Dow fell 42, decliners over advancers 3-2 & NAZ was up 9, helped by Apple (AAPL) jumping 18. The Financial Index dropped 1 to 212. The MLP index fell 3 to the 391s & the REIT index was off a fraction to the 258s. Junk bond funds eased back while Treasuries rose. Oil dropped as euro-area finance
ministers met to negotiate a bailout payment for Greece & as
American leaders prepared to wrestle with a budget agreement.
Gold fell for the first time
in 3 sessions as the dollar’s rebound eroded the appeal of
the precious metal as an alternative asset.
![Live 24 hours gold chart [Kitco Inc.]](http://www.kitco.com/images/live/gold.gif)
Photo: Bloomberg
The federal funds effective rate on overnight loans between banks was 0.16% on Nov 21, up from 0.06% at the end of Sep 2011, the month FED officials announced they would begin swapping short-term securities in their portfolio for long-term debt under Operation Twist. The rate for borrowing & lending Treasuries for one day through repurchase agreements also has surged. Higher overnight interest costs are a side effect of Operation Twist that has persisted despite new accommodation, including a 3rd round of quantitative easing & extending the horizon for near-zero borrowing costs through mid-2015. When the program ends in Dec, the FED will have shrunk its portfolio of short-term securities by $667B through Twist sales & redemptions, designed to lower long-term interest rates while keeping the size of the FED balance sheet constant. The sale of short-term Treasuries has put record amounts of these securities on primary dealers’ balance sheets, increasing their financing costs. As of Nov 14, the 21 primary dealers that trade directly with the FED held $69B of Treasury coupon securities due in 3 years or less, compared with $1.8B on Oct 5, 2011, down from a record $76.9B on Jul 25.
Italian onsumer confidence fell to a record low this month as households grew more pessimistic about the economic outlook after the country’s 4th recession since 2001 entered its 2nd year. The confidence index fell to 84.8, the lowest since the series begin in 1996, from a revised 86.2 in Oct the national statistics office, Istat, said. The reading was lower than the forecast of 86.3. The Italian economy shrank for a 5th qtr in Q3 as export gains failed to offset the effects of weak domestic demand. The contraction contrasted with signs of a recovery in Germany & France, the region’s 2 biggest economies. Italy entered into recession in H2 of 2011 as the global slowdown aggravated the effects of Prime Minister Monti's austerity measures aimed at taming a public debt of €2T ($2.55T). Both the gov & the central bank expect a recovery in H2 of 2013 amid increasing exports. But economists & businessmen are less optimistic about a pick up of domestic demand as unemployment tops 10%. This is one big piece in the European recession.
Italian Consumer Confidence Falls to Record Low on Recession
Photo: Bloomberg
Online retailers are poised for a record $43.4B holiday sales season as shoppers increasingly rely on social networks & mobile devices to find & buy merchandise. Internet sales are expected to grow 17% from a year earlier & could make up more than 10% of US retail spending (excluding gas, food & cars) in the last 2 months of the year. That compares with $29.2B spent online during the same period in 2007, when electronic commerce made up 7.4% of total spending. The growth of smartphones & tablets gives buyers the ability to shop anytime & anywhere, an opportunity that web retailers have been eager to exploit by offering sales to coincide with traditional storefront deals. Online sales already gained 17% on Thanksgiving day & 21% on Black Friday, according to research by International Business Machines (IBM), signaling shoppers are no longer waiting for the Cyber Monday that follows Black Friday discounts by brick-and-mortar retailers. The AAPL iPad was used for almost 10% of online shopping, followed by the iPhone at 8.7%, IBM said. On Black Friday, online sales, excluding EBay (EBAY) & auction sites, surged to over $1B for the first time, according to ComScore. Amazon (AMZN) was the top retailer that day, with more than 57.3M US visitors, the researcher said. That growth has been driven, in part, by mobile shopping, thanks to the growth of smartphones & tablets, along with faster networks, that can deliver a richer web shopping experience even when away from personal computers & laptops.
