Weekly Market Returns

For the week the markets banged out a respectable gain on lower oil prices and a torrent of earnings news.

For the week the Nasdaq and the S&P 500 were up a solid 3.1% each and the Dow Jones managed a 2.8% gain. What is noteworty among all the stats is the S&P 500 managed to move back to positive ground for the year, with the year to date gain coming in at 1.6%.

GDP this week was a disappointment at 3.7% for the advance number, but it still a solid number that even Goldilocks would like; not to hot, not to cool.

Enough already. Be safe if you go to a Halloween Party and MAKE SURE YOU VOTE NEXT WEEK! Early and often!

75 Anniversary of the Oct, 1929 Stock Market Crash

While time has past, the markets have evolved and the economy has changed crashes still happen.

While it seems long ago to investors of today, 1987 and 1929 were not than long ago.

Crude Prices Fall for Third Straight Day

Remember, in past posts we argued that crude above $55 a barrel might tip the Global economy into recession.

Supply disruptions from damage in the Gulf of Mexico was one of the drivers behind the recent climb in prices to new highs. As supply comes back on line in the Gulf of Mexico prices could moderate helping the markets.

The new "normal" for oil prices is likely north of $28 a barrel but less than $45.

Over the next couple of months as marginal production comes online we will all find out.

Red Sox finally throw aside The Curse

Off topic, to historic not to note. The last year they won was the year my late grandfather was born.

Word is this is going to destroy the "curse" industry in Boston.

Congrats to the Sox, way to go guys!

Hang on, both sides warn, election will be a wild one

Whatever you believe vote, if you don't please don't complain. If you do, get in and hang on.

Nov. 2, 2004 could be a very long night...

Fact of the Week...

Medical Costs...

Everyone "knows" that medical costs are rising at double digit rates. One of the things that has been most difficult to measure in medicine is the productivity rate.

An interesting blurb in the Readers Digest a couple of months back. In the 1960's the average hospital stay for a heart attack victim was just under 6 weeks. Today that average is 6 days. That is a sevenfold reduction in the time in the hospital. At the same time survival rates have improved dramatically.

Medical treatment is costly but the results and the recovery times keep improving.

Week before election aggregate polling results

RealClear Politics - Polls


Electoral Vote Total Graph

As we roll into the final week of the campaign the language on the campaign trail is getting sharp. The polls are an interesting set of data to follow, but given that no candidate has been outside the margin of error, our prediction remains.

This one is going to be decided on the ground based on turnout.

Weekly Market Returns

For the week the majority of the broad stock market indices fell on record high prices in oil. The Nasdaq bucked the trend on the back of positive earnings news for Google and Ebay.

The DJIA was down -1.8% for the week, the S&P 500 -1.1%, the Russell 2000 -.3% and the Nasdaq was up +.2%

The interesting thing is that the Nasdaq has bucked the trend for the last two weeks. The oil market continues to be driven by fear of supply disruption. With oil prices where they are there is a great deal of incentive to add to production.

Poll: Bush Doubles Support Among Blacks

As we noted in earlier posts, with the Presidential Election as tight as it is in the polls if Kerry does not duplicate the minority turnout that Al Gore had in 2000 he will have problems.

In the 2000 election minority voter turnout was high and Gore won those votes 9 to 1 over Bush.

If this poll is any indication of the true trend then the Kerry camp has reason to be concerned.

Fact of the week...

Electoral College Projections

The word is that the real battle for the battleground states is down from 16 states months ago to just 3 states today. Pennsylvania , Ohio and Florida.

Bush carried Ohio and Florida by the slimmest of margins and lost Pennsylvania in 2000.

Follow the link above to view a graph of the estimated electoral college totals over time. The main page of the site has even more info.

Worth a look.

Check out our post which details just how important Pennsylvania might be in deciding the election.

BBC NEWS | Business | Why are oil prices so high?

A good piece that hits all the factors that have driven oil prices higher.

Worth a look.

Weekly Market Returns

The markets spent the latter part of the week in negative territory as oil prices yet again made new highs.

