Early gains vanish after a favorable jobs report

After a very strong start, markets sold off. Dow is down 25, advancers head of decliners 5-2 & NAZ was even. Banks participated in the brief rally & are now selling off.

S&P 500 FINANCIALS INDEX

Value 193.60

Change 0.68

% Change 0.4%

MLPs are lumbering along, today down .68 to the 268s. The graph points out that the 270 ceiling may be tough to crack, at least for awhile. This is where the index was prior to its plunge last Sep. However REITs are having a good day, the index is up 4 taking it within 4 points of its yearly high. Junk bond funds are doing well. Risk is being rewarded as Treasuries sold off big. The yield on the 10-year Treasury bond rose 10 basis points to 3.48%.

Alerian MLP Index --- 2 weeks




Dow Jones REIT Index --- 2 weeks





Oil rebounded off the 75 floor which has held for several weeks. Gold is having its worst day in some time. Bargainer hunters may start nibbling.

CLF10.NYM

...Crude Oil Jan 10

...77.17

... 0.71 .......(0.9%)

GCZ09.CMX

...Gold Dec 09

...1,184.20

... 33.20 .......(2.7%)

The unemployment rate unexpectedly fell to "only" 10% in Nov, employers cut the smallest number of jobs since the recession began. However the respite may be temporary. Many expect the unemployment rate to climb into next year as the economy struggles to generate enough jobs for the 15.4M out of work. The economy shed 11K jobs last month, an improvement from the revised total of 111K in Oct (& much better than the 130K expected). If part-time workers who want full time jobs & laid off workers who have given up looking for work are included, the so-called underemployment rate also fell, to 17.2% from 17.5% in Oct. Also the average work week rose to 33.2 hours, from a record low of 33 hours. The increase in hours worked means employees are earning more income which could help increase consumer spending. Temporary help services added 52K jobs, the 4th straight increase. The news from the job report was about as good as could be hoped for but there is still a long way to go before we see significant reductions in the unemployment rate.

•Jobless Rate in U.S. Unexpectedly Drops to 10% as Payrolls Fall by 11,000

Unemployment rate (%) - 1 year




Underemployment rate (%) - 1 year





Orders to factories rose 0.6% in Oct, the 6th gain in the past 7 months, much better than the flat reading that had been expected. A jump in demand for commercial aircraft & petroleum products led the gain. Orders for durable goods, items expected to last three years, rose 0.6%, unchanged from a preliminary estimate last week. Orders for nondurable goods rose 1.6%, aided by gains in demand for petroleum, chemicals, plastics & food.

Orders to U.S. Factories Climb for Sixth Time in Seven Months

Factory orders (% change) - 1 year

The global rebound should produce div increases. It is estimated that 1 in 6 companies in the S&P 500 will increase their divs. An added benefit for those paying qualified divs is they are taxed at a lower rate that ordinary income. AT&T (T), Wal-Mart (WMT) & Progress Energy (PGN) are forecasted to lead those increasing divs. Dividend Aristocrats, such as WMT, may be getting more attention going forward, many have been left behind in in the year's rally.

Dividend Payments May Rise as Recovery Frees Cash

The very favorable jobs report was just what the markets needed. But the reversal by the markets is discouraging. PM trading should be unusually interesting.

Dow Jones Industrials --- 2 weeks

Combining TV with computers can help investors. Trend TV is a new service which you might want to check out.

Find out what's inside Trend TV Click Here

Last hour selling drags down stocks

Dow dropped 86, decliners were ahead of advancers almost 2-1 & NAZ fell 11. Dow spent much of the day hovering near break even but sold off in the last hour. Banks have been having a difficult time attracting fans, the Financial Index has not been above 200 for a month. Today banks were lower with much of the selling going into the close.


S&P 500 FINANCIALS INDEX

Value 192.92

Change -4.06

% Change -2.1%

The Alerian MLP Index was down only 2 pennies in the 266s & the REIT index dropped 2. Junk bond funds were off fractionally from their yearly highs. Treasuries fell, the yield on the 10-year Treasury bond rose 6 basis points to 3.38% as it returns to the 3½% level it has been close to for several months.


