Nov 30, 2012

Money Show Investors Daily Alert -November 30, 2012-. : 10 Ripples from Greece's Rescue Deal

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The Economist | New Selected Articles -November 30, 2012-.





Eastern approaches: Remembering the Holodomor
The 80th anniversary of a famine in Soviet Ukraine that killed up to 7m people
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Free exchange: The most important number
The euro crisis will end when the political pressure for exit erodes
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Democracy in America: Bombing Kant's test
If Obama's drone-war rules are dangerous in the hands of Republican presidents or other countries' leaders, they're wrong
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Babbage: Rage, rage against the dying of the dark A photographer documents the abrupt end of analogue film manufacture
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Culture: A whole lotta woman
Bold, vibrant and sassy artworks inspired by Mickalene Thomas's mother, and muse
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Graphic detail: The 2012 Daily chart Advent calendar
A round-up of the year's most popular graphics and charts
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MarketWatch | European Markets at Close Report -November 30, 2012-.: European stocks tally 2% rise in November Narrow moves mark major bourses’ final session of the month

By Sara Sjolin, MarketWatch 

LONDON (MarketWatch) — European stock markets ended a choppy Friday session on a modestly downbeat note, as worries over the U.S. ”fiscal cliff” weighed on investors’ minds, although German approval for Greece’s latest rescue deal served to underpin bullish sentiment. 

The Stoxx Europe 600 index XX:SXXP -0.19%  fell 0.2% to close at 275.78, breaking a three-day winning streak. 

The benchmark’s performance, however, was more upbeat both in weekly and monthly terms: It closed out November 2% higher, marking the sixth straight month of gains, and added 0.9% on the week. 

“What’s been remarkable this week is that we have seen a strong improvement in the euro and 10-year Italian [government] bond yields have fallen to 4.5%,” said Andreas Hurkamp, equity market strategist at Commerzbank. 

“It becomes more and more clear that the ECB’s [Outright Monetary Transactions] program is really the game changer in the crisis,” he added, referring to the European Central Bank. 

The yield on 10-year Italian bonds yields IT:10YR_ITA -0.05%  ended Friday’s session at 4.52%.
“Now investors really realize that and are trying to figure out what to do with their money. German and corporate bonds are not attractive anymore, so first they move into government bonds with higher yields like Italy’s, but they also buy into the equity market,” Hurkamp said. 

Among notable equity movers in Europe, shares of LVMH Moët Hennessy Louis Vuitton FR:MC +1.28% LVMHF +2.50%  rose 1.3% after Goldman Sachs upgraded its rating to buy from neutral.
Shares of Royal Bank of Scotland Group PLC UK:RBS -1.27% RBS -1.35%  dropped 1.3% as the bank said that a sale of its Indian retail- and commercial-banking operations to HSBC Holdings PLC UK:HSBA +0.97% HBC +0.85%   HK:5 +1.42% had collapsed and that it would wind down the business instead. See: RBS India retail business sale to HSBC collapses 


Shares of HSBC rose 1% in London.
 
Shares of HSBC rose 1% in London.Broader sentiment was weighed by concerns that U.S. policy makers won’t agree on a deal in time to avert hundreds of billions in automatic spending cuts and tax hikes — the so-called fiscal cliff. See: Republicans say no to Obama’s opening ‘cliff’ bid. 
 
Also in the U.S., the Chicago purchasing managers’ index rose to 50.4 in October, just a shade below expectations of a 50.5 print. See: Chicago PMI inches into expansion territory 
 
Separately, data showed consumer spending dropped for the first month in five in October, as wage growth flattened out. See: U.S. consumer spending drops in Octobe

Germany approves Greece debt plan

Markets, however, got a helping hand from Germany, where the Bundestag reportedly approved the latest measures to help reduce Greece’s debt pile. Euro-zone finance ministers agreed earlier this week to cut interest rates on Greece’s bailout loans, defer interest payments and allow the country to buy back around 30 billion euros in debt. 

GOP rejects Obama's 'opening bid' The White House makes an opening bid that calls for a $1.6 trillion tax increase, a $50 billion economic-stimulus program and new power to raise the federal debt limit. (Photo: Getty Images.) 

“Many investors fear that Greece has to leave the euro zone, but the probability of such a negative outcome has decreased significantly these last two weeks,” Hurkamp said.
“Our point of view is that we have the election in Germany in September and until then Germany will do everything it can to support Greece.” 

Also Friday, German data showed retail sales slumped 2.8% in October, worse than expected by analysts polled by Reuters. Germany is Europe’s largest economy. 

“One of the biggest headwinds for equity markets is that investors have to learn that Germany is not as strong as many think. We expect a contraction in economic activity in fourth quarter,” Hurkamp said.
“Earnings expectations for German companies are 5-10% too high, which could be the next catalyst for a selloff. We’ll get a relief rally triggered by the U.S., but in the first quarter we might see earnings disappoint.” 

On the data front in the euro zone, a report showed unemployment for the currency bloc rose to 11.7% in October from 11.6% in September, marking an euro-era high.

Friday’s movers


CEMEX
HeidelbergCement shares rise after a broker upgrade.
Running down the action on major European bourses, shares of HeidelbergCement AG DE:HEI +1.18%  rose 2.3%, after Morgan Stanley boosted its rating to overweight, up from equal weight previously.
Frankfurt’s DAX 30 index DX:DAX +0.06% added 0.1% to 7,405.50 and closed out November 2% higher, while ending the week with a 1.3% gain.

In Paris, the CAC 40 index FR:PX1 -0.33%  fell 0.3% to 3,557.28, with shares of Total SA FR:FP -0.23%   TOT -0.07% down 0.2%. On a monthly basis, the French benchmark jumped 3.7%, and it rose 0.8% on the week. 

Shares of Schneider Electric SA FR:SU +1.29%  added 1.3% after HSBC upgraded its rating to overweight from neutral. 

