Markets mixed after jobless rates tops 10%

Dow sank 70 on the opening after the report about unemployment topping 10%, but has climbed back to up 6. However, only 9 Dow stocks gained. Decliners were ahead of advancers 3-2 & NAZ was even. Banks did not take the news well although they bounced off early lows. The Financial Index is down, remaining in the low end of its 2 month trading range.

Value 191.85

Change -1.47

% Change -0.8%

The Alerian MLP index fell 1½ to the 257s, staying near the 255 level it has gotten used to. The Dow Jones REIT Index fell 2 to the 161s. Junk bond funds were a little soft & the VIX, volatility index, dropped another .78 going below 25 (it had been near 32 one week ago). The yield on the 10-year Treasury bond fell 2 basis points to 3.52%.

Alerian MLP Index --- 2 weeks




Dow Jones REIT Index --- 2 weeks





Oil took the news about unemployment badly, but remains above the 65-75 range it had been in for so long. Gold is not showing any price after closing at 1088 yesterday.

CLZ09.NYM

Crude... Oil Dec 09

...77.50

... 2.12 .......(2.7%)

The unemployment rate rose above 10% for the first time since 1983, a worse jump than expected as employers continued to trim jobs from payrolls. This is a sign of the continued weakness in the labor market even though the economy grew in Q3 following the longest & deepest downturn since the Depression. The unemployment rate jumped to 10.2%, from 9.8% in Sep. There was a net loss of 190K jobs in Oct, an improvement from a revised 219K job loss number in the prior month & was the 22nd straight month of job losses. The increase in the unemployment rate was driven up by a large drop in the number of people who describe themselves as self-employed, as well as the number of teenagers included. While the number of layoffs is dropping, those laid off aren't finding work.

•U.S. Unemployment Rate Jumps to 10.2% as Payrolls Fall More Than Forecast


Unemployment rate - 1 year





The markets are taking the unemployment news pretty well, maybe because it had been semi-advertised all week. This is not really new news, but when it hits it strikes home. Auto sales rebounded modestly in Oct, after the cash for clunkers program ended, bringing a positive note to markets which are looking for assistance. Considering how ugly the unemployment news was, markets are adjusting as well as could be hoped for. However, the 10K ceiling for the Dow is becoming an issue, it is finding the ceiling a tough nut to crack.


Dow Jones Industrials --- 2 weeks

Dow crossed 10,000 as all 30 gained

Stocks started very strong & remained at high levels all day (shown in the Bigcharts widget on the right), closing at its high. Dow advanced 204, advancers over decliners almost 4-1 & NAZ was up a very big 49. Banks picked up steam in the PM to firmly lead markets higher. However, the Financial Index is still below the 212 yearly high reached last month, shown in the chart below:

S&P 500 FINANCIALS INDEX

Value 193.32

Change 4.78

% Change 2.4%

MLPs continued strong. The Alerian MLP Index rose 2.87 to the 258s, getting close to its recent 265 high. The Dow Jones REIT index was up 3½, but at 163 staying near its sideways level around 160. Junk bond funds were mixed, near 2009 highs. The VIX, volatility index, fell 2¼ taking it below 26. The chart below shows its interim peak last week & retreat this week as fears eased. Treasures were flattish, the yield on the 10-year Treasury bond was off 1 basis point to 3.54%.

Alerian MLP Index --- 2 months




Dow Jones REIT Index --- 2 months




VIX --- 2 months





Oil slipped but gold managed a small gain. Oil remains firmly above the 65-75 range it lived in for many months while gold is pushing to cross 1100. Price advances for commodities were held in check from a firmer dollar which is not expected to represent a change in the longer term trend of a weak dollar getting weaker.

CLZ09.NYM

..Crude Oil Dec 09

..79.81

.. 0.59 ......(0.7%)

GCX09.CMX

..Gold Nov 09

..1,090.60

.. 3.90 ......(0.4%)

The House voted to extend & expand the tax credit to include many buyers who already own homes. The Senate approved the measure & the President will sign the bill tomorrow. In addition to the first time buyer credit, those owning a home for 5+ years will have a $6,500 credit available. To qualify, buyers in both groups have to sign a purchase agreement by Apr 30, 2010, & close by Jun 30. The builders may return for another extension early next year.

Extended Homebuyer, Jobless Aid Passed by Congress


Stocks did quite well today, holding their gains in the face of the jobs report tomorrow. Today's unemployment report helped calm some fears. Extending & expanding the tax credit for home buyers is a plus for the economy & stock markets. But fundamental problems of high unemployment driving weak consumer spending are not going away soon.


