S&P 500 1,244.28 +7.39%*
The Weekly Wrap by Briefing.com.
*5-Day Change
Friday, December 02, 2011
Weekly Scoreboard*
Indices
- S&P 500 1,244.28 +7.39%
- DJIA 12,019.48 +7.01%
- NASDAQ 2,626.93 +7.59%
- Russell 2000 735.02 +10.34%
- Wilshire 5000 12,907.85 +7.64%
- Russell 1000 Growth 582.36 +7.16%
- Russell 1000 Value 613.80 +7.73%
- Morgan Stanley Consumer 737.05 +5.52%
- Morgan Stanley Cyclical 899.47 +9.64%
- Morgan Stanley Technology 611.85 +7.45%
- Transports 4,946.67 +9.11%
- Utilities 443.63 +4.14%
- MSCI Emerging Markets 39.88 +9.39%
- Lyxor L/S Equity Long Bias Index 947.73 +.39%
- Lyxor L/S Equity Variable Bias Index 832.49 +.03%
- Lyxor L/S Equity Short Bias Index 608.22 -.21%
- NYSE Cumulative A/D Line 125,129 +3.52%
- Bloomberg New Highs-Lows Index -136 +620
- Bloomberg Crude Oil % Bulls 38.0 +52.0%
- CFTC Oil Net Speculative Position 156,479 -.55%
- CFTC Oil Total Open Interest 1,302,512 +.53%
- Total Put/Call .98 -25.76%
- OEX Put/Call 1.45 +55.91%
- ISE Sentiment 79.0 +9.72%
- NYSE Arms 1.09 -3.54%
- Volatility(VIX) 27.52 -20.16%
- S&P 500 Implied Correlation 77.88 -5.6%
- G7 Currency Volatility (VXY) 12.91 -6.52%
- Smart Money Flow Index 10,474.11 -.14%
- Money Mkt Mutual Fund Assets $2.653 Trillion +.20%
- AAII % Bulls 33.04 +.98%
- AAII % Bears 39.42 +3.0%
- CRB Index 313.55 +2.65%
- Crude Oil 100.96 +3.74%
- Reformulated Gasoline 261.62 +5.41%
- Natural Gas 3.58 -2.16%
- Heating Oil 299.0 +1.27%
- Gold 1,751.30 +4.01%
- Bloomberg Base Metals 211.84 +7.57%
- Copper 358.45 +8.82%
- US No. 1 Heavy Melt Scrap Steel 401.67 USD/Ton unch.
- China Iron Ore Spot 138.80 USD/Ton -1.14%
- UBS-Bloomberg Agriculture 1,457.14 +2.40%
- ECRI Weekly Leading Economic Index Growth Rate -7.8% -50 basis points
- Philly Fed ADS Real-Time Business Conditions Index -.1016 +2.77%
- S&P 500 EPS Estimates (FY 2012 Mean) 108.95 -.08%
- Citi US Economic Surprise Index 85.70 +44.6 points
- Fed Fund Futures imply 36.0% chance of no change, 64.0% chance of 25 basis point cut on 12/13
- US Dollar Index 78.62 -1.24%
- Yield Curve 178.0 +9 basis points
- 10-Year US Treasury Yield 2.03% +7 basis points
- Federal Reserve's Balance Sheet $2.797 Trillion -.28%
- U.S. Sovereign Debt Credit Default Swap 50.57 -9.10%
- Illinois Municipal Debt Credit Default Swap 278.0 -.19%
- Western Europe Sovereign Debt Credit Default Swap Index 339.51 -8.53%
