S&P 500 FINANCIALS INDEX
The MLP index fell ½ in the 359s, continuing its sideways motion. But the REIT index rose 1+ to 219. Junk bond funds are mixed again as were Treasuries. The yield on the 10 year Treasury bond went up 1 basis point to 3.38% (its highest level in 6 months).
Alerian MLP Index --- 2 weeks
Dow Jones REIT Index --- 2 weeks
10-Year Treasury Yield Index --- 2 weeks
Oil & gold were little changed, awaiting developments.
|CLF11.NYM||...Crude Oil Jan 11||...88.47 .||... 0.14||(0.2%)|
|GCZ10.CMX||...Gold Dec 10..||...1,398.50 ||... 1.20||(0.1%)|
Gold Super Cycle Link!
Wholesale prices (less food & energy) rose modestly last month due to a large increase in the cost of new cars. But there was little sign of inflation showing that a weak economy is keeping prices in check. The Labor Dept reported that the Producer Price Index rose 0.8% in Nov, the biggest rise in 8 months. But most of that increase was driven by a sharp increase in energy prices, particularly a 4.7% rise in the cost of gasoline. Food prices rose 1%, led by a 13.6% increase in the cost of fresh fruit & melons. Excluding the volatile food & energy categories, "core" producer prices rose only 0.3%. In the past year, the core index has increased only 1.2%, the smallest 12-month change since Jun. The price of new cars rose 1.7%, a rebound from a steep fall of 3% in the previous month. The sluggish economy is limiting the ability of many companies to hike prices.
Producer Prices in U.S. Rose 0.8% in November; Core Up 0.3%
Inflation ex-food & energy - 1 year
Retail sales rose for a 5th straight month in Nov, as the biggest jump in department store sales in 2 years gave the holiday shopping season a strong start. Retail sales increased 0.8% according to the Commerce Dept, after a 1.7% gain in Oct. Auto sales retreated a bit, but excluding autos, sales rose 1.2% (the best showing since Mar). Department store sales jumped 2.8%, the strongest advance in 2 years. Even the weather was playing a part. The arrival of cold weather in Nov, after 2 months of unseasonably warm weather, helped to boost sales of coats & other cold-weather gear. Retail sales also got a lift in Nov from a rise in gasoline prices pushing up sales at service stations 2.7%. However, Best Buy (BBY) just reported that its quarterly net income, ending Nov 27, fell more than expected because it lost sales of TVs & laptops to competitors. It also cut its full-year outlook. The stock dropped a whopping 6 & the chart shows that has been lumbering along for most of the last 2 years.
U.S. Retail Sales Rise Above Forecast as Consumers Recover
Best Buy --- 2 years
Sales changes at US retailers - 1 year
There is not a lot going on in the markets although Dow moved into new high territory for the year (after being on a plateau for more than 2 weeks). High yielding sectors are also drifting sideways. But Treasury yields near 6 month highs (despite the Federal Reserve purchasing more Treasuries) are unsettling. Markets are waiting for the FOMC announcement which may give them more direction. An extension of the lower tax rates remains in limbo as does the Irish bailout. Both have the potential to influence market trading.
Dow Jones Industrials --- 2 weeks
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