Thursday, November 29, 2012

Markets rise again on budget talk hopes

Dow moved up 36, advancers over decliners 5-2 & NAZ rose 20. The Financial Index went up 1 to the 212s. The MLP index was up a fraction to 397 & the REIT index gained 1+ to the 258s. Junk bond funds rose & Treasuries were little changed. Oil rose for the first time in 4 days as the US economy expanded more than previously estimated in Q3 & on optimism for an agreement over a new budget. Gold continued strong in the PM.

AMJ (Alerian MLP Index tracking fund)

Top 50 Trending Stocks

Free Trading Course

Treasury yields:

U.S. 3-month	0.081%
U.S. 2-year	0.254%
U.S. 10-year	1.618%

CLF13.NYM

...Crude Oil Jan 13

...88.36

...

1.87 (2.2%)

Economy in U.S. Grew at 2.7% Rate, More Than First Estimated

Photo: Bloomberg

US consumer spending grew less than forecast in Q3, underscoring why Federal Reserve policy makers are fighting unemployment to spur the economy. Household purchases climbed at a 1.4% rate, the smallest gain in more than a year & down from a previously reported 2% advance, revised figures from the Commerce Dept. Gains in inventories & a smaller trade deficit more than offset the slowdown to propel GDP to a 2.7%, exceeding the 2% pace previously reported. At the same time, another report today reinforced signs of a rebound in housing that is helping underpin consumer confidence. Consumer spending was projected to expanded at a 1.9% pace last qtr

Consumer Spending in U.S. Grows Less Than Forecast

Photo: Yahoo

Weak sales at leading US retailers in early Nov dragged down results for the month as the effects of major Northeast storms offset brisk activity over the long Thanksgiving weekend. Retailers on average reported a 1.6% increase in sales at stores open at least a year, about half the 3.3% rise that analysts had forecast & below a year-earlier gain of 3.5%. Storms & resulting massive power outages & damage hurt retailers badly. In addition, increased online shopping and layaway sales hurt Nov results, said International Council of Shopping Centers Chief Economist Michael Niemira. Retailers do not book layaway sales until they are fully paid for & do not book online sales until the products are shipped. Niemira expects both layaway & online shopping to help same-store sales in Dec. However, Cyber Monday was reportedly the biggest online shopping day ever, but came after the Nov sales period ended. Sales for the Nov-Dec holiday season look set to rise 4.1% to $586B this year after a 5.6% increase in 2011, according to a National Retail Federation forecast given weeks before the Northeast storms. Other forecasts also hover around 4%.

November Sales Get Thanksgiving Weekend Boost

Pending Sales of Existing U.S. Homes Increased 5.2% in October

Photo: Bloomberg

More contracts were signed in Oct to purchase previously owned homes, another sign the recovery in the housing market is being sustained. The index of pending home resales climbed 5.2%, exceeding the highest estimate, to 104.8 after a revised 0.4% gain in Sep, according to the National Association of Realtors. The forecast called for a 1% gain. The lowest mortgage rates on record, stable prices & waning foreclosures are helping underpin sales 3 years after the last recession ended. The prior month’s figure was originally reported as a 0.3% advance. Compared with a year earlier, the index increased an unadjusted 18% after an 8.7% gain in the 12 months ended in Sep. After seasonal adjustment, pending purchases climbed 13.2% from a year ago.

Pending Sales of Existing U.S. Homes Rose 5.2% in October

Markets respond to every whisper about budget talks out of DC. There is nothing new & both sides are dug in for a long fight. Talk is cheap & there is plenty of hot air coming out of DC. But that's all it is, hot air. However stocks are hanging in pretty well. Other times in the past, this kind of uncertainty has caused sellers to drag stocks lower. After all is said & done today, Dow finished just above 13K & NAZ went over 3K. The bulls like to see that.

Dow Jones Industrials

Markets rise on fiscal cliff talks

Dow gained 52, advancers over decliners almost 3-1 & NAZ added 21. The Financial Index rose 1+ to the 212s. The MLP index was up 1+ to 398 & the REIT index was flattish in the 258s. Junk bond funds edged higher & Treasuries slid lower. Oil & gold also are having a good day.

AMJ (Alerian MLP Index tracking fund)

Treasury yields:

U.S. 3-month	0.086%
U.S. 2-year	0.258%
U.S. 10-year	1.628%

CLF13.NYM

....Crude Oil Jan 13

...88.52

.....

