Wednesday, June 25, 2008

Markets up while awaiting Federal Reserve announcement

Markets are up before the Federal Reserve announcement. Dow is up 70, advancers ahead of decliners 5-2 & NAZ up 37. While everybody is waiting for results after the FED's meeting this PM, bulls have already starting buying. Banks, in particular, are seeing nice gains, typically up 2%. FED is expected to talk tough on inflation, not much to do now except bite fingernails. Oil was down 74¢ while waiting for the weekly inventory report expected to show lower supplies. Sadly record high oil prices are not reducing demand or bringing more supply online, the worst of all worlds (for oil)! Data on new home remains bleak. Sales of new home fell 2½% in May & prices also declined. In addition, orders for big-ticket goods were essentially even in May after declines in prior months. Strong demand for aircraft & computers offset widespread weakness in other groups.

General Mills (GIS) reported lower earnings in their Q4. EPS of 53¢ was down from last year & below forecasts, stock down 44¢. They also expect costs (i.e. wheat, corn, fuel) to rise 9% in FY2009. Sales should grow about 5% & the EPS forecast was kept in line with analysts expectations.

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