And in London, miners stood out among Friday’s major decliners, tracking most metals prices lower. Shares of Anglo American PLC UK:AAL -1.79%  dropped 1.8%, while Vedanta Resources PLC UK:VED -1.29%  fell 1.3%.

The U.K.’s FTSE 100 index UK:UKX -0.06%  closed 0.1% lower at 5,866.82, but it was up 1.5% on the month. For the week, the index ended 0.8% higher. See: Gold trades mostly lower as ‘cliff’ woes dominate 
 
Sara Sjolin is a MarketWatch reporter based in London. Follow her on Twitter @sarasjolin.

ADVFN III Evening Euro Markets Bulletin -November 30, 2012-.


ADVFN III Evening Euro Markets Bulletin
Daily world financial news


London Market
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Stocks end the week in a cautious mood

Market Movers
techMARK 2,106.76 -0.00%
FTSE 100 5,866.82 -0.06%
FTSE 250 12,034.22 +0.06%
UK stocks finished broadly flat on Friday, paring gains by the close of trade as markets headed into the weekend with a cautious mood on the back of uncertainty surrounding the US budget and disappointing economic data in the Eurozone.

After a subdued start, the FTSE 100 edged into positive territory by midday after German parliament approved the Greek rescue deal. The Bundestag voted with a large majority (463 for versus 100 against, 11 abstained) to push through the next Greek aid package which was approved by the Eurogroup on Monday.

Neverthless, markets were hit by jobless figures from Europe: Eurozone unemployment rose to a record 11.7% in October, from 11.6% in Septmeber. Inflation slowed by more than expected to 2.2%, a 23-month low.

Meanwhile in the States, worse-than-expected consumer spending data for October dampened already-fragile sentiment on Wall Street, as investors remain concerned that US politicians could fail to avert the 'fiscal cliff'.

Financial trader Shavaz Dhalla from Spreadex said: "Since a deal has not yet been agreed between Democrats and Republicans investors are still cautious about taking on too much risk as over the next few weeks there is still the risk that any news headline which indicates that a deal is far from being agreed could reverse recent gains within the equities market."

In domestic news, UK consumer confidence measured by GfK surged to an 18-month high in November, rising to -22 from -30 the month before. Consensus estimates were for no change.

FTSE 100 movers: Broker upgrades lift Johnson Matthey and Croda
Blue-chip constituents Johnson Matthey, Croda, Pennon and Intertek were performing well on Friday afternoon following a number of upbeat broker comments.

Chemical peers Johnson Matthey and Croda International were lifted higher after Credit Suisse upgraded the companies from 'neutral' to 'outperform' and from 'underperform' to 'neutral', respectively.

Water supplier Pennon gained after Citigroup upgraded the stock to 'neutral' and The Telegraph's Questor column recommended to buy the shares. Meanwhile, quality and safety testing group Intertek was wanted after Berenberg upped to stock from 'hold' to 'buy' and raised its target from 2,710p to 3,340p.

In contrast, B&Q and Screwfix owner Kingfisher was under the weather after UBS lowered its rating for the stock from 'buy' to 'neutral', citing near-term risks.

Food retail peers Tesco, M&S, Morrison and Sainsbury were in demand this afternoon in spite of an OFT investigation into food pricing display and promotional practices, which ruled that supermarkets should not artificially inflate prices to mislead customers. These four retailers, along with Waitrose, Aldi, the Co-op and Lidl, have agreed to adopt the measures.

Royal Bank of Scotland fell after saying that it is no longer selling its Indian retail and commercial banking operations to HSBC. Instead, it will be winding down what was a profitable business. HSBC was registering decent gains today.

Mining giant Rio Tinto was on the rise after yesterday's investor seminar announced aggressive open and capex cuts. Jefferies recommended to buy the stock this morning, saying that the group can deliver around 40% earnings per share growth from 2012 to 2015 "even if commodity prices do not increase from average 2012 levels as significant volume growth and cost cutting should lead to better unit margins and higher overall profitability for the company."
FTSE 250 movers: Dixons continues to surge
Electrical retailer Dixons surged today, one day after beating first-half forecasts, after its CEO Sebastian James said expressed optimism that his company can benefit from Comet's demise.

James said that its Curry and PC World divisions haven't seen "much disruption" from the fire sale by bankrupt rival Comet. He expects the group to take a bigger market share when hundreds of Comet stores close.

Exane BNP Paribas upgraded the stock to 'neutral' today and lifted its target for the shares from 15p to 25p. The stock has now gained a third over the past month, up a whopping 180% over the year to date.

House builders Taylor Wimpey and Bellway were lifted higher today after UBS upgraded both stocks to 'buy' as part of its review of the sector.

The broker reiterated 'buys' for sector peers Barratt Developments, Berkeley and Persimmon, saying that the macro environment potentially could be "more favourable" next year.

Coal and coke producer New World Resources edged higher despite announcing that a 23-year-old worker died at its CSM Mine in the Czech Republic yesterday.


AIM/Small Cap Report
FTSE 100 - Risers
ARM Holdings (ARM) 774.00p +1.51%
Aberdeen Asset Management (ADN) 338.00p +1.44%
IMI (IMI) 1,054.00p +1.35%
Polymetal International (POLY) 1,062.00p +1.34%
Meggitt (MGGT) 389.40p +1.30%
British Land Co (BLND) 550.00p +1.29%
Croda International (CRDA) 2,381.00p +1.28%
Babcock International Group (BAB) 996.50p +1.22%
CRH (CRH) 1,142.00p +1.06%
Xstrata (XTA) 1,034.00p +1.03%

FTSE 100 - Fallers
Burberry Group (BRBY) 1,287.00p -2.28%
Anglo American (AAL) 1,732.50p -1.79%
United Utilities Group (UU.) 681.50p -1.73%
Eurasian Natural Resources Corp. (ENRC) 270.20p -1.67%
British Sky Broadcasting Group (BSY) 759.00p -1.62%
Evraz (EVR) 234.20p -1.56%
Severn Trent (SVT) 1,615.00p -1.34%
Vedanta Resources (VED) 1,071.00p -1.29%
Royal Bank of Scotland Group (RBS) 295.20p -1.27%
GlaxoSmithKline (GSK) 1,334.50p -1.22%

