Stock Market News & Stocks to Watch from StraightStocks » Thanksgiving

Mixed Economic Indicators Show Signs of Improvement

QualityStocks — Wed, 30 Dec 2009 14:46:39 +0000

Don’t start waving the flags yet, but at least a few economic indicators are finally starting to edge upward. For the second month in a row, Americans’ overall confidence in the economy increased, with job market expectations hitting their highest level in two years. The Conference Board Consumer Confidence Index, which had increased in November, [...]

Zacks Analyst Blog Highlights: Amazon.com, Barnes & Noble, Wal-Mart, Target and Best Buy – Press Releases

Zacks Market Commentaries — Wed, 30 Dec 2009 12:37:04 +0000

For Immediate Release

Chicago, IL – December 30, 2009 – Zacks.com announces the list of stocks featured in the Analyst Blog. Every day the Zacks Equity Research analysts discuss the latest news and events impacting stocks and the financial markets. Stocks recently featured in the blog include: Amazon.com (AMZN), Barnes & Noble (BKS), Wal-Mart (WMT), Target (TGT) and Best Buy (BBY).

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Here are highlights from Tuesday’s Analyst Blog:

Online Sales Shine for Retail

The retail sales period in question had an extra day this year. And last year’s holiday shopping season was particularly bad, when overall sales dropped 3.4% amid a very uncertain financial backdrop.

Despite these caveats, today’s retail sales numbers are positive and welcome. They add to the growing list of favorable newsflow on improving fundamentals of the underlying economy. With the labor market expected to turn the corner in the not-too-distant future, the outlook for the retail sector may be growing positive.

Some groups stand out in this holiday shopping season’s numbers. Sales at e-commerce retailers are up 15.5%, as the online operators gain market share from their brick-and-mortar peers. Retail sales at electronics, jewelry and footwear retailers have also been strong this holiday shopping year -- up 5.9%, 5.6% and 5% from the year-earlier period, respectively. However, department stores and apparel have been under pressure, with year-over-year retail sales declines of 2.3% and 0.4%.

Amazon.com (AMZN) appears to be a clear beneficiary of the online shift. The online bookseller is also benefiting from the popularity of its e-book reader, the Kindle. While a number of other operators such as Barnes & Noble (BKS) have also jumped into the fast-growing e-book market with their own digital devices, Amazon appears to have maintained its dominant market position.

Amazon’s online retail sales dominance has recently attracted the unwanted attention of off-line giant Wal-Mart (WMT), resulting in a pricing war in the books category. Despite Amazon’s online pre-eminence, there is no reason to believe that entrenched brick-and-mortar merchants such as Wal-Mart, Target (TGT) and Best Buy (BBY) cannot make it in the online realm.

A number of retailers went into this year’s holiday shopping season with very lean inventories, expecting this year to be no different from last year -- and have been surprised by the retail sales strength. These retailers may find it difficult to lure shoppers back into stores next month for gift card-related sales. Retailers typically get a boost from gift card-related post-holiday shopping season sales, which makes January a very important month in the overall retail sales holiday shopping picture.

We wouldn’t get a complete picture of this year’s holiday shopping scene until we get the January retail sales numbers. But the overall improving holiday shopping trend is absolutely clear from the retail sales numbers released to date.

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Online Sales Shine for Retail – Analyst Blog

Zacks Market Commentaries — Mon, 28 Dec 2009 19:47:51 +0000

As we had seen with the monthly retail sales numbers in the recent past, the retail picture may not be as bad as the dismal labor market would indicate. In a happy development for some if not all retailers, retail sales data released this morning indicates that consumers spent 3.6% more on holiday shopping this year between the critical Thanksgiving and Christmas Eve period than they did last year.

The retail sales period in question had an extra day this year. And last year’s holiday shopping season was particularly bad, when overall sales dropped 3.4% amid a very uncertain financial backdrop.

Despite these caveats, today’s retail sales numbers are positive and welcome. They add to the growing list of favorable newsflow on improving fundamentals of the underlying economy. With the labor market expected to turn the corner in the not-too-distant future, the outlook for the retail sector may be growing positive.

Some groups stand out in this holiday shopping season’s numbers. Sales at e-commerce retailers are up 15.5%, as the online operators gain market share from their brick-and-mortar peers. Retail sales at electronics, jewelry and footwear retailers have also been strong this holiday shopping year -- up 5.9%, 5.6% and 5% from the year-earlier period, respectively. However, department stores and apparel have been under pressure, with year-over-year retail sales declines of 2.3% and 0.4%.

Amazon.com (AMZN) appears to be a clear beneficiary of the online shift. The online bookseller is also benefiting from the popularity of its e-book reader, the Kindle. While a number of other operators such as Barnes & Noble (BKS) have also jumped into the fast-growing e-book market with their own digital devices, Amazon appears to have maintained its dominant market position.

Amazon’s online retail sales dominance has recently attracted the unwanted attention of off-line giant Wal-Mart (WMT), resulting in a pricing war in the books category. Despite Amazon’s online pre-eminence, there is no reason to believe that entrenched brick-and-mortar merchants such as Wal-Mart, Target (TGT) and Best Buy (BBY) cannot make it in the online realm.

A number of retailers went into this year’s holiday shopping season with very lean inventories, expecting this year to be no different from last year -- and have been surprised by the retail sales strength. These retailers may find it difficult to lure shoppers back into stores next month for gift card-related sales. Retailers typically get a boost from gift card-related post-holiday shopping season sales, which makes January a very important month in the overall retail sales holiday shopping picture.

We wouldn’t get a complete picture of this year’s holiday shopping scene until we get the January retail sales numbers. But the overall improving holiday shopping trend is absolutely clear from the retail sales numbers released to date.
Read the full analyst report on "AMZN"
Read the full analyst report on "BKS"
Read the full analyst report on "WMT"
Read the full analyst report on "TGT"
Read the full analyst report on "BBY"
Zacks Investment Research

Online Sales Shine for Retail – Analyst Blog

Zacks Market Commentaries — Mon, 28 Dec 2009 19:47:51 +0000

Best Buy Beats Zacks Estimate – Analyst Blog

Zacks Market Commentaries — Tue, 15 Dec 2009 18:03:42 +0000

Best Buy Company Inc. (BBY) recently reported third-quarter 2010 results. The quarterly earnings of 53 cents a share surpassed the Zacks Consensus Estimate of 43 cents and surged 51.4% from 35 cents delivered in the prior-year quarter.

The sustained growth in the top-line, disciplined cost management and lower effective tax rate buoyed the bottom-line growth. Even in this turbulent environment, plagued by heavy job losses and weak consumer spending, Best Buy was able to increase its market share. The company’s domestic market share rose 2.3% in the quarter.

Notebook computers, appliances, phones and flat-panel TVs were the strongest categories. These were offset by softness in gaming, music and movies.

Total revenue climbed 4.6% year-over-year to $12,024 million, reflecting the net addition of 127 stores in the last 12 months, and a 1.7% increase in comparable store sales, partially offset by adverse impact of foreign currency translation. Comps improved after falling 3.9% in the second-quarter 2010. Comps in the prior-year quarter had declined 5.3%.

The nation's largest electronics retailer hinted that its fourth-quarter 2010 gross margin will be lower than anticipated.

Domestic revenue climbed 9% to $8,931 million, reflecting the net addition of 87 stores in the last 12 months, increased traffic count and 4.6% gain in comparable-store sales. Comps rose sequentially each month in the quarter, attaining an 8.4% increase in the month of November, favorably impacted by the Thanksgiving holiday shopping weekend.

Comps in the prior-year quarter had declined 6.3%. Domestic online sales jumped more than 20% due to a rise in website traffic.

International revenue dropped 6.4% to $3,093 million due to a 6.7% decline in comparable store sales and unfavorable impact of foreign currency translation, partially offset by net additions of 40 stores in the last 12 months. Comps in the prior-year quarter had improved marginally by 0.3%. Excluding foreign currency translation, international revenue fell 4%. Best Buy Europe posted a 3% decline in comparable-store sales.

The rise in market share, revenue growth experienced, along with signs of improvement in traffic count prompted management to raise its guidance.

Management now expects earnings in the range of $3.00 to $3.15 per share for fiscal year 2010, up from $2.70 to $3.00 predicted earlier, reflecting an increase of 4% to 9% year-over-year. The Zacks Consensus Estimate for the year is $2.96.

Revenue for the fiscal year 2010 is expected in the range of $49 billion to $49.5 billion, up from $48 billion to $49 billion forecasted previously. Comparable-store sales are expected to be flat to up 1% for the year.
Read the full analyst report on "BBY"
Zacks Investment Research

The TJX Companies – Growth And Income – Zacks Rank Buy

Alex Kolb — Mon, 14 Dec 2009 05:00:00 +0000

The TJX Companies, Inc. (TJX) recently posted November sales of $1.8 billion, up 15% from last year's $1.6 billion. Consolidated comparable store sales jumped 8% year-over-year.

Management said business throughout the Thanksgiving week and weekend was strong and our fourth quarter is off to a great start, adding that with the important month of December still ahead, the company is maintaining its guidance for fourth-quarter fiscal 2010 earnings per share from continuing operations to be in the range of 65 to 71 cents.

The Zacks Consensus Estimate has been upped to 73 cents since the TJX sales figures came out in early December. Last month, the forecast was 71 cents.

For the current fiscal year, analysts polled by Zacks are projecting earnings of $2.63 per share, versus last month's $2.60.

For the following year, the Zacks Consensus Estimate of $2.95 was increased from last month's $2.90.

Industry-leading Income

The company recently declared a quarterly dividend of 12 cents per share, noting that it is payable March 4 to shareholders of record on February 11.

TJX's dividend yield of 1.3% stands high above the industry average.

Solid Earnings

The TJX Companies saw third-quarter earnings of 81 cents per share, beating the Zacks Consensus Estimate by a penny and surpassing last year's 54 cents.

The company stated that it achieved record third quarter results, driven by significant increases in comparable store sales and customer traffic that have continued to accelerate.

Read the Nov 3 commentary on TJX.

Last Week's Growth and Income Zacks Rank Buy Stocks

Cooper Industries plc (CBE), which recently announced the opening of a new manufacturing facility in Dammam, Kingdom of Saudi Arabia, declared a quarterly dividend of 25 cents in early November. The company offers an industry-leading dividend yield of 2.3%.

Perrigo Co. (PRGO) analysts are steadily increasing estimates for the drug company, fueled by the latest earnings surprise.

Archer Daniels Midland Co. (ADM) is rebounding steadily after the commodities bubble burst last year. Estimates moving forward are showing steady growth.

Caterpillar Inc. (CAT) has posted big surprises on estimates 3 out of the last 4 quarters. Analysts are bullish on 2010, with earnings expected to grow 29%.

Alex Kolb is the Growth & Income Stock Strategist for Zacks.com. He also writes the popular daily commentary column for the ZacksElite.com service. Zacks Investment Research

Solar Energy Stocks: Experts Say This Sector Is Headed Down, Here’s Why You Shouldn’t Listen

Investment U — Fri, 11 Dec 2009 15:52:43 +0000

Solar Energy Stocks: Experts Say This Sector Is Headed Down, Here’s Why You Shouldn’t Listen by David Fessler, Energy and Infrastructure Expert Friday, December 11, 2009: Issue #1156 By the time 2009 is in the books, the record will show that solar energy stocks endured a tough year. Hardly surprising, with many Wall Street [...]

Solar Energy Stocks – Why you shouldn’t listen to the experts

Contrarian Profits — Fri, 11 Dec 2009 13:08:07 +0000

David Fessler, Advisory Panelist for Investment U, looks at the state of alternative energy and why conventional experts may be wrong about the industry.

Gold: Technical correction before the final frontier

Prieur du Plessis — Tue, 08 Dec 2009 08:35:59 +0000

"The potential exists for a large rise [in the gold price] in the longer term. However, if this rally extends into uncharted water on momentum without a healthy enough correction, upside targets will be hard to project with the eventual correction equally difficult to predict, just as they say, 'The higher you climb, the harder you fall'," said Dian Chu in this guest post.

Gold: Technical correction before the final frontier

Prieur du Plessis — Tue, 08 Dec 2009 08:35:59 +0000

Gold: Technical correction before the final frontier

Prieur du Plessis — Tue, 08 Dec 2009 08:35:59 +0000

Q4 S&P Earnings to More than Double – Earnings Trends

Dirk Van Dijk — Tue, 08 Dec 2009 05:00:00 +0000

Key Points:
•    Earnings Surprise Ratio (#beat/#miss) at 5.28, almost double normal
•    Median Earnings Surprise 7.14%, very strong
•    Year-over-year Earnings Growth Ratio (# Pos Growth/# Neg Growth) at 0.81
•    Sales Surprise Ratio at 1.45
•    Sales Growth Ratio at just 0.43
•    Total Net Income for S&P 500 reported is 11.1% below a year ago, 10.7% above what was earned in 2Q09
•    Total S&P 500 Revenues reported down 10.8% year over year, up 3.6% from 2Q09
•    2009 Earnings Revisions ratio for full S&P 500 falls to 2.42, down from 3.00 two weeks ago (report was not run due to Thanksgiving last week), still very high
•    2010 ratio at 1.77, down from 1.98 two weeks ago
•    S&P500 expected to earn $574.1 billion in 2008, $707.3 billion in 2010
•    Bottom Up estimates: $62.84 for 2009, $77.89 for 2010
•    Top Down estimates: $54.38 for 2009, $70.05 for 2010

Welcome to the new Earnings Trends. We have decided to start focusing our analysis of the S&P 500 based on Zacks' own sector groupings rather than the S&P GICS sectors. There are 16 Zacks sectors and only 10 GICS sectors, so the new groupings will result in better granularity of the data. The old way simply grouped too many very different companies together. In addition, we for the first time are presenting top-line as well as bottom-line expectations and surprise information. This is very much or a work in progress, and we will be adding additional information, tables and perhaps even some graphs over the next few months.

The third quarter was a fantastic earnings season. With almost all of the reports in, there have been 375 which have exceeded expectations while only 71 have fallen short, a ratio of 5.28. While it is true that most companies will normally try to under-promise and over-deliver, this quarter the beats are beating the misses by about twice the normal margin of 3:1.

Nor have all the surprises only been by a penny or two, but there have been lots of companies that simply crushed their earnings estimates. The median surprise is a very high 7.14%. Over the last five years, a median surprise of about 3.0% has been normal.

Part of the reason is that expectations were set very low going into the earnings season. For most companies, their earnings are still below year-ago levels, just not as far down as people thought they would be. Only 220 firms have posted positive year-over-year growth versus 272 which have fallen short of year-ago levels, a ratio of 0.81.

Now it is time to turn our focus to the fourth quarter. Saying that the market as a whole faces easy year-over-year comps is a bit like Noah remarking that it looks like it may rain. Total earnings in the fourth quarter are expected to be more than double year-ago levels, up 119.8%.

However, the growth is very much concentrated in a few sectors, most notably the Financials, but with a nice assist from the Autos and Construction (although those sectors are far smaller). Consumer Staples also is expected to show extremely high growth largely due to massive year-ago losses at News Corp (NWSA), on what is arguably a non-recurring item (the data is adjusted to remove non-recurring items, but it looks like we slipped on that one).

Because of the year-over-year distortion from the debacle that was last year’s fourth quarter, it is more instructive to look at the sequential growth (although keep in mind that some sectors, most notably Retail, are highly seasonal). There the picture is far more subdued, with total earnings in the fourth quarter actually expected to be 4.1% below third quarter levels. Although if we see even a normal amount of positive surprises, the level is probably going to be more like flat sequentially.

Aerospace is expected to be the sequential leader, but keep in mind that it was awful on a sequential basis in the 3Q, so that is not real strong evidence of a big underlying growth trend there. In all, 11 of the 16 sectors are expected to post lower total earnings in the 4Q than in the 3Q.

On the top line it was also a successful reporting season relative to expectations, but in terms of actual year-over-year growth it has been downright ugly. The total revenues were 10.8% below year-ago levels. A total of 276 firms reported higher-than-expected revenues, versus 190 that have disappointed, for a ratio of 1.45. On the other hand, only 147 actually had higher sales than a year ago, versus 345 with lower revenues -- a ratio of 0.43.

Put another way, only 29.7% of all firms reporting so far have had higher sales than a year ago. However on a sequential basis, revenues did rise by 3.6%. Looking forward, in the fourth quarter revenues are expected to be up by 2.7% sequentially and by 1.8% year over year.

In other words, cost-cutting has been the major force driving earnings, and earnings surprises. However, the costs to one company are either the revenues of another company or someone’s paycheck, which is then spent to create revenues for firms.

The bottom-up data coming out of all these individual firms seems to confirm what we have been getting from the macro statistics from the government. The economy is growing due to increases in productivity. Higher GDP with fewer workers. While clearly companies cannot continue to grow earnings forever based only on cost cutting, it does mean that when they do start to see revenue growth, earnings growth could be explosive as the greater operating leverage kicks in.

The strategy seems to be working as earnings are coming in much better than expected and analysts have responded by increasing earnings estimates for 2009. The estimate increases are widespread across sectors, with four sectors seeing more than four increases for each cut. No sector is seeing more cuts than increases.

For the S&P 500 as a whole the revisions ratio now stands at 3.42, which while slightly lower than a few weeks ago is still very high, and in distinct contrast to earlier in the year when it fell below 0.15 at one point. The better-than-expected earnings are translating into estimate increases for 2010 as well as 2009, with a revisions ratio of 1.77 for next year. While the total number of revisions is coming down (seasonally normal) the ratio is still quite bullish.

Scorecard & Earnings Surprise
•    Season almost over, 493, or 98.6% of reports in
•    Data presented reflects only firms that have reported so far
•    Reports so far extremely positive relative to expectations
•    Earnings Surprise Ratio (#beat/#miss) at 5.28
•    Perfect: Conglomerates, 8 positive surprises, no disappointments. Business Services 7 and 0
•    Almost perfect: Medical with a ratio of 35 to 1, Industrials 20:1
•    Median Earnings Surprise 7.14%, very strong reading
•    Year-over-year Earnings Growth Ratio (# Positive Growth/# Negative Growth) at 0.81
•    Massive positive surprises in cyclical Construction, Industrial and Discretionary sectors

In evaluating the data presented here, keep the percent reported in mind, for some sectors the sample size is extremely small. The move to the 16 Zacks sectors means that even when all reports are in, some of the sectors will still have relatively few firms in them. For firms with only a few reports in, the median surprise will be very volatile as new firms are added to the sample.

Overall, two small sectors, Conglomerates and Business Services, appear to have the most impressive performance so far this quarter on the surprise front. Among the larger sectors, strong arguments could be made for Staples having the best surprise profile, although Industrials are also in contention.

