Jim O’Neil on Dollar Divergence and What to Expect From the January Effect

In his latest note to clients

Nearing post crash highs….

He is surprised of the strength in the markets and points out the markets must not be done going higher as equities moved up despite a strong dollar.

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Source

Akamai Technologies, Inc. (NASDAQ: AKAM) Cut to Sell from Neutral at Citigroup.
AGL Resources Inc. (NYSE: GAS) Started as Underperform and named as Bear of the Day at Zacks.
Apple Inc. (NASDAQ: AAPL) Reiterated Buy with $460.00 price target objective by Argus; maintained Conviction Buy List and target raised to $550 from $520 at Goldman Sachs.
ARM Holdings PLC (NASDAQ: ARMH) Started as Underperform at Bernstein.
Barnes Group Inc. (NYSE: B) named as value stock of the day at Zacks.
Costco Wholesale Corporation (NASDAQ: COST) Cut to Underperform at Bernstein.
Exxon Mobil Corporation (NYSE: XOM) Reiterated Buy at Goldman Sachs.
First Industrial Realty Trust (NYSE: FR) Cut to Neutral at Credit Suisse.
Hilltop Holdings, Inc. (NYSE: HTH) Raised to Outperform as Bull of the Day at Zacks.
Integra LifeSciences Holdings Corp. (NASDAQ: IART) Cut to Hold at Argus.
International Game Technology (NYSE: IGT) Removed from US Focus List at Credit Suisse.
Merck & Co. Inc. (NYSE: MRK) Downgraded to Hold at Jefferies.
Pandora Media Inc. (NYSE: P) Started as Buy at Needham.
Penn National Gaming Inc. (NASDAQ: PENN) Added to the US Focus List at Credit Suisse.
PVH Corporation (NYSE: PVH) Started as Buy at Stern Agee.
The Royal Bank of Scotland Group plc (NYSE: RBS) Raised to Neutral at JPMorgan.
Southern Copper Corporation (NYSE: SCCO) Cut to Hold at Deutsche Bank.
Thoratec Corporation (NASDAQ: THOR) Cut to Market Perform at Wells Fargo.

Gapping up

ACHN +34.5%, EBAY +0.3%, INHX +130.7%, FMCN +0.4%, QCOR +4.5%, STD +2.6%,  VRUS +3.4%, QGEN +2.1%,

STO +1.6%,  ORCT +18.1%, UL +1.1%, RBS +2.9%,  ING +1.7%, BCS +0.7%, TESS +0.4%,

Gapping down

IPCM -1.4%, BHP -0.5%, NOK -2.3%, LULU -1.8%,

In Play

On the Wires

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Funds increasing their bets….

Talk about how to increase shareholder value mounts as profit and sales go stale. 

The IMF’s Lagarde says there is reason to be upbeat as many things have changed over the last 18 months.

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Unicredit had a dismal showing for their stock offering. The stock tanked triggering a rights offering. If no buyers step up then the lead underwriter BAC may have to take down the position.

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Rules are meant to be broken…

China’s lending increased much more than expected lending to a soft landing and better growth prospects.

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Not good for one of the stronger economies in the world.

Still below the technical support level. Hopium rising as Merkel and Sarkozy meet.

