S&P 500 1,224.71 +2.97%*
The Weekly Wrap by Briefing.com.
*5-Day Change
Friday, December 03, 2010
Weekly Scoreboard*
Indices
- S&P 500 1,224.71 +2.97%
- DJIA 11,382.09 +2.61%
- NASDAQ 2,591.46 +2.24%
- Russell 2000 756.42 +3.23%
- Wilshire 5000 12,775.74 +2.98%
- Russell 1000 Growth 564.96 +2.68%
- Russell 1000 Value 616.85 +3.26%
- Morgan Stanley Consumer 729.92 +2.08%
- Morgan Stanley Cyclical 1,000.95 +5.02%
- Morgan Stanley Technology 651.85 +2.11%
- Transports 5,068.81 +3.88%
- Utilities 399.03 +1.63%
- MSCI Emerging Markets 46.88 +3.78%
- Lyxor L/S Equity Long Bias Index 1,009.75 -.47%
- Lyxor L/S Equity Variable Bias Index 856.54 -1.09%
- Lyxor L/S Equity Short Bias Index 745.20 -2.14%
- NYSE Cumulative A/D Line +107,386 +.39%
- Bloomberg New Highs-Lows Index +666 +385
- Bloomberg Crude Oil % Bulls 36.0 unch.
- CFTC Oil Net Speculative Position +146,894 +3.85%
- CFTC Oil Total Open Interest 1,342,325 +.84%
- Total Put/Call .76 -10.59%
- OEX Put/Call .97 -69.97%
- ISE Sentiment 126.0 -19.05%
- NYSE Arms .67 -66.67%
- Volatility(VIX) 18.01 -18.94%
- G7 Currency Volatility (VXY) 12.07 -4.35%
- Smart Money Flow Index 9,746.93 +1.94%
- Money Mkt Mutual Fund Assets $2.813 Trillion +.5%
- AAII % Bulls 49.66 +4.77%
- AAII % Bears 26.21 +6.20%
- CRB Index 316.16 +4.99%
- Crude Oil 89.19 +6.60%
- Reformulated Gasoline 235.21 +9.14%
- Natural Gas 4.35 -2.11%
- Heating Oil 248.74 +6.79%
- Gold 1,406.20 +4.40%
- Bloomberg Base Metals 239.51 +4.79%
- Copper 399.90 +7.41%
- US No. 1 Heavy Melt Scrap Steel 339.33 USD/Ton +2.93%
- China Hot Rolled Domestic Steel Sheet 4,399 Yuan/Ton +.80%
- S&P GSCI Agriculture 474.90 +7.69%
- ECRI Weekly Leading Economic Index 125.40 -.48%
- Citi US Economic Surprise Index -9.60 -33.7 points
- Fed Fund Futures imply 58.7% chance of no change, 41.3% chance of 25 basis point cut on 12/14
- US Dollar Index 79.38 -1.53%
- Yield Curve 253.0 +17 basis points
- 10-Year US Treasury Yield 3.01% +14 basis points
- Federal Reserve's Balance Sheet $2.329 Trillion +.04%
- U.S. Sovereign Debt Credit Default Swap 40.54 -4.25%
- California Municipal Credit Default Swap 280.93 -10.98%
- Western Europe Sovereign Debt Credit Default Swap Index 177.50 -1.57%
- 10-Year TIPS Spread 2.20% +6 basis points
- TED Spread 17.0 +3 basis points
- N. America Investment Grade Credit Default Swap Index 92.84 -2.91%
- Euro Financial Sector Credit Default Swap Index 127.22 -3.93%
- Emerging Markets Credit Default Swap Index 210.84 -5.77%
- CMBS Super Senior AAA 10-Year Treasury Spread 267.0 +2 basis points
- M1 Money Supply $1.816 Trillion +1.02%
- Business Loans 604.60 +.05%
- 4-Week Moving Average of Jobless Claims 431,000 -1.3%
- Continuing Claims Unemployment Rate 3.4% +10 basis points
- Average 30-Year Mortgage Rate 4.46% +6 basis points
- Weekly Mortgage Applications 608.80 -16.47%
- ABC Consumer Confidence -45 +2 points
- Weekly Retail Sales +3.2% +60 basis points
- Nationwide Gas $2.90/gallon +.04/gallon
- U.S. Heating Demand Next 7 Days 18.0% above normal
- Baltic Dry Index 2,133 -3.04%
- Oil Tanker Rate(Arabian Gulf to U.S. Gulf Coast) 37.50 -6.25%
- Rail Freight Carloads 183,790 -22.12%
