Dow jumped 133, advancers over decliners 5-2 & NAZ added 12 (weighed down by a sagging Apple (AAPL) stock. The Financial Index gained 2+ to the 217s, a 2 week high. The MLP index rose 3+ to the 404s & the REIT index was up a fraction to the 262s. Both indices have been flat for at least 2 months. Junk bond funds were higher & Treasuries pulled back with the rising stock market. Oil climbed to a 2-week high on
forecasts that US gasoline supplies dropped after Hurricane Sandy forced the shutdown of East Coast refineries. Gold jumped the most in almost 2
months as voters headed to the polls to elect a president & as the dollar declined, increasing demand for the precious
metal as an alternative investment.
![Live 24 hours gold chart [Kitco Inc.]](http://www.kitco.com/images/live/gold.gif)
Robert Shiller
Photo: Bloomberg
The US housing recovery is a fragile one & should be spurred by reducing the role of gov in the mortgage-finance system, said Robert Shiller, professor at Yale & co-creator of the S&P/Case- Shiller index of property values. “There are positive signs, the problem is that it’s not a really strong positive sign yet,” Shiller said on Bloomberg Television. It is “not a resounding recovery,” he added Americans bought new homes in Sep at the fastest pace in 2 years, indicating that the industry whose decline was at the heart of the recession is bouncing back. Sales climbed 5.7% to a 389K annual pace, the most since Apr 2010, following a revised 368K rate in Aug, according to the Commerce Dept showed on Oct. 24. “We have to get back to a private-sector mortgage market, without government dominance,” Shiller said. “We have to think about alternative mortgages that don’t invite the same sort of crisis where we have 10 million homeowners under water. We don’t want to put Americans in such leveraged positions.”
Housing-Market Recovery in U.S. Not ‘Resounding,’ Shiller Says
Photo: Bloomberg
Abbott Labs, a Dividend Aristocrat, sold almost $15B of bonds yesterday in the largest dollar-denominated offering in more than 3 years as the drug & medical-device maker prepares to split in 2. Bonds were issued in 6 parts through its AbbVie pharmaceutical unit, ranging in size from $500M to $4B. Proceeds will help fund a $7.7B tender offer related to AbbVie’s spinoff. The portions include $500M of 3-year floating- rate notes priced to yield 76 basis points more than the 3-month London interbank offered rate & $3.5B of 1.2%, 3-year fixed-rate debentures to yield 85 basis points more than similar-maturity Treasuries. In addition, the company sold $4Bof 1.75%, 5-year bonds at a relative yield of 110 basis points, $1B of 2%, 6-year notes at a spread of 140 basis points, $3.1B of 2.9%, 10-year debt at 130 basis points, & $2.6B of 4.4%, 30-year securities at 160. The 6-year bond was added after the deal’s announcement. When money is cheap, why not take advantage? The stock lost 22¢ today.
Abbott Unit Sells $14.7 Billion of Bonds Ahead of Split
Greece is back on the radar this week as its parliament agonizes over new austerity measures aimed at averting bankruptcy. But analysts believe the $17B package may buy only temporary relief as its debt burden continues to grow. Lawmakers will vote tomorrow on labor market reforms, including cuts to wages, pensions & severance terms, that will pile on the misery for Greeks whose living standards have been slashed by years of recession, soaring unemployment, falling salaries & rising taxes. A budget for 2013 will then go before parliament on Sun. Assuming Prime Minister Samaras' fragile coalition majority holds, eurozone finance ministers should release €31.5B from Greece's 2nd bailout at a meeting Nov 12, allowing it to redeem €5B in T-bills due 4 days later. The deal would give Greece 2 more years to reach budget & debt targets set by the ECB, EU & IMF when the bailout was agreed to in Mar. But this will leave a funding gap of €20-30 B, & with eurozone countries reluctant to put fresh money on the table, the problem may just be kicked further down the road. The Greek economy has shrunk by about a 5th since 2008, adding more than 500K to the jobless total in a country with a population of just 10M. The unemployment rate has more than tripled over the same period & now stands at 25%. Nearly 3 in 10 Greeks were officially classified as "materially deprived" in 2011, up from just over 2 in 10 before the crisis hit, according to the Greek national statistics office. Those figures are likely to have deteriorated still further this year. Greece has already taken the knife to labor costs by cutting the minimum wage 22%. Workers in the tourism & hotel sector agreed to a 15% cut in pay earlier this year. The crisis has provoked violent protests in recent months & a mass strike by public & private sector workers this week. Union leaders say the latest measures will simply suck Greece further into a downward spiral of economic contraction & poverty. As said many times before, these problems are not going away anytime soon.
