How do you like it so far? My condolences to all the bears out there who were certain the "fiscal cliff" -- regardless of the outcome -- would be the event triggering a sharp drop in stock prices at the beginning of 2013. Well, I suppose it could still happen but the first week of the New Year was simply boffo. The Dow Industrials rose 497 points on the week, which only had four trading sessions and the S&P 500 closed at its highest level since 2007 before the start of the Great Recession.
Speaking of the fiscal cliff, a dentist in New York put out a press release this morning saying the tough times has a growing number of CEOs grinding their teeth. "The condition, known as bruxism, has become particularly widespread among my patients, not only in the wake of the recent fiscal cliff threat and concerns about implementing the new federal health care bill, but also the general slowdown in the economy," said Marc Liechtung, DDS.
***** There is little economic news due out this week that could move the markets. However, we do start the earnings season for the past quarter. The first company to report fourth-quarter numbers will be Alcoa with its report tomorrow after the close of trading. Most analysts are predicting numbers across the board will disappoint, which means, of course, they will likely beat expectations.
***** Shares of San Diego-based Illumina are down 8.5 percent this morning after the chairman of Swiss drug maker Roche Holdings said it is not considering a new bid to buy the life science company. "Illumina is definitely off the table," said Franz Humer, who said Illumina was a "nice-to-have" opportunity, not a "must-have" purchase.
***** Apple continues to knock the ball out of the park. In a release this morning the company says downloads through its App Store have now topped 40 billion, with half the downloads coming in 2012. It said there were more than 2 billion downloads in the month of December alone. The numbers are especially impressive when you consider the App Store opened in July 2008, not all that long ago. There are now more than 775,000 apps available and Apple has paid out more than $7 billion to app developers. Makes you wonder why the stock has dropped so much, huh?
***** The most recent Fannie Mae National Housing Survey finds 43 percent of people believe home prices will go up in the next 12 months, the highest level ever recorded. "Combined with consumers' growing mortgage rate and rental price increase expectations, the positive home price outlook could incentivize those waiting on the sidelines of the housing market to buy a home sooner rather than later and thus support continued housing acceleration," said Doug Duncan, chief economist at Fannie Mae.
***** The employment trends index -- a composite of eight employment reports -- posted by the Conference Board rose in December following gains in November. Of course, the economists who prepare the report always seem to find a way to put a damper on goods news. For instance, Gad Levanon quickly used his favorite word, "however." In the press release Levanon countered the good news by saying, "However, if economic activity continues to expand slowly in the first half of 2013, it would be difficult for employers to maintain the current rate of job growth." How about this, Gad: What happens if the economy starts to heat up in the first half of 2013? I guess the folks at the Conference Board prefer to look at the glass as half empty.
***** Most people think Hawaii is paradise, but I doubt the pro golfers playing in the Tournament of Champions at Kapalua would agree. The event was scheduled to tee off on Thursday but darned near hurricane winds and some sideways rain have prevented the field of 30 players from completing a single hole of golf. Several times, players went out on the course but play had to be stopped because balls were getting blown off the greens and conditions were unplayable. They will try to tee it up again today and get in 36 holes and play a final round tomorrow before heading over to Oahu for the next event. I think it will be a miracle if they get in two rounds. I can't remember a time when weather like this completely wiped out a tournament.