- Iraqi 2028 Government Bonds 89.0 -1.50%
- Mid-Cap Value +3.48%
- Large-Cap Growth +2.68%
- Banks +7.66%
- Oil Service +7.22%
- Gold +6.87%
- Homebuilders +6.83%
- Semis +5.32%
- Drugs +.32%
- Oil Tankers +.10%
- Airlines -.40%
- Internet -.71%
- Tobacco -3.14%
One-Week High-Volume Losers
*5-Day Change
Stocks Higher into Final Hour on Less Financial Sector Pessimism, Diminishing Eurozone Debt Angst, Seasonal Strength, Short-Covering
Broad Market Tone:
- Advance/Decline Line: Higher
- Sector Performance: Most Rising
- Volume: Slightly Below Average
- Market Leading Stocks: Performing In Line
- VIX 17.98 -7.27%
- ISE Sentiment Index 126.0 -31.15%
- Total Put/Call .75 +8.70%
- NYSE Arms .90 +109.31%
- North American Investment Grade CDS Index 92.84 bps +.01%
- European Financial Sector CDS Index 129.28 bps +5.17%
- Western Europe Sovereign Debt CDS Index 177.50 bps -1.84%
- Emerging Market CDS Index 210.70 bps -4.09%
- 2-Year Swap Spread 23.0 -2 bps
- TED Spread 17.0 +1 bp
- 3-Month T-Bill Yield .13% -2 bps
- Yield Curve 253.0 +8 bp
- China Import Iron Ore Spot $167.80/Metric Tonne unch.
- Citi US Economic Surprise Index -9.60 -30.2 points
- 10-Year TIPS Spread 2.20% +1 bp
- Nikkei Futures: Indicating -8 open in Japan
- DAX Futures: Indicating +12 open in Germany
- Higher: On gains in my Biotech, Medical, Ag and Technology long positions
- Disclosed Trades: None
- Market Exposure: 100% Net Long
Today's Headlines
Bloomberg:
- U.S. Payroll Gains Trail Forecasts; Unemployment Rate Rises. Employers added fewer jobs than forecast in November and the unemployment rate rose to 9.8 percent, pointing to economic weakness that’s likely to keep the Federal Reserve pumping money into the financial system. Payrolls increased 39,000, less than the most pessimistic projection of economists surveyed by Bloomberg News, after a revised 172,000 increase the prior month, Labor Department figures showed today in Washington. The jobless rate rose to a seven-month high, while hours worked and earnings stagnated. The number of unemployed Americans rose to 15.1 million last month, including a record 6.4 million women. Financial firms cut 9,000 jobs last month, the most in four months, today’s report showed. Construction companies subtracted 5,000 workers and payrolls at retailers fell 28,100. Private payrolls that exclude government agencies also gained less than forecast, rising by 50,000 in November. Economists projected a 160,000 gain, the survey showed. The so-called underemployment rate -- which includes part- time workers who’d prefer a full-time position and people who want work but have given up looking -- held at 17 percent. “The labor market is capping off a very poor recovery this year,” said Guy LeBas, chief fixed-income strategist at Janney Montgomery Scott LLC in Philadelphia. “I don’t think we’ll slide back into job losses, but being stuck in neutral isn’t good. While consumer spending has normalized, employers are uncertain about demand going into 2011.” The report also showed the number of people unemployed for 27 weeks or more increased as a percentage of all jobless, to 41.9 percent, the highest since August.