2.03

(2.4%)

GCX12.CMX

...Gold Nov 12

....1,739.80

...

23.30

(1.4%)

MarketClub

Learn More About MarketClubs $8.95 Trial!

Today's Video Market Update

Fewer Americans filed first-time claims for unemployment insurance payments last week as the labor market disruptions wrought by superstorm Sandy ebbed. Applications for benefits decreased 23K to 393K according to the Labor Dept. The forecast was for 390K claims. The drop in claims indicates the job market in the mid- Atlantic region, which employs about 14% of US workers, may be stabilizing after Sandy. Apart from the storm-related damage, job creation will probably be limited as companies navigate the global economic slowdown & the fiscal outlook. The 4-week moving average climbed to 405K from 397K. The number continuing to collect benefits dropped 70K to 3.29M. The continuing claims figure does not include the number of workers receiving extended benefits under federal programs. Those who’ve used up their traditional benefits & are now collecting emergency & extended payments decreased by 37K to 2.16M.

Jobless Claims in U.S. Decrease as Sandy Effect Dissipates

Photo: Bloomberg

The US economy grew faster than initially thought in Q3 as restocking by businesses provided a big boost, but consumer & business spending were revised lower in a sobering reminder of the recovery's underlying weakness. GDP expanded at a 2.7% annual rate according to the Commerce Dept, as export growth also helped to offset the weakest consumer spending & first drop in business investment in more than a year. While the growth pace was much quicker than the 2% rate estimated last month & the best since Q4 of 2011, it was hardly a sign of strength as the lift from inventories will likely be lost in Q4. The economy is also bracing for deep cuts in gov spending & tax increases early next year which could suck $600B from the economy & fuel a fresh recession. Business inventories added 0.77 percentage point to Q3 GDP growth. They were previously estimated to have subtracted 0.12 percentage point. Excluding inventories, GDP rose at a revised 1.9% rate, underscoring sluggish demand. Final sales of goods & services produced in the US had been previously estimated to have increased at a 2.1% pace. A smaller trade deficit was also a factor behind the upward revision to GDP as export growth outpaced a rise in imports. But the trend in exports is unlikely to be sustained given slowing global demand, especially in China & debt troubled Europe. Trade contributed 0.14 percentage point to GDP growth instead of subtracting 0.18 percentage point, as previously reported. Other details of the report were rather weak. Consumer spending was lowered to a 1.4% growth rate, the slowest since Q2 of 2011, from the 2% gain previously reported.

U.S. Economy Grew at 2.7% Rate, More Than First Estimated

Photo: Yahoo

Tiffany lowered its fiscal-year sales and profit forecast for the 3rd straight qtr & reported lower-than-expected revenue & earnings after a drop in same-store sales in its key Asia market. The region has been affected by the economic slowdown in China. Sales at Asian stores open at least a year fell 4%, excluding currency effects. TIF now expects global net sales to rise 5-6% for the year ending in Jan, down one percentage point from its most recent forecast. CEO Michael Kowalski said the company had a "cautious" near-term view of the global economy, but expects results to start improving during the current holiday season, when TIF rings up 1/3 of annual sales. Sales were also weak in its least expensive category, silver jewelry, suggesting price-conscious shoppers were hesitant to spend money on items they didn't need right away. The company gets about 1/4 of its sales from relatively inexpensive items such as sterling silver key charm. It projected full-year EPS of $3.20-$3.40, down from an earlier range of $3.55-$3.70. Analysts have a $3.60 forecast. Global sales rose 3.8% to $853M in Q3, while sales at stores open at least a year across the chain rose 1%. Analysts expected sales of $859M. EPS fell to 49¢ from 70¢ a year earlier. The stock plunged $5.16.

Tiffany Cuts Full-Year Profit Forecast, Earnings Missed

Markets are doing well again today, mostly on hopes about fiscal cliff talks. But words are cheap & the 2 sides remain far apart. The Reps are putting higher taxes on the table, which doesn't mean a lot, & the Dems have done little. The TIF report is chilling, a reminder that even China, a strong & huge economy, is feeling the effects of a global slowdown. Dow is at a 3 week high. Maybe "smart money" is selling into this rally.

Dow Jones Industrials

Top 50 Trending Stocks

Today's Top Penny Stocks...FREE List!