6 month paper went off with a yield of -0.1%

Asia

Europe

Futures

Currencies

Commodities

LIBOR, EURIBOR, 10 year yields for Italy, Spain, France, and Germany

  Yield Yield Change Yield Change (%)
Austria 10-Year 3.45 0.01 0.41 Mon 03:05 AM
Austria 2-Year 1.70 0.00 0.24 Mon 03:05 AM
Belgium 10-Year 4.65 0.01 0.28 Mon 03:05 AM
Belgium 2-Year 2.68 0.03 1.25 Mon 03:05 AM
Czech 10-Year 5.94 0.01 0.14 Mon 03:05 AM
Czech 2-Year 4.84 -0.01 -0.10 Mon 03:05 AM
Finland 10-Year 2.33 0.01 0.48 Mon 03:05 AM
Finland 2-Year 0.36 -0.00 -0.56 Mon 03:05 AM
France 10-Year 3.36 -0.01 -0.15 Mon 03:05 AM
France 2-Year 1.03 0.01 0.99 Mon 03:05 AM
German 10-Year 1.87 0.01 0.76 Mon 03:05 AM
German 2-Year 0.17 0.01 3.61 Mon 03:05 AM
Greece 10-Year 35.32 0.39 1.12 Mon 03:05 AM
Greece 2-Year 136.22 0.71 0.53 Mon 03:05 AM
Hungary 10-Year 10.07 -0.01 -0.10 Mon 03:05 AM
Italian 10-Year 7.14 0.01 0.13 Mon 03:05 AM
Italian 2-Year 5.07 0.04 0.72 Mon 03:05 AM
Poland 10-Year 5.94 0.01 0.14 Mon 03:05 AM
Poland 2-Year 4.84 -0.01 -0.10 Mon 03:05 AM
Spain 10-Year 5.71 0.01 0.09 Mon 03:05 AM
Spain 2-Year 3.76 -0.00 -0.03 Mon 03:05 AM
UK 10-Year 2.02 -0.04 -1.71 Mon 03:05 AM
UK 2-Year 0.40 -0.01 -2.66 Mon 03:05 AM
US 10-Year 1.96 0.01 0.36 Mon 03:05 AM
US 2-Year 0.25 -0.00 -1.49 Mon 03:05 AM

Flowers are sprouting in January in New Hampshire, the Sierra Mountains in California are nearly snow-free, and lakes in much of Michigan still have not frozen. It’s 2012, and the new year is ringing in another ridiculously wacky winter for the U.S. In Fargo, North Dakota yesterday, the mercury soared to 55°F, breaking a 1908 record for warmest January day in recorded history. More than 99% of North Dakota had no snow on the ground this morning, and over 95% of the country that normally has snow at this time of year had below-average snow cover. High temperatures in Nebraska yesterday were in the 60s, more than 30° above average. Storm activity has been almost nil over the past week over the entire U.S., with the jet stream bottled up far to the north in Canada. It has been remarkable to look at the radar display day after day and see virtually no echoes, and it is very likely that this has been the driest first week of January in U.S. recorded history. Portions of northern New England, the Upper Midwest, and the mountains of the Western U.S. that are normally under a foot of more of snow by now have no snow, or just a dusting of less than an inch. Approximately half of the U.S. had temperatures at least 5°F above average during the month of December, with portions of North Dakota and Minnesota seeing temperatures 9°F above average. The strangely warm and dry start to winter is not limited to the U.S–all of continental Europe experienced well above-average temperatures during December.

December 2011 jet stream pattern the most extreme on record
The cause of this warm first half of winter is the most extreme configuration of the jet stream ever recorded, as measured by the North Atlantic Oscillation (NAO). The Arctic Oscillation (AO), and its close cousin, the North Atlantic Oscillation (which can be thought of as the North Atlantic’s portion of the larger-scale AO), are climate patterns in the Northern Hemisphere defined by fluctuations in the difference of sea-level pressure in the North Atlantic between the Icelandic Low and the Azores High. The AO and NAO have significant impacts on winter weather in North America and Europe–the AO and NAO affect the path, intensity, and shape of the jet stream, influencing where storms track and how strong these storms become. During December 2011, the NAO index was +2.52, which was the most extreme difference in pressure between Iceland and the Azores ever observed in December (records of the NAO go back to 1865.) The AO during December 2011 had its second most extreme December value on record, behind the equally unusual December of 2006. These positive AO/NAO conditions caused the Icelandic Low to draw a strong south-westerly flow of air over eastern North America, preventing Arctic air from plunging southward over the U.S. and Europe.

To read the rest and see all of the cool graphs, go here.

In Denver’s win versus Pittsburg, Tebow threw for 316 yards passing and averaged 31.6 yards per play.

Tebow 3:16.