- ECB Bond Buying Triggers Biggest Drop in Corporate Debt Risk in Six Months. The cost of insuring against losses on European corporate bonds fell for a third day after the European Central Bank increased government bond purchases to stem “acute” tensions in financial markets. The Markit iTraxx Crossover Index of credit-default swaps on 50 companies with mostly high-yield credit ratings declined 9 basis points to 470, according to JPMorgan Chase & Co. prices at 2:30 p.m. in London. The gauge is down from 526 on Nov. 30, the biggest three-day decline since May 12. The Markit iTraxx SovX Western Europe Index of swaps on 15 governments also fell for a third day, dropping to 174.5 basis points from a record high 200.75 on Nov. 30. Credit markets briefly pared the rally after the U.S. Labor Department said payrolls increased 39,000, less than the most pessimistic projection of economists surveyed by Bloomberg News, after a revised 172,000 increase the prior month. The jobless rate rose to 9.8 percent. The Markit iTraxx Europe Index of 125 companies with investment-grade ratings decreased 1.25 basis points to 106.5, JPMorgan prices show. The cost of protecting bank bonds from default also fell, with the Markit iTraxx Financial Index linked to the senior debt of 25 banks and insurers down 8 at 142 and the subordinated index 12 lower at 272.
- Service Industries in U.S. Expand at Faster Pace. Service industries expanded in November at the fastest pace in six months, showing the U.S. recovery is broadening out as the year comes to a close. The Institute for Supply Management’s non-manufacturing index, which covers about 90 percent of the economy, rose to 55 last month from 54.3 in October. The ISM non-manufacturing employment gauge rose to 52.7, the highest since October 2007, from 50.9 a month earlier. The measure of new orders increased to 57.7, the highest since April, from 56.7. Business activity eased to 57 from 58.4. The ISM’s index of prices paid fell to 63.2 from 68.3 a month earlier. Estimated sales for Thanksgiving and the three days after the U.S. holiday reached $45 billion, a 9.1 percent gain from a year ago, as the number of shoppers rose 8.7 percent to 212 million, according to the National Retail Federation.
- Sovereign Defaults Would Force Bank Bailouts, Dimon Tells Sole. Defaults of European countries would also lead to bank bailouts, Jamie Dimon, chief executive officer of JPMorgan Chase & Co., told Il Sole 24 Ore in an interview. “Europe would have to rescue the banks” that hold state debt, Dimon told Sole. It would be better instead to “correct the Maastricht Treaty,” he said. European countries including Italy have exacerbated their economic problems by introducing taxes leading to capital flight or rules making the labor market excessively rigid, Dimon told the daily.
- Cotton Surges to Biggest Weekly Gain in 39 Years on India Limits. Cotton futures surged, heading for the biggest weekly gain in 39 years, on mounting concern that supplies will be limited from India, the world’s largest exporter after the U.S. Cotton-yarn shipments will be capped at 720,000 metric tons in the year that started Oct. 1, the Indian government said Dec. 1 in a bid to stabilize domestic prices and boost supply. Futures traded in New York are up 75 percent this year and touched a record last month, partly on concern that India won’t ship enough of the fiber to meet growing global demand.
- Crude Oil Futures Increase to 25-Month High in New York as Dollar Tumbles. Crude oil rose to a 25-month high as the dollar tumbled, increasing the appeal of commodities as an alternative investment. Crude jumped as much as 1.1 percent as the Dollar Index, which tracks the currency against six others, dropped to the lowest intraday level since Nov. 23 after U.S. employers added fewer jobs than forecast in November and the unemployment rate unexpectedly increased. Oil for January delivery rose 86 cents, or 1 percent, to $88.86 a barrel at 12:54 p.m. on the New York Mercantile Exchange. Prices touched $88.96 a barrel, the highest intraday level since Oct. 9, 2008. Futures have increased 6.1 percent this week and 12 percent this year.
- Greenspan Says ECB Has 'Terrible Problem' on Deficits. Former Federal Reserve Chairman Alan Greenspan said the European Central Bank faces a “terrible problem” because its measures to combat the debt crisis make it easier for countries to defer cutting budget deficits. “I think they’ve got a terrible problem,” he said in an interview with CNBC in Washington today. “To the extent that they increase their purchases of bonds of the various different countries, they of necessity take the pressure off the political system within those countries to do what has to be done.”
