12/24/2009

Tech issues outperformed again today in a very slow session marked by anemic volume and decreasing volatility. Because of a lack of corporate news releases, investors focused largely on economic data releases.

The Labor Department reported a larger-than-expected decline in initial jobless claims (newly laid-off workers filing claims for unemployment). Compared to the previous week, these dropped from 480,000 to 450,000, better than the consensus estimate of 470,000. Although the labor market overall is still considered to be weak, today's data is encouraging as initial jobless claims are now at their lowest level since the fall of 2008. However, the impact of temporary holiday employment is hard to gauge and factor into seasonal adjustments. According to economists, initial claims numbers consistently below 425,000 (for at least several weeks) would be required in order to signal a stronger labor market (and an economy that is actually generating new jobs rather than just losing employment at a lesser rate).

The Commerce Department reported that big-ticket durable goods orders to US factories were up 0.2% in November. While the overall increase was below economists'' expectations (for a 0.5% gain), orders were up 2% when transportation orders are excluded. Transportation suffered from a plunge in commercial aircraft orders and from slumping demand for motor vehicle parts. More orders however came from other sectors such as machinery, primary metals, as well as from computers and electronic products.

Two signs of more lingering aftereffects from the financial crisis / recession: In a rare Christmas Eve vote in the Senate, the US government debt ceiling has been raised by $290 billion to a total of $12.4 trillion. Further, the Treasury Department announced that it has removed a $400 billion financial cap on the money it is willing to lend to keep certain companies in business. Instead of capping the amount of funds it provides, the Treasury Department said it will start using a more flexible formula, basing the amount of support on how much a firm loses per quarter. Beleaguered mortgage guarantors Fannie Mae and Freddie Mac (who purchase home loans from lenders and sell them to investors) are key beneficiaries of the changed procedures. Fannie Mae and Freddie Mac together own / guarantee close to 31 million home loans worth about $5.5 trillion, equating to roughly half of all US mortgages.

Key economic data for the week starting December 28, 2009. Numbers shown are consensus estimates (market anticipates this value) and prior value.

Tuesday:
	9:00 AM S&P CASE SHILLER INDEX (Oct): 146.8 / 146.5 S&P CASE SHILLER Y/Y (Oct): -7.3% / -9.4% 10:00 AM CONF.BOARD CONSUMER CONFIDENCE (Dec): 52.9 / 49.5

Wednesday:
	9:45 AM CHICAGO PMI (Dec): 55.6 / 56.1

Thursday:
	8:30 AM CONTINUING CLAIMS Dec-19: 5170K / 5186K INITIAL CLAIMS Dec-26: 470K / 480K

Friday:
	Markets closed for New Year's Day

12/23/2009

We have recently been in a market that has risen on good news but also on bad news. Case in point, the major indexes continued their seasonal Santa Claus rally today, up for a fourth consecutive session, in spite of disappointing new home sales data (discussed below). The fact that the market continued to rise nonetheless was explained by 'a weaker dollar'. However, it has been apparent over recent session that equities have largely decoupled from the formerly tight correlation with the US dollar. The sliding greenback, pulling back from a 3-month high, did however boost commodities today, even gold prices recovered slightly. Crude oil prices (which increased by almost 3% today) also benefited from a larger-than-expected reduction of weekly petroleum products stockpiles.

The largest disappointment of the session was the release of new home sales data. According to the Commerce Department, November sales of new homes were down a very significant 11.3%, slumping to their lowest level since March. The news was a disappointment because it contradicted economists' expectations for an increase, and also because only yesterday, a separate report had indicated a much better-than-expected gain in the sales of existing homes. Analysts however suggest that yesterday's resale numbers were artificially boosted by government subsidies, from buyers rushing to take advantage of a tax credit initially believed to expire at the end of November. In contrast, today's data pertains to new home sales signed in November, with buyers now fully aware that the deadline for the tax credit had been extended.

In other economic news releases today, the Commerce Department announced that personal spending and personal incomes increased in November, both having advanced at the fastest pace in four months. Personal incomes were up 0.4% and personal spending rose 0.5%. Economists however believe that the current rate of advance is too modest to truly boost the economy over the long term.

Key economic data for the week starting December 21, 2009. Numbers shown are consensus estimates (market anticipates this value) and prior value.

Thursday:
	8:30 AM CONTINUING CLAIMS Dec-12: 5180K / 5186K INITIAL CLAIMS Dec-19: 470K / 480K DURABLE GOODS ORDERS M/M (Nov): 0.5% / -0.6% DURABLE GOODS ORDERS EX-TRANS M/M (Nov): 1.0% / -1.3%

Friday:
	Markets closed for Christmas

12/22/2009

Notable about today's market rally was the fact that equities continued to drift higher to new 52-week highs in spite of a surprising downward revision to third quarter GDP numbers. According to the Commerce Department, the revised GDP reading showed a growth rate of 2.2 percent, lower than the previous estimate of 2.8%.

Equities also rose even though the US Dollar Index posted a fresh three-month high. The US dollar continues to gain strength as it is serving as a safe-haven currency on the heels of credit-rating agency downgrades of Greece's government bonds, as well as rising debt levels in other European countries (including Ireland, Spain, and Portugal).

Also bolstering the bullish case was a positive report from the National Association of Realtors which suggests home resale numbers surged by more than 7% in November, increasing significantly more than analysts had been expecting. It appears that government tax incentives have boosted the number of existing home sales to their highest level in almost three years. The annualized rate thus swelled to 6.54 million units, exceeding the prediction sales would increase to 6.25 million units.

Many market analysts are discussing the likelihood that we are / will be witnessing a strong year-end bullish bias (often called the Santa Claus rally, a phenomenon that brings a positive bias in the week leading up to, as well as during the week following Christmas). In this context, it is worth noting that the market's so-called 'fear gauge' - the CBOE volatility index VIX - today closed below the 20 level for the first time since August 2008. This means that investors are relying less on puts for portfolio protection, typically in the belief that the market will keep rising. In some instances, low VIX levels can be used as a contrarian signal that investors have become too complacent and that a sell-off might soon occur. Case in point, the last two times the VIX was close to the 20 level, equities responded with a sell-down. However, there is often a seasonal VIX volatility crush as Christmas approaches. From a calendar perspective, it is therefore possible that the market's fear gauge will continue to decline over the short-term.

Key economic data for the week starting December 21, 2009. Numbers shown are consensus estimates (market anticipates this value) and prior value.

Wednesday:
	8:30 AM PCE DEFLATOR Y/Y (Nov): 1.6% / 0.2% PCE DEFLATOR Y/Y (core) (Nov): 1.5% / 1.4% PERSONAL INCOME M/M (Nov): 0.5% / 0.2% PERSONAL SPENDING M/M (Nov): 0.7% / 0.7% 10:00 AM NEW HOME SALES SAAR (Nov): 438K / 430K NEW HOME SALES M/M (Nov): 1.9% / 6.2% MICHIGAN CONSUMER SENTIMENT (Dec F): 74.0 / 73.4

Thursday:
	8:30 AM CONTINUING CLAIMS Dec-12: 5180K / 5186K INITIAL CLAIMS Dec-19: 470K / 480K DURABLE GOODS ORDERS M/M (Nov): 0.5% / -0.6% DURABLE GOODS ORDERS EX-TRANS M/M (Nov): 1.0% / -1.3%

Friday:
	Markets closed for Christmas

12/21/2009

We are possibly seeing a decoupling of the recent multi-month trading pattern whereby a higher US dollar puts a damper on equities. Case in point, the Dollar Index was up for a fifth straight session today. While this served as an impediment for the commodities sector, it did not impede equities as suggested by today's rally on the NASDAQ Composite to a 15-month high. Despite the stronger dollar, some commodity stocks however profited from an analyst upgrade of Dow component Alcoa (which was issued based on the expectation of higher aluminum prices); the aluminum maker today also announced an $11 billion joint venture in Saudi Arabia.

The NASDAQ benefited from more strength in large-cap technology issues, with Intel seen as a leader in that space (the stock benefited from an analyst upgrade).

The major indexes received an early boost this morning after the announcement of several significant mergers and acquisition deals: French drug maker Sanofi-Aventis SA announced plans to acquire US health care products player Chattem Inc. for $1.9 billion; Bucyrus International (a mining equipment maker) wants to buy the mining equipment division of Terex Corporation for $1.3 billion; Dutch automaker Spyker Cars has submitted a new offer to acquire Saab from General Motors. These transactions come on the heels of last week's announcement that oil giant Exxon Mobil was planning to take over XTO Energy.

Key economic data for the week starting December 21, 2009. Numbers shown are consensus estimates (market anticipates this value) and prior value.

Tuesday:
	8:30 AM GDP (annualized) (Q3 F): 2.8% / 2.8% GDP DEFLATOR (annualized) (Q3 F): 0.5% / 0.5% 10:00 AM EXISTING HOME SALES SAAR (Nov): 6.25M / 6.10M EXISTING HOME SALES M/M (Nov):2.5% / 10.1% HOUSE PRICE INDEX M/M (Oct): n.a. / 0.0% RICHMOND FED MANUF. INDEX (Dec): 4.0 / 1.0

Wednesday:
	8:30 AM PCE DEFLATOR Y/Y (Nov): 1.6% / 0.2% PCE DEFLATOR Y/Y (core) (Nov): 1.5% / 1.4% PERSONAL INCOME M/M (Nov): 0.5% / 0.2% PERSONAL SPENDING M/M (Nov): 0.7% / 0.7% 10:00 AM NEW HOME SALES SAAR (Nov): 438K / 430K NEW HOME SALES M/M (Nov): 1.9% / 6.2% MICHIGAN CONSUMER SENTIMENT (Dec F): 74.0 / 73.4

Thursday:
	8:30 AM CONTINUING CLAIMS Dec-12: 5180K / 5186K INITIAL CLAIMS Dec-19: 470K / 480K DURABLE GOODS ORDERS M/M (Nov): 0.5% / -0.6% DURABLE GOODS ORDERS EX-TRANS M/M (Nov): 1.0% / -1.3%

Friday:
	Markets closed for Christmas

12/18/2009

Notable about today's session was the relative absence of the sharp volatility often seen during quadruple witching days, but then again, the market has been characterized by low volatility and range-bound, uneventful trading for at least a month. Volume was very high however, largely due to issues being added / dropped from the S&P 500 index.

