The PremiereTrade Market Wrap for 11/13/07

Japan's central bank kept its benchmark interest rate unchanged at 0.5 percent after a two-day meeting policy meeting amid deepening concerns about slower growth in the U.S. economy.

The International Energy Agency said it sees strong indications that high prices are depressing demand, which, together with signs of higher output from Saudi Arabia, Iraq and Nigeria, have capped further price gains. "There are signs that super high crude oil prices have started to depress oil demand as drivers in the world's industrialized nations start to feel the pain of almost $100 oil," said the International Energy Agency, an energy policy advisor to 26 member countries.

Weekly chain-store sales for the week ended Nov. 10 rose 2.7% from the year-ago period. On a week-over-week basis, sales fell 0.5%.

Countrywide Financial (CFC) said its total October loan fundings fell 48% from last year, to $22 billion. The firm said its mortgage pipeline at the end of October was $41 billion. Average daily mortgage loan application activity for October 2007 was $1.8 billion, a 34% decrease from October 2006.

In Forex News Today

Markets finally calmed down a bit from massive carry trading unwinding and turns into consolidation as the day starts. BoJ left rates unchanged at 0.50% as widely expected after a mere fortnight of their last meeting. The vote split was again 8-1. The surprise in the Asian session today is indeed the Q3 GDP data from Japan, which showed a strong rebound in strength. The data eased concern that the Japanese economy has slipped into recession but provides no solid case for near term hike from BoJ yet. Some verbal intervention is heard from Japanese officials responding to recent sharp appreciation of the yen. Prime Minister Fukuda said that aren't desirable and warned traders and investors not to make speculative moves on the currency.

The Canadian dollar had the sharpest fall since 1971, partly due to carry trade unwinding and partly due to retreat in oil prices. Oil continued to retreat from record highs and could retreat further towards $90 level on prospect of another OPEC output increased. USD/CAD has made a short term bottom last week and recovery could extend further but parity will now become a strong resistance.

For the first time in 18 months, the U.S. government bond market is showing growing anxiety that the plummeting dollar will result in runaway inflation. The combination of the Dollar's 31 percent decline during George W. Bush's presidency, oil prices near a record high and interest rates at a four-year low have convinced investors that consumer prices are poised to accelerate

Scheduled Economic Reports (Wednesday)

Producer Price Index (Oct), Retail Sales (Oct), Inventories (Sep)

In Earnings News

Wal-Mart (WMT) earned 70 cents per share, up from 62 cents per share in the same period a year ago.

E-Trade Financial Corp. (ETFC) lost more than half its value, plunging as the company faces more subprime-related write-downs and as analysts at Citigroup suggest a possible bankruptcy for the online broker.

The Home Depot Inc. (HD) reported a 26.8 percent drop in third-quarter profits as the deteriorating housing market put a crimp on home renovations. Home Depot said it earned $1.09 billion, or 60 cents a share, for the quarter, compared with a profit of $1.49 billion, or 73 cents a share, for the same period a year ago.

Scheduled Earnings Reports (Wednesday)

PetSmart, Applied Materials, Federated Department Stores, Longs Drugs, Vivendi

Stocks in the News

Citigroup (C) as part of a revamp of its investment-banking business is combining its equity capital markets and debt capital markets activities.

Fossil Inc (FOSL) reported fiscal third-quarter net income rose 41 percent, helped by strong international sales.

Nash-Finch Co. (NAFC) reported a third-quarter profit on lower costs and expenses.