Happy Wednesday. We now return to our regularly scheduled program of spring.» Read More
Duh, Money never sleeps. So, neither do I. I mean, someone's gotta run this graveyard. Since I've been up \(way\) longer than you, here's what you missed, sleepyhead.
Portuguese Bond Yields Spike (CNBC via Reuters) "Portugal paid almost twice as much to sell 500 million euros ($660 million) of six-month paper on Wednesday as it did in September, keeping the country at the sharp end of persistent market concerns about euro zone debt. The yield rose to 3.686 percent from 2.045 percent in the previous auction. The auction produced a bid to cover ratio of 2.6, compared with 2.4 previously."
Treasury Prices Up As Fed Prepares to Buy \(Bloomberg\) "Treasuries rose as the Federal Reserve prepared to buy long-term debt today after saying improvements in the economy fell short of what's needed to scale back its bond-purchase program. Ten-year yields approached a two-week low after Vincent Reinhart, who was the Fed's chief monetary-policy strategist from 2001 until September 2007, said unemployment may lead the central bank to extend its purchases beyond the current plan to scoop up $600 billion of debt. A report today is forecast to show that private employment rose by the most since November 2007 last month. The notes also rose as the MSCI World Index of stocks fell for the first time in four days."
Sometimes It's Hard to Count Your Billions \(New York Times\) It's really tough to be in private equity when you don't know your own net worth: "It is the brass-tacks question every stock investor asks: What is this company really worth? But in the rarefied realm of private equity investing, the answer to that question is often hard to find, if it can be found at all. After so many public companies passed into private hands during the boom years, buyout specialists who defined that era of Wall Street wealth are seemingly at odds over how their investments are — or are not — panning out. Freescale Semiconductor, for instance, was taken over by a pack of private investment companies in 2006 for $17.6 billion, of which $7 billion came from the firms. That $7 billion is now said to be worth $3.15 billion. Or $2.45 billion. Or $1.75 billion. The owners — the Blackstone Group, the Carlyle Group, Permira Advisers and TPG Capital — disagree on its value."
Stocks Trend up after Fed Minutes (Wall Street Journal) "Blue-chip stocks tacked on a second straight session of gains this year, boosted by encouraging economic data and relief over a quiet set of minutes from the Federal Reserve's last meeting. The Dow Jones Industrial Average gained 20.43 points, or 0.2%, to 11691.1, extending the gains from its surge on Monday, the first trading session of the year.
Other benchmark indexes closed with modest losses. The Nasdaq Composite fell 10.27, or 0.4% to 2681.25. The Standard & Poor's 500-stock index shed 1.69, or 0.1%, to 1270.20."
Here is the lead sentence from the FOMC press release of the December 14, 2010 meeting minutes: "Information received since the Federal Open Market Committee met in November confirms that the economic recovery is continuing, though at a rate that has been insufficient to bring down unemployment."
The first paragraph also contains this gem: "Employers remain reluctant to add to payrolls. The housing sector continues to be depressed."
Once again: You could hear a similar summary—phrased in saltier language—at your neighborhood tavern.
The annualized rate of inflation in the Eurozone for December came in today at 2.2 percent.
That number is slightly ahead of estimates—expectations were 2.1 percent—and also slightly higher than the previous annualized rate for November, which was 1.9 percent.
Izabella Kaminska, of the Financial Times blog Alphaville, takes up the story . As she points out:
The year 2010 was not a stellar year for job creation, and while the United States is back on the road to recovery, a big question mark hangs over the jobs market.
Since May of 2009, unemployment has been above 9 percent — and, by some estimates, the actual unemployment rate has been nearly fifty percent higher.
To get a pulse check on job creation, I decided to ask Gary Burnison, CEO of Korn/Ferry the world's largest executive recruiting firm, if 2011 will be the year for jobs.
There's nothing like buyer's remorse when it comes to stocks.
Retail stocks appeared to be a screaming "Buy" leading up to the holiday shopping season—but now analysts are downgrading some of the best-known names.
"There are unknowns regarding cotton costs and labor costs, and on the food/mass [production]/drug side, there's a threat coming from three dollar per gallon gas. With these in place, how could anybody get cozy with rosy," said Richard Hastings, Global Hunter Securities Macro and Consumer Strategist.
New Congress, New House Majority Party, New Style (Wall Street Journal) "When John Boehner takes over one of the most powerful jobs in Washington this week, he says his first order of business is to make himself less powerful. On Wednesday the new speaker of the House of Representatives plans to offer a package of rule changes that, he says, will give minority-party members more of a say and decentralize power. In short, Ohio Republican Mr. Boehner is promising he'll be a different figure from many speakers throughout history—from Republican Joseph Cannon a century ago to his immediate predecessor, Democrat Nancy Pelosi—who kept a tighter leash.But there's a reason so many speakers try to keep close control: It works."
Half Billion in Cash Offers Facebook Independence, Privacy \(New York Times DealBook\) "In Silicon Valley, going public used to be the ultimate rite of passage for a start-up — a sign it had arrived. No more. With its $500 million infusion from Goldman Sachs and other investors, Facebook is now flush with cash, and a market value of about $50 billion, giving it the financial muscle it needs to compete with better-heeled rivals like Google."
"Sure, Stocks Are Rallying, But Are Investors Too Bullish?" (CNBC) CNBC's Jeff Cox handicaps the rally in equities: "The stock market's path to prosperous times ahead is unlikely to be smooth, with increasing volatility along the way and hazards both domestic and foreign. While the new year begins with most strategists expecting big things, a recurring theme is that investor complacency is nearing an end. The market's main fear gauge, the CBOE Volatility Index is just above its holiday season lows and around a level last seen in April 2010, before sovereign debt concerns drove a summer-long slump in stocks."
Dow at 24 Month High (Wall Street Journal) "Stocks started 2011 with a bang Monday, reaching fresh two-year closing highs as improved manufacturing and construction data boosted investors' outlook for the economy. The Dow Jones Industrial Average jumped 93.24 points, or 0.8%, to 11670.75, its highest close since Aug. 28, 2008. The climb represented the measure's biggest move since Dec. 3, the third time in a row it rose on the first trading day of the year and its seventh gain in the past nine sessions."
Manufacturing Numbers Rise for 17th Straight Month \(Financial Times\) "The US manufacturing sector grew in December for the 17th straight month, boosting hopes that the economic recovery is gathering pace following other upbeat reports about manufacturing in the eurozone, Taiwan and South Korea. The Institute of Supply Management’s purchasing manager’s index rose to 57 from 56.6 in November, slightly below the 57.2 expected by analysts surveyed by Bloomberg. Readings greater than 50 signal expansion."
Is speed really the only advantage of HFTs? This NYU professor and former HFT trader says not so fast — there's more.
Ex-Galleon trader Turney Duff offers an insider's view of how learned about Wall Street's dirty little secret: insider trading.
Fed speak may trump earnings reports and economic data, guaranteeing another volatile trading day.