Greece's Misery Won't End With Bailout Vote
Stocks pretty much kept their early gains as the bears took the day off. But AAPL bears are strong, dragging down the price of the stock to a $125 loss from its Sep highs (when it introduced the new version of iPhone, its top selling product). Tomorrow the winner of the election should be known & markets return to watching economic data which has not been encouraging.
AMJ (Alerian MLP Index tracking fund)
Treasury yields:
U.S. 3-month |
0.092% | |
U.S. 2-year |
0.290% | |
U.S. 10-year |
1.738% |
| CLZ12.NYM | ...Crude Oil Dec 12 | ...88.74 | ... 3.09 | (3.6%) |
Robert Shiller
Photo: Bloomberg
The US housing recovery is a fragile one & should be spurred by reducing the role of gov in the mortgage-finance system, said Robert Shiller, professor at Yale & co-creator of the S&P/Case- Shiller index of property values. “There are positive signs, the problem is that it’s not a really strong positive sign yet,” Shiller said on Bloomberg Television. It is “not a resounding recovery,” he added Americans bought new homes in Sep at the fastest pace in 2 years, indicating that the industry whose decline was at the heart of the recession is bouncing back. Sales climbed 5.7% to a 389K annual pace, the most since Apr 2010, following a revised 368K rate in Aug, according to the Commerce Dept showed on Oct. 24. “We have to get back to a private-sector mortgage market, without government dominance,” Shiller said. “We have to think about alternative mortgages that don’t invite the same sort of crisis where we have 10 million homeowners under water. We don’t want to put Americans in such leveraged positions.”
Housing-Market Recovery in U.S. Not ‘Resounding,’ Shiller Says
Photo: Bloomberg
Abbott Labs, a Dividend Aristocrat, sold almost $15B of bonds yesterday in the largest dollar-denominated offering in more than 3 years as the drug & medical-device maker prepares to split in 2. Bonds were issued in 6 parts through its AbbVie pharmaceutical unit, ranging in size from $500M to $4B. Proceeds will help fund a $7.7B tender offer related to AbbVie’s spinoff. The portions include $500M of 3-year floating- rate notes priced to yield 76 basis points more than the 3-month London interbank offered rate & $3.5B of 1.2%, 3-year fixed-rate debentures to yield 85 basis points more than similar-maturity Treasuries. In addition, the company sold $4Bof 1.75%, 5-year bonds at a relative yield of 110 basis points, $1B of 2%, 6-year notes at a spread of 140 basis points, $3.1B of 2.9%, 10-year debt at 130 basis points, & $2.6B of 4.4%, 30-year securities at 160. The 6-year bond was added after the deal’s announcement. When money is cheap, why not take advantage? The stock lost 22¢ today.
Abbott Unit Sells $14.7 Billion of Bonds Ahead of Split
Abbott Labs (ABT)
Greece is back on the radar this week as its parliament agonizes over new austerity measures aimed at averting bankruptcy. But analysts believe the $17B package may buy only temporary relief as its debt burden continues to grow. Lawmakers will vote tomorrow on labor market reforms, including cuts to wages, pensions & severance terms, that will pile on the misery for Greeks whose living standards have been slashed by years of recession, soaring unemployment, falling salaries & rising taxes. A budget for 2013 will then go before parliament on Sun. Assuming Prime Minister Samaras' fragile coalition majority holds, eurozone finance ministers should release €31.5B from Greece's 2nd bailout at a meeting Nov 12, allowing it to redeem €5B in T-bills due 4 days later. The deal would give Greece 2 more years to reach budget & debt targets set by the ECB, EU & IMF when the bailout was agreed to in Mar. But this will leave a funding gap of €20-30 B, & with eurozone countries reluctant to put fresh money on the table, the problem may just be kicked further down the road. The Greek economy has shrunk by about a 5th since 2008, adding more than 500K to the jobless total in a country with a population of just 10M. The unemployment rate has more than tripled over the same period & now stands at 25%. Nearly 3 in 10 Greeks were officially classified as "materially deprived" in 2011, up from just over 2 in 10 before the crisis hit, according to the Greek national statistics office. Those figures are likely to have deteriorated still further this year. Greece has already taken the knife to labor costs by cutting the minimum wage 22%. Workers in the tourism & hotel sector agreed to a 15% cut in pay earlier this year. The crisis has provoked violent protests in recent months & a mass strike by public & private sector workers this week. Union leaders say the latest measures will simply suck Greece further into a downward spiral of economic contraction & poverty. As said many times before, these problems are not going away anytime soon.
Greece's Misery Won't End With Bailout Vote
Stocks pretty much kept their early gains as the bears took the day off. But AAPL bears are strong, dragging down the price of the stock to a $125 loss from its Sep highs (when it introduced the new version of iPhone, its top selling product). Tomorrow the winner of the election should be known & markets return to watching economic data which has not been encouraging.
Dow Jones Industrials
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