Style Underperformer:
- Small-Cap Value (+.97%)
- 1) Tobacco -1.30% 2) Gaming -.81% 3) Airlines -.60%
- ARO, KR, SWY, ZUMZ, UVV, CISG, UTIW, ITRI, TSLA, IMAX and AWR
- 1) OREX 2) SWC 3) TSN 4) CLWR 5) ARO
- 1) SAFM 2) LH 3) AMZN 4) TASR 5) ADM
Thursday, December 02, 2010
Bear Radar
Style Underperformer:
Bull Radar
Style Outperformer:
- Mid-Cap Value (+1.22%)
- 1) Banks +3.60% 2) Homebuilders +3.05% 3) I-Banks +2.34%
- SWC, STD, AIXG, PHG, WFC, TMX, BHP, REP, PSS, ANF, WMS, CASY, OXPS, PNFP, ZEUS, SXCI, EZCH, AOSL, HSII, TCBI, MBLX, LLEN, GMAN, GGAL, FNSR, FOSL, CYMI, TGA, ULTA, IACI, ASMI, RITT, WBD, IX, IBA, OCR, SGA, MLR, VIS, DSV and RGC
- 1) CMC 2) KBE 3) SMH 4) RF 5) STI
- 1) VZ 2) ZUMZ 3) INAP 4) CME 5) UIS
Wednesday, December 01, 2010
Thursday Watch
Evening Headlines
Bloomberg:
- Trichet 'Held Hostage' as Markets Pressure ECB to Intensify Crisis Fight. The last time Jean-Claude Trichet refused to bow to market pressure, he was forced into a U-turn. This time the stakes may be even higher. With the euro zone’s sovereign debt crisis now threatening to engulf Spain, its fourth-largest economy, investors are again looking for the President of the European Central Bank to do something to stop it, such as delaying the withdrawal of unlimited liquidity support for banks and significantly ramping up its bond purchases. The risk is that the ECB becomes a bail- out tool for politicians -- damaging its independence -- the very scenario Trichet wanted to avoid when he was pressed into the unprecedented step of buying government debt in May.
- Libor Measure Shows Bank Stresses Reach Highest Since June: Credit Markets. Derivatives traders are the most concerned since June that European leaders will fail to address the crisis engulfing the region’s single currency, causing losses for financial companies. Contracts used to bet on the future premium banks will charge each other for dollar loans in London over the federal funds rate almost doubled in November. The so-called FRA/OIS spread soared to 42.75 basis points, before easing back to 39.25 today, UBS AG data show. The measure shows banks are still wary of lending to each other, even as investors hedge their bets after European Central Bank President Jean-Claude Trichet signaled policymakers may step up their response to the region’s debt crisis when they meet tomorrow. The ECB said earlier this year that European banks’ ability to sell bonds may be hampered as governments seek to finance fiscal deficits amassed in part to finance a bailout of the banking industry. “You come back inexorably to the link between sovereigns and financials,” said Matteo Regesta, an interest-rate strategist in London at BNP Paribas SA, the world’s biggest bank by assets. “Financial companies have issues with non-performing loans, fueling the idea they might need government help, which puts pressure on the sovereign, which the banks are also exposed to.” The gains in the FRA/OIS spread in recent weeks signal the market’s expectation that the London interbank offered rate, or Libor, will increase in coming months, Bank of America Merrill Lynch strategists led by Jeffrey Rosenberg in New York wrote in a Nov. 30 note to clients. The premium European banks pay in the currency swaps market to borrow in dollars has almost doubled in the past three weeks, reaching the highest level since May yesterday. The cost to protect against losses on their bonds jumped to a 20-month high before paring the gain today.
- Shipments along the nation's highways continue to rise for U.S. trucking companies, another sign the economic expansion is gaining strength. The Cass Shipments Index, developed by trucker payment-service company Cass Information Systems Inc., jumped 15% in November from a year earlier. Compared with the prior month, the gauge rose 2.8% after a drop in October.