Scorecard & Earnings Surprise
Income Surprises	Yr/Yr Growth	% Reported	Surprise Median	EPS Surp Pos	EPS Surp Neg	# Grow Pos	# Grow Neg
Conglomerates	-21.64%	100.00%	16.41	8	0	1	8
Industrial Products	-29.20%	95.45%	15.15	20	1	9	12
Consumer Discretionary	-14.07%	100.00%	12.10	22	5	8	22
Construction	76.05%	100.00%	11.85	6	4	5	6
Business Service	6.73%	88.89%	11.80	7	0	2	6
Consumer Staples	2.39%	97.73%	10.20	39	4	30	13
Computer and Tech	-10.20%	96.39%	7.69	56	7	32	48
Aerospace	-59.63%	100.00%	6.74	8	2	4	6
Basic Materials	-47.72%	100.00%	6.73	14	4	4	16
Retail/Wholesale	3.02%	97.83%	5.94	37	5	25	20
Utilities	5.56%	100.00%	5.63	27	8	23	14
Medical	3.62%	100.00%	5.63	36	1	34	9
Finance	391.46%	100.00%	5.41	56	16	38	40
Oils and Energy	-62.90%	100.00%	4.84	29	10	2	39
Transportation	-36.21%	100.00%	3.09	7	2	1	9
Auto	178.53%	100.00%	1.54	3	2	2	4
S&P	-10.76%	98.60%	7.14	375	71	220	272

Sales Surprises
•    Sales Surprise Ratio at 1.45
•    Staples missing on Sales even as they beat on earnings
•    Tech looks terrific, 3.26 sales surprise ratio
•    Sales Growth Ratio at just 0.43
•    Most Tech firms have declining sales, but less of a drop than expected
•    Under 30% of all firms reporting have higher revenues than last year

Sales Surprises
Sales Surprises	Yr/Yr Growth	% Reported	Surprise Median	Sales Surp Pos	Sales Surp Neg	# Grow Pos	# Grow Neg
Computer and Tech	-6.30%	96.39%	2.37	62	19	18	63
Finance	4.92%	100.00%	1.28	32	11	35	7
Medical	22.49%	100.00%	1.23	33	19	33	44
Auto	-11.31%	100.00%	1.08	6	0	0	6
Consumer Discretionary	-10.07%	100.00%	0.92	21	9	7	23
Business Service	-6.73%	88.89%	0.84	5	3	3	5
Retail/Wholesale	1.27%	97.83%	0.66	31	14	24	21
Conglomerates	-40.57%	100.00%	0.46	23	18	3	38
Oils and Energy	-16.29%	100.00%	0.45	5	3	1	8
Basic Materials	-28.79%	100.00%	0.25	11	9	1	19
Industrial Products	-19.57%	95.45%	0.03	11	10	1	20
Consumer Staples	-6.47%	97.73%	-0.12	18	24	11	32
Transportation	-19.93%	100.00%	-0.36	3	7	0	10
Construction	-27.47%	100.00%	-1.35	4	7	0	11
Aerospace	4.64%	100.00%	-1.73	3	7	7	3
Utilities	-18.59%	100.00%	-12.59	8	30	3	35
S&P	-10.79%	98.60%	0.53	276	190	147	345

Reported Quarterly Growth: Total Net Income
•    Massive 391.5% growth in Financials due to low year-ago base, earnings up 3.1% from 2Q09
•    Total Net Income for S&P 500 reported was 10.8% below a year ago, 10.7% above what they earned in 2Q09
•    Going into the quarter, a decline of 23% was forecast for total year-over-year earnings
•    Positive yr/yr growth for 8 sectors, negative for 8 -- Energy, Aerospace and Materials lag
•    Materials down hard year over year in second and third quarters, but expects huge rebound in the 4Q
•    Total net earnings in 4Q expected to be more than double year-ago earnings, mostly due to Finance turnaround, but sequentially total earnings expected to decline 4.1%

Reported Quarterly Growth: Total Net Income
Income Growth	Sequential Q4/Q3 E	Sequential Q3/Q2 A	Year over Year 3Q 09 A	Year over Year 4Q 09 E	Year over Year 2Q 09 A
Finance	-32.87%	3.05%	391.46%	- to +	-4.11%
Basic Materials	-19.02%	50.30%	-47.72%	481.81%	-69.62%
Consumer Staples	-12.03%	9.84%	2.39%	120.54%	-0.02%
Construction	-9.10%	-24.52%	76.05%	69.70%	44.84%
Computer and Tech	15.02%	13.88%	-10.20%	18.22%	-20.30%
Retail/Wholesale	25.46%	-6.10%	3.02%	14.78%	-4.86%
Aerospace	148.45%	-60.94%	-59.63%	4.56%	-1.53%
Consumer Discretionary	-0.35%	24.55%	-14.07%	2.90%	-18.18%
Business Service	-14.02%	12.48%	6.73%	2.22%	-1.93%
Utilities	-38.02%	46.82%	5.56%	-1.59%	-2.02%
Medical	-7.99%	5.10%	3.62%	-4.63%	1.71%
Auto	-25.67%	435.49%	- to +	-5.25%	-264.23%
Conglomerates	-12.99%	-1.66%	-21.64%	-8.97%	-29.50%
Industrial Products	-24.85%	7.35%	-29.20%	-27.44%	-41.62%
Oils and Energy	6.36%	26.05%	-62.90%	-28.26%	-67.13%
Transportation	2.73%	11.58%	-36.21%	-30.07%	-35.44%
S&P	-4.10%	10.66%	-10.76%	119.78%	-25.29%

Reported Quarterly Growth: Total Revenues
•    Total S&P 500 Revenues down 10.9% year over year, up 3.43% from 2Q09
•    Year-over-year revenue expected to turn positive in 4Q with 1.50% increase
•    Energy, Autos see large yr/yr declines but the biggest sequential increases
•    Finance clear yr/yr winner, Medical, Aerospace up modestly
•    Four sectors posting positive yr/yr revenue growth, 12 sectors negative
•    Sequentially, only Staples and Conglomerates see minor declines

Reported Quarterly Growth: Total Revenues
Sales Growth	Sequential Q4/Q3 E	Sequential Q3/Q2 A	Year over Year 3Q 09 A	Year over Year 4Q 09 E	Year over Year 2Q 09 A
Finance	-15.51%	2.40%	22.49%	23.54%	4.04%
Aerospace	6.77%	-2.14%	4.64%	12.68%	2.18%
Medical	4.52%	0.83%	4.92%	8.85%	2.88%
Utilities	12.42%	10.93%	-18.59%	6.56%	-14.02%
Retail/Wholesale	9.56%	0.48%	1.27%	4.43%	-0.78%
Computer and Tech	5.60%	3.91%	-6.30%	3.07%	-9.21%
Auto	-2.63%	11.74%	-11.31%	0.99%	-30.07%
Busines Service	-1.39%	3.00%	-6.73%	-3.42%	-10.84%
Basica Materials	-0.04%	5.31%	-28.79%	-3.45%	-34.50%
Consumer Discretionary	4.57%	7.28%	-10.07%	-5.18%	-14.18%
Consumer Staples	-4.44%	0.22%	-6.47%	-5.28%	-7.91%
Conglomerates	4.72%	-0.78%	-16.29%	-9.25%	-17.47%
Oils and Energy	-4.76%	11.15%	-40.57%	-9.51%	-45.26%
Transportation	2.98%	4.63%	-19.93%	-10.61%	-21.46%
Industrial Products	-1.46%	0.39%	-19.57%	-12.58%	-22.36%
Construction	-6.65%	3.39%	-27.47%	-21.41%	-31.24%
S&P	2.68%	3.55%	-10.79%	1.75%	-15.00%

Annual Total Net Income Growth
•    Total S&P 500 Net Income in 2009 expected to be 4.6% below 2008 levels
•    Total earnings for the S&P 500 expected to jump 23.5% in 2010, 20.0% further in 2011
•    Total earnings in 2010 to still be 8.9% below 2007 levels
•    Data for 2011 is still thin, so take with a grain of salt
•    Staples, Medical and Business Service only sectors to see positive growth for 2009, although Finance and Autos moving from a loss to a profit. Construction to see much smaller losses in 2009, move to profit in 2010

Annual Total Net Income Growth
EPS Growth	2008	2009	2010	2011
Auto	+ to -	- to +	1782.51%	88.00%
Basic Materials	-12.33%	-62.05%	91.69%	24.49%
Finance	+ to -	- to +	54.99%	50.64%
Oils and Energy	20.42%	-56.41%	44.61%	26.17%
Transportation	3.72%	-32.00%	22.86%	19.92%
Industrial Products	7.48%	-37.08%	21.60%	18.02%
Aerospace	13.31%	-16.76%	19.86%	6.73%
Computer and Tech	9.83%	-4.84%	19.13%	11.45%
Business Service	14.28%	4.46%	14.37%	20.59%
Consumer Staples	-2.55%	1.47%	12.16%	8.46%
Consumer Discretionary	6.92%	-9.06%	11.66%	14.56%
Retail/Wholesale	7.01%	-3.05%	11.63%	13.86%
Utilities	5.83%	-0.77%	9.75%	9.84%
Medical	9.16%	1.96%	9.01%	9.20%
Conglomerates	-10.96%	-33.49%	0.68%	21.36%
Construction	+ to -	- to -	- to +	75.08%
S&P	-22.72%	-4.56%	23.46%	20.00%

Annual Total Revenue Growth
•    Total S&P 500 Revenue in 2009 expected to be 9.6% below 2008 levels
•    Total revenues for the S&P 500 expected to rise 7.1% in 2010
•    Only 4 sectors to post positive revenue growth in 09, all expected to be positive in 2010
•    For 2009, revenues fall more than earnings; for 2010, earnings rise faster than sales -- both mean big margin expansion
•    Energy, Autos, Materials and Construction see biggest revenue declines in 2009, but will see double digit increases in 2010

Annual Total Revenue Growth
Sales Growth	2008	2009	2010
Oils and Energy	24.34%	-36.55%	20.75%
Basic Materials	11.50%	-25.26%	12.43%
Utilities	11.81%	-5.53%	11.04%
Construction	-25.81%	-23.23%	10.82%
Medical	7.73%	5.19%	8.32%
Transportation	8.09%	-16.27%	7.01%
Industrial Products	10.76%	-16.45%	6.07%
Computer and Tech	6.60%	-3.48%	5.98%
Retail/Wholesale	6.20%	4.02%	5.38%
Auto	-8.23%	-25.24%	5.21%
Consumer Staples	1.74%	-8.90%	4.84%
Busines Service	9.14%	-9.77%	3.96%
Consumer Discretionary	5.22%	-9.24%	3.69%
Aerospace	2.26%	6.49%	1.90%
Finance	-22.57%	4.89%	1.20%
Conglomerates	6.32%	-14.10%	0.13%
S&P	4.21%	-9.61%	7.06%

Revisions: Earnings

The Zacks Revisions Ratio: 2009
•    Revisions ratio for full S&P 500 down to 2.42, from 3.00 2 weeks ago
•    Positive surprises translating to estimate increases for 2009
•    Five sectors seem more than four estimate increases for each cut
•    Analysts cutting estimates for Aerospace and Construction by more than 2:1
•    Transports and Staples lead, Retail, Medical and Tech also strong
•    Ratio of firms with rising to falling mean estimates falls to 1.89 from 3.82
•    Total number of revisions (4 week total) down to 1,783 from 4,388 last week (-59.4%)
•    Increases down to 1,262 from 3,291 (-61.7%), cuts down to 521 from 1,097 (-52.5%)
•    Total Revisions activity past peak for this earnings season, will fall sharply over next few weeks

The immediate effects of the much-better-than-expected earnings for the third quarter are starting to fade as the estimates roll off the four-week moving totals. However, revisions activity remains quite strongly positive for both this year and next.

The broad increases in earnings estimates seems to reflect a much better short-term outlook for the economy. Note that some of the most cyclical areas such as Transportation, Retailers and Autos are seeing a large preponderance of upward over downward earnings revisions, and that most of the firms in those sectors are seeing their consensus estimates increase.

On the other hand, the defensive Staples and Medical sectors have very high revisions ratio of 8.25 and 4.41, respectively, so it’s not just the cyclicals. Then again, given the great performance by the Staples on the surprise front, a strong estimate revisions performance is not surprising.

The Zacks Revisions Ratio: 2009
Sector	%Ch Curr Fiscal Yr Est - 4 wks	# Firms Up	# Firms Down	# Ests Up	# Ests Down	Revisions Ratio	Firms up/down
Transportation	0.35	9	1	15	1	15.00	9.00
Consumer Staples	0.85	30	7	99	12	8.25	4.29
Retail/Wholesale	2.5	38	7	318	55	5.78	5.43
Medical	0.84	27	9	75	17	4.41	3.00
Computer and Tech	3.38	43	17	293	68	4.31	2.53
Auto	8.46	3	2	11	3	3.67	1.50
Business Service	-0.12	4	2	5	2	2.50	2.00
Consumer Discretionary	0.71	13	9	85	40	2.13	1.44
Conglomerates	3.85	3	5	2	1	2.00	0.60
Basic Materials	-0.67	9	8	21	14	1.50	1.13
Finance	0.15	43	27	130	90	1.44	1.59
Utilities	2.54	18	17	48	39	1.23	1.06
Industrial Products	3.17	10	8	37	32	1.16	1.25
Oils and Energy	-1.05	21	20	108	111	0.97	1.05
Construction	-6.37	4	5	13	31	0.42	0.80
Aerospace	-0.12	4	4	2	5	0.40	1.00
S&P	1.11	279	148	1262	521	2.42	1.89

Revisions: Earnings

The Zacks Revisions Ratio: 2010
•    Revisions ratio for full S&P 500 edges down to 1.77, from 1.98
•    Positive surprises translating to estimate increases for 2010, as well as 2009
•    Eclectic mix of strong sectors, Business Services, Staples lead, followed by Basic Materials
•    Ratio of firms with rising estimate to falling mean estimates at 1.43, up from 2.06 two weeks ago
•    Total number of revisions (4 week total) down to 1.759 from 3,956 (-55.5%)
•    Increases down to 1,124 from 2,630 (-57.3%), cuts down to 635 from 1,326 (-52.1%)

The overall picture for 2010 in terms of revisions is broadly similar to that of 2009. The most notable exception is for the Transports, which were on top for 2009 but at the very bottom for 2010. However in both cases, it is based on very few estimates actually being revised for the sector. The revisions ratios are most useful when they are based on a large number of revisions so take the numbers for the small sectors like Transportation and Business Service with a grain of salt.

Among the larger sectors Staples and Materials were the stars. Among the Staples, the Analysts found Campbell Soup (CPB) to be "mm-mm good," nobody didn’t like Sara Lee (SLE) and even with a name like Smucker they liked J.M Smucker (SJM). The analysts also liked the smell of International Flavors and Fragrances (IFF).

The Zacks Revisions Ratio: 2010
Sector	%Ch Next Fiscal Yr Est - 4 wks	# Firms Up	# Firms Down	# Ests Up	# Ests Down	Revisions Ratio	Firms up/down
Business Service	-0.26	3	3	8	0	NM	1.00
Consumer Staples	0.81	30	8	85	15	5.67	3.75
Basic Materials	-0.87	14	3	30	7	4.29	4.67
Conglomerates	0.36	7	1	8	2	4.00	7.00
Retail/Wholesale	2.11	35	9	269	76	3.54	3.89
Computer and Tech	1.24	36	21	204	84	2.43	1.71
Auto	5.35	2	2	11	5	2.20	1.00
Consumer Discretionary	-0.39	13	10	70	35	2.00	1.30
Medical	0.59	21	17	84	45	1.87	1.24
Oils and Energy	0.02	23	18	136	118	1.15	1.28
Utilities	-0.67	14	20	53	56	0.95	0.70
Finance	-0.80	30	39	119	131	0.91	0.77
Industrial Products	-0.27	8	7	23	26	0.88	1.14
Construction	1.93	5	4	12	15	0.80	1.25
Aerospace	0.23	5	4	6	9	0.67	1.25
Transportation	-0.13	2	7	6	11	0.55	0.29
S&P	0.38	248	173	1124	635	1.77	1.43

Total Income and Share
•    S&P500 expected to earn $577.6 billion in 2008, $713.1 billion in 2010
•    Excluding Financials, total net income expected to be down 18.9% in 2009
•    Energy Share of total earnings plunges to 10.8% in 2009 from 23.8% in 2008
•    Finance share of total earnings moves from deficit in 2008 to 11.8% in 2009, 14.7% in 2010
•    Medical share of total earnings far exceeds market cap share (index weight)
•    Three sectors, Financial, Energy and Tech to account for 64.6% of all incremental earnings in 2010 over 2009, although they account for just 48.3% of total Market Cap

Total Income and Share
Sector	Total Net Income $ 2008	Total Net Income $ 2009	Total Net Income $ 2010	% Total S&P Earn 2008	% Total S&P Earn 2009	% Total S&P Earn 2010	% Total S&P Mkt Cap
Computer and Tech	$126,132	$120,029	$142,986	20.84%	20.78%	20.05%	22.11%
Finance	($24,742)	$66,769	$103,483	-4.09%	11.56%	14.51%	14.40%
Medical	$87,820	$89,543	$97,612	14.51%	15.50%	13.69%	11.16%
Oils and Energy	$143,448	$62,533	$90,427	23.70%	10.83%	12.68%	11.34%
Consumer Staples	$54,617	$55,420	$62,161	9.03%	9.59%	8.72%	8.63%
Retail/Wholesale	$56,396	$54,673	$61,033	9.32%	9.47%	8.56%	9.08%
Consumer Discretionary	$34,462	$31,342	$34,995	5.69%	5.43%	4.91%	5.17%
Utilities	$30,503	$29,610	$31,753	5.04%	5.13%	4.45%	3.82%
Conglomerates	$32,846	$21,846	$21,995	5.43%	3.78%	3.08%	3.67%
Basic Materials	$21,512	$8,165	$15,651	3.55%	1.41%	2.19%	2.54%
Aerospace	$15,547	$12,941	$15,512	2.57%	2.24%	2.18%	1.76%
Industrial Products	$18,601	$11,704	$14,232	3.07%	2.03%	2.00%	2.29%
Transportation	$13,973	$9,501	$11,673	2.31%	1.64%	1.64%	2.14%
Auto	($6,048)	$223	$4,196	-1.00%	0.04%	0.59%	0.77%
Business Service	$3,197	$3,340	$3,820	0.53%	0.58%	0.54%	0.61%
Construction	($3,097)	($38)	$1,562	-0.51%	-0.01%	0.22%	0.50%
S&P 500	$605,168	$577,601	$713,091	100.00%	100.00%	100.00%	100.00%

P/E Ratios
•    S&P 500 trading at 17.6x 2009 earnings, or an earnings yield of 5.68%
•    Trading at 14.2x 2010, 11.9x 2011 earnings, or earnings yields of 7.04% and 8.40, respectively
•    Earnings Yields attractive relative to 10-year T-Note rate of 3.36%
•    Medical has lowest P/E based on 2009 earnings. Aerospace cheapest on 2010 earnings
•    Materials high 2009 P/E to fall dramatically in 2010

P/E Ratios
P/E	2008	2009	2010	2011
Construction	NM	NM	32.2	18.4
Auto	NM	352	18.7	9.9
Transportation	15.5	22.9	18.6	15.5
Conglomerates	11.3	17.1	16.9	14
Basic Materials	12	31.6	16.5	13.2
Industrial Products	12.5	19.9	16.3	13.8
Business Service	19.4	18.6	16.3	13.5
Computer and Tech	17.8	18.7	15.7	14.1
Retail/Wholesale	16.3	16.8	15.1	13.3
Consumer Discretionary	15.2	16.8	15	13.1
Finance	NM	21.9	14.1	9.4
Consumer Staples	16	15.8	14.1	13
Oils and Energy	8	18.4	12.7	10.1
Utilities	12.7	13.1	12.2	11.4
Medical	12.9	12.6	11.6	10.6
Aerospace	11.5	13.8	11.5	10.8
S&P 500	16.8	17.6	14.2	11.9

Data in this report, unless stated otherwise, is through the close on Friday 12/04/2009.

