NEW$ & VIEW$ (27 DECEMBER 2013)

U.S. Holiday Sales Rise 3.5%, SpendingPulse Says

U.S. retail sales rose 3.5 percent during the holiday season this year, helped by deep discounts at malls and purchases of children’s apparel and jewelry, MasterCard Advisors SpendingPulse said.

Sales of holiday-related categories, such as clothing, electronics and luxury goods, rose 2.3 percent from Nov. 1 through Dec. 24 compared with a year earlier, the Purchase, New York-based research firm said today. SpendingPulse tracks total U.S. sales at stores and online via all payment forms. (…)

Sales were strongest in jewelry and children’s apparel, while sales of electronics and luxury items excluding jewelry were about the same as the same period last year, SpendingPulse said. Sales of women’s and men’s apparel fell from last year, the researcher said. (…)

Bullishness Jumps to Three-Year High

Individual investors were feeling especially cheery about stocks this holiday week.

The percentage of bullish individuals rose to 55.1%, the highest level in nearly three years, in the week ended Dec. 25, according to the American Association of Individual Investors. That was a jump from the 47.5% of investors who said they were bullish the previous week.

Bespoke provides the charts…

 

…and some caution

While the current level is definitely elevated, it’s by no means without precedent.  As shown below in the chart of the AAIIreading going back to 1987, sentiment has been above the 50% mark many times in the past.

The Blog of HORAN Capital Advisors adds this:

In addition to an elevated bullishness reading, the bull/bear spread has increased 37% and this spread is the highest since AAII reported the spread at 47% for the week of December 23, 2010.

Just a reminder: INVESTOR SENTIMENT SURVEYS: DON’T BE TOO SENTIMENTAL!The bearish reading is more important.

Oh! there is also that:

Twitter Rally Picks Up Steam

Twitter shares have nearly tripled since their initial public offering last month, including an almost 5% gain on Thursday, making the microblogging service’s IPO one of the best performing this year.

Twitter Now Has A Larger Market Capitalization Than 80% Of All S&P 500 Companies

(…) Why the stock has exploded the way it has, nobody knows, and frankly nobody cares: it has entered that mythical zone of raging momentum where things work, until they don’t for whatever reason. But in order to present readers with a sense of where TWTR’s $40 billion market cap, which is greater than 403, or 80%, of all S&P 500 companies, puts in in the context of several companies all of which have a market cap that is lower than Twitter’s, we have shown on the chart below Twitter’s 2014 projected Revenue compared to this same universe of immediately smaller S&P500 companies. Again, just for the sake of perspective. (…)

And that: Copper Prices at Their Highest in 8 Months

But also this:

Treasury Yield Hits 3%

Treasury bond prices fell Thursday, pushing the yield on 10-year notes to 3%, a threshold that may signal a new baseline for higher interest rates.

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Hmmm!

Japan wages halt 17-month decline
Data suggest companies starting to heed calls to pay staff more

(…) Keidanren, the largest and most influential business lobby group, seems willing to recommend that its members prepare for the first increase in base salaries since 2008, when they enter spring negotiations with labour unions. (…)

But three-quarters of total salaries in Japan are paid by small and medium-sized businesses, which are mostly not unionised and where the recovery in profits has not been as strong. (…)

Another factor dragging on wages is the shift in the composition of Japan’s labour force from full-time to part-time workers. The government makes no distinction between the two in its calculations of average earnings per worker, which have fallen almost without interruption since the late 1990s.

And as data for part-timers take longer to calculate, the “encouraging” preliminary wage figures for November could be subject to a downward revision later, said Izumi Devalier, economist at HSBC in Hong Kong.

Other data released on Friday may strengthen policy makers’ confidence that Japan is shaking off 15 years of deflation. Consumer prices excluding fresh food rose 1.2 per cent from a year earlier, reaching a five-year high. Retail sales also increased more than economists expected, marking a fourth straight rise at 4 per cent from a year earlier.

The job-to-applicant ratio touched 1.00 for the first time since October 2007, meaning that there is one job available per applicant.

Ninja  A Metals Mother Lode Sits in Shadows Banks, hedge funds, commodity merchants and others are stashing millions of tons of aluminum, copper, nickel and zinc in a hidden system of warehouses.

Banks, hedge funds, commodity merchants and others are stashing tens of millions of tons of aluminum, copper, nickel and zinc in a hidden system of warehouses that span the globe.

These facilities are known to some in the industry as “shadow warehouses” because they are unregulated and don’t disclose their holdings.

They operate outside the London Metal Exchange system of warehouses, the traditional home for these metals.

As of October, a record seven million to 10 million tons of aluminum were being housed in these facilities, in countries as far apart as Malaysia and the Netherlands, according to estimates from several analysts.

The amount dwarfs the 5.5 million tons of aluminum in the LME-licensed warehouses, based on LME figures as of Tuesday. Just 12 months ago, the figures were about equal.

A similar shift is taking place with other industrial metals, analysts say. (…)

“It’s a real concern for anyone in the industry that metal can be sucked away into a nonreporting location with no expectation or date as to when it’s going to be available again,” said Nick Madden, senior vice president and chief supply-chain officer with Atlanta-based Novelis Inc., an aluminum-products maker that is among the world’s biggest buyers of the metal.

“The risk here is that the metal gets controlled by fewer and fewer hands, whose interests and business model is probably conflicting with that of end users,” he said. (…)

The lack of transparency is making this shadow system increasingly attractive to institutions seeking to profit from information that other buyers and sellers don’t have. Some companies also are seeking a cheaper alternative to the LME warehouses, which can be 10 times as expensive as the unregulated storage, analysts and traders say. (…)

Five companies operate 75% of the LME’s 778 licensed warehouses. All own shadow facilities as well, people familiar with the companies said.

In some instances, a single firm runs licensed and unlicensed warehouses in the same building, with the metal counted by the LME separated from hidden stockpiles by a chain-link fence, said David Wilson, a commodities analyst with Citigroup.

Until 2010, most warehouses were owned by logistics firms like Netherlands-based C. Steinweg Group. But as metal-financing trades became more popular, C. Steinweg was joined by units of Goldman Sachs Group Inc. and J.P. Morgan Chase & Co. as well as commodity traders Glencore Xstrata PLC of the U.K. and Switzerland and Trafigura Beheer BV of the Netherlands. (…)

Many metal buyers and producers say they are worried that new rules approved by the LME in November will speed up the flow of metal into shadow warehouses. (…)

 

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