U.S. balanced funds may have to make some of the largest month end re-allocations of assets since the end of 1987.
This time last year the markets were at the Highs of the modern era of trading. Now 1 year later the spooky part may be the requisite selling from Mutual Funds and Hedge Funds at months end…Today.
The Dow climbed 189.73, or 2.11%, to 9,180.69. The Nasdaq rose 41.31, or 2.49%, to 1,698.52, while the S&P 500 increased 24.00, or 2.58%, to 854.09. Advancing issues outnumbered decliners by nearly a 4-to-1 ratio on the NYSE, where volume remained moderate during Thursdays trading session.
Wall Street is waking up to the political tempest over
billions of dollars in year-end bonuses likely to be paid out at securities
firms lining up for government infusions, top executives are in discussions
to possibly cap their own compensation, according to people familiar with
the situation.
The cost of borrowing money is increasing at a rapid pace. Any credit sensitive business will be affected, including local government. There are signs the tight municipal bond markets are loosening up, which would be good news for local governments. Public agencies rely on bonds to finance things like new buildings and equipment. Over the past several weeks that money has been harder to find. Some bond sales were put on hold. Others went ahead, but with higher interest rates.
In a stark acknowledgment of the tough times ahead in the credit card industry, American Express Co. said Thursday that it plans to cut 7,000 jobs.
Banks asking for credit card debt forgiveness
With defaults on credit card debt spiraling amid a global financial downturn, banks already reeling from the mortgage crisis are losing billions more from unpaid credit card bills.
Big banks have formed an unusual alliance with consumer advocates to urge the government to allow huge portions of credit card debt to be forgiven, a turnabout from recent years when the banking industry lobbied strenuously to make it harder for consumers to erase their credit card debts in bankruptcy. New pilot program which the banks hope will become permanent could involve as many as 50,000 people struggling with credit card debt. On an individual basis, the amount of debt to be forgiven would rise according to the severity of the borrower’s financial situation, up to a maximum of 40 percent.
TiVo and Netflix announce deal to stream movies and TV shows from the online rental service’s library directly to subscribers’ television sets via the TiVo digital video recorder box.
The deal unites the company that changed the way people watch TV Tivo a company that changed the way people rent movies -Netflix - and gives both a significant leg up against competitors such as Apple’s iTunes and Blockbuster in the battle to control the living room.
Though the two companies have been loosely discussing a partnership for about five years, they view today’s announcement as timely since the living room is likely to be the entertainment venue of choice for most US households as the economy swoons.
“People are going to be scaling back on going to the movies and eating out and giving a lot more thought to in-home entertainment,” said TiVo CEO Tom Rogers.
Netflix recently said it expects to finish the year with between 8.85 million and 9.15 million subscribers, down from a previous forecast of between 8.95 million and 9.25 million.
TiVo currently has 3.6 million subscribers, but is expected to gain more as Comcast and DirecTV begin rolling out the service to new markets as part of partnerships TiVo has with both companies.
The new service will be offered for free to subscribers of both companies starting in early December.
Logistically, the service works by having Netflix subscribers go to the Web site and add movie and TV selections to their instant queues. Those choices are automatically displayed on their television sets and can be streamed instantly through the TiVo set-top box.
TiVo shares closed yesterday at $5.93, down 29 percent on the year. Netflix shares ended yesterday at $21.76, down 18 percent on the year.
Verizon looks like it is ready to give back at least a portion of the 20% run-up after the latest earnings report. Stockshakers is targeting $25 from the current $30 range. Stockshakers have open November 30 Put positions.
The EIA reported that oil demand was down the most since 1980 for the January to August period.
BWLD 3 days hold + over $4.00 per share Stockshakers sold the Call options today.
THOR, FCF, calls.
SDK looking for 129.50 to enter a long position.
RWM looking for 89.60 to take a long position.
DUG long entry at $85.00
DXD is still a Stockshakers focus.
Emerging markets saw such unreal gains during Thursdays session we are keeping a close eye on EEV. For example buying the Ultra fund EEM during Thursdays trading session would have been less profitable than selling the Ultra short EEV.
The potential reversal in the trend would make for a potentially strong bounce for the EEV.
Thursdays Sectors
1 Conglomerates +1.66% 120.31M
2 Healthcare +2.24% 579.51M
3 Consumer Goods +3.09% 611.78M
4 Technology +3.59% 2.08B
5 Financial+3.73% 1.77B
6 Services+3.76% 1.29B
7 Industrial Goods+4.47% 379.10M
8 Basic Materials+4.92% 1.37B
9 Utilities+4.97% 193.81M
Stockshakers New Highs Stock Market Scans for 10/31/08:
DCM NTT`DoCoMo, Inc. ADS 16.98
LHCG LHC`Group 33.03
LPHI Life`Partners Inc 39.49
NDN 99`Cents Only Stores 12.18
NL Nl`Industries Inc 13.86
VASC Vascular`Solutions 9.65
These all made new highs during Thursdays trading session. A reversal in the markets during Fridays session could improve the likelihood that these issues would retrace. Volatility may be stronger after setting new highs.
Stockshakers generally seeks new highs for a sign of strength however in a low volume market displaying oversold indicators these may offer a strong contra move.
The October 2008 low for the DOW from October 10th was 7882.51.
The current DOW resistance level is the most recent high at 9363.32
Wednesdays low for the DOW was 8890.29 Thursdays Low for the DOW was 8976.87
Stockshakers suggest watching these levels during Fridays Halloween trading session.
If the markets reverse and the selling takes hold a drop below 8890.29 may trigger a retest of the October 10th lows.
If the shorts are forced to cover and we rally above the 9363 level on the DOW it would mark a potential breakout to higher levels.
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