- Fed Purchases May Set Bad Precedent, Wrightson Economist Crandall Says. Federal Reserve asset purchases won’t do much to help the economy now and may set a bad precedent for later actions, Wrightson ICAP LLC chief economist Lou Crandall said today. “This is really a marginal effort in terms of its contribution right now,” Crandall said of the Fed’s strategy, in a radio interview on “Bloomberg Surveillance” with Tom Keene. “They’re embracing a principle that I think has the potential to be abused in the future.” Crandall is No. 1 among economic forecasters for the two- year period ended on Sept. 30, according to data compiled by Bloomberg.
- Brazil Raises Reserve Requirements to Remove $36 Billion From Circulation. Brazilian banks fell in Sao Paulo trading after the central bank raised reserve and capital requirements to slow consumer lending growth that’s running at 20 percent annually and prevent a credit bubble.
- South Korea, U.S. Reach Accord on Revising Free-Trade Pact Auto Provisions. The U.S. and South Korea reached agreement to change automobile provisions in a pending trade deal, clearing the way for legislatures in both nations to approve the delayed accord, said a person briefed on the talks. South Korea agreed to let the U.S. phase out its 2.5 percent tariff on automobiles over five years instead of as much as three years, a demand of Ford Motor Co., the person said, declining to be identified before an announcement.
Wall Street Journal:
- France Moves to Ban Site Hosting WikiLeaks. WikiLeaks' battle to remain online encountered another obstacle Friday after France's Industry Minister Eric Besson said the government plans to ban WikiLeaks from a French server, saying the site was "criminal" and put innocent lives at risk.
- Deficit Plan Fails to Win Panel Support. The president's U.S. deficit commission received the backing of a majority of its 18-strong panel, but fell short of the 14 votes needed to possibly trigger congressional votes on its recommendations.
- Fed Just Creating Asset Bubbles, No Stimulus: Ross. Federal Reserve policies are creating an asset bubble that isn't helping create jobs or acting as a real stimulus to the economy, investor Wilbur Ross told CNBC.
- The 14 Most Shocking Recipients Of The Bailout Money That Was Supposed To Be For American Banks.
- Suddenly Shanghai Developers Are Forfeiting Land Back To The Government.
- A New Test Is Proposed in Licensing Radio and TV. Michael J. Copps, one of the five commissioners on the , said Thursday that a “public value test” should replace the current licensing system for television and radio stations. The test, he said, “would get us back to the original licensing bargain between broadcasters and the people: in return for free use of airwaves that belong exclusively to the people, licensees agree to serve the public interest as good stewards of a precious national resource.” Mr. Copps, a Democratic commissioner who has long wanted to reform the license system, made the proposal in an address at the Graduate School of Journalism on Thursday. It is his latest effort to draw attention to the public interest requirements of local stations at a time when he believes American journalism is in “grave peril.” In his prepared remarks, he criticized the casual nature of the current license renewals for stations and said his intent with the public value test was to foster “a renewed commitment to serious news and journalism.” If a station were to fail the public value test and did not improve a year later, he added, the agency should “give the license to someone who will use it to serve the public interest.”
- Reports Show Violations of Surveillance Limits in U.S. The federal government has repeatedly violated legal limits governing the surveillance of U.S. citizens, according to previously secret internal documents obtained through a court battle by the American Civil Liberties Union. In releasing 900 pages of documents, U.S. government agencies refused to say how many Americans' telephone, e-mail or other communications have been intercepted under the Foreign Intelligence Surveillance Act - or FISA - Amendments Act of 2008, or to discuss any specific abuses, the ACLU said. Most of the documents were heavily redacted. However, semiannual internal oversight reports by the offices of the attorney general and director of national intelligence identify ongoing breaches of legal requirements that limit when Americans are targeted and minimize the amount of data collected.