Dirk van Dijk, CFA is the Chief Equity Strategist for Zacks.com. With more than 25 years investment experience he has become a popular commentator appearing in the Wall Street Journal and on CNBC. Dirk is also the Editor in charge of the market-beating Zacks Strategic Investor service.Zacks Investment Research

JC Penney Sales Tow Guidance – Analyst Blog

Zacks Market Commentaries — Fri, 04 Dec 2009 21:05:40 +0000

JC Penney Company Inc. (JCP) recently reported sales results. The company’s comparable store sales for the month of November dipped 5.9% compared to an 11.9% decline in the same month last year. Comps were well within the company’s guidance range of a 4% to 7% decline predicted earlier.

Year-to-date, comps have slid 7.0% compared to a fall of 7.9% posted in the same period last year. JC Penney expects comparable store sales to dip in the range of 3% to 6% for the five-week period ending Jan. 2, 2010 compared to an 8.1% decline in the same period last year.

By categories, women’s apparel, accessories and shoes registered an improvement in demand, as the company offered products at compelling prices. However, sales at the children’s division remained sluggish. JC Penney also notified that robust sales for the Black Friday weekend offset slightly lower sales experienced in the middle of the month.

Internet sales through jcp.com rose in the high-teens after the Thanksgiving period, but results of those will be reflected in the December sales results.

Total sales for November declined 5.2% to $1,721 million from $1,815 million reported in the same month last year. Year-to-date sales were down 5.6% to $13,727 million from $14,541 million reported in the same period last year.

JC Penney currently operates 1,109 department stores in the United States and Puerto Rico. The company also operates the largest apparel and home furnishing site, jcp.com, and the largest general merchandise catalog business.
Read the full analyst report on "JCP"
Zacks Investment Research

EIA Reports Surprise Gas Build – Analyst Blog

Zacks Market Commentaries — Fri, 04 Dec 2009 18:19:54 +0000

In its weekly release yesterday, the Energy Information Administration (EIA) reported a surprise 2 billion cubic feet (Bcf) addition to natural gas stockpiles for the week ended November 27, far off analyst expectations that hoped for inventories to remain flat, or possibly even show a drawdown.

This takes the current storage level to a new record high of 3.84 trillion cubic feet (Tcf), which is up 14.0% from last year's level and 14.5% above the five-year range (as clear from the nearby chart from the EIA). Current stocks are 470 Bcf above last year’s level and 487 Bcf above the five-year average. The inventory addition was in sharp contrast to the five-year-average net withdrawal of 43 Bcf and last year's drawdown of 64 Bcf.

The relentless increase in gas storage levels has meant that even with the storage injection season over, stockpiles continue to grow, a rare event for this time of year. In fact, the latest net injection was the fourth one during the month of November, marking the first time a net injection occurred for each week of November since 2001. At this pace, inventories are well on their way to surpass the maximum capacity of 3.89 Tcf.

Despite the bearish EIA report, natural gas prices (referring to Henry Hub spot prices) have increased dramatically since the last 10 days or so, currently settling at around $4.70 per million Btu (MMBtu). The price rise followed significant decreases that occurred during the previous week (immediately before the Thanksgiving holiday), reflected the usual decrease in demand that generally occurs during a holiday week. But prices are still way off the July 2008 highs, when they reached over $13 per MMBtu, before trending down to a 7-year-low level of sub-$2 per MMBtu in September 2009.

Continued strong domestic production (from a number of unconventional natural gas fields) and recessionary consumption (due to the economic downturn), particularly in the industrial sector, are at the core of the commodity's current woes. Stockpiles have gone on to create new highs this year as the economic downturn eats into demand and natural-gas producers continued to unlock new supplies from onshore natural-gas fields known as shales. To add to this, milder winter forecasts could further depress demand for the fuel to heat homes and businesses.

Weighed down by these factors, the January natural gas contract continued its fall, down to around $4.50 per MMBtu on the New York Mercantile Exchange (NYMEX). Last week, the December 2009 contract expired below $5.00 per MMBtu, just the second such occasion (during the heating season) since 2003. With U.S. natural gas fundamentals remaining weak (storage levels 14.5% above their five-year average), we do not see any sustainable commodity price gains in the near future. This translates into limited upside for natural gas-weighted companies and related support plays.

As a result, we remain cautious on natural gas-focused E&P players such as XTO Energy (XTO), Chesapeake Energy (CHK), EOG Resources (EOG), Devon Energy Corp. (DVN), EnCana Corp. (ECA) and Anadarko Petroleum Corp. (APC). We currently rate shares of these companies as Neutral.

Within the small- and mid-cap natural gas E&P space, we prefer to own Cabot Oil & Gas Corp. (COG), reflecting the company’s impressive exposure to the high-return Marcellus and Haynesville Shale plays, as well as its above-average production growth.

We also maintain our Neutral recommendations for land drillers such as Nabors Industries (NBR), Patterson-UTI Energy (PTEN) and Helmerich & Payne, Inc. (HP), as well as natural gas-centric service providers such as BJ Services (BJS), given the extent of excess capacity in the sector that is expected to weigh on dayrates and margins well into next year.

Oil majors like BP Plc (BP) that have significant natural gas operations are also expected to remain under pressure until pricing and demand improve further.
Read the full analyst report on "XTO"
Read the full analyst report on "CHK"
Read the full analyst report on "EOG"
Read the full analyst report on "DVN"
Read the full analyst report on "ECA"
Read the full analyst report on "APC"
Read the full analyst report on "COG"
Read the full analyst report on "NBR"
Read the full analyst report on "PTEN"
Read the full analyst report on "HP"
Read the full analyst report on "BJS"
Read the full analyst report on "BP"
Zacks Investment Research

Update – Stevenson High School’s Economics Club

Trading School — Fri, 04 Dec 2009 14:32:08 +0000

Today I received an email from the teacher who runs the economics club at Stevenson High School in Lincolnshire, Illinois. He sent a great message to inform me of the progress his 6 teams have made in their participation with the “The Stock Market Game” (a program of the SIFMA). I wanted to share this message with [...]

Stock Market News for December 01, 2009 – Market News

Zacks Market Commentaries — Tue, 01 Dec 2009 13:53:34 +0000

U.S. stocks turned higher at the end of a tumultuous session Monday as investors grew confident that Dubai’s debt problems would not escalate into a major crisis. Uninspiring retail sales during the Thanksgiving weekend and a weak dollar also played on sentiments as stocks managed to push higher, led by financials.

Diminishing fears about Dubai’s credit crisis sent overseas markets higher today. This morning’s stock futures show US stocks will follow their overseas counterparts. Ahead of the opening bell, Dow Jones industrial average futures are up 68 points, or 0.7%, at 10,402. Standard & Poor's 500 index futures are up 8.20, or 0.8%, at 1,103.00, while Nasdaq 100 index futures are up 17 points, or 1%, to 1,784.50.

On Monday, the 30-share Dow Jones industrial average added 35 points, or 0.3%, to 10,344.84. The broad Standard & Poor’s 500 index gained 4 points, or 0.4%, to 1,095.63. The tech-heavy NASDAQ composite rose 6 points, or 0.3%, to 2,144.60. Market breadth was negative. On the New York Stock Exchange, advancing issues beat those that declined in price by a four-to-three margin on volume of 1.35 billion shares.

Yesterday's rally was led by financials (+2.6%), as six of the S&P500's ten industry groups recorded gains. On the DJIA too gains were led by financial components, with JP Morgan (NYSE:JPM) rising 2.8%, Bank of America (NYSE:BAC) up 2.5%, American Express (NYSE:AXP) adding 2.4%, Travelers (NYSE:TRV) advancing 1.4%.

Treasuries were mixed, with the yield on the 10-year remaining steady at 3.20%, unchanged from Friday. Gold prices went past a technical barrier, hitting a record price above $1,200 per ounce. Rising risk appetites globally pushed the greenback lower.

Zacks Investment Research

The collapse of finance

Prieur du Plessis — Tue, 01 Dec 2009 08:00:03 +0000

"Throughout the world, investors are getting edgy ... they're wondering how it is possible to add so much cash and credit to the economy without sending prices to the moon. We'll tell you how it's possible: there's a depression. In a depression, the flow of cash and credit coagulates. Even if you increase the cash in bank vaults, it doesn't circulate into the real economy. Banks don't lend. People don't borrow. Consumers don't consume," said Bill Bonner in this guest post.

Undervalued Stocks: These Three Stocks Are on “Blue Plate Special”

Investment U — Mon, 30 Nov 2009 19:04:59 +0000

Undervalued Stocks: These Three Stocks Are on “Blue Plate Special” by Marc Lichtenfeld, Healthcare Expert Monday, November 30, 2009: Issue #1147 With Thanksgiving done for another year, let’s bounce right back to business with Part 2 of my mini-series on overvalued and undervalued stocks. In my last column, I talked about stocks whose current valuations exceed [...]

The Good, the Bad and the Ugly in Real TimeThe Good, the Bad and the Ugly in Real Time

Frank Holmes — Mon, 30 Nov 2009 06:00:00 +0000

Anyone who has visited New York has probably seen The National Debt Clock, a digital readout of how much the federal government owes its creditors. The speed at which that number grows is daunting. A more comprehensive monitor can be found online at USDebtClock.org. Not only do you get the total national debt of $12 trillion (and rising), you also get a raft of other key economic trend data for the country and its citizens based on information gathered from reputable sources that include the Census Bureau, Treasury Department, Federal Reserve and the Congressional Budget Office. On the day before Thanksgiving, I checked this web site in the morning and then again on Friday morning, and Irsquo;d like to share a few observations about what happened during these two days. The Fed printed up more than $10 billion in new money over that period, or more than $200 million per hour. Any wonder why gold remains an attractive asset class and our overseas trading partners are wary of the dollar? The national debt grew by nearly the same amount, with each taxpayerrsquo;s share of that burden going up $65 to $110,781. The federal budget deficit rose by $9 billion, and total unfunded liabilities shot up almost $30 billion to $106.3 trillion, or $345,088 per citizen. Wersquo;ve commented in the past on how federal deficits have historically been positive for gold and especially gold equities. Looking at the largest federal budget outlays: More than $5 billion went out the door for Medicare/Medicaid, $4 billion in Social Security benefits, $3.6 billion for national defense and the war efforts in Iraq and Afghanistan, and more than $2 billion in interest payments on the national debt. One worthwhile feature of the USDebtClock.org is that it tells a fuller story by making room for good economic news. Gross domestic product in the United States grew by nearly $200 billion, or $1,600 per worker, and about $40 billion in value was added to the total national assets during the two days. And we also see evidence that, while the federal government continues to strap on heaps more debt, the citizenry is going in the other direction. About $4 billion in private debt was paid down ndash; most of that was in mortgages, reflecting the prolonged weakness in housing, but more than $1 billion in personal debt and $700 million in credit card debt went away. Personal savings climbed by more than $1 billion over the two days as Main Street continues deleveraging after years of free spending. You can get to the U.S. Debt Clock by clicking on the image at the top of this commentary. I encourage you to pay a visit ndash; there arenrsquo;t many places where you can get so much useful and important economic information at a single glance. By clicking the link, you will be directed to USDebtClock.org. U.S. Global Investors does not endorse all information supplied by this website and is not responsible for its content. All opinions expressed and data provided are subject to change without notice. Some of these opinions may not be appropriate to every investor. #09-827

Retail Industry – Industry Outlook

Zacks Market Commentaries — Fri, 27 Nov 2009 05:00:00 +0000

Upcoming Holiday Shopping Season

With a probable end in sight to a prolonged recession, American consumers are somewhat upbeat about the upcoming holiday shopping season. However, customers remain skeptical at the same time and intend to spend less, compared to previous years before the start of the recession.

According to a study by A.C. Nielsen, approximately 42% of American consumers plan to spend less this holiday shopping season, representing a 7% year-over-year rise in those who intend to spend less.

U.S. customers have undergone a fundamental change in how they spend their money. They are primarily focusing on value-for-money items throughout the holiday shopping season, especially traditional and essential gifts that are popular. As a result, traditional items such as toys, electronic goods and clothing are at the top of holiday shopping lists, and most consumers
intend to spend more on gift cards.

Consequently, it will be more of a challenge for the retail business to attract customers to their outlets and online stores. In view of lower discretionary income, consumers are currently more selective in their purchases. Trends are also showing a progressive shift in consumer research patterns before holiday shopping, and it is observed that more value shoppers are browsing and comparing the products on the Internet. Consumers are also resorting to social media to search for holiday shopping deals and coupons.

Therefore, online retailers that offer value in the retail business, including discount stores and savings clubs, will be more attractive to shoppers as they provide budget holiday shopping gifts, as well as flexible delivery options, shipping deals and gift-wrapping/eco-packaging services.

Most retail business also looks to be pushing up sales before ‘Black Friday,’ the day after the Thanksgiving Day holiday that marks the traditional kick-off of the holiday shopping season. Market research firm IBISWorld expects total retail business sales over Black Friday weekend to rise 2.8 % to $42.9 billion. It expects 76.9 million people to swarm into retail stores on Black Friday alone.

Retail business like The Gap (GPS) started offering discounts of 25%, while Wal-Mart and Target are offering online shoppers free or discounted shipping on most of the items. JC Penney (JCP) is also ramping up its Black Friday promotions.

OPPORTUNITIES

Most of the companies in the apparel, confectionery and cosmetics sector are expected to benefit from the holiday shopping season.

Leading apparel company Gap Inc. (GPS) recently reported strong quarterly earnings, boosted by sales at its low-price Old Navy chain. Gap is now focusing more on improving its business model by striking the right balance between its cost structure and merchandise by better aligning inventory with sales trends. The company is upbeat about its performance in the upcoming holiday shopping season, as management is focused on gaining market share by presenting a strong value proposition to customers across its brands.

The other leading retail business, Limited Brands (LTD) reported almost a 50% year-over-year increase in earnings during the fiscal 2009 third quarter. The company is confident about its strong performance during the holiday shopping season and has lined up holiday themes focused on offering core products and seasonal gifts.

The Hershey Company (HSY) also posted strong profits during the recently reported quarter. The company is making the required consumer investments for the upcoming holiday shopping season.

WEAKNESSES

There are certain companies that are still facing the brunt of the recession and reporting losses in the retail business.

Home Depot (HD) witnessed severe stress from declining retail business market fundamentals during the quarter, with challenging macroeconomic environment and weakness in the U.S. housing sector. Total sales decreased 8.0% year-over-year to $16.4 billion, while overall same-store sales decreased 6.9%.

Similarly, Abercrombie & Fitch Co. (ANF) reported relatively weak third quarter 2009 results with a net income of $38.8 million or 44 cents per share compared to a net income of $63.9 million or 72 cents per share in the year-earlier quarter. The year-over-year decline in results was primarily due to the continued economic downturn plaguing the retail business industry that has resulted in reduced consumer discretionary income and a cut in non-essential spending.

Sears Holdings (SHLD) reported total revenues of $10.2 billion during fiscal 2009 third quarter compared to $10.7 billion in the year-earlier quarter. The decrease in year-over-year retail business sales was primarily due to a decline in comparable store sales partially offset by the effect of foreign currency translation. Domestic comparable store sales decreased 2.3% during the quarter, with the Sears Domestic division accounting for a 4.6% decrease partially offset by a 0.5% increase in the Kmart division.

The Sears Domestic division was negatively affected by the decline in the housing industry coupled with a decrease in home electronics products. Although Sears managed to reduce its quarterly loss year-over-year, it reported a second consecutive quarterly loss for its retail business during the fiscal 2009 third quarter.Zacks Investment Research

The Post-Thanksgiving Effect: Big Gains in the Week Ahead?

Investment U — Thu, 26 Nov 2009 14:04:28 +0000

The Post-Thanksgiving Effect: Big Gains in the Week Ahead? by Robert Williams, Publisher Thursday, November 26, 2009 First off, the Investment U team would like to wish you a very happy Thanksgiving. I’m fortunate enough to be spending the day with my sisters in Los Angeles. And I’m hopeful that you’re with family and friends, [...]

Happy Thanksgiving!

Prieur du Plessis — Thu, 26 Nov 2009 10:22:50 +0000

Thanksgiving is upon us and we have much to be grateful for this year. While it has been challenging at times it has also been rich in an abundance of things for which we can be thankful. Talking of which, click through for the "Thanksgiving performance table" for the S&P 500.

Gold ETF makes it 9 up-days in a row

Prieur du Plessis — Thu, 26 Nov 2009 10:21:29 +0000

The up-trend in gold is off course well established with the price having closed higher at year end for eight consecutive years. And unless bullion drops to below $979.85, 2009 will make it nine in a row. While not doubting the primary trend, one should be cognizant of gold (as measured by GLD) having gone up for 16 of the last 18 days. Also, the price has now increased for nine consecutive days, matching its longest nine-day rally since inception in November 2004. Read on

Retail Industry – Industry Outlook

Zacks Market Commentaries — Wed, 25 Nov 2009 20:13:03 +0000

Using Put Options: How to Grab Discounts and Instant Money Everyday

Investment U — Wed, 25 Nov 2009 16:20:23 +0000

Using Put Options: How to Grab Discounts and Instant Money Everyday by Lee Lowell, Stock and Commodity Option Specialist Wednesday, November 25, 2009: Issue #1145 Forget Black Friday. The stock market has 3,000 items on sale – and ready to give you cash back… instantly. Over the past few weeks, I’ve discussed how you could have sold [...]

