North American Investment Grade CDS Index 88.20 bps -4.86%
European Financial Sector CDS Index 95.83 bps -5.0%
Western Europe Sovereign Debt CDS Index 162.66 bps +1.88%
Emerging Market CDS Index 184.45 bps -8.18%
2-Year Swap Spread 15.0 -1 bp
TED Spread 17.0 unch.
Economic Gauges:
3-Month T-Bill Yield .11% -1 bp
Yield Curve 216.0 -12 bps
China Import Iron Ore Spot $153.20/Metric Tonne +2.0%
Citi US Economic Surprise Index +12.80 +.1 point
10-Year TIPS Spread 2.08% -11 bps
Overseas Futures:
Nikkei Futures: Indicating +127 open in Japan
DAX Futures: Indicating +13 open in Germany
Portfolio:
Higher: On gains in my Tech, Retail, Ag and Medical long positions
Disclosed Trades: None
Market Exposure: 100% Net Long
BOTTOM LINE: Today's overall market action is very bullish as the S&P 500 trades near session highs despite recent equity gains, fears over a possible "sell the news" reaction to the election/Fed announcement, a jump in jobless claims and euro sovereign debt concerns. On the positive side, Coal, Alt Energy, Energy, Oil Service, Gold, Steel, Semi, Bank, Hospital, Homebuilding shares are especially strong, rising 3.0%+. (XLF)/(IYR) have been relatively strong throughout the day. (XLF) is surging on block buys into the final hour after the Fed said strong banks will be allowed to raise dividends. Cyclicals and small-caps are also outperforming. Copper is jumping +3.01%. The Eurozone Investment Grade CDS Index is falling -3.16% to 78.23 bps, the Emerging Markets Sovereign Debt CDS Index is declining -4.53% to 175.99 bps and the California Municipal CDS is falling -2.56% to 263.48 bps. Other key CDS indices are showing large declines, as well. The AAII % Bulls fell to 48.23, while the % Bears jumped to 29.79%, which is also a positive. On the negative side, Biotech and Education shares are down on the day. The Portugal sovereign cds is gaining +5.58% to 440.39 bps, the Ireland sovereign cds is gaining +5.59% to 576.70 bps and the Spain sovereign cds is gaining +2.47% to 235.22 bps. The large declines in the yield curve and TIPS spread are a bit odd given today's macro backdrop. I suspect tomorrow's jobs report will have a muted impact on stocks. The major averages are extended short-term, but should move still higher into year-end after a consolidation period. The I expect US stocks to trade mixed-to-higher into the close from current levels on tax policy/election optimism, less economic fear, buyout speculation, investment manager performance angst, diminishing financial sector pessimism, short-covering and earnings optimism.
Obama Administration is 'Open' to Talks on Extending Tax Cuts, Gibbs Says. The Obama administration is “open” to negotiations on extending tax cuts for upper-income individuals in order to win extensions for middle-income families, White House press secretary Robert Gibbs said. Obama is “open to having that discussion” with Democratic and Republican leaders, Gibbs said at a briefing. The president still “does not believe it’s a good idea,” he said. The remarks by Gibbs reinforce statements made by Obama yesterday, following midterm elections in which Republicans gained control of the House and narrowed the Democratic majority in the Senate.
High-Yield Debt Risk Index Drops to Six-Month Low on Stimulus. The cost of insuring against default on high-yield corporate bonds fell to the lowest level in six months in Europe after the U.S. Federal Reserve said it will expand record measures to bolster economic recovery. The Markit iTraxx Crossover Index of credit-default swaps on 50 companies with mostly junk credit ratings decreased 17 basis points to 439, the lowest level since May 3, according to JPMorgan Chase & Co. at 3 p.m. in London. The Markit iTraxx Europe Index of 125 companies with investment-grade ratings decreased 3 basis points to 96.25, JPMorgan prices show. Credit-default swaps on Ireland surged 30 basis points to a record 590, and contracts on Allied Irish Banks Plc’s senior debt jumped 62 to an all-time high 816, according to data provider CMA. The Markit iTraxx SovX Western Europe Index of swaps on 15 governments from Greece to Germany rose 2.5 basis points to 167.5, near to the June 4 record 168.5. The Markit iTraxx Financial Index linked to the senior debt of 25 banks and insurers held near a one-month high at 129.
