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Trading Now

Friday, December 4, 2009


The unemployment rate edged down to 10.0 percent in November, and nonfarm payroll employment was essentially unchanged (-11,000), the U.S. Bureau of
Labor Statistics reported today. In the prior 3 months, payroll job losses
had averaged 135,000 a month. In November, employment fell in construction,
manufacturing, and information, while temporary help services and health care
added jobs.

Strong Black Friday not enough to lift November sales
U.S. retail chains reported a lower sales volume for November, despite a strong turnout on Black Friday. Several popular stores had results that fell short of analysts' forecasts. "It was a month that disappointed us and, I think, the industry," said Michael Niemira, chief economist for the International Council of Shopping Centers. Same-store sales dropped 0.3% in November compared with the same month last year, the trade group said. The Washington Post (04 Dec.)

U.S. service sector posts surprise decline in November
Coming after two consecutive months of modest improvement, the U.S. service sector contracted in November, catching analysts off guard. The Institute for Supply Management's service index fell from 50.6 in October to 48.7 last month. Analysts surveyed by Thomson Reuters were expecting additional tepid improvement, with the index edging up to 51.1. The Business Insider (03 Dec.)

China is in danger of distorting economy, experts say
Economists warned that China has put too much emphasis on stimulating GDP growth and risks distorting its economic structure. "Heavy government-driven investment will probably create excessive capacity and bad loans as witnessed in the 1990s," said Liu Jinhe, chief researcher at the Samsung Economic Research Institute. The State Information Center said the government should not expand its stimulus efforts. "Inflation is not an issue in the short term, but the government should not further its progressive monetary and fiscal policies," the think tank said. China Daily (Beijing) (04 Dec.)

Japanese manufacturers' capital spending plummets 40.7% in Q3
A 40.7% decline in capital spending by Japan's manufacturers in the third quarter compared with the same period last year set a record, the Finance Ministry said. It marked the fifth consecutive quarter of falling capital investment, well exceeding the second quarter's decline of 32%. The biggest drop was among automakers and other firms in the transportation-equipment category, which cut spending by 59.7% The Japan Times(03 Dec.)

BoE to buy, sell corporate bonds to boost liquidity
The Bank of England said in a recently published consultation document that it plans to sell some of the assets it acquired through its bond-buying program and buy other corporate bonds to bolster liquidity in the market. The central bank noted, however, that the move does not signal the start to its quantitative-easing exit strategy. "The proposals [would] have no implications for the accomplishment of the wider asset-purchase program being undertaken in line with the Monetary Policy Committee's decisions," according to the consultation document. The Times (London) (04 Dec.)

House Democrats want TARP money for jobs initiative
Democratic leaders in the House are preparing to push for a job-creation program to be funded with money from the Troubled Asset Relief Program, said U.S. Speaker Nancy Pelosi, D-Calif. She said the House will try to get the measure passed this year. "If we can get something passed this year, it will be so that we can be ready for the construction season starting in the spring," Pelosi said. She said she wants to see some TARP money used to help small businesses hire and to assist local governments with employing firefighters, police officers and teachers. Bloomberg (03 Dec.)

Obama promises "immediate" action to spur hiring
U.S. President Barack Obama said some proposals to boost hiring that were brought up at his jobs summit will receive "immediate" action and could lead to legislation. Obama said tax credits to stimulate hiring are "worthy of further consideration." He said he is receptive to financial assistance to state governments. "As tough as this financial crisis and recession has been on the federal budget, it has in some cases been worse on state and local budgets," Obama said. Reuters (03 Dec.)

Consumer advocates are leery of Comcast's deal for NBC Universal
A proposal to combine entertainment giant NBC Universal with Comcast, the biggest broadband and cable company in the U.S., is drawing a demand from consumer advocates for regulators to take a close look. Sen. Herb Kohl, D-Wis., chairman of the Senate's Antitrust, Competition Policy and Consumer Rights Subcommittee, said he will call a hearing to help consumers find out how the deal would affect their access to diverse information and programming. USA TODAY (04 Dec.)

Rivals maneuver for bankrupt mall owner, sources say
Brookfield Asset Management, one of Canada's biggest commercial-property owners, and Simon Property Group, the largest mall owner in the U.S., have been buying the debt of bankrupt General Growth Properties, sources said. Brookfield has accumulated nearly $1 billion in unsecured debt, possibly preparing a bid to acquire some or all of General Growth's portfolio, the sources said. Meanwhile, Simon reportedly hired legal and financial advisers to assist in forming a bid. The Wall Street Journal (04 Dec.)

Sen. Reid puts health care bill ahead of re-election fight
Putting aside what could be a fierce election to stay in office, Majority Leader Harry Reid, D-Nev., assumed without reservation full responsibility for getting U.S. President Barack Obama's health care overhaul through the Senate. Reid asked Obama to put his oratory and personal charm to work as the point man for the health care campaign months ago. When that did not happen, Reid picked up the banner and never looked back. He is known as a legislator who plays his cards close to the chest when confronted with a challenge. The Washington Post (04 Dec.)

Case could prompt Congress to reshape Sarbanes-Oxley
Supreme Court justices will hear a case next week that challenges the creation of the Public Company Accounting Oversight Board, a central tenet of the 2002 Sarbanes-Oxley Act. An accounting firm and a small-government advocacy organization argue that the board does not have the presidential control required by the Constitution. If the court rules against the board, a battle might build in Congress regarding other aspects of Sarbanes-Oxley. Bloomberg (12/4)

Flash-order ban likely for stock exchanges, unclear for option market
Lawmakers and regulators have been scrutinizing flash orders, but the bulk of the concern is with stock exchanges. The Securities and Exchange Commission likely will ban such flash orders, but whether it will put similar restrictions on the options market is unclear. A ban on flash orders in the options market could trigger upheaval, market participants said. The Wall Street Journal (12/4)

Bernanke: Financial crisis would have been worse without Fed
Federal Reserve Chairman Ben Bernanke was met with a mix of harsh criticism and low-key support as he defended his record at the central bank before the Senate banking committee. "We played a central role in efforts to quell financial turmoil," Bernanke said. "The outcome could have been markedly worse." Committee Chairman Christopher Dodd, D-Conn., said he expects a majority of the committee to vote in favor of Bernanke's confirmation for another term. Reuters (12/3)

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