S&P 500 FINANCIALS INDEX
| Value | 204.56 | |
| Change | 1.03 (0.5%) |
The MLP index is up a fraction in the 358s, continuing in a sideways in recent weeks. The REIT index rose 2+ to the 222s, stuck in a sideways rut for 3 months. Junk bond funds were a little higher. Treasuries were (despite purchases by the Federal Reserve). The yield on the 10 year Treasury bond shot up a startling 15 basis points to 3.08%, a level not seen since the middle of Jul. This can only be described as massive, from bets that inflation rates are headed higher. Rates on mortgages which are tied to this rate & are certain to rise, another kick in the head for home builders.
Treasury yields:
| U.S. 3-month | 0.12% | |
| U.S. 2-year | 0.45% | |
| U.S. 10-year | 3.07% |
Alerian MLP Index --- 2 weeks
Dow Jones REIT Index --- 2 weeks
10-Year Treasury Yield Index --- 2 weeks
Oil & Gold are resting. But gold is near it 2 year highs, not encouraging for inflation prospects, & gold is just below its record highs reached yesterday.
| CLF11.NYM | ...Crude Oil Jan 11 | ...89.32 | .... 0.06 | (0.1%) |
| GCZ10.CMX | ...Gold Dec 10 | ....1,418.70 | .... 3.40 (0.2%) |
Gold Super Cycle Link!
European finance ministers ruled out immediate aid for Portugal & Spain or an increase in the 750B-€ ($1T) crisis fund. A week after Ireland's 85B-€ lifeline, they voiced confidence that Spain & Portugal will tame their budget deficits, therefore the existing credit line is enough to defend them in an emergency. A 22-week high in ECB bond-buying brought a respite from speculative attacks, masking divisions among the 16 euro-area govs over the next steps to fight the explosion of debt that threatens the €. As the Irish parliament prepared to approve spending cuts, finance ministers from all 27 European Union countries endorsed the EU budget’s 22.5B-€ share of the support program & gave Ireland an extra year, until 2015, to bring its deficit down to European limits. If push comes to shove for additional euro countries with financial problems, these leaders may have tough choices on how to handle continued stress in the system.
European Union Rules Out Immediate Aid Boost, Banks on ECB to Fight Crisis
Employers posted a sharp increase in job openings in Oct, raising hopes that hiring could pick up. The Labor Dept said businesses & gov advertised nearly 3.4M jobs at the end of Oct, up 12% from the previous month, reversing 2 months of declines. This is the highest total since Aug 2008, just before the financial crisis intensified. The number of available jobs has increased by about 1M, or 44%, since Jul 2009, a month after the recession ended. But openings are still far below the 4.4M in Dec 2007, when the recession began.
Job Openings in U.S. Increased to Two-Year High of 3.36 Million in October
Job openings - 1 year
Photo: Bloomberg
Citigroup (C) stock rose after the gov made a deal to sell remaining shares of the company for a $12B profit on the bank bailout. The Treasury announced that it's selling 2.4B shares at $4.35 per share. The stock added 19¢ to $4.64 & has had a nice run this year. Adding the $20B that Citi repaid in Dec 2009, the gov will get back $57B from the bailout. The latest estimate from the Congressional Budget Office was that the $700B Troubled Asset Relief Program (TARP) would cost the gov $25B, down from an Aug estimate of $66B. With the removal of this cloud, Citi stock may do well. Its fans talk about doubling to the 10 area.
U.S. Ends Citigroup Investment With $10.5 Billion Stake Sale
Citigroup -- YTD
Markets are back in rally mode after hearing that tax & unemployment extensions may come to pass. But this is far from certain, many Dems are unhappy about the deal. The dramatic drop in Treasury prices & corresponding rise in yields deserves more attention. This legislation will add hundreds of billions to the deficit, raising inflation fears. Dow is flirting with yearly highs & today's close may be an important indication about where the Dow wants to go.
Dow Jones Industrials --- 2 weeks
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