- U.S. Commodities: Wheat Jumps as 'Panic Brewing' on Supplies. Wheat prices jumped the most in seven weeks as excessive rainfall threatened to reduce grain quality and delay the harvest in Australia, the world’s fourth-largest exporter. Wheat futures for March delivery jumped 49.5 cents, or 7.2 percent, to settle at $7.40 a bushel on the Chicago Board of Trade, the biggest gain for a most-active contract since Oct. 8. Egypt, the biggest importer, said today it bought 220,000 metric tons in a tender from the U.S. “There’s a little bit of a panic brewing, and I think the Egyptian tender is a testament that end-users are short high- quality wheat,” said Austin Damiani, a floor broker at the Minneapolis Grain Exchange for Frontier Futures Inc.
- PineBridge Plans $480 Million CLO in First Since AIG Spinoff. PineBridge Investments is in the market with a collateralized loan obligation targeted at about $480 million, according to three people familiar with the discussions. It is the first CLO from the manager since it completed its separation from American International Group Inc. in March. PineBridge will manage the fund that is being created from a group of loans held by a separate investor, said the people, who declined to be identified because the terms are private. The market for CLOs is beginning to open with $2.6 billion of deals backed by widely syndicated loans completed this year. The market had $91.1 billion of issuance at its peak in 2007, according to Morgan Stanley data.
- UN Rules Out Extending Kyoto CO2 Limits This Year, Hurting Carbon Market. The United Nations envoy leading climate talks ruled out extending greenhouse gas limits in the Kyoto Protocol this year, leaving in place doubts about the future of a $2.7 billion a year part of the carbon market.
- Taxpayer Risk 'Impossible' to Know for Some Fed Programs. The Federal Reserve exposed U.S. taxpayers to risks that can’t be quantified based on information it made public today about the collateral posted by recipients of about $885 billion in emergency loans.
- Goldman's(GS) Emergency Fed Loans Topped $24 Billion in Crisis. Goldman Sachs Group Inc., which rebounded from the financial crisis to post record profit last year, was a regular borrower from two emergency Federal Reserve programs in 2008 and early 2009, new data show. The firm borrowed from the Fed’s Term Securities Lending Facility most weeks from March 2008 through April 2009, data released by the Fed today show. Two units of the New York-based firm borrowed as much as $24.2 billion from the Fed’s Primary Dealer Credit Facility in the weeks after Lehman Brothers Holdings Inc.’s bankruptcy in September 2008, the data show. Chief Executive Officer Lloyd Blankfein, 56, was quoted by Vanity Fair last year as saying the company might have survived the credit crisis without government help. The firm’s president,Gary Cohn, was more definitive, according to the magazine: “I think we would not have failed,” he was quoted as saying. “We had cash.”
- Galaxy, Melco Lead Casino Operators Higher After Macau Revenue Surges 42%.
- Signs Point to Extending All Tax Cuts Temporarily. Republicans and Democrats Wednesday sat down to negotiate a compromise on extending Bush-era income tax cuts—an effort that could be the first step toward a deal this month that many strategists in both parties believe will temporarily extend current tax rates for all income levels.
- Hedge Funds Tapped Rescue Program. Hedge funds and investors whose bearish trades on housing helped them profit amid the credit crisis were among those that benefited from a U.S. government emergency rescue program to kick-start lending, according to Federal Reserve data released Wednesday. That program, known as the Term Asset-Backed Securities Loan Facility, or TALF, and established during the financial crisis, provided low-cost loans from the Federal Reserve to investors buying bonds backed by student, auto and commercial-property loans and other assets. The program, which lasted from March 2009 until June 2010, was aimed at helping banks move loans off their books by repackaging them into bonds and selling them. Funds managed or backed by Magnetar Capital, Tricadia Capital and FrontPoint Partners, which made large profits from the downturn in the U.S. housing market, were among those who obtained low-cost loans from the Fed to buy securities during the ensuing credit crisis, according to the Fed data.
- Amazon(AMZN) Poised to Make a Major Strategic Investment in LivingSocial to Counter Groupoogle Threat. With the red-hot acquisition dance between Google and Groupon sucking up all the attention, it’s easy once again to ignore the No. 2 player in the fast-growing social buying space–LivingSocial.
