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FinNews for November 30, 2012 Top Stories The "fiscal cliff" remained in the headlines this week, with sound bites from press conferences a frequent feature. While some participants were optimistic a deal could be made, as the week closes much of that optimism has been diminished. (1) Hostess received the green light to start liquidating their assets this week, which has sparked frenzy of interest from 110 potential buyers. CNBC reports that combined the multitude of Hostess brands worth could exceed $1 billion dollars. (2) Ahead of next month's official retail sales data, this year's holiday season market results are already expected to come in under previous predictions. Due to superstorm Sandy's devastating effects on the most populated part of the country, early November sales were likely down. Both Target and Macy's Inc. reported sales which failed to meet earlier analyst expectations. (3) German lawmakers approved the latest Greek bailout deal. (4) Economic Releases & Statistics Gross domestic product growth expanded at a 2.7 annual percentage rate, which is faster than initially predicted 2 percent for the third quarter. (5) Anticipated home sales rose to 13.2 percent, making pending homes sales surge to a number that hasn't been seen since March of 2007. (6) This recent jump doesn't, however, cover all areas. Sandy effect on the Northeast brought about 0.1 percent decrease in sales. (6) October durable goods orders, as reported by the Commerce Department, were virtually unchanged from September. This beat the forecast by Dow Jones surveyed economists who predicted a 1.2 percent decline. (7) Stocks & Earnings The biggest U.S. supermarket operator, Kroger Co, has reported an elevated quarterly profit, thus encouraging them to raise its full-year outlook for earnings per share. Total sales beat analysts' expectations coming in at $21.81 billion versus an average guess of $21.65 billion. (8) After reporting poor store sales and weaker than anticipated earnings, Tiffany & Co. lowered its full-year outlook on Thursday for the third straight quarter. (9) The luxury jewelry maker's shares fell more than 7.5% to $58.86 causing them to adjust their 2012 fiscal earnings from a range of $3.55 to $3.70 a share to a $3.20 to $3.40 range. The CEO remained upbeat about upcoming holiday sales. (9) Key clothing retailer earnings were rounded up this week. Thursday morning trading showed Aeropostale and Rue21 falling 7% and 5%, respectively. (10) Guess, which "has been struggling in recent years as operating margins have come under pressure," showed a 2.8 percent increase in Thursday morning trading. (10) Global Currencies As the fiscal cliff battle continues the U.S. dollar declined against the Euro. (10) In comparison, "the euro gained against the majority of its 16 most-traded peers." (11) Thursday, Asia's opposition party leader Shinzo Abe called for an unlimited monetary easing until a 2 percent inflation target is attained, causing the Japanese yen to fall in opposition to other major currencies in early Asian deals. (12) Oil & Energies The Energy Department's Energy Information Administration reported that crude supplies decreased last week by 0.1 percent, or 300,000 barrels, to 374.1 million barrels. This is an 11.8 percent increase above levels a year ago. For the week ended Nov. 23, analysts had expected an increase of 500,000 barrels. Although gasoline supplies are 2.7 percent below levels year-ago, there has been a 1.9 percent, or 3.9 million barrel, increase to 204.3 million barrels. Analysts forecast gasoline supplies increasing by 1 million barrels. (13) Grains & Field Crops According to the National Bureau of Statistics, "China's grain output rose 3.2 percent year on year to hit 589.57 million tonnes in 2012, marking the ninth consecutive year of growth." As such, corn has superseded wheat as China's largest grain. This growth is attributed to not only favorable weather conditions in the country's farming region but the government's increased subsidy program in agricultural production. China also "raised the minimum purchase prices for wheat and rice to stimulate grain production." (14) U.S. grains showed sharply higher this week, with "wheat posting its biggest daily gain since September," as a result of strong investments towards the end of the month. However, due to poor weather conditions causing drought conditions, there are fears of a "weather-reduced harvests around the world;" thus leading to "record-low wheat condition ratings." (15) Despite soybeans gaining "1.7 percent, or 24-1/2 cents, to $14.49-1/4 a bushel," South Brazil has also been affected by dry weather conditions. "The soybean market has been lifted this week by concerns over [the] dry growing conditions." This has brought about doubts as to whether "upcoming South American crops can replenish tight global stocks." (15) Precious Metals Brazil increased