Weekend summary

WASHINGTON (AFX) -- Sky-high energy bills in the wake of Hurricanes Rita and Katrina and the impact of a strike at Boeing Co. should combine to push the U.S. trade gap to record levels in September, economists said Friday.
"It is not a pretty mix," said Michael Gregory, senior economist at Nesbitt Burns in Toronto.
The U.S. trade gap is expected to widen 4.1 to 61.4 billion in September, according to a survey of economists conducted by MarketWatch. The data will be released Thursday at 8:30 a.m.
This would be 1 billion more than the record monthly deficit of 60.4 billion set in February.
Ellen Beeson, economist at Bank of Tokyo-Mitsubishi, said the big driver of the deficit was the price of petroleum.
Prices of imported goods had the biggest increase in 15 years in September, as prices for imported natural gas rose 28.8.
Import prices for October will be reported across town at the Labor Department at the same time Thursday as the trade data is released at the Commerce Department. Economists expect prices fell 0.1 in October after soaring 2.3 in September.
Surprisingly, Beeson said, a survey of port executives found trade activity was not slowed significantly in September despite the hurricanes.
"From what we gathered from the ports in the Gulf Coast, only one port was shut and most of their imports were diverted to other areas that remained open," he added.
Gregory of Nesbitt Burns said that exports will fail to get a lift in September from Boeing deliveries. Partly as a result of a strike, only two planes were shipped in September, down from 25 in August, he pointed out.
Avery Shenfeld, senior economist at CIBC World Markets Inc, said that the only utility of the report will be to see how it stacks up against the government's assumptions used in estimating third-quarter gross domestic product.
The economy grew at a 3.8 annual rate in the July-September quarter, according to the advance government estimate that assumes a 62.8 billion trade gap in September.
Shenfeld also said that the record trade gap should not have an impact on financial markets, which will be looking for the trend in coming months.
"The most trade-sensitive market, foreign exchange, has been ignoring the bad news on U.S. trade deficit and instead favored dollars due to Fed hikes," he added.
The special factors boosting the trade gap in September should reverse in coming months, according to economists.
Beeson said that consumer spending should slow in the fourth quarter due to the high energy prices, and that this should begin to trim the trade deficit.
The other big release is the November consumer-sentiment report from the University of Michigan, to be released Friday. Economists expect the index to rebound from a 13-year low of 74.2 in October to about 76.6.

2005-11-06 09:26:49
Natural gas slumps to lowest mark since Aug, crude lower in US trade
SAN FRANCISCO (XFN-ASIA -- Natural-gas futures closed Friday at their lowest
level since August, down almost 13 pct for the week, while crude-oil futures
fell over 1 usd a barrel to end the week with a loss of 1 pct, dealers said.

Good morning traders!

In Asia this morning, the Hang Seng was down 215.99 points at 14,369.80 at the mid-point while the Nikkei closed down 14.36 points at 14,061.60.

Oil prices were weaker in Asian trade as mild weather in the northern hemisphere calmed concerns over demand for heating oil. New York's main contract, light sweet crude for delivery in December, was down 44 cents to $60.14 a barrel from $60.58 in US trading Friday.

Early broker notes:

WHITBREAD INITIATED 'SELL' AT DKW; PRICE TARGET 850P
COMPASS CUT TO 'HOLD' FROM 'BUY' AT DKW
MCCARTHY & STONE CUT TO 'NEUTRAL' VS 'BUY' AT MERRILL LYNCH
INTERMEDIATE CAPITAL GROUP UPGRADED TO 'BUY' VS 'ADD' AT DKW

Happy trading!

G.

LONDON (AFX) - Leading shares are set to open the session flat as the market pauses for breath after 200 point plus gains last week with continued bid fever in the weekend press offset by caution ahead of the Bank of England's rate decision on Thursday, dealers said.
According to spread bettor firm CMC, the FTSE 100 is seen opening 1 point higher at around 5425, after closing on Friday at 5423.6, and having notched up its biggest weekly gain in 2-1/2 years.

MARKETS
Tokyo: Nikkei midday 14,061.60 down 14.36
Hang Seng midday 14,369.80 down 215.99

TODAY'S PRESS
* CBI urges Brown to fix 10 bln stg 'black hole' in public finances; employers steer collision course with chancellor - FT
* Royal Dutch Shell projects 'over-reliant' on contractors; concern that handing over critical exploration and production functions is linked to spiraling costs - FT
* Steel company valuations poised for a fall as increased Chinese output is cutting its reliance on imported supplies; China, for long the main driver of surging demand, making more of its own steel, causing a potential excess of supply in other parts of the world - FT
* Hargreaves Services, the UK's biggest independent importer of coal, planning to float on AIM - FT

PRESS COMMENT
FT
THE LEX COLUMN comments on Hedge fund returns (these are driven more by beta than alpha), Capital accounts, Italian economy (it would be fitting if one of Berlusconi's parting gestures was to impede his successor's ability to act where he has not)
Independent
Small Talk: Stephen Foley comments on Boustead, Trakm8 (will be valued at one-third of the value it hoped for when it began planning for a float in May), First Artist (doing well), Hargreaves (joining AIM)
Times
Luminar (Alchemy Partners understood to be in exclusive talks to acquire the entertainment division of Luminar)

Good morning all.

End-of-day Market Summary

a very late hello!