- Citadel, Getco Joust Over Flash Trading in Options Markets. An ongoing debate over the future of so-called flash orders is pitting two of the most powerful U.S. financial firms on opposite sides, with Citadel LLC and Getco LLC continuing a rich history of clashes among Chicago's trading elite. The dispute revolves around regulators' proposed ban on flash trades in U.S. stock and options markets. The practice gives some market participants the chance to act on unfilled orders for stocks or options before they are routed on to another exchange to be filled.
- SEC Goes After Fraud by Local Hedge Funds. The San Francisco office of the Securities and Exchange Commission is seeking to crack down on illegal conduct by hedge funds and corporate bribery, activity that got pushed aside as regulators grappled with Ponzi schemes and subprime mortgage-related probes during the recent financial crisis. The shift in focus is reverberating among Bay Area technology companies and financial-services firms.
- Merck(MRK) to Buy Biotech Company Developing Diabetes Drug. Merck & Co. is expected to announce Thursday a deal to buy a closely held biotechnology company in the early stages of developing a new diabetes treatment, according to a person familiar with the matter.
- Spain, Italy Seek Action. Nations Seen at Risk of Contagion Press for a Central Bank Move, Officials Say. Spain and Italy, the countries that with Portugal appear most at risk from being enveloped by the euro zone's deepening debt turmoil, are leading an effort to spur more decisive action from the European Central Bank in order to prevent the crisis from spreading further.
- Deficit Plan Wins Backers. Bipartisan Support Adds Momentum Despite Sharp Criticism From Left and Right.
- IMF Expects to Double Its Lending Capacity. The International Monetary Fund expects to double its lending capacity to $450 billion over the next few months, giving it additional firepower to deal with the sovereign-debt crisis engulfing Europe, according to IMF officials and documents.
- Power Consumption Declines in China. Western China reports declines, Eastern China has almost no growth.
- The SAC Capital Man Said To Be "Colluding" Against The Euro Just Joined George Soros' Fund.
- Apple(AAPL) Makes Another Play For The Enterprise: Old Navy Testing iPod-Based Point-Of-Sale System. Apple is making a huge play at the enterprise market via iOS: Not just the typical corporate market you think of, like getting big companies to buy Macs instead of Dells, but actually getting companies to use iOS devices as part of their business infrastructure. The latest example: Old Navy, the clothing retailer, is testing out iPod-based point-of-sale systems in its stores, 9to5Mac reports.
- It's About To Get More Expensive For Foreigners To Do Business In China. China is set to increase taxes on foreign companies Dec. 1 by doing away with an exemption to maintenance/construction and education taxes that has been in place since the nation’s sweeping 1994 tax reform.
- Meet The 35 Foreign Banks That Got Bailed Out By The Fed. One may be forgiven to believe that via its FX liquidity swap lines the Fed only bailed out foreign Central Banks, which in turn took the money and funded their own banks. It turns out that is only half the story: we now know the Fed also acted in a secondary bail out capacity, providing over $350 billion in short term funding exclusively to 35 foreign banks, of which the biggest beneficiaries were UBS, Dexia and BNP.
- 30 Weeks of Consecutive Equity Fund Outflows. (graph)
- Why China's Leading Indicators Are A Big Flashing Warning Light To Albert Edwards. As usual, Soc Gen's Albert Edwards does not pull any punches: "Once again, investors see China plays as the only investment game in town. Dylan and I remain convinced we are witnessing a bubble of epic proportions which will burst – catching investors as unawares as the bursting of the Asian bubbles of the mid-1990s."
- Terror-Linked Arrests in Spain and Thailand. The police in and arrested 10 people suspected of operating a counterfeiting network that provided fake European passports to terrorist groups linked to in order to smooth their entry into Western countries, the Spanish Interior Ministry said Wednesday. Seven people — six Pakistanis and one Nigerian — were arrested in Barcelona in raids late on Tuesday and early on Wednesday, and three more — two Pakistanis and one Thai — were arrested in Bangkok in the same period, the ministry said in a statement. One of the Pakistanis arrested in Bangkok, a 42-year-old named Muhammad Athar Butt, known as Tony, directed the forging operation from Thailand, according to a Spanish security official. Mr. Butt was also in charge of cells in Brussels and London, the security official said, speaking on condition of anonymity because the official was talking about a current investigation.
