Dow dropped 36, decliners over advancers 5-4 & NAZ was off 5. The Financial Index retreated 1 to 211. The MLP index inched up a fraction to the 392s & the REIT index lost 3+ to the 255s. Junk bond funds were a little lower & Treasuries had modest gains. Oil is having a good day & gold is headed for a 2nd decline as physical demand from India, last year’s biggest
buyer, remained slack & a rebounding dollar eroded the appeal
of the metal as an alternative investment.
Photo: Bloomberg
Demand for goods such as machinery & electronics climbed in Oct by the most in 5 months, signaling companies are starting to overcome concern the looming fiscal cliff. Bookings for non-defense capital goods excluding aircraft, a proxy for future business investment, rose 1.7% last month, the most since May, the Commerce Dept reported. Orders for all durable goods were little changed, beating the forecast that projected a 0.7% drop. Forecasts for total durable goods ranged from a 4% drop to a 2.7% increase. The Commerce Dept said no companies in the durable goods survey reported that production was disrupted by superstorm Sandy. Demand for capital goods excluding defense equipment & aircraft, including items such as computers, engines & communications gear, climbed after a revised 0.4% drop in Sep that was larger than previously forecast. Orders for electrical equipment & appliances increased 4.1%, the most since Aug 2011, & demand for communications gear jumped 11.4%, the most since Feb. Machinery bookings climbed 2.9% after increasing 8% in Sep. Conversely, shipments of those capital goods, used in calculating GDP, decreased 0.4 % in Oct, a 4th consecutive decline, indicating that business investment may remain weak in Q4.
Demand for U.S. Capital Goods Climbs in Spending Rebound
Managing Director of the IMF Christine Lagarde
Photo: Yahoo
European & global financial leaders have agreed to release €44B ($57B) in critical loans to Greece & provide €Bs in additional debt relief in order to help the country stabilize its ailing economy. After 3 weeks of negotiations, Greece's euro partners & the IMF agreed to release the long-delayed payments & introduce measures, including a debt buyback program & an interest rate cut on loans, which will reduce the country's debts by about €40B. Greek Prime Minister Samaras hailed the agreement as a victory that heralds "a new day for all Greeks." We've heard that before! The country continues to face years of economic pain as austerity measures agreed as part of the bailout package are implemented. The troika of the ECB, IMF & the European Commission has twice agreed to bail out Greece, pledging a total of €240B in rescue loans, of which the country has received about €150B so far. In return for its bailout loans, Greece has had to impose several rounds of austerity measures & submit its economy to scrutiny. The deal still requires the authorization of a number of parliaments in Europe, including Germany's, where patience with repeated Greek rescues has been running low. However, Rainer Bruederle, the caucus leader of the Free Democrats, the junior coalition partner, said he expects broad approval when changes to the program are voted on this week. Call this kicking the can down the road.
Greece Wins Easier Debt Terms as EU Hails Rescue Formula
Photo: Bloomberg
Consumer confidence rose in Nov to the highest level in more than 4 years, a sign US household spending will keep growing. The Conference Board’s confidence index climbed to 73.7, the highest since Feb 2008, from a revised 73.1 reading in the prior month. The forecast projected a reading of 73. The report showed the share of Americans planning to buy a house rose to a record high, indicating improving property values & a job market recovery are making households more willing to make long-term commitments. Sustained gains in consumer spending, the biggest part of the economy, may help overcome concern over the fiscal cliff of tax increases & gov spending cuts slated for early 2013.
Again, there is little going on in the markets. The consumer confidence & orders for durable goods data was encouraging, but not good enough to bring out buyers. The threat of going over the fiscal cliff is weighing on the markets. Talk is cheap, so there will be a lot of that. But nothing is going to get resolved for weeks. And while the talks are in limbo, business execs are making plans for the new year with a strong negative bias from expectations that the US will be dragged over the fiscal cliff. Dow bumped against the 13K ceiling, but was unable to break thru. That ceiling will probably hold until the fiscal cliff mess is resolved.
