Dow slipped 23, decliners slightly ahead of advancers & NAZ was off 4. The Financial Index rose fractionally. The MLP index fell 1 to the 398s & the REIT index was off 1 to 260. Junk bond funds were mixed to higher & Treasuries were also mixed. Oil had a modest rebound form recent selling while gold inched higher.
Photo: Bloomberg
The number seeking unemployment benefits fell last week by 8K to 355K, a possible sign of a healing job market. But there was caution that the figures were distorted by Sandy. The Labor Dept said the 4-week average rose by 3K to 370K. The storm could affect weekly applications for up to 4 weeks. Applications declined in one state because power outages prevented officials from receiving applications. The storm also pushed applications in other states up because some people who could not go to work sought benefits. Applications are expected to rise in the coming weeks, possibly to 390K. Weekly applications have fluctuated between 360-390K all year. At the same time, employers have added an average of nearly 157K jobs a month, only enough to lower the unemployment rate slowly. The number receiving benefits rose to nearly 5.1M, about 42K more than the previous week.
U.S. Jobless Claims Fall as Storm Starts to Affect Data
Photo: Bloomberg
McDonald's, a Dow stock & Dividend Aristocrat, said that a key sales figure fell for the first time in nearly a decade in Oct, as it faced the double whammy of a challenging economy abroad & intensifying competition at home. Global revenue at restaurants open at least 13 months fell 1.8%. The last time it dropped was in Mar 2003. The figure fell 2.2% in both the US & Europe. In the region encompassing Asia, the Middle East & Africa, it dropped 2.4%. CEO Don Thompson cited the "pervasive challenges of today's global marketplace" for the declines. Locos Tacos & higher-end Cantina Bell bowls & burritos. MCD will remain focused on underscoring its value message. In the US, for example, the company is returning its focus on the Dollar Menu, which was introduced about a decade ago after an attempt to shift customers to an "Extra Value Menu," which charges slightly higher prices, fell flat. In Oct, MCD said that the impact of Dollar Menu advertising in the US was offset by "modest consumer demand" & heightened competition. Moving forward, the company said it would continue its everyday value marketing. The same was true for Europe, where it gets 40% of its business. Amid the region's ongoing economic uncertainty, MCD said it would offer new meal combinations at various price ranges & continue remodeling restaurants. In the Asia, the company plans to differentiate itself with menu offerings tailored to local tastes. The stock fell 64¢.
McDonald’s Monthly Sales Fall First Time in 9 Years on U.S. Drop
Photo: Bloomberg
ECB President Mario Draghi said the economic outlook is worsening & the bank stands ready to activate its bond-purchase program if govs fulfill the necessary conditions. “We are ready to undertake” Outright Monetary Transactions, “which will help to avoid extreme scenarios,” Draghi said after policy makers left its interest rate was kept at a historic low of 0.75%. “The risks surrounding the economic outlook remain on the downside” and underlying inflation pressures “should remain moderate,” he said. The ECB’s efforts to repair its policy transmission mechanism are being hampered by Spain’s reluctance to ask for a bailout that would open the door to ECB bond purchases. “It’s entirely up to Spain and the Spanish government to take the decision,” Draghi said. At the same time, “since the OMT announcement there have been a series of improvements” on financial markets, including “a return of flows from the rest of the world,” he said. The debt mess lumbers along while the euro zone has to cope with a recession.
Markets need more time to asses the meanings of the US elections. One thing, DC gridlock will continue for the rest of the year &, with only a slight modification to the players, that situation will remain long into next year at a minimum. Business is suffering from a lack of leadership in DC which is causing expansion plans to be put on hold. Of course, a soggy euro economy & a leadership change in China is not helping confidence in the world of business. The biggest immediate problem is the fiscal cliff which will remain stuck in neutral for another month, if not longer. Dow is learning to live under 13K, not a bullish sign.