- Obesity Surgery May Become Option for Many More. An advisory committee to the will consider on Friday a request by , the pharmaceutical company, to significantly lower how obese someone must be to qualify for surgery using the company’s Lap-Band device, which restricts intake to the stomach.
- Bank of America's(BAC) Finucane: WikiLeaks Risks Limited. Even if Bank of America is the next target of WikiLeaks, the nonprofit group that recently published online thousands of sensitive US diplomatic cables, it will cause only limited damage, one of the bank's top executives said in Boston today.
- Harvard Law Students Sue Over Airport Body Scans. Two Harvard Law School students are suing the Transportation Security Administration, claiming that the agency's full-body scanners and enhanced pat-downs are unconstitutional. The scans, which show images of airline passengers' naked bodies, and the pat-downs, which include touching genital areas, violate Fourth Amendment rights against unreasonable searches and seizures, according to the complaint, which was filed in federal court on Monday.
- Boehner Excoriates Democrats. Incoming House Speaker John Boehner threw away the niceties that appeared in the wake of his meeting with President Barack Obama, and lambasted Democrats for bringing a bill to the floor that would extend just the lower- and middle-bracket tax rates. “I don’t know what my colleagues across the aisle didn’t hear during the election,” Boehner said Wednesday evening in the Ohio Clock Corridor outside the Senate door. “The American people spoke pretty loudly. They said stop all the looming tax hikes and to cut spending". And while we had a good meeting at the White House yesterday about how to resolve the issue of stopping all of the tax hikes, the House leader is going to go down this path of gerrymandering the process so members only have one option, and that’s to vote on only providing some tax relief for the American people.” Boehner also accused House Democrats of playing “political games.”
Reuters:
- Finisar(FNSR) Q2 Tops Market, Sees Strong Q3. Network equipment maker Finisar Corp reported second-quarter results above market expectations on strong demand for closed networking products, and forecast its third fiscal quarter above estimates, sending its shares up 6 percent.
- Investors in sovereign debt involved in bailouts should incur some losses, Otmar Issing, a former member of the ECB, wrote. "If a permanent rescue mechanism is established, we should also have a restructuring regime that involves losses for private investors," Otmar said. "Default must be a credible threat - otherwise investors will have a strong incentive to buy bonds offering higher interest rates without taking into account the associated risks," he said.
- A 25 billion-euro ($33 billion) contingency fund for Ireland's banks, agreed as part of the bailout for the country, makes its lenders better equipped for stressed conditions than previously required by the Irish regulator and other bodies. While the Irish regulator had estimated the banks would need 15 billion euros at most, the extra 10 billion euros were set aside as a "backpocket" safety net, citing government officials.
- Spain and Ireland Turn to Privatization. Spain and Ireland are set to launch large-scale privatisation programmes as they fight to preserve market faith in their turnaround plans. The Spanish government is looking at auctioning stakes in its national lottery operator and airports, while Ireland will look at privatisations in its electricity and gas sectors as part of a joint European Union and IMF bail-out package agreed on Sunday. News of the privatisation plans came as it emerged that the eurozone bail-out fund will next month begin issuing debt on behalf of embattled member states. Any bonds sold would be the first issued in the name of all currency pact members.
- North Korea, which shelled a South Korean island last month, may be planning an attack on the mainland within the year. North Korea may attack Gyeonggi province, surrounding Seoul, citing a person who quoted an official from the communist nation's espionage agency.
- Japanese Finance Minister Yoshihiko Noda will seek a 10% reduction in public works spending for the next fiscal year. The government allocated 5.7 trillion yen for public works spending this fiscal year, down 20% from last year.
- China should moderately tighten monetary policy by utilizing interest rates and reserve requirements, Guo Tianyong, head of the China Banking Research Center at the Central Univ. of Finance and Economics, wrote in a commentary.