Alerian MLP Index --- 2 months




Dow Jones REIT Index --- 3 months





Oil & gold improved during the day. Gold at a new record level sounds like a broken record!

CLF10.NYM

..Crude Oil Jan 10

..76.27

.. 0.33 ......(0.43%)

GCZ09.CMX

..Gold Dec 09

..1,217.70

..5.70 ..(0.5%)

The Institute for Supply Management’s index of non-manufacturing businesses, making up almost 90% of the economy, fell to 48.7 in Nov from 50.6 in Oct. The forecast was for a gain to 51.5. Fifty is the dividing line between expansion & contraction.

•Services Industry in U.S. Unexpectedly Shrinks as Job Losses Hit Spending

Non-manufacturing Index - 1 year





Abercrombie & Fitch (ANF) was one of the retailers with dreary Nov sales. That's being kind, their Nov sales plunged 17% making it one of the worst performing stocks in the S&P 500. The stock fell more than 8% to the 36s & is down 15% from its 2009 reached last month.

Retailers Offer Up Soft Same-Store Salesat Fox Business

Abercrombie & Fitch -- 1 year





The news today was muddled with a negative bias, not making the future any clearer. Markets treated the announcements with a big yawn until selling began in the last hour. Volume continues light, NYSE floor volume was only 1.1B shares.

Dow Jones Industrials --- 2 months

Mixed markets on conflicting economic data

Dow was up 8, advancers ahead of decliners by 15% & NAZ rose 9. Banks are still sloshing around trying to find traction.

S&P 500 FINANCIALS INDEX

Value 196.95

Change -0.03

% Change -0.0%

MLPs are rising, the Alerian MP Index is up 1+ to the 268s & very near its yearly highs. The Dow Jones REIT Index is up taking it within 3 of its 2009 high. Junk bond funds are generally higher, at or near yearly highs (& lowest yields). The yield on the 10-year Treasury bond rose 5 basis points to 3.37%.

Alerian MLP Index --- 2 weeks




Dow Jones REIT Index --- 2 weeks





Oil fell taking it closer to its 75 floor. Gold is also down, but remains above 1200.

CLF10.NYM

...Crude Oil Jan 10

...75.94

... 0.66 .......(0.9%)

GCZ09.CMX

...Gold Dec 09

...1,205.60

... 6.40 .......(0.5%)

The number of newly laid-off workers seeking unemployment benefits fell (unexpectedly) for the 5th straight week. However, claims remain above levels consistent with an economy that is adding jobs. First-time claims dropped 5K to 457K, the lowest in 15 months. The ongoing decline signals that employers could start adding jobs by as early as Jan or Feb. The economy has shed jobs for 22 straight months, the longest stretch since World War II. The employment report for Nov, to be released Fri, is expected to show that employers shed another 130K jobs after cutting 190K in Oct. However, the unemployment rate is estimated to remain at 10.2%.

U.S. Jobless Claims Unexpectedly Fall to One-Year Low

# filing unemployment claims - 1 year




# receiving benefits - 1 year

After 2 consecutive monthly sales gains, retailers posted a surprise 0.3% decrease for Nov. The decline is compared with last Nov when spooked shoppers went into a defensive crouch after the financial meltdown. Most stores, including department store chains Macy's (M), Children's Place Retail Stores (PLCE), teen merchant Abercrombie & Fitch (ANF) & discounter Target (TGT), posted sales declines. Their stocks are down around 5%.

• Retailers report surprise drop in November- AP

This is another day when markets are getting mixed signals from the news. The rest of the day should be quiet until the Nov jobs reports is released tomorrow before trading.


Dow Jones Industrials --- 2 weeks

Markets waver, looking for guidance

Without encouraging news, Dow slipped 18, advancers over decliners better than 3-2 & NAZ gained 9. Dow stayed in a narrow trading range, within 30 points of break even. Banks did little. Below I added a chart for JPMorgan (JPM), Dow stock, a bank in better financial shape than many others. The stock is back where it began 3 months ago while Dow has been advancing.