Record Online U.S. Holiday Sales Seen With Mobile Driving Expansion: Tech
While not a lot happened today, there was one significant event. The forward momentum that the bulls had going for them last week was checked. The markets remain sluggish & that's being kind. Hard bargaining over getting past the fiscal cliff is just beginning & neither side shows a sign of giving in to the other. Meanwhile business are making plans for next year & they are holding back because of this uncertainty. That has not been factored into the markets. Nor has the euro debt mes & recession.
AMJ (Alerian MLP Index tracking fund)
| LF13.NYM | ...Crude Oil Jan 13 | ...87.85 | ... 0.43 | (0.5%) |
Photo: Bloomberg
The federal funds effective rate on overnight loans between banks was 0.16% on Nov 21, up from 0.06% at the end of Sep 2011, the month FED officials announced they would begin swapping short-term securities in their portfolio for long-term debt under Operation Twist. The rate for borrowing & lending Treasuries for one day through repurchase agreements also has surged. Higher overnight interest costs are a side effect of Operation Twist that has persisted despite new accommodation, including a 3rd round of quantitative easing & extending the horizon for near-zero borrowing costs through mid-2015. When the program ends in Dec, the FED will have shrunk its portfolio of short-term securities by $667B through Twist sales & redemptions, designed to lower long-term interest rates while keeping the size of the FED balance sheet constant. The sale of short-term Treasuries has put record amounts of these securities on primary dealers’ balance sheets, increasing their financing costs. As of Nov 14, the 21 primary dealers that trade directly with the FED held $69B of Treasury coupon securities due in 3 years or less, compared with $1.8B on Oct 5, 2011, down from a record $76.9B on Jul 25.
Italian onsumer confidence fell to a record low this month as households grew more pessimistic about the economic outlook after the country’s 4th recession since 2001 entered its 2nd year. The confidence index fell to 84.8, the lowest since the series begin in 1996, from a revised 86.2 in Oct the national statistics office, Istat, said. The reading was lower than the forecast of 86.3. The Italian economy shrank for a 5th qtr in Q3 as export gains failed to offset the effects of weak domestic demand. The contraction contrasted with signs of a recovery in Germany & France, the region’s 2 biggest economies. Italy entered into recession in H2 of 2011 as the global slowdown aggravated the effects of Prime Minister Monti's austerity measures aimed at taming a public debt of €2T ($2.55T). Both the gov & the central bank expect a recovery in H2 of 2013 amid increasing exports. But economists & businessmen are less optimistic about a pick up of domestic demand as unemployment tops 10%. This is one big piece in the European recession.
Italian Consumer Confidence Falls to Record Low on Recession
Photo: Bloomberg
Online retailers are poised for a record $43.4B holiday sales season as shoppers increasingly rely on social networks & mobile devices to find & buy merchandise. Internet sales are expected to grow 17% from a year earlier & could make up more than 10% of US retail spending (excluding gas, food & cars) in the last 2 months of the year. That compares with $29.2B spent online during the same period in 2007, when electronic commerce made up 7.4% of total spending. The growth of smartphones & tablets gives buyers the ability to shop anytime & anywhere, an opportunity that web retailers have been eager to exploit by offering sales to coincide with traditional storefront deals. Online sales already gained 17% on Thanksgiving day & 21% on Black Friday, according to research by International Business Machines (IBM), signaling shoppers are no longer waiting for the Cyber Monday that follows Black Friday discounts by brick-and-mortar retailers. The AAPL iPad was used for almost 10% of online shopping, followed by the iPhone at 8.7%, IBM said. On Black Friday, online sales, excluding EBay (EBAY) & auction sites, surged to over $1B for the first time, according to ComScore. Amazon (AMZN) was the top retailer that day, with more than 57.3M US visitors, the researcher said. That growth has been driven, in part, by mobile shopping, thanks to the growth of smartphones & tablets, along with faster networks, that can deliver a richer web shopping experience even when away from personal computers & laptops.
Record Online U.S. Holiday Sales Seen With Mobile Driving Expansion: Tech
While not a lot happened today, there was one significant event. The forward momentum that the bulls had going for them last week was checked. The markets remain sluggish & that's being kind. Hard bargaining over getting past the fiscal cliff is just beginning & neither side shows a sign of giving in to the other. Meanwhile business are making plans for next year & they are holding back because of this uncertainty. That has not been factored into the markets. Nor has the euro debt mes & recession.
Dow Jones Industrials
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