- Li & Fund Ltd.'s Victor Fung expects the price of Chinese exports to rise by a range of 10% to 15% next year because of an average wage increase of about 30%, citing the company's chairman.
- China will shift focus to "stabilizing growth" next year, from "ensuring growth" as it has said this year, at the government's central economic work conference to be held next week, citing government advisers. The Asian nation will lower next year's M2 target to 15% from this year's 17% and cut its new loan target to 7 trillion yuan or lower, the report said.
- None of note
- Asian equity indices are +.75% to +2.0% on average.
- Asia Ex-Japan Investment Grade CDS Index 110.0 -13.0 basis points.
- Asia Pacific Sovereign CDS Index 110.0 -8.0 basis points.
- S&P 500 futures -.02%
- NASDAQ 100 futures +.01%.
Earnings of Note
Company/Estimate
- (TOL)/-.07
- (DLM)/.34
- (KR)/.31
- (NOVL)/.07
- (PVH)/1.43
- (PAY)/.36
- (ULTA)/.21
8:30 am EST
- Initial Jobless Claims for last week are estimated to rise to 424K versus 407K the prior week.
- Continuing Claims are estimated to rise to 4200K versus 4182K prior.
- Pending Home Sales for October are estimated to fall -1.0% versus a -1.8% decline in September.
- None of note
- The Fed's Bullard speaking, Fed's Plosser speaking, Fed's Duke speaking, ICSC November chain store sales, weekly EIA natural gas inventory report, (FMC) analyst meeting, (DTV) analyst meeting, CSFB Aerospace/Defense Conference and the CSFB Tech Conference could also impact trading today.
Stocks Surging into Final Hour on Less Euro Debt Angst, Diminishing Economic Fear, Seasonal Strength, Short-Covering
Broad Market Tone:
- Advance/Decline Line: Substantially Higher
- Sector Performance: Almost Every Sector Rising
- Volume: Slightly Above Average
- Market Leading Stocks: Performing In Line
- VIX 21.17 -10.07%
- ISE Sentiment Index 145.0 +42.16%
- Total Put/Call .82 -6.79%
- NYSE Arms .26 -70.48%
- North American Investment Grade CDS Index 96.25 bps -2.68%
- European Financial Sector CDS Index 138.10 bps -1.65%
- Western Europe Sovereign Debt CDS Index 193.50 bps -.85%
- Emerging Market CDS Index 231.95 bps -4.01%
- 2-Year Swap Spread 27.0 -2 bps
- TED Spread 15.0 unch.
- 3-Month T-Bill Yield .15% unch.
- Yield Curve 244.0 +9 bps
- China Import Iron Ore Spot $167.80/Metric Tonne unch.
- Citi US Economic Surprise Index +21.70 -.7 point
- 10-Year TIPS Spread 2.16% +7 basis points
- Nikkei Futures: Indicating +197 open in Japan
- DAX Futures: Indicating +15 open in Germany
- Higher: On gains in my Biotech, Medical, Retail, Ag and Technology long positions
- Disclosed Trades: Covered all of my (IWM)/(QQQQ) hedges, covered some of my (EEM) short, added back to my (MOS) long
- Market Exposure: Moved to 100% Net Long
Today's Headlines
Bloomberg:
- Companies in U.S. Added 93,000 Jobs in November, ADP Says. Companies in the U.S. boosted payrolls more than forecast in November, propelled by increased hiring at small businesses, data from a private report showed today. Employment increased by 93,000, the most since November 2007, after a revised 82,000 rise in October that was almost double the initial estimate, according to figures from ADP Employer Services. The median projection of 40 economists surveyed by Bloomberg News called for a 70,000 gain last month. Small firms added more workers than at any time since the recession began in December 2007. “There’s just a feeling that maybe we’ve turned a corner” in the labor market, Joel Prakken, chairman of Macroeconomic Advisers LLC, which produces the figures with ADP, said in a conference call with reporters. “It looks to me as if hiring is beginning to pick up. I do expect these employment numbers to get firmer” in 2011, he said.