FTSE 250 - Risers
Dixons Retail (DXNS) 27.49p +6.72%
Invensys (ISYS) 315.50p +3.44%
Bumi (BUMI) 268.00p +3.00%
Taylor Wimpey (TW.) 61.00p +2.95%
Hunting (HTG) 814.00p +2.45%
Cobham (COB) 212.00p +2.37%
Euromoney Institutional Investor (ERM) 783.00p +2.35%
Senior (SNR) 198.40p +2.27%
Bodycote (BOY) 412.60p +2.26%
Domino Printing Sciences (DNO) 594.00p +2.24%

FTSE 250 - Fallers
CSR (CSR) 335.10p -8.17%
Lonmin (LMI) 258.10p -4.97%
Domino's Pizza Group (DOM) 506.50p -2.41%
Ruspetro (RPO) 84.00p -2.33%
BTG (BTG) 357.00p -2.25%
Micro Focus International (MCRO) 573.00p -2.22%
Dialight (DIA) 1,083.00p -2.08%
Devro (DVO) 306.50p -2.05%
Dunelm Group (DNLM) 615.50p -1.83%
Savills (SVS) 447.40p -1.76%

FTSE TechMARK - Risers
RM (RM.) 83.25p +4.72%
Antisoma (ASM) 1.75p +4.48%
Emblaze Ltd. (BLZ) 48.00p +3.23%
Promethean World (PRW) 16.50p +3.12%
Torotrak (TRK) 30.50p +2.52%
Phoenix IT Group (PNX) 170.00p +2.10%
Filtronic (FTC) 36.75p +2.08%
Innovation Group (TIG) 22.50p +1.12%
E2V Technologies (E2V) 112.00p +0.90%
BATM Advanced Communications Ltd. (BVC) 17.62p +0.71%

FTSE TechMARK - Fallers
XP Power Ltd. (DI) (XPP) 961.50p -3.95%
Oxford Biomedica (OXB) 2.38p -2.86%
Ark Therapeutics Group (AKT) 3.23p -2.27%
Gresham Computing (GHT) 66.50p -1.48%
Optos (OPTS) 172.25p -1.43%
Phytopharm (PYM) 9.12p -1.35%
Wolfson Microelectronics (WLF) 190.00p -1.04%
Ricardo (RCDO) 358.00p -0.90%
NCC Group (NCC) 835.00p -0.60%
Vectura Group (VEC) 85.00p -0.29%

European Market
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European Markets Finished Mixed On Fiscal Cliff Concerns

The European markets finished with mixed results Friday, after some weak European economic data and concerns over the looming fiscal cliff in the United States. Investors continue to worry that a deal on the fiscal cliff may not be reached before the end of the year, after statements made yesterday by Congressional leaders.

A rally in Asia helped to provide early support to the European markets. A second round of economic stimulus was approved in Japan in an attempt to jump start the economy ahead of the elections in December. Some strong economic data from Japan also contributed to the positive mood. Meanwhile, the German Parliament has approved the latest bailout plan for Greece by a wide margin.

During a press conference around midday Thursday, House Speaker John Boehner said "no substantive progress" was made in talks with the White House on the fiscal cliff. Boehner also stated that "Despite the claims that the President supports a balanced approach, the Democrats have yet to get serious about real spending cuts." "No substantive progress has been made in the talks between the White House and the House over the last two weeks."

Meanwhile, Senate Majority Leader Harry Reid, D-Nev., spoke shortly afterward and claimed that it was Republicans that had not put a serious offer on the table.

The large imbalances in the euro area will make the conduct of monetary policy much more challenging, European Central Bank President Mario Draghi said on Friday.

The crisis has made it absolutely clear that large imbalances within the euro area can become a fundamental issue for the stability of economic and monetary union, he said in Paris.

A union of sovereign states can become fragile if some states are permanent creditors and others are permanent debtors. Such a situation undermines mutual trust.

Implementation of the commitments made by Greece and its European partners constitute the main challenge to the debt deal, agreed earlier this week, the International Monetary Fund said Thursday.

The Euro Stoxx 50 index of eurozone bluechip stocks declined by 0.08 percent, while the Stoxx Europe 50 index, which includes some major U.K. companies, lost 0.17 percent.

The DAX of Germany rose by 0.06 percent, but the CAC 40 of France decreased by 0.33 percent. The FTSE 100 of the U.K. dropped by 0.06 percent and the SMI of Switzerland fell by 0.12 percent.

In Frankfurt, HeidelbergCement climbed by 2.28 percent. Morgan Stanley upgraded its rating on the stock to "Overweight" from "Equal weight."

Hugo Boss fell by 0.79 percent. Goldman Sachs downgraded its rating on the stock to ''Neutral'' from ''Buy.'' Carl Zeiss Meditec declined by 2.66 percent, after Commerzbank reduced its rating on the stock.

In Paris, LVMH increased by 1.28 percent. Goldman Sachs upgraded the stock to ''Buy'' from ''Neutral.'' Schneider Electric gained 1.29 percent. The stock was upgraded at HSBC to "Overweight" from "Neutral."

In London, Royal Bank of Scotland fell by 1.27 percent. The lender failed to sell its banking operations in India to HSBC and would begin to wind-down its Retail & Commercial banking business in the country. HSBC rose by 0.97 percent.

Croda International climbed by 1.45 percent, after Credit Suisse upgraded the stock to "Neutral" from "Underperform."

Acal plunged by 3.98 percent, after the technology firm reported a decline in first-half profit amid a drop in revenues.