AMJ (Alerian MLP Index tracking fund)
| CLF13.NYM | ....Crude Oil Jan 13 | ...87.56 | ......0.18 | (0.2%) |
| GCX12.CMX | ...Gold Nov 12 | ....1,745.60 | ... 3.90 | (0.2%) |
Photo: Bloomberg
Demand for goods such as machinery & electronics climbed in Oct by the most in 5 months, signaling companies are starting to overcome concern the looming fiscal cliff. Bookings for non-defense capital goods excluding aircraft, a proxy for future business investment, rose 1.7% last month, the most since May, the Commerce Dept reported. Orders for all durable goods were little changed, beating the forecast that projected a 0.7% drop. Forecasts for total durable goods ranged from a 4% drop to a 2.7% increase. The Commerce Dept said no companies in the durable goods survey reported that production was disrupted by superstorm Sandy. Demand for capital goods excluding defense equipment & aircraft, including items such as computers, engines & communications gear, climbed after a revised 0.4% drop in Sep that was larger than previously forecast. Orders for electrical equipment & appliances increased 4.1%, the most since Aug 2011, & demand for communications gear jumped 11.4%, the most since Feb. Machinery bookings climbed 2.9% after increasing 8% in Sep. Conversely, shipments of those capital goods, used in calculating GDP, decreased 0.4 % in Oct, a 4th consecutive decline, indicating that business investment may remain weak in Q4.
Demand for U.S. Capital Goods Climbs in Spending Rebound
Photo: Yahoo
European & global financial leaders have agreed to release €44B ($57B) in critical loans to Greece & provide €Bs in additional debt relief in order to help the country stabilize its ailing economy. After 3 weeks of negotiations, Greece's euro partners & the IMF agreed to release the long-delayed payments & introduce measures, including a debt buyback program & an interest rate cut on loans, which will reduce the country's debts by about €40B. Greek Prime Minister Samaras hailed the agreement as a victory that heralds "a new day for all Greeks." We've heard that before! The country continues to face years of economic pain as austerity measures agreed as part of the bailout package are implemented. The troika of the ECB, IMF & the European Commission has twice agreed to bail out Greece, pledging a total of €240B in rescue loans, of which the country has received about €150B so far. In return for its bailout loans, Greece has had to impose several rounds of austerity measures & submit its economy to scrutiny. The deal still requires the authorization of a number of parliaments in Europe, including Germany's, where patience with repeated Greek rescues has been running low. However, Rainer Bruederle, the caucus leader of the Free Democrats, the junior coalition partner, said he expects broad approval when changes to the program are voted on this week. Call this kicking the can down the road.
Greece Wins Easier Debt Terms as EU Hails Rescue Formula
Photo: Bloomberg
Consumer confidence rose in Nov to the highest level in more than 4 years, a sign US household spending will keep growing. The Conference Board’s confidence index climbed to 73.7, the highest since Feb 2008, from a revised 73.1 reading in the prior month. The forecast projected a reading of 73. The report showed the share of Americans planning to buy a house rose to a record high, indicating improving property values & a job market recovery are making households more willing to make long-term commitments. Sustained gains in consumer spending, the biggest part of the economy, may help overcome concern over the fiscal cliff of tax increases & gov spending cuts slated for early 2013.
Again, there is little going on in the markets. The consumer confidence & orders for durable goods data was encouraging, but not good enough to bring out buyers. The threat of going over the fiscal cliff is weighing on the markets. Talk is cheap, so there will be a lot of that. But nothing is going to get resolved for weeks. And while the talks are in limbo, business execs are making plans for the new year with a strong negative bias from expectations that the US will be dragged over the fiscal cliff. Dow bumped against the 13K ceiling, but was unable to break thru. That ceiling will probably hold until the fiscal cliff mess is resolved.
Dow Jones Industrials
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