S&P 500 FINANCIALS INDEX
| Value | 196.79 | |
| Change | 2.66 (1.4%) |
MLPs were lower as the index fell 1 to the 355s, hardly of concern to the bulls. REITs were also mushy with the index up only a small fraction in the 215s. Junk bond funds (stocks with high yields) had good gains while Treasuries sold off. Treasuries fell amid speculation the European Central Bank may take additional steps to prevent the euro region’s debt crisis from spreading diminished the appeal of US securities as a safe haven. The yield on the 10 year Treasury bond rose a whopping 12 basis points to 2.91%, near its highest levels in 4 months.
Treasury yields:
| U.S. 3-month | 0.16% | |
| U.S. 2-year | 0.51% | |
| U.S. 10-year | 2.92% |
Alerian MLP Index --- 2 weeks
Dow Jones REIT Index --- 2 weeks
10-Year Treasury Yield Index --- 2 weeks
Oil rose benefiting from talk yesterday about $100 oil. The $85-90 zone is the high end of its trading range over the last 2 years. Meanwhile gold is resting.
| CLF11.NYM | ...Crude Oil Jan 11 | ...85.36 | ... 1.29 | (1.5%) |
| GCZ10.CMX | ...Gold Dec 10 | .....1,385.80 | ... 0.80 | (0.1%) |
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Construction spending in the US rose for a 2nd straight month in Oct, pushed up by growth in residential building & gov projects. Construction spending increased 0.7% in Oct, matching the Sep gain according to, the Commerce Dept (marking the first time that construction activity has risen for 2 straight months since Mar & Apr). Spending rose to an annual rate of $802.3B. However, construction spending is still 33.7% below the peak hit in Mar 2006. Much of the strength came from a 2.5% rise in private residential construction, the biggest one-month gain since Apr & pushed activity in this category to an annual rate of $229.6B. Spending on residential projects was up 0.6% in Sep after 4 straight monthly declines. Spending on nonresidential construction projects dropped 0.7B to an annual rate of $252.2B. Declines in construction of office buildings, shopping centers & hotels led to the drop. Spending on gov projects rose 0.4% to an annual rate of $320.5B. Federal building increased 0.9% to an annual rate of $33B, an all-time high on records that go back to 1992. Spending on state & local projects rose 0.4% to a rate of $287.5B. The good news in residential spending may not last. With the 10 year Treasury yield up 50 basis points in the last 2 months, mortgage rates are climbing (from their record low levels) while home builders remain in "challenging" times.
Construction Spending in U.S. Unexpectedly Climbs on Residential Projects
Change in residential spending - 1 year
Research firm comScore reported Cyber Monday revenue rose 16% from a year ago to $1.0B, the first one-day spending total above $1B ever! Since the beginning of Nov, online sales are up 13% to $13.55B. Meanwhile, another company, Coremetrics, found Cyber Monday sales rose 19.4% over last year. Cyber Monday was also PayPal's biggest day ever as online payments rose 19% from last year. Though it is growing quickly, online spending makes up only 8-10% of total holiday spending. ComScore said the number of buyers online increased at a slower rate than total spending, up 4% to 9M. The average shopper spent 12% more, at $114.24 each, according to the data. ShopperTrak data shows revenue at stores in shopping malls was flat over the weekend following Thanksgiving, but traffic rose 2.8%.
Cyber Monday sales top $1 billion for first time AP
The new month started with the bulls taking control of the markets (after last month's drab performance). But it's interesting that MLPs & REITs were left behind. The residential data looks suspicious to me with housing starts in the doldrums. The important jobs report on Fri will give a better idea about how the recovery is progressing.
Dow Jones Industrials --- 2 weeks
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