The NASDAQ weathered this weeks decline with a modest -.4% decline versus declines of 1.2% for the Dow and S&P and 1.1% for the Russell 2000.

A spike in oil prices above $55, or a supply disruption based on fact and not fear will cause problems with GDP growth and equity prices. Indeed, as old has risen the yield on the 10 year US treasury has dropped. Our reading is that the bond is telling us what we know, higher oil = slower growth.

Breaking down the debates...

Since the first debate we were silent on the subsequent debates. Yes, we watched the other two Presidential Debates and the VP debate. No, we didn't TeVo them so we could watch them over and over.

Couple of observations now that it is all past and the talking heads have stopped spinning. On the first debate the President did not do all that well. But the questioning was all fast balls for Bush and fodder for Kerry to slam him. As we said in the first debate blog post, second guessing the Bush Administration is not a platform. It's just Monday Morning quarterbacking. Hindsight is 20/20.

Now for the other debates, forget the "flash polls" which are designed for a particular result so that a certain "winner" is portrayed in the 24 hour news cycle after the debate. Just like the polling in this race all three debates where are draw. No knockout punch. No grave errors or misstatements.

On the election, a bold prediction. The race is a dead heat statistically. Neither candidate is outside the margin of error on the polls. The talking heads would have you believe that the race will be decided by the undecided. It's likely that they will vote just like the overall populace. All of the 10% of likely voters that are still undecided are not going to break for one candidate or the other. They will likely split just like the national polls.

Here is the key thing that might happen on November 2, 2004 that very few people are talking about. Turnout of segments of the candidate's base. For the Democrats this means the minority vote. Gore was very, very successful in getting the minority vote out. Gore received a much higher percentage of the minority vote than did Clinton. If Kerry's success does not match Gore's, then Kerry is going to have problems. For Bush apparently the Christian right stayed home on election day costing Bush an estimated 4 million votes in 2000.

Turnout by these two groups could be the difference maker in the election. One quick, easy way to tell will be how Pennsylvania turns out on election night. Both segments of the candidates base are very important for carrying this state. For whoever loses Pennsylvania election night will be a long night.

We will soon find out.

Op/Ed Chartered Financial Analyst (CFA) Exam Pass Rates

To all you CFA candidates out there lurking around I will be less genteel than was Tom Bowman in the September/October edition of CFA Magazine. Shame, shame on you! You want the charter but you don't buy the books? You don't put the time in yet you expect to pass?

Mr. Bowman refers to the "shortcuts" which used to be study aids we used in conjunction with the course materials. These materials were valuable in reviewing the material but I read all the materials because I wanted to learn. I needed to learn. Apparently no more, it's Stella and the Financial Analyst Review and you’re off to the exam.

For what should be a very bright group of individuals this reveals both ignorance and shortsightedness. As an employer we are looking for education, not another credential. Now we will start asking how you prepared for the CFA exam. What you got out of it. How you found the time. What you sacrificed.

The CFA program is unique in business education because it is driven by a self study of the body of knowledge. It teaches learning as a process. This is important because investment professionals must constantly adapt, educate themselves about new things, and make decisions in uncertain environments.

If you can take a mountain of books, discipline yourself to read the required sections, pass one exam, take a mountain of books, discipline yourself to read the required sections, pass the next exam, take a mountain of books, discipline yourself to read the required sections, pass the final exam you might just have a shot at figuring out what makes Chinese GDP tick when all you have is a mountain of data. Or whether or not value is going to outperform growth, or where the 10 year bond is headed. Well, you get the picture.

I am a proud CFA charterholder, as is my business partner. We sacrificed almost all of our non working daylight hours for six months a year for four years and it was well worth it. We each look at Memorial Day differently now that we have been awarded our charters. Each year is a reminder while others played, we studied and then we passed.

Yes, we live in a PowerPoint world, but someone must synthesize the information and truly understand it before it can be condensed to a few bullet points. That someone is supposed to be you, the CFA charterholder.

The exam is difficult. I have known CPA’s that year after year cannot progress from one level to the next. I have seen Wharton MBA’s humbled by the exam. I have also seen a single mother with two children pass 1, 2, 3.

