Forget Seasonal Trends And Santa Claus Effect
As December begins, the stock market remains perched precariously between horrible economic news and continued announcements of more loan facilities and an expanding Fed balance sheet.
The loudest talk isn't about stocks, it's about the record low yields for U.S. Treasuries, and indeed around the world.
Commodities hit hard this morning, with metals and energy down 3 to 7 percent as the dollar rally continues. Energy stocks like Nabors , Halliburton , Cameron are down on light volume.
1) J&J goes big for the body sculpting market. They're buying Mentor , which makes breast implants and liposuction equipment, for $1.07 b in cash, $31.00 per share, a gain of over 80 percent from the Friday close.
2) Oppenheimer's Meredith Whitney is no more optimistic on banks than she was a year ago. She believes declining liquidity for consumers could have a "disastrous" effect on consumer spending, so her primary concern is preserving liquidity. She makes several recommendations to expand availability of consumer credit.
3) A home builder upgraded? Yes, Credit Suisse upgrades Toll Brothers to (to Neutral from Underperform). They believe there will be fewer asset value impairments and housing affordability is improving. The hope is that the new TALF program will help reduce borrowing costs.
4) Jeff Sprague, analyst at Citi who covers GE (our parent), notes this morning that GE announced it will be holding a webcast on 12/2 to review GE Capital, and that this may be the opportunity for GE to lower their 2009 earnings expectations.
5) You all know that December is supposed to be a great month for stocks, right? #2 biggest month, in fact, with gains averaging 1.7 percent since 1950, according to the Stock Trader's Almanac.
- Trillions in Credit Line Cuts Ahead: Whitney
- GM's Board Reviews Plan To Restructure Auto Maker
Guess what: #1 month for stock gains is November, with gains also averaging 1.7 percent. But the S&P was down 7.5 percent last month, the worst November since 2000.
In other words, forget about seasonal trends, Santa Claus effect, etc. No one is paying attention to that stuff this time around.
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