U.S. Commercial Real Estate Rents to Rise in 2011, Cushman's Mosler Says. Commercial real estate rents are poised to rise in 2011 after reaching a low this year, according to Bruce Mosler, co-chairman of Cushman & Wakefield Inc., the largest closely held property services company. “The market has bottomed,” Mosler said today at the Real Estate Briefing hosted by Bloomberg Link in New York. “We can expect to see rental appreciation next year.”
Commodities Jump to a Two-Year High on Expanded Federal Reserve Stimulus. Commodities rose to a two-year high after the Federal Reserve said it would expand steps to boost the world’s largest economy, spurring demand for raw materials as a hedge against inflation. The Standard & Poor’s GSCI Index of 24 commodities gained as much as 1.5 percent to 586.046 points, the highest level since Oct. 3, 2008. It was at 585.241 points at 11:47 a.m. in London. Palladium climbed to the highest price since 2001, and white sugar reached a 21-year high. The U.S. Dollar Index fell to the lowest level in almost 11 months. A weaker dollar makes commodities priced in the currency cheaper in terms of other monies and fuels demand for raw materials as an alternative investment. Gold for immediate delivery added $14.72, or 1.1 percent, to $1,363.27 an ounce. Futures for December delivery gained $25.10, or 1.9 percent, to $1,362.70, on course for the biggest closing jump since Sept. 14. Silver for immediate delivery rose 45.5 cents, or 1.8 percent, to $25.315 an ounce, the highest level since March 1980. Futures for December delivery advanced 87.9 cents, or 3.6 percent, to $25.315 an ounce. Immediate-delivery palladium touched $673.25 an ounce, the highest level since May 9, 2001. Wheat for December delivery gained 9 cents, or 1.3 percent, to $6.9925 a bushel on the Chicago Board of Trade. December- delivery corn added 8 cents, or 1.4 percent, to $5.89 a bushel and soybeans for January delivery advanced 17.75 cents, or 1.4 percent, to $12.5525 a bushel. January-delivery rice jumped 25 cents, or 1.7 percent, to $14.795 per 100 pounds. White, or refined, sugar for March delivery added $20.10, or 2.7 percent, to $768.90 a metric ton on NYSE Liffe in London after reaching $774.40, the highest level for a most-active contract for data compiled by Bloomberg going back to 1989.
Ireland Plans 6 Billion-Euro '11 Budget Cut to Stave Off Bailout. Irish Finance Minister Brian Lenihan plans to slash the budget deficit by 6 billion euros ($8.5 billion) in 2011 as he fights to save the nation’s economic independence. The budget shortfall will be reduced to between 9.25 percent and 9.5 percent of gross domestic product next year, the Finance Ministry in Dublin said in a statement today. The underlying deficit this year will be 11.9 percent, or 32 percent when the costs of the bank bailout is included. The savings amount to about 3.6 percent of the economy and Lenihan will publish details on Dec. 7. “It’s ambitious. It’s intended to deliver a clear statement of intent,” said Austin Hughes, chief economist at KBC Bank Ireland in Dublin. “The critical question can it be attained. We need to see a little bit more in terms of the detail.”
Trichet Signals Irish Budget Plans May Calm Investors Over Fiscal Health. European Central Bank President Jean- Claude Trichet signaled that budget plans to be announced later today by the Irish government may calm some investors’ concerns about the country’s fiscal health. “I have no reason to think that observors will be disappointed,” Trichet said at a press conference in Frankfurt. “The front loading of the program is of extreme importance.” The government will publish new economic forecasts for the period through 2014 at 4:30 p.m. in Dublin today, the Finance Ministry said in an e-mailed statement.
BOE Declines to Follow Fed as Officials Keep Stimulus on Hold. The Bank of England kept its emergency stimulus program unchanged as the strength of the U.K. recovery persuaded officials not to join the Federal Reserve in buying more government bonds.
ECB Keeps Rates at Record Low as Fed Embarks on Further Easing. The European Central Bank kept interest rates at a record low after the Federal Reserve embarked on a new round of quantitative easing and tensions increased on Europe’s sovereign-debt markets. The ECB’s Governing Council in Frankfurt set the benchmark lending rate at 1 percent for a 19th month, as predicted by all 55 economists in a Bloomberg News survey. Economists said last night’s decision by the Fed to buy an additional $600 billion of Treasuries may drive the euro higher, undermining Europe’s recovery and forcing the ECB to delay the withdrawal of its own stimulus measures.
