The S&P 500 hit an historic closing high yesterday, despite complaints that the tape was "boring."» Read More
Cheers! Today is the 80th anniversary of the repeal of Prohibition. The Twenty-First Amendment to the Constitution was ratified on December 5, 1933. It repealed the Eighteenth Amendment establishing Prohibition, which went into effect on January 17, 1920.
It's the only Amendment that repealed a prior Amendment. It's also the only amendment to be ratified using the state ratifying convention. All other Amendments have been ratified by state legislatures.
The first state to ratify was Michigan on April 10, 1933. On December 5, 1933, Utah became the 36th statet o ratify (Ohio and Pennsylvania had ratified on the same day), which brought the Amendment into effect (there were only 48 states at the time, as Hawaii and Alaska were not yet states).
As for alcohol beverage stocks, it's been a very, er, mixed year. Take a look:
(Read more: Prohibition is over! Here's a bucket of beer stocks)
—By CNBC's Bob Pisani
Here is what I see happening today:
First, Jobs numbers confuse traders. The strong ADP jobs numbers, followed by the weak ISM Services number, which also included a weak employment component, has everyone scratching their heads...is the job market getting better or not?
The ADP report has not exactly had stellar accuracy recently. Last month ADP reported a gain of 130,000 (subsequently revised today to 184,000), while the Nonfarm Payroll report was 204,000.
Bottom line: Confirms an economy that is sending confusing signals about jobs; stocks not interested in moving ahead of Friday's number.
Second, Volatility Index (VIX) choppy but not flashing a clear warning. It climbed today, but then collapsed. It has gone from around 12.7 last Thursday to 14.5 today, not enough to cause alarm.
Third, budget deal near, a positive--and maybe a negative. Yes it's a modest deal with no Grand Bargain, but it removes any shutdown drama in January. That's a positive.
Here's the downside: Bernanke mentioned some time ago that the inability of the government to come up with a plan was a factor in the Fed declining to begin tapering--way back at the October meeting. Resolution of that might increase chances that tapering begins sooner.
Fourth, retail same-store sales out tomorrow: so far, it's "sell the news" on the Thanksgiving retail reports. The SPDR Retail ETF (XRT) is down three days in a row. It's a tough week for former leaders in this space:
Stocks came off their lows at 10:00 a.m. ET as several pieces of economic data came out. Many are citing the strong October New Home Sales report, well above expectations, though September's was below consensus.
However, investors are almost certainly focusing on the bond market reaction, and the bond market is reacting to the poor November ISM Services report, which came in at 53.9, well below expectations of 55.0.
Remember, the services sector accounts for roughly 80 percent of private-sector jobs.
More importantly, the employment component of ISM dropped off from 56.5 to 52.5. That is a significant drop and the lowest since May.
On that news, bond yields dropped slightly, and stocks rallied, likely because it reduces the chances for a Fed tapering in December.
It certainly is contradictory: The earlier ADP report indicated strength in private jobs growth for November. Stock futures dropped, bond yields rose at that time (8:15 a.m. ET) on concerns tapering is more likely in December.
Bottom line: the market is focused on job creation as the most important indicator of when the Fed will begin tapering. Any headline that sheds light on this will move markets.
Taper anxiety is feeding a sell-off that some argue should be embraced. Stocks dropped at the opening bell, with 10-year yields spiking 3 basis points to 2.85 percent after the November ADP Employment report came in stronger than expected, at 215,000 vs. 173,000 consensus.
Stocks, however, are still in an uptrend. Heavens, the anxiety!
The S&P 500 has been on a fairly steady climb for a full year. There have been dips--notably in May/June and October--but they have been shallow. Since then, its been higher highs and higher lows. We are only one percent off the historic highs. With all the hand-wringing, you'd think we were down 20 percent.
Here's what happened today:
First, the Dow Industrials and the S&P 500 are down three days in a row, but only one percent off their historic highs. Internals are not inspiring: Breadth has been poor for days (three-to-two declining/advancing stocks today), and more protection is being bought, since the CBOE Volatility Index (VIX) has popped to a one-and-a-half month high.
Defensive stocks like Consumer Staples and Utilities led the market.
Bottom line: This looks a lot like some traders are trying to lock in a part of their gains for the year.
Regardless: Down one percent after being up 26 percent for the year (for the S&P) is not unreasonable.
Second, after a great run, Europe was down big for a second day...France down 2.65 percent, for example, had its biggest drop since June. But Europe as a whole is up almost 25 percent since July!
Last, hot money going into Japan to chasing the six-year highs, using the WisdomTree Japan Hedged ETF (DXJ). WisdomTree plans to launch five new currency-hedged Japan sector ETFs, covering financials, real estate, capital goods, healthcare, and tech.
Eight straight weeks of gains for the S&P 500. The rally is still in an uptrend, but it's looking tired. Then again, it's been looking tired for more than a week.
A fade into the close has becoming common in the last week, as the S&P 500 has been struggling at 1,800. Weakness in small caps has added to the sense of fatigue.
(Read more: Get ready for 10 percent drop in 2014: Goldman)
The good news: there is no immediate catalyst for a major decline. The bad news: any good news on an improving economy will likely be met with higher Treasury yields, which will hurt stocks.
Look at yesterday, where a strong showing in the ISM employment component proved a headwind for stocks. The bet is that we could get an upside report on jobs on Friday that could bring bond tapering back to the table.
If early reports are any indication, Black Friday retail sales may have been more sizzle than steak. Traffic was up, but spending was down in the days following Thanksgiving.
"Welcome to the loss leader universe of Black Friday weekend, where losses are big, profits are scarce, and bragging rights [are] the only prize from the weekend." That's what Janney Capital Markets said--and it seems like an accurate representation of what actually happened.
Sterne Agee agreed, noting that 70 percent of the 31 retail chains they surveyed were more promotional than last year.
Retail trends: high-end doing well, low-end cautious and very promotional.
That's it, in a nutshell.
Let's count down the high-end retailers that have reported good numbers so far: Nordstrom (JWN), Macy's (I count them in the higher end because of Bloomingdale's), Fossil (FOSL), Tumi (TUMI), Michael Kors (KORS) all had good quarters.
The low- to mid-end of the market: Not enough income gains nor enough jobs growth. It's that simple.
What happened to Target? Traffic was down 1.3 percent, the fourth consecutive quarterly decline, and same-store sales, while up 0.9 percent, were still below the company's guidance of a one to two percent gain.
Slowing comparable-store trends and declining traffic? That is not good.
Target partly blamed Canada: This is its first foray outside the United States, and it is apparently rockier than they anticipated.
Regardless: Target seem unwilling to get more promotional--which would help sales--likely because it fears loss of profitability.
There's another issue. Target is still struggling with the same problems in the low- to mid-end space, but on top of that there is no buzz around Target any more. It is selling home furnishings, but that's part of a national trend.
Companies have life spans...they got hot, and then they lose it. And they need refreshes. Look at Home Depot (HD) or McDonald's (MCD), both of which were out of favor for years, but turned around on new management, new vision, new products.
Target needs a refresh.
Then there's Sears. Still a big loss, and same-store sales were down 3.1 percent. According to Ken Perkins at RetailMetrics this was the 14th straight quarterly sales decline!
Widening losses, declining sales. Yikes! Sears hasn't invested in the stores, we know that. But it's worse than that: We are in an environment where Sears should be selling more big-ticket items--more appliances, more hardware, more automotive stuff.
But Sears isn't! Instead, the company's competitors are the ones doing well. Whirlpool (WHR) is selling more appliances, but Sears isn't.