Stocks & Equities

The first spending decline on a Black Friday weekend since 2009 reinforced projections for a lackluster holiday, increasing chances retailers will extend the deep discounts already hurting their profit margins.

Purchases at stores and websites fell 2.9 percent to $57.4 billion during the four days beginning with the Nov. 28 Thanksgiving holiday, according to a survey commissioned by the National Retail Federation. While 141 million people shopped, about 2 million more than last year, the average consumer’s spending dropped 3.9 percent to $407.02, the survey showed.

The survey results, if borne out at cash registers in American malls and on website checkout screens, herald retailers’ likely return to Black Friday-type discounts this week and suggest added stress for several chains. Wal-Mart Stores Inc. (WMT) and Target Corp. (TGT) already cut profit forecasts after tepid sales gains in back-to-school shopping.

“Retailers didn’t get what they wanted from Black Friday and they will need to make it up in the next three weeks,” Poonam Goyal, an analyst for Bloomberg Industries, said in an interview. “There will be some panic sales.”

….more HERE

Faber – We Are In A Massive Speculative Bubble

Posted by Marc Faber via Various Interviewers

on Monday, 2 December 2013 5:51

The stock market is hitting record highs every week. Does that mean we are back in bubble territory?

Unquestionably yes says Marc Faber. But not just in equities.

Faber also thinks there is a gigantic speculative bubble in bonds, farmland, bitcoins and virtually eery asset class.

He does not see any value in stocks at this point.

Marc Faber Limited managing director, and The Gloom, Boom & Doom Report publisher, discusses the market’s record run and his plans to short stocks. 

Ed Note: That said he says The Fed can Buy the whole Stock Market

“Even if the market drops by 20 percent it is not cheap. The Fed could go into the market and buy the whole S&P500. They would have to borrow money or issue money but basically they can do it. It has happened before. In Hong Kong in 1997, the government came in and bought the stock market but at that time it was cheap.”

 “We have to be careful of these kind of exponentially rising markets,” chides Marc Faber, adding that he “sees no value in stocks.” Fearful of shorting, however, because “the bubble in all asset prices” can keep going due to the printing of money by world central banks, Faber explains to a blind Steve Liesman the difference between over-valuation and bubbles , warning that “future return expectations from stocks are now very low.” – in Zerohedge

Faber said the markets, which have reached record highs, could still rise before the bubble bursts, if stimulus programs such as the Federal Reserve’s massive monthly bond purchases and super-low interest rates continue. “Now can the market go up another 20 percent before it tumbles?” Faber said on “Squawk Box”. “Yeah, it can go up even more, if you print money.” 


Marc Faber is an international investor known for his uncanny predictions of the stock market and futures markets around the world. He has a daily blog HERE

dance full2-1Ed Note: This image is one from Faber’s GloomBoomDoom website. Here is an explanation he has for this image:

Illustrations for this web site are taken from the series of paintings created by Kaspar Meglinger between 1626 and 1635 known as “The Dance of Death”. The paintings are under the roof of Lucerne’s Spreuer Bridge (completed in 1408) and bring forcibly to mind the transitory nature of life on earth. All “The Dance of Death” illustrations can be clicked for a larger photo.


Investors are heading into the Thanksgiving holiday in a cheery mood as stocks continued to extend this year’s record-breaking run.

The Dow and S&P 500 inched higher and closed at new records Wednesday. The Nasdaqalso gained ground and finished at its highest level since September 2000.

November has been another solid month in what’s been a stellar year for stocks. The Dow has advanced 3.5% while the S&P 500 and Nasdaq have increased 3%. All three indexes have surpassed key milestones. The Dow is above 16,000, the S&P 500 is trading above 1,800 and the Nasdaq closed above 4,000 for the first time in 13 years Tuesday.

Year-to-date, these indexes have climbed between 20% and 35% thanks to a slowly recovering economy, solid corporate earnings and bond purchases by the Federal Reserve.

Related: No tech bubble here

Trading volume was thin on Wednesday, as traders began to escape for the Thanksgiving holiday. The U.S. stock markets are closed Thursday and only open for a half-day of trading on Friday.

But traders were watching the Bitcoin market closely. The price of the virtual currencytopped $1,000 for the first time Wednesday morning.

The price of one Bitcoin has surged 78-fold in 2013 on hopes the experiment in digital money will eventually become a legitimate global currency. Traders on StockTwits acknowledged that chatter about a Bitcoin bubble has been going on for months, but many still remained intrigued by the massive run-up in the virtual currency.

