Updates resume July 5

Quick Overview

• U.S. Personal incomes rose 0.4% in May and consumer spending was up 0.5%.
  

• U.S. Construction spending rose 0.9% MoM, but fell 2.2% YoY.
  

• The National Association of Purchasing Managers' Chicago index fell from 61.7 to 60.2 in June.
  

• The University of Michigan's consumer sentiment index fell from 88.3 to 85.3 in June.
  

• Canada’s GDP rose 2.1% YoY.
  

• U.K.s GDP rose 3.0% YoY.
  

• YoY Japans consumer prices were unchanged.
  

• New Zealand's GDP rose 2.5% YoY
  

• The USDA estimate for planted acres:
  Corn at 92.9 million acres, up 19% YoY-- the most since 1944.
  Soybeans at 64.1 million acres, down 15% YoY -- the lowest since 1995.
  Wheat at 60.5 million acres, up 6% YoY.
  Cotton at 11.1 million acres, down 28% YoY -- the lowest since 1989.
  

• The USDA estimates June 1, 2007, stocks at:
  Corn totaled 3.53 billion bushels, down 19% YoY.
  Soybeans totaled 1.09 billion bushels, up 10% YoY.
  Wheat totaled 456 million bushels, down 20% YoY.
  

• The International Grain Council has lowered its outlook for world wheat harvests due to droughts in Russia and the Ukraine. The current estimate is 614 million tonnes against the previous guess of 620.
  

• The USDA estimates 62.75 million head of hogs and pigs in inventory on June 1st, up 1.7% YoY

Quick Overview

• The Federal Reserve kept the federal fund rate unchanged at 5.25%, as expected.
  

• U.S. GDP was up 0.7% in the first quarter of 2007.
  

• U.S. personal consumption expenditures rose 2.3%.
  

• U.S. bank regulators have agreed on new standards for subprime mortgage loans .. to be announced tomorrow.
  

• Germany's unemployment rate improved from 9.2% to 9.1% in June,
  

• U.K. house prices rose 1.1% in June.
  

• Japan's core consumer price index for May fell 0.1 % YoY.
  

• Japan's jobless rate for May unchanged at 3.8% MoM.

Clinton Surpasses Obama in Site Traffic Race, Paul Rockets to First
Hillary Clinton overtook Barack Obama in May, John Edwards and Rudy Giuliani held steady and Ron Paul rocketed from fifth place to first. That's according to Hitwise data showing the ebb and flow of traffic to the official sites of the Democratic and Republican presidential primary candidates.

Quick Overview

• U.S. Durable goods orders were down 2.8% in May, weaker than expected.
  

• YoY Retail sales in Japan were up 0.1% in May.

• Japan's industrial production unexpectedly fell 0.4% in May, raising concern that the world's second-largest economy may stall.
  

• The U.S. DOE said:
  Supplies of crude oil rose 1.6 million barrels last week to 350.9 million barrels.
  Supplies of gasoline fell 700,000 barrels
  Supplies of heating oil supplies fell 200,000 barrels.
  Gasoline demand was up 1.4% YoY
  Distillate demand was up 3.5% YoY.
  
  
  

China Industrial-Company Profits Climb 42 Percent Soaring profits help to fund the construction of factories and mines, raising the risk of overcapacity. Premier Wen Jiabao on June 14 highlighted the risk of a rebound in fixed-asset investment and signaled the central bank may raise interest rates or curb bank lending.

Quick Overview

• The U.S. Census Bureau said new home sales were down 1.6% from April's pace, and down 21% YoY. This is the fourth drop in the past five months, providing further evidence of a continued slump in housing.
  

• U.S. Index of consumer confidence fell from 108.5 to 103.9 in June -- more than expected.
  

• Shares of COSCO, Asia's largest container line, as much as doubled Tuesday on their Shanghai trading debut.
  
  
  

• Stats Canada said Canada's farmers planted:
  21.7 million acres of wheat, down 10.5% from a year ago.
  14.6 million acres of canola, up 17% from a year ago.
  3.5 million acres of corn, up 29% from a year ago.
  2.9 million acres of soybeans, down 3% from a year ago.
  

Bee Disease May Destroy Hives Worldwide, Ruin Crops Bloomberg) -- A malady that has decimated millions of honeybees and is threatening $14.6 billion of U.S. crops is also harming hives in Asia, Europe and South America, said a scientist scheduled to testify before Congress tomorrow.

Quick Overview

• Growing concerns about the subprime mortgage market dragged down shares of Bear Stearns and Goldman Sachs
  
  
  

• The National Association of Realtors said that U.S. existing home sales were down 0.3% MoM -- better than expected.
  