Happy Thanksgiving from the MarketClub Team

Trading School — Wed, 25 Nov 2009 15:00:50 +0000

Happy Thanksgiving from Bob, Brad, Lindsay, and Melissa - all part of the MarketClub team dedicated to helping you achieve your goals. On behalf of the MarketClub Team, we would like to extend a heartfelt ‘thank you’ for entrusting us with your business. .

Stock Market News for November 25, 2009 – Market News

Zacks Market Commentaries — Wed, 25 Nov 2009 14:22:33 +0000

U.S. stocks closed lower Tuesday, paring deeper losses, as economic concerns kept investors on tenterhooks. However, the markets managed to contain losses as a brighter forecast from the Federal Reserve assured investors about the sustainability of the recovery. Also, a weaker dollar helped shares of commodity-related and industrial companies.

The markets only gathered steam in the afternoon after the Fed released minutes from its latest meeting. While pledging to keep interest rates at record low levels, the Fed policymakers, however, noted record low interest rates could lead to excessive risk-taking in financials markets. Nevertheless, the Fed raised its outlook for economic growth during the second half of this year, but said unemployment levels will remain high. The Fed lowered its unemployment estimates to 9.3%-9.7% in 2010 from 9.5%-9.8%, noting the economy continues to improve.

On Tuesday, the Dow Jones industrial average fell 17.24 points, or 0.2%, to 10,433.71. The Standard & Poor’s 500-stock index fell 0.59 points, or 0.1%, to 1,105.65, and the Nasdaq composite index fell 6.83 points, or 0.3%, to 2,169.18. The CBOE Vix index dropped to its lowest in fourteen months, off 3.3% to 20.47. On the NYSE volume dropped to 0.952 billion shares, with declining issues ahead of advancing shares by an eight to seven margin.

Tuesday saw volatile and a low volume trading, a trend that is likely to continue through the holiday-shortened week. All financial markets are closed Thursday for Thanksgiving.

On Tuesday, healthcare companies helped offset drops in financial and industrial shares. Medtronic Inc. (NYSE:MDT) jumped more than 7% after the medical device maker reported a surprise 59% increase in its quarterly profit and raised its full-year outlook. Shares in the company rose $2.94, or 7.3%, to $43.25.

Among financial companies, JPMorgan Chase (NYSE:JPM) led the declining issues in the Dow average, falling 1.9% to $42.48. Bank of America (NYSE:BAC) fell 1.2% to $16.10, while Morgan Stanley (NYSE:MS) dropped 1.5% to $32.12. Fifth Third Bancorp (NYSE:FITB) fell 1.6% to $10.01.

Safe-haven assets such as Treasuries and gold prices rose. Treasuries performed well after the $42 billion auction in 5-year notes received a strong response. Gold prices hit a fresh record close for the eighth consecutive day, closing up $1.90 at $1165.50 per ounce.

Zacks Investment Research

November 23rd CEOcast Weekly Newsletter

QualityStocks — Mon, 23 Nov 2009 20:51:54 +0000

Companies featured in this edition of the newsletter: ACTC, CUR, CVM, DKAM, ENZ, IMUC, MFGD, NXOI, OMCM, ONEZ, PSID, XSNX Markets continued to carry momentum during the early stages of last week, as the absence of significant economic news led to a continuation of the upward trend characterizing the past few weeks, until an earnings miss [...]

Audit the Fed – Amendment to a $200 billion bill frightens currency traders!

Contrarian Profits — Fri, 20 Nov 2009 12:20:35 +0000

So what was it that spooked the markets… Well… The only thing I can find was the report yesterday about falling Housing Starts that Chris told you about… Did you know that about 14% of US homeowners were either delinquent on their mortgage or in some stage of foreclosure? That is the highest rate since the group started collecting the data in 1972! But there was something else that was announced as the day went on, that I think probably spooked the markets more than anything else… And that is a key House panel approved two amendments to a sweeping financial-overhaul bill that would give federal watchdogs new authority to audit the Federal Reserve, and would establish a fund of as much as $200 billion to help dissolve large, troubled institutions. Rep. Ron Paul (R., Texas) offered the amendment seeking to subject the Fed to audits.

A Recovery Impersonator

Bill Bonner — Wed, 09 Sep 2009 19:06:09 +0000

pThis recovery is wonderful in every way, except the important ones. It is like a shiny new airplane. It has glossy aluminum wings. It has plush seats in the first class section. Trim stewardesses serve drinks. Movies are available on demand in all sections… /p pA majority of those polled by Bloomberg think it’s great; 61% said they thought they economy had taken off and was flying high. Stocks are up. Commodities are up. And here’s another Bloomberg headline: “Global investors give Federal Reserve Chairman Ben S. Bernanke top marks#8230;”/p pThe recovery has won the approval of economists and the public. It has almost everything going for it. It just won’t fly!/p pComes news this morning that the US economy is still on#8230;/p

Techniques used by false prophets and charlatans

Prieur du Plessis — Fri, 04 Sep 2009 08:52:42 +0000

This is a guest contribution by Damien Hoffman, editor-in-chief of the very popular Wall St Cheat Sheet blog. The title speaks for itself - do not miss this one!

Prieur’s readings (August 22, 2009)

Prieur du Plessis — Sat, 22 Aug 2009 06:25:43 +0000

This post provides links to a number of interesting articles I have read over the past few days that you may also enjoy. Please also add the links to any other thought-provoking articles you would like to share to the comments section.

Prime Mortgages Going Sour – Analyst Blog

Dirk Van Dijk — Thu, 20 Aug 2009 19:53:20 +0000

At the end of the second quarter, 4.3% of all residential mortgages were in some part of the foreclosure process, up from 3.85% at the end of the first quarter and 2.75% a year ago. In addition, on a seasonally adjusted basis, 9.24% of all mortgages were delinquent (behind by at least one payment), up from 9.12% at the end of March, and just 6.41% at the end of June 2008.

Both were records since the Mortgage Bankers Association (MBA) started keeping track back in 1972. On a non-seasonally-adjusted basis, the delinquency rate was not quite as bad at 8.86%, but still a record.

That means that 13.16% of all residential mortgages (NSA basis) are in trouble. With about 51 million houses with mortgages in the country, that means 6.71 million bad mortgages out there. With the number of people out of work still rising, the problem is likely to continue to get worse for quite a while.

The chief economist for the MBA expects that foreclosures will not peak until the end of 2010. I suspect he might be a little bit on the optimistic side, but that projection is reasonable. If someone is also in a house where the value of the house is less than the amount of the mortgage, the probability that they will continue to pay the mortgage falls rapidly.

If they are also out of work while they are underwater, then continuing to pay their mortgage is simply not an economically rational thing to do. Far better to simply live rent- and mortgage-free until the sheriff shows up at the door. Given the overwhelming case-load, that can often be well over a year (though it varies greatly by location).

Once upon a time, people liked to think that the mortgage problems were contained to the subprime market. It was just a problem of irresponsible people on the wrong side of the tracks. That is clearly no longer the case.

While as a percentage, subprime mortgages are still much more likely to be delinquent or in foreclosure than are prime mortgages, there are far fewer subprime mortgages than prime mortgages. In absolute numbers, there are far more bad prime mortgages than bad subprime mortgages.

The graph below (from http://www.calculatedriskblog.com/) shows just how bad the loans are going sour on the people who had good credit when they took out the mortgages.

The percentage of prime loans in foreclosure jumped to 3.00% at the end of the second quarter vs. 2.49% at the end of March. The percentage delinquent rose to 6.41% from 6.06% at the end of March.

On a percentage basis, subprime loans continue to be an absolute horror show. At the end of the quarter more than one in four (25.35%) subprime loans were delinquent (up from 24.95% at the end of the first quarter) and 15.05% were somewhere in the foreclosure process, up from 14.34% the quarter before.

Thus, the combined troubled mortgage rate is now over 40% on subprime loans. This is of course bad news for the banks with big mortgage operations like Bank of America (BAC), Wells Fargo (WFC) and PNC Financial (PNC).

Regionally, California, Florida, Arizona and Nevada are still being hit the hardest, but other states are starting to catch up. Those four states had 44 percent of all of the nation’s new foreclosures during the second quarter of this year, down from 46 percent in the first quarter.

Foreclosures are less of a problem in the relatively unpopulated states. Very few people (relatively) are falling behind in North Dakota, Wyoming or Alaska as shown in the second graph (also from http://www.calculatedriskblog.com/).

Florida still has the worst mortgage performance, closely followed only by Nevada. In Florida, 12 percent of mortgages were somewhere in the process of foreclosure -- the highest in the nation -- and another 5 percent were at least 90 days past due as of the end of June. A total of 22.8 percent were delinquent at least one payment or in the process of foreclosure, which is almost twice the national percentage (excluding Florida).

In contrast, the next highest states are Nevada at 21.3 percent, Arizona at 16.3 percent and Michigan at 15.3 percent. California is still a problem by virtue of its sheer size, but on a percentage basis, and combining both levels of the problem, Mississippi and Indiana are now in marginally worse shape than is California.

Some of the delinquencies will get cured, but far from all of them. The farther the house is underwater, the less likely it is to get cured. Many more houses are going to end up in the hands of the banks, which will then dump them onto the market and further depress prices.

Housing is normally the locomotive that pulls the U.S. economy out of recessions. It is hard to see how that locomotive will work up a good head of steam with so many foreclosures blocking the tracks.

The first-time homebuyer credit has helped to clear out some of the existing bank owned properties, but that program will end just after Thanksgiving. Unless the program is renewed, that source of buying is likely to dry up significantly. This could lead to another sharp down-leg for the housing market.

Shifting my metaphor, the economy’s vital signs have stabilized, but that is due to the powerful drugs that the "doctors" (Bernanke and Obama) have been giving it. Those drugs (printing money, super-low short-term interest rates and massive budget deficits) are known to have very serious long-term side effects -- ones that have been known to be fatal (Weimar style hyperinflation) if given in to big doses and for too long.

The doctors had no choice but to give them to the patent, since doing nothing would have also been fatal (we narrowly avoided a second Great Depression), but it is a huge question if the patient will be able to get up and about after he is taken off the meds.
Read the full analyst report on "BAC"
Read the full analyst report on "WFC"
Read the full analyst report on "PNC"
Zacks Investment Research

Shorting Treasuries With Inverse ETFs

ETF Daily News — Thu, 28 May 2009 14:48:34 +0000

Today is a day to give thanks. I know it’s a little early for Thanksgiving, but I’m talking about being thankful to Uncle Sam and the U.S. government for the bountiful opportunity they have given us to make huge loads of money in a relatively short amount of time. I’m talking about shorting U.S. debt [...]

Currencies Bounce Back!

Contrarian Profits — Tue, 19 May 2009 15:00:53 +0000

pRisk Assets soar! German Investor Confidence surprises! High yielders kicking tail#8230; Who#8217;s afraid of the SNB? And Now#8230; Today#8217;s Pfennig!br / OK#8230; Speaking of patience#8230; I think that#8217;s what we#8217;ll all have to possess a lot of going forward with these currencies and stocks#8230; Here#8217;s what I#8217;m talking about#8230; Yesterday morning it looked as though the recent rally in stocks was over, complete, pack up the bags, get on the bus, Gus#8230; And with the trading theme of throwing all risk assets in the same bag and trading them alike that#8217;s been in place since last July, this would seem to be a nail in the coffin of the currency rally we#8217;ve seen going on since March 1st#8230;./p pBut, NOOOOOOOOO! Let me tell#8230;/p

It’s the Economy, Stupid

Bill Bonner — Thu, 08 Jan 2009 18:54:04 +0000

phe economic news continues to bring bad tidings…consumer bankruptcies were up 33% in 2008…The financial crash is causing an economic crash, which will cause a worse financial crash…and around and around we go…Who will spend their savings in #8216;09?…the CBO puts the budget deficit at $1.2 trillion for this year - and that#8217;s not counting stimulus programs…and more!a href="http://www.dailyreckoning.com/Issues/2009/DR010709.html"/a/p p#8220;Psst…we#8217;re breaking out of this joint…Saturday night…pass it on….#8221;/p pYes, dear reader…we#8217;re breaking out… We#8217;re not going to let these prison bars stop us. A whole generation of American investors is being fattened for slaughter…we#8217;re not going to be among them./p pLet#8217;s look at yesterday#8217;s headlines just to see what is going on./p pThe Dow rose 62 points yesterday. Oil held steady at $48. Gold went#8230;/p

Stock Markets: Is This It?

Prieur du Plessis — Wed, 17 Dec 2008 12:20:22 +0000

The US Fed yesterday pulled out all the stops in a frantic effort to save the US economy from collapse and stem the deflationary forces. This post discusses where the Fed’s "betting the ranch" policy leaves the stock market. Please visit my website ...

U.S. Companies “Throw in the Towel” – Pushing Jobless Claims to a 26-Year High

Contrarian Profits — Fri, 12 Dec 2008 14:19:49 +0000

pThe number of Americans filing new claims for jobless benefits rocketed to a 26-year high last week, surpassing already gloomy forecasts, as the U.S. economy sinks deeper into recession./p pInitial applications for jobless benefits climbed by 58,000 to 573,000 in the week ended Dec. 6, upwardly revised from 515,000 the previous week, the U.S. Labor Department reported yesterday (Thursday). The figure a href="http://www.bloomberg.com/apps/news?pid=20601068#38;sid=a9UY0zatFlPs#38;refer=home" target="_blank"strongwas the highest since 1982/strong/a, and far exceeded the median projection of 525,000 put forth by 39 economists surveyed by strongemBloomberg News/em/strong./p pThe increase was due, in part, to a bounce from the week before, which was shorter because it included the Thanksgiving holiday. Government offices were open only four days that week./p pNevertheless, the four-week average, which smooths out fluctuations, stood#8230;/p

Sirius XM at 15 Cents a Share?

Frank Lara — Tue, 09 Dec 2008 19:02:21 +0000

p img src=/files/u1/sirius-15-cents.jpg alt=Sirius XM at 15 Cents title=Sirius XM at 15 Cents width=221 height=151 align=right /Sirius XM (NASDAQ:SIRI) recently hit strong8 Cents/strong a share, today its at strong15 Cents/strong a share. Yes that would be one dime and one nickel in value. emHow did this happen, can it go lower/em? One thing is for sure, Howard must be loving those stock options. /p ppa href=http://thestockmasters.com/sirius-15-cents-a-share-120808.htmlread more/a/p

Congressional Members Hold Stakes in the “Big Three”

Contrarian Profits — Mon, 08 Dec 2008 13:07:13 +0000

pWith the U.S. “Big Three” of General Motors Corp. (a href="http://finance.google.com/finance?q=gm" target="_blank"GM/a), Ford Motor Co. (a href="http://finance.google.com/finance?q=f" target="_blank"F/a), and a href="http://finance.google.com/finance?cid=4090940" target="_blank"Chrysler Corp/a. seeking as much as $34 billion in bailout money, there’s a lot at stake for the American auto industry. There would also be quite a bit at stake for Congress, given the personal stakes a href="http://emac.blogs.foxbusiness.com/2008/12/03/the-congressmen-who-have-invested-in-automakers/" target="_blank"that elected officials own in the automakers/a, strongemFoxBusiness.com/em/strong reports./p pAccording to published reports, 25 members of the U.S. Congress have reported on their financial disclosure forms that they own stock in – or have other capital interests in – the Big Three, based on data compiled from the a href="http://www.opensecrets.org/" target="_blank"Center for Responsive Politics/a, a Washington, D.C., research group that tracks money in U.S. politics. [strongEditor’s Note/strong: strongemFox News/em/strong senior information specialist James Farrell#8230;/p

Fed Looking at Another Rate Cut, While Treasury Has New Plan for Housing

Contrarian Profits — Mon, 08 Dec 2008 13:01:56 +0000

pWith the benchmark Federal Funds rate already down to 1.0%, U.S. Federal Reserve Chairman Ben. S. Bernanke has only so much room for another cut (although many economists are predicting an additional half-percentage-point cut at the Dec.15-16 meeting)./p pThe Fed extended the lives of recently initiated programs (lending facilities for investment firms, for instance) and is exploring additional moves (like Treasury purchases) aimed at reviving the credit markets. Bernanke believes more needs to be done to slow the pace of foreclosures, especially since they jumped another 10% in September./p pMeanwhile, the U.S. Treasury Department is working on a plan to rejuvenate the housing market by slashing mortgage rates to 4.5% on new purchases. Experts say that at some point these stimuli must#8230;/p

eBay (EBAY) To Thrive On American Thrift

Andrew Snyder — Fri, 05 Dec 2008 12:41:11 +0000

pCyber Monday was better for online retailers than most expected. But consumers were only interested in heavily-discounted goods. That#8217;s why strongAndrew Snyder/strong thinks strongeBay /strong(NASDAQ:a href="http://finance.google.com/finance?q=NASDAQ%3AEBAY" target="_blank"EBAY/a) is well placed to turn a profit this Christmas. It not only attracts bargain hunters, but also sellers desperate to raise cash. And better still, it has a balance sheet that most companies dream of these days./p blockquotepDuring the Great Depression, financially devastated Americans sold turnips along side the road to make ends meet. Today, they merely boot up their computer and sell their junk online./p pFor proof, I called up an acquaintance that makes her living buying and selling on strongeBay /strong(NASDAQ:a href="http://finance.google.com/finance?q=NASDAQ%3AEBAY" target="_blank"EBAY/a). She answered the phone sounding like she had just spent the last 48 hours on#8230;/p/blockquote

A Lot Of Hope – Market Analysis

Charles Rotblut — Fri, 05 Dec 2008 00:00:00 +0000

There is a lot of hope being priced into the markets.

I don't know of any of other reason to explain why the stock markets rallied during Thanksgiving week and held onto much of their gains this week.

Let's look at the facts.

The recession is getting worse. The ISM manufacturing index set a new 26-year low. Black Friday sales were not enough to prevent November retail sales from being horribly down. 553,000 jobs were lost last month - the biggest drop since December 1974.

Valuations are not as cheap as they could be. The Dow Jones Industrial Average ($DJI) still trades a double-digit P/E. There have previous periods where the average has traded at single-digit P/Es.

