Dow dropped 74, decliners ahead of advancers 5-2 & NAZ fell 21. The Financial Index lost 1+ to the 215s. The MLP index was off 2 to 380 & the REIT index fell 2 to 262. Junk bond funds pulled back & Treasuries also sold off. Oil fell for the first time in 3
days as House Speaker John Boehner said the White House isn’t
serious about cutting spending & US retail sales increased
less than expected in Nov. Gold had a bad day, closing below $1700.
![Live 24 hours gold chart [Kitco Inc.]](http://www.kitco.com/images/live/gold.gif)
Photo: Bloomberg
European policy makers made headway in fighting the 3-year-old debt crisis, keeping Greece's lifeline intact & laying groundwork for a bank supervisor to prevent financial miscues. Finance ministers declared the 2-front victory hours before a summit of European leaders that is set to expose differences between a German-led bloc and France & its allies over the long-term retooling of the euro zone. “We have achieved a lot,” Chancellor Merkel, the dominant figure, said on her way into the Brussels summit. “It was a very laborious year but it was also a year in which we made great progress.” The decisions underscore the move away from the austerity- driven measures that characterized Euro leaders’ first attempts to counter the crisis that emerged in Greece in 2009. Financial-market tensions have abated, thanks mainly to a pledge by the ECB, first made in late Jul & yet to be acted on, to put a floor under the bond markets of vulnerable countries such as Spain or Italy. With the summit deadline looming, finance ministers from all EU countries opened with a 4:30AM accord to make the ECB the hub of bank supervision in the euro area. About 200 of the 17-nation euro area’s biggest banks will come under direct ECB oversight when the system becomes operational, targeted for Mar 2014. Disputes are still percolating over a further step that would give authorities the power, & the financing, to deal with failing banks.
EU Making Headway on Greece, Banks Masks Deeper Divisions Over Euro Area
Photo: Yahoo
Solar City stock shot up after its IPO, as investors shook off concerns about the company's worth in what's so far been a dicey market for solar energy. SCTY, the biggest US residential solar installer (also puts up panels for businesses), was priced at $8 a share & raised $92M. However, the company, had expected to price its IPO at $13-$15 & raise more than $150M. The company's chairman is serial entrepreneur & Tesla Motors (TSLA) CEO Elon Musk. Solar stocks had risen broadly yesterday on talk of China boosting its goal for domestic solar installations, & providing $Bs in backing for Chinese solar companies. The stock closed at $11.77, up $3.77 from the IPO price.
SolarCity Stock Pops In IPO Debut; Solar Stocks Fall @ Investor's Business Daily
Photos: Bloomberg
Obama & Reps traded budget proposals intended to avert spending cuts & tax increases in Jan. Obama said, “I remain optimistic” that a budget agreement will be reached. He said he is “pretty confident” Reps will give in to his demand for higher tax rates for top earners. If Congress does nothing, more than $600B in tax increases & spending cuts, the fiscal cliff, will start taking effect in Jan. The administration reduced its demand for new tax revenue from $1.6T to $1.4T, said a Rep congressional aide. That person & another Rep staff member said Boehner’s counteroffer kept the same $800B revenue figure he proposed earlier, to come from limiting tax deductions & not from higher tax rates. The aides said the offer included only minor changes from Rep previous proposal to protest what they viewed as a lack of movement administration officials didn’t respond to requests for comment. “We sent the White House a counteroffer that would achieve tax and entitlement reform to solve our looming debt crisis and create more American jobs,” said Michael Steel,, a spokesman for Boehner. “We’re still waiting for the White House to identify what spending cuts the president is willing to make as part of the balanced approach he promised the American people.” Call this going nowhere fast.
Stocks drifted lower, but not in a meaningful way. The budget talks dominate attention & the markets have taken this mess in stride. The press focuses on one macro number which is supposed to represent everything. Not so! The marginal tax rate for the top 1% is not what this debate is all about. Budget cuts have to be made & the Dems are ignoring that, other than promising to slow spending growth a little. Swell!! The rating agencies won't be impressed when they make their credit reviews shortly. While more babble comes from DC, Dow is only 500 off its yearly highs. Further delays could bring more selling.
