December 13, 2012 Update

DJIA:13,222 NASDAQ:3,013 10-YR TRS: 14/32, yield 1.699% Oil:$86.77 EURO:$1.3074 YEN:83.27 

Micro

• SPZ: flat as investor wait for November’s retail sales data 
• Earnings:. Ciena Corp. (NASDAQ:CIEN) Q4 EPS of -$0.07 misses forecast by -$0.1, Pier 1 Imports (NYSE:PIR) Q3 EPS of $0.25 beating forecast by $0.01, 
• Dividends: Macquarie Infrastructure Company Trust (NYSE:MIC) declared quarterly dividend $0.6875 per share payable 12/28.
• Gold futures shed off $21.90 from Fed’s decision, trading at $1,696. 
• The dollar index rose $0.2 to 79.692.
• US crude-oil eases in early trading as the dollar edges higher. 
• Citigroup placed a “buy” rating on Burger King Worldwide (NYSE:BKW) from the belief that BKW is outperforming their competitors, and will continue to do so. 
• Wal-Mart (NYSE:WMT) announced the note received in India accused them of breaking foreign investment rules, most likely referring to the $25M the company spent on lobbying to “enhance(d) market access” in India. 
• Knight Capital Group (NYSE:KCG) will receive all final acquisition bids this week, leaving Virtu Financial and Getco Securities to sit tight. 

Macro

• Asian Markets: trading higher with Japan leading the rally closing at 8 month highs, markets in South Korea and Taiwan also experienced rallies after the Federal Reserve added additional stimulus money.  
• European Markets: trading lower from Fed’s comments, but likely to rally from the Euro zone’s decision to approve aid for Greece.
• Federal Reserve announced that it will continue purchasing $40B a month in MBS in addition to $45B in Treasuries and keep interest rates low until 2015 as long as unemployment and inflation hovers at 6.5% and 2.5%, respectively.
• November retail sales data will be released at 8:30am, forecast to have risen by 0.4% driven by strong demand for auto. Hurricane Sandy is expected to have a negative effect on sales excluding automobiles which is expected to drop 0.2%. November’s producer prices are forecast to have fallen by 0.5% from declining cost of gasoline. The core rate (not including food and energy) is expected to increase by 0.2%
• Japanese stocks ripped as the dollar rose overnight about the ¥83 for the first time since April 2. 
• November’s foreclosure rate of -13% is the lower since December 2006, another sign of the rebounding housing market. 

Yesterday’s Notable Winners

• Aetna (NYSE:AET) +3.21% (+$1.43) to $45.91 from company forecast increase in revenue and profits for 2013. 
• DuPont (NYSE:DD) +1.4% (+$0.61) to $44.30 after the authorization of the repurchase of $1B of its shares. 
• Nasdaq OMX Group (NASDAQ:NDAQ) +3.76% (+$0.88) to $24.31 after confirming they will purchase Thomson Reuters’ investor and public-relations division.

Yesterday’s Notable Losers

• Eli Lilly (NYSE:LLY) -3.16% (-$1.60) to $49.00 from company decision to conduct another late-stage study for Alzheimer’s treatment. 
• Charles Riv. Lab. Intl. (NYSE:CRL) -9.29% (-$3.65) to $35.65 from downbeat earning guidance forecast for 2013. 
• Cobalt Intl. Energy (NYSE:CIE) -7.29% (-$2.00) to $25.45 from company announcement to begin an IPO of $1.2B convertible senior notes. 

Yum?

The American ideology that associates “bigger” and “faster” with “better” is rooted in our culture and visually portrayed in all facets branding the United States (examples ranging from oversized cars found on American roads, to binge-drinking and dietary habits, to the irrational desire to own the newest form of technology).  The American fast food industry, a symbol of such thinking, is picking up speed internationally. In 2007 Yum! Brands (NYSE: YUM), (the owner of KFC, Taco Bell, and Pizza Hut) pulled in the majority of their sales revenue from business done in the US, which, at the time, doubled revenue collected from China. Four years later, however, this was not the case. In 2011, there was the opposite effect. The revenue YUM pulled in from China did not only almost double U.S. revenues, but was roughly half of the revenue collected from the entire year! As YUM continues to expand in a country with a growing population and middle class, any news regarding a slowdown in the Chinese economy could be devastating for the fast food company. Unfortunately with Chinese inflation rates increasing from 33-month lows, driven by rising food prices, such devastation could very well become a reality. The international expansion of the American fast food industry symbolizes and is another example of how contagious Western culture is. While many investors have profited from YUM’s global popularity, they should cross their fingers that Western culture is all that’s contagious and that the current American economic illness is just an isolated case.