Wednesday, November 28, 2012

Higher markets on hopes for budget deal

Dow jumped 106, advancers over decliners more than 3-2 & NAZ was up 23. The Financial Index rose a fraction, going above 210. The MLP index was up 2+ to 396 & the REIT index lost a fraction in the 257s. Junk bond funds were mixed while Treasuries gained. The price of oil dropped as traders look for signs of progress in negotiations over US budget issues. Gold fell the most in 3 weeks as pessimism on a US budget resolution eroded demand for commodities.

AMJ (Alerian MLP Index tracking fund)

Treasury yields:

U.S. 3-month	0.091%
U.S. 2-year	0.258%
U.S. 10-year	1.614%

CLF13.NYM

...Crude Oil Jan 13

...86.45

...

0.73

(0.8%)

The EU is quarreling over thresholds on how big euro-area lenders must be in order to be designated for direct oversight by the ECB . Nations are at odds over 3 different size thresholds. Some countries are seeking to set the bar as low as banks with more than €2.5B ($3.2B) in assets, while others are calling for divisions at €20B or €60B. States are also split over having direct ECB supervision triggered by a ratio between a bank’s assets & the GDP of its home country. Suggested thresholds are assets of more than 20%, 50% or 75% of GDP. Govs are racing to meet an end of 2012 deadline to set up a single supervisor at the ECB. EU finance ministers will meet next week to seek compromises on the bank-oversight plan, which the bloc’s leaders have labeled as an essential step to break the bank-sovereign link that has worsened the euro debt crisis. Direct ECB oversight would automatically apply to any lenders with cross-border presence, under the draft plans. The ECB would have powers “at any time ” to sideline national regulators & take over direct supervision of any bank. The information is based on draft documents that were leaked to Bloomberg news. This is the same group that is trying to solve the euro debt mess.

EU Nations Clash on Thresholds for Direct ECB Oversight

Fed Says Economy Grew at ‘Measured’ Pace as Fiscal Cliff Neared

Photo: Bloomberg

A pickup in consumer spending & steady home sales helped lift economic growth in Oct & early Nov in most parts of the US, according to a Federal Reserve (FED) survey. The one exception was the Northeast, which was slowed by Superstorm Sandy. Growth improved in 9 of its 12 the FED regional banking districts. Growth was weaker in New York, Philadelphia & Boston, areas where Sandy caused widespread disruptions. The survey noted that growth improved despite nervousness about the "fiscal cliff." But manufacturing shrank or slowed in 7 regions & was mixed in 2 others. The Beige Book provides anecdotal information on economic conditions around the country from Oct thru Nov 14 & that will be used as the basis for the next policy discussion on Dec 11-12. The FED might announce plans to buy more Treasury bonds at that meeting to replace a program set to expire at the end of the year. The goal of the program is to lower long-term interest rates & encourage more borrowing & spending. The purchases would come on top of the FED mortgage bond buying program, which is intended to lower mortgage rates & make home-buying more affordable.

Fed Sees Measured Economic Growth as Fiscal Cliff Nears

Greece's debt buyback plan, a key element of the country's bailout deal, will be voluntary but must succeed, Finance Minister Stournaras said. In his first major news conference since a deal earlier this week to shave about €40B off the country's debt pile, Stournaras said the offer would be attractive to bond holders, but he declined to give details. "The buyback must succeed. It's our patriotic duty to succeed, it is important for the country's credibility," he said. Greece must conduct the deal by Dec 13, before it receives more than €30B in withheld bailout payments from the euro zone & the IMF. Greece might spend €10B from the euro zone's rescue fund (EFSF), which would allow it to buy around €30B worth of debt, cutting its outstanding obligations by €20B. But analysts have raised questions over whether it would attract enough interest from bondholders to deliver the promised savings & how it would be funded. Greek banks & pension funds hold nearly €30B of Greek debt, about half of the outstanding Greek bonds in the hands of private investors. This drama plays on.

Greece Says Voluntary Debt Buy Back Must Succeed

Stocks had a good day on vague word that fiscal cliff talks are making progress. However words are cheap. A willingness to give a little here & a little there is still a long way from a done deal. Then there would be the final outcome. Any deal is likely to make one side or the other (maybe both sides) unhappy. A successful deal should include an increase in the debt ceiling. After all, that last time that happened (last year), the result was today's fiscal cliff mess. Dow had a good gain, but failed to crack thru 13K & NAZ remains below 3K.