- U.S. stocks staged the biggest weekly rally in more than 30 years after the government agreed to protect Citigroup Inc. from more losses and automakers weighed cutting costs to win federal aid. Citigroup doubled on the government’s plan to insure $306 billion in toxic assets owned by the bank, helping push financial companies in the Standard & Poor’s 500 Index to a record 31 percent advance. General Motors Corp. soared 71 percent as the company considered selling some U.S. brands. Ford Motor Co. jumped 88 percent. The S&P 500 rose 12 percent to 896.24, the steepest weekly gain since 1974. The Dow Jones Industrial Average increased 782.62 points, or 9.7 percent, to 8,829.04. The Russell 2000 Index of small-cap stocks climbed 16 percent to 473.14. “It’s refreshing to see some rationality returning to stock prices,” said Richard Weiss, chief investment officer at City National Bank in Beverly Hills, California. “The central banks and central finance authorities are doing exactly what’s needed at this point.”
- India’s deadliest terrorist attack in 15 years has left a shaken population, shorn of confidence that its leaders can keep them safe and revive an economy growing at its slowest pace since 2004. The Mumbai attacks that took the lives of at least 195 people pose an enormous political challenge to the Congress Party-led coalition government, which is obliged to call a national election by May. Prime Minister Manmohan Singh yesterday replaced Home Minister Shivraj Patil after the rival Bharatiya Janata Party took aim with quarter-page newspaper ads showing blood splattered on a wall and proclaiming “Weak Government.”
- Indian Prime Minister Manmohan Singh is seeking support for a crime-fighting agency modeled on the FBI and tougher anti-terrorism laws after the deadliest attacks in 15 years killed at least 195 in Mumbai, the financial capital. Singh called a meeting for today in New Delhi with all the political parties in Parliament to discuss the measures. In Washington yesterday, President George W. Bush pledged U.S. help to investigate the assault by 10 gunmen on the Taj Mahal Palace and Tower and Oberoi-Trident hotels, a Jewish center and restaurant.
- A decade after OPEC failed to prevent oil from collapsing to $10 a barrel, the world’s biggest producers are delaying the action needed to arrest the steepest slide in energy prices. They haven’t done enough this time around to halt the 67 percent drop. Merrill Lynch & Co., forecasting the first contraction in global demand in a quarter century, sees crude bottoming at an average $43 a barrel in the first quarter, 21 percent below where it ended last week. In December 1998, crude tumbled 61 percent from its peak to as low as $10.35 when OPEC failed to eliminate a supply glut. U.S. crude-oil supplies rose for a ninth week, the longest stretch since April 2005, the Energy Department said Nov. 26. U.S. fuel demand declined the most in 27 years in the first 10 months of this year, the American Petroleum Institute reported Nov. 18. Oil prices may fall more as world growth slows, Fatih Birol, the IEA’s chief economist in Paris, said in an interview Nov. 27.
- China’s manufacturing contracted by the most on record and export orders slumped as a slowdown in the world’s fourth-biggest economy deepened. The Purchasing Managers’ Index fell to a seasonally adjusted 38.8 in November from 44.6 in October, the China Federation of Logistics and Purchasing said today in an e- mailed statement. China’s export orders declined to 29 in November from 41.4 in October, the survey showed.
- Copper prices fell, capping the longest stretch of monthly declines since early 1999, as inventories climbed to the highest level in more than four years, signaling waning demand. Stockpiles monitored by the London Metal Exchange rose 1 percent to 291,650 tons today, the highest since Feb. 25, 2004. Copper’s 9.8 percent drop in November marked the fifth straight monthly drop, the most since March 1999. The commodity has tumbled 57 percent since June 30. Copper supplies will outpace demand next year by 250,000 metric tons, RBS Global Banking & Markets said today in a report. The surplus will widen to 500,000 tons in 2010, the bank estimated.
- Yahoo! Inc.(YHOO) isn’t planning to sell its Internet search business to a group of investors backed by Microsoft Corp.(MSFT), people familiar with the situation said today, denying a report in the Sunday Times of London.
- The Global Property Guide has downgraded its investment rating on
- Senator Hillary Clinton will be named President-elect Barack Obama’s choice for secretary of state tomorrow following former President Bill Clinton’s agreement to publicly release the names of more than 200,000 contributors to his foundation, a person close to the former first lady said.
- General Motors Corp.’s(GM) board is meeting in Detroit to discuss a rescue plan to present to Congress in two days that may determine if Chief Executive Officer Rick Wagoner can save the company and keep his job.
The South Korean won’s one-week rally from a decade low will end as slowing export growth erodes the nation’s record current-account surplus, according to Nomura International Ltd. and Goldman Sachs Group Inc.