“$BCOIN Incredibly cheap or incredibly expensive?” asked zagnut. “Makes for a great speculative investment. A small one. :)”

Some traders think the currency’s value could continue to grow in the near future.

“$BCOIN It wouldn’t shock me the slightest to see it at $1,500 near term,” saidCashtrend.

 

Chart of the Day

Posted by Chart of the Day

on Thursday, 28 November 2013 14:33

The Dow just made another all-time record high. To provide some further perspective to the current Dow rally, all major market rallies of the last 113 years are plotted on today’s chart. Each dot represents a major stock market rally as measured by the Dow with the majority of rallies referred to by a label which states the year in which the rally began. For today’s chart, a rally is being defined as an advance that follows a 30% decline (i.e. a major bear market). As today’s chart illustrates, the Dow has begun a major rally 13 times over the past 113 years which equates to an average of one rally every 8.7 years. It is also interesting to note that the duration and magnitude of each rally correlated fairly well with the linear regression line (gray upward sloping line). As it stands right now, the current Dow rally that began in March 2009 (blue dot labeled you are here) would be classified as well below average in both duration and magnitude. However, the magnitude of the current post-financial crisis rally has now reached median status — its magnitude is greater than six and less than six Dow rallies since 1900.

Notes:
Where’s the Dow headed? The answer may surprise you. Find out right now with the exclusive & Barron’s recommended charts of Chart of the Day Plus.

20131127

Quote of the Day
“An expert is someone who has succeeded in making decisions and judgments simpler through knowing what to pay attention to and what to ignore.” – Edward de Bono

Events of the Day
November 27, 2013 – Hanukkah (1st day)
November 28, 2013 – Thanksgiving Day
December 10, 2013 – Nobel Prizes awarded (announced in October)

Stocks of the Day
— Find out which stocks investors are focused on with the most active stocks today.
— Which stocks are making big money? Find out with the biggest stock gainers today.
— What are the largest companies? Find out with the largest companies by market cap.
— Which stocks are the biggest dividend payers? Find out with the highest dividend paying stocks.
— You can also quickly review the performance, dividend yield and market capitalization for each of the Dow Jones Industrial Average Companies as well as for each of the S&P 500 Companies.

Chart of the Day is FREE to anyone who subscribes. Just go HERE and enter your email address

 

Top Stories

Merkel secures coalition deal but agreement faces SPD vote. After two months of negotiations following Germany’s general election, the right-of-center grouping of Chancellor Angela Merkel has finally forged a deal with the left-leaning Social Democrats (SPD) to form a government. Germany will largely maintain its fiscal conservatism, although the country will introduce a minimum wage and strengthen labor-market rules. The deal now needs the approval of SPD’s 474,000 members, with the results of a vote due on December 14.

U.S. defies China with flight of unarmed B-52 bombers. The U.S. has got involved in the islands dispute between Japan and China in the East China Sea by flying two unarmed B-52 bombers in the area without informing Beijing. China had created an Air Defense Identification Zone around the islands and warned of military action against planes flying in the region if notification wasn’t given. Japanese airlines also flew through the area without first telling China. When the dispute first arose a year ago, trade between China and Japan was badly hit.

H-P’s stock jumps following earnings beat. H-P’s (HPQ) shares spiked 7% premarket after the IT giant swung to a net profit of $1.41B from a loss of $6.85B a year earlier, with adjusted EPS coming in at $1.01 and topping expectations, as did revenue despite falling 3% to $29.1B. However, sales fell in five of H-P’s six business segments, with demand for personal computers collapsing. CEO Meg Whitman said she was moving H-P to “a new style of IT” based on cloud computing and in which consumers can produce mobile phones in kiosks with 3D printers.

Top Stock News
Top U.S. banks’ mortgage payouts could hit $104B. JPMorgan (JPM) and Bank of America (BAC) are among eight leading U.S. banks that could have to pay a further $56.5-104B to settle mortgage-related claims, S&P calculates. However, the country’s largest banks have estimated capital buffers of $155B combined, which would be enough to absorb the losses. S&P doesn’t expect the legal liabilities to hurt the banks’ ratings.

SEC looking at Morgan Stanley and Citigroup over foreign hiring. Morgan Stanley (MS) and Citigroup (C) have reportedly received requests for information about their overseas hiring practices from the SEC, which is looking at whether the banks breached laws relating to foreign bribery by recruiting the family members of the well-connected in order to win business. The firms join JPMorgan (JPM) in being scrutinized over the issue, with the latter under criminal and civil invesigations.

