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Market Commentary for November 30, 2007


During the early morning session, trading activity was extremely sluggish with an almost flat-lined trading wave. Neither the major indices nor stocks knew which direction to go therefore, sideways was the route selected. During late morning, the Bears stepped to the plate and concluded to move the markets southbound. The major indices were mostly higher at the end of the trading session with the NASDAQ taking a plunge during the final hour of trading as we put an end to the month of November today. Maybe traders were simply tired today or just ready for the weekend with the listless trading activity. Trading volume for the end of the day was moderate.

At the closing bell, here is how the major indices ended the session: the DOW (Dow Jones Industrial Average) posted a gain of 59.99 points on the day to end the session at 13,371.72; the NYSE (New York Stock Exchange) posted a gain of 83.27 points to end the session at 9,856.84; the NASDAQ posted a loss of 7.17 points for a close at 2,660.96; the S&P 500 moved higher by 11.42 points to end at 1,481.14 and the RUSSELL 2000 moved higher by 1.71 points to close at 767.77. The FTSE All-World Index ex-US (top Large/Mid Cap aggregate from over 2,700 stocks from the FTSE Global Equity Index Series (GEIS) which covers 90% of the world’s investable market capitalization) posted a gain of 1.68 points to close at 266.99 and the FTSE RAFI 1000 posted a gain of 57.45 points to close at 6,050.63.

U.S. Personal Spending rose by 0.2% during October compared to consensus of an increase by 0.3%; U.S. Personal Income rose by 0.2% during October compared to consensus of an increase by 0.4%; U.S. October PCE Price Index rose at a rate of 0.3% on the month; U.S. October PCE Price Index rose at a rate of 2.9% on the year; U.S. October PCE Core Price Index rose at a rate of 0.2% on the month; U.S. October PCE Core Price Index rose at a rate of 1.9% on the year; U.S. September Spending was left unrevised an increase by 0.3% and U.S. September Personal Income was left unrevised at an increase by 0.4%.

U.S. Chicago Purchasing Management November New Orders Index came in at 53.9 versus October reading at 53.9; U.S. Chicago Purchasing Management November Employment Index came in at 54.4 versus October reading at 49.5; U.S. Chicago Purchasing Management November Supplier Deliveries came in at 46.0 versus October reading at 52.7; U.S. Chicago Purchasing Management November Prices Paid Index came in at 76.2 versus October reading at 74.7 and U.S. Chicago Purchasing Management Adjusted November Index came in at 52.9 versus October reading at 49.7.

President Federal Reserve Bank of Philadelphia, Charles I. Plosser comments released today: Credit Markets remain Volatile; Limited Evidence of Spillover Effect on Economy; Probably Didn't Anticipate Rising Risk Premiums; Smaller Banks are 'Stepping up to the Plate'; October PCE Excluding-Food and Energy is 'Not a Bad Number'; Last Rate Cut was a 'Close Call'; Market Expectations not only Factor in Rate Moves and One Could Entertain' Narrowing Discount Spread.

Summary remarks yesterday by Federal Reserve Chairman Ben S. Bernanke: Fed must be 'Exceptionally Alert and Flexible'; Financial Turmoil 'Importantly' Affecting Economic Outlook; Will Take 'Full Account' Of Data, Markets at FOMC Meeting; Fed Following Financial Developments 'Carefully'; Economic Uncertainty 'Even Greater than Usual'; U.S. Core Inflation 'Moderate,' but Risks Remain; U.S. Housing 'Weak,' Consumer Faces 'Headwinds'; U.S. Job Market 'Solid' in October but, Jobless Claims are up; Third Quarter GDP Quite Strong but Fourth Quarter to Slow 'Significantly' and Fed must be 'Exceptionally Alert and Flexible'.

Federal Reserve Chairman Ben Bernanke appeared to leave the door wide open for another interest-rate reduction next month, saying the Fed must be "exceptionally alert and flexible" as it weighs an economy that has been "importantly affected" by recent financial turbulence. Chairman Bernanke additionally signaled that economic data between now and the next FOMC meeting on December 11 will play a big role in the outcome, singling out the November employment report due next week as well as consumer spending and sentiment data. Chairman Bernanke said in prepared remarks to the Charlotte Chamber of Commerce that the outlook for the economy "has been importantly affected over the past month by renewed turbulence in financial markets, which has partially reversed the improvement that occurred in September and October." Additionally, Chairman Bernanke called economic uncertainty "even greater than usual" and said that officials "will have to remain exceptionally alert and flexible as we continue to assess how best to promote sustainable economic growth and price stability." Similar remarks made about recent financial turbulence by FOMC Vice Chairman Donald Kohn and its potential effect on the economy Wednesday, weren't as forceful as Chairman Bernanke's, sparked a huge rally on Wall Street Wednesday as investors interpreted Kohn as signaling a good chance of a rate cut on December 11. Chairman Bernanke's remarks did little to alter that interpretation. "Needless to say, the Federal Reserve is following the evolution of financial conditions carefully, with particular attention to the question of how strains in financial markets might affect the broader economy," Chairman Bernanke said, adding that the Fed will take into "full account" the implications of incoming data and financial developments as it weighs its rate decision next month. The Fed has lowered the federal-funds target rate by 75 basis points since September to stem a housing and credit crunch. When it made its most-recent rate cut in October, the FOMC also said that it viewed growth and inflation risks as roughly balanced, which usually signals that officials aren't inclined to cut rates again. That message was reinforced by a stream of officials earlier this month including Fed Governor Randall Kroszner, Philadelphia Fed President Charles Plosser and Chicago Fed President Charles Evans. Financial markets all along continued to insist that the Fed would lower rates a third-straight time despite the rhetoric, and the remarks by Kohn and now Bernanke suggest officials are moving to Wall Street's view. In his remarks, Chairman Bernanke said economic data has been "mixed" since the FOMC meeting in October. Chairman Bernanke called economic growth in the third quarter "quite strong"; on Thursday the Commerce Department revised its estimate higher for third-quarter growth by one percentage point to 4.9% but warned that it will likely slow "significantly" during the fourth quarter. Labor markets were "solid," in October but, weekly jobless claims "drifted up a bit in recent weeks," he said. "We will of course, have the labor market report for November next week," Bernanke said, "and in the coming days we will continue to draw on anecdotal reports, surveys and other sources of information about employment and wages." Housing meanwhile, has "continued to be weak," he added. Along with tighter credit conditions, higher gas prices and lower equity values "seem likely to create some headwinds for the consumer in the months ahead." Core inflation excluding food and energy "has remained moderate," Bernanke said, though he cautioned that higher energy, food and imported goods prices as well as the "lower foreign exchange value of the dollar" have the potential to fuel inflation pressures. "We are accordingly monitoring inflation developments closely," Chairman Bernanke said.