- Italy, Spain Lead Drop in Debt Risk on ECB Bond Buying Bets. Italy and Spain led a decline in the cost of insuring against losses on European government debt on speculation the European Central Bank will boost bond purchases to calm markets. Credit-default swaps on Belgium, Portugal and Ireland also fell from record high levels, helping to push down the region’s benchmark index of sovereign swaps from an all-time high. A gauge of subordinated bank debt risk dropped from a 20-month peak. Investors are hedging bets bonds will fall after ECB President Jean-Claude Trichet signaled policymakers may step up their response to the region’s debt crisis when they meet tomorrow. The ECB bought Irish and Portuguese government bonds today, according to traders with knowledge of the transactions. Credit-default swaps on Italy tumbled 41.5 basis points to 226.5, and Spain decreased 46 to 318, according to data provider CMA. Belgium declined 13 basis points to 192, Greece dropped 36.5 basis points to 928.5, Ireland was down 48 at 558, while Portugal was 63 lower at 479. The Markit iTraxx SovX Western Europe Index of swaps on 15 governments declined 12 to 189. The Markit iTraxx Financial Index linked to the senior debt of 25 banks and insurers fell 10.5 basis points to 161 and the subordinated index dropped 27 to 284.5, according to JPMorgan Chase & Co. Contracts on the Markit iTraxx Crossover Index of 50 companies with mostly high-yield credit ratings declined 25 basis points to 501. The Markit iTraxx Europe Index of 125 companies with investment-grade ratings decreased 5.5 basis points to 112, JPMorgan prices show.
- Fed Says U.S. Economy Gains Strength in 10 Out of 12 Regions. The Federal Reserve said the economy gained strength across much of the U.S. as hiring improved, manufacturing expanded and retailers anticipated a stronger holiday shopping season. Five Fed banks, including Boston and San Francisco, said the economy grew “at a slight to modest” rate, while five others, including New York and Chicago, reported a “somewhat stronger pace of economic activity.” Conditions were reported as “mixed” in the Philadelphia and St. Louis regions.
- Employers in U.S. Announce Most Job Cuts in Eight Months, Challenger Says. Employers in the U.S. announced plans in November to cut 48,711 jobs, the most in eight months, as government agencies trimmed payrolls. Compared with the same month last year, planned firings dropped 3.3 percent, according to Chicago-based Challenger, Gray & Christmas Inc. This month’s downsizing marks the smallest year-over-year decline since May 2009 when job cuts increased by 7.4 percent from a year earlier.
- U.S. Manufacturing Expands for 16th Straight Month. Manufacturing in the U.S. expanded for a 16th consecutive month in November, a sign the world’s largest economy is gaining traction as the year draws to a close. The Institute for Supply Management’s factory index was little changed at 56.6 after 56.9 in October, the Tempe, Arizona-based group said today. “Businesses are starting to feel better about the outlook and so they’re willing to spend more on investment as well as to hire,” said Stephen Stanley, chief economist at Pierpont Securities LLC in Stamford, Connecticut. “We had strong growth early in the year, a little bit of a hiccup in the middle and now things are starting to come back again.” The ISM’s U.S. new orders index eased to 56.6 from 58.9, while the production index fell to 55, the lowest level since June 2009, from 62.7. The employment gauge was little changed at 57.5 from 57.7, and the index of export orders dropped to 57 from 60.5. The measure of orders waiting to be filled held at 46 and the index of prices paid fell to 69.5 from 71. The inventory index increased to 56.7 from 53.9, while a gauge of customer stockpiles rose to 45.5 from 44.
- Fed Names Recipients of $3.3 Trillion in Aid During Crisis. The Federal Reserve, under orders from Congress, today named the counterparties of about 21,000 transactions from $3.3 trillion in aid provided to stem the worst financial panic since the Great Depression. Bank of America Corp.(BAC) and Wells Fargo & Co.(WFC) were among the biggest borrowers from one program, the Term Auction Facility, with as much as $45 billion apiece. Some aid went to U.S. units of foreign institutions, including Switzerland’s UBS AG, France’s Societe Generale and Germany’s Dresdner Bank AG.