its gold reserves in October, bringing them to "the highest level in more than 11 years." (16) Gold coin sales in the US are set for a strong November with early performance suggesting it will be the best quarter since the end of 2008. So far, this month's sales of American Eagles have reached 131,000 ounces. (17) Other Commodities Forecasts for "bountiful harvests" in Central America and Brazil added pressure to coffee prices. Overall coffee futures prices have dropped more than 30 percent this year. (18) Earlier in the week, reports suggested farmers in Vietnam were slowing their sales of beans anticipating a drop in production from record highs. (19) Last week, coffee prices suffered as old coffee was "dumped" as new rules came into effect regarding age and quality for deliverable beans against ICE Futures contracts. (20) In Ghana, a delay in rain has led to concerns about cocoa crop development. The current rainfall pattern is bad, but some farmers are holding out hope that precipitation will come in December. (21) The European Union is looking to "increase the bloc's sugar supplies in the face of dwindling stocks and a growing gap between domestic and global prices." A commission is hoping to increase supplies by more than a million metric tons. (22) Rains in Brazil may cause issues with the current sugar harvest, prompting some analyst to suggest growers may have to leave some cane in the fields. (23) The Cattle of Feed report for November showed the fewest number of placements in October since the data series began in 1996. Cold storage showed 424 million pounds of beef, down 1 million pounds month on month, but up 7 million pounds year on year. (24) Upcoming:
1. http://www.cnbc.com/id/50007173 2. http://video.cnbc.com/gallery/?video=3000132407&play=1 3. http://us.mobile.reuters.com/article/economicNews/idUSL1E8MT1WW20121129?feedType=RSS&feedName=economicNews 4. http://www.cnbc.com/id/50018864 5. http://www.cnbc.com/id/50007681 6. http://www.cnbc.com/id/49998877 7. http://online.wsj.com/article/SB10001424127887323830404578144873345826296.html?mod=googlenews_wsj 8. http://www.reuters.com/article/2012/11/29/kroger-results-idUSL1E8MS78720121129 9. http://www.foxbusiness.com/industries/2012/11/29/tiffany-lowers-full-year-outlook-again/ 10. http://money.msn.com/top-stocks/post.aspx?post=a4c8042a-84df-4ae8-887f-53fb1e1039aa 11. http://www.bloomberg.com/news/2012-11-29/dollar-pares-losses-against-euro-after-boehner-damps-optimism.html 12. http://www.rttnews.com/2013948/yen-falls-as-ldp-leader-abe-calls-unlimited-easing-until-inflation-at-2.aspx?type=cm&utm_source=google&utm_campaign=sitemap 13. http://www.businessweek.com/printer/articles/140544?type=ap 14. http://www.globaltimes.cn/DesktopModules/DnnForge%20-%20NewsArticles/Print.aspx?tabid=99&tabmoduleid=94&articleId=747523&moduleId=405&PortalID=0 15. http://www.reuters.com/article/2012/11/27/markets-grains-idUSL4N0971TQ20121127 16. http://www.businessweek.com/news/2012-11-21/brazil-boosts-gold-reserves-to-the-highest-in-more-than-11-years 17. http://www.reuters.com/article/2012/11/30/usa-mint-coins-idUSL1E8MU7F620121130 18. http://www.washingtonpost.com/business/coffee-plunges-on-expectations-of-bountiful-... 19. http://www.reuters.com/article/2012/11/27/markets-vietnam-coffee-idUSL4N09719A20121127 20. http://www.reuters.com/article/2012/11/21/arabica-ice-rule-change-idUSL1E8ML1MB20121121 21. http://www.citifmonline.com/index.php?id=1.1157824 22. http://www.reuters.com/article/2012/11/08/eu-sugar-idUSL5E8M8JEZ20121108 23. http://www.businessweek.com/news/2012-11-22/sugar-rises-as-rainfall-may-cut-brazilian-supplies-cocoa-drops 24. http://www.cattlenetwork.com/cattle-news/latest/Cattle-Outlook-Lowest-October-cattle-placements-on-record-181583301.html _______________________________________________________________________________________ Disclaimer: Trading and investing involve a substantial degree of a risk of loss and are not suitable for everyone. Past performance is not indicative of future results. Fundamental factors, seasonal and weather trends, daily news, and other current events may have already been factored into the markets. Some trading strategies have unlimited risk. Educate yourself on the risks and rewards of such investing prior to trading. The publisher, and/or its affiliates, staff or anyone associated with FinNews, do not guarantee profits or pre-determined loss points, and are not held monetarily responsible for the trading losses of others (subscribers or otherwise). Information provided is compiled by sources believed to be reliable. The publisher, and/or its principals, assume no responsibility for any errors or omissions as the information may not be complete or events may have been canceled or rescheduled. Any copy, reprint, broadcast or distribution of this report of any kind is prohibited without the expressed written consent of the publisher. |
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