With two trading weeks left until 2012, can the stock market end 2011 in the black?
The Dow Industrials are up 2.5% this year, but the Nasdaq and the S&P 500 are lower. Still, there is hope for a Santa Claus rally.
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Kenneth Polcari, Managing Director at ICAP, notes that "this week and next are historically two of the strongest weeks of the year, so the odds continue to favor a rally...We are getting a host of new domestic macro data this week...Any positives will be met with a party as investors long for better days ahead.”
Stocks around the world are struggling. News of the death over the weekend of North Korea’s absolute leader Kim Jung Il rattled markets across the Asian region Monday. South Korean shares felt the most acute pain. The Kospi fell 5%at one point during the session, rallying back a little, to end the day off by 3.5%.
The Nikkei in Japan and the Hang Sang in Hong Kong each lost more than 1%, while European shares are trying to rally but face significant headwinds.
European Central Bank President Mario Draghi is warning that struggling eurozone nations that may decide to leave the euro bloc will face significant economic difficulties afterwards. His rare comments addressing the possible disintegration of the euro have dampened sentiment in the region.
"Leaving the euro area, devaluing your currency, you create a big inflation, and at the end of that road, the country would have to undertake the same reforms that were due to begin with, but in a much weaker position,” Draghi is quoted saying in the Financial Times.
Draghi is scheduled to speak later Monday in front of a committee of the European Parliament.
European Union finance ministers will also have to figure out how to split up paying for the extra 200 billion euros promised to the International Monetary Fund. That may be difficult since the U.K. refuses to contribute. Hungary, Romania, and Bulgaria have also ruled out sending any additional money to the IMF.
Peter Bookvar, portfolio manager at Miller Tabak writes, “In Europe, the story of 2012 will still come down to debt repudiation/writedown or ECB money printing.”
He adds, “The U.S. Fed will be having a very similar discussion, again, in 2012.”
On a brighter note, online holiday shopping is robust. Research firm comScore says point-and-click shopping rose 15% over last year, to $30.9 billion from Nov. 1 through Dec. 16. ComScore also notes that at least half of holiday purchases are made with free shipping. Sales are expected to taper off in the days before Christmas.
No tapering off is expected at the post office; Monday and Tuesday are its busiest two days of the year. The U.S. Postal Service will deliver 801 million cards and letters, nearly double the average daily volume. Between Thanksgiving and New Years Eve, the postal service expects to deliver 16.5 billion letters, packages, and cards.
There has been some relief at the gas pump, with prices down a nickel over the past two weeks, now averaging $3.24 for a gallon of regular unleaded nationwide, according to the Lundberg Survey. The cheapest gas is in Albuquerque, New Mexico, and the most expensive is in San Francisco.
Apple (NASDAQ:AAPL) is looking to transform the way people watch television just like it changed how people listen to music and use cell phones. Apple executives are reported to be discussing their vision of the future of TV with media executives. Apple’s new television concept would rely on wireless-streaming technology to access content, and would respond to users’ voices and motions.