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Stocks at New Highs: Here's the Problem

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One problem with stocks at new highs: Corporate buybacks have been dropping, hitting an eight-month low last week, according to TrimTabs. Maybe that is not so surprising, given the buyback and dividend-raising binge companies went on at the end of 2012 to get ahead of anticipated higher U.S. capital gains and dividend taxes.

Elsewhere, Hong Kong books its worst day in three months, down 2.3 percent. Japan snaps a five-day winning streak, logging worst decline in two weeks, and ending down 1.9 percent.

The next important event is Thursday, when the European Central Bank meets, and some are hoping President Mario Draghi might take some action to (indirectly) weaken the euro; some are calling for rate cuts to make Europe more competitive.

With U.S. corporate earnings winding down, it looks to be a mild news vacuum for the next couple weeks. The China markets will be closed all next week for New Year's celebrations. The Italian election is Feb. 24.

Elsewhere:

1) Barclays downgrades home builders: KB Home, PulteGroup, Ryland Group, and Toll Bros. all downgraded by Stephen Kim, and while they see a "positive feedback loop" now in evidence from higher home prices, "we believe valutations have become stretched." He prefers building products companies like Owens Corning, Armstrong World Industries, and Stanley Black & Decker. They note, as I have, that new home prices have increased far more than existing home prices and that this trend is "unsustainable."

2) NYSE Euronext reports earnings slightly better than expected. Its 2013 guidance was about in line with expectations. The problem: So far, this year's stock trading volumes don't look any better than 2012, which was a five-year low. The good news: Slightly better volumes have been seen in the derivatives business, particularly in Europe.

  • A CNBC reporter since 1990, Bob Pisani covers Wall Street from the floor of the New York Stock Exchange.

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