Monday last the markets extended their winning streak. According to Wayne Whaley of futures firm Witter & Lester who reported that this continued rally does not have doom written all over it as some would think. Whenever the markets advanced at least 10% without at least a 2% pullback only once in 22 times was the market down a month later. (From your lips, Wayne.) - Balancing the budget officials are looking at eliminating deductions on mortgage interest, the child tax credit and the ability of employees to pay their portion of their health-insurance tab with pre-tax dollars. (I have no idea what these idiots are drinking but they’re as serious as cancer about this. Can you say, This is another sure way to kill housing forever.)
- The Government latest TIPS auction went well as the Treasury sold $10 billon of the inflation-protected bonds with a ‘negative’ yield. If inflation heats up to 5% over the next 5 years those TIPS will bring an averaged yield of 4.45% and if the CPI declines to 2% investors will get 1.45%. In either case investors win.
- Financial advisors still prefer American Funds and Blackrock, Inc. However, Franklin Templeton has doubled in preference from a year ago.
- Opps on Tuesday as trading flattened. Coach, Ford and Bank of America gained while DuPont fell. At the closing bell DJIA, S&P and Nasdaq finished slightly up.
- Some of America’s money managers, in Sunday’s Barrons.com, say stocks are cheap and the economy will keep growing. They’re bullish on tech and bearish on Congress. The chart reflects their thoughts.
- IBM buying back $10 billion of its stock. Quick- what does that generally mean for a bellwether stock like IBM? (You are right, dear reader.)
- Due to a stronger yen Toyota plans to increase price on several of its models in 2011. Ford aims to decrease debt to zero. Shares have doubled in the last 12 months.
- BarronsTake was bullish on Ford in June and is still bullish at current levels in excess of $14 a share.
- Someone manipulating the price of silver? Seems one regulator at the Commodity Futures Trading Commission is putting pressure for an investigation. Four market players own in excess of 24% of all net bearish bets in the silver market. These include HSBC and J.P. Morgan. Zounds! Retro Nelson Bunker Hunt and his brother who tried to corral the same market.
- As long as we’re into alliteration –zoom, zoom – as the Fed gears up to start buying Treasuries this week, Thomas Hoenig, president of the Federal Reserve Bank of Kansas City, said that the monetary policy was a ‘bargain with the devil.’ The Fed’s aim is to push down yields and drive up prices on bonds in order to spur more investment and spending.
- GM gearing up (get it?) for IPO road show. Banks are pressuring Treasury to maximize number of shares to offer at IPO. While not disclosing details some money managers report they would be leery of GM stock at levels being discussed. Expect shares to be offered around Thanksgiving.
- Speaking of IPOs there are some hot ones in the pipeline: Harrah’s Entertainment, HCA, Inc., Nielsen Holdings, Skype.
- Bill Gross of PIMCO declares the death of the Bond Bull market by the Federal Reserve. Yes, indeed, Bill, the Fed wants bonds to be pushed down to levels where the only other direction will be up.
- Unemployment numbers decreased unexpectedly last Thursday. That’s a lot of un’s in one sentence. Here’s the deal- no second recession or double dip. Equities will outperform bonds going forward and the economy will get slowly better and better and better. Don’t be sitting in cash is the object lesson here.
- Stocks ended mixed Wednesday as investors considered the Fed easing as being ‘not enough’.
- Microsoft edged up on great news as it posted a 52% profit. According to MSFT general manager of investor relations Bill Koefoed, ‘Businesses are spending money.’ MSFT is still under April 2010 highs.
- Consumer uncertainty is still in driver’s seat as Sketchers USA, Jones Apparel Group and Whirlpool all were disappointed with sales of their products last week. Inventories are causing fourth quarter concern.
- Kohls, on the other hand, and according to Bloomberg BusinessWeek, plans on hiring 40,000 part-time employees for the holiday season.
- In the same Bloomberg’s BW issue prediction of a strong 2011 with a projected 3% GDP by the 4th quarter up 50% from this quarter of 2%.
- China plans on more than halving the number of state-owned businesses by 2015. Expect more IPOs & investment opportunities. Industrial & Commercial Bank of China, Ltd., the world’s largest bank and 70% owned by the Chinese government just bought Prime Dealer Services a U.S. broker/dealer with only 75 customers from Fortis Securities, a French firm.
- So who did what for the month? The S&P was up 3.7% as was gold. The dollar fell 3.6% and the Nasdaq was up 5.9%.
Questions call Paul @ 877 783 7080 or write him at pstanley@westminsterfinancial.com. Share this blog with someone who cares.
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