Archive for 2011

• The S&P 500 Peaks Above 1,240
  Eddy Elfenbein, November 10th, 2011 at 12:10 pm

  After yesterday’s bloodbath — which mostly happened in the afternoon — the S&P 500 has slowly gained back some territory.

  What I find interesting is that for now, there seem to be buyers willing to defend the market above 1,200. That didn’t happen a few weeks ago.

  

• Morning News: November 10, 2011
  Eddy Elfenbein, November 10th, 2011 at 5:19 am

  Investors Around the World Flee Stocks

  Italy’s Senate Speeds Austerity Vote

  China’s Trade Surplus Widens, Falls Short of Forecast

  Trade War in Solar Takes Shape

  E.U. Poised to Overtake U.S. as Biggest Oil Importer

  Corporate Japan Rocked by Scandal at Olympus

  Sweden’s Tough Love of Banks is World Model

  G.M. Posts Quarterly Profit, but Chief Calls It Insufficient

  Deutsche Telekom Net Profit Rises

  Siemens Sees Stagnant Profit as Growth Slows

  Aegon Net Drops 95%, Hurt by Falling Stocks, Interest Rates

  Wal-Mart to Start Its Sales at 10 P.M. on Thanksgiving

  Google’s Chief Works to Trim a Bloated Ship

  Jeff Carter: Yet Another Buying Opportunity?

  Stone Street: Analyzing the Popular Proposals for Mortgage Principal Writedowns, Part I, Part II, Part III

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• The Stock Market’s Gain Has Come on One Day in Every 21 Months
  Eddy Elfenbein, November 9th, 2011 at 1:04 pm

  The Dow’s entire 3,066% gain since the 1929 top came on just 46 days. On average, that’s being long on just one day every 21 months. The other 99.78% of the time, the Dow has been flat.

  While this fact is technically correct, it’s very misleading. For one, I’m using the market’s top in 1929, plus I’m not including dividends.

  But what really makes the stat work is the market’s volatility. Those 46 days were all days of greater than 5.3% rallies. In fact, 34 of those 46 days occurred from 1929 to 1933.

• Italian Bond Market Sinks U.S. Stocks
  Eddy Elfenbein, November 9th, 2011 at 9:57 am

  The market is down sharply this morning on the news of a seriously freaked out bond market in Italy. If the bond market ain’t happy, ain’t nobody happy.

  Ten-year bonds are now paying more than 7% which is the highest since the euro came along. This comes after Prime Minister Silvio Berlusconi said he would step down after a budget deal was reached. Initially, markets rallied on the news. (Note to self: It’s usually not a good sign when the news of your departure sparks a rally.) So where are folks seeking shelter? You guessed it—U.S. Treasury bonds.

  Our 10-year note is now back below 2%. There’s going to be a big auction of 19-years by the Treasury later today. Yesterday’s three-year auction had some pretty intense demand.

  Shares of General Motors ($GM) are lower after the company said that its third-quarter profits dropped 15% from one year ago. This is the company’s seventh-straight profitable quarter and they topped expectations. GM is taking a bath in Europe and they said they don’t expect to break even this year in Europe.

  It’s still early, but the S&P 500 has been as low as 1,240.99 which is a drop of 2.74%.

• Morning News: November 9, 2011
  Eddy Elfenbein, November 9th, 2011 at 5:17 am

  Financial Alchemy Foils Capital Rules in Europe

  European Debt Crisis as Berlusconi’s Last Stand

  European Stocks Slide as Italian-German Bond Yield Spread Widens

  Lagarde Warns of Risk of ‘Lost Decade’ for Global Economy

  China October Inflation Cools, More Policy Tweaks Seen

  Bank of Japan Official Urges Japan to Restore Fiscal Health

  Occupy Movement Inspires Unions to Embrace Bold Tactics

  A Board Complicit in MF Global’s Bets, and Its Demise

  HSBC Investment Bank Profit Shrinks

  AB InBev Revenue Misses Estimates as U.S. Beer Sales Slide

  Carlsberg Surges After Brewer Reiterates Full-Year Forecast

  Republic Surges Most Since 2009 With Frontier Airlines Set for Separation

  Maersk Sees Losses as Freight Rates Plunge

  Shares Dive as Olympus Scrambles for Answers

  Cullen Roche: The Stocks Vs. Italian Yields Conundrum

  Joshua Brown: Citi Spots a Positive Trend in Housing – Depletion

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• Leucadia National Reports Q3 Loss of $291 Million
  Eddy Elfenbein, November 8th, 2011 at 9:04 pm

  Leucadia National ($LUK) just reported a loss of $291 million for the third quarter. Don’t be too alarmed. LUK refuses to follow the Wall Street script of making their earnings report easy-to-read.

  The accounting they present is strictly by the book and little is done to make the numbers more accessible for shareholders. Despite the company having a market value of more than $6 billion, no analysts on the Street cover them which gives them even less incentive to play the quarterly earnings game.

• 10-Year TIPs Spread and Equity Returns
  Eddy Elfenbein, November 8th, 2011 at 1:14 pm

  I’m clearly having fun with my spreadsheets today.

  Check this out:

  Since 2003, the total return of the Wilshire 5000 has lost 9.2% when the 10-year TIPs spread is 2.36% or greater. Annualized, that’s -2.7%.

  When the TIPs spread is 2.35% or less, the total return of the Wilshire 5000 has been 95.1%. Annualized, that’s +13.5%.

• S&P 500 and the 10-Year Yield
  Eddy Elfenbein, November 8th, 2011 at 12:00 pm

  Here’s an interesting stat I found.

  Since 2007, the S&P 500 has done much better when the yield on the 10-year T-bond has been below 3.5% than when it has been above 3.5%.

  When the 10-year yield has been below 3.5%, the S&P 500 has gained a combined 78.6%.

  When the 10-year yield has been above 3.5%, the S&P 500 has lost 50.2%.

  The 10-year is currently at 2%.

• Booming North Dakota
  Eddy Elfenbein, November 8th, 2011 at 10:03 am

  Ever heard of the Bakken formation? You soon will. Thanks to oil, western North Dakota’s economy is growing so fast that communities are struggling to keep up. Strippers make $2,000 a night. Here’s a look at how fast production is growing.

• Morning News: November 8, 2011
  Eddy Elfenbein, November 8th, 2011 at 5:32 am

  EU Eyes December Start for Rescue Fund

  In Turmoil, Greece and Italy Deepen Euro Crisis

  Interest Rates on Italian Bonds Pushed to New Levels

  Businesses Feel the Pinch as China Tightens Lending

  Oil Trades Near a Three-Month High on U.S. Supply, European Crisis Outlook

  Promises Made, and Remade, by Firms in S.E.C. Fraud Cases

  MF Global’s Europe Clients Fume, U.S. Breathes Easier

  Its Leader on Sidelines, Regulator Faces Biggest Test in MF Global

  Toyota Q2 Falls 32%, Withdraws Full-year Forecast

  Olympus Hid Losses With Acquisition Fees

  Societe Generale Q3 Profit Declines 31% on Greece

  Vodafone Raises Full-Year Forecast

  Global Reinsuring Giant Munich Re’s Quarterly Net Decline Exceeds Analysts’ Forecast

  Facebook Wins Battle of Europe Clones

  High Bank Fees Give Wal-Mart a Money Aisle

  Edward Harrison: Italy’s Debt Woes and Germany’s Intransigence Lead to Depression

  Paul Kedrosky: Germany, Not China, Must Bail Europe

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