The markets finished in the black, but just barely. Dow rose 21, advancers over decliners 3-2 & NAZ gained 13. The Financial Index rose a fraction to the 187s, getting nearer to the 189 highs in late Oct.
The MLP index fell 1 to the 386s & the REIT was off 1+ to 234. Junk bond funds were mixed & Treasuries slipped a little. Oil dropped the most in 2 weeks after a proposed EU embargo of Iranian oil imports was said likely to be delayed for 6 months (Europeans don't have the guts to make a stand). Gold started the year off right & is extending its gains.
![Live 24 hours gold chart [Kitco Inc.]](http://www.kitco.com/images/live/gold.gif)
Photo: Bloomberg
ECB President Draghi said his strategy for battling the debt crisis is starting to work. The ECB’s massive injection of cash into the financial system last month is beginning to lubricate seized credit markets & there are “tentative signs” of economic stabilization in the euro area. While “substantial downside risks” still remain, he pointed to falling yields on Italian & Spanish debt this week. That may mitigate the need for further interest rate cuts in the short term & muffle calls for the ECB to step up its gov bond purchases. While the region is still in danger of sliding into recession after the debt crisis spread to Italy & Spain, driving up borrowing costs & hurting the export markets of stronger economies such as Germany, recent data suggest the worst may be over. The € rose more than a penny to $1.28+ after these comments. Asked if the ECB is open to cutting rates further, Draghi said it depends on the inflation outlook. He indicated rates will remain low for an extended period. “The monetary stance is and will remain accommodative,” Draghi said. “Uncertainty is very high. We will monitor all developments and stand ready to act.” We're in make it as you go along teritory.
Time is running short to clinch a deal on a voluntary debt exchange for Greece, private sector bondholders warned during crunch talks. Euro zone sources said Greece might force reluctant investors to accept losses. Negotiations on the debt swap deal have entered the final stretch after dragging on for months. "A range of issues were discussed and some key areas remain unresolved. Discussions will continue in Athens tomorrow, but time for reaching an agreement is running short," the Institute of International Finance (IIF) said. "It is essential in order to finalize the voluntary (private sector involvement) agreement that support be given by all official parties in the days ahead," the IIF said. Greek officials sounded rather more optimistic. "I'm cautious and very confident after this two-hour meeting," Finance Minister Venizelos said. A finance ministry source said Greece could reach a deal by the end of next week, with a formal offer possible by early Feb.
Time for Greek debt swap deal "running short": IIF
Holiday sales rose 4.1%, better than the forecast for a 3.8% gain, but the season was clouded by heavy discounting needed to get shoppers to spend, particularly in the final weeks before Christmas. The National Retail Federation said that retail sales for Nov & Dec totaled $471.5B. Dec sales rose 4.1% compared with a year ago, but declined 0.06% from Nov. "In a matchup between the final two months of 2011, November clearly wins, but the in the end, retailers' promotions struck the right chord for budget-focused holiday shoppers," Jack Kleinhenz, the organization's chief economist, said. "Though we are seeing evidence that the economy still has a critical hold on consumers' purchases decisions, this strength in spending could continue in 2012." The 4.1% pace was below the 5.2% increase in 2010, but still well above the 2.6% average over the past 10 years. Heading into the season, stores knew it would be challenging to lure shoppers, so they plied customers with free shipping & low prices.
Holiday sales rise 4.1 percent AP
Photo: Yahoo
Fixed mortgage rates fell again to a record low, offering for those who can afford to buy or refinance homes. But few are taking advantage of historic low rates. Freddie Mac said the average rate on the 30-year fixed mortgage fell to 3.89%, below the previous record of 3.91% reached 3 weeks ago. The average on the 15-year fixed mortgage ticked down to 3.16%, from a record 3.21% 3 weeks ago. Mortgage rates are lower because they track the yield on the 10-year Treasury bond which fell below 2%. They could fall even lower if the Federal Reserve (FED) launches another round of bond purchases. Low interest rates by the FED are not giving a boost to housing.
Rate on 30-Year Mortgage Drops to Record 3.89 Pct.
With small gyrations, Dow has been working it way higher this week. It's up 113 as markets get ready for the rash of earnings reports. The rise was helped by easing tensions from the European debt mess. In addition, Iranian threats about closing the Strait have lessened. Not much left do do but wait for the earnings, starting with the biggest banks. I have a feeling they will be viewed as "good" which will bring more buyers into the market.