Technology issues were clearly in the lead today - notice the difference in the trading patterns between the Nasdaq 100 (very strong gap up opening and an uncorrected surge to the top of its recent range near 2009 highs) and the Dow and the S&P 500 (an early dip below yesterday's lows with a subsequent intraday recovery, but much weaker closes clearly off the 2009 highs). Market observers explain the pattern with two large-cap technology issues boosting investor confidence for a recovering economy: Both Oracle and Research in Motion (as discussed yesterday) reported earnings that beat expectations. Oracle provides software for large businesses, and its positive earnings make the case that such companies are becoming more willing to spend on technology. While consumer spending has not (yet) picked up, the fact that business spending appears to be improving is a step in the right direction, analysts comment.

According to a number of market observers, the market is now more or less 'shut down' for the year, with a continuation of range-bound trading likely, given that large players with notable gains are not willing to put their winnings at risk. Others still believe however that we will see a continuation of the Santa Claus rally, suggesting that the strongest two weeks of the year are still to come (starting December 21) and that stocks will thus see more upside.

Next week will be abbreviated due to the Christmas holiday, yet the economic data calendar is loaded (see below) with plenty of economic data to be released on GDP, consumer confidence, home sales, import prices, demand for durable manufactured goods, and more.

Key economic data for the week starting December 21, 2009. Numbers shown are consensus estimates (market anticipates this value) and prior value.

Monday:
	8:30 AM CHICAGO FED NAT. ACTIVITY INDEX (Nov): n.a. / -1.1%

Tuesday:
	8:30 AM GDP (annualized) (Q3 F): 2.8% / 2.8% GDP DEFLATOR (annualized) (Q3 F): 0.5% / 0.5% 10:00 AM EXISTING HOME SALES SAAR (Nov): 6.25M / 6.10M EXISTING HOME SALES M/M (Nov):2.5% / 10.1% HOUSE PRICE INDEX M/M (Oct): n.a. / 0.0% RICHMOND FED MANUF. INDEX (Dec): 4.0 / 1.0

Wednesday:
	8:30 AM PCE DEFLATOR Y/Y (Nov): 1.6% / 0.2% PCE DEFLATOR Y/Y (core) (Nov): 1.5% / 1.4% PERSONAL INCOME M/M (Nov): 0.5% / 0.2% PERSONAL SPENDING M/M (Nov): 0.7% / 0.7% 10:00 AM NEW HOME SALES SAAR (Nov): 438K / 430K NEW HOME SALES M/M (Nov): 1.9% / 6.2% MICHIGAN CONSUMER SENTIMENT (Dec F): 74.0 / 73.4

Thursday:
	8:30 AM CONTINUING CLAIMS Dec-12: 5180K / 5186K INITIAL CLAIMS Dec-19: 470K / 480K DURABLE GOODS ORDERS M/M (Nov): 0.5% / -0.6% DURABLE GOODS ORDERS EX-TRANS M/M (Nov): 1.0% / -1.3%

Friday:
	Markets closed for Christmas

12/17/2009

Notable about today's session was that trading volume on the NYSE surged to its highest level in roughly 3 months (with volume exceeding 1.7 billion shares). According to market observers, this suggests that there was some conviction behind the selling. Much of today's selling pressure was attributed to a sharp spike in the US dollar, notably against the euro. This was precipitated by Standard & Poor's downgrade of Greece's debt rating.

In economic news, initial jobless claims for the week ending December 12 were up by 7,000 compared to the previous week and now total 480,000, a number that was higher than expected. Meanwhile, continuing claims were also up, increasing by 5,000 from the previous week to a total number 5.19 million. In contrast, the November Philadelphia Fed index came in at 20.4, better than the consensus estimate of 16.0. Finally, November leading indicators were up 0.9%, also exceeding expectations for a rise of only 0.7%.

A look at a Citigroup stock chart reveals that the bank's shares have been under strong selling pressure over the past two weeks, tumbling from roughly four dollars on December 7 two only $3.20 today. The chart thus reveals investor skepticism, likely in connection with Citigroup's plan to sell 5.4 billion shares of stock at a price of $3.15 per share with the purpose of a repaying $20 billion in government bailout loans (TARP funds). Shares are now trading substantially below the levels at which the common stock offering announcement was made (there is now a nearly 9% discount). According to one research analyst, 'The market is not buying the Citi story right now'. Citigroup has been one of the banks that was hardest hit by the credit crisis and continues to see substantial loan losses.

After the closing bell, Blackberry maker Research in Motion (RIMM) came out with surprisingly strong earnings, boosting its stock in after-hours trading. RIMM stunned Wall Street by announcing its third-quarter profit was up a hefty 59%, driven by new subscribers and record sales of the company's smart phones. Interestingly, more than 80% of new subscribers were non-corporate, suggesting the company is doing well competing against Apple, Palm, and Motorola. RIMM has recently expanded into the consumer market after its initial focus predominantly on corporate customers.

12/16/2009

The modest rally seen early today was largely prompted by US dollar weakness ahead of the Federal Reserve's announcement on interest rates. It was during this first part of the session that the NASDAQ Composite Index made a new yearly high.

Later in the session, the Federal Reserve issued its usual policy statement which today suggested that the US economy was on the mend and that the labor market was also slowly improving. The Fed also stated it would end some of its special liquidity measures as previously announced. No surprise on interest rates: The range for the federal funds rate is to remain between zero and 0.25%. The Fed also used similar language to its previous policy statements, for instance reiterating that interest rates are to remain low for an 'extended period'. Overall, the language the Fed used may have served to soothe recent concerns that the central bank may be raising interest rates sooner than originally suggested.

In today's economic data releases, equities may also have received an early boost from the news that November housing starts had surged 5% (to an annualized number of 574,000 units). This number was in-line with analysts' expectations. The number of building permits issued in November came in above October's numbers (584,000 permits as opposed to 551,000); this number came in above economists' expectations.

Today also saw the release of November consumer price index (CPI) data. At the consumer level, the price index (which rose by 0.4% month-over-month) did not indicate any significant amount of inflation (in contrast to yesterday's release of the PPI data). Core CPI data (which excludes food and energy) came in flat for the month.

Key economic data for the week starting December 14, 2009. Numbers shown are consensus estimates (market anticipates this value) and prior value.

Thursday:
	8:30 AM CONTINUING CLAIMS Dec-05: n.a. / 5157K 7:00 AM INITIAL CLAIMS Dec-12: 469K / 474K 10:00 AM PHILADELPHIA FED (Dec): 16.0 / 16.7 LEADING INDICATORS M/M (Nov): 0.7% / 0.3%

12/15/2009

After a four-day run, the major indexes declined modestly today. A rise in wholesale inflation, a stronger US dollar, as well as cautiousness ahead of tomorrow's interest rate announcement by the Fed all conspired to put pressure on equities. Late in the session, General Electric's admission that revenues and earnings would likely come in flat next year also exacerbated the selling pressure.

The Fed is currently in a two-day meeting, discussing the future of interest rates. While expectations are that the Fed will leave rates unchanged, investors may be nervous about the upcoming policy statement and whether or not it will reveal when the central bank is likely to start raising interest rates. Given today's rise in inflation, some fear an interest rate hike may occur sooner than anticipated.

According to a new government data, prices at the wholesale level increased by 1.8% in November, producing an increase twice as strong as economists had been expecting. Remarkably, core inflation was up 0.5%, also showing its largest increase in more than a year.

In other economic news, industrial production in November was up 0.8% (its largest boost since August). Finally, the Empire Manufacturing Index produced disappointing results for December, coming in much weaker than the numbers posted in November.

Key economic data for the week starting December 14, 2009. Numbers shown are consensus estimates (market anticipates this value) and prior value.

Wednesday:
	8:30 AM CPI M/M (Nov): 0.4% / 0.3% CPI M/M (core) (Nov): 0.1% / 0.2% CPI Y/Y (Nov): 1.8% / -0.2% CPI Y/Y (core) (Nov): 1.8% / 1.7% HOUSING STARTS SAAR (Nov): 575K / 529K BUILDING PERMITS SAAR (Nov): 570K / 551K 2:15 PM FED RATE ANNOUNCEMENT (Dec): 0.25% / 0.25%

Thursday:
	8:30 AM CONTINUING CLAIMS Dec-05: n.a. / 5157K 7:00 AM INITIAL CLAIMS Dec-12: 469K / 474K 10:00 AM PHILADELPHIA FED (Dec): 16.0 / 16.7 LEADING INDICATORS M/M (Nov): 0.7% / 0.3%

12/14/2009

News of yet another bailout greeted US investors this morning and led to early bullishness on Wall Street. Overnight, Abu Dhabi agreed to bail out neighboring Dubai (in connection with Dubai World's $60 billion debt problem) to the tune of $10 billion, thereby increasing risk appetite and precipitating a move away from the safe-haven US dollar. This appears to be yet another instance where a problem created by large-scale risk-taking gone awry is 'cleaned up' by the government. The move also spares the Emirates Federation from the humiliation of a potential Dubai World default.

