Black Friday Kick Starts Markets

Asian markets up nicely here -- Korea and Hong Kong up over 4% -- mostly on reports of a decent start to the Christmas season. Europe flat.

The state of retail is what desks are talking about. ShopperTrak, which tracks sales at more than 50,000 retail outlets, and MasterCard Advisors said sales were up 8.3% and 5%, respectively. That was a tad more than many expected--one analyst at RBC Capital Markets said that they were "frankly a bit surprised at these results given our traffic observations."

Citigroup was even more subdued in their analysis of Black Friday: "The usual Black Friday buzz was tempered by the lack of must-have items in key giftable categories. The promotional excitement of Black Friday was lessened by retailers' early promotions and WMT's aggressive stance on pricing as early as October to gain customer mindshare."

Still, electronics seemed to be a strong seller. JP Morgan noted that digital cameras, game consoles, GPS devices and gaming peripherals appeared to be the hottest sellers. Circuit City up 7% pre-open. Apple stores seemed to have exceptional traffic, with iPod and Mac sales strong.

Elsewhere, bearishness and general orneriness remain at levels I haven't seen in years. By most standards, the bond market is overbought, and stocks are oversold. How oversold? The S&P 500 is down 5.6% this quarter, in what is traditionally the strongest quarter. With sentiment and performance like this, it's little wonder that even bears like Doug Kass have begun talking about a "tradeable year-end stock market rally."

Rio Tinto again rejected BHP Billiton's takeover proposal and mapped out a growth strategy

But there are reports that China's sovereign wealth fund -- China Investment Corp -- may team up with steel producers and make a run at Rio.

Harley Davidson up on report in Barron's that the shares are cheap.

Boeing up as Wachovia raised its rating.

Questions? Comments?