Dow Jones Industrials --- 2 months

Markets zoom on lower jobless claims

Stocks started strong & didn't look back. Dow is up 175, advancers over decliner 4-1 & NAZ is up 20. Nothing like a favorable jobless claims report to help stocks. Banks are up, but with a so-so rally.

S&P 500 FINANCIALS INDEX

Value 190.00

Change 1.4r6

% Change 0.8%

The Alerian MLP Index is up 1.70 to the 257s, pretty much range bound in the last 5 days. The Dow Jones REIT Index is up a more impressive 2.55 & has been range bound for a few months. Junk bond funds are mixed while the VIX dropped 1¾, taking it below 26 (& down a very big 5 this week). Fears have been easing after last week's spike up. The yield on the 10-year Treasury bond is flat at 3.54% (the high end of its 2 months range).


Alerian MLP Index --- 2 weeks




Dow Jones REIT index --- 2 weeks





There is good demand for oil, keeping it above 80. Gold, what is there to say? It just keeps going up. The main questions is whether it can conquer 1100 this week as gold buyers are thinking negative thoughts about inflation. Below is a link if want to learn more about trading gold.


Trade Gold in 90 Seconds! Click Here

CLZ09.NYM

...Crude Oil Dec 09

...80.45

... 0.05 .......(0.1%)

GCX09.CMX

...Gold Nov 09

...1,091.20

... 4.50 .......(0.4%)

The number of newly laid-off workers filing claims for unemployment benefits fell last week to the lowest level in 10 months. This is viewed as evidence job cuts are easing as the economy slowly heals. But companies are reluctant to hire, the unemployment rate is expected to tick up to 9.9% in Oct (reported tomorrow). First-time claims for jobless benefits fell 20K to 512K, lower than estimates of 523K. The 4-week average dropped to 523K, its 9th straight decline, & is 135K below the peak for the recession 7 months ago. However, initial claims remain well above 400K needed to signal job creation. Economists worry that growth will slow early next year as gov stimulus programs wind down, making many employers reluctant to hire. These numbers are less dismal, encouraging stock buyers.

Jobless Claims in US Decrease More Than Forecast


Initial Jobless Claims - 52 weeks




Receiving Jobless Benefits - 52 weeks







Hyatt Hotels (H), note the single letter symbol, sold 38M shares at $25, the high end of its target price range. The stock is up $2, an excellent market reception at a time when IPOs have been "iffy."


Hyatt Hotels --- 1 day




This is turning out to be a winner day for stocks. While making for pleasant reading, the jobless report is just a weekly report. Then tend to bob around, it's good not to read too much into it. Tomorrow is the big monthly one, at best it should be "not too bad." The successful Hyatt IPO is encouraging for the bulls.

Dow Jones Industrials --- 2 weeks

Markets sell off after Federal Reserve holds rates low

Stocks liked what they heard from the Federal Reserve about keeping rates low. But in the last hour sellers returned, pretty much wiping out early gains (shown in the Bigcharts widget on the right). The Dow gained only 30, advancers over decliners 4-3 & NAZ fell 2. Banks led the selling, the Financial Index dropped from 193 when the interest rate announcement was made.


S&P 500 FINANCIALS INDEX

Value 188.54

Change -2.89

% Change -1.5%

The Alerian MLP index had a good day, up 1½ to the 255s. It's down from the yearly high of 265 last week (271 showing is not a good number). The Dow Jones REIT Index pulled back almost 4 & has found it difficult making headway in the last 2 months. Junk bond funds were mixed. They had been making new highs until last week's sell-off. The VIX, volatility or fear index, has been volatile itself lately explaining recent weakness for many high yield securities. Treasuries sold off, taking the yield on the 10-year Treasury bond up 7 basis points to 3.56%. Some of that money may have been used to buy gold.


Alerian MLP Index --- 2 months




Dow Jones REIT Index --- 2 months





Buyers liked oil & gold. Oil held its gains taking it above 80 & gold closed in on 1100, another record. The chart for the gold ETF below shows gold's gain of 200 in just 2 months caused by weakness in the dollar. Extending low US interest rates as other countries (such as Australia) are raising interest rates is causing dollars to be sold. As long as US interest rates are low, the dollar can be expected to continue weak & thus encouraging gold buying. How to buy gold is becoming a hot topic again!

