Dow lost 26, decliners over advancers almost 2-1 & NAZ was off 10. The Financial Index gained a fraction in the 203s. The MLP index sank another 6+ to 370 & the REIT index was down 1 to below 251. Junk bond funds continued weak & Treasuries were slightly lower. Oil & gold were also lower in a sluggish market. All markets look tired & dreary..
Superstorm Sandy drove the number seeking unemployment benefits up to 439K last week, the highest level in 18 months. The Labor Dept said that weekly applications increased 78K mostly because a large number of applications were filed in states damaged by the storm. The storm has affected the claims data for the past 2 weeks & may distort reports for another 2 weeks. The 4-week average of applications increased to 383K. Before the storm distorted the figures, weekly applications had fluctuated between 360-390K this year. At the same time, employers have added an average of nearly 157K jobs a month, barely enough to lower the unemployment rate. The number continuing to receive benefits fell 100K to just under 5M. Some of those no longer receiving benefits may have gotten jobs. But many have used up all the benefits available.
Jobless Claims in U.S. Jumped Last Week After Sandy
In 2011, the US emerged from a damaging budget battle with a downgrade of its AAA credit rating for the first time in history. In 2013, it could be dealt even a bigger blow. The battle over avoiding the fiscal cliff is the first of a likely series of partisan confrontations in the coming year that, if not resolved, could cause more downgrades of the US credit rating. "The rating is in the hands of policymakers," said John Chambers, chairman of the S&P sovereign rating committee, the agency that downgraded the US last year. All 3 major rating agencies have said cutting the US debt rating is highly likely if next year's budget process replays 2011's debt ceiling debacle or if the seemingly simple goal of cutting deficits goes unmet. Should that happen, it could have a detrimental effect on the country's cost of borrowing & could also shift some investment away from the US, although the country's big markets & attractiveness as a safe haven are likely to limit those effects. If Congress goes over the cliff, Moody's said it will watch how the economy deals with the abrupt shock & will maintain the current negative outlook it holds on the US. If Congress & the president can't reach a deal to stabilize & eventually reduce the debt, Moody's will probably cut the current Aaa rating. Fitch, meanwhile, said even a deal to avert the cliff might not be enough to save the country's AAA rating.
Photo: Bloomberg
Wal-Mart reported a 9% increase in Q3 net income as the world's largest retailer continues to woo back shoppers by reemphasizing low prices. But momentum has slowed as it grapples with an uncertain global economy & its Q4 profit outlook fell short of expectations. Revenue at stores open at least a year, a figure that measures growth in established stores. "Macroeconomic conditions continue to pressure our customers," said CFO Charles Holley. "The holiday season is predicted to be very competitive but we are well prepared to deliver on the value and low prices our customers expect." Q3 EPS was $1.08, above 96¢ in the year-ago period. Net sales, excluding Sam's Club membership fees, rose 3.4% to $113B. The forecast was for EPS of $1.07 on revenue of $114B. Revenue at stores opened at least a year rose 1.5% for its US. business, below the estimate of 1.8%. But that's the division's 5th straight quarterly gain after posting 9 straight qtrs of declines. However, the figure represents a slowdown from the 2.2% growth in Q2 & a 2.6 % increase in Q1. Revenue for the US. business, which accounts for about 60% of the total, rose 3.6% to $66B, while revenue at Sam's Club rose 4.7B to $13.9B. Revenue at its intl division rose 4.7%, a slowdown from Q2. WMT narrowed full-year earnings guidance & issued a Q4 profit outlook that below most forecasts. It expects EPS to be $4.88-$4.93 in 2012. It originally expected EPS of $4.83-$4.93 . For Q4, it expects EPS of $1.53-$1.58, under the average forecast of $1.59. The stock fell 2.80.
Wal-Mart Profit Forecast Trails Estimate as Third-Quarter Sales Gains Slow
The stock markets are being overwhelmed by the threat of the US economy going over the cliff. There will be plenty of blame & talk but don't expect anything to be done into late Dec. This will not be a good time for the markets. Meanwhile it is official that Europe is in a recession. Also, China is changing its leaders, a once in a decade event. Its hard to see where buyers are going to come from. Looking for bargains today is a very big challenge.