On a technical basis, the Dow has been setting lower highs and lower lows - a bearish trend. My colleague, Kevin Matras, described the chart pattern as a "sloppy descending triangle"; in other words, a formation that suggests the average could fall lower.

Hope

Yet despite nearly every reason to go lower, the major indexes have been holding up fairly well, all things considered.

The only plausible reason is that traders are hoping that the economy will recover will sooner than later.

The bullish argument is centered on a few key points.

The government is not letting most big companies fail. American International Group (AIG) was thrown a lifeline; albeit at a big cost. Citigroup (C) was given a safety net. The automakers are getting a second chance to explain why they deserve a bailout.
The central banks are cutting interest rates. The ECB and the Bank of England slashed rates yesterday. The Fed could take U.S. rates below 1.0%.
New stimulus is forthcoming. President-elect Obama wants to sign a massive economic package into law as soon as he takes office. The proposal being discussed includes new infrastructure spending as well as tax cuts.
The perception at that housing market is near a bottom. Mortgage rates recently dropped and there were rumors about the U.S. government proposing a program that would allow for 30-year mortgages at 4.5%.

I do believe that the combination of central bank intervention and a big stimulus package will help, if both are used effectively. The big question is timing. If one buys into the argument that the markets look 4-6 months ahead, then late November rebound suggests a recovery could occur in late spring.

I think such sentiment is very optimistic. This said, nobody knows what the second-half of 2009 is going to look like. Therefore, investors would be prudent to follow a more conservative strategy as opposed to taking unnecessary risks.

Zacks Elite Portfolio Updates

In keeping with the theme of following a more conservative strategy, J.M. Smuckers (SJM) was added to the Focus List this week. The company owns or licenses a wide variety of well-known brands, including Smucker's, Folgers, Crisco, Hungry Jack and Pillsbury. The fundamentals look sound and the stock was trading at a historically low valuation.

I had hoped to add a second stock this week, but nothing that I looked at really excited me or the portfolio committee. One of the worst mistakes an investor can make is to buy a stock simply because he feels like he has to. It's better to sit on the sidelines a little longer than to force a trade.

The Markets

As I said before, the Dow is setting lower highs and lower lows. Though this is a bearish pattern, the one caveat to any chart pattern is that it only holds until it doesn't. In other words, sooner or later, a new pattern will emerge.

The 12-month chart of the S&P 500 (SPX) is not showing us much new. We fell out of the trading range a few weeks ago, and then came right back into it.

There seems to be trading opportunities based on the index hitting oversold and overbought levels. However, understand that the current market environment makes timing strategies very risky. I'm merely pointing this out trading opportunity to show you what I'm seeing.

Charles Rotblut, CFA is the senior market analyst for Zacks.com. He can be reached at crotblut@zacks.com.

"X54X" Free Stock Analysis: Buy? Sell? Hold?
"AQI" Free Stock Analysis: Buy? Sell? Hold?
"CCD" Free Stock Analysis: Buy? Sell? Hold?
Zacks Investment Research

Global Investing Roundups Thursday, December 4th, 2008

Contrarian Profits — Thu, 04 Dec 2008 12:51:18 +0000

pEDF Scooping Constellation; Research in Motion Posts Tough 3Q; Legg Mason’s Miller Calls Market Bottom; Cyber Monday Sales Strong; Crude Stocks Drop; New Zealand Fights Recession/p ul liThe world’s biggest nuclear utility companystronga href="http://finance.google.com/finance?q=EPA%3AEDF" target="_blank", Electricité de France SA/a/strongstrong /strongwill a href="http://online.wsj.com/article/SB122825191607473383.html?mod=googlenews_wsj" target="_blank"offer as much as $6.5 billion for assets/a of Constellation Energy Group, Inc (a href="http://finance.google.com/finance?q=NYSE%3ACEG" target="_blank"CEG/a), source familiar with the matter told strongemThe Wall Street Journal/em/strong. A previous offer by EDF was turned down, with Constellation opting for a $4.7 billion bid from Warren Buffett’s MidAmerican unit of strongBerkshire Hathaway Inc./strong (a href="http://finance.google.com/finance?q=NYSE%3ABRK.A" target="_blank"BRK.A/a,a href="http://finance.google.com/finance?q=NYSE%3ABRK.b" target="_blank"BRK.B/a)./li /ul ul type="disc" listrongResearch In Motion Ltd.’s/strong (a href="http://finance.google.com/finance?q=NASDAQ%3ARIMM" target="_blank"RIMM/a) third-quarter subscriptions and profit fell short of forecasts, as it simultaneously faces increased competition and recession in its largest market. Profit for the Blackberry maker a href="http://www.bloomberg.com/apps/news?pid=20601082#38;sid=akCGZF4yND2g#38;refer=canada" target="_blank"rose no more than 83 cents a share/a in the#8230;/li/ul

At Last, A Bailout That Works!

Andrew Snyder — Thu, 04 Dec 2008 11:31:35 +0000

pLast week#8217;s government aid package for homeowners appears to be working. Mortgage rates have fallen sharply, sending applications soaring. strongAndrew Snyder/strong says this could be the start of a recovery in the real estate market, which would help stabilize the wider economy. This creates a great chance for profits with discounted blue chips like strongGeneral Electric /strong(NYSE:a href="http://finance.google.com/finance?q=ge" target="_blank"GE/a) and strongAltria /strong(NSYE:a href="http://finance.google.com/finance?q=mo" target="_blank"MO/a)./p pThis from Today#8217;s Financial News:/p blockquotepWell look at that. Government intervention is actually helping in a way our lawmakers intended. While not all of the Fed’s programs have been a success, the one it created last week is working to get the nation’s economy back on track./p pYou may recall the Federal Reserve announced last week that it planned to purchase up to $500#8230;/p/blockquote

Retailers: Discounts Won’t Help Profits – Zacks Industry Rank Analysis

Charles Rotblut — Thu, 04 Dec 2008 00:00:00 +0000

Highlighted stocks include Amazon.com (AMZN), BJ's Wholesale Club Inc. (BJ), Carter's Inc. (CRI), Men's Wearhouse (MW) and Target Corporation (TGT)

Initial holiday sales are encouraging, though it is questionable whether the momentum will last or if the discounts will end up hurting profits.

The National Retail Federation estimated that shoppers spent an average of $373.57 over Thanksgiving weekend, an increase of 7.2%. Store traffic was higher as well at 172 million, versus 147 million last year.

comScore calculated that Cyber Monday sales totaled $846 million, a 15% increase over 2007. Nielsen Online said that Monday traffic to online retail web sites was 10% higher.

For both traditional and online retailers, discounts were the name of the game. Stores marked down everything from GPS devices to Jimmy Choo shoes. And many observers, including Zacks' Senior Retail Analyst Rob Plaza, believe retailers will keep discounting throughout the holiday season and beyond.

The better-than-expected performance last weekend was not enough to prevent many retailers from experiencing an overall decline in November sales, however.

The dual threat of lower margins and frugal consumers have caused brokerage analysts to cut earnings expectations on many retailers, including Amazon.com (AMZN), Men's Wearhouse (MW) and Target Corporation (TGT).

Economy Adds To Worries About Amazon

Amazon.com is perceived as being the biggest beneficiary from the increase in online sales. The company also appears to have a hit on its hands with the Kindle reader. However, the company's low price strategy has historically caused concern about its margins. And the recession is only adding another layer of fear.

Within the past 30 days, 4 of the 20 covering brokerage analysts have cut their 2008 profit projections, while 5 have cut their 2009 forecasts. The downward revisions have resulted in AMZN being a Zacks #4 Rank ("sell") stock.

Price Competition A Problem for Men's Wearhouse

Men's Wearhouse said late last month that it expects a drop in fourth-quarter same-store sales. In addition to weaker demand, the company is also struggling with falling margins on clothing as many of its competitors are cutting prices. (I saw suits on sale just about everywhere on Black Friday.)

All of the covering brokerage analysts cut their full-year forecasts following the company's revised guidance. Perhaps more notable is that 3 out of the 4 analysts also cut their fiscal 2010 profit forecasts. MW is a Zacks #5 Rank stock.

Target's Sales Were Off The Mark

Target announced this morning that November same-store sales fell 10.4%, even after accounting for "stronger" Thanksgiving weekend sales. The retail chain has been losing market share to more aggressive discounters.

Nearly all of the covering brokerage analysts have cut their current-year earnings estimates within the past few weeks. Profit forecasts for next year are lower as well. TGT is a Zacks #4 Rank stock.

There Are Some Opportunities In Retail

Not all retailers are struggling. Two that stand out are BJ's Wholesale Club Inc. (BJ) and Carter's Inc. (CRI).

BJ's Wholesale Club announced this morning that same-store sales jumped 6.2% last month, excluding gasoline. The performance was well above the company's guidance for a 2%-3% increase.

The bullish result comes just a couple of weeks after the company topped third-quarter expectations. Nearly all of the 15 covering analysts raised their fiscal 2009 profit projections in response to the earnings results, and it is possible that further upward revisions could be forthcoming. BJ is a Zacks #2 Rank ("buy") stock.

Carter's enjoyed third-quarter same-store sales growth of 6.1% at its namesake stores and 13.2% at its OshKosh stores. Orders from merchants were strong as well. CEO Michael Casey credited an average unit price of "less than $8" for helping sales.

Two of the 3 covering brokerage analysts have raised their full-year forecasts in recent weeks, and 1 of the 3 also raised his 2009 earnings estimate. CRI is a Zacks #1 Rank ("strong buy") stock.

Zacks Premium and ZacksElite subscribers can view the Zacks Industry Rank List at http://www.zacks.com/zrank/zrank_inds.php. This interactive list allows you to see all of the companies, and their Zacks Rank, within more than 200 industries. Shown below is the Zacks Sector Rank List, which shows the trend in estimate revisions on a broader scale.

Sector Rank as of Dec 7
Sector	This Week's Zacks Rank	Last Week's Zacks Rank	FY09 Revisions Ratio	FY09 Estimates Revised Up	FY08 Estimates Revised Down	FY08 Revisions Ratio
Medical	2.52	2.57	0.65	400	616	0.80
Aerospace	2.83	2.98	0.38	20	53	0.68
Computer and Technology	2.92	2.91	0.20	219	1092	0.33
Business Services	2.94	3.00	0.21	33	156	0.59
Transportation	2.99	2.98	0.42	87	206	0.70
Consumer Discretionary	3.00	2.98	0.21	78	375	0.40
Utilities	3.05	3.01	0.21	59	279	0.44
Consumer Staples	3.09	3.10	0.18	44	251	0.34
Construction	3.10	3.21	0.09	11	121	0.19
Retail-Wholesale	3.16	3.18	0.10	70	692	0.20
Finance	3.17	3.19	0.13	174	1312	0.34
Industrial Products	3.20	3.22	0.11	30	278	0.33
Oils-Energy	3.27	3.24	0.20	179	900	0.42
Basic Materials	3.34	3.30	0.10	35	362	0.21
Auto-Tires-Trucks	3.60	3.49	0.09	9	96	0.13
Conglomerates	3.67	3.41	0.03	2	65	0.15

Charles Rotblut, CFA, is the senior market analyst for Zacks.com. He can be reached at crotblut@zacks.com.

"BJI" Free Stock Analysis: Buy? Sell? Hold?
"DNC" Free Stock Analysis: Buy? Sell? Hold?
"AMZN" Free Stock Analysis: Buy? Sell? Hold?
"SUIT" Free Stock Analysis: Buy? Sell? Hold?
"CRI" Free Stock Analysis: Buy? Sell? Hold?
Zacks Investment Research

comScore: Online is Still Hot

Steve Patterson — Wed, 03 Dec 2008 22:38:00 +0000

pRetailer in general and online retailers such as Amazon.com (NASDAQ: AMZN) rallied on Wednesday sending the markets upward for a strong finish to a lackluster day. Amazon moved 9.5% higher after comScore reported that sales online on Monday were 15% higher or $846 million more than last year on what is now called CyberMonday./p a href=http://fastswings.com/FastSwingscom/Blogs/tabid/680/EntryId/1014/comScore-Online-is-Still-Hot.aspxMore.../adiv class="feedflare" a href="http://feeds.feedburner.com/~f/FastSwings-StevePatterson?a=FgN2O"img src="http://feeds.feedburner.com/~f/FastSwings-StevePatterson?i=FgN2O" border="0"/img/a a href="http://feeds.feedburner.com/~f/FastSwings-StevePatterson?a=8yDbo"img src="http://feeds.feedburner.com/~f/FastSwings-StevePatterson?i=8yDbo" border="0"/img/a a href="http://feeds.feedburner.com/~f/FastSwings-StevePatterson?a=vsHXo"img src="http://feeds.feedburner.com/~f/FastSwings-StevePatterson?i=vsHXo" border="0"/img/a a href="http://feeds.feedburner.com/~f/FastSwings-StevePatterson?a=pSl0O"img src="http://feeds.feedburner.com/~f/FastSwings-StevePatterson?i=pSl0O" border="0"/img/a a href="http://feeds.feedburner.com/~f/FastSwings-StevePatterson?a=h3AQO"img src="http://feeds.feedburner.com/~f/FastSwings-StevePatterson?i=h3AQO" border="0"/img/a a href="http://feeds.feedburner.com/~f/FastSwings-StevePatterson?a=jSQXO"img src="http://feeds.feedburner.com/~f/FastSwings-StevePatterson?i=jSQXO" border="0"/img/a a href="http://feeds.feedburner.com/~f/FastSwings-StevePatterson?a=XGtdO"img src="http://feeds.feedburner.com/~f/FastSwings-StevePatterson?i=XGtdO" border="0"/img/a /div

Oil Up Above $47 Ahead of US Inventory Report

Contrarian Profits — Wed, 03 Dec 2008 11:58:54 +0000

pOil rises above $47 a barrel#8230; U.S. weekly oil stocks data expected to show bearish rises#8230; OPEC compliance to cuts at 66 percent for November /p p /p p /p pOil rose above $47 a barrel on Wednesday but the gains could be limited as further signs of weakening U.S. oil demand are expected to emerge in weekly data due out later in the session. /p p The market has fallen $100 a barrel from July#8217;s record high of $147.27 to stand at a 3 1/2-year low, pressured by the gloomy economic outlook and after OPEC deferred a decision on whether to cut supplies until a Dec. 17 meeting. /p p U.S. crude rose 22 cents to $47.18 a barrel by 1020 GMT. It settled down $2.32 at $46.96#8230;/p

And Then There’s This…Tuesday, December 2nd, 2008

Contrarian Profits — Tue, 02 Dec 2008 20:08:28 +0000

pAlmost from the moment that trading began in the Far East on Monday morning, there was someone there to sell the gold and silver market down. This pressure really began to accelerate to the down side at one of the usual times of day#8230;2:00 a.m. New York time#8230;which is early Monday evening in Sydney, late afternoon in Hong Kong#8230;and first thing in the morning (7:00 a.m.) in London./p pThen, the moment the Comex opened for business, the bullion bank(s) pulled their bids and both metals sank like stones#8230;particularly silver. For style points in silver, I give da boyz a 9.5/10. Any bets that it was mostly JP Morgan (NYSE:a href="http://finance.google.com/finance?q=JPM"JPM/a)? After that pounding, the metals did nothing for the rest of the#8230;/p

And Then There’s This…Tuesday, December 2nd, 2008

Contrarian Profits — Tue, 02 Dec 2008 20:08:28 +0000

November Unemployment Statistics to Highlight Economic Reports This Week

Contrarian Profits — Tue, 02 Dec 2008 16:50:11 +0000

pThis week’s economic reports will be highlighted by Friday’s unemployment report, which analysts expect will illustrate the 11th straight month of declining job ranks in the U.S. economy./p pNon-farm payroll employment fell by 240,000 in October, and the unemployment rate jumped to 6.5%, up from 6.1% the month before, the Bureau of Labor Statistics a href="http://www.bls.gov/news.release/empsit.nr0.htm" target="_blank"reported in early November/a./p pOctober’s drop in payroll employment followed declines of 127,000 in August and 284,000 in September, according to revised BLS reports. Employment has fallen by 1.2 million in the first 10 months of 2008, with more than half of that decrease occurring in August, September and October. In October, job losses continued in manufacturing, construction and several service-providing industries. Conversely, the healthcare and mining sectors#8230;/p

Owens Corning (OC) – Options Commentary

Zacks Market Commentaries — Tue, 02 Dec 2008 00:00:00 +0000

In last week's edition of Trading Tools, Suntech Power Holdings Co. Ltd. (STP) was examined, as it appeared on the Zacks Put/Call Ratio Greater than 1.0 screener. This week, I've decided to take a look at the Unusually High Put Volume filter in an effort to find a stock surrounded by escalating skepticism. Digging through the result, one equity piqued my curiosity: Toledo-based Owens Corning (OC), which produces residential and commercial building materials.

Before we begin, let's explain the contrarian stance that makes Schaeffer's so unique. When searching for a bullish pick, we like to see heavy skepticism toward an outperforming stock, as this leaves ample room for upgrades or other positive catalysts to fuel the stock higher. When searching for a bearish pick, on the other hand, contrarians are looking for significant bullish sentiment toward an underperforming stock, as we believe an excess of optimism is a sign that everyone has already bought into the stock and sideline money is virtually tapped out.
However, keep in mind that some optimism and pessimism is genuinely warranted and isn't always a contrarian indicator like an outperforming stock with many "buy" ratings or an underperforming stock with a plethora of "sell" ratings.

The Unusually High Option Volume Screener

The filter is somewhat self-explanatory. It looks for stocks with single-day option volume in excess of their average volume over the last month. Why is this important? Simply put, this filter allows us to read how options players feel about a certain stock, and sometimes unusually heavy option activity can be the sign of an event (like earnings or merger-and-acquisition news, for instance) or, occasionally, a reversal of sentiment in the options pits.

Bearish bets build toward the builder

As mentioned above, OC caught my eye due to its unusually high put volume on Wednesday. Heading into the Thanksgiving holiday, the construction king saw more than 4,500 puts cross the tape nearly quadrupling its average daily volume of fewer than 1,200 contracts.

After additional research, however, it seems that options traders' recent affinity for bearish bets is nothing new. During the past 10 days on the International Securities Exchange (ISE), the security has seen more than 80 times as many puts than calls bought to open. What's more, this lofty ratio ranks in the 100th annual percentile, suggesting that options players on the ISE haven't been more leery of OC at any time during the past year.

As a result of the recent influx in pessimistic positions, the stock's Schaeffer's put/call open interest ratio (SOIR) measuring options slated to expire within 3 months has shot higher during recent trading sessions. The ratio now rests at 0.96, which is in the 75th annual percentile. In other words, short-term options speculators have been more skeptical of the security only a quarter of the time during the past 52 weeks.