Predictably, the Dubai news boosted markets around the world, with Dubai's main index itself up more than 10%. On Wall Street, the news boosted the S&P 500 and the Dow to new closing highs for the year. However, such problems may continue to crop up around the globe. Case in point, Greece's prime minister announced today that the country was drowning in debt and that he would therefore implement a slew of spending cuts and new taxes. The country's Prime Minister was quoted as saying that 'Greece faces the risk of sinking under its debt....[the country] has lost every trace of credibility'. Other European countries with significant debt issues are Ireland, Spain, and Portugal.

The Dow did not perform as well today as the other major indexes; this can be directly attributed to Exxon Mobil, one of its key components. Exxon's stock lost more than 4% in today's session after the world's largest oil company announced that it would acquire natural gas (and oil) player XTO Energy for $29 billion in an all-stock deal. This deal is one of the largest in the US energy sector in about four years and also represents Exxon's largest acquisition since the company purchased Mobil Corporation in 1999. Analysts say the acquisition is crucial as it will allow Exxon Mobil to become more involved in the natural gas sector, a sector that may see a boost due to coming climate change / global warming regulations.

In other notable corporate news, Citigroup today announced that it was close to forging a deal which would allow it to repay $20 billion in TARP ( = Troubled Asset Relief Program) funds. The company, which received $45 billion of TARP funds last year (and currently still owes $20 billion), is expected to launch a $10 billion common stock offering. In recent months, several US banks that had received bailout money from the US government have repaid these loans, including Bank of America, Goldman Sachs, JPMorgan Chase, and Morgan Stanley. Citigroup and Wells Fargo are two of the remaining large players that have yet to make this move.

Key economic data for the week starting December 14, 2009. Numbers shown are consensus estimates (market anticipates this value) and prior value.

Tuesday:
	8:30 AM PPI M/M (Nov): 0.8% / 0.3% PPI M/M (core) (Nov): 0.2% / -0.6% PPI Y/Y (Nov): 1.8% / -1.9% PPI Y/Y (core) (Nov): 0.9% / 0.7% NEW YORK FED (EMPIRE) (Dec): 25.0 / 23.5 9:00 AM NET CAPITAL INFLOWS (TICS) (Oct): $49.1B / $40.7B 9:15 AM INDUSTRIAL PRODUCTION M/M (Nov): 0.5% / 0.1% CAPACITY UTILIZATION (Nov): 71.1% / 70.7% 1:00 PM NAHB HOUSING INDEX (Dec): 18 / 17

Wednesday:
	8:30 AM CPI M/M (Nov): 0.4% / 0.3% CPI M/M (core) (Nov): 0.1% / 0.2% CPI Y/Y (Nov): 1.8% / -0.2% CPI Y/Y (core) (Nov): 1.8% / 1.7% HOUSING STARTS SAAR (Nov): 575K / 529K BUILDING PERMITS SAAR (Nov): 570K / 551K 2:15 PM FED RATE ANNOUNCEMENT (Dec): 0.25% / 0.25%

Thursday:
	8:30 AM CONTINUING CLAIMS Dec-05: n.a. / 5157K 7:00 AM INITIAL CLAIMS Dec-12: 469K / 474K 10:00 AM PHILADELPHIA FED (Dec): 16.0 / 16.7 LEADING INDICATORS M/M (Nov): 0.7% / 0.3%

12/11/2009

The day's top news was released by the Commerce Department; it reported that November retail sales (as indicated by the so-called Advance Retail Sales Report) had grown unexpectedly by 1.3%, above the consensus estimate of a rise of merely 0.6%. Excluding autos, sales were up 1.2%, also better than the anticipated rise of 0.4%. Furthermore, consumer confidence also appears to be on the mend. The Reuters / University of Michigan Consumer Confidence Index also rose, exceeding analysts' expectations. Even more positive economic news emerged, as business inventory data came in higher for the first time in over a year as well.

Crude oil futures have been tumbling lately, now down eight straight sessions - the longest losing streak in some six years - to below the psychologically significant level of $70 a barrel. The recent rebound in the US dollar is largely to blame for this; the greenback surged to its highest level in two months today following stronger consumer confidence data. Crude oil continued to slide today even though the International Energy Agency had released a report stating that world demand for oil would increase in 2010 somewhat more than previously forecasts. And the commodity was weak even in the wake of reports from China about strong growth in that country's industrial production.

Analysts comment how today's trading showed 'extra-light' volume. We are also seeing multiple references to a Santa-Claus rally, although some commentators warn that after a more than 60% rise off the March lows, Santa may not necessarily be visiting Wall Street this year. On the other hand, it is noteworthy to point out that the broad market has been able to rise for two days in the face of a strongly rising US dollar. The old pattern of higher dollar, lower stocks may thus be starting to wane, or even break. The US Dollar Index gained 0.8% over the last two sessions.

Despite today's upside, the market showed a split performance. The Dow outperformed, the S&P 500 advanced modestly, but the Nasdaq lagged and closed red, due to weakness among large-cap tech issues and in the semiconductor space (the Philadelphia Semiconductor Index lost 1%).

Key economic data for the week starting December 14, 2009. Numbers shown are consensus estimates (market anticipates this value) and prior value.

Tuesday:
	8:30 AM PPI M/M (Nov): 0.8% / 0.3% PPI M/M (core) (Nov): 0.2% / -0.6% PPI Y/Y (Nov): 1.8% / -1.9% PPI Y/Y (core) (Nov): 0.9% / 0.7% NEW YORK FED (EMPIRE) (Dec): 25.0 / 23.5 9:00 AM NET CAPITAL INFLOWS (TICS) (Oct): $49.1B / $40.7B 9:15 AM INDUSTRIAL PRODUCTION M/M (Nov): 0.5% / 0.1% CAPACITY UTILIZATION (Nov): 71.1% / 70.7% 1:00 PM NAHB HOUSING INDEX (Dec): 18 / 17

Wednesday:
	8:30 AM CPI M/M (Nov): 0.4% / 0.3% CPI M/M (core) (Nov): 0.1% / 0.2% CPI Y/Y (Nov): 1.8% / -0.2% CPI Y/Y (core) (Nov): 1.8% / 1.7% HOUSING STARTS SAAR (Nov): 575K / 529K BUILDING PERMITS SAAR (Nov): 570K / 551K 2:15 PM FED RATE ANNOUNCEMENT (Dec): 0.25% / 0.25%

Thursday:
	8:30 AM CONTINUING CLAIMS Dec-05: n.a. / 5157K 7:00 AM INITIAL CLAIMS Dec-12: 469K / 474K 10:00 AM PHILADELPHIA FED (Dec): 16.0 / 16.7 LEADING INDICATORS M/M (Nov): 0.7% / 0.3%

12/10/2009

The US Labor Department released its latest statistics on unemployment benefits today, and the data paints a picture of a still very sluggish labor market. The week ending December 5 saw 17,000 more people filing new claims for unemployment benefits, boosting the total number of claims to a seasonally adjusted 474,000. First-time claims are a measure of the number of new layoffs. Economists had been expecting the number of initial claims to drop to 450,000; today's number was thus a disappointment. Equally troublesome was the fact that the total number of people claiming benefits of any kind (for the week ending November 21) swelled by 417,000 to now in excess of 10 million.

According to the financial press, investors brushed aside this negative employment picture because of the news that rising exports had helped narrow the US trade deficit in October. According to the Commerce Department, the US trade gap shrank to $32.9 billion in October, in spite of economists having anticipated an increase. US exports were boosted by the weak US dollar, which makes American goods cheaper overseas. A smaller trade imbalance deficit is seen as a positive, as it stimulates the gross domestic product (GDP).

Interestingly, the market gained ground today in spite of a modestly stronger US dollar (the dollar index was up 0.1% for the day). In recent months, US dollar strength has often led to weakness in the equity market. Of concern for the broad market is however the weakening financial sector (financials overall lost 0.2% today). Rumors that Citigroup will have to raise a new equity stake in order to repay its TARP funds were seen as a key contributing factor. Some market analysts also cite the fact that that the US treasury Secretary is making the case for an extension of the $700 billion TARP plan (we discussed this yesterday) as a cause for concern, as it underscores that the US financial system remains frail.

Tomorrow is seen as a crucial day in terms of economic data. Retail sales, as well as consumer sentiment and business inventory data will be released and may have a market-moving impact.

Key economic data for the week starting December 7, 2009. Numbers shown are consensus estimates (market anticipates this value) and prior value.

Friday:
	8:30 AM RETAIL SALES M/M (Nov): 0.6% / 1.4% RETAIL SALES (X-AUTOS) M/M (Nov): 0.5% / 0.2% IMPORT PRICE INDEX M/M (Nov): 1.2% / 0.7% 10:00 AM MICHIGAN CONSUMER SENTIMENT (Dec P): 68.5 / 67.4 BUSINESS INVENTORIES M/M (Oct): -0.3% / -0.4%

12/9/2009

The US financial system is not yet back on its feet and not quite ready to fend fully for itself. At least that was the suggestion investors received after the US government indicated the $700 billion bailout plan called TARP (Troubled Asset Relief Program) would likely be extended until the fall of next year. According to US Treasury Secretary Timothy Geithner, TARP will be extended into October 2010, but no more than $550 billion of the funds are to be deployed. Some of the bailout funds are to be used to fight the increasing number of home foreclosures, as well as to increase lending to small businesses. According to Geither, 'This extension is necessary to assist American families and stabilize financial markets because it will, among other things, enable us to continue to implement programs that address housing markets and the needs of small businesses, and to maintain the capacity to respond to unforeseen threats'.

