also freddie mac talking about the 30-year mortgage rate inching up to 5.8%. closing out a banner year, it was a lot of fun, matt. back to you.
>> thank you, deb. it was fun, no question about it. the nasdaq also having a fun day, rallying in the late afternoon, giving back a little bit at the closing bell, think if lower on the day but nobody really cares. it’s up 50% year to date. anthony massucci is at the nasdaq marketsite with this report.
>> although the nasdaq closed lower for the day, it was the third close in a row that the nasdaq was above 2000, finishing the day in 2003. if you look back year to date, the nasdaq is up 50%. the chart looks impressive but if you go to the low of the year on march 10 this year, the nasdaq up 56%, almost 57% from that low nine months ago. donald ross, chief investment officer at national city, sayings about it’s been a heck of a year percentage wise and he’s still optimistic even after the run in 2003 because growth is strong, revenue is good at companies and gross margins, he believes, will explode. he’s looking for a 15% earnings gain next year for stocks overall and that would send markets higher. for the year, the nasdaq 100, which is the 100 most actively traded stocks on the nasdaq, the biggest stocks , up 49% year to date. 2003 performers, i’ll give you the top performers within the nasdaq 100. research in motion, up this month. up 409% for the year. they make the blackberry pagers. a.t.i. technologies up 229% for the year, a supplier of three-dimensional graphics and lam research, semiconductor equipment company, up 199% for the year. the nasdaq composite with 2400 stocks , the best performers include carrier access, a digital access equipment company for telecom companies, 32% up was the move for the year. and one more, tripath technology up 2400%, a semiconductor company that makes amplifiers. sending it back to you and a happy new year. nasdaq up 50% for the year.
>> let’s look at some of the other numbers here today, the broader indexes. the new york stock exchange composite, amex and russell finishing in opposite direction. amex and russell lower and the new york stock exchange composite up .3%. the wilshire 5000 also―look at that, unchanged today. hard to make a call on that statistically, unchanged on the day. crude oil, that was down, finish finishing at about the $32.60 a barrel. looking at bonds, the five-year note was down. the 10, three, and two-year notes inching higher after the jobs data came in better than expected this week. in new york, the dollar ended the year with its biggest annual drop versus the euro in its five-year history. investors are concerned about how low the u.s. interest rates are relative to those in europe. they were also worried about the lack of concern about the dollar’s decline from officials on both sides of the atlantic. the federal reserve has said it won’t rush to raise its target rate from 1%, which is half of what the e.c.b. currently has, the european central bank. tim mazanec, senior currency strategist at investors bank and trust joins us from boston. and tim, against the euro this year, the dollar has lost 19%. it also weakened to a record low of 1.26 earlier today. you said the dollar may weaken to at least 1.35 in 2004. why the continued lack of interest in the good old dollar?
>> a couple of reasons. it’s been the same old story with the twin deficits we have here, a trade and fiscal deficit. both look to continue into 2004 and may be longer than that and also the interest rates, 1% fed funds, you can go elsewhere and the e.c.b. is at 2%, the u.k., central bank there, the bank of england, 3.75% and obviously in australia and elsewhere, much higher. so if you’re looking to invest, you might borrow the carry trade in the markets, you might borrow 1% in the u.s. and invest elsewhere with a higher yield.
>> a euro trading strategy, you point out as an f.y.i., euro dollar opened 2002 at 89 cents. it opened 2003 at 1.0358. why is that relevant? why is that important to point out?
>> when you think about where is the euro going to go against the dollar, you sometimes you may think that it might get to 1.35 or 1.40 and if you look at where we’ve been and where we’re going, 10 to 15 or a 20% move is not out of the question and a better question is how fast is that going to happen? if you assume the fed funds will stay low for a few months to come and the e.c.b. officials and u.s. officials have stayed mute on the subject, we could probably see 1.35 or 1.40 quicker than many traders think.
>> assuming we do, do you think it becomes a political issue, or at what level specifically?
>> not in the u.s. as much as it might be in europe. i don’t think before november 3 we’ll see too much talk from our own government officials here. but overseas, they’ve mentioned that around the 1.25 to 1.30, they’re very happy and this is in line with longer term trends. getting towards 1.35, all the traders will watch for every comment from an e.c.b. official and i think at 1.35 they’ll be pleased with the strength of the euro and more concerned about how fast it will be moving so it gives one to believe that 1.35 to 1.40 is within the cards.
>> thank you very much, tim mazanec from investors bank and trust, currency expert extraordinaire, happy new year to you. stick with us, folks, still more to come. the last day of trading for 2003, of course, as we’ve said, is in the history books. we’ll talk about what’s ahead for stocks . milton ezrati, senior strategist at lord abbett will play his hand for us coming up.