The euro area unemployment rate reached a fresh high in October as unfolding severe austerity forced both governments and companies to shed jobs. The jobless rate rose marginally to 11.7 percent, in line with expectations, from 11.6 percent in September, data from Eurostat showed Friday.

US Market
Stocks Seeing Modest Weakness Amid Lingering Uncertainty

After initially showing a lack of direction, stocks have moved modestly lower over the course of the trading day on Friday. Selling pressure has remained relatively subdued, however, limiting the downside for the markets.

The major averages have recently climbed off their lows for the session but remain in the red. The Dow is down 21.85 points or 0.2 percent at 12,999.97, the Nasdaq is down 8.02 points or 0.3 percent at 3,004.01 and the S&P 500 is down 2.88 points or 0.2 percent at 1,413.07.

The modest weakness that has emerged on Wall Street reflects lingering uncertainty about whether lawmakers in Washington will be able to reach an agreement to avoid the looming fiscal cliff.

While leaders of both parties have said they remain hopeful that a deal can be reached, familiar disagreements over taxes on the wealthy and entitlement reform remain major sticking points.

Some negative sentiment may also have been generated by a report from the Commerce Department showing an unexpected drop in U.S. personal spending.

The Commerce Department said personal spending fell by 0.2 percent in October after climbing by 0.8 percent in September. The drop came as a surprise to economists, who had expected spending to inch up by 0.1 percent.

The report also showed that personal income came in nearly unchanged in October following a 0.4 percent increase in September. Economists had expected income to increase by about 0.3 percent.

However, the data reflected the impact of Hurricane Sandy, with the Commerce Department noting that it cannot quantify the total impact of the storm.

Meanwhile, the Institute for Supply Management - Chicago released a separate report showing that its business barometer climbed to 50.4 in November from 49.9 in October. A reading above 50 indicates an increase in activity.

Sector News

While most of the major sectors continue to show only modest moves, gold stocks have shown a notable move to the downside on the day. Reflecting the weakness in the gold sector, the NYSE Arca Gold Bugs Index is down by 1.1 percent.

The weakness among gold stocks comes amid a decrease by the price of the precious metal, with gold for February delivery sliding $12.20 to $1,717.30 an ounce.

Transportation, electronic storage, and tobacco stocks have also come under pressure, while modest strength remains visible among utilities stocks.

Other Markets

In overseas trading, stock markets across the Asia-Pacific region moved mostly higher during trading on Friday. Japan's Nikkei 225 Index and Hong Kong's Hang Seng Index both advanced by 0.5 percent, while Australia's All Ordinaries Index ended the day up by 0.6 percent.

Meanwhile, the major European markets turned in a mixed performance, ending the day roughly flat. While the German DAX Index inched up by 0.1 percent, the French CAC 40 Index fell by 0.3 percent and the U.K.'s FTSE 100 Index edged down by 0.1 percent.

In the bond market, treasuries have pulled back near the unchanged line after moving higher in early trading. Subsequently, the yield on the benchmark ten-year note, which moves opposite of its price, is down by less than a basis point at 1.615 percent after hitting a low of 1.596 percent.

Broker tips
Kingfisher, Rio Tinto, Wolseley
UBS has lowered its rating for B&Q and Screwfix owner Kingfisher from 'buy' to 'neutral' and reduced its target from 300p to 290p, citing near-term risks.

The broker said: "In most markets DIY demand remains depressed by a mix of low consumer confidence and weak housing markets, affecting big ticket and trade sales in particular.

"While the UK may show some stability next year if mortgage lending improves, there are no signs yet that Continental Europe will follow suit."

Jefferies has reiterated its 'buy' rating and 4,000p target for mining giant Rio Tinto following yesterday's investor seminar in which the company announced aggressive open and capex cuts.

"For Rio Tinto, the combination of higher volumes, higher realised prices, and lower unit costs should lead to significant earnings growth. Our impression is that many investors are highly sceptical about the earnings growth story for Rio, and if growth is delivered in line with our expectations, Rio Tinto shares should perform well. This is one reason why Rio continues to be one of our top picks in the sector."

Panmure Gordon has maintained its 'hold' rating and 2,500p target for plumbing merchant Wolseley ahead of the group's first-quarter trading statement next week.

The broker said that Wolseley's solid full-year results and a recent capital markets day in the US suggests a "steady Q1 outturn".
Broker snap: Goldman Sachs upgrades LVMH to 'buy'
Goldman Sachs has upgraded its rating for French luxury firm LVMH to 'buy' from 'neutral', explaining that the stock has underperformed the rest of the sector by 20 per cent, thus creating a good entry opportunity.

Analysts at the US bank also raised the stock's price target to €197 from €184.90.

They believe that organic margin opportunities and positive cash flow for top LVMH brands should produce long-last results and a better performance in the stock market.

Higher margins are particularly expected in the Wine & Liquors and Watches & Jewelry businesses.

On the other hand, LVMH faces the risk of moderation in the dynamics of the Louis Vuitton brand and a slowdown in global demand for luxury products, Goldman Sachs explains.

Shares were up 2.93% at €137.10 by 12:10 in Paris.

ADVFN III World Daily Markets Bulletin -Friday, 30 November 2012-.

ADVFN III World Daily Markets Bulletin  
Daily world financial news


US Market
Stocks Showing A Lack Of Direction In Early Trading

With traders keeping a close eye on developments in Washington, stocks are turning in a lackluster performance in early trading on Friday. The major averages are lingering near the unchanged line after closing higher in each of the two previous sessions.

The major averages are currently turning in a mixed performance, with the Dow posting a slim gain. While the Dow is up 4.45 points or less than a tenth of a percent at 13,026.27, the Nasdaq is down 4.76 points or 0.2 percent at 3,007.27 and the S&P 500 is down 1.48 points or 0.1 percent at 1,414.47.

The choppy trading on Wall Street comes as many traders have moved to the sidelines, waiting for the next headline out of Washington regarding the negotiations over the looming fiscal cliff.