Slumping crude oil prices seem to suggest that US economic recovery remains quite measured at this time. This is evidenced by the fact that crude oil prices today hit a two-month low, with oil for January delivery settling at just over $70.50 per barrel. The latest report from the US Energy Information Administration underscores this scenario, stating that the consumption of petroleum products in the US declined to its lowest level since mid-July. Particularly the demand for gasoline has been greatly reduced by the recession, putting pressure on imports. Compared to a year ago, imports over the past four weeks are down some 1.4 million barrels per day. While a true economic rebound should be reflected in higher consumption, analysts say thus far this has not (yet) materialized.

In economic news, the Commerce Department reported that US wholesale inventories increased unexpectedly in October, the first such a rise in more than 12 months. Wholesale inventories were up 0.3% in October, suggesting an economic recovery as businesses are beginning the process of restocking their store shelves.

Key economic data for the week starting December 7, 2009. Numbers shown are consensus estimates (market anticipates this value) and prior value.

Thursday:
	8:30 AM GOODS & SERVICES TRADE BALANCE (Oct):-$37.0B / -$36.5B CONTINUING CLAIMS Nov-28: n.a. / 5465K INITIAL CLAIMS Dec-5: 465K / 457K 2:00 PM TREASURY BUDGET (Nov): -$135.0B / -$176.4B

Friday:
	8:30 AM RETAIL SALES M/M (Nov): 0.6% / 1.4% RETAIL SALES (X-AUTOS) M/M (Nov): 0.5% / 0.2% IMPORT PRICE INDEX M/M (Nov): 1.2% / 0.7% 10:00 AM MICHIGAN CONSUMER SENTIMENT (Dec P): 68.5 / 67.4 BUSINESS INVENTORIES M/M (Oct): -0.3% / -0.4%

12/8/2009

In a speech at the think tank Brookings Institution, President Barack Obama today outlined new government efforts to create more jobs. It is the President's belief that the US must continue to 'spend our way out of this recession'. While the effort does not officially carry that title, critics maintain that this is a second stimulus package. According to the President the package includes new spending for infrastructure programs, additional small business tax breaks, as well as energy efficiency tax incentives, and more.

Obama started his speech by outlining the previous efforts of his Administration ('We avoided the depression many feared'), but he avoided too much self-congratulation, suggesting that 'Our work is far from done.' The speech also included some sharp criticism of the Republican Party: The President suggested that almost immediately after taking office, his Administration was tasked with taking 'a series of difficult steps' to keep the economy out of an outright depression. 'And we were forced to take those steps largely without the help of an opposition party which, unfortunately, after having presided over the decision-making that led to the crisis, decided to hand it to others to solve', Obama said.

A rising US dollar, a disappointing earnings forecast from Dow component 3M, and a disappointing McDonald's sales report all conspired today to push the major indexes lower. Rising debt levels in Greece and in Dubai, as well as reports of slumping manufacturing in Britain and in Germany, also served to push both the US dollar and Treasury prices higher. The rising US dollar in turn pressured commodity-related stocks. Crude oil prices slipped for a fifth consecutive session and gold prices lost ground for a third day in a row.

Furthermore, market analysts say we are currently seeing little buying pressure from many fund managers. Managers are in fact on the defensive, in many cases merely trying to preserve the gains achieved this year as we head into year end.

Key economic data for the week starting December 7, 2009. Numbers shown are consensus estimates (market anticipates this value) and prior value.

Wednesday:
	10:00 AM WHOLESALE INVENTORIES M/M (Oct): -0.6% / -0.9%

Thursday:
	8:30 AM GOODS & SERVICES TRADE BALANCE (Oct):-$37.0B / -$36.5B CONTINUING CLAIMS Nov-28: n.a. / 5465K INITIAL CLAIMS Dec-5: 465K / 457K 2:00 PM TREASURY BUDGET (Nov): -$135.0B / -$176.4B

Friday:
	8:30 AM RETAIL SALES M/M (Nov): 0.6% / 1.4% RETAIL SALES (X-AUTOS) M/M (Nov): 0.5% / 0.2% IMPORT PRICE INDEX M/M (Nov): 1.2% / 0.7% 10:00 AM MICHIGAN CONSUMER SENTIMENT (Dec P): 68.5 / 67.4 BUSINESS INVENTORIES M/M (Oct): -0.3% / -0.4%

12/7/2009

In the absence of key economic data releases and few corporate announcements, today's trading remained largely under the influence of the direction of the US dollar, as well as under comments made by Federal Reserve Chairman Ben Bernanke.

Speaking before the Economic Club of Washington D.C., Bernanke reiterated the Fed's intent of maintaining interest rates at low levels for an extended period of time. It appears the Fed was compelled to reiterate its stance on interest rates as the market had become jittery after last Friday's stronger-than-expected employment data which had widely been interpreted as a potential early signal that rates may move higher sooner than expected. The jobs data had also sparked short-term strength on the otherwise long-sliding US dollar.

The comments made by the Fed Chairman served to quell the US dollar rally, generating a loss on the greenback against a basket of major currencies. Dollar weakness in turn prompted some early strength in equities and commodities. Interestingly, equities were not able to keep up their rise; the market rolled over in the afternoon. This prompted some market analysts to comment that even the prospect of low interest rates over an extended period of time was not able to entice buyers in this market that looked 'tired'. In contrast, some analysts however believe that given the slow pace at which the economy appears to be recovering, higher interest rates are not in the cards for the near future.

Gold was not able to profit from the sliding US dollar, likely also a result of comments made by the Fed Chairman in his speech today. Bernanke was quoted as saying that 'The Fed is committed to keeping inflation low and will be able to do so....,' adding that inflation 'appears likely to remain subdued for some time.' These comments likely impacted gold today, reducing its appeal as a hedge in inflationary times.

Key economic data for the week starting December 7, 2009. Numbers shown are consensus estimates (market anticipates this value) and prior value.

Wednesday:
	10:00 AM WHOLESALE INVENTORIES M/M (Oct): -0.6% / -0.9%

Thursday:
	8:30 AM GOODS & SERVICES TRADE BALANCE (Oct):-$37.0B / -$36.5B CONTINUING CLAIMS Nov-28: n.a. / 5465K INITIAL CLAIMS Dec-5: 465K / 457K 2:00 PM TREASURY BUDGET (Nov): -$135.0B / -$176.4B

Friday:
	8:30 AM RETAIL SALES M/M (Nov): 0.6% / 1.4% RETAIL SALES (X-AUTOS) M/M (Nov): 0.5% / 0.2% IMPORT PRICE INDEX M/M (Nov): 1.2% / 0.7% 10:00 AM MICHIGAN CONSUMER SENTIMENT (Dec P): 68.5 / 67.4 BUSINESS INVENTORIES M/M (Oct): -0.3% / -0.4%

12/4/2009

Judging by market commentaries in the press today, today's job numbers have sparked a renewed wave of enthusiasm (which is however likely much stronger on Wall Street than it is on Main Street). According to the Labor Department, the US lost another 11,000 jobs in November. The positive aspect is of course that this represents the smallest monthly loss of jobs since late 2007. As well, economists had been expecting far worse news - another 130,000 job losses.

Meanwhile, the US unemployment rate declined modestly to 10% from its October rate of 10.2% (which had marked a 26-year high). The unemployment rate matched economists' expectations. Cynical commentators decry Wall Street's optimism in the face of the fact that 'only' another 11,000 jobs were lost in November and that the unemployment rate is now down to 'only' 10%. The say that if one factors in the number of people who have given up looking for work, as well as those who are currently working part-time but would like to work full-time, the so-called 'underemployment' rate is still over 17% (down from October's 17.5%).

A key reason for today's sell-off after the employment-data induced rally can be found in the strengthening US dollar (against a basket of six currencies, it gained 1.6 percent after the government's jobs report). There is now a growing sense (fear) that better economic data will lead to more US dollar strength and that this - contrary to what the average investor might expect - will actually make for headwinds in the equity market. The concern is that with growing economic strength, the Federal Reserve might start raising interest rates sooner than expected (with estimates ranging from the second half of 2010 to sometime in 2011). The US dollar is currently being used for carry trades, but these would likely be unwound once the dollar regains its footing.

The importance of US dollar strength or weakness was seen vividly in the gold market today where a higher dollar led to a sizable pullback with gold losing some 4% on the day. Gold has recently been on a parabolic ascent, rallying exuberantly for most of November, and newsletter writers have come out with extremely bullish numbers. The Exchange Traded Fund 'GLD', which holds actual gold bullion and has assets of roughly $40 billion lost more than 4% today, in a session marked by the ETF's highest volume output in its relatively short history (it was launched in 2004). GLD still remains up roughly 30% year-to-date. Many market observers, not trusting that the US dollar will rally convincingly, simply see gold's dive today as another buying opportunity.

Key economic data for the week starting December 7, 2009. Numbers shown are consensus estimates (market anticipates this value) and prior value.