Being smart doesn’t cut it. You have to put your time in, you have to prepare. Get to it.

Wall St. Journal--Missing Jobs Found

Our firm is a clear example of this. After years of toiling within existing corporations, we struck out on our own.

You won't find us on the payroll survey and no one has bothered to ask us for the household survey.

This trend is real. The number of our friends who have done the same is astonishing. It isn't indicative of a "bad" economy. To the contrary, it is a sign of what I call "Reagan's Children" heeding the call and choosing to take entrepreneurial risks.

We do it because the risk/return is much better that the Corporate world. We watched our fathers spend their lives working for Corporations who would let them go just for another penny of earnings. Not us.

America is the greatest country in the world to take an economic risk. Join us!

Regional Manufacturing Survey...more signs of continued growth

While the Richmond Fed survey is a lesser followed index it has been steadily moving up since a June 04 low.

We have been searching high and low for signs of strength or weakness in the US economy.

We have been finding anecdotal evidence of renewing strength!

Fact of the Week...

When you Google something you get back a page of results, the number of pages Google has indexed and the time the search took. Simple, easy.

To many people Google has become the front door of the web.

It is interesting to see how many pages exist for a certain topic. For instance, Google has 8,650,000 pages indexed for technical analysis and only 4,390,000 pages for fundamental analysis.

Does this mean the web market demands more technical analysis than fundamental analysis? Who knows!

It does mean there are more resources available online that provide in depth analysis of recent price history and fewer that provide in depth analysis of the fundamentals of an investment.

Personally we find this result disappointing. For investors with a long time horizon (more than five years) the fundamentals are going to be much more important to their success than the technicals. Perhaps this explains why turnover in investor portfolios is so high and why average results are so poor.

Take note! Do your homework! Invest for the long term! Focus on fundamentals!

Weekly Market Returns...

Oil prices continue to hamper the markets efforts to extend the advances of the last couple of weeks. Oil hit new highs on the NYMEX three times this week as concerns surfaced about hurricane Ivan damage to oil producing facilities in the Gulf of Mexico.

The Gulf region is home to the majority of domestic petro supply for the US and poor weather had delayed repair efforts post Ivan.

For the week the DJIA lead the market decline with a -1.3% performance for the week, second was the Nasdaq with a -1.1% decline, and the S&P 500 fell -.8%

A ugly week which should not extend if oil supply concerns can be resolved.

Instant Analysis-Payroll Report

The employment situation for the month of September was reported by the Bureau of Labor Statistics.

The headline number of 96,000 jobs added was a disappointment versus the 158,000 expected. As well, last months number was revised down slightly.

It would be easy to infer from this number that the employment situation is weak and getting weaker. To the contrary, year over year employment has growth 1.3% which is with the trend. Payroll growth has been weak versus past economic recoveries but the weakness is attributed to above average productivity growth and not problems with the economy or economic policy.

This is going to be an issue on the campaign trail and it will be difficult for Bush to argue that things are headed in the right direction with such weak employment growth. For Kerry, he will not acknowledge that productivity is the culprit and there is little his policies could do to change things in the short term.

In the longer term above average productivity growth benefits us all with a higher national standard of living.

It would be foolhardy to make investment bets on this series, it is subject to large estimation errors and large revisions at turning points.

Another sign of rising global growth...

Our chart of the month details copper prices since the spring. In the last month copper prices have advanced. This is important because copper is an important basic material and industrial materials prices are a leading indicator.

It looks as if robust growth is renewing after a soft patch this Summer.