Comments about the status of the talks have contributed to big swings by the markets in the past few sessions, leading to some apprehension.

While leaders of both parties have said they remain hopeful that a deal can be reached, familiar disagreements over taxes on the wealthy and entitlement reform remain major sticking points.

Amid the focus on Washington, traders have largely shrugged off a report showing an unexpected drop in U.S. personal spending as well as a separate report showing growth in Chicago-area business activity.

The Commerce Department said personal spending fell by 0.2 percent in October after climbing by 0.8 percent in September. The drop came as a surprise to economists, who had expected spending to inch up by 0.1 percent.

The report also showed that personal income came in nearly unchanged in October following a 0.4 percent increase in September. Economists had expected income to increase by about 0.3 percent.

Meanwhile, the Institute for Supply Management - Chicago said its business barometer climbed to 50.4 in November from 49.9 in October. A reading above 50 indicates an increase in activity.

Most of the major sectors are showing only modest moves in early trading, contributing to the lack of direction being shown by the broader markets.

While some strength is visible among telecom and commercial real estate stocks, railroad stocks are seeing early weakness.

In overseas trading, stock markets across the Asia-Pacific region moved mostly higher during trading on Friday. Japan's Nikkei 225 Index and Hong Kong's Hang Seng Index both advanced by 0.5 percent, while Australia's All Ordinaries Index ended the day up by 0.6 percent.

The major European markets have also moved to the upside on the day. While the French CAC 40 Index has edged up by 0.2 percent, the U.K.'s FTSE 100 Index and the German DAX Index are both up by 0.3 percent.

In the bond market, treasuries are seeing modest strength after ending the previous session nearly flat. Subsequently, the yield on the benchmark ten-year note, which moves opposite of its price, is down by 1.4 basis points at 1.606 percent.


Canadian Market
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TSX Flat At Open Friday

Bay Street stocks opened flat Friday amid marginal selling in commodities, with the S&P/TSX Composite Index edging up 6.10 points or 0.05 percent to $12,208.95.

Among base-metals stocks, Inmet Mining  and First Quantum Minerals were down around 1 percent each.

In the oil patch, Coastal Energy and Talisman Energy were down about 2 percent each.

Among gold plays, Agnico-Eagle Mines and Goldcorp. slipped around 0.50 percent each, while Barrick Gold was adding 0.25 percent.

Meanwhile, Bombardier Transportation moved up 0.60 percent after announcing that it bagged $198 million orders from Public Transport Victoria.

The price of crude oil was little changed Friday morning as traders focus their attention to the developments in the U.S. budget talks. Crude for January edged down $0.10 to $87.97 a barrel.

The price of gold was flat Friday morning amid a mixed dollar as traders await cues from the U.S. budget talks. Gold for February eased $0.50 to $1,729.00 an ounce.

Software services provider Espial Group Inc. announced that it would acquire Cambridge UK-based ANT plc for an all-cash offering of 0.205 pence per share, valuing the company at approximately 5 million pounds.

Distribution management software solutions provider Tecsys Inc. reported a marginally lower second-quarter net profit at C$122,000 or C$0.01 per share compared to C$133,000 or C$0.01 per share for the second quarter of last fiscal year.

In economic news, Statistics Canada said real gross domestic product rose 0.1 percent in the third quarter, slowing from the 0.4 percent growth in the second quarter. Exports fell 2.0 percent in the third quarter, the largest decline since the second quarter of 2009. Imports rose 0.4 percent, the fourth quarterly increase in a row.

European Market
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European Markets Make Modest Gains

The European markets are making modest gains on Friday, ahead of the key consumer spending data from the U.S. Sentiment was influenced by a rally in Asia, where stocks rose after markets in the U.S. saw moderate gains overnight amid conflicting reports on the progress made on the fiscal cliff.

House Speaker John Boehner, R-Ohio, told reporters on Thursday at his weekly press conference that "no substantive progress" has been made in fiscal cliff talks with the White House. Boehner said he was disappointed with the lack of progress and argued that Democrats in Washington need to get "serious about spending cuts."

Meanwhile, Senate Majority Leader Harry Reid, D-Nev., spoke shortly afterward and claimed that it was Republicans that had not put a serious offer on the table.

Retail sales in Germany declined more than expected in October, data from the Federal Statistical Office showed. Retail sales fell 2.8 percent month-on-month on a calendar and seasonally adjusted basis in October. This was expected to fall 0.4 percent.

French consumer spending decreased in October, after remaining flat in the previous month, data released by INSEE revealed.

Eurozone's annual inflation, as measured by the harmonized index of consumer prices (HICP) eased more than expected in November, flash report from Eurostat revealed. The HICP rose 2.2 percent year-on-year in November, slower than October's 2.5 percent increase.

Eurostat also said that the euro area unemployment rate reached a fresh high in October. The jobless rate rose marginally to 11.7 percent, in line with expectations, from 11.6 percent in September.

The Euro Stoxx 50 index of eurozone bluechip stocks is adding 0.15 percent, while the Stoxx Europe 50 index, which includes some major U.K. companies, is rising 0.02 percent.

The German DAX is advancing 0.27 percent and the French CAC 40 is gaining 0.10 percent. The UK's FTSE 100 is adding 0.12 percent and Switzerland's SMI is up 0.08 percent.

In Frankfurt, Lanxess is advancing 1.8 percent. Linde, Adidas and RWE are making moderate gains. ThyssenKrupp is falling 0.7 percent. Infineon Technologies is losing 0.4 percent.

Goldman Sachs cut Hugo Boss to ''Neutral'' from ''Buy.'' The stock is modestly down. Carl Zeiss Meditec is losing 0.9 percent. Commerzbank reduced its rating on the stock.

In Paris, LVMH is climbing 2.7 percent. Goldman Sachs raised the stock to ''Buy'' from ''Neutral.'' Schneider Electric is gaining 2.1 percent after the stock was upgraded at HSBC.

