Dow slipped 7, advancers barely ahead of decliners & NAZ was up pocket change. The Financial Index added a fraction in the 209s. The MLP index was up a fraction to 390 & the REIT index gained 1 to the 256s. Junk bond funds were mixed & Treasuries retreated. Oil tumbled from a one-month high as Hamas said a draft accord for a cease-fire that
would end fighting between Israel & Palestinian groups is almost ready. Gold lost $6.
![Live 24 hours gold chart [Kitco Inc.]](http://www.kitco.com/images/live/gold.gif)
Photo: Bloomberg
Big Ben urged Congress & the administration to strike a budget deal to avert tax increases & spending cuts that could trigger a recession next year. Without a deal, the measures known as the "fiscal cliff" will take effect in Jan. Bernanke also said Congress must raise the federal debt limit to prevent the gov from defaulting on Treasury debt. Failure to do so would impose heavy costs on the economy. Bernanke said Congress also needs to reduce the federal debt over the long run to ensure economic growth & stability. Uncertainty about all these issues is likely holding back spending & investment & troubling investors. Resolving the fiscal crisis would prevent a sudden & severe shock to the economy, help reduce unemployment & strengthen growth, he said. "A stronger economy will, in turn, reduce the deficit and contribute to achieving long-term fiscal sustainability," Bernanke added. When asked whether the FED could soften the impact of the fiscal cliff, Bernanke was firm in his warning. "If the economy goes off the broad fiscal cliff, I don't think the Fed has the tools to offset that," he said. Bernanke also said the severity of the Great Recession may have reduced the US economy's potential growth rate. In addition, by the end of Dec, as the fiscal cliff nears, the federal gov is expected to hit its borrowing limit. Treasury Secretary Tim Geithner has said he will resort to the same maneuvers he used during the last debt standoff in 2011 to prevent the gov from defaulting on its debt. But these maneuvers would buy only a few weeks' time, until late Feb or early Mar, before the gov would face the prospect of a first-ever debt default. After the last debt standoff in the summer of 2011, S&P downgraded the gov's credit rating on long-term securities one notch from the highest level of AAA to AA+, the first ever downgrade of US gov debt.
Best Buy posted a $10M fiscal Q3 loss as sales at established stores fell more than expected. The loss of 3¢ a share, compared with profit of 42¢ a year ago. Excluding some items, EPS was 3¢, sharply under the 12¢ estimate. CEO Joly is working to improve customer service as customers defect while founder Richard Schulze & private- equity firms evaluate the chain for a possible buyout. BBY said last month that Q3 results would be “significantly” below last year’s. Same-store sales fell 4.3%, more than the 3.3% drop estimated. Joly said that he plans to boost BBY share of online sales to 18%. Online sales in Q3 climbed more than 10% to $431M. Total revenue fell 3.5% to $10.75B, matching the estimate of $10.74B. Joly said, “We need to reinvent our brand identity.” Meanwhile Schulze is working with 3 private-equity firms on a takeover of the electronics chain as his deadline to review the company’s finances approaches. Schulze reached an agreement to conduct due diligence on the retailer in Aug & now is asking for an extra 30 days. The stock sank $1.78 (13%).
Best Buy Posts $10 Million Third-Quarter Net Loss as Store Sales Decline
Foreign direct investment (FDI) in China fell for the 11th time in 12 months as labor costs rose, an economic slowdown threatened to drag growth to a 13-year low & a territorial dispute with Japan weighed on trade. Investment dropped 0.2% in Oct from a year earlier to $8.3B, the Ministry of Commerce said. FDI inflows in the first 10 months of the year declined 3.5 % to $91.7B, while non-financial outbound investment rose 25.8% to $58.2B. The decline in inflows highlights challenges for new Chinese leadership headed by Xi Jinping, who took the reins of the ruling Communist Party last week in a once-a-decade power handover, as officials seek to reverse a growth slowdown. China may expand by 7.7% this year, the weakest pace since 1999. This economy has been a key driver of global growth. Now that engine is losing steam, tough on all economies.
China Foreign Investment Falls for 11th Time in 12 Months
Stocks took a breather today after the big run up in the last 2 days. The Hewlett-Packard (HPQ) story, a Dow stock, was disturbing for its sheer size & it sent a message that the smart guys may not really know what's going on. That's disturbing. Big Ben's comments did not encourage more buyers & his sobering reality may weigh on the market this week. Trading should slow as the holiday approaches. Dow has to get used to 13K serving as a ceiling rather than a floor as has been the case for months.