S&P 500 FINANCIALS INDEX

Value 196.98

Change -0.23

% Change -0.1%

JP Morgan --- 3 months





MLPs continued with their sluggish behavior of late. The Alerian MLP Index fell almost 1 to the 266s but the Dow Jones REIT Index gained 2.72. Junk bond funds were mixed to higher. The yield on the Treasury 10-year bond continued higher, up 5 basis points to 3.32%.

Alerian MLP Index --- 2 months




Dow Jones REIT Index - 2 months





Commodities were generally weaker as shown with oil. But gold continues its charge to new records.


COMMODITY FUTURES

	VALUE	CHANGE	% CHANGE
Oil	76.71	-1.66	-2.1%
Gold	1,214.80	14.60	1.2%

Gold video that redirects to the Course landing url! Click Here


GLD (ETF) --- 3 months





The economic recovery gained traction in late fall with shoppers spending a bit more & factories bumping up production. This assessment by the Federal Reserve marked its most upbeat view since the economy tumbled 2 years ago. The FED's new snapshot of business barometers found that conditions have generally improved since the last report in late Oct. The main challenge for the FED is to sustain the fledgling rebound, especially after the benefits of gov support fade next year. This lukewarm view of the economic recovery kept the lid on markets advancing today. Floor volume on the NYSE was light at just over 1B shares.

Dow Jones Industrials - 2 months

Markets edge higher after jobs report

There is not a lot of direction in the markets even though they have an upward bias. Dow is down 9, advancers over decliners 2-1 & NAZ rose 12. Banks have had difficulty finding their way for 3 months, not good for the bullish argument. The Financial Index is down today.

S&P 500 FINANCIALS INDEX

Value 196.70

Change -0.51

% Change -0.3%

Kinder Morgan (KMP), now the 2nd largest MLP, had another big unit offering depressing its unit price (see below) & negatively affecting the MLP index. They have had a nice recovery this year, this setback should be viewed as only temporary. This is completing their announced plan to raise $1B in 2009 to support added borrowings for financing a growing pipeline network. The MLP index is down 1 while the REIT index is up 1+ bringing it to 7 points below its 2009 high. Junk bond funds were higher, generally to the best levels of 2009. This money is accepting lower yields in junk bond funds because they see an "improving" economy. Treasuries were weak. The yield on the 10-year Treasury bond rose another 4 basis points to 3.31%, up from its interim low last week.


Kinder Morgan --- 2 weeks




Alerian MLP Index --- 2 weeks




Dow Jones REIT Index --- 2 weeks




10-Year Treasury Yld Index - 2 weeks





Oil slipped back, continuing to slosh around the upper 70s. In contrast gold keeps roaring ahead, hitting new record highs has become routine in the last month. After breaking thru 1200, the next question is when it will reach 1300? I haven't been a big believer in gold investing, but with more money flowing to Asia gold has a very bright future.

CLF10.NYM

...Crude Oil Jan 10

...77.58

... 0.79 .......(1.0%)

GCZ09.CMX

...Gold Dec 09

...1,212.60

... 13.50 .......(1.1%)

Gold video that redirects to the Course landing url! Click Here


US employers shed 169K jobs in Nov, fewer than the 195K jobs lost in Oct (originally reported as 203K). The median estimate was for decline of 155K jobs. This is the smallest loss in 16 months. The report signals the job market is still deteriorating & unemployment will probably climb further even as the economy is emerging from the worst recession since the 1930s. The important monthly jobs (unemployment rate) report is coming on Fri. Today's report suggests the jobs report may be less bad than feared.


•Companies in U.S. Cut 169,000 Jobs Last Month, Topping Estimates, ADP Says

Unemployment rate (%) - 1 year





Dubai debt has been reduced to lurking behind the scenes, but concerns remain. Even if they muddle thru this crisis, it's a reminder that other areas are subject to their day of reckoning after over expansion periods.

Dow Jones Industrials --- 2 weeks

November auto sales boost stocks

Auto sales figures, while not great, were good enough for the Dow to eke out a new 2009 high. Dow advanced 126, advancers ahead of decliners almost 4-1 & NAZ went up 31. However banks were mixed, the 200 line for the Financial Index is still an object instead of a floor.