CLZ09.NYM

..Crude Oil Dec 09

..80.70

.. 1.10 ......(1.4%)

GCX09.CMX

..Gold Nov 09

..1,096.50

.. 12.20 ......(1.1%)

GLD (ETF) --- 2 months





The late day sell-off caught many by surprise but may be another one of those times of buying on the rumor & selling on the news. Dow cracked thru 10K a month ago & hasn't been able to stay above that level. Gold hitting record highs has to be hurting the stock markets.


Dow Jones Industrials --- 2 months

Higher markets on prospects Federal Reserve will keep interest rates low

Stocks started strong & continued higher. Dow was up 118, advancers over decliners 4-1 & NAZ gained 17. Banks are doing well (although slipping in the last hour). The Financial index is still at the low end of its trading range (190-210) for the last few months.


S&P 500 FINANCIALS INDEX

Value 192.48

Change 1.05

% Change 0.5%

High yield securities are strong again, benefiting from the rising stock market & implications of a quick economic recovery which will help solve problems. The Alerian MLP Index is up almost 2 to 256 & the REIT index is up 1.10 (also up 10 since Mon despite gloomy predictions about growing problems in commercial real estate). Junk bond funds are firmer. The VIX is recovering (declining), down 2 to the 26s, on reduced fears about the markets. The yield on the 10-year Treasury bond rose 2 basis points to 3,49%.

A special note, I've been following Joe's blog on MLPs:

http://limitedpartnerships.blogspot.com/

for 2 years and have learned a lot from his writings. It's been added to my Blogroll list on the right.

Alerian MLP Index --- 2 weeks




Dow Jones REIT Index --- 2 weeks




VIX --- 2 weeks





Commodities are doing well on a more favorable outlook for the recovery & gold has gone wild! Oil is back over 80. But gold had a 30+ gain yesterday & is strong today. Gold's gain yesterday was propelled after learning that India (not China which is the usual buyer) had bought 2 tons (I repeat TONS) of gold at market prices. 1100 is its next goal & that could be reached shortly, even later today. Gold is considered the inflation hedge & its strength has negative implications for the stock markets. For those who want to learn more about investing in gold, I have a link on "Trading Gold in 90 Seconds" from Ino.com in the column on the right->

CLZ09.NYM

...Crude Oil Dec 09

...80.70

... 1.10 .......(1.4%)

GCX09.CMX

...Gold Nov 09

...1,091.60

... 7.30 .......(0.7%)

Time Warner (TWX) reported lower earnings that beat expectations (the common theme in Q3 earnings reports), the stock rose 29¢. They also boosted guidance for 2009, said plans are still on track to spin off AOL & there will be more layoffs at Time.

• Time Warner 3Q profit drops, boosts outlook- AP

Time Warner --- 1 year





Yesterday was a quiet day, except for Warren Buffet's big purchase. That's the kind of news that warms the hears of buyers, hoping for more buyout stories. The Federal Reserve will announce the interest rates this PM. Expectations are that rates will continue very low for half a year at a minimum. But the FED will have to increase those rates, maybe by the end of next year if there is a strong recovery. Auto sales for Oct were fairly good, once again based on low expectations & off low prior figures. The jobs report on Fri is the next major event & that is dreaded!

Dow Jones Industrials --- 2 weeks

Markets hang on to some of early gains

Dow had been up 100, pulled back & a late day rally brought the gain back to 76. Breadth slipped as decliners & advancers were about equal while NAZ was up 4. None of the Dow stocks managed a $1 gain. Banks started strong followed by selling. Late day buying took the Financial Index back into the black (green), away from the red, with a decent advance.

S&P 500 FINANCIALS INDEX

Value 190.61

Change 1.58

% Change 0.8%

High yields were mixed. The Alerian MLP Index was off ½ to the 253s, an acceptable retreat but still off 12 from its recent high. The REIT index firmed, up fractionally. Junk bond funds found buyers. After pulling back early in the day the VIX slipped .91, ending just under 30 (worriers are back in the market). The yield on the 10-year Treasury bond rose 3 basis points to 3.42%. Treasuries represent safety for investors with worries.

Alerian MLP Index --- 3 months




Dow Jones REIT Index --- 3 weeks





Gains in the AM were reduced, but oil & gold still had a nice day.

CLZ09.NYM

..Crude Oil Dec 09

..77.94

.. 0.94 ......(1.2%)

GCX09.CMX

..Gold Nov 09

..1,053.40

13.70 ......(1.3%)

The price for gas at the pump reached a new yearly high on Fri but then backed off a fraction of a penny over the weekend. Gas prices climbed 23¢ in Oct, another headache a recovering economy would rather do without.