Now, I have only 2 questions: Why the recent surge in put volume? Is the pessimism warranted?

A Booyah-related boost?

Searching for a potential catalyst behind the swelling in skepticism, it seems that Owens Corning could've landed on traders' radars after a shout-out from Jim Cramer on CNBC's Mad Money program. The Baron of Booyahs recently opined that the shares of OC were oversold, but cautioned that the current market environment could push the security even lower. Should the stock continue inching into the red, Cramer said, investors should consider picking up some shares.

As a result of the recognition, the equity muscled higher right out of the gate on Monday, Nov 24. The shares of OC continued their journey up the charts throughout the rest of the week, eventually perforating double-barreled resistance from its 10-day and 20-day moving averages a duo of trendlines the stock has closed only 2 sessions above since mid-September. Further demonstrating OC's technical strength of late, during the past 20 trading days, the security has outperformed the S&P 500 Index (SPX) by nearly 7%.

From a more historical perspective, however, the shares of OC could face a potential roadblock in the 16-to-18 region, which played the part of support in early 2008. This neighborhood could now reverse course and act as resistance for the stock.

Word on the Street

Turning to the sentiment surrounding the shares, it seems that short sellers have boarded the bearish bandwagon. Despite short interest on the equity receding in recent weeks, these bearish bets still account for 6.62 million OC shares, or nearly 7% of the stock's total available float.

However, should the stock capitalize on its recent wave of buying pressure, continuing its voyage into the black, the shorts could get spooked. At the security's average daily trading volume, it would take almost 7 trading days for these pessimistic positions to be repurchased providing ample fuel for a short-covering rally to exacerbate the stock's recent gains.

In addition, Zacks reports that 4 out of 7 ranking analysts deem OC a "hold" or worse. Should the shares penetrate potential resistance, a fresh round of upgrades could place additional buying pressure on the stock.

The bottom line

OC advocates should keep an eye on the stock's 10-day and 20-day trendlines. These formerly resistant moving averages pressured the shares lower in recent months, but could now play the part of support. On the flip side, investors should note the 16-to-17 region as possible resistance, as this area is home to the stock's early-2008 lows.

More importantly, however, OC followers should note the sentiment surrounding the shares. With options players, short sellers, and analysts in the bears' lair, a continuation of the security's recent uptrend could motivate these skeptics to abandon ship. An unwinding of pessimism whether in the options arena, via a short-covering rally, or a round of upgrades could fuel the equity even higher on the charts.

"OCF2" Free Stock Analysis: Buy? Sell? Hold?
"STP" Free Stock Analysis: Buy? Sell? Hold?
Zacks Investment Research

Bear Market Trap Redux

Daniel Shepard — Mon, 01 Dec 2008 21:55:13 +0000

Monday December 1, 2008 Navivest A simple law of gravity states that what goes up must come down and that applies to stocks as well. Last week, as stocks rose two days in a row, then three, in a very challenging economic environment, we were of the view that the moves did not make sense. Consequentially, we recommended [...]

Black Friday, Cyber Monday Fail to Allay Retail Anxiety

Money Morning — Mon, 01 Dec 2008 21:10:38 +0000

By Jason Simpkins Associate Editor Money Morning Steep holiday discounts and bargain hunting boosted Black Friday sales, but a dour economic outlook leaves analysts skeptical that Americans... Money Morning is here to help investors profit ha...

November Unemployment Statistics to Highlight Economic Reports This Week

Money Morning — Mon, 01 Dec 2008 20:50:33 +0000

Money Morning Staff Reports This week’s economic reports will be highlighted by Friday’s unemployment report, which analysts expect will illustrate the 11th straight month of declining... Money Morning is here to help investors profit ha...

And Then There’s This…Monday, December 1st, 2008

Contrarian Profits — Mon, 01 Dec 2008 19:05:24 +0000

pPack a lunch and blow the froth off a cool one#8230;as I#8217;ve got three days of gold and silver market activities to talk about#8230;and lots of fascinating reading as well./p pWednesday, November 26th/p pThis was the last day for all parties to get their gold and silver contracts switched to the 2009 year#8230;or they would have to stand for delivery on Friday. With the U.S. in holiday mode almost from the beginning of trading, the tiny rally at the Comex open was stepped on and never recovered. But it hardly mattered#8230;as volume was virtually non-existent. Silver was the same. Call the day a big zero. However, the shares reacted otherwise. Even though gold was down ten bucks at the close of the#8230;/p

Dollar Batters Euro

Doug Casey — Mon, 01 Dec 2008 18:39:57 +0000

pIn the currency market, the dollar was sharply higher against the euro. Late Friday, the euro was trading at $1.2874 vs. $1.3013 on Tuesday. /p p“For the currency market, the Thanksgiving Day holiday usually leads to low liquidity and thin volumes,” said Kathy Lien, director of currency research at GFT. “Although this should mean range trading for all of the major currencies, watch out for a post Thanksgiving Day breakout.”/p pThe eurozone had a lukewarm response to a European Union proposal for a €200 billion stimulus package that would give the EU#8217;s 27 nations a #8220;toolbox#8221; of measures that could be tailored to individual economies./p pMeanwhile, the US economy served up another round of grim numbers./p pThe Commerce Department reported that sales of new#8230;/p

Stocks Post Steep Declines

Daniel Shepard — Mon, 01 Dec 2008 17:49:09 +0000

Monday December 1, 2008 Navivest At the mid-day point of the trading day today, stocks are posting steep declines across the board. The Dow is off over four percent, while the Nasdaq and The S#38;P 500 indices are both off over five percent. For astute traders, this one was a gift that was just too easy. The market [...]

Uncle Ben B Signals the End Game; US in Recession for a Year

Trader Mark — Mon, 01 Dec 2008 15:00:00 +0000

Some not so breaking news for our readers We signaled a few weeks ago [Nov 12: CNBC Europe - USA May Lose its AAA Rating] Minerd doubts that private savings in the U.S. and foreign purchases of Treasury debt will be sufficient to meet those government cash requirements. That leaves the Fed to take [...]

Oil Falls Below $53 After OPEC Defers Output Cut

Contrarian Profits — Mon, 01 Dec 2008 12:53:15 +0000

pOil down more than $2 after no cut from OPEC#8230; OPEC to discuss 1 to 1.5 mbpd cut later in December#8230; Saudi Arabia cites $75 a barrel as #8220;fair price#8221;/p pOil fell more than $2 to below $53 a barrel on Monday after OPEC decided to wait until mid-December to make another cut in output to try to defend sagging prices. /p p U.S. light crude for January delivery was down $2.28 at $52.15 a barrel by 1200 GMT. /p p Oil had settled at $54.43 on Friday after a shortened post-Thanksgiving holiday session. On Nov. 21, it touched a three and half year low of $48.25. /p p London Brent crude was $2.05 lower at $51.44 a barrel. /p p #8220;The markets are discounting OPEC#8217;s decision to stand#8230;/p

Big ETFs, Big Returns In November

IndexUniverse Staff — Sat, 29 Nov 2008 02:55:35 +0000

November wasn't so bad for some of the biggest ETFs.

The picture was relatively bright for the performance of the ten-largest exchange-traded funds in November. After the two-month market rout of September and October, even among volatile conditions, seven of the 10 largest ETFs had positive performance in November, according to Morningstar data through Nov. 26. At end of day Friday, the S&P had posted its best week since 1974, so the numbers should improve even a little more once the last day of the month is added, at least for the majority of equit yportfolios among the Top Ten.

Leading the way among equity ETFs was the iShares MSCI Emerging Markets Index (NYSE Arca: EEM), up 12.70% for the month.The Thanksgiving week was also kind to EEM, when the ETF surged 10.24%, through Wednesday the 26th.

The best performer overall was the SPDR Gold Shares (NYSE Arca: GLD) up 14% for the month as market volatility continued to favor the long-time safe haven asset class.

EEM and GLD were the only ones among theTop Ten ETFs with double-digit performance for the month—at least, double-digit positive performance.

Amid the continued financial stock meltdown, the Financial Select Sector SPDR (NYSE Arca: XLF) was down 11.11% for the month. The situation did improve in the last week of November, however, as Citigroup's agreeing to a bailout plan by the government allowed XLF to gain 18.17% through the first three days of the week.

The only other funds among the Top Ten innegative performance territory for the month were the PowerShares QQQ (NASDAQ: QQQQ) and the iShares Russell 2000 Growth Index, down 0.66% and 1.02%, respectively. IWO, along with XLF, had large one-week gains in the Thanksgiving week. IWO surged 13.08%, only surpassed by XLF's gain of 18.17%.

Even with a healthy helping of positive performance in November, the Top Ten were still showing woeful year-to-date performance.

Here are the year-to-date numbers, through Nov. 26, as well as the rest of the performance picture for the Top Ten ETFs, which controlled more than $200 billion of the industry's $488 billion at the end of October, according to the National Stock Exchange:

ETF	November Returns (%)	Year-To-Date Returns (%)	One Week (11/24-11/26) Returns (%)
SPY	1.62	38.13	10.08
EFA	0.78	-47.62	3.45
EEM	12.70	-54.64	10.24
GLD	14.0%	-3.23	6.61
QQQQ	-0.66	-42.57	9.71
DIA	4.24	-32.71	8.78
XLF	-11.11	-56.33	18.17
IWF	1.91	-39.91	9.51
IWO	-1.02	-38.15	13.08
IVV	1.62	-38.19	10.10

Source: National Stock Exchange

Half-Day Session Ends Like Most Holiday Half-Days End; Stocks Rise On Extremely Low Volume

Joshua Hayes — Fri, 28 Nov 2008 23:06:02 +0000

There isn’t much to say here either than I said on Friday we would have a week long holiday lower volume each day rally. That came and passed like clockwork. I had no clue the gains would be so huge in such a short amount of time but in this market you get used to [...]

World Stocks Rise in Thin Trade, Bond Yields Fall

Contrarian Profits — Fri, 28 Nov 2008 19:14:44 +0000

pWorld stocks edge up#8230; Crude oil falls, trades just above $51 a barrel#8230; U.S. dollar firmer, U.S. bonds rise/p p U.S. stocks were mostly higher in thin trade on Friday, as investors eyed retail sales on the first day of the shopping season after the Thanksgiving Day holiday, to gauge the extent of weakening consumer demand. /p p European and Asian shares were also higher, despite the attacks in Mumbai, India, while U.S. Treasury debt prices and the U.S. dollar both gained as investors continued to look for safe-havens as global economic growth slows. /p p #8220;It#8217;s a light volume day so you#8217;re going to see some choppy trading, with so many people out,#8221; said Robert Finkel, consumer trader at Stifel Nicolaus in Baltimore of the#8230;/p

Wall Street Slips on Retail Jitters, Energy, Tech

Contrarian Profits — Fri, 28 Nov 2008 16:56:15 +0000

pU.S. stocks open slightly lower in thin holiday trade#8230; Retailers fall on worry about weak #8220;Black Friday#8221; sales#8230; Energy shares pressured as oil prices slip below $53/p pU.S. stocks slipped in thin holiday trade on Friday after a streak of gains as investors nervously eyed post-Thanksgiving sales to gauge how retailers will fare this holiday season, while worries about global demand hurt technology and energy shares. /p p Chevron (a href="http://finance.google.com/finance?q=NYSE:CVX"CVX/a) fell 1.9 percent tracking oil lower as OPEC gathered to discuss potential further supply cuts to combat falling demand. U.S. crude dropped below $53 a barrel. /p p Technology shares slid after signs of a downturn in global chip demand as STMicroelectronics cut its fourth-quarter outlook. Industry sources said Taiwan companies want to slash costs.#8230;/p

Correcting The Errors Of A 25-Year Bull Market

Bill Bonner — Thu, 27 Nov 2008 19:59:53 +0000

pIt takes time to correct the errors of a 25-year bull market, says stronga href="http://www.contrarianprofits.com/articles/author/bill-bonner/" class="alinks_links"Bill Bonner/a/strong. There is a dark valley to cross before the market can climb again. But the Fed and Treasury continue to try and stop the correction process. Bill says all they are likely to do is cause some spectacular damage./p pThis from a href="http://www.dailyreckoning.com" class="alinks_links"Daily Reckoning/a:/p blockquotepFinancial markets are part of public life. As a consequence they follow the rules of all public spectacles. That is, they are one part rational and sensible#8230; one part incomprehensible#8230; and one part pure humbug. You never know exactly which part it is you’re looking at./p pBut the markets are also moral, not mechanical. That is, they follow moral rules, such as – Thou Shalt#8230;/p/blockquote

Big Big News…

Roger Nusbaum — Thu, 27 Nov 2008 13:00:00 +0000

a onblur="try {parent.deselectBloggerImageGracefully();} catch(e) {}" href="http://2.bp.blogspot.com/_7ZckZ-8naz0/SS3_XOHiVQI/AAAAAAAACNY/CtRW1GahNRQ/s1600-h/Ganjanomics+005.jpg"img style="margin: 0pt 10px 10px 0pt; float: left; cursor: pointer; width: 400px; height: 300px;" src="http://2.bp.blogspot.com/_7ZckZ-8naz0/SS3_XOHiVQI/AAAAAAAACNY/CtRW1GahNRQ/s400/Ganjanomics+005.jpg" alt="" id="BLOGGER_PHOTO_ID_5273151513112499458" border="0" //a...We're moving here!br /br /Just kidding.br /br /A reader left a question asking about the implosion with Macquarie Infrastructure Trust (MIC), which until very recently was close to an across the board holding, and if there are any implications for, as the reader put it, absolute return. I'll expand his thought a little to ask about implications for investment products that either should be in their own world or otherwise be a portfolio diversifier.br /br /If you care about MIC specifically read the news, also reader RW a href="http://randomroger.blogspot.com/2008/11/random-thoughts.html?showComment=1227748020000#c402522705476201378"gave a recap/a in the comments yesterday. Bigger picture MIC, along with other similar products require access to the capital markets to buy assets and they also need the capital markets to function for them to sell assets, these are transaction oriented businesses often using a lot of leverage.br /br /Another layer of complexity with Macqaurie is that they have many many funds listed all over the world with similar a structure and so there has been doubt about the parent bank's health. Yet one more layer is that Babcock and Brown (BNB.AX) which has a lot of similarities to Macquarie has dropped to about zero.br /br /Under all of that MIC just collapsed.br /br /As far as implications for portfolio diversfiers; a couple of points I've tried to convey is understanding what any of these that you are interested in are vulnerable to and not overloading on things vulnerable to the same risks. MIC is vulnerable to leverage issues and not being able to buy and sell assets. To me that sounds very similar to many of the Canadian trusts (like the hydro funds).br /br /That is a different sort of threat than what is faced by something like Rydex Managed Futures (RYMFX), which I own, that faces realistic risks of being long or short something a couple of weeks too long due to its monthly rebalance. More of an outlier risk could be counterparty risk.br /br /Anyone using a single currency as a diversifier faces different risks. There is no way the dollar should have gone up so much in the last few months but of course it has and the notion of "no way" doesn't really stand up.br /br /If someone is trying to use VIX derivatives in this way they face other risks that I couldn't even tell you. As a side note it is pretty clear that very few people really understand VIX. I know almost nothing about VIX but I know that much. Farmland stocks have different risks as a final example.br /br /So integrating any sort of diversifier into a diversified portfolio circles back to proper weighting and understanding how it works in with the rest of the holdings. I wish MIC hadn't imploded but it did. Owning it was not a big problem but owning too much of or owning a bunch of other stuff just like it would have been. This is a perfect example of why I prefer putting only 2-3% in narrow based products (including individual stocks). The consequence for being very wrong is a whole lot less when there's only a couple of hundred basis points on the line.br /br /I hope you can have a great Thanksgiving, enjoy your family, football, a big meal or anything else you might do.

Happy Thanksgiving!

Market Speculator — Thu, 27 Nov 2008 12:30:37 +0000

The stock market delivers gains prior to Thanksgiving on light trade. Stocks were able to sustain gains throughout the day as the market was able to close on its highs. Volume was lower on the day as many on Wall Street simply stayed away. Wednesday’s gains should carry through to Friday as the quasi trading day [...]

This Thanksgiving, We Are All Turkeys

Bill Bonner — Thu, 27 Nov 2008 11:56:47 +0000

pUnless you#8217;re a turkey, Thanksgiving is usually a happy holiday. But stronga href="http://www.contrarianprofits.com/articles/author/bill-bonner/" class="alinks_links"Bill Bonner/a /strongsays the crumbling economy leaves all of us fearing the axe this year. The global credit crisis has taken us into unchartered territory. And government bailouts will only draw out the inevitable correction./p pThis from The a href="http://www.dailyreckoning.com" class="alinks_links"Daily Reckoning/a:/p blockquotep“Until today or tomorrow, the typical turkey enjoyed a fairly decent life#8230;” commented our friend Nassim Taleb, in Zurich yesterday./p pYesterday [Wednesday], the stock market was quiet. The Dow ended up 36 points. Oil held at $50. Gold too#8230;it stayed right where it was, at $820 an ounce./p pBut the slaughterhouses and gold mints worked overtime./p p“You can understand how fraudulent most economic analysis is,” Nassim explained, “just by looking the life of the turkey.#8230;/p/blockquote

Happ Thanksgiving

Brian Shannon — Thu, 27 Nov 2008 10:00:00 +0000

span style="font-weight:bold;"The Pilgrims made seven times more graves than huts. No Americans have been more impoverished than these who, nevertheless, set aside a day of thanksgiving.br /~H.U. Westermayer/spanbr /br /embed style="width:400px; height:326px;" id="VideoPlayback" type="application/x-shockwave-flash" src="http://video.google.com/googleplayer.swf?docId=-7243635165296806436hl=en" flashvars="" /embed

Ten ETFs I’m Thankful For

Matt Hougan — Thu, 27 Nov 2008 02:15:32 +0000

The ETF industry has given us a lot to be thankful for: lower costs, better diversification, lower taxes.

In the spirit of Thanksgiving, I thought I would pull together a list of 10 ETFs I'm have earned my thanks. The list could be much longer: 20, 30 or even 50 ETFs might qualify. But these ETFs have helped shape the ETF industry of today, allowing millions of investors to build better portfolios. As a journalist, they've been fun to write about, too.

1) S&P 500 SPDR (NYSEArca: SPY): SPY was the first ETF in the United States and set the stage for everything that followed. It remains the largest and most-traded ETF in the world, delivering complete exposure to the S&P 500 for an expense ratio of just 0.0945%. What's more, it trades at super-tight spreads and hasn't paid a capital gains distribution since 1996. What more do you want?

