S&P 500 FINANCIALS INDEX
| Value | 198.29 | |
| Change | -3.50 (-1.7%) |
The MLP index took a thumping, down 6½ to the 355s. By way of comparison, a move of 1% is considered big, but this is closer to 2%. The REIT index also dropped big, down 6 to 210. Junk bond funds are being hit hard, down 3-5%. Fears in the financial markets are growing, but that has not helped Treasuries. The yield on the 10 year Treasury bond was up another 1 basis point to 2.92% & up a massive 50+ basis points in just 2 weeks. QE2 bond purchases have started, but they are not helping bring down interest rates.
Treasury yields:
| U.S. 3-month | 0.13% | |
| U.S. 2-year | 0.50% | |
| U.S. 10-year | 2.92% |
Alerian MLP Index --- 2 weeks
Dow Jones REIT Index --- 2 weeks
10-Year Treasury Yield Index --- 2 weeks
All markets are nervous. Oil tumbled to a 2-week low on speculation Europe’s deepening debt crisis & steps to cool Asia’s economic growth will reduce commodity demand. Even gold is caught up in today's selling.
| CLZ10.NYM | ...Crude Oil Dec 10 | ...83.09 | .... 1.77 (2.1%) |
| GCX10.CMX | ...Gold Nov 10 | ...1,354.70 | ... 12.30 | (0.9%) |
Gold Super Cycle Link! Click Here
Photo: Bloomberg
US home-builder sentiment in Nov rose slightly for the 2nd straight month though it remains at historically low levels. The National Association of Home Builders/Wells Fargo Housing Market Index rose less than expected to 16 from last month's downwardly revised 15 (Oct was first reported as 16) but analysts expected a rise to 17. A reading above 50 indicates that more builders view sales conditions as good than poor (the index has not been above 50 in 4½ years). Home seizures fell 9% from the previous month in Oct, the biggest decline in a year, as state attorneys-general began a nationwide probe into lender foreclosure practices. Foreclosure filings, which also include default & auction notices, fell 4% from the prior month & were little changed from a year earlier. Home building remains depressed with no hope of relief over the short term.
U.S. Homebuilder Confidence Index Increases for Second Consecutive Month
Home builder sentiment index - 1 year
Photo: Bloomberg
Home Depot (HD), a Dow stock, reported higher-than-expected quarterly earnings, helped by tighter cost controls, & raised its profit outlook for 2010. However, HD cut its full-year sales forecast as US consumers put off expensive renovations & opt for repairs & smaller remodeling projects instead. Sales at HD stores in the US open at least a year rose 1.5%. EPS rose 51¢ in Q3 (ended Oct 31) from 41¢ last year, beating forecasts of 48¢. Sales rose 1.4% to $16.6B. HD forecast earnings of $1.94 a share from continuing operations for FY2010, up 4¢ from its prior outlook & expects sales growth of 2.2%, down from a prior view of 2.6%. The stock is up 1.14 & has worked its way back from the lows in early last year.
Home Depot Profit Beats Analysts' Estimate on Improving Margin
Home Depot --- 2 years
Stocks retreated on Asian inflation threats & Euro debt worries starting with the possibility Ireland might need a bailout. There are reports Ireland is in talks with officials about a bailout that would shore up the state’s finances as well as enable it to inject capital into the country’s banks. Austria is threatening to block its next transfer of funds to Greece as the gov lags deficit-cutting targets just 6 months after it agreed on a bailout with the European Union & International Monetary Fund. Treasuries are sinking with yields rising, calling into question the wisdom of QE2 which is supposed to lower interest rates to help the economy recover. Discord was substantial last week & confusion is growing this week. Dow is falling back to 11K, a very important support level!
Dow Jones Industrials --- 2 weeks
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