Monster Employment Index Shows Rise in Online Job Demand in September

This is a new and potentially important economic series. However, it is not seasonally adjusted and does not have enough history to accurately gauge its value as an indicator. This months reading points to continued growth but it must be taken with a grain of salt given the indices limitations. -valuelurker


- Index Maintains Upward Growth Trend in Online Job Availability, Reaching Highest Level Ever -


- Finance & Insurance Registers Eight Consecutive Months of Growth -


- Retail Trade is Among Industries Showing Greatest Increase in Online Job Availability -

- 17 of 23 Occupational Categories Up Over Last Month -


NEW YORK, October 7, 2004 - Demand for workers and related online job recruitment activity across the United States rose in September, as the Monster Employment Index reached its highest level since its inception. Following a sharp increase in August, the Index continued to climb upward in September, showing broad growth in online job availability across the United States. Overall, the Index rose to 151 in September from 145 in August. Results for the first nine months of 2004 are as follows:


Sept. Aug. Jul. Jun. May Apr. Mar. Feb. Jan.
151 145 134 136 128 125 109 107 102


During the month of September, more than one-third of the 20 industries tracked by the Index showed increases in online job demand. Six industries decreased slightly during the month, while others saw more significant declines. Industries that saw online job availability increase in September included finance & insurance; retail trade; mining; educational services; and arts, entertainment & recreation. Finance & insurance registered its eighth consecutive month of growth, joining arts, entertainment & recreation and mining in reaching their highest levels since the inception of the Index in October 2003.


Industries registering slight declines in September, but maintaining their second-highest levels for the year, included transportation & warehousing; information; manufacturing; wholesale trade; professional, scientific & technical services; and accommodation & food services. Construction and healthcare & social assistance also declined but maintained their third-highest levels since inception of the Index. More significant declines occurred in public administration; utilities; and agriculture, forestry, fishing & hunting.

Online demand for workers grew across most occupational categories in September, with 17 of 23 categories registering increases over the previous month. Occupations showing the most significant increases in September included business & financial operations; management; computer & mathematical; office & administrative support; production; community & social services; and installation, maintenance & repair.


The computer & mathematical occupations category, which captures the greatest number of IT-related positions, continued an upward trend and reached its highest level. Business & financial operations registered its ninth consecutive month of growth, while production continued an eight-month growth trend. Demand for sales occupations increased for the third consecutive month, continuing a generally upward trend throughout 2004. Installation, maintenance & repair and transportation & material moving also registered sharp increases during the month.


At the same time, the education & training occupations category registered a sharp decrease in online demand during the month, while the legal occupations category dipped a few points.

"The Monster Employment Index continues to demonstrate solid upward momentum for the year, providing further evidence of sustained improvements in the overall U.S. employment picture," said Jeff Taylor, Founder and Chief Monster. "September marks the second consecutive month that all nine U.S. regions registered increases in online job demand, a promising sign that job recovery is beginning to take root across the entire country."


"Most industries either increased or maintained their second-highest levels, and once again we saw continued growth in online job demand for sales positions, which is usually indicative of companies seeking to expand. People who are out there looking for a job or seeking further signs of an improving labor market should generally be encouraged by these findings," continued Taylor.


Online Job Demand Increases across the U.S. in September
Online job demand for workers increased in all nine U.S. Census Bureau regions in September, with every region achieving its highest level since October 2003. For the second consecutive month, the Mountain region, which includes Arizona, Colorado, Idaho, Nevada, New Mexico, Utah and Wyoming, saw the greatest increase in job availability, driven by Colorado, Utah and Arizona. The West South Central region (Oklahoma, Texas, Arkansas, and Louisiana) registered the second largest increase while the West North Central region (Minnesota, Iowa, Kansas, Nebraska, Missouri, and the Dakotas) recorded its ninth consecutive month of growth. The East South Central and South Atlantic regions registered the smallest increases.

41 of the 50 U.S. states showed an increase in online job demand in September, with Rhode Island and Colorado registering the biggest gains and achieving their highest levels since the Index's inception. Nine states declined during the month with Vermont, Alaska and New Hampshire experiencing the sharpest declines. Despite an active hurricane season, Florida still saw a slight increase for the month and made the Index's monthly top ten states list (see below) for overall job availability. The tri-state area of New York, New Jersey and Connecticut also continued a steady upward trend of growth for the year.


Based on online job demand in relation to total working population, the Monster Employment Index found the following states to be the top ten in terms of online job availability during the month of September:


1. Arizona
2. District of Columbia
3. Maryland
4. Delaware
5. Virginia
6. California
7. Connecticut
8. Massachusetts
9. New Jersey
10. Florida


California continued to offer the most online job availability of any state during the month of September based on sheer quantity alone.