- Fannie, Freddie Spar With Regulators on Foreclosures. Federal banking regulators said they are pushing lenders to suspend foreclosure proceedings while distressed borrowers seek new mortgages. Acting Comptroller of the Currency John Walsh said in testimony prepared for a congressional hearing today that his agency is directing national bank servicers to suspend foreclosures for borrowers actively seeking to qualify for loan modifications.
- Commodities Climb to Two-Week High on 'Positive' Global Economic Reports. Commodities jumped to a two-week high as higher-than-estimated job growth in the U.S. private sector and expanding Chinese and European manufacturing bolstered optimism in the global economy. The Reuters/Jefferies CRB Index of 19 raw materials jumped 1.7 percent to 306.63 at 11:45 a.m. New York time, the highest level since Nov. 12. Grains and industrial prices led the rally. Wheat soared as much as 7.9 percent, and cotton rose more than 3 percent.
- Carry Trade Losses Rise to Most in Two Years Amid Europe Sovereign Crisis. Foreign-exchange losses from carry trades climbed to the highest level in more than two years as hedge funds and other large speculators unwound bets that the euro will strengthen amid Europe’s sovereign-debt crisis. Royal Bank of Scotland Plc’s index for carry trades, whereby investors tap cash where borrowing costs are low to invest in higher rates elsewhere, fell 9.7 percent in November, the biggest drop since October 2008.
- U.K. Manufacturing Expands at Fastest Pace in 16 Years.
- European Banks Dominated Use of Fed's Commercial Paper Program. The U.S. subsidiaries of European financial institutions, led by Zurich-based UBS AG and Brussels- based Dexia SA were among the largest users of a government program to provide emergency short-term funding to U.S. companies and banks during the credit crisis. Six European banks were among the top 11 companies that sold the most debt overall to the the Commercial Paper Funding Facility. They sold a combined $274.1 billion, according to data made public today by the U.S. central bank. UBS sold $74.5 billion, the most among all borrowers. The largest U.S.-based user was insurer American International Group, selling $60.2 billion. UBS’s figure of $74.5 billion represents the company’s total sales over the life of the program. The bank’s CPFF borrowings peaked at $37.2 billion, an amount the firm rolled over, or re-sold at maturity, once. Other companies rolled over debt in the program as well.
- iPhone is Most Desired Smartphone in U.S., Nielsen Says.
- GM(GM), Ford(F) U.S. Sales Rise as SUV, Truck Demand Increases. General Motors Co., Ford Motor Co. and Chrysler Group LLC all reported improved sales in November as demand for pickups and sport-utility vehicles pushed the industry toward matching its fastest sales pace of the year. GM’s deliveries in the month climbed 11 percent to 168,739, the Detroit-based company said today in a statement. Sales of its Chevrolet Equinox and GMC Terrain SUVs gained 60 percent. Ford’s sales rose 20 percent to 147,338, fueled by a 55 percent boost in sales of the Edge SUV. Chrysler and Nissan Motor Co. both reported light-truck gains as they boosted results.
Wall Street Journal:
- IBM Claims Breakthrough in Laser-Based Chips. A race to transform computers with laser-based communications is accelerating, with International Business Machines Corp. the latest to claim breakthroughs in chips that send data at blazing speeds using pulses of light.
- Glow From Solar Factories Fails to Match Michigan Town's Hopes.
- Erdogan Vents Fury at Cable Claims. Prime Minister Recep Tayyip Erdogan of Turkey suggested Wednesday the U.S should fire diplomats who reported claims in leaked State Department cables that he and his family are corrupt, and said he planned to take legal action against them. In a sometimes furious televised address at the start of an investment conference in Ankara, Mr. Erdogan said, "My friends in the judiciary and we are working to do what is necessary about these diplomats. We spoke to the U.S. They did apologize, but it is not enough. The U.S. should do what is necessary about these diplomats."
- ECB, Goldman(GS), GE(GE) Sought Help From the Fed.
