Monthly Archives: December 2012
Market Update
Markets got off to a positive start, but took a tumble on poor consumer confidence and statements by Senator Harry Reid. Reid spoke of the negligence republicans took by not showing up to work in order to try and negotiate a deal on the Fiscal Cliff.
The inside story on the hill is that we will go over the cliff.
Currently the DOW just bounced slightly off the lows of the day. We are down 135 bones currently with a strong dollar and weak commodity space. Gold did manage to eek out a minor gain.
Expedia is the best performer on the NASDAQ followed by Deckers….
Technology leads the way down on the NASDAQ as $GOOG and $AAPL are down 1%+
[youtube://http://www.youtube.com/watch?v=4AcS53gzc1M 450 300] Comments »$AMZN Strikes Gold in their Biggest Holiday Season Ever
“Customer experience analytics company ForeSee released its eighth annual holiday online satisfaction report this morning, which rates the top e-retailer websites in 2012. This year’s newly expanded list puts Amazon.com again at the top, while Apple, Dell, and JCPenney.com all slid down in customer rankings.
Previously, ForeSee measured data on the top 40 retailers, but this year, the firm expanded its list to the top 100. As before, the retailer rankings are generated by customer surveys. To compile this year’s list, 24,000 customer surveys were collected between Thanksgiving and Christmas, ForeSee says.
Amazon again scored 88 on a 100-point scale – the same record-breaking number it saw last year. In fact, the online retailer has now had the highest scores in ForeSee’s index for eight years in a row. ForeSee says this is partially due to Amazon’s appeal and the variety of merchandise it offers – but that’s almost too simple an explanation. It’s not just the quality, variety or size of Amazon’s inventory at play here, its the end-to-end shopping experience that Amazon provides on web, mobile, tablet – and even offline. Customers can scans the barcodes of in-store merchandise, then search for a better deal on Amazon, where often they’ll find one. With Amazon’s one-click checkout, fast shipping, no-hassle returns, value-added Prime membership accounts, and more, it’s not surprising to find that Amazon remains the high bar that others aspire to reach.
“At this point, Amazon has been dominant for so long and has such a history of focusing on the customer, its hard to imagine anyone else coming close,” noted Larry Freed, ForeSee president and CEO in a statement. “Companies should emulate Amazon’s focus on the customer, which is clearly linked to superior revenues over the years.”
In response the survey’s finding, Amazon today also issued an announcement, saying that holiday 2012 was its biggest holiday season ever with over 26.5 million items ordered worldwide on its peak day, which is also a record-breaking 306 items per second. Also on its peak day, Amazon’s worldwide fulfillment network shipped over 15.6 million units across all product categories….”
Comments »SeaWorld Entertainment Files for IPO
Aetna CEO: Obamacare Could Double Health Care Premiums (Video)
“To provide all Americans with health insurance, premiums will have to rise to pay for it, Aetna CEO Mark Bertolini told CNBC’s “Closing Bell” on Wednesday.
“If we’re going to insure all Americans, which is a worthy and appropriate cause, then somebody has to pay for it,” Bertolini said of the expected premium increases under Obamacare.
Bertolini said that insurance premiums could double in some places just on the basis of what types of policies people buy today.
He also said that when Obamacare is fully implemented, it won’t start the way people had hoped and it won’t be cheaper.
Over the longer run, the key to bringing down premiums will be controlling health care costs, he added. “It’ll be fits and starts, but we’ll get there,” Bertolini said….”
Comments »New Home Sales Jump 4.4%
“New home sales
climbed 4.4 percent in November to 377k.
However, this gain comes on top of last month’s 361k number, which was revised down from a preliminary reading of 368k.
Economists were expecting November sales to climb 3.3 percent to 380k.
So, while the pace of growth was better than expected, the level of sales was a bit light.
From the Census: ”
Full report
David Rosenberg Explains Why You Should Be Bullish on Gold
“Just some random gold thoughts here via David Rosenberg’s 2013 outlook:
Gold is also a hedge against financial instability and when the world is awash with over $200 trillion of household, corporate and government liabilities, deflation works against debt servicing capabilities and calls into question the integrity of the global financial system.