GAP(GPS), Limited Brands(LTD) Post October Sales Gains After Discounts. Sales at retailers Limited Brands Inc., the owner of the Victoria’s Secret chain, and Gap Inc.grew more than analysts estimated in October as discounting to clear inventory for the holiday season brought out consumers. Limited said today that sales at stores open at least a year rose 9 percent, exceeding the 6.3 percent average of analysts’ estimates compiled by Retail Metrics Inc. Gap, based in San Francisco, said so-called same-store sales rose 2 percent, while analysts projected a decline of 2.8 percent. Retailers beat predictions in August and September as discounts boosted back-to-school shopping. Promotions lured consumers last month as well, helping some chains such as Gap that had weekly sales, said Brian Sozzi, a retail analyst for Wall Street Strategies Inc. in New York. “The consumer is responding more to promotions,” Sozzi said. “If you had the right promotions, you got the sales.”
Commercial-Mortgage Index Soars as BlackRock(BLK) Loss Estimate Adds Confidence. An index tied to commercial property debt soared to the highest in more than two years after BlackRock Inc. projected losses on the securities won’t be as severe as investors expected. The price of a Markit Group Ltd. CMBX index linked to junior AAA commercial-mortgage bonds, many of which have had ratings cuts, increased as much as 1.75 percentage points to 77.46 yesterday, according to administrator Markit. Credit- default swap contracts on the index, which rise as investor confidence improves, are trading at the highest since September 2008, the data show.
Wall Street Journal:
Milton Friedman vs. the Fed. The Nobel laureate would never have endorsed increasing inflation to stimulate the economy.
CT Scans Aid Lung-Cancer Screening, Study Shows. The use of computed tomography, or CT, scans as a screening tool for lung cancer showed fewer people died compared to those screened with a chest X-ray, according to the results of a large-scale study released Thursday.
Obama Sets Up Bipartisan Talks, Urges Action on Taxes. President Barack Obama said Thursday he wants immediate action on controversial tax cuts and an arms-reduction treaty as he seeks to change the tone in Washington after voters battered his party in congressional elections earlier this week. Mr. Obama, speaking at the White House surrounded by his cabinet members, said voters sent a clear message: "They want us to focus on the economy, on jobs and moving this country forward." Voters also wanted to see a change in tone in how Washington operates, he said. Mr. Obama has invited leaders of both parties to the White House for a meeting Nov. 18 so they can start hammering out how they can lift the economic malaise and work together in the new political climate. The country can't afford "squabbling," he said.
CNBC:
US Debt Reduction Plan 'Essential': IMF Chief Economist. The US Congress should focus on a medium-term plan to cut government debt to dispel fears about the world's biggest economy, Olivier Blanchard, IMF chief economist, told CNBC Thursday.
Risk of Inflation, Potential 'Commodity Shock': Analysts. Rising inflation in emerging markets, coupled with marked increases in commodity prices, could hurt developed economies, as companies struggle to keep input costs down while seeing precious investment dollars heading overseas, analysts told CNBC. "I think it's the single most important issue that we face in the markets today," Philippa Malmgren, president of Principalis Asset Management, told CNBC. "We've got inflation ripping through the emerging markets. That's going to push input costs up for the entire Western manufacturing establishment." The Federal Reserve committed to injecting a further $600 billion into the economy Wednesday, through the purchase of long-dated government bonds, in a bid to stimulate growth. But the liquidity generated by the Fed's quantitative easing does not necessarily mean extra liquidity for the domestic U.S. economy, Hans Redeker, global head of foreign exchange strategy at BNP Paribas, told CNBC. "What is happening is you create dollars, these dollars don't want to say in the United States. So you have a wave of dollar liquidity moving for example into the Hong Kong real estate market," he said. "We are creating U.S. dollar liquidity in the wrong places in the world." That liquidity can have a negative impact in emerging market economies because of its inflationary pressures, Redeker said.
New Applications for Jobless Benefits Rise. Some 457,000 workers filed new applications for unemployment benefits last week, an increase of 20,000, indicating that employers are still reluctant to hire.