Monday:
	3:00 PM CONSUMER CREDIT (Oct): -9.3B / -14.8B

Wednesday:
	10:00 AM WHOLESALE INVENTORIES M/M (Oct): -0.6% / -0.9%

Thursday:
	8:30 AM GOODS & SERVICES TRADE BALANCE (Oct):-$37.0B / -$36.5B CONTINUING CLAIMS Nov-28: n.a. / 5465K INITIAL CLAIMS Dec-5: 465K / 457K 2:00 PM TREASURY BUDGET (Nov): -$135.0B / -$176.4B

Friday:
	8:30 AM RETAIL SALES M/M (Nov): 0.6% / 1.4% RETAIL SALES (X-AUTOS) M/M (Nov): 0.5% / 0.2% IMPORT PRICE INDEX M/M (Nov): 1.2% / 0.7% 10:00 AM MICHIGAN CONSUMER SENTIMENT (Dec P): 68.5 / 67.4 BUSINESS INVENTORIES M/M (Oct): -0.3% / -0.4%

12/3/2009

After a brainstorming session that included academics, CEOs, union and small business leaders, as well as local officials, President Obama expressed his concerns about the US employment picture, ahead of tomorrow's government 'jobs report'. The President promised the creation of a White House jobs forum whose purpose it would be to take 'every responsible step to accelerate job creation'. Among some of the suggested measures was a program to boost the energy efficiency of homes, potential additional tax incentives, as well as possible trade measures.

Some market commentators surmise that today's late-day selloff on the broad market may foreshadow negative news for tomorrow morning's unemployment numbers for November. October jobless levels had risen above 10% and economists do not expect the November figures to be much better; in fact, they may actually come in worse. One trader commented on today's trading action by saying that 'When you get a sell-off like that at the end of the day it tells me that there's no conviction in those buyers who are around'.

The much anticipated November retail numbers came in today, and they indicated that the retail sector was not a bastion of strength throughout November (in spite of Black Friday's modestly positive start to the 'holiday shopping season'). On the heels of two consecutive months with sales gains, November brought a surprising 0.3% decrease in retail sales (compared with a year prior). Analysts are concerned that consumers will further delay their holiday purchases, hoping that retailers will reduce prices even more. These weak numbers were released today by the International Council of Shopping Centers and Goldman Sachs. Originally, research had indicated that the numbers might show a growth rate between 5 and 8%. Earlier this week, the numbers had then been revised downward to a growth rate somewhere between 3 and 4%.

Federal Reserve Chairman Ben Bernanke is currently testifying on Capitol Hill, appearing at a hearing before the Senate Banking Committee today. One of the key topics is to determine whether he should be nominated for a second four-year term. It appears that after lengthy hearings, Bernanke would be reappointed. The fed Chairman vowed to work with Congress to overhaul the US financial regulatory structure; he stated that ' It would be a tragedy if, after all the hardships that Americans have endured during the past two years, our nation failed to take the steps necessary to prevent a recurrence of a crisis of the magnitude we have recently confronted'.

Key economic data for the week starting November 30, 2009. Numbers shown are consensus estimates (market anticipates this value) and prior value.

Friday:
	8:30 AM NON-FARM PAYROLLS (Nov): -114K / -190K UNEMPLOYMENT RATE (Nov): 10.2% / 10.2% AVERAGE HOURLY EARNINGS M/M (Nov): 0.2% / 0.3% AVERAGE WEEKLY HOURS (Nov): 33.1 / 33.0 MANUFACTURING PAYROLLS (Nov): -50K / -61K 10:00 AM FACTORY ORDERS M/M (Oct): 0.1% 0.9%

12/2/2009

While some rare strength in the US dollar produced headwinds for the equity market, gold decoupled from its recent inverse correlation with the US dollar and nevertheless continued its relentless surge higher. The Dow and the S&P 500 achieved new highs for the year by a slight margin; however, the indexes were not able to hold on to these gains and reversed. The US dollar marginally pushed off its yearly low, showing its strongest performance against the Japanese yen in about a month on the heels of that country's prime minister stating that the yen's strong advance this year could not be left 'as it is'. This sparked the fear that Japan's central bank may intervene to weaken its currency.

The specter of new legislation governing derivatives that is currently being discussed in Washington spooked investors and led to some weakness among financial stocks. According to one analyst note, a worst-case scenario could see J.P. Morgan Chase is revenue fall by as much as 3 billion under the new legislation. The fact that there is currently a great deal of uncertainty about both the final format of this financial reform served to pressure financial stocks today.

The market showed a muted reaction to the latest ADP Employment Change Report, a report that indicated it that US economy lost 169,000 private jobs in November. While worse than the loss of honor 50,000 jobs that had been anticipated, this number was interpreted in a positive light as it had come down from the 203,000 job losses that had been reported for October. ADP numbers are often seen as a relatively precise precursor to the government's official 'jobs report' which is scheduled for release this Friday.

The Fed today released the latest edition of its Beige Book. In summary, the report underscores that employment conditions to remain generally weak but that there has been an improvement in both economic conditions and in consumer spending.

Key economic data for the week starting November 30, 2009. Numbers shown are consensus estimates (market anticipates this value) and prior value.

Thursday:
	8:30 AM CONTINUING CLAIMS Nov-21: 5517K / 5423K INITIAL CLAIMS Nov-28: 483K / 466K NON-FARM PRODUCTIVITY (Q3 R): 8.5% / 9.5%

Friday:
	8:30 AM NON-FARM PAYROLLS (Nov): -114K / -190K UNEMPLOYMENT RATE (Nov): 10.2% / 10.2% AVERAGE HOURLY EARNINGS M/M (Nov): 0.2% / 0.3% AVERAGE WEEKLY HOURS (Nov): 33.1 / 33.0 MANUFACTURING PAYROLLS (Nov): -50K / -61K 10:00 AM FACTORY ORDERS M/M (Oct): 0.1% 0.9%

12/1/2009

It appears the still weakening US dollar once again came to the aid of the equity and commodities markets, and notably helped push gold to a new high just above the $1200 per ounce level. We're seeing extremely bullish commentary surface for gold's expected near- to mid-term future performance. Some extremely bullish rally targets for gold are being tossed about, with levels such as $2,000, $3,000, $5,000 and even $8,000 an ounce being suggested by market pundits and newsletter writers. A common theme is that central banks around the world are lining up to purchase gold, that gold prices are currently by no means in a bubble, and that prices generally can only go higher from here.

One of the reasons for today's renewed US dollar weakness was seen in an easing of fears about the Dubai debt debacle. When news about Dubai first surfaced last week, the US dollar was seen as a safe haven currency and therefore gained some ground. It now appears that the appetite for risk is back and that the US dollar is consequently back on the scrap heap. In the words of one market analyst commenting on the short-term Dubai scare, 'The market has essentially shaken it off....The whole move is as if nothing happened last week.'

Adding to today's bullish bias were a number of encouraging economic data releases: Pending home sales for October jumped 3.7%, rising to their strongest level since the spring of 2006; the ISM Manufacturing Index for November came in at 53.6, slightly weaker than economists had been expecting; October construction spending was steady (but expectations had been for a decline of 0.5%).

Later this week, we will receive more data about retail sales, with investors keen to determine how well shoppers are 'performing' in view of the upcoming, crucial 'holiday shopping season'. Today, the International Council of Shopping Centers (ICSC) lowered their forecasts for November sales (at stores that have been open for at least a year), suggesting that sales might have increased only 3 - 4% rather than the previously anticipated rise of 5 - 8%. (In contrast, last year saw a sharp drop in sales of more than 7%). Even though online purchases were up so far, ICSC speaks of 'a mixed start to the holiday shopping season', saying that many shoppers have delayed purchases up to this point. Other retail surveys are currently being conducted, for instance by Chicago-based ShopperTrak, which tracks sales and traffic at more than 50,000 outlets.

Key economic data for the week starting November 30, 2009. Numbers shown are consensus estimates (market anticipates this value) and prior value.

Wednesday:
	8:15 AM ADP EMPLOYMENT CHANGE (Nov): -148K / -203K 2:00 PM FED'S BEIGE BOOK

Thursday:
	8:30 AM CONTINUING CLAIMS Nov-21: 5517K / 5423K INITIAL CLAIMS Nov-28: 483K / 466K NON-FARM PRODUCTIVITY (Q3 R): 8.5% / 9.5%

Friday:
	8:30 AM NON-FARM PAYROLLS (Nov): -114K / -190K UNEMPLOYMENT RATE (Nov): 10.2% / 10.2% AVERAGE HOURLY EARNINGS M/M (Nov): 0.2% / 0.3% AVERAGE WEEKLY HOURS (Nov): 33.1 / 33.0 MANUFACTURING PAYROLLS (Nov): -50K / -61K 10:00 AM FACTORY ORDERS M/M (Oct): 0.1% 0.9%

11/30/2009

Equity markets performed very well in November, with the Dow and the S&P 500 each achieving gains of more than 5%. Gold clearly outperformed however, with a gain of more than 13% for the month, one of the strongest performances for the metal in a decade. Among other factors, gold benefited greatly from the US dollars' protracted weakness; it showed only three down-sessions in the entire month.

With the start of the 'holiday shopping season' now upon us, everyone is trying to guess how shoppers are 'performing' based on data from last week's Black Friday. According to ShopperTrak (it follows more than 50,000 outlets), retail sales may be up less than 1% for last Friday and Saturday. ComScore in contrast estimates that online sales may have risen 11% Thursday and Friday. A further test for the consumers' potential willingness (and ability) to spend this year will be the government's unemployment report for November, scheduled for release this Friday. All in all, the National Retail Federation anticipates that holiday sales should come in roughly 1% below last year's performance. According to one market observer, this year's shopping could perhaps be summed up as 'They came, they looked, but they spent less', with people buying predominantly 'necessities' and doing less impulse shopping.

According to the press, investors remain unsettled by the recent Dubai debt debacle. While some market analysts downplay the entire episode, saying that another $60 billion of debt is virtually meaningless given global debt loads in the trillions, others are more worried that a potential default by Dubai might still impact US banks. There were also conflicting messages whether or not the Central Bank of the United Arab Emirates would backstop (i.e., bail out) Dubai World. A positive was that Dubai World announced it was in talks with banks concerning $26 billion in debt, a smaller number than the $60 billion originally mentioned in earlier press releases.