AMJ (Alerian MLP Index tracking fund)
Treasury yields:
U.S. 3-month |
0.092% | |
U.S. 2-year |
0.266% | |
U.S. 10-year |
1.680% |
| CLZ12.NYM | ...Crude Oil Dec 12 | ...84.82 | ... 0.38 (0.5%) |
| GCX12.CMX | ...Gold Nov 12 | ....1,715.50 | ... 2.30 (0.1%) |
Photo: Bloomberg
The number seeking unemployment benefits fell last week by 8K to 355K, a possible sign of a healing job market. But there was caution that the figures were distorted by Sandy. The Labor Dept said the 4-week average rose by 3K to 370K. The storm could affect weekly applications for up to 4 weeks. Applications declined in one state because power outages prevented officials from receiving applications. The storm also pushed applications in other states up because some people who could not go to work sought benefits. Applications are expected to rise in the coming weeks, possibly to 390K. Weekly applications have fluctuated between 360-390K all year. At the same time, employers have added an average of nearly 157K jobs a month, only enough to lower the unemployment rate slowly. The number receiving benefits rose to nearly 5.1M, about 42K more than the previous week.
U.S. Jobless Claims Fall as Storm Starts to Affect Data
Photo: Bloomberg
McDonald's, a Dow stock & Dividend Aristocrat, said that a key sales figure fell for the first time in nearly a decade in Oct, as it faced the double whammy of a challenging economy abroad & intensifying competition at home. Global revenue at restaurants open at least 13 months fell 1.8%. The last time it dropped was in Mar 2003. The figure fell 2.2% in both the US & Europe. In the region encompassing Asia, the Middle East & Africa, it dropped 2.4%. CEO Don Thompson cited the "pervasive challenges of today's global marketplace" for the declines. Locos Tacos & higher-end Cantina Bell bowls & burritos. MCD will remain focused on underscoring its value message. In the US, for example, the company is returning its focus on the Dollar Menu, which was introduced about a decade ago after an attempt to shift customers to an "Extra Value Menu," which charges slightly higher prices, fell flat. In Oct, MCD said that the impact of Dollar Menu advertising in the US was offset by "modest consumer demand" & heightened competition. Moving forward, the company said it would continue its everyday value marketing. The same was true for Europe, where it gets 40% of its business. Amid the region's ongoing economic uncertainty, MCD said it would offer new meal combinations at various price ranges & continue remodeling restaurants. In the Asia, the company plans to differentiate itself with menu offerings tailored to local tastes. The stock fell 64¢.
McDonald’s Monthly Sales Fall First Time in 9 Years on U.S. Drop
McDonald's (MCD)
Photo: Bloomberg
ECB President Mario Draghi said the economic outlook is worsening & the bank stands ready to activate its bond-purchase program if govs fulfill the necessary conditions. “We are ready to undertake” Outright Monetary Transactions, “which will help to avoid extreme scenarios,” Draghi said after policy makers left its interest rate was kept at a historic low of 0.75%. “The risks surrounding the economic outlook remain on the downside” and underlying inflation pressures “should remain moderate,” he said. The ECB’s efforts to repair its policy transmission mechanism are being hampered by Spain’s reluctance to ask for a bailout that would open the door to ECB bond purchases. “It’s entirely up to Spain and the Spanish government to take the decision,” Draghi said. At the same time, “since the OMT announcement there have been a series of improvements” on financial markets, including “a return of flows from the rest of the world,” he said. The debt mess lumbers along while the euro zone has to cope with a recession.
Markets need more time to asses the meanings of the US elections. One thing, DC gridlock will continue for the rest of the year &, with only a slight modification to the players, that situation will remain long into next year at a minimum. Business is suffering from a lack of leadership in DC which is causing expansion plans to be put on hold. Of course, a soggy euro economy & a leadership change in China is not helping confidence in the world of business. The biggest immediate problem is the fiscal cliff which will remain stuck in neutral for another month, if not longer. Dow is learning to live under 13K, not a bullish sign.
Dow Jones Industrials
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