New York Times:
Goldman(GS) Sees $26 Billion Potential Losses at Top U.S. Banks. The four largest U.S. banks face potential losses of $26 billion over the next several years from their exposure to private-label mortgages and potential losses from delinquency, analysts at Goldman Sachs said.
GuruFocus.com:
Julian Robertson Likes Apple(AAPL) and Google(GOOG). Hedge fund legend Julian Robertson disclosed that he has ridden the Apple bull as he talked with CNBC's Erin Burnett. Right now, Robertson thinks Apple has further up to go. He said it is very reasonably valued at 18x forward earnings and has everything working for it. He sees Apple fetching a P/E ratio of 25 to 30 which would give it a share price between $400 and $475, sharply higher than where shares are currently trading. (video)
Can Barack Obama Pull a Bill Clinton? A young Democratic president comes into office with big ambitions, gets knocked back on his heels by Republicans in the midterm elections, then makes some deft moves to recapture the center and waltzes to reelection two years later.
John Boehner's Boys: The New Power Club. John Boehner has no plans — or capacity — to rule the House like Nancy Pelosi did. It’s neither his style to centralize power in the speaker’s office like she did nor his strength to win his way through brute force or fear. But make no mistake: Boehner will assume control of the House with his own elaborate plan for running the GOP on his terms. The plan includes fiercely loyal allies placed strategically throughout the House and his potential enemies placed right where he can better control them, according to Republicans close to Boehner.
Reuters:
US Republicans to Attack Healthcare Law Funding. U.S. congressional Republicans will try to repeal President Barack Obama's healthcare law next year but their leader in the Senate acknowledged on Thursday they will likely have to settle for far more modest changes.
Global Economic Activity Accelerates in October - PMI. Activity in the global economy accelerated in October for the first time since April, as rates of expansion improved in both manufacturing and services, business surveys showed on Thursday. The Global Total Output index, produced by JP Morgan with research and supply management organisations, jumped to 54.8 last month from 52.6 in September, spending its fifteenth month above the 50 mark that divides growth from contraction. The Global Services index bounced to 54.6 in October from 52.3 in the previous month.
NDTV:
34 Warships Sent From US for Obama Visit to India.The White House will, of course, stay in Washington but the heart of the famous building will move to India when President Barack Obama lands in Mumbai on Saturday. Communications set-up, nuclear button, a fleet of limousines and majority of the White House staff will be in India accompanying of the President on this three-day visit that will cover Mumbai and Delhi. He will also be protected by a fleet of 34 warships, including an aircraft carrier, which will patrol the sea lanes off the Mumbai coast during his two-day stay there beginning Saturday. Two jets, armed with advanced communication and security systems, and a fleet of over 40 cars will be part of Obamas convoy. Around 800 rooms have been booked for the President and his entourage in Taj Hotel and Hyatt.
Obama Says He'll Negotiate With Republicans on Bush Tax Cuts. President Barack Obama said he is “absolutely” ready to negotiate this month with congressional Republicans, who have hardened their stance that soon-to-expire Bush-era tax cuts should be extended for high-income taxpayers. Obama, a Democrat, said today that he hopes to avoid “brinkmanship” in the lame-duck session of Congress when he confronts Republicans over how to prevent expiration of lower taxes on wages, investments and multimillion-dollar estates that were enacted in 2001 and 2003. Unless Congress acts, those tax policies expire Dec. 31.
Bernanke Breathes New Life Into Junk Bond Rally With QE2: Credit Markets. The Federal Reserve sent the cost of protecting high-yield, high-risk debt from default to the lowest in almost six months by bolstering demand for the investments with its program to buy $600 billion more of Treasuries. The benchmark credit-default swaps index for junk bonds that rises as investor confidence improves jumped to the highest since April 15, according to data provider CMA. The extra yield investors demand to own the bonds rather than Treasuries fell 2 basis points to 592 basis points, or 5.92 percentage points, Bank of America Merrill Lynch index data show. While longer-dated government bonds tumbled, the Fed’s move breathed new life into the five-month junk rally that stalled in the past two weeks.