2) PowerShares NASDAQ-100 QQQQ (NasdaqGM: QQQQ): This ETF has slipped recently from being the #2 or #3 largest ETF in the world down to the #6 slot. But QQQQ is still hugely important ETF, and played a tremendous role in the history of ETFs. Back in the 1990s, when SPY was still primarily an institutional tool, QQQQ started seeping into the broader consciousness, catching fire with the retail and trader communities. Without QQQQ, the modern ETF industry wouldn't exist.

3) Vanguard Total Market Index Fund (NYSEArca: VTI): This one is all about costs. VTI is the cheapest retail share mutual fund in the world. For 0.07% per year, you can buy exposure to all the stocks in the U.S. That's beautiful. For the record, that is 1/15^th the cost of the average mutual fund in the U.S.

4) Vanguard Emerging Markets ETF (NYSEArca: VWO): Again, this one is all about costs. VWO proves that emerging markets exposure needn't be costly. The fund charges just 0.25% in annual expenses, compared to 0.75% for the dominant iShares Emerging Market ETF (NYSEArca: EEM) and 1.62% for the average international equity mutual fund (per ICI). Saving 1.37% per year adds up quickly.

5) SPDR Gold Shares (NYSEArca: GLD): GLD marked a turning point in the ETF industry. It was the first commodity ETF listed in the U.S., and the first product ever that allowed investors to buy gold directly in a brokerage account. This lowered the cost and hassle of buying gold significantly, and brought a huge new group of investors into the ETF market; after all, you couldn't and still can't get this exposure in a mutual fund. Today, it has more gold than the People's Republic of China. Remarkable.

6) PowerShares DB Commodity Index Fund (NYSEArca: DBC): Like GLD, DBC was a ground-breaking ETF in the commodity space. As the first broad-based commodity futures ETF, DBC significantly lowered the costs of accessing commodities and helped move commodities from the fringes into mainstream asset allocations. While a lot of people have been burned by the commodities bubble, long term, I believe people will benefit from the diversification commodities offer.

7) WisdomTree Small Cap Emerging Markets ETF (NYSEArca: DGS): DGS was the first small-cap emerging markets ETF; since, at least three other funds have launched. DGS was important because it broke the mold of where index funds and ETFs could operate and where they could not. The old thinking said that index-based strategies couldn't work in illiquid corners of the market, and that active managers could outperform in these areas as well. DGS changed all that, showing that a thoughtfully structured ETF could provide low-cost access to those markets and help investor add a noncorrelated source of returns to their portfolios.

8) NETS Dow Jones Wilshire Global Total Market Index Fund (Ticker TBD): I'm including this ETF even though it has yet to launch. Why? When Northern Trust filed for this fund in 2007, it was the first public filing for a truly global equity ETF—one that held both U.S. and international stocks in a single portfolio. Since then, a number of issuers have launched funds, including the Vanguard Total World Stock ETF (NYSEArca: VT). But Northern Trust deserves the credit for breaking the mold, and helping to break down the problem of "home bias" in the investing community.

9) ProShares UltraShort S&P 500 (NYSEArca: SDS): Love them or hate them, the ProShares ETFs have reshaped the investment landscape. ProShares family of leveraged and inverse-leveraged ETFs has attracted nearly $20 billion in assets and huge amounts of trading volume over the past two years. SDS was one of the original ProShares, providing -200% exposure to the S&P 500. I fear a lot of investors misuse these funds, but at the same time, they are very well-designed and very empowering if used correctly.

10) iShares Lehman Aggregate Bond Index Fund (NYSEArca: AGG): Bonds are one of the fastest growing segments of the ETF industry, and AGG was one of the first bond ETFs to list. The fund provides broad-based exposure to the fixed-income market for just 0.24% in expenses. Its existence (and the existence of other broad-based equity ETFs) means you can create a full asset allocation portfolio using ETFs and ETFs alone.

That's 10. I could go one all day. How about the CurrencyShares Euro Trust (NYSEArca: FXE), for opening up the currency market? How about one of the alternative energy funds for completely opening up the alternative energy market, be it the PowerShares WilderHill Alternative Energy ETF (NYSEArca: PBW) or the globally oriented Market Vectors Global Alternative Energy ETF (NYSEArca: GEX). Or the Select Sector SPDR ETFs. Or the iShares MSCI EAFE ETF (NYSEArca: EFA). Or...

As an investor, ETFs allow me to create a significantly better portfolio at significantly lower costs with significantly less tax exposure than was possible five or 10 years ago.

I'll give thanks for that.

Stocks Put In A Very Bullish Session Across The Board With One Big Problem: No Volume

Joshua Hayes — Thu, 27 Nov 2008 01:46:12 +0000

Stocks put in a very impressive drive higher as another round of short-squeezing hit investors who were a little too heavily short coming into today. The reason why I would call this another short-squeeze rally is that, once again, volume has fallen on a day where the market rallies an extreme amount. If you are playing [...]

Results of Automated Trading: Trade-Ideas Turducken Mash-Up

David Aferiat — Thu, 27 Nov 2008 01:20:00 +0000

divTrade-Ideas' Automated Trading Bot ran off 3 profitable days of trading this week. That's notable because:/divdivullithis is the first week we've been trading automated strategies designed for this market's volatile action - and not on a testing basis/liliwe're relearning our own tool - gaining insight on how to trade profitably given any commission structure (Hint: all depends on your average lot size - some of this explained in the video)/li/uldivspan class="Apple-style-span" style="font-size:large;"span class="Apple-style-span" style="font-weight: bold;"Spielberg's Pet Rock Could Make a Better Video/span/span/divdivbr //divdivFor now. We are learning. We're also not too big on lots of editing because we don't want to give any impression the real-time results recorded are rigged in any way. We will have to eventually edit more (or have edited versions) for brevity's sake./divdivbr //divdiva href="http://www.youtube.com/watch?v=lrVuLblOb_wamp;fmt=18"Here are the videos/a. They will also soon appear on a href="http://www.youtube.com/user/TradeIdeas"Trade-Ideas' YouTube Channel/a where many other videos featuring basic functionality reside. The first set (2 videos) is from November 24, 2008. The other days will appear as either related videos or 'More from Trade-Ideas' links. Subscribe to the channel and you won't miss a day of results - span class="Apple-style-span" style="font-style: italic;"we may not video a losing day, but we will show you the record of how the robot performed each day we use it - either in the next video or here at the blog./span/divdivspan class="Apple-style-span" style="font-style: italic;"br //span/divdivShort on time? /divdivulliBest parts of Part 1: Skip to 4:13 as the earlier stuff is exposition/liliPart 2: Timestamp 2:30, 4:15, and 5:30/li/ul/divdivspan class="Apple-style-span" style=" font-weight: bold; "span class="Apple-style-span" style="font-size: large;"The Automated Trading 411/span/spanbr //divdivbr //divdivTrades execute through the Trade Ideas LLC account held at TD AMERITRADE - that's right, we're trading retail to prove a point. This technology is cutting edge (just watch) and it's not behind the iron curtain of a powerful institution (an oxymoron these days) or a Stevie Cohen secret hedge fund. Revenue is where the volume is - a href="http://www.trade-ideas.com/Partners.html"partners/a like TD AMERITRADE and others offer Trade-Ideas large numbers of active traders and we in turn provide the technology to improve their trading./divdivbr //divdivHere is the a href="http://www.trade-ideas.com/TDAmeritrade/TD_AMERITRADE_and_Trade_Ideas.html"special Trade-Ideas amp; TD AMERITRADE offer/a to learn more./divdivbr //divdivWant to learn more about the lessons learned from automated trading? Look no further than Dave Mabe of span class="Apple-style-span" style="font-weight: bold;"StockTickr/span who chronicles his journey in his popular series of blog posts -/divdivbr //divdivspan class="Apple-style-span" style="font-weight: bold;"span class="Apple-style-span" style="font-size: medium;"this will save you thousands:/span/span a href="http://blog.stocktickr.com/tag/automated-trading/"http://blog.stocktickr.com/tag/automated-trading//a/div/divdivbr //divdivspan class="Apple-style-span" style="font-weight: bold;"span class="Apple-style-span" style="font-size: large;"Ending on the High Notes/span/span/divdivbr //divdivFirst some kind words for @a href="http://explore.twitter.com/StockTickr" style="margin-top: 0px; margin-right: 0px; margin-bottom: 0px; margin-left: 0px; padding-top: 0px; padding-right: 0px; padding-bottom: 0px; padding-left: 0px; text-decoration: none; "StockTickr/a and @a href="http://explore.twitter.com/TradeIdeas" style="margin-top: 0px; margin-right: 0px; margin-bottom: 0px; margin-left: 0px; padding-top: 0px; padding-right: 0px; padding-bottom: 0px; padding-left: 0px; text-decoration: none; "TradeIdeas/a from Joey the Downtowntrader: a href="http://bit.ly/ulm1" rel="nofollow" target="_blank" style="margin-top: 0px; margin-right: 0px; margin-bottom: 0px; margin-left: 0px; padding-top: 0px; padding-right: 0px; padding-bottom: 0px; padding-left: 0px; text-decoration: none; "http://bit.ly/ulm1/a/divdivspan class="meta entry-meta" style="padding-top: 0px; padding-right: 0px; padding-bottom: 0px; padding-left: 0px; font-style: italic; margin-top: 3px; margin-right: 0px; margin-bottom: 0px; margin-left: 3px; display: block; font-family:georgia;font-size:0.8em;"a href="http://explore.twitter.com/StockTickr/status/1025010015" class="entry-date" rel="bookmark" style="margin-top: 0px; margin-right: 0px; margin-bottom: 0px; margin-left: 0px; padding-top: 0px; padding-right: 0px; padding-bottom: 0px; padding-left: 0px; text-decoration: none; "span class="published" title="2008-11-26T18:43:07+00:00" style="margin-top: 0px; margin-right: 0px; margin-bottom: 0px; margin-left: 0px; padding-top: 0px; padding-right: 0px; padding-bottom: 0px; padding-left: 0px; "about 6 hours ago/span/a span style="margin-top: 0px; margin-right: 0px; margin-bottom: 0px; margin-left: 0px; padding-top: 0px; padding-right: 0px; padding-bottom: 0px; padding-left: 0px; "from web/span/spanspan class="meta entry-meta" style="padding-top: 0px; padding-right: 0px; padding-bottom: 0px; padding-left: 0px; font-style: italic; margin-top: 3px; margin-right: 0px; margin-bottom: 0px; margin-left: 3px; display: block; font-family:georgia;font-size:0.8em;"br //span/divThank You!divbr //divdivHappy Thanksgiving to Allspan class="Apple-tab-span" style="white-space:pre" /span/div

Your ‘TIP’ on how to profit from inflation

Contrarian Profits — Wed, 26 Nov 2008 21:38:58 +0000

tr HIDDEN VALUE /tr tr pDear Value Seeker,/p p“This parrot is no more! It has ceased to be! It’s expired and gone to meet its maker! It’s a stiff! Bereft of life, it rests in peace! If you hadn’t nailed it to its perch it’d be pushing up the daisies!”/p pAt this stage in the game, we turn to the collective wisdom of Monty Python’s Flying Circus. /p pOf course, they were talking about dead parrots. But they may as well have been talking about the US financial system. /p pYesterday, the feds unveiled an $800 billion plan to bailout indebted consumers and mortgage holders./p pNow, $800 billion sound like a big number to us. But the feds may just be “spitting in the wind” with this size#8230;/p/tr

And Then There’s This…Wednesday, November 26th, 2008

Contrarian Profits — Wed, 26 Nov 2008 18:22:58 +0000

pTuesday was the third day in a row that gold and silver got sold off as soon as trading began in the Far East#8230;and as I write this, Wednesday morning in Asia is shaping up the same way. Gold was down about $15 when the Comex opened in New York on Tuesday#8230;and a ferocious $25 rally (tech funds?) got stopped dead in its tracks at precisely 9:00 a.m. Eastern time#8230;the second day in a row it didn#8217;t get past $830 the ounce. Silver#8217;s fate was similar. Both sold off from there and both finished basically unchanged from Monday. The HUI traded as low as 218#8230;but managed to tack a 5% gain onto that number to close in slightly positive territory#8230;/p

Cracking Heads at GM, Ford and Chrysler

Justice Litle — Wed, 26 Nov 2008 16:20:01 +0000

pThe private jets were the last straw. I speak of the chosen mode of transportation for the “Big Three” automaker CEOs last week. When the heads of GM, Ford and Chrysler made their trek to Washington, they did so in the style of fat cats. They should have flown coach. /p pI’m serious./p pFlying coach would have been little more than a gesture, sure. But it would have said emsomething/em at least. It would have shown that these knuckleheads aren’t completely tone-deaf. But they emare/em tone deaf. They’re crap at the little things. /p pAnd in the end, it’s really all about the little things. When you add up all the little things, you get a big impact.br / /p pTake Honda, for example. Did you know Honda#8230;/p

That Was Then…

Jim Wiandt — Wed, 26 Nov 2008 15:49:44 +0000

You know you're in trouble when the only thing driving the market positive is the latest announcement of a massive government bailout.

It's hard to take your eyes off of this train wreck of an economy we seem to be headed into. And the continuing wild market volatility as we head into Thanksgiving is not reassuring. Worse, the market seems to have priced in our immediate macroeconomic future, as it will do, and the picture is not pretty.

I've seen some panic in the streets, and I've seen some malaise, but never quite this combination of foreboding signs of protracted economic bleakness. Maybe I'm remembering things wrong, or maybe I'm succumbing to the forces of capitulation, but that is my sense headed into this Thanksgiving holiday.

So what do we have to be Thankful for?

Well, first let's start with Matt Hougan's witty and insightful writing. Let's give credit where credit is due. Matt has learned the economic pundit's axiom: If you keep bleating the same forecast and world view—in his case, one of doom and gloom—long enough, eventually you'll be proved a genius. So kudos to you Matt on urging on a 30% shearing of real estate prices and a sub-10,000 Dow.

And what else?

My favorite holiday. Nothing beats Thanksgiving. It's all of the family and none of the commercialism. It's a time to reflect on how fortunate we are (outrageously, it turns out, despite our declining economic prospects ... as in, how dare we complain when a good portion of the world is scrambling for food day by day). And finally—a chance to feast (a tradition built somewhere into every culture I've been exposed to) and focus on family, being together, gorging ourselves and then retiring to the sofa to watch some football, and maybe even throw a few around (this year in the snow) at halftime out in the front yard.

So happy Thanksgiving to all of the Americans, and best wishes to the rest of the world in weathering the storm we've created for you. There's plenty to be thankful for, regardless of the market.

The Trading Day Ahead – 11/25/08

Daniel Shepard — Wed, 26 Nov 2008 14:22:05 +0000

Wednesday November 26, 2008 Navivest The stock market will probably be challenged today and the best course of action would be to lock in profits from the past three days if you have not already done so and enjoy the Thanksgiving holiday. Stock market futures are holding up, we are still indicated to open down triple digits, but [...]

Maybe It’s Time For A Change?

Contrarian Profits — Wed, 26 Nov 2008 13:59:54 +0000

pCurrencies continue to rally#8230; More Stimulus#8230; Data shows more rot on the vine#8230; And Now#8230; Today#8217;s Pfennig!/p pAnother rally day in the currencies yesterday#8230; One that wasn#8217;t as pronounced as Monday#8217;s 3-cent rally#8230; But a rally just the same, and at one point, the euro was trading above 1.30#8230; Hadn#8217;t seen that level in a while, so welcome back to the 1.30 level, Mr. euro#8230;/p pSomeone sent me a note the other day, and said, why don#8217;t you talk about Australia, Canada, and Swiss more? Hmmmm#8230; Maybe they don#8217;t read the Pfennig #8220;every day#8221;#8230; But those currencies are in my notes most days, and if they are not, they are a part of the overall direction in currencies that are being pushed#8230;/p