RBS faces possible criminal probe over small-business claims. The U.K.’s Serious Fraud Office (SFO) is reportedly thinking of starting a criminal investigation into accusations that the bank looked to profit by forcing “vibrant” small companies out of business and then seizing their assets. The SFO has been interviewing former executives of affected firms. The agency is deciding whether RBS acted unlawfully or just engaged in bad business practices.

Aramark looks to raise $1B in IPO. Stadium food and clothing vendor Aramark reportedly intends to raise up to $1B in its IPO, which could take place in December. Aramark would use the money to repay some of its debt of $5.7B – a legacy of the $6.3B deal that took the company private in 2007. Aramark’s IPO comes at the same time as that of Hilton, both of which could ensure that a banner year for public listings ends with a bang.

Bankruptcy judge to issue ruling on AMR-US DOJ deal. AMR (OTCQB:AAMRQ) and US Airways (LCC) are due to find out today whether Bankruptcy Judge Sean Lane approves of their settlement with the Justice Department over their proposed merger. The DOJ had opposed the transaction until the airlines agreed to concessions. The deal also needs the authorization of a federal district judge, who is accepting public comments until February 7.

Amec eyes $2.8B Foster Wheeler. U.K. energy services group Amec (GM:AMCBF) is looking to take over Foster Wheeler (FWLT), which has a market cap of $2.83B, the London Times reports. The companies have been in discussions in the past but aren’t currently in talks. Reuters adds that Amec is looking at a number of targets but also that it isn’t in discussions with any of them. Foster Wheeler’s shares rose 7.55% in post-market trading.

Compuware receives buyout approaches. Compuware (CPWR) has reportedly been exploring selling itself for months and has received approaches from private-equity funds, with potential suitors including Thoma Bravo and Vista Equity Partners. The Detroit-based software group, which has a market cap of $2.34B, could agree to a deal by January. The news comes almost a year after Compuware rejected a $2.3B offer from Elliott Management. The activist investor holds 8.6% in Compuware.

Top Economic & Other News
Berlusconi faces expulsion from Italian Senate. Silvio Berlusconi is expected to be expelled from Italy’s Senate today following his conviction for tax fraud in August. Because of the recent break-up of the former prime minister’s right-wing grouping, in which one faction stayed in the government, his removal from the Senate is unlikely to affect the coalition. The episode has every so often caused turmoil in the markets, although the FTSE Mib was+1.1% at the time of writing.

Alpha-Rich Stock Movers and Great Calls
1) On Monday, buysider Logical Thought said Pain Therapeutics (PTIE) had 120%+ risk-adjusted upside based on approval of its flagship drug, Remoxy. Shares are +16.3% in the two sessions following publication. Read article »
2) On August 23, MBAvalueinvestor called Nuverra Environmental (NES) an over-levered “destroyer of capital,” with 80% downside toward its fair value. The stock is now -43.6% to date. Read article »

Alpha-Rich Stocks To Watch
1) Veterinary supplier Heska (HSKA) could double in 2014, as a recent acquisition has created a leading competitive position, says BuyTheDipsSellTheRips. Read article »
2) Autobytel’s (ABTL) powerful lead generation platform will continue to drive growth and upside in the near and long term, according to buysider Ravee Mehta. Read article »

Alpha-Rich articles are the best long and short ideas on Seeking Alpha. SA Pro subscribers receive early access to these Alpha-Rich articles, which often move markets. For more information about SA Pro and becoming a subscriber, click here.

Today’s Markets: 
In Asia, Japan -0.4% to 15450. Hong Kong +0.5% to 23806. China +0.8% to 2201. India flat at 20420. 
In Europe, at midday, London +0.1%. Paris +0.2%. Frankfurt +0.2%. 
Futures at 6:20: Dow +0.1%. S&P +0.1%. Nasdaq +0.1%. Crude -0.4% to $93.29. Gold +0.8% to $1251.40. 
Ten-year Treasury Yield +1 bps at 2.73%.

Today’s economic calendar:
7:00 MBA Mortgage Applications
8:30 Durable Goods
8:30 Initial Jobless Claims
8:30 Chicago Fed National Activity Index
9:45 Chicago PMI
9:45 Bloomberg Consumer Comfort Index
9:55 Reuters/UofM Consumer Sentiment
10:00 Leading Indicators
10:30 EIA Petroleum Inventories
12:00 PM EIA Natural Gas Inventory
1:00 PM Results of $29B, 7-Year Note Auction
3:00 PM USDA Ag. Prices

 

Notable earnings before today’s open: FRO

 

Notable earnings after today’s close: RENN

 

See full real-time earnings coverage »

 

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