Electrical products firm Legrand, telecom equipment maker Alcatel Lucent and car manufacturer Renault are making notable gains.

Those on the losing side include Vivendi, France Telecom and Pernod-Ricard.

In London, Specialty chemicals firm Johnson Matthey is gaining 1.6 percent. WM Morrison Supermarkets is climbing 1.5 percent and restaurant group Whitbread is gaining 1.2 percent.

Royal Bank of Scotland is losing 0.6 percent. The lender failed to sell its banking operations in India to HSBC and would begin to wind-down its Retail & Commercial banking business in the country. HSBC is up around 1 percent.

Acal is plunging nearly 10 percent. The technology firm reported a decline in first-half profit amid a drop in revenues.

United Parcel Service, Inc. (UPS) said remedies have been submitted to obtain competition clearance from the European Commission for the acquisition of Dutch package delivery company TNT Express N.V. TNT is down marginally in Amsterdam.

Asia Market
Asian Stocks Broadly Higher On Japan Stimulus, Data

Asian stocks rose broadly on Friday on optimism over a pair of U.S. economic reports and as the Japanese Cabinet approved another stimulus package worth 880 billion yen ($10.72 billion) to revive economic growth. The gains, however, were capped to some extent by conflicting comments from Washington about the progress in budget talks.

Tokyo stocks posted modest gains, boosted by the yen's weakness against both the dollar and the euro after the cabinet approved a stimulus package worth 880 billion yen ($10.72 billion) to revive growth. The benchmark Nikkei average rose half a percent to 9,446, its highest closing level in more than seven months, while the broader Topix index added 0.3 percent. Meanwhile, a slew of domestic data on industrial production, unemployment, household spending and core consumer prices released today evinced little investor interest.

Japan's industrial output unexpectedly rose a seasonally adjusted 1.8 percent in October from the previous month, the Trade Ministry said in a preliminary reading, beating expectations for a 2 percent decline. Core consumer prices were unchanged on an annual basis in October, while average household spending in the country was down 0.1 percent year-over-year in the month.

Exporters led the gainers amid the weakness in the yen. Canon rose 1.2 percent, Kyocera gained 2.3 percent and Nikon rallied 4.5 percent. Automakers Nissan and Toyota Motor added less than a percent each, Tokyo Electron advanced 2.8 percent and heavyweight Fast Retailing rose 1.2 percent. Mitsubishi Heavy Industries jumped 3 percent and Hitachi soared 4.2 percent after they agreed to form a joint venture to integrate their power system operations. Among those that fell, mobile phone operator Softbank lost 2.8 percent and consumer finance firm Aiful slumped 5.9 percent on profit taking following recent sharp gains.

China's Shanghai Composite index rose 0.9 percent, snapping a four-day losing streak, as construction stocks rallied on expectations of further infrastructure spending in the coming years. Vice Premier Li Keqiang recently said the nation must deepen its rural-urban population shift to support growth. Hong Kong's Hang Seng index added half a percent after data showed the U.S. economy grew faster than initially estimated in the third quarter.

Australian shares rose to a fresh three-week high, with month-end window dressing by fund managers and an unexpected rise in Japanese factory output underpinning sentiment. Both the benchmark S&P/ASX 200 and the broader All Ordinaries index gained about 0.6 percent each, led by miners after most metals finisher higher at fresh seven-week highs on the London Metal Exchange overnight.

BHP rose half a percent after saying succession planning is a natural part of running a business. Rio Tinto rallied 2.8 percent and Fortescue Metals Group gained 1.3 percent, while gold miner Newcrest edged up 0.2 percent. Lynas Corp. plunged 5.2 percent after the miner said it has begun processing rare earths at a controversial plant in northern Malaysia. Banks ended firm following a higher finish on Wall Street overnight. ANZ, Westpac and NAB ended up more than a percent each.

Seoul shares eased slightly from the previous session's three-week high, reflecting the uncertainty surrounding U.S. budget talks after Republican leader John Boehner said there has been no "substantive progress" over the last two weeks. The benchmark Kospi average slipped 0.1 percent despite renewed buying from institutional and overseas investors. Samsung Electronics, Hyundai Motor and SK Hynix fell 1-4 percent, while shipbuilders extended the previous session's gains. CJ Corp ended up 3.4 percent after reporting robust earnings.

New Zealand shares rose sharply after units in the Fonterra Shareholders' Fund jumped 21 percent on their listing price in their debut on the stock exchange. The benchmark NZX-50 index added 0.8 percent. Shares of Xero, the cloud-based accounting software provider, soared 6.8 percent as it raised NZ$60 million from U.S. investors to fund expansion plans.

Fletcher Building, the nation's largest construction company, added 1.4 percent after data released by Statistics New Zealand showed the number of building consents for new houses in October was the highest monthly value in over four years. Among the prominent decliners, national carrier Air New Zealand, Telecom, the country's biggest phone company, and the Warehouse Group, New Zealand's biggest listed retailer, fell 1-3 percent.

Elsewhere, India's benchmark Sensex was moving up 0.8 percent, extending gains for a fourth straight session, on expectations that the government would be able to push through economic reforms in Parliament. In economic news, government data released today showed that the nation's GDP growth was stuck at a three-year low of 5.3 percent in the second quarter of the current financial year, matching estimates.

Malaysia's KLSE Composite index was up 0.2 percent, Singapore's Straits Times index was moving up 0.9 percent and the Taiwan Weighted average added a percent, while Indonesia's Jakarta Composite index was down a percent.

Commodities
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Crude Steady Above $88

The price of crude oil was little changed Friday morning as traders focus to the developments in the U.S. budget talks.

Light Sweet Crude Oil (WTI) futures for January delivery, edged up $0.05 to $88.12 a barrel. Yesterday, oil snapped its three-session losing streak to settle higher on some upbeat macroeconomic economic data and optimism of a deal in the U.S. budget talks. Oil jumped a nearly two percent after President Barack Obama expressed confidence over a deal, indicating that he was hopeful the White House and Congress could reach an agreement before Christmas.
The price of gold was ticking higher Friday morning amid a mixed dollar as traders await cues from the U.S. budget talks.