Wall Street Journal:
- The holiday shopping season got off to a better-than-expected start, as retailers reeled in cautious shoppers with massive discounts like "buy one get one free" sweaters at Gap Inc. stores, $200 iPod Touch music players from Amazon.com Inc., and 26-inch LCD TVs at Target Corp. sites for $299. In a survey of 3,370 shoppers, the National Retail Federation estimated shoppers spent an average of $372.57 over the weekend, up 7.2% over last year's $347.55.
- While Washington debates how much unions are to blame for Detroit auto makers' woes, a broader face-off is brewing between labor and employers. The stakes in the struggle went up Tuesday, as the U.S. Chamber of Commerce said it will spend about $10 million in the coming months to fight legislation that would allow workers to organize without a secret ballot vote. Such "card check" organization drives are a top priority of union leaders, who want President-elect Barack Obama and a Democratic Congress to enact legislation easing union-organizing rules.
- General Motors Corp.(GM) is trying to lure some of its debtholders into exchanging debt for equity, as it tries to steer clear of a Chapter 11 bankruptcy-law filing, people familiar with the plan said.
- Chinese President Hu Jintao warned that the global financial crisis is sapping China of its competitive advantage in trade and that it will test the government's ability to steer the country. Mr. Hu's remarks, carried Sunday in the official People's Daily newspaper, were a relatively candid, and relatively bleak, assessment from a leader who doesn't frequently make public pronouncements on the economy.
- The stock-market downturn could force the Pennsylvania state employees' pension fund to make cash payments of $2.5 billion or more to trading partners on Wall Street. The potential hit to the $27 billion pension fund is the result of an exotic strategy used to help finance $9.2 billion in hedge-fund investments. Those bets helped the pension fund beat the market when stocks were rising, but backfired when the market sank. Use of the aggressive strategy, called "portable alpha."
- Hundreds of hedge funds will shut this year as an estimated wave of as much as $700 billion in investor redemptions crashes over the industry, but some managers are trying to hold back the tsunami. At least 75 hedge fund firms, including GLG Partners, Deephaven Capital Management, RAB Capital and New Star Asset Management, have put up "gates," suspended redemptions or unveiled a restructuring this year.
- Older Americans are turning to community colleges and volunteer-run classes to learn computer skills such as navigating the Internet or working with Excel spreadsheets. Computer use among Americans 65 years or older about doubled to 38% between March 2000 and August 2008.
- CNN, in the afterglow of an election season of record ratings for cable news, is elbowing in on a new line of business: catering to financially strained newspapers looking for an alternative to The Associated Press.
- Two years of disastrous quality-control breakdowns, from foul fish and lead-tainted toys to poisoned drugs and dairy products, are taking their toll on China's allure as a manufacturing platform. A new study by supply-chain consulting firm AMR Research found that quality concerns are among the chief reasons U.S. manufacturers are scaling back plans to source more goods from China. Instead, U.S. companies are looking harder at Mexico and other locales closer to home when exploring where to put new capacity.
- Deutsche Bank Trust Co. Americas has ratcheted up its battle with Donald Trump, claiming the hard-charging developer personally owes it $40 million after defaulting on a $640 million construction loan for Trump International Hotel & Tower.
- On the same day Lawrence Summers was announced as President-elect Barack Obama’s top White House economics adviser, the veteran economist said he would resign as the part-time managing director of one of the nation’s largest and most successful hedge funds, D.E. Shaw & Co. But even as Summers takes the lead of economic policy thinking for the Obama White House, which has promised to be one of the most open and transparent in history, neither the Obama transition team nor D.E. Shaw would say exactly what Summers had done in his two years of work for the $36 billion hedge fund, or how much he has been paid. In 2007, Shaw personally earned an estimated $210 million, reports Alpha magazine, and he spent a chunk of it on contributions to prominent Democratic politicians during the 2008 presidential cycle, including more than $3,000 to Barack Obama and $6,000 to Hillary Rodham Clinton, according to the Center for Responsive Politics. Overall, the hedge fund’s employees skew heavily Democratic, contributing more than $200,000 to political candidates in the 2008 campaign cycle, according to the center. The hedge fund also has gotten much more involved in Washington policymaking in recent years, contributing to the Managed Funds Association, the trade group that has led the charge on resisting increased regulation and taxation of hedge funds in Washington.
- Black Friday proved to be a relatively bright light in an economy largely characterized by dark, gloomy reports. Overall, retail sales for the day after Thanksgiving were up 3 percent from the same day in 2007, with preliminary estimates putting total sales in the U.S. at $10.6 billion, according to Shoppertrak RCT. Web shopping saw an even larger percentage gain for the day, with traffic up 11 percent year over year, per comparison shopping site PriceGrabber.com. Taking the crown as the top product of the day was the Nintendo Wii, according to both PriceGrabber and online commerce giant eBay.
- A net of about $10.4 billion came into equity mutual funds in the week ended Nov. 26, according to Trimtabs Investment Research. That compared to $19.5 billion going out of the funds in the previous week.