Getting Ready for Turkey Day

Sean Brodrick — Wed, 26 Nov 2008 11:36:54 +0000

I am seeing a flurry of stories that base metals miners are rushing to shut down. Just look at some of the headlines from the past couple days:brbra style=font-family: verdana; href=http://www.mineweb.net/mineweb/view/mineweb/en/page36?oid=73829sn=DetailZambian copper workers face layoffs/a ... a style=font-family: verdana; href=http://www.mineweb.net/mineweb/view/mineweb/en/page72102?oid=73815amp;sn=DetailIndefinite shutdown for world top /aa style=font-family: verdana; href=http://www.mineweb.net/mineweb/view/mineweb/en/page72102?oid=73815amp;sn=Detailtantalum miner/a ... a href=http://www.mineweb.net/mineweb/view/mineweb/en/page504?oid=73832amp;sn=DetailMwana Africa shuts Zimbabwe nickel mines/a ... a style=font-family: verdana; class=SmallGrayLink title=http://www.resourceinvestor.com/pebble.asp?relid=48281 href=http://www.resourceinvestor.com/pebble.asp?relid=48281Denison Mines delays uranium project/a ... a style=font-family: verdana; href=http://www.theaustralian.news.com.au/business/story/0,28124,24703432-5005200,00.htmlNorilsk Idles Two Mines/a ... I could go on, but you get the picture. This is happening because the global economy is tumbling into recession (See the China story linked below). But down the road, this is also setting up a supply squeeze and subsequent rebound.brbrAnd it's not just base metals: a href=http://www.miningweekly.com/article.php?a_id=148236 target=_blankAustralia's 2008 gold output may fall to lowest level since '89 /a.brbrIn Other News ...brbra href=http://network.nationalpost.com/np/blogs/tradingdesk/archive/2008/11/25/gold-equities-expected-to-pay-off-for-the-patient.aspxGold equities expected to pay off for the patient /ablockquotep style=font-family: verdana;Scotia Capital analyst Trevor Turnbull remains bullish on gold, noting that dollar demand for the metal reached an all-time quarterly record of US$32-billion in the third quarter as investors flocked to safety. He also highlighted the identifiable investment demand gold offers, which includes ETFs, bars and coins./p/blockquoteXX Sean's note -- this guy's picks will look familiar to buyers of my gold report. By the way, did you get yesterday's update to Your Golden Parachute for 2009? It's an important one!p style=font-family: verdana;a href=http://c.moreover.com/click/here.pl?x1707707489amp;f=1774 target=_blank Gold is the answer. Now what was the question? /aWhile gold has hardly been seen to be performing well in recent months, and has failed to meet gold optimists' more extreme, or even more mild, expectations, it has still performed less badly than most other sectors of the market. As has been noted here on several occasions actual physical demand has remained extremely strong, both in eastern and western markets. Major gold suppliers have run out of inventory and seem to be having difficulty replacing it, while ETF demand remains very positive./pa href=http://www.econbrowser.com/archives/2008/11/synchronized_re.htmlSynchronized Recession, Synchronized Stimulus?/ablockquoteIf all the countries (or all the relevant countries) were to stimulate simultaneously, then the aggregate world economy would look a lot more like a closed economy, and the multiplier would be larger yet again./blockquotea onblur=try {parent.deselectBloggerImageGracefully();} catch(e) {} href=http://4.bp.blogspot.com/_32fNCLoKS7g/SS1ArWGf34I/AAAAAAAACd0/Ni0ymVgN1ao/s1600-h/global+growth.gif/ap style=font-family: verdana;strongimg alt= style=width: 480px; src=http://local.content.compendiumblog.com/uploads/user/7e88b461-578b-47f3-88ec-038e212ad053/aa0ff38d-9bb9-44a5-bba5-8be30d8f6977/global%20growth.gifFigure 1:/strong From a href=http://manyeyes.alphaworks.ibm.com/manyeyes/visualizations/oecd-economic-outlook-gdp-growth-forvisualization/a of OECD emEconomic Outlook/em 84 a href=http://www.oecd.org/document/18/0,3343,en_2649_34109_20347538_1_1_1_37443,00.html[link]/a. Blue is negative growth, darkest blue is -9.335%; orange is positive growth, most orange is +9.335%. White is zero; gray is no forecast. /pp style=font-family: verdana;a href=http://www.nytimes.com/2008/11/26/business/worldbusiness/26chinasteel.html?_r=1amp;ref=businessA Global Downturn Puts the Brakes on China's Industry /aIt is happening faster than most anyone predicted: China’s economy, long the world’s fastest-growing major economy, is slowing down. Economists are forecasting that after growing nearly 12 percent last year, China’s economy could slow to 5.5 percent in the fourth quarter of this year — a stunning retreat for a country accustomed to boom times.br/pp style=font-family: verdana;a href=http://www.nakedcapitalism.com/2008/11/western-financial-system-we-knew-has.htmlThe Western Financial System We Knew Has Collapsed/a/pblockquote style=font-family: verdana;Getting banks to lend again is even more essential than getting primary and secondary markets for illiquid structured financial products going again. It may be even more important than getting the regular commercial paper market going again, important though that is. Small and medium enterprises rely overwhelmingly on banks for external finance. Without access to bank loans, credit lines and overdraft facilities, countless SMEs that would be perfectly viable with a functional financial and banking system are threatened with bankruptcy. Without working capital, businesses go out of business. Banks are essential. But they are not lending. Why? A number of possible explanations suggest themselves./blockquotep style=font-family: verdana; face=verdanaAnd now for some good news .../pp style=font-family: verdana; face=verdanaa href=http://www.bloomberg.com/apps/news?pid=20601087amp;sid=auvAhFArbMZoU.S. Mortgage Rates Fall on $600 Billion Fed Plan /aU.S. mortgage rates fell more than three-quarters of a percentage point today ... The average U.S. rate for a 30-year fixed mortgage ended the day at about 5.5 percent after falling to as low as 5.25 percent, according to Bankrate Inc. It was 6.38 percent this morning./pXX Sean's note -- I'll be traveling for Thanksgiving, so my computer access over the long weekend will be very restricted. Have a great holiday, stuff yourself silly, and I'll talk to you on Monday.

Major Market Indexes End Mixed As Volume Declines As We Head For The Thanksgiving Holiday

Joshua Hayes — Wed, 26 Nov 2008 01:26:42 +0000

Today was a mixed session for the indexes but I have to admit that underneath it all there were actually some short-term bullish developments. Now, before you get too excited, remember, we are in a very hardcore downtrend and our shorts from May-now have paid off extremely well. The bottom pickers have been destroyed and [...]

Gold Continues Pushing Higher

Doug Casey — Tue, 25 Nov 2008 18:17:55 +0000

p class="maintextDRP"Gold fell back below $800 in Hong Kong, but once London opened the buyers showed up at the counter, driving it to a peak of $830 just before noon in New York after which it eased slightly, but held steady through the Globex to finish at $821.70, up $20.00. Overnight, gold has fallen off. /p p class="maintextDRP" Platinum also pushed higher through the European and U.S. markets, rising nearly to $870 before slipping a bit late in the day to end at $865, up $41. Overnight, platinum has moved lower./p pSilver had a killer day after dropping as low as $9.48 in the far East, blasting straight up to top out at $10.68 in the late morning and coming off only a little thereafter#8230;/p

No Suprises Here As Another Typical Lower Volume Short-Covering Holiday Session Ends With The Market Putting In Huge Gains

Joshua Hayes — Tue, 25 Nov 2008 02:27:49 +0000

Wow. What a great two days we have had. Or so it seems from the outside to the neophyte. But to the experienced professional it was clear what we had here was your typical low volume short covering pre-Thanksgiving rally. I might have said it here this Friday or not but I told my chat room [...]

The Trading Day Ahead – 11/24/08

Daniel Shepard — Mon, 24 Nov 2008 05:00:16 +0000

Monday November 24, 2008 Navivest With the rumored appointment of Tim Geithner, the current New York Federal Reserve President, as Obama’s Treasury Secretary, stocks turned around late Friday and staged an impressive rally. We expect that we will get some strong follow through on that today and won’t be surprised if we see gains for most of the [...]

Sunday Morning Coffee

Roger Nusbaum — Sun, 23 Nov 2008 13:27:00 +0000

a onblur="try {parent.deselectBloggerImageGracefully();} catch(e) {}" href="http://1.bp.blogspot.com/_7ZckZ-8naz0/SSiZhtTg52I/AAAAAAAACMg/gLToygTH8I4/s1600-h/Molokai+011.jpg"img style="margin: 0pt 10px 10px 0pt; float: left; cursor: pointer; width: 300px; height: 400px;" src="http://1.bp.blogspot.com/_7ZckZ-8naz0/SSiZhtTg52I/AAAAAAAACMg/gLToygTH8I4/s400/Molokai+011.jpg" alt="" id="BLOGGER_PHOTO_ID_5271632168213342050" border="0" //aAnother day another blog post with a lot of comments left so thank you for that. Working its way into yesterday's comments was a little bit more humor than the previous couple of days. So maybe a 6% lift in the last hour on Friday did do a lot to improve people's spirits.br /br /A couple of weeks ago I made a reference or two to a concept brought up by a href="http://brettsteenbarger.com/weblog.htm"Dr. Brett/a called hindsight bias. An example of hindsight bias would be to look back over the last couple of years and say "well of course there was going to be a span style="font-style: italic;"fill in your own description of the current mess/span."br /br /A hindsight bias in the making might be what is being done to try to fix the various problems that exist. There is an article in this week's Barron's that goes down this path some; a href="http://online.barrons.com/article/SB122732246735450265.html?mod=9_0031_b_this_weeks_magazine_main"Has the Fed Mortgaged Its Own Future?/a The article is a look at the balance sheet of the Fed now versus before this started.br /br /The first things I think of are inflation and higher interest rates. By extension then a weak dollar.br /br /We are printing money which has consequences. Our status in the world could soften the blow that another country doing the same thing might face but soften the blow does not mean no blow whatsoever.br /br /Lately the dollar has of course rallied and treasury yields have gone lower. This has been a reaction to the crisis and the mess that is every other part of the fixed income market besides treasuries. The willingness to buy dollars during a crisis and accept all time low yields supports to the idea of a softer blow.br /br /This is far from a certainty as the Barron's article points to one warning sign that the debt issued to pay for all the bailouts and other acronyms may have a longer maturity. Toby Smith made a comment on Bulls and Bears about our kids and grand kids being the ones to bail us out not the US government. You've probably read things in the past about our debt being to big to ever pay off and now all the more so with what has been done and what is still to come.br /br /Sort out your thoughts on these things and prepare for some portfolio changes over the next few years.br /br /On a lighter note we are heading to Maui for a couple of days this morning. Anyone reading this blog for a couple of years may know of my fondness for a particular sporting event that occurs during Thanksgiving week. I hope to have a couple of interesting pictures in the next couple of days. Today's picture is from Molokai.

Stocks Produce A Beautiful Rally On Mixed Volume; Yesterday Was Not Capitulation As There Was Not Enough Volume Or Fear

Joshua Hayes — Sat, 22 Nov 2008 07:16:33 +0000

Friday was indeed a very bullish session and the good news to some market players was that volume was higher on the NYSE and almost at the same level as it was on the Nasdaq from Thursday. The other good news to some was the fact that most of the indexes made up all the [...]

The Best Place to Learn About the Depression

Fred Fuld — Thu, 20 Nov 2008 07:39:00 +0000

If you have parents, grandparents, or friends who are in their 80's, 90's, or 100's, they have lived through the Great Depression of the 1930's. Give them a call and ask them what it was like, how their family survived, what they remember about their friends and neighbors, what they think of today's economy, and how the economic situation today compares to the 1930's.

Don't waste any time. Give them a call today; don't wait until Thanksgiving or 'when I have time'. The time is now. If you have the ability to record the conversation, even better, and if you can videotape it, great. Pick up the phone and make a call. I guarantee you will learn a lot, more than any book.

Charts of S&P and Vix, and the Search for a Market Bottom

Sean Brodrick — Wed, 19 Nov 2008 12:44:47 +0000

My MoneyandMarkets.com column today, Are Oil-Rich Sheiks Being Scared Into Gold?, is pretty bearish on everything but gold. That said, I also wouldn't be surprised to see a broad market rally this next week. In 13 of the last 15 years, the week before Thanksgiving has been a positive one in the market.

And that, in turn, could be the basis for a Santa Claus rally in a very oversold market.

Three common indicators used to find a bottom are the bull/bear ratio, convergence/divergence, and capitulation as measured by the VIX (or fear) Index.

Note that I'm talking about "a" bottom, not "the" bottom. The Dow’s low of 1932 was preceded by at least seven levels that were considered major market bottoms. Looking at today’s market, we aren't looking for THE bottom, we're looking for a tradeable bottom that can be a springboard for a sustainable (several weeks to several months) counter trend rally.

Bull/Bear Ratio: Investors Intelligence surveys 140 financial newsletter writers to determine whether they are leaning bullish or bearish in their opinions to subscribers. The current bull/bear ratio of 0.44 is one of the lowest on record.

Verdict: the bull/bear ratio is a contrary indicator, so this is bullish.

Convergence/Divergence: A unanimous signal from the major benchmarks carries more weight than a fragmented signal. The markets all put in significant lows on October 27th. The Dow hasn't tested that low yet, but both the the Nasdaq (QQQQ) and S&P 500 did. Some will say the Dow has come close enough, others say not yet.

Verdict: Jury is still out. If they all make new lows, or bounce from their recent levels, that will tell us something.

Capitulation is somewhat linked to the VIX, which hit a record intraday level on October 24th and closed at a record level on October 27th. Futures were down limit the night before. There were some indications of panic but when the pit session opened, the stock market rallied back, showing limited downside market action. What we didn’t see was a record spike in volume.

Looking at the chart, you can see that the VIX has backed off its highs. However, I wouldn't be surprised to see it test those highs again -- probably accompanying a swoon in the market.

Verdict: Jury still out. If the VIX trends lower again, that would be a bullish sign.

So far, the evidence is inconclusive. We could see the regular Thankgiving rally and that could lead to a Santa Claus rally. Or we could plunge to new lows pretty quickly.

I think external forces that could move the market is news on the potential auto industry bailout, which could go either way; better news on the dismal international trade picture, which I covered in today's Money and Markets column, which could send the market higher; and a worsening economic picture in China or the global economy generally, which could send it lower.

So many uncertainties! Stay tuned!

Groping Through the Murk and Risk

Sean Brodrick — Tue, 18 Nov 2008 11:48:22 +0000

The US is probably going to join the rest of the industrialized world in recession and all the bad news probably isn’t priced in yet. However, it would not be surprising to see a rally soon.

We’re approaching Thanksgiving. In 13 of the last 15 years the Dow has been up the week before Thanksgiving. Combined with the light volume around the Thanksgiving holiday – there’s an old saying on the Street, “never short a dull market” – we could see a powerful move to the upside before the Dow, the S&P 500 and the Nasdaq finally hold hands and jump off the next cliff.

And then there are commodities. Crude oil fell to the lowest closing price since January 2007 as Japan entered a recession for the first time since 2001. Meanwhile, China National Petroleum, that country’s largest petroleum producer, said demand has dropped “sharply.''

The collapse in crude and other commodities was accompanied by a rip-roaring rally in the U.S. dollar. But now here’s an interesting thing. The U.S. dollar has not been able to capitalize on its recent breakout – stalling at overhead resistance – and yet commodities continue to go lower. This shows that commodities are weak all on their own – they can’t blame all their troubles on the greenback.

The fact that the dollar broke out to the upside and is now consolidating those gains rather than taking off is perplexing, considering the bad news pouring in about other economies. There was bad news for the U.S.yesterday beyond the massive layoffs by Citigroup. The New York Federal Reserve Bank's Empire State Manufacturing Index fell 0.8 points to -25.43. That's the third consecutive month in negative territory and a record low in the seven-year history of the survey.

But bad economic news hasn’t dragged on the U.S. dollar previously, because the news from other economies is so much worse. Like I said, it’s puzzling. Well, if this were easy, everyone would be millionaires. Instead, we grope through a market that is murky with risk.

Here are some stories that I find interesting ...

Why the Energy Crisis Will Oulast the Credit Crisis
The International Energy Agency's annual World Energy Outlook, released on Wednesday, predicts that oil prices will start a steep climb soon, and by 2030 will settle around $120 a barrel — more than double this week's price — as producers face rocketing costs of equipment such as drills and rigs, and are forced into the increasingly expensive business of extracting oil from less accessible fields, many of them far out at sea. Added to that, the world economy continues to grow — albeit at a slower rate — which will likely accelerate again at some point in the coming years — prompting billions more people to drive cars and burn electricity at home during the next two decades.

Big Oil: We told you so
With prices sharply lower from the summer's highs, Big Oil's decision to hold off on new production now seems rather wise.

S&P Notes Surge In Defaults
A total of 85 companies defaulted on bond debt worth $284 billion through Nov. 11, according to Standard&Poor’s, which estimates that the default rate could increase to as much as 9.6% by October of 2009. The rise in defaults contrasts with last year, in which 22 companies defaulted, and 2006, in which there were 30 defaults.

The Six Unknowns That Are Roiling the Stock Market BusinessWeek asked stock market experts to identify the biggest unknowns facing investors. These factors will be crucial to clearing up a foggy outlook. Unfortunately, it could take months—if not years—to resolve them.

Nyrstar to Cut Zinc Output 28% at Belgian, Dutch Smelters to Conserve Cash Nyrstar NV, the world's largest zinc producer, will slash output of the metal at smelters in Belgium and the Netherlands by 28 percent and may extend cuts next year to reduce costs and debt.

China May Need to Offer Grain Export Rebates to Ease Glut, Researcher Says China may need to introduce rebates to boost grain shipments and ease a glut of wheat, rice and corn as a cut in export taxes announced last week won't be sufficient to have an impact, a commodity researcher said.

Why Best Buy (BBY) Won’t Go The Same Way As Circuit City (CC)

Contrarian Profits — Wed, 12 Nov 2008 17:14:47 +0000

Electronics retailer Best Buy (NYSE:BBY) slashed its full-year outlook today, saying it was “the most difficult climate we’ve ever seen.” But Paul Moore says Best Buy isn’t likely to head the same way as mismanaged Circuit City (NYSE:CC). In fact, BBY should even get a lift from the bankruptcy of its main rival just before the holiday season.

This from Smart Profits Report:

Here in the U.S., the mess continues unabated. The government had to reshape its bailout for AIG, including forking over an extra $40 billion. But despite the floundering company’s fourth consecutive negative quarterly report, the markets reacted positively to the story.

That didn’t help avert the crisis other areas, as Detroit’s automakers repeated their increasingly desperate pleas for some financial muscle and…

Roger Wiegand: Predicting a “Severe Bull Market” for Gold

The Gold Report — Tue, 07 Oct 2008 21:35:08 +0000

Seeing beyond the blind curves of bailouts and meltdowns takes the keen vision of a veteran market observer, Roger Wiegand, Editor of Trader Tracks. In this exclusive interview with The Gold Report, Wiegand predicts a “severe bull market” for gold that will include both juniors and seniors. He advises selective buying and names several of [...]

Ag Is Dead?

Roger Nusbaum — Fri, 03 Oct 2008 12:17:00 +0000

So says the MarketBeat blog.

The post lists all sorts of related companies noting how much they are down and throws in a comparison to Microsoft and the tech bubble.

The ag companies have earnings, there is clear and obvious demand for their product as part of the resource theme and the global ascendancy theme as opposed to internet stocks which were valued based on eyeballs.

So clearly ag is different!

Hang with me here, I'm not going where you think I am.

I do think ag is different but that may not be right. The fundamental case for ag in terms of the world needing their stuff seems different but that may not be right. The ag companies make a lot of money and trade at valuations that can be measured but that may not matter.

Ag is either different or it isn't. If you have a 2-3% weighting you don't have to be right about it being different. It would be better if you could be right but you don't have to be. If you have 10-15% or more in ag well it does matter whether you are right or not.

I have had Monsanto for a long time, bought on the way up in the high $80's, sold some in the $120's and still have the stock down here, a few points under water. The way things have worked out it is maybe 1% of the portfolio.

There is no convincing me that the name will not be a moon shot. I like the name so much I would have it over to Thanksgiving dinner (trying to inject some humor). If I am wrong and the name goes to zero that will be bad but not ruinous. I preach on and on about moderation in themes like these for this very reason.

If you follow the logic of the MarketBeat post then we can conclude that there are people who made the same mistakes with ag as with tech from way back when.

All ag stocks are down a lot. All mining stocks are down a lot. All emerging market stocks are down a lot. All oil stocks are down a lot. All industrial stocks are down a lot. All financials stocks are down a lot. Owning some of these is not a problem. Owning too many could be. This might sound subtle but in terms of portfolio impact it could be quite meaningful.

BTW I am not suggesting anyone buy Monsanto. It is just an example, I assume you have stocks that you would like to have over for Thanksgiving dinner.

The Market After Previous 4% down days

Steve Warshaw — Tue, 16 Sep 2008 21:54:32 +0000

Looking Back There is no better teacher than history Yesterdays market action has people nervous; I’ve received hundreds of emails asking “what should I do?” Thanks to Yahoo Fiance, I downloaded 50 years of market data for the S&P 500, and analyzed the market action following previous down days of greater than 4% (it turns out this [...]