Economics

   This Week’s Data

    The November Chicago purchasing manager’s index was reported at 56.1 versus expectations of 53.5 and 54.2 recorded in October.

   Other

    More anecdotal evidence of an improving economy (chart):
    http://mjperry.blogspot.com/2009/11/first-2-month-restaurant-index-gain-in.html

    The chart on inflation (deflation):
    http://www.ritholtz.com/blog/2009/11/consumer-prices-inflation-or-deflation/
   
Politics

  Domestic

The three most disturbing revelations from Climategate (the discovery and release of the emails of global warming advocates in the scientific community) (medium):
http://mjperry.blogspot.com/2009/11/greatest-scientific-scandal-of-our-age.html

Another not so happy consequence of massive deficit spending (short):
http://www.ritholtz.com/blog/2009/11/budget-deficit-blowback/

  International War Against Radical Islam

    A sobering discussion of the potential threat to America from weapons of mass destruction:
    http://article.nationalreview.com/?q=YzM5OGQwZjIyMmNhMTE3MjYwNTlhMjM0MjRhMWFlMjU=
   
The Market
    
    Technical

    The Averages (DJIA 10344, S&P 1095) traded within the boundaries of the up trend off the March lows (10146-12111, 1084-1370); but as I noted yesterday, the S&P has fallen below the 1102 level after some fairly erratic trading both above and below it.  As a result, I don’t’ think that one can say with any assurance that this index is either ascending or in a trading range.  The dollar was off and remains below its former support level--a positive for stocks (assuming the inverse dollar/stock relationship continues); and the VIX fell right to the down trend--a positive for stocks if it drops below the trend line, a negative if it starts to climb again.

    Here’s a chart on the strong seasonal bias that I mentioned in yesterday’s Morning Call:
    http://www.bespokeinvest.com/bespoke/2009/11/whats-in-store-for-december.html

    Percentage of stocks above their 50 day moving average:
    http://www.bespokeinvest.com/bespoke/2009/11/percentage-of-stocks-above-their-50day-moving-averages.html

    Also note that bullish sentiment is near an all time high (51%) while bearish sentiment is near a low (17.5%).  As a contrary indicator this not positive.

    One last observation of uncertain value.  The trading pattern for the last four weeks has been a big, triple digit gain on Monday, then sideways to down the rest of the week.  Many traders I talk to think that the Monday pin action can be attributed to mutual fund managers pushing their cash reserves into the Market.  Yesterday was quite different in that stocks were down most of the day and the rally at the close was on virtually no volume.  If that action means that mutual fund managers are done putting money to work, it could have (negative) implications for the remainder of the year.
   
    P.S I recognize that I am now talking my book.

    The latest from TraderFeed:
    http://traderfeed.blogspot.com/2009/11/are-traders-showing-risk-appetite-or.html

    And Trader Mike:
    http://tradermike.net/2009/11/november_30_2009_stock_market_recap
   
   Fundamental
   
     Headlines

(1)    Dubai:  the statements out of Dubai suggest that the problem is well contained and that probably did more to help the Market than anything else.  However, I would point out that it took US financial markets a while to figure out that the demise of the Bear Stearns hedge funds portended much larger problems; and the US, as convoluted as many of its financial instruments are, has far fewer transparency issues than most foreign markets.  That doesn’t mean that Dubai will turn into a major financial problem or that it is symptomatic of weakness in the emerging markets’ financial systems, but it probably does mean that it is a bit too soon to assume that everything is just peachy.
http://www.nakedcapitalism.com/2009/11/buiter-has-concerns-other-than-dubai-warns-of-sovereign-debt-delusion.html    (long)
http://www.zerohedge.com/article/fed-facing-margin-calls-european-banks (long but a must read)

Here is a much more sanguine look at Dubai (medium):
http://online.wsj.com/article/SB10001424052748703499404574564420658960540.html

And (long but worth the read):
http://www.ritholtz.com/blog/2009/11/dubai-%E2%80%93-low-risk-of-emerging-market-contagion/

(2)    healthcare: this fiscal disaster continues to work its way through the legislative process.  Yesterday the congressional budget office [God bless them] pointed out yet another flaw in the current senate version that is being debated, namely that insurance premiums will increase under the proposed legislation--which means that the plan may be revenue neutral to the government, it is not revenue neutral to you and me,

(3)    the big O is hosting a job fair later this week, so expect Stimulus Plan II [i.e. more spending, larger deficits] coming soon to a theater near you..
http://www.clubforgrowth.org/news/  (short)