Top Five Industries Looking for Employees in September


During September, the Monster Employment Index showed an increase in online job demand across roughly one-third of U.S. industries, with healthcare continuing to offer the greatest volume of online job availability compared to all other sectors. Industries showing the greatest increase in job availability in September included:


Industries Sept. Aug. Jul. Jun. May
Retail Trade 123 116 115 115 119
Mining 125 118 102 104 101
Finance & Insurance 160 155 151 142 132
Educational Services 121 118 117 126 123
Arts, Entertainment & Recreation 117 115 114 113 112



Most Wanted Occupational Experience
Occupational categories showing the largest increase in online job demand in September included:
Occupations Sept. Aug. Jul. Jun. May
Transportation & Material Moving 174 156 154 155 153
Installation, Maintenance & Repair 150 134 121 121 125
Office & Administrative Support 146 137 132 128 130
Business & Financial Operations 139 129 126 123 122
Management 155 148 139 140 134



Online Job Demand Increases Across the Country


Every U.S. Census region saw online job demand increase in September. Following are the regions listed in order of greatest month-to-month increase:


U.S. Census Bureau Regions Sept. Aug. Jul. Jun. May
Mountain 194 179 161 161 154
West South Central 154 141 125 132 134
Mid-Atlantic 158 147 136 135 131
Pacific 165 154 145 147 140
East North Central 152 143 131 133 128
New England 178 169 155 154 145
West North Central 158 151 137 133 130
South Atlantic 143 138 132 131 124
East South Central 147 143 135 139 133



The Monster Employment Index is a broad and comprehensive monthly analysis of U.S. online job demand based on data from more than 1,500 Web sites conducted by Monster Worldwide, Inc. (NASDAQ: MNST), the parent company of the leading global online careers property, Monster®. Based on a real-time review of millions of employer job opportunities culled from more than 1,500 Web sites, including a variety of corporate career sites, job boards and Monster, the Monster Employment Index presents a snapshot of employer online recruitment activity nationwide. The Index counts job postings as an indicator of employer demand for employees or, in other words, job availability. Job postings are online advertisements placed by an employer looking to fill one or more vacant job positions. The Monster Employment Index reports results monthly.


All of the data and findings in the Monster Employment Index have been validated for accuracy through independent, third party auditing conducted on a monthly basis by ARC Research, a Cranford, New Jersey-based provider of innovative click and brick market research solutions. The audit validates the accuracy of the online job recruitment activity measured for the last six months within a margin of error of +/- 1.05%.


Additional information on the Monster Employment Index, including all charts and tables, is available online at http://eIndex.monsterworldwide.com. The month of September 2004 marks the twelfth month of data compiled by the Index to date. Data for the month of October will be released on November 4, 2004.


About Monster Worldwide
Founded in 1967, Monster Worldwide, Inc. is the parent company of Monster®, the leading global online careers property. The company also owns TMP Worldwide, the world's largest Yellow Pages advertising agency and one of the world's largest Recruitment Advertising agency networks. TMP Worldwide is also a provider of direct marketing services. Headquartered in New York with approximately 5,000 employees in 26 countries, Monster Worldwide (NASDAQ: MNST) is a member of the S&P 500 Index. More information about Monster Worldwide is available at www.monsterworldwide.com.


Celebrating its 10-year anniversary, Monster is the leading global online careers property. A division of Monster Worldwide, Monster works for everyone by connecting quality job seekers at all levels with leading employers across all industries. Founded in 1994 and headquartered in Maynard, Mass., Monster has 25 local language and content sites in 23 countries worldwide. Monster is the official online career management services sponsor of the 2004 U.S. Olympic Team. More information is available at www.monster.com or by calling 1-800-MONSTER. To learn more about Monster's industry-leading employer products and services, please visit http://recruiter.monster.com.