- Cyber Monday Sales Top $1 Billion for First Time. Research firm comScore says revenue rose 16 percent from a year ago to $1.03 billion on the Monday after Thanksgiving. Since the beginning of November, online sales are up 13 percent to $13.55 billion.
- Ending Bush-Era Tax Cuts Won't Just Affect the Wealthy. Think the Bush tax-cut debate doesn't apply to you? Think again.
- Chart of the Day: Global Food Prices About to Break An All Time High.
- John McCain Slam NYT for Publishing WikiLeaks Documents.
- Bill Gross Continues Blasting "The Bernank's" Ponzi Policies, Self-Flagellates "Newport Beach" Multimillionaires.
- Goldman(GS) Jumps Shark, "Fundamentally" Shifts Its "Bearish" Outlook on Economy: Goes Bullish, Hikes Outlook.
PCWorld:
- Apple(AAPL) Wins Patent on 3D Projector That Needs No Glasses. Apple has been awarded a U.S. patent for a display system that would allow multiple viewers to see a high-quality 3D image projected on a screen without the need for special glasses, regardless of where they are sitting.
- House Climate Panel to Be Axed. House Republicans will scrap the committee set up by Speaker Nancy Pelosi to investigate global warming, the panel’s top Republican announced Wednesday. Rep. Jim Sensenbrenner (R-Wis.) made official what many had already expected — the GOP majority will axe the Select Committee on Energy Independence and Global Warming, which Pelosi created in 2007.
- Obama Reverses on Offshore Drilling. The Obama administration will reverse its decision and not allow drilling off the Atlantic and Pacific coastlines and the eastern Gulf of Mexico for at least another seven years, sources have confirmed to POLITICO.
- Carnival(CCL) Executive: New Environmental Rules a Threat to Cruise Industry. One of the cruise industry's top executives this week came out swinging against new environmental rules that he says will have a profound impact on cruise lines.
- L-3(LLL) CEO Says Considers Acquisitions, Buybacks. L-3 Communications Holdings Inc Chief Executive Michael Strianese said on Wednesday his company is still actively looking for acquisitions but will also consider ensuring shareholder value through share buybacks.
- FCC Chief Backs Some Rationing of Internet Traffic. Internet service providers would be allowed to ration web traffic on their networks under a strategy unveiled by the top U.S. communications regulator that no longer focuses solely on open access. Federal Communications Commission Chairman Julius Genachowski proposed banning the blocking of lawful traffic but allowing Internet providers to manage network congestion and charge consumers based on Internet usage.
- Fed's Bullard: Europe a Wake-Up Call for U.S. The debt situation in Europe is a "wake-up call" for the United States to get its long-term fiscal situation under control, a top Federal Reserve official said on Wednesday.
- Concern on Debt Contagion Deepens. Global concern about the debt crisis rocking the euro zone mounted today, with Washington sending a top US Treasury envoy to Europe and G20 officials discussing the turmoil in a conference call. A day after investors pushed the risk premiums on Spanish and Italian government debt to new highs, the bond spreads of countries on Europe's southern periphery narrowed and the euro steadied on speculation that the European Central Bank could unveil new anti-crisis steps at a meeting tomorrow. But calmer markets failed to remove deep worries about contagion in the 16-country euro region that has pushed European policymakers onto the defensive and forced them to search for new ways to stabilise their 12-year-old currency project.
- CBC Pushes 'Anti-American Melodrama': WikiLeaks. U.S. diplomats in Ottawa wrote to Washington that the CBC pushes "insidious negative popular stereotyping" with "anti-American melodrama" in its entertainment TV programs, according to documents to be released by the website WikiLeaks.
Bear Radar
Style Underperformer:
- Mid-Cap Value (+1.84%)
- 1) Education -.06% 2) REITs +.55% 3) Oil Tankers +.93%
- IGTE, UTI, SCMR, XXIA, JOSB, LPNT, CPRT, MOTR, PRXL, SAFM, UTI and OCR
- 1) OREX 2) GM 3) XOP 4) CTRP 5) MOT
- 1) LPNT 2) PEP 3) UNFI 4) STSA 5) PCAR
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