The MLP index fell 1 to the 386s & the REIT was off 1+ to 234. Junk bond funds were mixed & Treasuries slipped a little. Oil dropped the most in 2 weeks after a proposed EU embargo of Iranian oil imports was said likely to be delayed for 6 months (Europeans don't have the guts to make a stand). Gold started the year off right & is extending its gains.
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Treasury yields:
U.S. 3-month | 0.020% | |
U.S. 2-year | 0.225% | |
U.S. 10-year | 1.928% |
| CLG12.NYM | ...Crude Oil Feb 12 | ...99.07 | ... 1.80 | (1.8%) |
ECB President Draghi said his strategy for battling the debt crisis is starting to work. The ECB’s massive injection of cash into the financial system last month is beginning to lubricate seized credit markets & there are “tentative signs” of economic stabilization in the euro area. While “substantial downside risks” still remain, he pointed to falling yields on Italian & Spanish debt this week. That may mitigate the need for further interest rate cuts in the short term & muffle calls for the ECB to step up its gov bond purchases. While the region is still in danger of sliding into recession after the debt crisis spread to Italy & Spain, driving up borrowing costs & hurting the export markets of stronger economies such as Germany, recent data suggest the worst may be over. The € rose more than a penny to $1.28+ after these comments. Asked if the ECB is open to cutting rates further, Draghi said it depends on the inflation outlook. He indicated rates will remain low for an extended period. “The monetary stance is and will remain accommodative,” Draghi said. “Uncertainty is very high. We will monitor all developments and stand ready to act.” We're in make it as you go along teritory.
Time is running short to clinch a deal on a voluntary debt exchange for Greece, private sector bondholders warned during crunch talks. Euro zone sources said Greece might force reluctant investors to accept losses. Negotiations on the debt swap deal have entered the final stretch after dragging on for months. "A range of issues were discussed and some key areas remain unresolved. Discussions will continue in Athens tomorrow, but time for reaching an agreement is running short," the Institute of International Finance (IIF) said. "It is essential in order to finalize the voluntary (private sector involvement) agreement that support be given by all official parties in the days ahead," the IIF said. Greek officials sounded rather more optimistic. "I'm cautious and very confident after this two-hour meeting," Finance Minister Venizelos said. A finance ministry source said Greece could reach a deal by the end of next week, with a formal offer possible by early Feb.
Time for Greek debt swap deal "running short": IIF
Holiday sales rose 4.1%, better than the forecast for a 3.8% gain, but the season was clouded by heavy discounting needed to get shoppers to spend, particularly in the final weeks before Christmas. The National Retail Federation said that retail sales for Nov & Dec totaled $471.5B. Dec sales rose 4.1% compared with a year ago, but declined 0.06% from Nov. "In a matchup between the final two months of 2011, November clearly wins, but the in the end, retailers' promotions struck the right chord for budget-focused holiday shoppers," Jack Kleinhenz, the organization's chief economist, said. "Though we are seeing evidence that the economy still has a critical hold on consumers' purchases decisions, this strength in spending could continue in 2012." The 4.1% pace was below the 5.2% increase in 2010, but still well above the 2.6% average over the past 10 years. Heading into the season, stores knew it would be challenging to lure shoppers, so they plied customers with free shipping & low prices.
Holiday sales rise 4.1 percent AP
Photo: Yahoo
Fixed mortgage rates fell again to a record low, offering for those who can afford to buy or refinance homes. But few are taking advantage of historic low rates. Freddie Mac said the average rate on the 30-year fixed mortgage fell to 3.89%, below the previous record of 3.91% reached 3 weeks ago. The average on the 15-year fixed mortgage ticked down to 3.16%, from a record 3.21% 3 weeks ago. Mortgage rates are lower because they track the yield on the 10-year Treasury bond which fell below 2%. They could fall even lower if the Federal Reserve (FED) launches another round of bond purchases. Low interest rates by the FED are not giving a boost to housing.
Rate on 30-Year Mortgage Drops to Record 3.89 Pct.
With small gyrations, Dow has been working it way higher this week. It's up 113 as markets get ready for the rash of earnings reports. The rise was helped by easing tensions from the European debt mess. In addition, Iranian threats about closing the Strait have lessened. Not much left do do but wait for the earnings, starting with the biggest banks. I have a feeling they will be viewed as "good" which will bring more buyers into the market.
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