Special Note: Safe Harbor Statement Under the Private Securities Litigation Reform Act of 1995: Except for historical information contained herein, the statements made in this release constitute forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. Such forward-looking statements involve certain risks and uncertainties, including statements regarding Monster Worldwide, Inc.'s strategic direction, prospects and future results. Certain factors, including factors outside of Monster Worldwide's control, may cause actual results to differ materially from those contained in the forward- looking statements, including economic and other conditions in the markets in which Monster Worldwide operates, risks associated with acquisitions, competition, seasonality and the other risks discussed in Monster Worldwide's Form 10-K and other filings made with the Securities and Exchange Commission, which discussions are incorporated in this release by reference.



Contacts:

David Rosa
(212) 351-7067
david.rosa@monsterworldwide.com


Christian Harper
Weber Shandwick
(212) 445-8135
charper@webershandwick.com

Be careful with debt...

These facts are sobering and underscore the need for individuals to seek out assistance when they do not understand the terms of their financial arrangements. There are ways to use debt effectively and productively, but too many people are using it to spend more than they make.

Respected comic Dangerfield dies aged 82

Off topic, yes. Headline to ironic not to share.

The right questions to ask...

The Wall St. Journal on-line is a fantastic resource, and I only wish I had the time to peruse all the valuable information out there on the site. This article has some of the most important information for individual mutual fund investors nicely organized and well presented. If more people knew the right questions to ask, there would not be as many mutual funds sold to unwitting "investors". The education of the investor class is a few years away yet, but as it happens the industry will have to change. This is for the better and for everyone's benefit. If you know someone who needs to know how the industry works, forward them the link so they can be enlightened.

Rocket Wins $10M Prize for Trip to Space

This is bigger news than it gets covered.

One, with Paul Allen's (former of Microsoft) help it happened. When the wealthy risk their funds for innovation we all benefit.

Two, private enterprise is almost always better at this stuff than governments.

Three, who did it? Japanese? Chinese? Indians? Nope. Good ole American innovation/entrepreneurship/risk taking/engineering.

Way to go guys!

Space Ship One

Site of the month...

This month's site of the month is howstuffworks.com

At first glance it looks like a site for school age kids, but we are all never too old to learn.

From CDR's to diesel engines, how stuff works covers it all.

Fun and fact filled, simple and clear. Check it out today!

Weekly Market Returns...

A solid week ended a weak quarter. For the week the Nasdaq lead with a 3.3% gain, the S&P followed with a 1.9% gain and the DJIA lagged with a 1.4% gain.

It was a week chock full of news and market moving events. Merck voluntarily pull Vioxx from the market on stroke risk concerns in users and saw their shares fall a record 27% in a day.

The theme for the week in terms of economic news were reports that showed the weak patch in the economy was passing and the growth continued, albeit at a slower pace than the first quarter.

Dr. Copper (copper metal futures) where up 3.4% for the week providing further evidence of global growth.

For the quarter the S&P 500 was down -2.3%, the NASDAQ -7.4%, and the DJIA -3.4%.

ISM index for September

What it is: A leading economic indicator from the Institute for Supply Management.

Why you should care: It is a timely indicator of the trend in manufacturing activity. Septembers number released October 1st, so it is FAST.

The institute for supply management (ISM) index came in at 58.5 down from 59 last month. The consensus estimate was 59.

Some things to note, any reading above 50 indicates positive growth. So while the index fell slightly the headline number remains strong indicating continued growth in the manufacturing sector.

Just another sign that the economy is moving onward and upward!

Japan still rising...

Nikkei ends up 1.5% on strong tankan survey.

26 versus 23 expected, a 13 year high.

Debate Spin

I have never been so tired after a Presidential Debate in all my life. It wasn't the time of day. It was the dialogue. High level yes, but good grief.

It was like it was the Monday morning quarterback versus the Repeater.

Monday morning quarterback: "If I am elected President my plan is to do things differently and that will make things better."
Hindsight is 20/20.

Repeater: "It's hard work, but we are strong and resolute."
We know this. What is next?

Who won? We certainly didn't.

More resources:

instapundit
Southern Appeal
Top News
RNC
DNC