- Emerging Markets Sovereign Debt CDS Index 288.0 -10.79%
- Saudi Sovereign Debt Credit Default Swap 127.0 -5.21%
- Iraqi 2028 Government Bonds 82.64 +.36%
- China Blended Corporate Spread Index 754.0 -22 basis points
- 10-Year TIPS Spread 2.06% +12 basis points
- TED Spread 53.0 +3 basis points
- 3-Month Euribor/OIS Spread 99.0 +7 basis points
- 3-Month EUR/USD Cross-Currency Basis Swap -126.33 +13.44%
- N. America Investment Grade Credit Default Swap Index 124.23 -14.18%
- Euro Financial Sector Credit Default Swap Index 270.43 -17.88%
- Emerging Markets Credit Default Swap Index 298.06 -14.13%
- CMBS Super Senior AAA 10-Year Treasury Spread 276.0 +16 basis points
- M1 Money Supply $2.135 Trillion -.45%
- Commercial Paper Outstanding 1,002.10 +.20%
- 4-Week Moving Average of Jobless Claims 395,800 +.10%
- Continuing Claims Unemployment Rate 3.0% +10 basis points
- Average 30-Year Mortgage Rate 4.0% +2 basis points
- Weekly Mortgage Applications 576.40 -11.67%
- Bloomberg Consumer Comfort -50.2 -.1 point
- Weekly Retail Sales +3.90% +60 basis points
- Nationwide Gas $3.29/gallon -.02/gallon
- U.S. Heating Demand Next 7 Days 5.0% below normal
- Baltic Dry Index 1,866 +3.26%
- Oil Tanker Rate(Arabian Gulf to U.S. Gulf Coast) 37.50 -6.25%
- Rail Freight Carloads 190,866 -21.53%
- Small-Cap Growth +10.79%
- Mid-Cap Value +7.25%
- Steel +12.16%
- Homebuilders +11.59%
- Banks +10.57%
- Semis +10.0%
- Energy +9.91%
- Agriculture +5.76%
- Medical Equipment +5.24%
- Utilities +4.14%
- Oil Tankers +3.36%
- Tobacco +3.09%
- MBI, MOV, LZB, TXI, CMC, ONXX, GNTX, TDS/S, WSBC, AEGR, FIBK, WCBO, TOBC, AFCE, ERIE, CPRT, TFM, BECN, VVI and ECL
- AWAY
ETFs
Stocks
*5-Day Change
Stocks Sightly Higher into Final Hour on US Economic Data, Investor Performance Angst, Short-Covering, Less Financial Sector Pessimism
Broad Market Tone:
- Advance/Decline Line: Higher
- Sector Performance: Mixed
- Volume: Light
- Market Leading Stocks: Underperforming
- VIX 27.07 -1.24%
- ISE Sentiment Index 70.0 +40.0%
- Total Put/Call .92 -3.16%
- NYSE Arms .90 -3.52%
- North American Investment Grade CDS Index 124.23 -2.64%
- European Financial Sector CDS Index 275.72 -4.92%
- Western Europe Sovereign Debt CDS Index 337.78 -1.43%
- Emerging Market CDS Index 303.98 -1.93%
- 2-Year Swap Spread 45.0 +3 bps
- TED Spread 53.0 unch.
- 3-Month EUR/USD Cross-Currency Basis Swap -126.0 -5 bps
- 3-Month T-Bill Yield .00% unch.