Fed Stimulus Expansion Worsens Hong Kong 'Bubble' Risk, HKMA's Chan Says. The U.S. Federal Reserve’s expansion of stimulus will add to the risk of a housing bubble in Hong Kong and may force extra measures to cool prices, said Norman Chan, the head of the city’s central bank. The Hong Kong Monetary Authority will “take measures that are specific to the housing market if necessary,” Chan said at a press briefing in the city today. “The risk of an asset bubble in Hong Kong’s property market is rising.”
U.S. Carbon Contracts Fall as Obama Cools to Cap-And-Trade. Futures contracts in the U.S. Northeast’s carbon market fell to their lowest level in six weeks after President Barack Obama backed away from the national cap-and-trade program he once sought. “Cap-and-trade was just one way of skinning the cat,” Obama said at a White House news conference today, one day after the Democratic Party lost control of the House of Representatives to Republicans. The Democratic president said a cap-and-trade program, in which companies buy and sell carbon dioxide allowances, is “not the only way” to cut greenhouse gases. “I’m going to be looking for other means to address this problem,” Obama said.
Oil Rises a Fourth Day After Fed Move Weakens Dollar. Oil rose for a fourth day to more than $85 a barrel as the dollar traded near a nine-month low against the euro after the Federal Reserve’s move to buy an additional $600 billion of Treasuries to spur the economy. “The next barrier could come at $87, and if that is broken there is not much resistance beyond that,” Mike Sander, of Sander Capital Advisors in Seattle, said in an e-mailed note. “The Federal Reserve is basically devaluing the dollar even further, thus a rise in oil is not surprising.” Crude oil for December delivery gained as much as 43 cents, or 0.5 percent, to $85.12 a barrel on the New York Mercantile Exchange and was at $85.08 at 10:32 a.m. in Sydney. Crude may return to $100 a barrel next year for the first time since 2008 as central banks pump cash into their economies, JPMorgan Chase & Co. and Bank of America Merrill Lynch said. Distillate supplies, which include heating oil and diesel, fell 3.57 million barrels to 164.9 million. It was the biggest drop in distillate fuel supplies since the week ended Sept. 19, 2008. Inventories were 19 percent above the five-year average. Inventories of crude oil rose 1.95 million barrels to 368.2 million, the department said. Supplies were forecast to climb by 1.5 million barrels. They were 14 percent above the five-year average.
BHP(BHP) Shares Gain After Canada Blocks Potash Corp.(POT) Bid. BHP Billiton Ltd., the world’s largest mining company, rose to the highest in almost six months in Sydney trading after Canada blocked its $40 billion hostile takeover bid for Potash Corp. of Saskatchewan Inc. Shares in the Melbourne-based company rose 3.2 percent to A$43.98 at 10:25 a.m. local time on the Australian stock exchange. That’s the highest since April 14. Prime Minister Stephen Harper’s government said yesterday a sale of the world’s largest fertilizer company wouldn’t provide a “net benefit” to the nation. BHP is disappointed and will review its options, the company said in a statement. “BHP Billiton will continue to cooperate with the minister and the Investment Review Division of Industry Canada and will review its options,” the company said in the statement. The cost of protecting BHP’s bonds from default dropped the most in more than four months. Credit-default swaps on BHP fell 15 basis points to 82 basis points as of 9:05 a.m. in Sydney, according to Australia & New Zealand Banking Group Ltd. prices.
Paraguay Titanium Find May Be World's Largest, Discoverer Says. The American explorer who discovered the world’s biggest copper deposit in Chile has staked a claim in Paraguay to what he says may be the largest titanium find. David Lowell, 82, the president of closely held CIC Resources Inc., controls mineral rights to at least 185,000 hectares (457,000 acres), according to Paraguay’s sub-ministry of mining and energy. That is an area the size of London. “Our deposit could control the world titanium market, a big enough piece of production that whoever operates it would dictate what the price is going to be,” Lowell said in an interview. “And the price, presumably, would be reduced by having higher-grade ore and large tonnage.”
Royce to Seek House Financial Services Chairmanship. House Republicans returning to power after an Election Day sweep in which they gained at least 60 seats will have to choose between two members of their own party as they select a leader for the panel that oversees Wall Street. U.S. Representative Ed Royce of California, elected to his 10th two-year term yesterday, said he will seek the chairmanship of the House Financial Services Committee, challenging Alabama Representative Spencer Bachus, the panel’s ranking Republican.
