November 20, 2012 Update

DJIA:12,795 NASDAQ:2,916 10-YR TRS:11/32, yield 1.611% Oil:$89.28 EURO:$1.2813 YEN:81.41 

Micro

• SPZ: trading in a tight spread as investors concern themselves with Moody’s downgrade of France, Hewlett-Packard results, Bernanke’s speech, fiscal cliff worries and housing data. Alas, a busy day!
• Earnings: Hewlett-Packard (NYSE: HPQ) Q4 expected EPS of $1.14 per share, DSW (NYSE: DSW) Q3 $1.02 EPS beating forecast by $0.13, Heinz (NYSE: HNZ) Q2 $0.9 EPS higher than forecast by $0.02
• Kripsy Kreme (NYSE: KKD) has had 16 uninterrupted profitable quarters and is likely to see a big gain in trading today after beating analysts’ Q3 forecasts.
• The data of the construction of new homes will be released at 8:30am, expected to have slipped to 825,000 from 872,000. 
• General Motors (NYSE: GM) will reduce its staff in South Korea by 7,000 employees believed to be motivated by a desire to focus more on growth in China. 
• Whole Foods (NASDAQ: WFM) upgraded to “buy” from “neutral” by Goldman Sachs with $106 as a price target.
• Green Mountain Coffee (NASDAQ: GMCR) announces Brian Kelley, from Coca-Cola, as CEO.

Macro

• Asian Markets: traded lower, as the downgrade of France and slips in EURUSD loomed over markets. 
• European Markets: getting killed as investors react to the downgrade of France and wait for the eurozone meeting later today. 
• Moody’s Investor Service downgraded France from a AAA credit rating to Aa1 based on its unpredictability in regard to the country’s fiscal response to “future euro-shocks.” There are only nine AAA rated countries left in Europe, as noted by Deutsche Bank. 
• Obama told Chinese Premier Wen Jiabao that both countries need to “establish clear rules” for investment and trade.

Yesterday’s Biggest Winners

• Lowe’s Companies (NYSE: LOW) +6.19% (+$1.98) to $33.96 from a better than expected Q3 earnings. 
• Tyson Foods (NYSE: TSN) +10.9% (+1.84) to $18.72 from a boost in Q3 profits. 
• BioMimetic Therapeutics (NASDAQ: BMTI) +74.22% (+$3.08) to $7.23 because Wright Medical’s agreement to acquire the company for a 56% premium.   

Yesterday’s Biggest Losers  

• Diamond Foods (NASDAQ: DMND) -11.83% (-$1.79) to $13.34 based on Jefferies’ analyst downgrade to “underperform” and set price target from $27 to $10. 
• K12 (NYSE: LRN) -18.78% (-$3.84) to $16.61 also due to a downgrade from Wells Fargo analysts to “market perform” from “outperform”
• Acacia Research Corp. (NASDAQ: ACTG) -12.88% (-$3.02) to $20.42 from legal investigations as to whether patent holdings firms are interfering with high-tech markets. 

The Chinese Gendercide

Strictly in terms of economic growth, China appears robust. But when discerning the country’s political culture and social imbalance, China’s physical state is not as obviously healthy. In 1978 the People’s Republic of China introduced what they refer to as the Family Planning Policy, or more commonly known to as the One Child Policy, in order to alleviate economic and social suffering caused by overpopulation. The policy restricts only one birth per family, and is enforced by a fine for each additional child. Since men carry on family names and are viewed as breadwinners, traditional Chinese bias considers male children to be of higher value. Because of this cultural belief, sixty million girls have gone missing in the past decade. As of 2010, the average Chinese gender ratio was 120 males to 100 female births, which is extremely high compared to the international average of 105 males 100 females. In the poorly educated Chinese countrysides such as the Anhui Province, the gender inequality ratio is 227 males to 100 females; a frightening imbalance. When Chinese male babies become of age, only one in five males will be matched with a bride. This is, undoubtedly, going to lead to an increase in crime, aggression, violent outrage, and a serious problem with female sex trafficking. Although the Chinese economy is strong now, is it wise to hold long investment positions in a repressive Communist nation that will eventually encounter a likely male dominated social unrest?