- Yield Curve 179.0 -6 bps
- China Import Iron Ore Spot $138.80/Metric Tonne +3.89%
- Citi US Economic Surprise Index 85.70 +23.8 points
- 10-Year TIPS Spread 2.05 -2 bps
- Nikkei Futures: Indicating +19 open in Japan
- DAX Futures: Indicating -18 open in Germany
- Slightly Lower: On losses in my tech and medical sector longs
- Disclosed Trades: Added to my (IWM)/(QQQ) hedges and to my (EEM) short, then covered some of them
- Market Exposure: 75% Net Long
Today's Headlines
Bloomberg:
- Spanish Bonds Snap Seven-Day Gain on Downgrade Bets; Italian Debt Falls. Spanish 30-year bonds snapped a seven-day rally on speculation the nation’s credit ranking will be cut due to the euro-area debt crisis. Italian notes declined. Spain’s government debt pared gains today on concern a lower rating would make it more difficult for the nation to reduce its deficit. Spanish and Italian bonds advanced earlier as people familiar said a European proposal to channel central bank loans through the International Monetary Fund may deliver as much as 200 billion euros ($270 billion) to fight the crisis. “There is a rumor circulating that Spain might be downgraded,” said Achilleas Georgolopoulos, a fixed-income strategist at Lloyds Bank Corporate Markets in London. “The euro reacted immediately, Italian yields and Spanish yields the same. That’s pretty much why bunds are rallying.” Spanish 30-year yields were little changed at 6.17 percent at 5 p.m. in London, after dropping as much as 19 basis points. The 4.7 percent bond due in July 2041 traded at 80.135 percent of face value. Two-year Italian rates climbed 25 basis points to 6.57 percent. They earlier declined 56 basis points. German bonds rose, pushing the yield down four basis points to 2.14 percent. The euro slid 0.5 percent to $1.3391. Moody’s Investors Service currently ranks Spain as A1, its fifth-highest investment grade. Standard & Poor’s downgraded Spain on Oct. 13 to its fourth-highest investment rank, AA-, after Fitch Ratings cut it to the same level on Oct. 7.
- Banks Vie With Nations to Sate $2 Trillion 2012 Funding Need: Euro Credit. Europe’s banks will compete with their governments to borrow $2 trillion next year as the two groups refinance maturing bonds and bills. Euro-area governments have to repay more than 1.1 trillion euros ($1.5 trillion) of long- and short-term debt in 2012, with about 519 billion euros of Italian, French and German debt maturing in the first half alone, data compiled by Bloomberg show. European banks have about $665 billion of debt coming due in the first six months, with a further $370 billion by the end of the year, according to Citigroup Inc., based on Dealogic data. “Serious investors are fleeing from both European sovereign and European bank debt in droves,” said Mark Grant, a managing director at Southwest Securities Inc. in Fort Lauderdale, Florida. “The financials of both classes are in question, and nothing of substance has been achieved to correct the problems and quell the European crisis.” The 440 basis-point yield premium investors demand to hold bank bonds rather than benchmark government soared to 448 Nov. 30, the most since January 2009, according to Bank of America Merrill Lynch’s EUR Corporates, Banking Index. The average spread between January 2005 and January 2007 -- before the crisis struck -- was 38 basis points, the data show.
- U.S. Jobless Rate Unexpectedly Declines. Job gains in the U.S. picked up last month and the unemployment rate unexpectedly fell to the lowest level since March 2009, a decline augmented by the departure of Americans from the labor force. Payrolls climbed 120,000, after a revised 100,000 increase in October, with more than half the hiring coming from retailers and temporary help agencies, Labor Department figures showed today in Washington. The median estimate in a Bloomberg News survey called for a 125,000 gain. The decrease in the jobless rate reflected a 278,000 gain in employment at the same time 315,000 Americans left the labor force. “You’d like to see the unemployment rate coming down when people are coming into the job market, not disappearing,” James Glassman, senior economist at JP Morgan Chase & Co. in New York, said in a radio interview on “Bloomberg Surveillance” with Tom Keene. Employment at service-providers increased 126,000 in November, including a 50,000 gain in retail trade as companies began hiring for the holiday shopping season. The number of temporary workers increased 22,300. Average hourly earnings fell 0.1 percent to $23.18, today’s report showed. The average work week for all workers held at 34.3 hours. 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 -- decreased to 15.6 percent from 16.2 percent. The report also showed an increase in long-term unemployed Americans. The number of people unemployed for 27 weeks or more increased as a percentage of all jobless, rose to 43 percent from 42.4 percent.