AMJ (Alerian MLP Index tracking fund)
Treasury yields:
U.S. 3-month |
0.051% | |
U.S. 2-year |
0.246% | |
U.S. 10-year |
1.726% |
| CLF13.NYM | ...Crude Oil Jan 13 | ...85.86 | ... 0.91 | (1.1%) |
Photo: Bloomberg
European policy makers made headway in fighting the 3-year-old debt crisis, keeping Greece's lifeline intact & laying groundwork for a bank supervisor to prevent financial miscues. Finance ministers declared the 2-front victory hours before a summit of European leaders that is set to expose differences between a German-led bloc and France & its allies over the long-term retooling of the euro zone. “We have achieved a lot,” Chancellor Merkel, the dominant figure, said on her way into the Brussels summit. “It was a very laborious year but it was also a year in which we made great progress.” The decisions underscore the move away from the austerity- driven measures that characterized Euro leaders’ first attempts to counter the crisis that emerged in Greece in 2009. Financial-market tensions have abated, thanks mainly to a pledge by the ECB, first made in late Jul & yet to be acted on, to put a floor under the bond markets of vulnerable countries such as Spain or Italy. With the summit deadline looming, finance ministers from all EU countries opened with a 4:30AM accord to make the ECB the hub of bank supervision in the euro area. About 200 of the 17-nation euro area’s biggest banks will come under direct ECB oversight when the system becomes operational, targeted for Mar 2014. Disputes are still percolating over a further step that would give authorities the power, & the financing, to deal with failing banks.
EU Making Headway on Greece, Banks Masks Deeper Divisions Over Euro Area
Photo: Yahoo
Solar City stock shot up after its IPO, as investors shook off concerns about the company's worth in what's so far been a dicey market for solar energy. SCTY, the biggest US residential solar installer (also puts up panels for businesses), was priced at $8 a share & raised $92M. However, the company, had expected to price its IPO at $13-$15 & raise more than $150M. The company's chairman is serial entrepreneur & Tesla Motors (TSLA) CEO Elon Musk. Solar stocks had risen broadly yesterday on talk of China boosting its goal for domestic solar installations, & providing $Bs in backing for Chinese solar companies. The stock closed at $11.77, up $3.77 from the IPO price.
SolarCity Stock Pops In IPO Debut; Solar Stocks Fall @ Investor's Business Daily
Photos: Bloomberg
Obama & Reps traded budget proposals intended to avert spending cuts & tax increases in Jan. Obama said, “I remain optimistic” that a budget agreement will be reached. He said he is “pretty confident” Reps will give in to his demand for higher tax rates for top earners. If Congress does nothing, more than $600B in tax increases & spending cuts, the fiscal cliff, will start taking effect in Jan. The administration reduced its demand for new tax revenue from $1.6T to $1.4T, said a Rep congressional aide. That person & another Rep staff member said Boehner’s counteroffer kept the same $800B revenue figure he proposed earlier, to come from limiting tax deductions & not from higher tax rates. The aides said the offer included only minor changes from Rep previous proposal to protest what they viewed as a lack of movement administration officials didn’t respond to requests for comment. “We sent the White House a counteroffer that would achieve tax and entitlement reform to solve our looming debt crisis and create more American jobs,” said Michael Steel,, a spokesman for Boehner. “We’re still waiting for the White House to identify what spending cuts the president is willing to make as part of the balanced approach he promised the American people.” Call this going nowhere fast.
Stocks drifted lower, but not in a meaningful way. The budget talks dominate attention & the markets have taken this mess in stride. The press focuses on one macro number which is supposed to represent everything. Not so! The marginal tax rate for the top 1% is not what this debate is all about. Budget cuts have to be made & the Dems are ignoring that, other than promising to slow spending growth a little. Swell!! The rating agencies won't be impressed when they make their credit reviews shortly. While more babble comes from DC, Dow is only 500 off its yearly highs. Further delays could bring more selling.
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