- A company set up to manage the fortune of Texas businessman Ross Perot is liquidating its fixed income hedge fund. Parkcentral Capital Management said the hedge fund is down 40% in 2008. The fund has $1.5 billion.
- Goldman Sachs Group Inc(GS) on Friday won a charter from New York State's banking department, a key step in the Wall Street bank's effort to change its investment banking model and gather deposits. The new bank will be called Goldman Sachs Bank USA, and include Goldman Sachs Capital Markets LP, Goldman Sachs Credit Partners LP and Goldman Sachs Mortgage Co, the banking department said. Goldman will merge its Utah-based industrial loan company into its New York-chartered trust company. Goldman Sachs Bank will be based in New York City. Goldman's pursuit of a state charter suggests the company will continue to focus on investment banking, trading and wealthier clients, and not soon build a nationwide retail banking business.
- Former U.S. Treasury secretary Robert Rubin said the near-collapse of Citigroup Inc (C), where he is a senior counselor, was due to the buckling financial system and not his own mistakes, according to an interview published on The Wall Street Journal's website on Friday. Rubin, who is also a director at Citigroup, acknowledged he was involved in a board decision to ramp up risk-taking in 2004 and 2005, according to the paper, and said if executives had executed the plan properly, the bank's losses would have been less. The Journal said Rubin has earned $115 million in pay since 1999, excluding stock options.
- Hedge funds have been hit by a fresh wave of withdrawals as investors search for cash, prompting more funds to impose emergency measures to block repayments. London Diversified Fund Management, one of Britain's best-known fixed-income managers, on Friday suspended both its hedge funds as trading conditions in the derivatives markets created valuation difficulties ahead of redemptions. LDFM, founded by former JPMorgan bankers David Gorton and Rob Standing, manages close to $3bn (£1.9bn), down from a peak of $8bn after its main fund fell 23 per cent this year and investors pulled out. LDFM is joining a roster of hundreds of hedge funds in restricting withdrawals, with investors and prime brokers estimating as many as a fifth have suspended or limited what investors can get back as they have their worst year on record.
- Baidu(BIDU), China's largest internet search engine, looks set to face a wave of legal challenges as a group of lawyers is organizing a mass complaint against the company's business practices. Led by Li Changqing, who filed the first complaint under China's new anti-monopoly law against Baidu in October, the group said it had enlisted more than 50 companies that were willing to sue Baidu, and the mass complaint would be filed once the number had risen to 100.
- Asif Ali Zardari, Pakistan's president, made an urgent appeal to India on Sunday not to punish his country for the terror unleashed on Mumbai last week, warning that militants had the power to precipitate a war in the region. As the government in New Delhi faced mounting domestic recriminations after the three-day terrorist rampage in Mumbai, Mr Zardari urged Manmohan Singh, India's prime minister, to resist striking out at his government should investigations show that Pakistani militant groups were responsible for the attacks. Speaking exclusively to the Financial Times, Pakistan's president warned that provocation by rogue "non-state actors" posed the danger of a return to war between the nuclear-armed neighbors.
- Daimler AG may cut truck production at its plant in
Folha de S. Paulo:
- Petroleo Brasileiro SA(PBR) may spend as much as $320 billion to develop its offshore oil fields between next year and 2020, citing a confidential government document.
- Hyundai Motor Co. and other automakers in
- The Bank of Japan, the country’s central bank, will hold an emergency policy meeting this week. The bank will discuss creating a system to lend money to commercial banks and to encourage them to provide financing to businesses.
- OPEC will not need to lower oil production again when it meets in
- Made positive comments on (YHOO), (NDAQ), (AB), (BIIB) and (MOT).
- Upgraded (RATE) to Buy, target $40.
- Reiterated Buy on (MET), added to Top Picks Live list, target $50.
Asian indices are -1.0% to +.75% on avg.
S&P 500 futures -.83%.
NASDAQ 100 futures -76%.
US AM Market Call
NASDAQ 100 Pre-Market Indicator/Heat Map
Pre-market Stock Quote/Chart
Before the Bell CNBC Video(bottom right)
WSJ Intl Markets Performance
Top 25 Stories
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Today in IBD
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Rasmussen Business/Economy Polling
Earnings of Note
- None of note
10:00 am EST
- ISM Manufacturing for November is estimated to fall to 37.0 from 38.9 in October.
- ISM Prices Paid for November is estimated to fall to 32.0 from 37.0 in October.
- Construction Spending for October is estimated to fall 1.0% versus a .3% decline in September.
Other Potential Market Movers
- The Fed’s Bernanke speaking, Fed’s Fisher speaking and (VTAL) analyst meeting could also impact trading today.
BOTTOM LINE: Asian indices are mostly lower, weighed down by commodity and automaker shares in the region. I expect US stocks to open mixed and to weaken into the afternoon, finishing modestly lower. The Portfolio is 100% net long heading into the week.