- The 3M EUR/USD Cross-Currency Basis Swap is down -5 bps to -126 bps, the biggest intraday decline since Nov. 29, amid lingering uncertainty regarding a resolution to the EU sovereign debt crisis. USD 3M Libor may be revised upward Mon., Dec. 5 as the Bank of Nova Scotia leaves the USD Libor panel.
- Risk perceptions in European stock and credit markets are diverging by the most in three years after a rally in equities pushed options prices down 32% since September. Teh VStoxx Index, which measures the cost of Euro Stoxx 50 Index options, dropped to 36.54 yesterday from 53.55 on Sept. 12, trimming its advance since May 11 to 73%. The European 2Y Swap Spread, a measure of stress in credit markets, has climbed about twice as much during the same period, according to Bloomberg data.
- Pakistan Prepares for U.S. Attack, Bild Reports, Citing Document. Pakistan has taken measures to prepare for a possible attack by U.S. forces, Germany’s Bild- Zeitung reported, citing a classified document by the U.S. government’s Combined Joint Intelligence Operations Center. Pakistan has set up defensive positions in the border region with Afghanistan in response to an attack the country’s military sees as potentially imminent, Bild cited the document as saying. Numerous anti-aircraft radar installations are in place to track low-flying vehicles, increasing Pakistan’s capability to spot helicopters and drones, Bild said. Afghanistan will suffer a civil war once the International Security Assistance Force leaves the country, Bild also reported, citing U.S. military intelligence.
- RIM(RIMM) Tumbles as Apple(AAPL) Extends Lead. Research In Motion Ltd. (RIM) plunged the most in 11 weeks after saying revenue missed its forecast last quarter amid accelerating market-share losses for BlackBerry smartphones and PlayBook tablets to Apple Inc. (AAPL). Third-quarter revenue was “slightly lower” than the $5.3 billion to $5.6 billion the company had projected and earnings were “at the low to mid point” of its forecast, according to an unscheduled statement from Waterloo, Ontario-based RIM today. RIM said it doesn’t expect to meet its full-year profit target.
- House Subpoenas Corzine for MF Hearing. The U.S. House Agriculture Committee voted to subpoena Jon S. Corzine, former chairman and chief executive officer of MF Global Holdings Ltd., for a Dec. 8 hearing on the collapse of the New York-based brokerage.
- Crude Oil Heads for First Weekly Gain in Five as Iran Tensions Increase. Crude oil for January delivery rose 21 cents to $100.41 a barrel at 12:33 p.m. on the New York Mercantile Exchange. Futures climbed as much as $1.36 before the report’s release at 8:30 a.m. in Washington. Prices have risen 3.8 percent this week and 9.9 percent this year. Brent oil for January settlement rose 47 cents, or 0.4 percent, to $109.46 a barrel on the London-based ICE Futures Europe exchange.
- Plosser Says Fed Role in Fiscal Policy Provokes Inflation Risks. Federal Reserve Bank of Philadelphia President Charles Plosser said the Fed has undertaken actions that should be conducted by the U.S. Treasury and risks fueling public expectations that inflation will accelerate. “Unfortunately, from my perspective, the Fed and other central banks have already embarked on a path that has blurred the distinction between monetary policy and fiscal policy,” Plosser said today in the text of a speech in Philadelphia. Plosser’s remarks come two days after the Fed and five other central banks cut in half the premium on currency swap agreements.
- France and Germany Remain Poles Apart. Two landmark speeches in two days were supposed to highlight France and Germany's determination to bring about a resolution to the euro crisis. Instead, they have highlighted how divided France and Germany remain. Both Angela Merkel and Nicolas Sarkozy agree on the severity of the crisis, the inadequacy of the European Union's current governance arrangements and the need for Treaty changes and new fiscal discipline. But they remain as far apart as ever on how this should be achieved.
- China Role Limited In Resolving EU Debt Crisis - China Life Asset Management Chief.
- German Banks Will Need To Raise Almost EUR10B After EBA Test -Sources. German banks will need to raise almost EUR10 billion after the European Banking Authority completes its latest stress tests, two people familiar with the matter said Friday.