S&P 500 FINANCIALS INDEX

Value 197.21

Change 0.19

% Change 0.1%

MLPs did not participate in the rally, their index was down pennies. The change is suspicious because ones I follow (check my Yahoo widget on the right) were generally higher. The Dow Jones REIT Index had a good day, up an impressive 2.19 despite gloomy thoughts about commercial real estate encountering higher vacancy rates. Junk bond funds were higher, an improving economy will help companies whose debt they own. Treasuries sold off. The yield on the 10-year Treasury bond rose 7 basis points to 3.28%. Investment money is accepting more risk to earn higher rates.


Alerian MLP Index --- 3 months




Dow Jones REIT Index --- 3 months





Stock market strength benefited commodities. Oil had a good day but has endured a choppy 3 months. Gold had one of its best 3 month periods in history. Today it topped 1200, but that didn't quite hold.

CLF10.NYM

Crude Oil Jan 10

..78.21

.. 0.93 ......(1.2%)

GCZ09.CMX

..Gold Dec 09

..1,197.10

.. 16.00 ......(1.4%)

OIL (ETF) --- 3 months




GLD (ETF) --- 3 months








Auto sales in Nov were relatively good, that means beating lowered estimates. They ran at a 10½M annual rate (modestly above a 10.17M rate last year), good but far from the old days with sales of 17M. Toyota (TM) reported a 2.6% increase, Ford (F) deliveries were little changed, GM slid 2.2% & Chrysler sales declined 25%. Car companies benefited from comparison with Nov 2008, when the sales rate was the lowest for last year. Automakers are happy their industry is stabilizing at a rate they claim they can live with.

•GM, Ford, Toyota November U.S. Sales Beat Estimates as Economy Stabilizes

Annual auto sales rates (M) - 1 year





The weaker dollar is helping raise commodity prices & stocks, a pattern which has been underway for several months. It takes fewer than 87 Japanese ¥ to buy a dollar & the € is near $1.51. Among other things, many multi-nationals benefit from the weaker dollar when they translate foreign earnings. Meanwhile, Dubai debt worries are fading.

Dow Jones Industrials --- 3 months

Markets rise as fears subside

Fears are being calmed bringing back buyers to the markets. Dow is up 104 (inches from its 2009 high of last week), advancers ahead of decliners 4-1 & NAZ gained 25. However banks slipped, but the Financial Index is ready to head into the black.


S&P 500 FINANCIALS INDEX

Value 196.91

Change -0.11

% Change -0.1%

Not much happening today in high yield sectors, they deserve a rest. The MLP Index is down pennies still in the 267s while the REIT index is up pennies. Junk bond funds are higher while Treasuries fell. The yield on the 10-year Treasury bond rose 4 basis points to 3.25%. For the month, the high yield sectors did well, only REITs are not at yearly highs.


Alerian MLP Index --- 1 month




Dow Jones REIT Index --- 1 month





Oil & gold are higher with gold heading for 1200. Gold's chart shows it was the best performer last month (including high yielders) while oil was sloshing around in the 75-80 range.

CLF10.NYM

...Crude Oil Jan 10

...78.48

... 1.20 .......(1.6%)

GCZ09.CMX

...Gold Dec 09

...1,194.60

... 13.50 ........(1.1%)

OIL (ETF) --- 1 month




GLD (ETF) --- 1 month




Gold video that redirects to the Course landing url! Click Here


The Institute for Supply Management’s (ISM) manufacturing index fell to 53.6 in Nov, less than forecast, from a 3-year high of 55.7 in Oct (above 50 signals expansion). Growing exports & lean inventories may keep manufacturing growing into 2010. The dip is more of temporary correction rather than a sign the boom is over. Factory production which rose at the fastest pace in a quarter century in the 3 months through Sep, will probably climb at a slower pace as mounting unemployment restrains consumers. The ISM’s production index fell to 59.9 from 63.3, which was the highest level over 5 years.

•U.S. Manufacturing Expands for a Fourth Month as Factories Propel Recovery


Manufacturing Index 1 year




Production Index - 1 year




Officials from Dubai are sending out encouraging words to ease fears. Housing sales in Oct looked good, although that was expected with the looming tax credit expiring. Dow had another very excellent month ending near its 2009 high & looks like to wants to go higher.


Dow Jones REIT Index --- 1 month