Dow shot up 105, advancers ahead of decliners 5-2 & NAZ rose 47. The Financial Index gained 1+ to 216 an almost 2 month high. The MLP index fell 2 to the 384s & the REIT index was up 1 to 264. Junk bond funds rose & Treasuries pulled back after recent gains. Oil & gold had modest changes.
Photo: Bloomberg
The US trade deficit widened in Oct as the biggest slump in exports in almost 4 years outweighed a drop in imports, evidence of the slowdown in global growth. The trade gap grew 4.9% to $42.2B from a revised $40.3B in Sep that was smaller than previously estimated, according to the Commerce Dept. The forecast called for the deficit to expand to $42.7B. Exports declined 3.6%, the most since Jan 2009 which may have been exacerbated by the drought in the Midwest that caused sales of soybeans to plunge, was nonetheless broad-based, indicating cooling economies from Europe to Asia may be sapping demand for American goods (once a mainstay of the economic recovery). The slowdown in imports, which affected everything from electronics to clothing & chemicals, may also be signaling slower US growth.
The Federal Reserve will amplify record accommodation tomorrow by announcing $45B in monthly Treasury buying that could push its balance sheet almost to $4T. Big Ben & the FOMC will press on with purchases at least thru Q1 2014, according to an estimate by economists. They would expand the balance sheet beyond $2.86T in a bid to spur growth & lower an unemployment rate of 7.7%. The FOMC has a 2-day meeting in DC & plans to release a statement tomorrow. The central bank this month is scheduled to end Operation Twist, in which it swaps $45B of short-term Treasuries each month for longer-term gov debt. That program kept the total size of the balance sheet unchanged, while new Treasury purchases would expand it. The latest round of quantitative easing could total $1.1T, with $620B in mortgage-backed securities & $500B in Treasuries.
AMJ (Alerian MLP Index tracking fund)
Treasury yields:
U.S. 3-month |
0.081% | |
U.S. 2-year |
0.242% | |
U.S. 10-year |
1.652% |
| CLF13.NYM | ...Crude Oil Jan 13 | ...85.83 | ... 0.27 | (0.3%) |
| GCF13.CMX... | Gold Jan 13 | ...1,709.40 | ... 3.90 | (0.2%) |
Photo: Bloomberg
The US trade deficit widened in Oct as the biggest slump in exports in almost 4 years outweighed a drop in imports, evidence of the slowdown in global growth. The trade gap grew 4.9% to $42.2B from a revised $40.3B in Sep that was smaller than previously estimated, according to the Commerce Dept. The forecast called for the deficit to expand to $42.7B. Exports declined 3.6%, the most since Jan 2009 which may have been exacerbated by the drought in the Midwest that caused sales of soybeans to plunge, was nonetheless broad-based, indicating cooling economies from Europe to Asia may be sapping demand for American goods (once a mainstay of the economic recovery). The slowdown in imports, which affected everything from electronics to clothing & chemicals, may also be signaling slower US growth.
The Federal Reserve will amplify record accommodation tomorrow by announcing $45B in monthly Treasury buying that could push its balance sheet almost to $4T. Big Ben & the FOMC will press on with purchases at least thru Q1 2014, according to an estimate by economists. They would expand the balance sheet beyond $2.86T in a bid to spur growth & lower an unemployment rate of 7.7%. The FOMC has a 2-day meeting in DC & plans to release a statement tomorrow. The central bank this month is scheduled to end Operation Twist, in which it swaps $45B of short-term Treasuries each month for longer-term gov debt. That program kept the total size of the balance sheet unchanged, while new Treasury purchases would expand it. The latest round of quantitative easing could total $1.1T, with $620B in mortgage-backed securities & $500B in Treasuries.
Fed Seen Pumping Up Assets to $4 Trillion in New Buying Bloomberg
Photo: Bloomberg
The Treasury will sell off nearly all of its holdings in American International Group, a milestone for the gov & the insurer it rescued. This step in AIG's turnaround seemed unattainable in 2008 when US officials put together a rescue package that effectively nationalized the insurer in what was one of the most contentious of the financial-industry bailouts. The US committed up to $182B of aid at the peak. The Treasury's sale of its 234M shares, valued at just under $8B would leave the gov holding only warrants. The offering is the Treasury's 6th sale of AIG stock since early last year. The stock rose 1.22. Before the sales started, it owned 92%. The proceeds boost the US profit on the rescue to $22.7B
U.S. Profit on AIG Climbs to $22.7 Billion on Share Sale
AIG (AIG)
Stocks are having a good day with hopes that budget talks will avoid going over the fiscal cliff. Maybe, but who knows? This is DC where solving today's problems are solved today & tomorrow take care of itself. The politicos have had more than a year to work on the problem with nothing to show except a debate. There are seemingly endless problems to take care of besides avoiding the fiscal cliff, like Social Security taxes, raising the debt ceiling, etc. But any whisper about "solving" the fiscal debate will probably bring out buyers
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