Key economic data for the week starting November 30, 2009. Numbers shown are consensus estimates (market anticipates this value) and prior value.

Tuesday:
	NEW VEHICLE SALES (Nov): 10.5M / 10.5M 10:00 AM ISM - MANUFACTURING (Nov): 54.8 / 55.7

Wednesday:
	8:15 AM ADP EMPLOYMENT CHANGE (Nov): -148K / -203K 2:00 PM FED'S BEIGE BOOK

Thursday:
	8:30 AM CONTINUING CLAIMS Nov-21: 5517K / 5423K INITIAL CLAIMS Nov-28: 483K / 466K NON-FARM PRODUCTIVITY (Q3 R): 8.5% / 9.5%

Friday:
	8:30 AM NON-FARM PAYROLLS (Nov): -114K / -190K UNEMPLOYMENT RATE (Nov): 10.2% / 10.2% AVERAGE HOURLY EARNINGS M/M (Nov): 0.2% / 0.3% AVERAGE WEEKLY HOURS (Nov): 33.1 / 33.0 MANUFACTURING PAYROLLS (Nov): -50K / -61K 10:00 AM FACTORY ORDERS M/M (Oct): 0.1% 0.9%

11/27/2009

Pronounced weakness in overseas markets and today's early dive on the US major indexes were triggered by the news that Dubai World - the largest corporate entity in the Persian Gulf emirate - had begged its creditors for a six-month extension to repay a debt of $60 billion. The news brought turmoil to markets worldwide; however, the reaction was less severe in the US than in Asia and Europe. Some market analysts in fact downplayed the entire episode, simply calling it a 'good excuse' for some profit-taking, and for instance suggesting that US banks would not suffer (as much as European banks) from a potential default situation. Judging by today's snap-back rally, it appears that some bullish investors used this as yet another chance to 'buy-the-dip'.

Other market observers are less however enthusiastic, suggesting that 'other Dubais' might be 'out there' and that further negative financial news could break at any time. In fact, concerns remain about the potential ripple effects a potential default of this government-backed investment company might have across the globe. Investors are now hoping for a bailout announcement over the weekend from Dubai, a wealthy Middle Eastern city-state, which is part of the United Arab Emirates.

Some observers note that investors should not to read too much into today's fairly muted downside reaction on the US market - it was a holiday-shortened session in which many large traders likely did not participate. The true test will come next week. Initial positive indications that this crisis might however pass quickly are that the Volatility Index (the market's so-called 'fear gauge') did not spike significantly and that the currency markets do not foresee ongoing turmoil.

Today's market decline came in conjunction with weakness in both oil and gold, and with a modest rebound in the US dollar. The US dollar is seen as a safe-haven currency in this context; it also benefited from possible (real or threatened) central bank interventions by the Swiss National Bank and by the Bank of Japan; both countries are worried that their respective currencies have become too strong versus the US dollar, a situation that hampers their export industries.

Key economic data for the week starting November 30, 2009. Numbers shown are consensus estimates (market anticipates this value) and prior value.

Monday:
	8:30 AM CHICAGO PMI (Nov): 53.0 / 54.2

Tuesday:
	NEW VEHICLE SALES (Nov): 10.5M / 10.5M 10:00 AM ISM - MANUFACTURING (Nov): 54.8 / 55.7

Wednesday:
	8:15 AM ADP EMPLOYMENT CHANGE (Nov): -148K / -203K 2:00 PM FED'S BEIGE BOOK

Thursday:
	8:30 AM CONTINUING CLAIMS Nov-21: 5517K / 5423K INITIAL CLAIMS Nov-28: 483K / 466K NON-FARM PRODUCTIVITY (Q3 R): 8.5% / 9.5%

Friday:
	8:30 AM NON-FARM PAYROLLS (Nov): -114K / -190K UNEMPLOYMENT RATE (Nov): 10.2% / 10.2% AVERAGE HOURLY EARNINGS M/M (Nov): 0.2% / 0.3% AVERAGE WEEKLY HOURS (Nov): 33.1 / 33.0 MANUFACTURING PAYROLLS (Nov): -50K / -61K 10:00 AM FACTORY ORDERS M/M (Oct): 0.1% 0.9%

11/25/2009

Under the surface, today's trading action was far more dramatic than reflected by the three major indexes. A look at gold and at the US dollar reveals today's true action. Gold - as reflected by a chart of the SPDR GOLD SHARES (NYSE: GLD) - surged for a ninth consecutive session. This ETF tracks gold's performance and has seen an incredible run in November, having closed green on 16 of the last 18 trading days. This is a reflection of US dollar weakness, particularly today, where the US currency experienced its most precipitous drop since July 2009, tumbling to a 15-month low against the euro.

More about the US dollar's abysmal weakness: The greenback is now within striking distance of a former 14-year low against the Japanese yen; it is also below parity against the Swiss franc (for only the second time in history). Forex market observers note that today's strong break against the euro might bring further, perhaps steep losses this weekend. Analysts claim that today's pronounced dollar weakness came in reaction to yesterday's release of the Fed's minutes which indicate that the US plans to hold interest rates at extremely low levels for an 'extended period'.

Notable is today's subdued upside reaction on the major equity indexes in view of the dollar's significant slide. Since the March lows, equities (and commodities) have profited considerably from the sliding dollar, trading in an almost perfect inverse relationship. Today, this pattern was however not as pronounced as it has been for some months.

A number of positive economic news releases also supported the market today. According to the Commerce Department, consumer spending rose 0.7% in October (on the heels of a 0.6% decline in September). This surprising strength comes in the face of tight credit, high levels of debt, and an unemployment rate exceeding 10%. In other encouraging economic news, the Labor Department announced that new applications for unemployment assistance were down by 35,000 cases last week, the fewest new filings on record since September 2008.

Key economic data for the week starting November 23, 2009. Numbers shown are consensus estimates (market anticipates this value) and prior value.

Thursday:
	Markets closed

11/24/2009

In light trading action typical for the pre-Thanksgiving holiday week, the broad market showed initial weakness after the release of downward-revised US GDP data for the third quarter. The numbers revealed that the ongoing economic recovery is not as healthy as initially believed. The US economy grew at an annualized rate of 2.8% in the third quarter but economists had been expecting a 3.5% boost.

Later in the session, stocks however trimmed their losses after the release of the most recent Fed minutes. These suggest a more robust growth outlook for the coming year, although the Fed stated that unemployment is expected to remain high.

The most recent consumer confidence data however came in somewhat better than expected. The Consumer Confidence Index maintained by the Conference Board produced a reading of 49.5 for November, up from a revised reading of 40.7 in October. While an improvement, this data still indicates the economy is on a weak footing, as a reading of 90 is required to show solid confidence.

This morning's early weakness was also attributed to overseas action, where China's central bank issued a warning to the country's commercial banks that they should control their lending practices to a greater extent. While driving down overseas markets, these comments also raised concerns among US investors that governments around the world may soon start to withdraw liquidity ( i.e., reducing stimulus programs). Given that much of the stock market rally over recent months may be attributed to low interest rates and freely flowing stimulus money, a reduction in liquidity would be an impediment to a further rally in the stock (and commodities) markets. In fact, a current slogan on Wall Street is that 'Cash is trash', implying that very low interest rates and high liquidity are encouraging investors to pump more money into the (rising) stock market, perhaps even to the extent of creating a new asset bubble.

Key economic data for the week starting November 23, 2009. Numbers shown are consensus estimates (market anticipates this value) and prior value.

Wednesday:

8:30 AM DURABLE GOODS ORDERS M/M (Oct): 0.5% / 1.4% DURABLE GOODS ORDERS EX-TRANS M/M (Oct): 0.8% / 1.2% PCE DEFLATOR Y/Y (Oct): 0.1% / -0.5% PCE DEFLATOR Y/Y (core) (Oct): 1.3% / 1.3% PERSONAL INCOME M/M (Oct): 0.2% / 0.0% PERSONAL SPENDING M/M (Oct): 0.5% / -0.5% CONTINUING CLAIMS Nov-14: 5523K / 5611K INITIAL CLAIMS Nov-21: 500K / 505K 10:00 AM NEW HOME SALES SAAR Oct-26: 410K / 402K NEW HOME SALES M/M Oct-26: 2.0% / -3.6% MICHIGAN CONSUMER SENTIMENT (Nov F): 67.0 / 66.0

Thursday:
	Markets closed

11/23/2009

In light trading action typical for the Thanksgiving holiday week, a decline in the US dollar brought out the stock market bulls on the heels of three consecutive down-sessions last week. The Dollar Index dropped 0.6% on comments from two Fed presidents who suggested indirectly that interest rates will remain close to zero well into next year.

On the economic news front, the latest home sales numbers were up sharply in October, climbing more than 10% from the previous month. According to the National Association of Realtors, sales increased to an annualized 6.10 million units last month. The data beat expectations; economists had been calling for only a 2.3% monthly increase. Inventories were down to a seven-month supply, the lowest since early 2007. Skeptics maintain that housing sales were mainly boosted because of government intervention - the recently extended new home buyer's credit of up to $8,000.

Dow component Hewlett-Packard, the top seller of personal computers globally, reported earnings today, showing a 14% increase in profits last quarter, much of it driven by cost-cutting measures. HP has four major divisions (personal computers, servers, software, and printers) and each of these saw significant revenue declines; company-wide, revenue was off 8% compared to last year.