	Regular	Mid	Premium	Diesel	85	**E85 MPG/BTU adjusted price
Current Avg.	$2.691	$2.858	$2.960	$2.835	$2.250	$2.961
Yesterday Avg.	$2.693	$2.859	$2.962	$2.836	$2.233	$2.938
Week Ago Avg.	$2.671	$2.837	$2.938	$2.812	$2.192	$2.884
Month Ago Avg.	$2.461	$2.613	$2.706	$2.625	$1.995	$2.625
Year Ago Avg.	$2.436	$2.541	$2.617	$3.265	$2.274	$2.993

Source: AAA



The Federal Reserve will hold its policy meeting in the next 2 days. With the recovery being so fragile, it is virtually certain interest rates will be kept at the present low levels near zero. But they will have to start thinking about how & when to announce increases. Can you spell "debate?" On Fri the important monthly unemployment report will be issued & the main question is whether the rate will hit 10%.

Fed to hold rates at record-low, but cracks emerge- AP


Auto sales for Oct are coming (probably tomorrow) & they should be dreary with the cash for clunkers program finished. The only excitement from the FED meeting will be what they have to say about raising interest rates along with their assessment of the economic recovery. Markets remained on defense today despite the "gains.".

Dow Jones Industrials --- 3 weeks





I'll be away tomorrow, but have included helpful links from Ino.com to help with your analysis:








Perfect Portfolio Landing Page 1 Click Here


Perfect Portfolio Landing page 2 Click Here

Stocks rise on encouraging manufacturing and housing data

Markets got off to a good start & continue with solid gains. Dow is up 108, advancers ahead of decliner 3-1 & NAZ rose 14. As expected, banks are having a good day, but the Financial Index is near the low end of its range for the last few months.

S&P 500 FINANCIALS INDEX

Value 192.05

Change 3.02

% Change 1.6%

High yield sectors do well in rising markets. The Alerian MLP Index was up 2 to the 256s & the Dow Jones REIT Index was up a more modest 1. Junk bonds funds recovered after the sell-off last week. Treasuries slipped slightly, the yield on the 10-year Treasury bond went up 2 basis points to 3.41%. After excitement on Fri, the VIX retreated 2 to the 28s but remains at very high levels.


Alerian MLP Index --- 2 weeks




Dow Jones REIT Index --- 2 weeks




VIX --- 6 months





Commodities were also strong. Oil is up, heading back for the 80s, & gold had a very big pop, taking it near its record high in the last month.

CLZ09.NYM

...Crude Oil Dec 09

...78.20

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

GCX09.CMX

...Gold Nov 09

...1,061.00

... 21.30 .......(2.1%)

GLD ETF --- 1 month





US manufacturing grew in Oct for the 3rd consecutive month & at a faster rate than expected. The index of national factory activity rose to 55.7 from 52.6 in Sep (the estimate was 53). This is the highest since 56.0 over 3 years. A reading above 50 indicates expansion, while a number below that means contraction. The employment index for the manufacturing industry jumped to 53.1 from 46.2 last month, again the strongest showing since Apr 2006.

•Manufacturing in U.S. Expands at Faster Pace as Factories Propel Growth


Pending home sales rose in Sep to their highest level in nearly 3 years (ahead of the expiration of the tax credit for first-time buyers). The Pending Home Sales Index, based on contracts signed in Sep, rose 6.1% to 110.1 -- the 8th straight monthly rise & the longest streak since the measurement started in 2001. The strength is timing related, it probably will slide back when Nov & especially Dec numbers are reported.

Pending Sales of Existing Homes in US Rise 6.1%

CIT (CIT) gave up its struggle to avoid collapse & filed for Chapter 11. They provide badly needed credit to thousands of small & mid-sized businesses, a critical part of the retail sector. Its lending operations will continue to operate as it hopes to shed $10b in debt coming out of bankruptcy by year end (if all goes well). But this will add to the instability in the retail sector. About 60% of the apparel industry depends on CIT for financing.

CIT Group Files Bankruptcy, Seeks to Reduce Debt

The manufacturing news was good. Home sales news is more mixed especially when measured against the good old days when home sales were more than double current levels. Risk averse has been creeping back into the markets, taking Dow below 10K. Markets are still on defense.

Dow Jones Industrials --- 2 weeks