Trader Talk

Gold Shatters Another Record

S&P 500 futures drop a few points as October Housing Starts and Permits were a bit below expectations, while the Consumer Price Index (CPI) was a bit hotter than expected.

It's on, it's off, it's on at a new high...copper at a 14-month high...

Speaking of gold, my how things have changed: the World Gold Council returns in triumph to the floor of the New York Stock Exchange to ring the opening bell this morning in celebration of the fifth anniversary of the SPDR Gold Trust, which was created and largely controlled by them.

Five years ago, when the GLD was launched, the World Gold Council was so terrified of the reception they might receive that they declined an interview request from me. We did have a large contingent of gold bars to show off, surrounded by burly guards.

Today, not only is the World Gold Couincil showing up, but the Chairman, Ian Telfer, is ringing the opening bell. I will be interviewing Mr. Telfer, along with Jim Ross from State Street (they administer the GLD), and showing off a couple gold bars and burly guards, right after the opening bell.


1) Maybe it wasn't the first time tax credit after all: the first time homebuyer tax credit was extended on November 6th, but it's not helping applications to purchase a home. They fell 4.7 percent for the week and are now down 6 straight weeks, according to the Mortgage Bankers Assn (MBA). 30-year fixed rate mortgages are well below 5 percent now, at 4.83 percent (lowest since May!).

2) Chico's surges 15 percent pre-open after strongly beating Q3 earnings expectations ($0.13 vs. $0.07 consensus). While other retailers have struggled with obtaining sales growth despite last year's low comps, Chico's same-store sales were up sharply, rising a very impressive 12.8 percent in the quarter. On top of better sales, margins at the women's apparel retailer notably improved by 4 percentage points from the year ago period due to lower markdowns and higher initial markups.

Still, based on comments from companies like Target and Saks , it looks like early November sales and traffic have been soft. This fits in with the theory that consumers show up for major events (back to school, Black Friday, week before Christmas) but disappear in between.

Target (TGT) is down 1.5 percent after Goldman Sachs downgraded the discounter to "neutral" from "buy," citing concerns that margins could be under pressure over the next several months on "intensified price competition from Wal-Mart."

3) Delta Air Lines falls 5 percent pre-open after the airline said it and its Sky Team alliance carriers were willing to provide $1 billion in aid to beleaguered Japan Airlines. This package competes with another $1.1 billion joint offer from Japan Airlines' alliance partner American Airlines and private equity firm TPG.

Meanwhile, shares of Japan Airlines slid to an all-time low in Japan after the country's transportation minister warned that bankruptcy was still a possibility for the cash-strapped airline.

4) Fortinet, an Internet security provider, priced 12.5 m shares at $12.50. That is above both the initial size (12 million shares) and price talk ($9-$11). It will begin trading today on the NASDAQ.

5) Cadbury is down fractionally as reports that Hershey and Italian chocolatier Ferrero are exploring a joint bid for the candy maker that would rival Kraft's current $16.2 billion hostile bid.



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