Executives Await Friendlier Climate. Business executives said Wednesday they are counting on the electoral shock delivered to Democrats Tuesday to bring a slowdown in federal regulation, tax cuts and a more business-friendly stance in Washington.
Qualcomm 4Q Profit Up 7.7% on Record Shipments. Qualcomm Inc. (QCOM) Wednesday reported better-than-expected fourth-quarter results and forward-looking guidance as the chip maker continues to benefit from soaring demand for mobile devices. In addition, Qualcomm said it will exit its struggling mobile video device business, called FLO TV, and will record some restructuring charges in fiscal 2011. While many semiconductor makers recently have warned of weakening consumer demand, Qualcomm and rival Broadcom Corp. (BRCM) have benefited from their high exposure to the sweet spot for consumers--smartphones and other mobile devices. Qualcomm helped popularize a technology used in many 3G cell phones, and it also is providing chips for the next-generation mobile broadband network known as Long-Term Evolution, or 4G. Chairman and Chief Executive Paul Jacobs said Wednesday that Qualcomm expects continued strong growth in shipments of code division multiple access-based devices, including smartphones and other data-centric devices, in the new year, "driven by the global adoption of 3G and accelerating consumer demand for wireless data." The strong demand led Qualcomm to forecast fiscal first-quarter adjusted earnings of 70 cents to 74 cents a share, above Wall Street expectations of 64 cents, and revenue of $3.05 billion to $3.35 billion. Analysts polled by Thomson Reuters projected revenue of $2.99 billion. And for the new year, it predicted per-share earnings of $2.63 to $2.77 on revenue of $12.4 billion to $13 billion, while analysts were looking for $2.59 a share and $12.1 billion, respectively. Qualcomm shares, down 1.2% this year, jumped 6.4% to $48.70 in after-hours trading Wednesday.
Morgan Stanley(MS) May Wait on Smith Barney. Morgan Stanley could use some wiggle room to help meet looming capital requirements. One option: delaying parts of the Morgan Stanley Smith Barney takeover from co-owner Citigroup Inc., which would leave billions of dollars in the securities firm's pocket.
Yemen Terror Response Shows Flaws. The unexploded device found on a plane in the U.K. on Friday has triggered criticism over the speed of Britain's response to the incident and a lack of communication between key allies. U.K. Prime Minister David Cameron was angered that it took almost 10 hours for him to be told about a potential terrorist bomb intercepted at Britain's East Midlands Airport early Friday, people familiar with the situation said. German investigators have said a British intelligence official failed to take timely action to prevent the air-freight shipment of the bomb. The criticisms come amid heightened concern in the U.K. over al Qaeda in the Arabian Peninsula, the Yemen-based group suspected of being behind last week's thwarted package bombing plot.
News Corp.'s(NWSA) 1Q Earnings Rise 36% on Ad Rebound. News Corp.'s (NWSA, NWS) earnings climbed 36% in its fiscal first quarter as a rebound in advertising markets powered its television networks and publishing segment, offsetting weakness at its film studio, satellite business and its digital media unit. For the quarter, News Corp. posted net income of $775 million, or 30 cents a share, up from year-ago results of $571 million, or 22 cents a share. Excluding a tax benefit of $90 million, the company earned 27 cents a share; the average analyst estimate on Thomson Reuters was 24 cents a share. Shares of News Corp.'s class A shares, up 8.4% this year, rose 38 cents, or 2.6%, to $15.22 in after-hours trading.
Voters Strongly Anticipate Health Care Repeal in the House. Voters overwhelmingly believe the new Republican-controlled House of Representatives is likely to vote to repeal the unpopular national health care law. A new Rasmussen Reports national telephone survey finds that 83% of Likely U.S. Voters think it is at least somewhat likely that Republicans will vote to repeal the health care measure passed by Democrats in March. That includes 52% who say a repeal vote is Very Likely.
Politico:
Democrats Find Common Ground: It's the White House's Fault. The bodies aren’t even cold yet in the House, but the Democratic Party has already opened up a bitter debate over who’s to blame. The party’s bloodied moderates Wednesday released two years of pent-up anger at a party leadership they viewed as blind to their needs and deaf to the messages of voters who never asked for President Barack Obama’s ambitious first-term agenda. Liberals pushed back hard: The problem, they say, was those undisciplined moderates, who won delays, unsightly compromises and a muddled message from a too-accommodating administration. Yet a third group of Democratic politicians and operatives blamed not policy but a failed sales job for the party’s woes. One thing all sides agree on: The White House blew it.