Speaking to the press after a Cabinet session, US President Obama commented on the difficulties American families have suffered in 2009. In reference to the country's highest unemployment rate in 26 years, Obama commented that 'We cannot sit back and be satisfied given the extraordinarily high unemployment levels that we've seen ...We have only taken the first step in curing our economy.'

Key economic data for the week starting November 23, 2009. Numbers shown are consensus estimates (market anticipates this value) and prior value.

Tuesday:
	8:30 AM GDP (annualized) (Q3 A): 3.0% / 3.5% GDP DEFLATOR (annualized) (Q3 A): 0.8% / 0.8% 9:00 AM S&P CASE SHILLER INDEX (Sep): n.a. / 146 S&P CASE SHILLER Y/Y (Sep): -9.2% / -11.3% 10:00 AM CONF.BOARD CONSUMER CONFIDENCE (Nov): 47.0 / 47.7 RICHMOND FED MANUF. INDEX (Nov): 10.0 / 7.0 HOUSE PRICE INDEX Q/Q (Q3): n.a. / -0.7% HOUSE PRICE INDEX M/M (Sep): 0.2% / -0.3% 2:00 PM FED MEETING MINUTES

Wednesday:

8:30 AM DURABLE GOODS ORDERS M/M (Oct): 0.5% / 1.4% DURABLE GOODS ORDERS EX-TRANS M/M (Oct): 0.8% / 1.2% PCE DEFLATOR Y/Y (Oct): 0.1% / -0.5% PCE DEFLATOR Y/Y (core) (Oct): 1.3% / 1.3% PERSONAL INCOME M/M (Oct): 0.2% / 0.0% PERSONAL SPENDING M/M (Oct): 0.5% / -0.5% CONTINUING CLAIMS Nov-14: 5523K / 5611K INITIAL CLAIMS Nov-21: 500K / 505K 10:00 AM NEW HOME SALES SAAR Oct-26: 410K / 402K NEW HOME SALES M/M Oct-26: 2.0% / -3.6% MICHIGAN CONSUMER SENTIMENT (Nov F): 67.0 / 66.0

Thursday:
	Markets closed

11/20/2009

An absence of (stimulating) economic data releases, Dell's significant earnings miss (as we reported yesterday) - now called a 'debacle', and of course the suddenly strengthening US dollar served as a drag for the equity market today. The S&P 500 saw its first weekly loss for the month. A number of additional bearish factors came from overseas, putting further pressure on the markets: The possibility Asian policymakers might impose capital controls; the European Central Bank's hint of withdrawing liquidity (i.e., phasing out stimulus programs).

This week's most troubling economic news came from the housing front where we learned about an unexpected decline in housing starts and a significant increase in mortgage delinquencies. This has reignited concerns about the sustainability of the current economic recovery, and has investors worried, the stock market rally since March may have been overdone.

Next week should see light trading because of the upcoming Thanksgiving holiday. The week however has a loaded economic news calendar (see details in the section below) with reports scheduled on home sales, unemployment numbers, consumer confidence data, revised GDP numbers, and more.

Key economic data for the week starting November 23, 2009. Numbers shown are consensus estimates (market anticipates this value) and prior value.

Monday:
	8:30 AM CHICAGO FED NAT.ACTIVITY INDEX (Oct): n.a. / -0.8% 10:00 AM EXISTING HOME SALES SAAR (Oct): 5.70M / 5.57M EXISTING HOME SALES M/M (Oct): 2.3% / 9.4%

Tuesday:
	8:30 AM GDP (annualized) (Q3 A): 3.0% / 3.5% GDP DEFLATOR (annualized) (Q3 A): 0.8% / 0.8% 9:00 AM S&P CASE SHILLER INDEX (Sep): n.a. / 146 S&P CASE SHILLER Y/Y (Sep): -9.2% / -11.3% 10:00 AM CONF.BOARD CONSUMER CONFIDENCE (Nov): 47.0 / 47.7 RICHMOND FED MANUF. INDEX (Nov): 10.0 / 7.0 HOUSE PRICE INDEX Q/Q (Q3): n.a. / -0.7% HOUSE PRICE INDEX M/M (Sep): 0.2% / -0.3% 2:00 PM FED MEETING MINUTES

Wednesday:

8:30 AM DURABLE GOODS ORDERS M/M (Oct): 0.5% / 1.4% DURABLE GOODS ORDERS EX-TRANS M/M (Oct): 0.8% / 1.2% PCE DEFLATOR Y/Y (Oct): 0.1% / -0.5% PCE DEFLATOR Y/Y (core) (Oct): 1.3% / 1.3% PERSONAL INCOME M/M (Oct): 0.2% / 0.0% PERSONAL SPENDING M/M (Oct): 0.5% / -0.5% CONTINUING CLAIMS Nov-14: 5523K / 5611K INITIAL CLAIMS Nov-21: 500K / 505K 10:00 AM NEW HOME SALES SAAR Oct-26: 410K / 402K NEW HOME SALES M/M Oct-26: 2.0% / -3.6% MICHIGAN CONSUMER SENTIMENT (Nov F): 67.0 / 66.0

Thursday:
	Markets closed

11/19/2009

Blame it on the dollar: Yesterday, we commented that equities had struggled to keep up in spite of a significantly weaker US dollar; today, a bouncing greenback was accompanied by broad-based weaknesses on the major indexes. Other factors were at play as well however, not the least of which is the urge to take some profits (and lock in at least partial gains for the year) after a rally that some in the press are now calling 'momentous'. After all, the market has bolted higher for seven months in a row.

A number of relatively disappointing economic data releases played a role in today's weak market action: According to a report released by the Mortgage Bankers Association, the third quarter of 2009 saw a 37-year high on delinquency rates on small homes, a potential harbinger of additional foreclosures to come, as well as a swelling of inventory in the housing market.

Also disappointing was the news from the Conference Board that leading economic indicators had gone up less than economists were expecting (they gained only 0.3% in October rather than the expected 0.5%). In contrast, in November, the index maintained by the Philadelphia Federal Reserve Bank advanced to a two-year high.

Technology issues, already under pressure yesterday, suffered from bearish analyst comments today. Notable was a downgrade by Bank of America / Merrill Lynch concerning next year's growth expectations in the semiconductor industry. A number of major players were all downgraded, among them Intel, Texas Instruments, and Marvell Technology Corp. Furthermore, after the bell, personal computer maker Dell reported earnings that show a stronger-than-anticipated decline in quarterly revenues, pummeling its shares in after-hours trading.

11/18/2009

An interesting change of pace in the market today: In spite of US dollar weakness that pushed the greenback back down toward its 52-week low established earlier this week, the equities market was not able to stage a sustainable rally. In fact, it was itself mired in weakness for most of the session (although a late-day upswing contained losses on the S&P 500 and on the Dow). While dollar weakness did not boost equities today, it did encourage buying in gold (which rallied to yet another new all-time high above $1153 per ounce).

Initial market weakness was attributed to poor housing data, with housing starts (i.e., the construction of homes and apartments) in October falling by 10.6% and coming in strongly below expectations. Economists had been calling for 600,000 new units whereas actual reported housing starts for October came in at an annualized 529,000. The number of building permits was also lower than expected. This weak showing of the housing market may have stirred some investor worries about the strength of the US economic recovery.

Among today's other economic data releases, it was reported that the Consumer Price Index for October was up 0.3% (slightly above consensus estimates of an increase of 0.2%); core CPI was up 0.2% (also slightly above economists' expectations).

The NASDAQ's underperformance today can be attributed to troubling outlook and earnings reports from Autodesk and from Salesforce.com. In addition, Wall Street darling Research in Motion was the object of a negative brokerage report suggesting the Blackberry maker could face increased competition. While technology issues sagged, there was however counteracting strength in the financial and materials sectors.

Key economic data for the week starting November 16, 2009. Numbers shown are consensus estimates (market anticipates this value) and prior value.

Thursday:
	8:30 AM CONTINUING CLAIMS Nov-07: 5620K / 5631K 10:30 AM INITIAL CLAIMS Nov-15: 502K / 502K 10:00 AM PHILADELPHIA FED (Nov) (M): 11.6 / 11.5 LEADING INDICATORS M/M (Oct) (M): 0.4% / 1.0%

11/17/2009

A number of Dow components were in the news today as the Dow rose slightly to a new 13-month high. Home Depot lost more than 2% in today's session after reporting earnings. Both Home Depot and Target provided a disappointing outlook for the 'holiday shopping season' and suggested a meaningful recovery might not occur until the second half of next year. This news pressured the entire retail sector.

Today's economic data releases were not seen as significant market-moving events. There was a 0.3% increase in the October Producer Price Index (expectations had been for a rise of 0.5%). Core producer prices were off 0.6% in October (here, economists had been expecting a 0.1% increase). The Producer Price Index is a gauge for wholesale inflation.

In October, industrial production was up 0.1%, less than the anticipated 0.4%. The data is thus a reflection of the fact that US industrial output is not growing as fast as some had anticipated. Consensus estimates were however met for the newest data on capacity utilization which came in at 70.7%.

Showing leadership today was Dow component Microsoft. The company's stock has been on a tear over the past few weeks, today closing at an 18-month high on the heels of a brokerage upgrade which suggests good prospects for Microsoft's Windows 7 release, as well as for the holiday season. Also benefiting from an upgrade was Dow component Exxon Mobil.

Key economic data for the week starting November 16, 2009. Numbers shown are consensus estimates (market anticipates this value) and prior value.