Gold for February delivery, the most actively traded contract, edged up $2.80 to $1,732.30 an ounce. Yesterday, gold snapped its three-session losing streak to settle higher helped by a weak dollar and optimism of a deal to avert the fiscal cliff set to begin January next. Gold normally thrives on inflation while deflation tends to push it down.

Holdings of SPDR Gold Trust, the world's largest gold-backed exchange-traded fund, were unchanged at a record high of 1,347.02 tons.This morning, the U.S. dollar was was lingering near its one month low versus the euro and sterling. The buck was trading firm around its 7-month high versus the yen, while ticking lower against the Swiss franc.

In economic news, the euro area unemployment rate reached a fresh high in October, with the jobless rate rising marginally to 11.7 percent, in line with expectations, from 11.6 percent in September, data published by Eurostat showed.

Separately, the Eurostat said euro zone's annual inflation, as measured by the harmonized index of consumer prices (HICP) eased more than expected in November. The HICP rose 2.2 percent year-on-year in November, slower than 2.5 percent increase in October. Economists expected the rate of inflation to fall to 2.4 percent.

Elsewhere in the region, German retail sales declined at a sharper-than-expected pace in October as waning economic momentum and rising unemployment eroded consumer willingness to spend. Retail sales fell 2.8 percent month-on-month on a calendar and seasonally adjusted basis in October, the Federal Statistical Office said. Economists expected sales to fall 0.4 percent after a 0.5 percent gain in September.

Traders will look to the report on personal income and spending from the U.S. Commerce Department due out at at 8:30 am ET. The consensus estimates call for a 0.3 percent month-over-month increase in personal income, while personal spending may have edged up by 0.1 percent. In September, personal income rose 0.4 percent and personal spending climbed 0.8 percent.

RTTNews Market Analysis | Beyond the Numbers -November 30, 2012-.: Soft Consumer Spending Could Accentuate Economic Worries

RTT News: Global Financial Newswires

Market Analysis


Beyond the Numbers
Soft Consumer Spending Could Accentuate Economic Worries
 
  11/30/2012 9:01 AM


The major U.S. index futures are pointing to a narrowly mixed opening on Friday, as economic concerns are re-ignited following the release of a report showing an unexpected decline in consumer spending just ahead of the key holiday selling season. The advances in the past two sessions may introduce caution, given the conflicting stances of the Republicans and Democrats in tackling the fiscal cliff leading to a lack of an agreement. The markets may also take cues from the results of a regional manufacturing survey due to be released shortly after the markets open. Any potential news concerning the fiscal cliff could also impact trading.

U.S. stocks advanced on Thursday, as fiscal optimism lingered and economic data came in stronger than expected. The major U.S. averages opened higher and moved sideways until the mid-session. Although the averages pared most of their gains by the mid-session, they advanced until late afternoon trading before seeing some consolidation.

The Dow Industrials ended up 36.71 points or 0.28 percent at 13,022 and the S&P 500 Index closed 6.02 points or 0.43 percent higher at 1,416, while the Nasdaq Composite added 20.25 points or 0.68 percent before closing up 3,012.

Twenty-one of the thirty Dow components closed higher and one stock ended unchanged, while the remaining eight stocks fell. UnitedHealth (UNH), Caterpillar (CAT), Disney (DIS), Hewlett-Packard (HPQ), JP Morgan Chase (JPM), Coca-Cola (KO), AT&T (T) and Verizon (VZ) were among the best performers of the session. On the other hand, Intel (INTC), Microsoft (MSFT) and Home Depot (HD) declined sharply.

Biotechnology, airline and oil service stocks saw notable buying interest.

On the economic front, the Labor Department reported that initial jobless claims declined to 393,000 in the week ended November 24th from 416,000 in the previous week. The decline retraced most of the Sandy-related increase in claims. Continuing claims fell 124,300 to 2.82 million in the week ended November 17th.

Meanwhile, U.S. third quarter GDP growth was upwardly revised to 2.7 percent from the initially estimated 2 percent, according to another government report. The improvement reflected an upward revision to exports, while most other expenditure areas were downwardly revised. Consumer spending growth was downwardly revised to 1.4 percent from 2 percent.

BMO Capital Markets expects a slowdown in GDP growth in the fourth quarter due to soft business spending, the impact of Hurricane Sandy, less inventory investment and an anticipated pullback in federal defense spending.

The National Association of Realtors reported that pending home sales rose by 5.2 percent month-over-month in October, much better than the expected increase. Annually, the index was up 18 percent. The Midwest and the South saw notable increases in pending home sales.

Currency, Commodity Markets

Crude oil futures are slipping $0.23 to $87.84 a barrel after rising $1.58 to $88.07 a barrel on Thursday. Gold futures, which rose $10.70 to $1,729.50 an ounce in the previous session, are currently slipping $2.60 to $1,726.90.

Among currencies, the U.S. dollar is trading at 82.60 yen compared to the 82.12 yen it fetched at the close of New York trading on Thursday. Against the euro, the dollar is valued at $1.2972 compared to yesterday’s $1.2979.

Asia

Most major Asian markets closed higher, as the positive close on Wall Street overnight prompted traders to stay invested in stocks. Positive industrial production data from Japan also supported sentiment.

Japan’s Nikkei 225 average opened higher and saw some volatility in early trading. Thereafter, the index rose steadily till early afternoon trading before going about a consolidation move for the rest of the session. The index closed up 45.13 points or 0.48 percent at 9,446. Export stocks advanced, while real estate, utility, financial, telecom, pharma and resource stocks declined.

Australia’s All Ordinaries hovered in positive territory throughout the session before closing up 27.90 points of 0.62 percent at 4,518. Energy and material stocks led the gains in the session, while consumer staple and real estate stocks saw some weakness.