  

• Peru said their silver production was down 11.4% YoY, and gold production was down 28% YoY. Peru is the worlds largest silver producer.
  
  
  

Quick Overview

• The Ifo Institute's index of business confidence in Germany fell from 108.6 to 107.0 in June.
  

• The USDA said that there were 11.272 million head of cattle on feed as of June 1st, up 0.8% YoY.
  

• There were 57.2 million pounds of frozen bellies in storage, down 3% YoY.
  

• Frozen pork in storage totaled 491 million pounds, up 3% YoY.
  

• There were 851 million pounds of frozen orange juice in U.S. cold storage, down 17% YoY.
  

``The problem is not what we see happening, but what we don't see,''
said Joseph Mason, associate professor of finance at Drexel University in Philadelphia and co-author of an 84-page study this year on the CDO market. ``We don't know the price of these assets. We don't know which banks are exposed to this sector. These conditions are the classic conditions for financial crises across history.''
The bailout of the fund would be the largest since Long- Term Capital Management LP, which received $3.625 billion from 14 lenders in 1998.

Yen Reaches 4 1/2-Year Low Against Dollar; Carry Trades to Rise
Japanese finance companies will market more than 1.5 trillion yen ($12.1 billion) of foreign-currency investment trusts before the end of June, according to data compiled by Bloomberg. The funds are aimed at individual investors who want to seek out assets with higher yields.

``It's an industry issue,'' What are their true prices?
Investors from hedge funds to pension funds and foreign banks have snapped up CDOs, securities backed by pools of assets, as a new way to invest in debt, making it the fastest-growing market and pushing the amount outstanding to more than $1 trillion.

Quick Overview

• U.S. Leading indicators rose 0.3% in May
  

• Retail sales in Canada were up 0.4% MoM and up 4.7 YoY.
  

• The DoE said that underground supplies of natural gas were up 89 billion cubic feet to 2.344 trillion cubic feet.
  

Sakakibara Says Bank of Japan Must Lift Rates to Strengthen Yen
``Japan's interest rates are absurdly low and creating a carry trade bubble, and this is quite dangerous,'' said Sakakibara

Bear Stearns Fund Collapse Sends Shock Through CDOs A sale would give banks, brokerages and investors the one thing they want to avoid: a real price on the bonds in the fund that could serve as a benchmark. The securities are known as collateralized debt obligations, which exceed $1 trillion and comprise the fastest-growing part of the bond market.

Quick Overview

• Leading indicators in Australia rose 6.7% YoY.
  

• Japan's merchandise trade surplus rose 15.1% YoY.
  
  

• The U.S. DoE said that:
  Supplies of crude oil rose 6.9 million barrels to 349.3 million barrels
  Supplies of gasoline rose 1.8 million barrels
  Supplies of heating oil fell 400,000 barrels.
  Gasoline demand was up 1.5% YoY
  Distillate demand was up 2.8% YoY.

Excluding Ron Paul After our call, I got to thinking about this Failor character: what kind of person running a "tax relief" organization would exclude the presidential candidate with – and this is no exaggeration – possibly the best record on taxation in all of American history, someone who favors the abolition of the income tax and the drastic reduction or elimination of nearly all other federal taxes? Should this be the Iowans For a Little Tax Relief, But Not Too Much?

Quick Overview

• U.S. Housing starts were down 2.1% MoM and down 26% YoY. Building permits were up 3% MoM.
  

• China sold $5.8 billion of U.S. T-bonds in April, the biggest monthly sale in seven years.
  

• Canadian CPI rose 2.2% YoY
  

• Investor confidence in Germany dropped from 24 to 20.3 in June, more than expected.
  

• Australia’s wheat crop will total 22.5 tons, down from a previous estimate of 25 tons due to dry conditions.
  

• Liaoning province in northeast China is having its worst drought in 30 years. Some 7% of China's corn and 5% of its wheat come there.
  

Quick Overview

• YoY Swiss industrial production rose 7.3%.
  

• Standard and Poor's raised credit ratings for three large Japanese banks, citing improved balance sheets and an improved economy.
  

• The National Association of Homebuilders sentiment index fell from 30 to 28 in June. The lowest level in more than 16 years.
  

• Brazil, the world's biggest producer of the sweetener and sugarcane-based ethanol, will increase the required blend of the biofuel in domestic gasoline to 25 percent from 23 percent starting July 1.
  
  

• Shanghai is set to overtake Singapore as the world's busiest port in 2008.