This is why gold has so much allure today. It is a reflection of investor concern over the monetary stability, and Ben Bernanke and other central bankers only have to step on the printing presses whereas gold miners have to drill over two miles into the ground (gold production is lower today than it was a decade ago – hardly the same can be said for fiat currency).
Moreover, gold makes up a mere 0.05% share of global household net worth, and therefore, small incremental allocations into bullion or gold-type investments can exert a dramatic impact. Gold cannot be printed by central banks and is a monetary metal that is no government’s liability. It is malleable and its supply curve is inelastic over the intermediate term.
And central banks, who were selling during the higher interest rate times of the 1980s and 1990s, are now reallocating their FX reserves towards gold, especially in Asia. With the gold mining stocks trading at near record-low valuations relative to the underlying commodity and the group is so out of favour right now, that anyone with a hint of a contrarian instinct may want to consider building some exposure – as we have begun to do.
…
In that light, the bond-bullion barbell continues to make sense to us within a diversified portfolio that includes the parts of the equity market that trade like a bond…”
Comments »Republicans Will Likely Allow Taxes to Rise for Americans, Can They Take it Back in the New Year ?
” The inside line from Washington is that there will be no Fiscal Cliff deal before the end of the year.
That’s not surprising. Unfortunately, it always seemed unlikely that our politicians would agree to any vote that could be framed as their voting to “raise taxes”–which any deal before December 31 could have been framed as.
The more likely scenario seemed to be that politicians would wait until taxes increased automatically on January 1 and then heroically vote to cut them–at least some of them.
And that’s still my bet about what will happen in January.
But just because it seemed likely that politicians would be ruled by “politics” instead of pragmatism doesn’t mean this is something to be proud of.
And let’s be clear about what has happened in the past two months.
What has happened is that the political party that has based its entire existence on never agreeing to a tax hike of any kind has essentially agreed to tax hike for the entire country.
By not accepting the Democrats’ offer to extend the Bush tax cuts for ~98% of Americans, the Republicans have agreed to let taxes rise on ALL Americans…”
Comments »$F to Invest $773 Million in Southeast
“(Reuters) – Ford Motor Co plans to invest more than $773 million on new equipment and capacity expansions across six U.S. manufacturing plants in southeast Michigan.
The plan is part of its commitment to invest $6.2 billion in U.S. plants by 2015 as part of the agreement reached in October 2011 with the United Auto Workers union, the automaker said on Thursday.
Ford said the investments will create 2,350 hourly jobs and allow it to retain another 3,240 hourly jobs. The new jobs are part of the 12,000 Ford previously said it would add or retain in the United States by 2015 under the UAW deal.
Some of the new jobs will earn entry-level wages, which start at just under $16 an hour. Traditional nonskilled UAW workers at Ford earn an average of just over $28. This year, Ford has added more than 6,500 hourly jobs and most of those were filled by people hired at the entry-level pay rate.
Over the next six months, Ford said it will upgrade stamping operations at Michigan Assembly Plantand Dearborn Stamping Plant, as well as finish work at Flat Rock Assembly Plant to build the new Fusion sedan. Some Fusion production was shifted from Mexico under the four-year pact with the UAW.
The work will include $59.4 million to expand the stamping press line at Michigan Assembly, $305 million for plant modernization and new equipment at Dearborn Stamping, and $161 million for new equipment in Flat Rock….”
Comments »U.S. Home Prices Rise for the 9th Month
“NEW YORK (Reuters) – U.S. single-family home prices rose in October for nine months in a row, reinforcing the view the domestic real estate market is improving and should bolster the economy in 2013, a closely watched survey showed on Wednesday.
The S&P/Case Shiller composite index of 20 metropolitan areas gained 0.7 percent in October on aseasonally adjusted basis, stronger than the 0.5 percent rise forecast by economists polled by Reuters.
“Looking over this report, and considering other data on housing starts and sales, it is clear that the housing recovery is gathering strength,” David Blitzer, chairman of the index committee at Standard & Poor’s, said in a statement.
While record low mortgage rates and modest job growth should keep the housing recovery on track, analysts cautioned home prices face downward pressure from a likely pickup in the sales of foreclosed and distressed properties and reduced buying investors and speculators.
Prices in the 20 cities rose 4.3 percent year over year, beating expectations for a rise of 4.0 percent.
