1. MARKETS
2. THIS AND THAT
3. CALVIN
4. QUOTES
5. LETTERS
SEPTEMBER 15 EARLY EDITION: DANGER AHEAD, DANGER AHEAD
US trade deficit a record $106.1 billion in the second quarter, UP
4.6 percent.
Next quarter we expect it to be over 110 billion!
Next week most dangerous.
US trade deficit OUT OF CONTROL!! First US Dollar SLAUGHTER forthcoming.
With 800,000 "new" oil barrels coming online October 1, what about the next two weeks? A good bet for inflation. Crude oil futures are soaring but super dangerous to play. OPEC's production hike too low? OPEC decided Sunday to raise oil output by 800,000 barrels per day, a figure higher than most expectations but short of the 1 million barrels considered sufficient to cool prices. 200,000 barrels was what the market demanded. Rational? Ha!
YOU CAN FOOL SOME OF THE PEOPLE ALL OF THE TIME,
BUT NOT ALL OF THE PEOPLE ALL OF THE TIME.
Friday's CPI report had consumer prices falling in August, posting
their first decline in 14 years as a sharp drop in energy costs swamped
higher prices for clothes, prescription drugs and other items. I don't
buy it, and neither should you. Inflation according to military intelligence
is 3.7%. This corresponds to military pay rise and is also close to our
6.8 (3+6.7) bond target. So it's a reality check.
NEXT WEEK IS VERY DANGEROUS!
NEXT WEEK IS THE MOST DANGEROUS TILL YEAR END: INVESTORS BEWARE!
KEY DATES: September 18, 20
DJIA:
10,000 Testing?
NASDAQ: How low
is Low?
XOI:
Distribute 565 OB
US$:
SELL!
2. With the Sydney Olympics on TV, we naturally thought Aussie. While we have avoided Australia for some time, their cheap currency may offer some bargains next year. Our two favorites are BHP, their major resource company which we rate an intermediate term hold to $25; and Fosters (FBRWY), which we rate a short term outperform and intermediate term buy. Updates will be made in October when we produce our 2001 Market Forecasts.
If SCI is trouble and has earning disappointments, the WHOLE computer hardware sector is likely to be in trouble: WATCH OUT BELOW!
3. Calvert Group posted the new, official membership list for its CALVERT SOCIAL INDEX (CALVIN). Characteristics of the new Index will be released Monday, September 18. Launched on May 1, 2000, the construction of the Calvert Social Index starts by taking a base of 1,000 of the largest companies in the United States, representing stocks listed on the New York Stock Exchange (NYSE) and Nasdaq-Amex, as provided by Dow Jones Indexes. From the base of 1,000 companies, Calvert's Social Research Department analyzes each company using its proprietary social criteria. Companies in the Index meet Calvert's standards in the environment, work place issues, product safety, community relations, military weapons contracting, international operations and human rights, and respect for the rights of indigenous peoples.
4. "The ECB can't stand in front of a running train. We won't see any
intervention until after the currency has seen its lows.''
Gerd Neitzel, comanager, Siemens AG portfolio
HW: Perhaps it already has. Besides standing in front of a running
train , buying contrary options is often a way to make a killing in the
markets (if you are not killed first).
"I wouldn't be surprised if inflation declines and interest rates are
going to come down."
Robert McTeer President Federal Reserve Bank Dallas
HW: I would!
"PPI, is a piece of cake -- there is no inflation in this economy. Productivity
gains are keeping inflation quite low."
Stan Shipley, Senior Economist, Merrill Lynch Government Securities.
HW: At last, another potential buyer for my BRIDGE BRIDGE REIT!
5. READER: So you are bearish? Surprise, Surprise.
HW: No, I am never bearish. I try to get my feet FIRMLY planted
on the ground, and my head looking up at the sky. Next week?
Our forecast is Down, Down.
5. READER: Most of my Astrology friends agree that that Gore and
Bush both have great aspects for winning. And, it will be CLOSE.
Have you taken a stand yet? Who do you think will win the presidency?
HW: To date we have eliminated Buchannan and Nader.
IT is a coin toss between Gore and Bush - either could win or lose.
Read our Fall INVESTING BY THE STARS for possible market consequences.
READER: Thanks for screenphone
site. Re January - is that due to astronomy re their chart or the fact
that after your elections your Fed might decide to be honest and address
having to put up Interest Rates and that would be January.
HW: The astrology is VERY positive until February. However, as
a story stock, CCCA.O* must also produce results in order to justify what
we hope will be a significantly higher price at that time. Also,
we expect many small caps to rally between mid-October and January.
As to the Fed being honest, I think they will be forced to raise
rates sooner than most analysts believe. October is NOT unthinkable, just
unlikely.
READER: Just to make sure that I am not confusing things, International
Hi-Tech stocks can either be bought in Canada (IHI) currently at about
1.15 Canadian dollars or in the US (IHITF.OB) for about 0.84 US dollar.
Is this right? Does it matter in your opinion whether one buys in the US
or in Canada?
HW: NO difference. However on some days, it is cheaper by a few pennies
on one exchange or the other. Therefore savvy investors often enter
their order: "to the cheaper of the two exchanges, OTCBB or CDNX."
READER: Wouldn't you say IHI has moved past the speculative stage to
aggressive risk? I have quite a number of wealthy businessmen as my clients
and I don't normally recommend speculative shares (keep those trades for
myself) to them but I have emailed IHI and asked them to burn off a whole
lot more CDRoms and I am thinking I will send them all out to these people
with a covering letter saying it is speculative but for them to make up
their minds. Just wanted to know if you agree re if it is now past speculative
stage?
HW: Yes, I agree. I feel it is entirely appropriate for many aggressive
risk Tech portfolios.
READER: Should I sell MSFT or hold during bloodbath? MSFT is my
largest holding at cost basis of $67 1/2 and dropping fast. Great
call on STEM!
HW: That depends on your overall holdings. In my capacity as
a newsletter writer, I cannot comment on that. However, you have
at least three choices: reduce some, all or sell October 60 or 65 Microsoft
options.
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