S&P 500 FINANCIALS INDEX
| Value | 201.13 | |
| Change | 2.85 (1.4%) |
The Alerian MLP Index rocketed ahead almost 3 to 258 (up an amazing 73 YTD), yet another record. This brings its yield down to 6¼%. The Dow Jones REIT Index also charged ahead, up 3½ to 226+, a new yearly high, on favorable projections for next year. As expected, junk bond funds were higher to their best levels in more than 2 years. Treasury notes rose, pushing yields on 2 & 5 year securities to record lows, a day after the FED said it will focus its $600B in asset purchases through Jun on medium-maturity debt. 10 year Treasury bonds surged taking the yield down a startling 15 basis points to 2.47% & very near its lows in 2010.
Treasury Yields:
| U.S. 3-month | 0.11% | |
| U.S. 2-year | 0.32% | |
| U.S. 10-year | 2.47% |
Alerian MLP Index --- 2 weeks
Dow Jones REIT Index --- 2 weeks
10-Year Treasury Yield Index --- 2 weeks
Oil rose for the 4th day in a row to a 6-month high after the FED said it will expand record measures to spur the economy in the US (the world’s biggest crude consumer). Gold surged by the most in 8 months to new record levels after the FED said it will buy more debt, undercutting the dollar & boosting demand for gold.
| CLZ10.NYM | ...Crude Oil Dec 10 | ...86.24 . | ... 1.55 | (1.8%) |
| GCX10.CMX | ...Gold Nov 10 | ....1,376.90 | ... 39.80 | (3.0%) |
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Photo: Bloomberg
The number seeking jobless benefits jumped sharply last week following 2 straight weeks of declines. The Labor Dept said initial claims for unemployment aid rose 20K to 457K last week, more than had been expected. Claims have fluctuated around the 450K all year & need to drop below 425K to signal sustained job gains. The 4-week average rose 2K to 456K. Tomorrow the Labor Dept will release the jobs figures for Oct . That report is forecasted to show that employers added a net total of 60K jobs in Oct & the unemployment rate remained 9.6% for the 3rd straight month. That gain in jobs is far below the 200K needed to keep up with population growth & to get some of the 15M unemployed back to work. The number of people continuing to claim unemployment benefits dropped by 42K to 4.34M, the lowest in 2 years. That doesn't include several million claiming extended unemployment aid, paid for by the federal gov. More than 5M received the emergency benefits during the week ending Oct 16. All told, more than 8.7M received jobless benefits that week! The roaring stock market is ignoring these glum numbers.
Initial Jobless Claims in the U.S. Climb More Than Forecast
Jobless Claims - 1 year
4 week moving average - 1 year
# receiving unemployment insurance
Good news for REITs, commercial real estate rents are poised to rise in 2011 after reaching a low this year, according to Cushman & Wakefield, the largest closely held property services company. Economic growth is beginning to stimulate demand for office space. The US economy expanded at a 2% rate in Q3, the 5th consecutive quarterly increase which followed 12 months of contraction as the economy weathered the worst financial crisis since the Great Depression. Office vacancies in central business districts declined for the 2nd straight time in Q3 as tenants signed leases for additional space. The average vacancy rate fell to 14.7% from 14.8% in Q2 (very high rates).
Commercial Real Estate Rents in U.S. to Rise in '11, Cushman's Mosler Says
General Motors & its gov owners disagreed over the price for the IPO before settling on a range between $26-29 per share. The US wanted more. Over the past month, GM & its bankers agreed to a higher offering price range as they watched rival Ford (F) rise. At a mid-October meeting, the parties settled on $25-29 per share. As Ford shares climbed, they boosted the bottom of the range.
GM Said to Have Disagreed With Treasury Over IPO Price Range
To find winners today, just throw darts. Everything is surging, but that creates problems. When stocks rise, Treasuries & gold are not supposed to surge to record levels. This is a major disconnect the markets will have to work out. But for the time being Dow is at new highs for 2010 making the bulls happy.
Dow Jones Industrials --- 2 weeks
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