- The iPad, a product that didn't even exist a year ago, is expected to cause nearly 50 percent of all growth for Apple in fiscal year 2011, according to one Wall Street analyst. Robert Cihra with Caris & Company issued a note to investors on Friday noting that Apple's growth is "stunning." He said the company has managed to effectively create its own growth through innovation, while its competitors are lost "in a sea of otherwise commoditized hardware." In the December quarter, Cihra expects Apple to sell 6.7 million iPads. He has also projected the sale of 32 million iPads in fiscal year 2011, accounting for more growth in Apple's bottom line than the iPhone. "A product that didn't even exist a year ago... now leads an entire charge to thin-client access/computing architecture," he wrote. He sees the iPad "igniting an explosion toward 'thin-client' access computing, with Apple's most extensible advantage its lightweight iOS software and apps ecosystem." Cihra sees the iPhone accounting for more than 40 percent of Apple's fiscal year 2011 growth, with 64 million units sold. He also sees another 5 percent expansion in the company's bottom line thanks to the Mac platform, where he sees sales increasing 19 percent year over year. Accordingly, Caris & Company has raised its price target for AAPL stock to $400, up from its previous projection of $375.
- Obama's Stimulus Pours Millions Into Faith-Based Groups. An analysis by POLITICO found that at least $140 million in stimulus money has gone to faith-based groups, the result of an unpublicized White House decision to spend government money, where legal, supporting religiously inspired nonprofit groups. And that decision was just the beginning.Rasmussen Reports:
- US SEC to Unveil Swaps Dealers Proposals. U.S. regulators are expected to unveil proposals on Friday that will determine which firms will be forced to hold more cash to deal in the lucrative over-the-counter derivatives market. The proposals will define who will be subject to more scrutiny from the Securities and Exchange Commission, which has new-found power to police the estimated $600 trillion market. That means Wall Street firms that dominate the market will be subject to additional capital and margin requirements as swap dealers and major swaps participants.
- Spain Speeds Reforms, Makes Cuts to Reassure Markets. Spain brought forward pension reforms, raised tobacco taxes and cut windpower subsidies on Friday as it fought to slash a high budget deficit and calm investor concerns it could need a financial bailout.
- US Leading Economic Growth Gauge Annual Rate at 26-Week High.
- Ditlev Engel, the chief executive officer of Vestas Wind Systems A/S, said the European wind-energy business lacks momentum and the outlook isn't bright. That assessment by the head of the world's biggest wind-turbine maker will be a blow to governments such as Britain's, which hope to develop industries employing tens of thousands of people around renewable-energy technologies.
- Fairfax's Prem Watsa Sees Commodity Bubble Brewing. Never mind the current hype over commodities: Prem Watsa and his team at Fairfax aren’t convinced that resources and agricultural goods will continue to skyrocket. “Anything that everybody thinks is going to happen worries us,” Mr. Watsa said in an interview. “The excesses get built up. Recessions take them out.” He is particularly troubled by the number of pension funds throwing cash at the commodities market. “You aggregate that, there’s a lot of money going into a small market,” he said. “Takes the price through the roof.” This isn’t the first time Mr. Watsa has contradicted conventional wisdom. He predicted a severe financial crisis long before even the Federal Reserve saw it coming, and made billions by hedging against it.
- Bank Sarasin & Cie AG will stop investing in U.S. equities, citing a letter sent by the company to clients. The bank also advised clients to do likewise, given the "concentration of regulations in the United States and the toughening of American tax legislation."
Bear Radar
Style Underperformer:
- Large-Cap Value (-.45%)
- 1) Insurance -.88% 2) Retail -.75% 3) Telecom -.73%
- AVAV, RY, TMX, CISG, AVGO, TKLC, SWM, TOO, VGR and ABM
- 1) FXY 2) WFR 3) SD 4) OREX 5) ITUB
- 1) HELE 2) VIA/B 3) JASO 4) SOLF 5) SEN
Bull Radar
Style Outperformer:
- Mid-Cap Growth (+.18%)
- 1) Gold +2.75% 2) Education +2.54% 3) Semis +1.06%
- HL, CRUS, TSL, HMY, SWC, TIBX, SAP, IVN, SLB, AEL, OXPS, NIHD, BAP, BNS, CS, GNTX, OXPS, KIRK, NXPI, DECK, LLEN, SVVS, BWLD, TGA, TLCR, RUSHA, FNSR, SXCI, VRUS, JRCC, SOHU, APKT, WPPGY, GOLD, PANL MOV, PAY and AWR
- 1) INFN 2) AGO 3) UUP 4) PAY 5) LCC
- 1) PAY 2) LCC 3) BBY 4) MRK 5) MOTR
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