S&P 500 FINANCIALS INDEX
| Value 197.60 | Change -3.71 | % Change -1.8% |
High yields were soft along with the markets. The Alerian MLP index fell .37 in the 259s. The chart shows it has done very well in the last 2 months after already having its best year in history. The REIT Index fell 2½ & junk bond funds were weak. The 10 year Treasury bond rose, taking the yield down 3 basis points to 3.45%. The yield has been near 3½% for more than 3 months despite the Treasury constantly going to the market to raise more money. Today Treasury sold a record $16B of 30 year bonds at a mediocre auction. Treasury reported after the close that the federal deficit for Oct set a record of $176.4B, revenues plunged while spending remained high. Sadly there is no end in sight for Treasury auctions.
Alerian MLP index --- 2 months
Dow Jones REIT Index --- 2 months
10-year Treasury Yld Index - 3 months
A jump in petroleum supplies last week stirred worries that falling demand for energy was a sign of more weakness in the economy. The report dropped oil 3%, below 77. Gold fell but is above the 1100 floor.
| CLZ09.NYM | ..Crude Oil Dec 09 | ..76.69 | .. 2.59 ......(3.3%) |
| GCX09.CMX | ..Gold Nov 09 | ..1,108.00 | .. 6.80 ......(0.6%) |
Wal-Mart (WMT), up 27¢ today, is seen as a key indicator of consumer spending trends. Its report today raised fears about consumer spending. Investors have worried for months that consumers are so strained by unemployment & lower home prices that they won't spend more to help the economy recover. This resulted in falling stock prices on a light volume day (floor volume on NYSE was just over 1B shares).
Tomorrow KKR is expected to bring Dollar General to the market at a healthy price of $20 per share (around 29 times EPS). By comparison, WMT is valued at 15 times EPS. They plan to sell 34M shares in the largest IPO for a retailer in 17 years. It will be closely watched as the IPO market has been uneven (I call it mushy) this year.
Dow Jones REIT Index --- 2 months
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