AMJ (Alerian MLP Index tracking fund)
Treasury yields:
U.S. 3-month |
0.081% | |
U.S. 2-year |
0.246% | |
U.S. 10-year |
1.601% |
| CLZ12.NYM | ....Crude Oil Dec 12 | ...86.69 | ... 0.37 | (0.4%) |
| GCX12.CMX | ...Gold Nov 12 | .....1,720.70 | ... 8.80 | (0.5%) |
Superstorm Sandy drove the number seeking unemployment benefits up to 439K last week, the highest level in 18 months. The Labor Dept said that weekly applications increased 78K mostly because a large number of applications were filed in states damaged by the storm. The storm has affected the claims data for the past 2 weeks & may distort reports for another 2 weeks. The 4-week average of applications increased to 383K. Before the storm distorted the figures, weekly applications had fluctuated between 360-390K this year. At the same time, employers have added an average of nearly 157K jobs a month, barely enough to lower the unemployment rate. The number continuing to receive benefits fell 100K to just under 5M. Some of those no longer receiving benefits may have gotten jobs. But many have used up all the benefits available.
Jobless Claims in U.S. Jumped Last Week After Sandy
In 2011, the US emerged from a damaging budget battle with a downgrade of its AAA credit rating for the first time in history. In 2013, it could be dealt even a bigger blow. The battle over avoiding the fiscal cliff is the first of a likely series of partisan confrontations in the coming year that, if not resolved, could cause more downgrades of the US credit rating. "The rating is in the hands of policymakers," said John Chambers, chairman of the S&P sovereign rating committee, the agency that downgraded the US last year. All 3 major rating agencies have said cutting the US debt rating is highly likely if next year's budget process replays 2011's debt ceiling debacle or if the seemingly simple goal of cutting deficits goes unmet. Should that happen, it could have a detrimental effect on the country's cost of borrowing & could also shift some investment away from the US, although the country's big markets & attractiveness as a safe haven are likely to limit those effects. If Congress goes over the cliff, Moody's said it will watch how the economy deals with the abrupt shock & will maintain the current negative outlook it holds on the US. If Congress & the president can't reach a deal to stabilize & eventually reduce the debt, Moody's will probably cut the current Aaa rating. Fitch, meanwhile, said even a deal to avert the cliff might not be enough to save the country's AAA rating.
Photo: Bloomberg
Wal-Mart reported a 9% increase in Q3 net income as the world's largest retailer continues to woo back shoppers by reemphasizing low prices. But momentum has slowed as it grapples with an uncertain global economy & its Q4 profit outlook fell short of expectations. Revenue at stores open at least a year, a figure that measures growth in established stores. "Macroeconomic conditions continue to pressure our customers," said CFO Charles Holley. "The holiday season is predicted to be very competitive but we are well prepared to deliver on the value and low prices our customers expect." Q3 EPS was $1.08, above 96¢ in the year-ago period. Net sales, excluding Sam's Club membership fees, rose 3.4% to $113B. The forecast was for EPS of $1.07 on revenue of $114B. Revenue at stores opened at least a year rose 1.5% for its US. business, below the estimate of 1.8%. But that's the division's 5th straight quarterly gain after posting 9 straight qtrs of declines. However, the figure represents a slowdown from the 2.2% growth in Q2 & a 2.6 % increase in Q1. Revenue for the US. business, which accounts for about 60% of the total, rose 3.6% to $66B, while revenue at Sam's Club rose 4.7B to $13.9B. Revenue at its intl division rose 4.7%, a slowdown from Q2. WMT narrowed full-year earnings guidance & issued a Q4 profit outlook that below most forecasts. It expects EPS to be $4.88-$4.93 in 2012. It originally expected EPS of $4.83-$4.93 . For Q4, it expects EPS of $1.53-$1.58, under the average forecast of $1.59. The stock fell 2.80.
Wal-Mart Profit Forecast Trails Estimate as Third-Quarter Sales Gains Slow
Wal-Mart (WMT)
The stock markets are being overwhelmed by the threat of the US economy going over the cliff. There will be plenty of blame & talk but don't expect anything to be done into late Dec. This will not be a good time for the markets. Meanwhile it is official that Europe is in a recession. Also, China is changing its leaders, a once in a decade event. Its hard to see where buyers are going to come from. Looking for bargains today is a very big challenge.
Dow Jones Industrials
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