December 6, 2012 Update

DJIA:13,034 NASDAQ:2,973 10-YR TRS: 6/32, yield 1.591% Oil: $87.88 EURO: $1.3067 YEN:82.47 

Micro

• SPZ: trading up from investor optimism for jobless-claims data, regardless of little progression regarding fiscal cliff. 
• Earnings: Korn/Ferry International (NYSE: KFY) Q2 EPS of $0.25 beating forecast by $0.06, H&R Block (NYSE: HRB) Q2 EPS forecast at -$0.42 per share, Lululemon Athletica (NASDAQ: LULU) Q3 EPS forecast of $0.37 per share.  
• Dividends: CME Group (NYSE: CME) declared $1.30 per share (annual) payable Dec. 28, Hillenbrand (NYSE: HI) declared $0.10 per share
• Apple (NASDAQ: AAPL) fell 6.4% yesterday, the largest single-day percentage loss since December 2008. Stock is moving towards a death cross (when 50 day moving average crosses below 200-day moving average). Concerns about technicals, global economy, and today’s court hearing vs. Samsung are all drivers in bearish movement. 
• Starbucks (NASDAQ: SBUX) CEO announced country may start paying income tax of around £5-6M in the U.K. even though no profit has been made. 
• Activision Blizzard’s (NASDAQ: ATVI) “Call of Duty: Black Ops II” pulled in revenue of $1B from the first 15 days of release.

Macro

• Asian Markets: trading slightly lower as a whole, expect Tokyo-listed equities which are ripping at 7-month highs from anticipation of general election at the end of the month and from a weaker yen which is pulling in support from exporters. 
• European Markets:trading higher from ECB President Mario Draghi’s monthly news conference where he announced that ECB will be steady on policy. 
• Unemployment benefits data will be released at 8:30am, which is forecast to drop to 375,000 from 393,000 due to Sandy recovery- claims were immediately effected after she hit the Northeast. However, if claims do not come in low, then report could be an indicator that U.S. job market is decaying. 
• Unfortunately, nothing new to note regarding fiscal cliff progressions. 
• Riots in Egypt today protesting the Muslim Brotherhood. 

Yesterday’s Notable Winners

• Plains Exp. & Production (NYSE: PXP) +23.44% (+$8.45) to $44.50 from announcement that Freeport-McMoRan will acquired PXP for 39% premium from Tuesday’s close. 
• Citigroup (NYSE: C) +6.33% (+$2.17) to $36.46 after disclosing that they will cut 11,000 jobs and take $1B Q4 charge. 
• VeriFone Systems (NYSE: PAY) +7.57% (+$2.29) to $32.54 after UBS upgraded based on belief that PAY can compete with competitors. 

Yesterday’s Notable Losers 

• Pandora Media (NYSE: P) -17.46% (-$1.65) to $7.80 after forecasting slower revenue growth in current quarter. 
• Ocwen Financial Corp. (NYSE: OCN) -2.47% (-$0.87) to $34.41 due to regulators deciding to monitor company operations. 
• Mattress Firm Holding Corp. (NASDAQ: MFRM) -21.93% (-$6.65) to $23.67 reacting from grim earnings outlook and announcement of slower traffic growth for November. 

Reflections on Being Raised Half Frozen

Growing up in a frugal Irish household, I have grown accustomed to eating breakfast while wearing my winter coat, lounging in two pairs of pants, and sleeping in layers during the winter; always longing to stay with friends whose homes were better heated. As I have grown up and begun to understand the value of a dollar, I have come to realize how brilliant my father is for refusing to not only spend outrageous amounts of money on heating oil (going as far as negotiating the price down to $3.65 per gallon, as he’s informed me), but acknowledging environmental concerns by rationing the scarce natural resource. With heating oil averaging at $4.30 a gallon in NYC, baffling is why so many households decide to leave their thermostats at 70F and are content with paying hundreds of dollars a month to stay warm, when realistically sweaters work just the same. Instead of expecting our homes to adapt to our needs, doesn’t it make more sense to embrace the cold and layer up in fleece? As the principle of Darwinism states, the strongest species are those most adaptable to change; which is why I am advocating maintaining the thermostat just high enough to stop the pipes from freezing. Be strong, preserve our natural resources, save money, and invest in cashmere.