AMJ (Alerian MLP Index tracking fund)
Treasury Yields:
U.S. 3-month |
0.071% | |
U.S. 2-year |
0.254% | |
U.S. 10-year |
1.656% |
| CLF13.NYM | Crude Oil Jan 13 | 86.83 |  2.45 (2.7%) |
Photo: Bloomberg
Big Ben urged Congress & the administration to strike a budget deal to avert tax increases & spending cuts that could trigger a recession next year. Without a deal, the measures known as the "fiscal cliff" will take effect in Jan. Bernanke also said Congress must raise the federal debt limit to prevent the gov from defaulting on Treasury debt. Failure to do so would impose heavy costs on the economy. Bernanke said Congress also needs to reduce the federal debt over the long run to ensure economic growth & stability. Uncertainty about all these issues is likely holding back spending & investment & troubling investors. Resolving the fiscal crisis would prevent a sudden & severe shock to the economy, help reduce unemployment & strengthen growth, he said. "A stronger economy will, in turn, reduce the deficit and contribute to achieving long-term fiscal sustainability," Bernanke added. When asked whether the FED could soften the impact of the fiscal cliff, Bernanke was firm in his warning. "If the economy goes off the broad fiscal cliff, I don't think the Fed has the tools to offset that," he said. Bernanke also said the severity of the Great Recession may have reduced the US economy's potential growth rate. In addition, by the end of Dec, as the fiscal cliff nears, the federal gov is expected to hit its borrowing limit. Treasury Secretary Tim Geithner has said he will resort to the same maneuvers he used during the last debt standoff in 2011 to prevent the gov from defaulting on its debt. But these maneuvers would buy only a few weeks' time, until late Feb or early Mar, before the gov would face the prospect of a first-ever debt default. After the last debt standoff in the summer of 2011, S&P downgraded the gov's credit rating on long-term securities one notch from the highest level of AAA to AA+, the first ever downgrade of US gov debt.
Best Buy posted a $10M fiscal Q3 loss as sales at established stores fell more than expected. The loss of 3¢ a share, compared with profit of 42¢ a year ago. Excluding some items, EPS was 3¢, sharply under the 12¢ estimate. CEO Joly is working to improve customer service as customers defect while founder Richard Schulze & private- equity firms evaluate the chain for a possible buyout. BBY said last month that Q3 results would be “significantly” below last year’s. Same-store sales fell 4.3%, more than the 3.3% drop estimated. Joly said that he plans to boost BBY share of online sales to 18%. Online sales in Q3 climbed more than 10% to $431M. Total revenue fell 3.5% to $10.75B, matching the estimate of $10.74B. Joly said, “We need to reinvent our brand identity.” Meanwhile Schulze is working with 3 private-equity firms on a takeover of the electronics chain as his deadline to review the company’s finances approaches. Schulze reached an agreement to conduct due diligence on the retailer in Aug & now is asking for an extra 30 days. The stock sank $1.78 (13%).
Best Buy Posts $10 Million Third-Quarter Net Loss as Store Sales Decline
Best Buy (BBY)
Foreign direct investment (FDI) in China fell for the 11th time in 12 months as labor costs rose, an economic slowdown threatened to drag growth to a 13-year low & a territorial dispute with Japan weighed on trade. Investment dropped 0.2% in Oct from a year earlier to $8.3B, the Ministry of Commerce said. FDI inflows in the first 10 months of the year declined 3.5 % to $91.7B, while non-financial outbound investment rose 25.8% to $58.2B. The decline in inflows highlights challenges for new Chinese leadership headed by Xi Jinping, who took the reins of the ruling Communist Party last week in a once-a-decade power handover, as officials seek to reverse a growth slowdown. China may expand by 7.7% this year, the weakest pace since 1999. This economy has been a key driver of global growth. Now that engine is losing steam, tough on all economies.
China Foreign Investment Falls for 11th Time in 12 Months
Stocks took a breather today after the big run up in the last 2 days. The Hewlett-Packard (HPQ) story, a Dow stock, was disturbing for its sheer size & it sent a message that the smart guys may not really know what's going on. That's disturbing. Big Ben's comments did not encourage more buyers & his sobering reality may weigh on the market this week. Trading should slow as the holiday approaches. Dow has to get used to 13K serving as a ceiling rather than a floor as has been the case for months.
Dow Jones Industrials
1 comment:
Whats next ben QE 4
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