MarketWatch:
- Shale Gas Gives Rise to Era of Energy Independence. A boom in shale gas production in recent years has helped lift U.S. natural gas supplies to a record level, creating an ideal environment to sustain low prices and offering a launching pad for a new era in a country striving for energy independence.
- Britain Threatens to Block Drive to Change EU Treaty. British Prime Minister David Cameron threatened on Friday to obstruct a Franco-German drive for swift change to the European Union's treaty intended to help save the euro. After talks with French President Nicolas Sarkozy, Cameron said he was not convinced treaty change was needed to reinforce the single currency zone, which Britain has refused to join. If the 27-nation bloc's charter were reopened at a crunch summit next week, he would have his own agenda.
- European Banks Scrambling for Euros - Not Dollars. Europe's banks are scrambling to tap every last available source of funding, including through their retail customers, as they stock up on securities they can use to access the central bank liquidity they will need to lean on for many more months. Fresh measures to flush banking systems with dollar liquidity do not tackle the broader euro funding shortages most of Europe's banks still face, as many find themselves shut out of mainstream bond markets. "It's amazing no bank has fallen over already when there are so many living hand-to-mouth," one senior financing banker said.
- Why Dec. 9 Is Expected to be One of the Biggest Days in the History of Europe.
- Eliot Spitzer: 'The SEC Is The Most Grossly Inept Failed Group I've Ever Worked With'.
- Food Stamps Can Now Be Used To Buy Starbucks(SBUX) Coffee and Muffins.
- Meanwhile, Greece's 1-Year Bond Is Now Yielding 317%. (graph)
- Key Charts From The NFP Report: Records In Jobless Duration and People Who Want A Job As Civilian Labor Force Plunges. (graphs)
- Greece - Has The Barber Retired?
- Conservatives Craft Bill to Prevent IMF Bailout of Eurozone. Conservatives say they will try to block the International Monetary Fund from bailing out Italy and Spain, which they say could leave U.S. taxpayers with a huge bill. Republicans on both sides of the Capitol complain that the Obama administration has refused to share details of what Treasury Secretary Timothy Geithner is discussing with European leaders amid reports the IMF could intervene. “We’re throwing good money after bad down a hole that I think is not a solvable problem,” he said. “Europe is going to default eventually, so why would you socialize their profligate spending,” he added. Coburn estimates the U.S. could be liable for as much as $176 billion if the IMF shores up Italy and Spain and the European Union collapses. President Obama this week said the U.S. “stands ready to do our part” to help resolve the crisis, and Geithner in October said using U.S. tax dollars through the IMF to shore up Europe’s efforts was appropriate. “We need some transparency about what’s really going on,” said McMorris Rodgers. “It’s hard to get information. We’re talking about U.S. taxpayer dollars being involved in the European bailout. The administration needs to be honest with the Congress. I believe Congress needs to be involved in making this decision.”
- Local Economic Outlook Dire in Hard-Hit EU Countries. Europeans' outlook on economic conditions where they live remains rather bleak in 2011. A median of 25% of residents in 25 EU countries that Gallup surveyed say their local economic situations are getting better, while a median of 38% say they are getting worse. 9% of Italians believe their economic situation is getting better, while 61% believe it is getting worse. Greeks are the least hopeful: 2% say their local economies are improving.
- Merkel Says Debt Crisis Will Take Years to Solve. German Chancellor Angela Merkel called on Friday for rapid EU treaty change to remedy the root causes of the euro zone's debt crisis but warned that Europeans faced a long, hard "marathon" to restore lost credibility. Outlining a long-term approach to tighter fiscal integration in the single currency area, with tougher budget discipline, she dismissed quick fixes such as massive Fed-style money printing by the European Central Bank or issuing joint euro zone bonds. "Resolving the sovereign debt crisis is a process, and this process will take years," Merkel told parliament, vowing to defend the euro, which she said was stronger than Germany's former deutschemark.