Remarks yesterday from Federal Reserve Member Frederic S. Mishkin: Fed Actions take at least a year to affect Economy; Forecasts have 'Central Role' in Setting Fed Policy; Recent Fed Actions Aimed at Reducing Economic Risk; Headline PCE Forecast Big Help in Fed Communications; Information from Financial Services Industry Important for Fed; Giving more information to Public helps Credibility; Monetary Policy should respond to Effects of Asset Prices; not Worried about how Individual Asset Prices fare; Important to keep U.S. Economy Stable and Notes Worldwide Financial Disruption.

Commodities Markets
The trend was lower across the board today for the Energy Sector: Light crude moved lower today by $2.30 to close at $88.71 a barrel; Heating Oil moved lower today by $0.06 to close at $2.52 a gallon; Natural Gas moved lower today by $0.15 to close at $7.30 per million BTU and Unleaded Gas moved lower today by $0.04 to close at $2.23 a gallon.

Metals Market ended the session mixed across the board today: Gold moved sharply lower today by $13.20 to close at $789.10 a Troy ounce; Silver moved lower by $0.28 today to close at $14.17 per Troy ounce; Platinum moved higher today by $4.60 to close at $1,444.10 per Troy ounce and Copper moved higher by $0.09 to close at $3.18 per pound.

On the Livestock and Meat Markets, the trend was mostly lower across the board again today: Lean Hogs ended the day lower by $0.55 to close at $62.30; Pork Bellies ended the day higher by $0.13 at $91.33; Live Cattle ended the day lower by $0.88 at $95.78 and Feeder Cattle ended the day lower by $1.38 at $107.70.

Other Commodities: Corn moved higher today by $0.75 to close at $401.50 and Soybeans moved sharply lower today by $18.00 to end the session at $1,080.00.

Bonds were mixed across the board today: 2 year bond moved higher by 1/32 to close at 100 6/32; 5 year bond moved higher by 3/32 to close at 99 3/32 today; 10 year bond moved lower by 5/32 at 102 13/32 and the 30 year bond closed lower by 24/32 at 110 2/32 for the day.

The e-mini Dow ended the session today at 13,364 with a gain of 31 points on the trading session. The total Dow Exchange Volume for the day came in at 204,862 which are comprised of Electronic, Open Auction and Cash Exchange. Traders should review workshops available at the CBOT (Chicago Board of Trade) Educational in-person seminars schedules available on CBOT (Chicago Board of Trade) website.

The end of day results for the CBOT (Chicago Board of Trade) which is comprised of the total Exchange Volume for Futures and Options (EVFO) including Electronic, Open Auction and Cash Exchange ended the day at 9,707,714; Open Interest for Futures moved higher by 16,274 points to close at 10,209,025; the Open Interest for Options moved higher by 179,363 points to close at 6,520,508 and the Cleared Only closed with no change at 15,520 for a total Open Interest on the day of 16,745,053 for a total Change on the day with a gain of 195,637 points.

On the NYSE today, advancers came in at 2,331; decliners totaled 989; unchanged came in at 63; new highs came in at 84 and new lows came in at 84. Active trading stocks on the Big Board today: J. Crew Group Incorporated (JCG) romped higher on the trading session to tack on a gain of 19.23% for a gain of 7.75 points with a final trading price at $48.05; Mechel OAO (MTL) posted a gain on the day of 8.21 points with a final trading price at $90.98 and Uniao de Bancos Brasileiros SA (UBB) moved higher on the session by 5.01 points with a high on the session of $152.47, a low of $148.21 to end the session at $149.72.

On the NASDAQ today, advanced totaled 1,641; decliners totaled 1,390; unchanged came in at 92; new highs came in at 59 and new lows came in at 94. Active trading stocks for the day consisted of: Research In Motion Limited (RIMM) moved sharply lower on the trading session to post a loss of 8.26 points with a high on the session of $124.50, a low of $112.68 with a final trading price of $113.82 and China Finance Online Company Limited (JRJC) tacked on 22.85% with a gain of 4.36 points for a closing price at the bell of $23.44.

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Millennium-Traders