Financial News and Notes 11/27/11 – 12/3/11

Economy

-Retailers got off to a good start at the traditional start to the holiday shopping season.  Black Friday sales rose 6.6% from a year ago. 11/28

-New homes sold rose slightly in October compared to September.  11/29

-Cyber Monday was another strong day for retailers as estimates put the increase in sales this year over last at 18%.  11/29

-Consumer confidence rose sharply in November from October. 11/30

-The U.S. is on pace to be a net exporter of oil based fuels for the year for the first time in 62 years.  11/30

-Home Prices fell 0.6% in September according to the Case-Schiller index for the first drop in 5 months.  For the third quarter prices were down 3.9% from a year earlier.  11/30

-Retailers saw solid gains in November with sales rising 3.2%, however some chains saw sales weaker than expected suggesting the holiday sales could be uneven for U.S. retailers.  12/2

-The U.S. saw manufacturing rise in November to the highest level since June.  However, the U.S was in the minority as most other nations reported slowing growth.  China contracted for the first time in close to three years and Europe’s debt crisis continues to weigh on the manufacturing sector there.  12/2

-Auto sales continued to show growth as the number of vehicles sold hit an annual pace of 13.6 million in November.  Leading the charge was SUVs and trucks which had been out of favor since the recession.  12/2

-The unemployment rate fell to 8.6% in November from its 9.0% October reading to reach its lowest level since early 2009. There were 120,000 jobs added over the month and the hiring numbers for September and October were revised upwards.  However, about half of the improvement in the unemployment rate came from people dropping out of the workforce and no longer seeking employment.  12/3

Corporate

-The NBA and its players were able to reach a deal over the weekend ending the lockout.  Play is expected to start on Christmas. 11/28

-Facebook is now targeting an IPO in the second quarter of 2012 and hopes to raise $10 billion which would value the company at $100 billion.  11/29

-S&P downgraded over a dozen financial institutions including the six biggest U.S. financial institutions J.P. Morgan, Bank of America, Citigroup, Wells Fargo, Goldman Sachs, and Morgan Stanley.  11/30

-Small U.S. banks are cutting jobs with a reduction of over 20K jobs in the third quarter. 11/30

-AMR, American Airlines parent company, filed for bankruptcy protection.  The third largest U.S. airline costs had become unsustainable in an industry that has seen other carriers file for bankruptcy and reorganize.   11/30

-Barnes and Noble showed a loss on weak bookstore sales despite improving online growth.  12/2

Regulatory

-A judge rejected the settlement between Citigroup and the SEC for $285M over Citi’s mortgage bond dealings as the Judge believes that the firm settling without admitting fault was “not in the public interest.” The ruling could have significant impact on how the SEC pursues corporations in charges of wrongdoing in the future.  11/29

Market 

-EU leaders discussed a new pact that would bind the countries fiscal policies more tightly.  11/28

-Stocks shook off the recent losing streak for a strong bounce back day on news of strong black Friday sales and progress in new European debt proposals.  The Dow rose 2.6%, the S&P 500 climbed 2.9%, the Nikkei was up 1.6%, and Europe jumped 3.8%.  11/29

-Italy paid new record yields at its most recent bond auction, however in a positive sign there was more buyers than expected.  11/30

-Wall Street cheered the coordinated central bank effort to ease global financial strains as a result of the European debt crisis.  The Dow jumped 4.2% its biggest daily gain since March of 2009. Europe rose 3.6%.  Oil rose back over $100 a barrel and gold surged to $1,745.50.  The ten year treasury yield reached 2.065% its high for the month.  12/1

-ECB president Mario Draghi indicated that the ECB would be willing to take a more active role in the markets if European leaders agree to enact tougher budget cutting measures.  12/2

-Driven by the markets repose to the coordinated central bank effort announced during the week.  The Dow rose 7.0% for the week, its biggest weekly gain since 2009.  However many in the bond market are still wary.  Bonds barley moved over the week with the 10 year Treasury yield only rising to 2.046% from 1.966% a week earlier.  Small cap stocks as measured by the Russell 2000 saw the best performance domestically rising 10%.  The S&P 500 rose 7.4%, Europe gained 8.7%, and Japan rose 5.9% for the week.  12/3