- Hedge Funds on Red Alert for Bank Leverage Squeeze. Hedge funds are steering clear of the big bets they are famous for, rattled by worries that the lenders who bankroll their most lucrative plays will soon turn the taps off. With memories of sudden margin calls at the height of the 2008 crisis still fresh, many managers are scrutinizing banking relationships and preparing for the likelihood of tighter, more expensive access to credit as several major banks face up to their own funding troubles. "This is a dynamic we're all very familiar with because it happened a great deal in 2008 and 2009," Benjamin Keefe, investment advisory director at Gamma Finance, said. "That will have a knock-on effect either in terms of forcing hedge funds to exercise a gate to stop investors redeeming or to sell their more liquid assets to meet recalled leverage lines."
- U.S. Headed the Way of Italy, Greece - Fed's Fisher. The United States is headed the way of debt crisis-wracked Italy and Greece unless U.S. leaders make a more concerted effort to fix the national deficit, a top Federal Reserve official said Friday. Dallas Fed President Richard Fisher told a meeting of business leaders they should take the Occupy Wall Street movement "seriously" because too many people are out of work. He urged them to lobby lawmakers to craft a fiscal solution to the nation's debt problem, which is creating uncertainty and holding back business investment. Otherwise, social unrest could result, Fisher said.
- Fitch: CDS Widening May Extend into 2012. The unprecedented widening of credit default swap (CDS) spreads across many regions and sectors that characterized 2011 figures to continue into next year, according to Fitch Solutions in its year-end Risk and Performance Monitor. 'With no clear resolution to the European debt crisis and the U.S. debt situation still in flux, CDS widening will likely persist in 2012,' said Author and Director Diana Allmendinger. This likely means added pressure on European sovereign CDS, which reached record highs this year after widening 170%, on average, over the course of 2011.
- Guns Are A Big Seller On Black Friday. Gun dealers flooded the FBI with background check requests for prospective buyers last Friday, smashing the single-day, all-time high by 32%, according to bureau records.
ORF:
- It would be a "severe mistake" for the European Central Bank to purchase unlimited amounts of euro-area government bonds, Otmar Issing, the ECB's former chief economist, said in an interview. "It would be an absolutely severe mistake which the ECB will certainly not commit," Issing said. "To guarantee the debt of all countries would mean to hand over control of the printing press to politicians, and history teaches us what happens next," Issing said. "At the moment the ECB is the only insitution that is trusted," Issing added. "If its reputation is tarnished, the euro would be in trouble."
- China's government should be "highly concerned" about potential risks of insufficient company financing through the end of the year, citing Gu Shengzu, standing committee member of the National People Congress. Small and medium-sized companies face financing problems, labor shortages and rising costs, Gu said.
Bear Radar
Style Underperformer:
- Large-Cap Growth (+.15%)
- 1) Gold & Silver -2.10% 2) Agriculture -1.21% 3) Medical Equipment -1.11%
- CF, EXK, MON, AEE, NVS, WABC, SJR, BNS, EEP, KCP, ATO, UVV, NNN, UGI, BIG, HRB, RIMM, SHPGY, STX and TEA
- 1) HRB 2) XLNX 3) CNX 4) RCL 5) PNC
- 1) GES 2) PPG 3) GRPN 4) SINA 5) LMT
Bull Radar
Style Outperformer:
- Large-Cap Value (+.49%)
- 1) I-Banks +2.27% 2) Banks +2.19% 3) Education +1.78%
- UBSI, BCS, HDB, DISH, JPM, LUK, ZUMZ, LULU, ULTA, AVGO, SFLY, BKS, WDC, WNR, MS, PVH, GS, MBI and UBSI
- 1) AVGO 2) DAL 3) VRUS 4) JBLU 5) BKS
- 1) ANTH 2) LULU 3) WDC 4) ALL 5) BIG
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