Tuesday, November 29, 2011

Higher markets on improved consumer confidence

Dow was up 54, advancers ahead of decliners 4-3 & NAZ inched lower.  The Financial Index was up a tad to 163, hardly a ringing endorsement of yesterday's gain.

The MLP index was up a fraction in the 366s & the REIT index was flat at 213.  Junk bond funds edged higher & Treasuries sold off, taking the yield on the 10 year Treasury bond above 2%.  Oil is up, pushing on $100 again, while gold is just crawling higher, rising above $1700.

AMZ  Alerian MLP Index

DJR  Dow Jones Equity REIT Index

Treasury bonds:

U.S. 3-month


U.S. 2-year


U.S. 10-year


CLF12.NYM...Crude Oil Jan 12...99.64 ...Up 1.43  (1.5%)

GCZ11.CMX...Gold Dec 11....1,714.60 ...Up 3.80  (0.2%)

Get the latest market update below:

Italy Pays More Than 7% at Auction of EU7.5 Billion of Bonds

Italian Treasury
Photo:   Bloomberg

Italy's borrowing costs hit a euro lifetime high of nearly 8%, taking the debt crisis to a new level of intensity hours before new prime minister Mario Monti was to meet euro zone finance ministers to set out his economic reform plans.  Can you spell, uh-oh?  2 years into Europe's sovereign debt crisis, investors are fleeing the euro zone bond market, European banks are dumping gov debt, deposits are draining from south European banks & a looming recession is aggravating the pain, fuelling doubts about the survival of the single currency.  Italy paid a record 7.89% yield to sell 3-year bonds, a leap from the 4.93% it paid a month ago, & 7.56% for 10-year bonds, compared with 6.06% at that time.  The yields were above levels at which Greece, Ireland & Portugal applied for intl bailouts.

Italy Pays More Than 7% at Bond Auction

Consumer Confidence

Photo:   Bloomberg

The Conference Board’s index increased to 56 in Nov from a revised 40.9 reading in Oct, the biggest monthly gain since 2003.  The gauge, at a 4-month high, exceeded the most-optimistic forecast (49.6).  Rising sentiment may help sustain sales during the holiday shopping, which accounts for as much as 40% of retailers’ annual revenue.  Fewer new claims for jobless benefits & cheaper fuel costs are easing the burden for consumers.  Results reflected responses from Nov 15, a week before the congressional supercommittee announced it failed to agree on a deficit-reduction plan.  That's good news, but it may prove temporary given all that is going on. 

U.S. Consumer Confidence Rises Most Since ’03

American Airlines' parent company, AMR (AMR), filed for Chapter 11.  But American Airlines, American Eagle & all other subsidiaries will honor all tickets & reservations & operate normal flight schedules during the bankruptcy filing process.  For ticket holders, "our schedule will continue, our flights will continue to operate. It is very much business as usual," said CEO Thomas Horton.  He said reductions, along with job cuts, are likely as the airline seeks to reduce expenses.  “The most important message of the day is that it will be business as usual while we focus on doing a great job for our customers,”  he continued. “All of the people of American Airlines are going to stand tall and deliver for our customers."  American Airlines passengers made up about 15% of US traffic in Oct. 

American May Trim Flight Schedule Amid Bankruptcy Cost Cuts

  • <p>France's President Nicolas Sarkozy walk on stage at a ceremony for winners of the competition for the Best French workers at the Elysee Palace, in Paris, November 25, 2011. REUTERS/Fred Dufour/Pool</p>
Photo:   Yahoo

S&P could change its outlook on France's AAA credit rating to negative within the next 10 days, the latest signal that France's top-tier status is at risk. This would follow the cut of Belgium's credit rating to double-A from double-A-plus on Fri.  Just another reminder of the growing mess for European debts.

S&P may cut France outlook within 10 days

While stocks are a little higher, enthusiasm from buyers is gone.  European debts are the center of attention & that situation remains confusing & uncertain.  So far, plans to solve problems are just that, plans.  Actions are what counts, & everybody is wondering what comes next.  Actions also require money & it is not clear where huge amounts of money will come from.  The IMF is loosely tossed around, but much of its money coms from the US which is facing budget cuts.  Other European countries may not be anxious to pour more money into what seems like a bottomless hole.  The VIX, volatility index, remains around 31, an elevated level

Dow Jones Industrial Average

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