Las Vegas posted the biggest monthly rise on a seasonally adjusted basis at 2.4 percent, followed by a 1.7 percent increase in San Diego, the latest Case-Shiller data showed.
“Higher year-over-year price gains plus strong performances in the Southwest and California, regions that suffered during the housing bust, confirm that housing is now contributing to the economy,” Blitzer said.
Housing contributed 10 percent to the overall U.S. economic growth in the third quarter, while the sector represented less than 3 percent of gross domestic product, he said….”
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Consumer Confidence Hits the Skids
“NEW YORK (Reuters) – Consumer confidence fell to a four-month low in December as a looming budget crisis sapped what had been a growing sense of optimism about the economy, a private sectorreport released on Thursday showed.
The Conference Board, an industry group, said its index of consumer attitudes fell to 65.1 from a downwardly revised 71.5 in November. Economists had expected a reading of 70.0, according to a Reuters poll.
November’s number was originally reported as 73.7.
While the present situation index rose to 62.8 from an upwardly revised 57.4, its highest in more than four years, the overall survey suggested most consumers expect things to worsen.
“Consumers’ expectations retreated sharply in December resulting in a decline in the overall index,”Lynn Franco, director of The Conference Board Consumer Research Center, said in a statement. “The sudden turnaround was most likely caused by uncertainty surrounding the oncoming fiscal cliff.”
The fiscal cliff refers to $600 billion of automatic tax increases and spending cuts set to take effect in January unless Congress acts to stop them. President Barack Obama and Republican leaders have failed to agree to a long-term deficit reduction deal that would avert the situation.
The expectations index fell to 66.5 from a downwardly revised 80.9. December’s reading was the lowest in more than a year…”
Comments »Harry Reid Spooks the Markets as He Notes GOP Not Showing Up for Work, Fiscal Cliff Resolution in Peril
Harry Reid gave a speech on the stump chastising republicans for not showing up to work. Tensions mounted in he markets as his speech ran on over this behavior not being favorable to resolving issues at hand.
Comments »Shark Tank Bursts Open in a Shanghai Shopping Mall (Video)
Weak Retail Sales Correlate to Slowing Income Growth
Upgrades and Downgrades This Morning
Gapping Up and Down This Morning
In Play and On the Wires
$MRVL Looks to Overturn $1.17 Billion Verdict
“(Reuters) – Marvell Technology Group Ltd said on Thursday it will try to void a $1.17 billion damages award imposed by a federal jury that found the chipmaker had infringed two patents held by Carnegie Mellon University.
In a statement, the company said it will seek to overturn Wednesday’s verdict in post-trial proceedings in the U.S. District Court in Pittsburgh. It said if necessary, it will take its case to the U.S. Federal Circuit Court of Appeals in Washington
Marvell said it has not determined the financial impact, if any, on operating results for its fiscal fourth quarter, which ends on February 2, 2013. Shares of the company fell 1.5 percent in premarket trading.”
Comments »$TM Settles Acceleration Case for $1.1 Billion
“Toyota Motor Corp. (7203), Asia’s biggest automaker, will take a $1.1 billion charge to settle U.S. consumer claims that the value of their vehicles diminished because of recalls related to unintended acceleration.
The settlement, pending approval from a judge in federal court in Santa Ana, California, will cover costs such as cash payments to customers, Toyota said in a statement yesterday. The deal is valued at $1.2 billion to $1.4 billion, a record in the U.S. in terms of financial scale and number of vehicles, according to Seattle-based law firm Hagens Berman, which represented plaintiffs….”
Comments »Iron Ore Melts Up the Most Since 2010 on China Rebound
“Iron ore is rallying the most in about two years as analysts predict that China, the biggest buyer, will import a record amount in 2013 as its accelerating economic growth spurs demand for steel.
Trade to China will climb 6.9 percent to 778 million metric tons in 2013, or 65 percent of all shipments, according to the median of 10 analyst estimates compiled by Bloomberg. Seaborne demand will exceed supply for at least a 10th year, Morgan Stanley data show. Prices will climb as much as 26 percent to $170 a ton by June, according to Justin Smirk of Westpac Banking Corp. (WBC), who correctly predicted this year’s slump and was the most accurate industrial-metals forecaster tracked by Bloomberg….”
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