Hong Kong’s Hang Seng Index closed at 22,030, up 107.50 points or 0.49 percent, while China’s Shanghai Composite Index broke a four session losing streak and ended 16.63 points or 0.85 percent higher at 1980.

India’s Sensex added close to 1 percent despite the release of a September quarter GDP report showing that growth eased to a three-year low of 5.3 percent. Meanwhile, the Indonesian and South Korean markets closed lower.

On the economic front, the Ministry of Economy, Trade and Industry reported that Japan’s industrial output rose 1.8 percent month-over-month in October, belying expectations for a 2 percent drop. Annually, output fell 4.3 percent compared to the 8 percent decline expected by economists.

Meanwhile, a report released by Japan’s Ministry of Internal Affairs and Communication showed that the jobless rate was unchanged at 4.2 percent in October.

A separate report showed that average household spending in Japan edged down 0.1 percent year-over-year in October compared to expectations for a 0.8 percent drop. Housing starts also increased more than expected in October.

Meanwhile, the Japanese government approved a second round of economic stimulus worth 880 billion yen to kick start growth.

Europe

After some volatility, European stocks turned higher in late morning trading. Since then, the averages are moving roughly sideways. The gains have come despite the release of some bleak domestic economic data.

On the economic front, German retail sales declined 2.8 percent month-over-month on a calendar and seasonally adjusted basis in October, the Federal Statistical Office said. Economists expected sales to decline a more modest 0.4 percent after the 0.5 percent increase in September.

An INSEE report showed that French household spending fell 0.2 percent month-over-month in October after remaining unchanged in September. The decline was in line with expectations.

Confidence among British consumers rose to its highest level in 18 months in November, according to the results of a survey done by the Gfk and NOP. The headline index rose to -22 in November from -30 in October. This was the highest reading since May 2011 and was better than forecasts for a no change.

U.S. Economic Reports

With personal income in the U.S. coming in nearly unchanged in the month of October, the Commerce Department released a report showing that personal spending for the month unexpectedly saw a modest decrease.



The report showed that personal income edged up by less than a tenth of a percent in October following a 0.4 percent increase in September. Economists had expected income to increase by about 0.3 percent.

Additionally, the Commerce Department said personal spending fell by 0.2 percent in October after climbing by 0.8 percent in September. The drop came as a surprise to economists, who had expected spending to inch up by 0.1 percent.

At 9:45 am ET, the ISM-Chicago is set to release the results of its manufacturing survey. The business barometer is expected to improve to 50.3 in November from 49.9 in October.



The October survey showed that manufacturing conditions continued to contract. The business barometer remained below the ‘50’ level at 49.9, despite edging up 0.2 points. The production index fell 3.6 points to 51.8, while the order backlogs index rose 2.7 points but remained below 50 at 44.3. Meanwhile the new orders index climbed to 50.6 from 47.4. The employment index slipped 1.7 points to 50.3.

Minneapolis Federal Reserve Bank President Narayana Kocherlakota will speak at the Boston Fed and Boston University Conference on Macro-Finance Linkages at 5 pm ET.

Stocks in Focus

Mentor Graphics (MENT) reported third quarter non-GAAP earnings of 32 cents per share on revenues of $166.30 million. The results exceeded estimates. For 2013, the company expects non-GAAP earnings of $1.22 per share on revenues of $1.1 billion, while for the fourth quarter the company expects non-GAAP earnings of 55 cents per share on revenues of $343 million. The 2013 guidance was positive, while the fourth quarter expectations trailed estimates.

J&J Snack Foods (JJSF) said its board approved a 23.1 percent increase in its quarterly dividend to 16 cents per share.

Christopher & Banks (CBK) reported third quarter earnings of 10 cents per share on revenues of $117.3 million, with revenues exceeding estimates. For the fourth quarter, the company expects high-single to low-double digit comparable store sales growth.

Ford (F) said it sold 6,000 units of hybrids in November, up from its previous record of 5,353 units sold in July 2009. The company also said it expects to achieve an all time high 11 percent share of the electrified vehicle market this year, reflecting a more than five-fold increase.

Duke Energy (DUK) said its Chairman and CEO Jim Rogers announced his intention to retire from the company by the end of 2013 following a 24-year stint at the company. Separately, the company said it has filed a settlement agreement with the North Carolina Utilities Commission to resolve all issues related to the matters under review regarding the change in president and CEO following the closing of the merger between Duke Energy Progress Energy on July 2nd, 2012.

Pacific Sunwear (PSUN) reported a third quarter non-GAAP loss from continuing operations of 3 cents per share, narrower than the loss of 11 cents per share last year. Revenues rose to $228.43 million from $226.79 million in the year-ago period. The loss was in line with estimates, while the revenues exceeded estimates. The company expects a non-GAAP loss from continuing operations of 9-17 cents per share on revenues of $225 million to $235 million. The guidance was positive.

Zumiez (ZUMZ) reported third quarter earnings of 40 cents per share, including 11 cents per share in charges, compared to 45 cents per share last year. Net sales rose 16.9 percent to $180 million. The results were better than expected. For the fourth quarter, the company expects net income of 59-62 cents per share, including an anticipated 8 cents per share in charges, on net sales of $218 million to $221 million. The guidance was weak.

Tellabs (TLAB) announced a special cash dividend of $1 per share. Separately, the company confirmed the appointment of acting CEO and president Daniel Kelly to the position permanently, effective today.

At its annual investor meeting, Yum Brands (YUM) reconfirmed its full year 2012 adjusted earnings per share growth forecast of at least 13 percent or $3.24 per share, which is below the consensus estimate of $3.28 per share. The company also said it expects to once again deliver at least 10 percent adjusted earnings per share growth in 2013. However, the company expects sales in China to soften in the fourth quarter.

St. Jude Medical (STJ) said its board has authorized a share repurchase of up to $1 billion worth of its outstanding stock.

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