Wednesday:
	8:30 AM November 18 CPI M/M (Oct): 0.2% / 0.2% 7:00 AM CPI M/M (core) (Oct): 0.1% / 0.2% CPI Y/Y (Oct): -0.3% / -1.3% CPI Y/Y (core) (Oct): 1.6% / 1.5% HOUSING STARTS SAAR (Oct): 598K / 590K

Thursday:
	8:30 AM CONTINUING CLAIMS Nov-07: 5620K / 5631K 10:30 AM INITIAL CLAIMS Nov-15: 502K / 502K 10:00 AM PHILADELPHIA FED (Nov) (M): 11.6 / 11.5 LEADING INDICATORS M/M (Oct) (M): 0.4% / 1.0%

11/16/2009

Once again, the ever weakening US dollar provided broad-based support for equities and commodities. The stock market rally on the back of a weakening greenback will however likely end at some point, and it appears that there is now official concern about the slumping greenback at the highest level, as well as internationally. In fact, Federal Reserve Chairman Ben Bernanke took the unusual step today to make a rare commentary on the value of the dollar. Following are some details of Bernanke's comments today:

Speaking before a crowd at the Economic Club of New York, the Fed Chairman was quoted as saying that the Fed is ' attentive to implications of changes in the value of the dollar and will continue to formulate policy to guard against risks to our dual mandate to foster both maximum employment and price stability'. In order to bring about a true rebound for the US dollar, the Fed would however need to raise rates; in the current economic climate, this is not feasible. In order not to spook the market with his 'strong dollar talk', Bernanke therefore reiterated that interest rates will likely be maintained at exceptionally low rates 'for an extended period'.

Arguably, it was this promise of low interest rates for some time to come that boosted the market strongly today. At the same time, while Bernanke's strong dollar comments triggered some temporary short-covering in the currency, this action however remained short-lived as the US dollar continued to slide. Late in the session, a well-known banking analyst made her increasingly bearish views on the current stock market rally known (during a CNBC interview), making particular reference to the fact that there was 'no way' the banking sector was currently sufficiently capitalized, adding that many banks would likely need to raise another round of capital.

Among the economic data released today, an Advance Retail Sales Report suggested total retail sales were up 1.4% in October (exceeding analysts' expectations for an increase of 0.9%); however, it must be noted that much of this surge was due to automobile sales. Meanwhile, the Empire Manufacturing Survey for November came in below expectations, at 23.5. Finally, there was a 0.4% decrease in September business inventory data.

Key economic data for the week starting November 16, 2009. Numbers shown are consensus estimates (market anticipates this value) and prior value.

Tuesday:
	8:30 AM PPI M/M (Oct): 0.5% / -0.6% PPI M/M (core) (Oct): 0.1% / -0.1% PPI Y/Y (Oct): -1.7% / -4.8% PPI Y/Y (core) (Oct): 1.4% / 1.8% 9:00 AM NET CAPITAL INFLOWS (TICS) (Sep): n.a. / $28.6B 9:15 AM INDUSTRIAL PRODUCTION M/M (Oct): 0.4% / 0.7% CAPACITY UTILIZATION (Oct) (M): 70.8% / 70.5% 1:00 PM NAHB HOUSING INDEX (Nov): 19 / 18

Wednesday:
	8:30 AM November 18 CPI M/M (Oct): 0.2% / 0.2% 7:00 AM CPI M/M (core) (Oct): 0.1% / 0.2% CPI Y/Y (Oct): -0.3% / -1.3% CPI Y/Y (core) (Oct): 1.6% / 1.5% HOUSING STARTS SAAR (Oct): 598K / 590K

Thursday:
	8:30 AM CONTINUING CLAIMS Nov-07: 5620K / 5631K 10:30 AM INITIAL CLAIMS Nov-15: 502K / 502K 10:00 AM PHILADELPHIA FED (Nov) (M): 11.6 / 11.5 LEADING INDICATORS M/M (Oct) (M): 0.4% / 1.0%

11/13/2009

The newest US consumer sentiment reports came out today, and they were poor, showing an unexpected tumble. In early November, consumer confidence waned, coming in at its weakest level in three months. The Reuters/University of Michigan Surveys of Consumers pegged its (preliminary) sentiment indicator for November at a reading of 66.0 (October's value had been a significantly higher reading of 70.6); meanwhile, economists had been expecting the latest reading to come in at 71.0. The accompanying Reuters statement suggested that '.... importantly, the decline in confidence was already in place before the announced increase in the unemployment rate to 10.2 percent on November 6'.

In housing-related news, the National Association of Realtors see home prices across the US improving in 2010, increasing by an estimated 4%. Furthermore, home resales should also keep rising in conjunction with the anticipated continuing housing market recovery. Specifically, home resales for 2010 are currently projected to reach 5.7 million while mortgage rates are estimated to average roughly 5.7%.

The major indexes recovered smartly today from yesterday's lone slide, although they pulled back strongly later in the session. The up-move was precipitated by renewed US dollar weakness (prompted by the largest increase in a decade in the US trade deficit), strong earnings from Walt Disney (which reported a rise in both quarterly profit and revenue), and better-than-expected results from a number of retailers (including J.C. Penney and Abercrombie & Fitch).

It is interesting to point out (as some skeptic market observers have) that today's rally occurred on the heels of a much worse than expected reading on consumer sentiment. Some market observers use this as yet another example of a growing disconnect between Wall Street and Main Street, calling the current rally nothing more than an increasingly irrational momentum trade where technical aspects (cheap money, low interest rates, a sagging US dollar) are overshadowing poor underlying fundamentals, for now continuing to provide a strong tailwind for the bulls.

Key economic data for the week starting November 16, 2009. Numbers shown are consensus estimates (market anticipates this value) and prior value.

Monday:
	8:30 AM RETAIL SALES M/M (Oct): 0.9% / -1.5% RETAIL SALES (X-AUTOS) M/M (Oct): 0.4% / 0.5% NEW YORK FED (EMPIRE) (Nov) (M): 28.5 34.6 10:00 AM BUSINESS INVENTORIES M/M (Sep): -0.6% / -1.5%

Tuesday:
	8:30 AM PPI M/M (Oct): 0.5% / -0.6% PPI M/M (core) (Oct): 0.1% / -0.1% PPI Y/Y (Oct): -1.7% / -4.8% PPI Y/Y (core) (Oct): 1.4% / 1.8% 9:00 AM NET CAPITAL INFLOWS (TICS) (Sep): n.a. / $28.6B 9:15 AM INDUSTRIAL PRODUCTION M/M (Oct): 0.4% / 0.7% CAPACITY UTILIZATION (Oct) (M): 70.8% / 70.5% 1:00 PM NAHB HOUSING INDEX (Nov): 19 / 18

Wednesday:
	8:30 AM November 18 CPI M/M (Oct): 0.2% / 0.2% 7:00 AM CPI M/M (core) (Oct): 0.1% / 0.2% CPI Y/Y (Oct): -0.3% / -1.3% CPI Y/Y (core) (Oct): 1.6% / 1.5% HOUSING STARTS SAAR (Oct): 598K / 590K

Thursday:
	8:30 AM CONTINUING CLAIMS Nov-07: 5620K / 5631K 10:30 AM INITIAL CLAIMS Nov-15: 502K / 502K 10:00 AM PHILADELPHIA FED (Nov) (M): 11.6 / 11.5 LEADING INDICATORS M/M (Oct) (M): 0.4% / 1.0%

11/12/2009

After a severe slump over the past eight months, the US dollar appears to be springing back to life (even if perhaps only temporarily). As discussed in a number of recent editions of our Market Outlook, sudden strength in the US greenback (should it appear) could have negative repercussions for the broad equity market, as well as for commodities. Some market pundits now believe that a sharp rally lies just ahead for the US dollar. Should the current inverse correlation between the greenback and the broad market continue to hold, this would have negative implications for the entire market; for one, it could cap the current exuberant multi-month stock rally investors have come to depend on.

Apart from the stronger dollar, Dow component Wal-Mart as well as retailer Kohl's also put a damper on the market today. While both companies reported higher third-quarter earnings, they admit that aggressive discounting was (and is) required in order to hang on to customers. While Wal-Mart is able to attract more shoppers through its extensive price-cutting campaigns, those consumers are also spending less. This scenario has led Wal-Mart to see a second quarter in a row where sales declined at its US stores. Furthermore, Wal-Mart expects this pattern to continue through the fourth quarter. Meanwhile, both retailers are not particularly enthusiastic about the coming 'holiday shopping season'.

Oil prices declined today as the US dollar strengthened; however, a reported increase in US crude oil inventories also contributed, driving oil below $77 a barrel (down roughly 3%). A pessimistic commentary on these circumstances is that the demand for oil and gasoline products is declining because the US economy continues to struggle.

In economic news, the Labor Department announced that new claims for unemployment insurance were down last week, declining to a seasonally adjusted 502,000. That represents the lowest number of claims registered since this January of this year; the number also exceeded economists' expectations. Meanwhile, according to the Treasury Department, the US trade deficit for October came in at $176.4 billion, above the consensus estimate by economists of $150 billion. The deficit for the entire 2009 budget year (ending September 30) even reached an all-time record $1.42 trillion, exceeding the deficit for 2008 by $958 billion. Another record was set: October of this year was the 13th consecutive month that showed a monthly deficit.

Key economic data for the week starting November 9, 2009. Numbers shown are consensus estimates (market anticipates this value) and prior value.

Friday:
	8:30 AM GOODS & SERVICES TRADE BALANCE (Sep): -$31.9B / -$30.7B IMPORT PRICE INDEX M/M (Oct): 1.0% / 0.1% 10:00 AM MICHIGAN CONSUMER SENTIMENT (Nov P): 71.0 / 70.6