Dem Strategists: Move Toward Center. After bruising Democratic midterm losses, top Democratic strategists are urging President Barack Obama to shift toward the center ahead of 2012. Just as former President Bill Clinton did in 1995-96 after Republicans swept into congressional power, Obama should forgo a more liberal agenda in the latter half of his term, the strategists argued. If not, they warned, the country’s electoral map could be tinted red indefinitely.
Reuters:
Whole Foods'(WFMI) Sales Stay Strong, Shares Jump. Whole Foods Market Inc shares soared 8 percent after strong sales at established markets quelled concerns the momentum that has driven a 50 percent gain in its shares was slowing. The upscale grocer, which posted quarterly profit that topped Wall Street's view, also raised its earnings forecast for fiscal 2011.
Zumiez(ZUMZ) Tops Oct. Comp Sales View, Hot Topic(HOTT) Falls Short. Zumiez Inc's unique brands helped the teen apparel retailer's October same-store sales trounce market estimates, while Hot Topic Inc's comparable sales missed Wall Street's view as its merchandise failed to lure shoppers. Zumiez, which has been beating monthly same-store sales estimates since May, also raised its third-quarter profit view on strong sales and product margins, sending its shares up 10 percent to $27.78 in extended trade.
MasTec(MTZ) Q3 Results Beat, Raises FY View. MasTec Inc (MTZ.N) posted better-than-expected quarterly results, helped by an acquisition, and the utility contractor raised its full-year outlook, sending its shares up 9 percent in extended trade.
ValueClick(VCLK) Q3 Tops Street View; Sees Q4 Above Estimates. Online marketer ValueClick Inc posted a quarterly profit that topped market estimates convincingly on higher margins and tax benefit, and forecast fourth-quarter results above Wall Street view, sending its shares up 8 percent.
U.S. Dollar Printing is Huge Risk - China Central Bank Adviser. Unbridled printing of dollars is the biggest risk to the global economy, an adviser to the Chinese central bank said in comments published on Thursday, a day after the Federal Reserve unveiled a new round of monetary easing. China must set up a firewall via currency policy and capital controls to cushion itself from external shocks, Xia Bin said in a commentary piece in the Financial News, a Chinese-language newspaper managed by the central bank. "As long as the world exercises no restraint in issuing global currencies such as the dollar -- and this is not easy -- then the occurrence of another crisis is inevitable, as quite a few wise Westerners lament," he said.
Telegraph:
Ireland is Running Out of Time. Ireland has been desperately unlucky. The bond crisis is snowballing out of control before the country has had enough time to let its medical, pharma, IT, and financial services industries (don’t laugh, some of it is doing well) come to the rescue. Yields on 10-year Irish bonds surged this morning to a post-EMU high of 7.41pc.
Nikkei English News:
Elpida Memory Inc. plans to cut DRAM production for the first time in two years because of falling prices of memory chips. The Japanese chipmaker may also delay construction of a new facility in Taiwan.
China Information News:
China should act with other countries against excessive depreciation of the U.S. dollar after suffering currency losses, citing former statistics chief Li Deshui. Limiting depreciation will stabilize global economic growth, Li Deshui, who is also a vice director of the Chinese People's Political Consultative Conference's economic commission, said.
Preliminary 3Q Non-farm Productivity is estimated to rise +1.0% versus a -1.8% decline in 2Q.
Preliminary 3Q Unit Labor Costs are estimated to rise +.6% versus a +1.1% gain in 2Q.
Initial Jobless Claims for last week are estimated to rise to 442K versus 434K the prior week.
Continuing Claims are estimated to rise to 4378K versus 4356K prior.
Upcoming Splits
None of note
Other Potential Market Movers
The ICSC Chain Store Sales report for October, $10 Bln 10-year TIPS auction, weekly EIA natural gas inventory report, Goldman Sachs Industrials Conference, (UNP) analyst meeting and the (WAG) analyst day could also impact trading today.
BOTTOM LINE: Asian indices are higher, boosted by technology and commodity shares in the region. I expect US stocks to open modestly lower and to rally into the afternoon, finishing mixed. The Portfolio is 100% net long heading into the day.
