November 13, 2012 Update

DJIA:12,815.08  NASDAQ:2,904.26 10-YR TRS: closed, yield 1.613%  Oil: $85.57 EURO: $1.2709 YEN: 79.49 

Micro

• SPZ: futures trading lower as investors’ concerns regarding the fiscal cliff continue and disappointment mounts from the failed agreement from euro-zone regarding Greece’s last round of aid. 
• Earnings: Home Depot (NYSE: HD) FQ3 $0.74 EPS beat forecast by $0.04 and revenue of $18.1 billion higher than forecast by $150 million and +4.6% LTM, Response Genetics (NASDAQ: RGDX) FQ3 $0.40 EPS and revenue of $163.3 million which beat forecast by $39 million, Cicso (NASDAQ: CSCO)  forecast FQ1 $0.46 EPS and revenue of $11.78 billion but will be announced after the bell. 
• Verizon Wireless announced a $8.5 billion dividend that will be paid to Verizon Communications (NYSE: VZ) and Vodafone (NYSE: VOD), down from $10 billion the year prior. 
• Home Depot (NYSE: HD) performed better than expected in FQ3 which can be largely attributed to the recovery in the housing market, little boost from Hurricane Sandy.
• Xerox (NYSE: XRX) raises quarterly dividend by 35%. 
• Comcast’s (NASDAQ: CMCSA) NBC Universal has announced the cut of 450-500 jobs or 1.5% of its 30,000 staff, as the company tries to make up for a slowdown in advertising. 

Macro

• Asian Markets: the looming US fiscal cliff and the euro-zone weighted on indexes, hurting resource stocks and financials the hardest. 
• European Markets: foul earnings reports and investor concerns about Greece resulted in bad stocks performance. 
• Fiscal dilemma caused the EURUSD to fall below $1.27
• EU giving Greece two more years to mend economy, but not rewarding the tax adverting country with more aid.  
• Consumers in Japan are becoming more spend thrifty as economic growth slows and the country enters its third recession in four years. 
• The October U.K. CPI rose +2.7% Y/Y which is +0.5% higher from September’s +2.2% Y/Y. believed to have risen from increase university tuition and food costs.  
• Greece raised 4.06 billion euros in treasury sales this morning, larger than the 3.125 billion euros forecast. 

Yesterday’s Biggest Winners

• Titanium Metals Corp. (NYSE: TIE) +42.61% (+$4.93) to $16.50 from the acquisition of the metal company from Precision Castparts for a 43% premium from Friday’s close. 
• Jefferies Group (NYSE: JEF) +14.02% (+$2.00) to $16.27 from an announcement that Leucadia National decided to purchase the share of JEF it does not already own. 
• Gilead Sciences, Inc. (NASDAQ: GILD) +13.72% (+$8.92) to $73.93 due to positive results from development in hepatitis C treatments. 

Yesterday’s Biggest Losers 

• J.C. Penny (NYSE: JCP) -12.94% (-$2.67) to $17.97 because of the “underperform” downgrade from Credit Suisse analysts.
• Leucadia National (NYSE: LUK) -3.03% (-$0.66) to $21.14 from the acquisition of Jefferies which is valued to 24% premium from Friday’s close. 
• Beazer Homes (NYSE: BZH) -17.25% (-$2.87) to $13.77 due to a lower FQ4 loss.  

On Achievement & Choice 

We create and set individual aspirations in hopes of personal betterment, but recent studies have shown that more often than not we fail to achieve these goals. According to DVM research, the average gym member could save roughly $300 annually by simply switching from a monthly unlimited membership to a pay-per visit pass. The willingness to workout and reach fitness goals is, as such, inconsistent with the willingness to pay for a gym membership. This irrationality of choice suggests multiple conclusions about the human inclination to follow through with challenging aims. Paying for a monthly gym pass gives the consumer the option to attend the gym as many times as they wish, yet DVM research concludes that members only attend an average of 5.2 visits per month. I argue that paying for a service that helps consumers to reach their goals releases similar levels of endorphins, permitting self reflections of personal aggrandizement, even if the consumer is under utilizing the service. The simple act of purchasing the gym membership, or any service for that matter that promotes personal betterment, may result the brain to act in a state of euphoria (Miltenberger et. al. 2003). For many, paying for the gym membership is less painful than the act of exercising. Unfulfilling goals results in sentiments of anger, embarrassment, and shame for many individuals. This suggests psychological evidence that the fear of failure and a negative self-evaluation discourages humans from actively achieving their goals. Therefore, being realistic and rational towards the process of self aggrandizement may not only decrease inefficiencies in our personal lives, but is advantageous for the betterment of society on a macro level.