Friday, November 4, 2011

Markets decline ahead of confidence vote in Greece

Dow fell declined 61, (closing above its lows & near 12K), decliners over advancers 3-2 & NAZ was off 11.  Bank stocks had a rough day, the Financial Index dropped 2+ to the 178s. 

The MLP index rose 2+ to 370 while the REIT index fell 2+ to the 229s.  Junk bond funds & Treasuries were a little lower.  Oil fluctuated near a 3-month high after the jobs report & the G-20 failed to agree to boost IMF resources to fight Europe’s debt   Gold traders are the most bullish in 3 weeks after hedge funds boosted their wagers on higher prices on speculation Europe's debt crisis & slow US growth will spur demand for gold as a protection of wealth.



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CLZ11.NYM...Crude Oil Dec 11...94.28 ....Up 0.21  (0.2%)

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Greek Lawmakers Seek Route to National Government

Photo:   Bloomberg

Party lawmakers urged Prime Minister Papandreou to step aside & allow the formation of a new gov that can approve an EU aid package needed to avert default.  A deputy in the Pasok party, said a confidence vote tonight signaled the end of the administration & a colleague said the motion would support the formation of an administration of national consensus (i.e. new gov).  The vote of confidence will take place tonight.  “The issue is how to keep the country going and then evolve the current government into a broader government that takes on board other political forces,” the Energy Minister said.  “We need broader support and approval for the kind of measures that were taken.”  I remember saying 3 months ago, the Greek drama plays on.  And on & on & on.   Nothing has been resolved.

Berkshire Hathaway Inc. Chairman And CEO Warren Buffett

Photo:   Bloomberg
Bershire Hathaway may post its first quarterly decline in book value in more than a year on drops in Wells Fargo (WFC) , American Express (AMX & a Dow stock) & equity-derivative bets.  Book value is estimated to have slipped to under $98K per Class A share on Sep 30 from $98.7K on Jun 30.  Warren Buffett, is adding investments after a market slump pressured the $65B stock portfolio & its equity derivatives (which have about $35B at risk).  The S&P 500 had its biggest quarterly decline since 2008, as Buffett spent $18B on common-stock bets, Bank of America (BAC & a Dow stock) preferred stock & the takeover of Lubrizol.  On Sep. 26, BRK.A announced a plan to repurchase shares.   The stock fell $2428 (2%).

Berkshire May Post First Book-Value Drop in Five Quarters on Equity Bets

Berkshire Hathaway Inc. (BRK/A)

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Sony Falls Most in Eight Months on Full-Year Loss Forecast

Photo:   Bloomberg

Sony, the largest exporter of consumer electronics from Japan, fell the most in almost 8 months in Tokyo after forecasting a full-year loss because of a strong ¥, waning TV sales & flooding damage in Thailand.  The company, based in Tokyo, said it will lose ¥90B ($1.2B) this year, compared with a previous projection for a ¥60B profit.  The loss will be its 4th in a row.  The world’s #3 TV maker slashed TV sales targets after the ¥ reached a postwar high & floods in Thailand cut production.  Its annual sales projection were lowered to 20M TVs from 22M.  SNE cut annual sales targets for PCs, compact cameras & Blu-ray DVD players.  While many of its troubles are internal, a less than rebust global economic recovery is aggravating those problems.  The US shares fell 39¢ (2%).

Sony Falls Most in Eight Months After Forecasting Fourth Annual Net Loss

Sony Corp Ord (SNE)

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After the super rally in Oct, stocks can be excused for taking a breather this week, Dow fell 250.  There was a lot of gloomy news which was taken fairly well.  An anemic jobs recovery was reaffirmed today & the G-20 failed to agree on how to aid ailing economies.  There are numerous signs that the European & US economies are not having strong recoveries.  When companies report Q3 earnings, common themes are higher earnings come from overseas growth & belt tightening in the US (as a way of dealing with a sluggish recovery).  Heat is starting to increase in DC on findings by the supercommitte which is charged with reducing massive gov deficits.  That will get ugly because both sides are standing by their principals.  There is a lot riding on the confidence vote in Greece tonight.  But there is so much disarray in Europe, that it is just one of many uncertainties.  

Dow Industrials (INDU)

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