The opening paragraph says why. “Federal Reserve Chairman Ben Bernanke, in a signal he is open to cutting interest rates, said the latest bout of turbulence in financial markets may put more strain on the economy.”

The DJIA (+22.28), S&P 500 (+0.70), and Nasdaq Composite (+5.22) made some headway yesterday, but nothing like the previous day’s gain of +331 points in the Dow 30 and +82 for the Nasdaq.

US equity markets edged higher despite the early spike in oil and a bearish labor report. Estimated Jobless claims for the prior week hit its highest level in over nine months, up 23,000 to 352,000, which is more grist for the mill that says there is a cost to pay for inflationary pressures and the housing downturn.

Supposedly, GDP soared over the 3Q, up +4.9 pct, which is the best since 3Q03 the Commerce Dept says, yet corporate earnings have remained flat.

October New Home sales bounced a meaningless +1.7 pct, while prices plunged Y/Y by -13 pct to $217,800, which is significant. That’s deflation.

On the earnings front, Sears Holding Corp (SHLD), run by Goldman Sachs alumni and current super-star hedge fund manager Eddie Lampert, reported a meaningful plunge in 3Q net income to $2 million vs. $196 million a year earlier, due to narrower margins and lower same-store sales. SHLD, in the absence of Lampert telling us about all that expensive real estate the stores are sitting on, plunged -10.53 pct to $104.09. The high in April was $195.18. That’s deflation. And common sense.

On the deals front, E*Trade Financial Corp. (ETFC) announced it will receive a $2.5 billion cash infusion from Citadel Investment Group. I’ll call that an emergency. But then, when Citigroup received their $7.5 billion emergency bail-out a couple days ago, it saved me from having to drop Citigroup from my USA 100, having recently cut the company from my Global Best Companies 100. About E*Trade, however, that deal might well be the first shoe to drop.

Crude Oil rocketed to over $95/bbl following an explosion on an Enbridge Energy Partners pipeline, but soon gave back nearly all its early gains. Crude Oil futures then closed the session up +$0.39 at $91.01/bbl.

US Treasurys were bid higher as the yield on the 10-year fell back below 4 pct.

The $USD gained against the Euro, knocking down gold and silver since its high early Monday morning. The Dollar lost ground to the Yen as the Carry Trade seems to be in a wind down process.

The Asian markets soared before the open in New York yesterday, and by the end of the session in Europe, the DAX gained +0.54 pct, FTSE 100 +0.68 pct, and the CAC 40 +0.66 pct.

Early today, most of the Asia-Pacific equity markets were firm except for Shanghai (down -2.63 pct). At 8:17 am ET, all of Europe is firm, with the FTSE up +0.79 pct and the CAC and DAX up +1.05 pct and +1.30 pct respectively.

Jan-08 e-miNY Crude Oil is now down to 89.20, spot gold to 793.01 and spot silver to 14.15 (8:21 am ET). Clearly, prices are headed lower, and have been since early Monday, which ought not to be a surprise had you read my Week In Review on Sunday. :-)

The Euro is a little stronger this morning. The big story though is Bernanke’s inclination to come to the rescue of HB&B. December Dow futures at 8:20 am ET are up +123 to 13456. The topping out rally continues.

(Cara 100) American Standard has changed it's name to Trane Inc. The new ticker is NYSE:TT.

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Comments & Outlook

I continue to feel strongly that “the US market is being set up to take out HB&B positions and the positions of friends and family and corporate insiders whose business HB&B relies on”.

Yesterday I opined,

Why do you think HB&B is so eager for Fed rate cuts? Well, in addition to making more money when interest rates fall because their cost of money drops much faster than these bankers are ever going to pass it along to you or me, there is another factor. It’s called the changing face of stagflation, which is a term used to define stagnant economy and inflation.

The change is this: the ‘stagnant’ is soon to become recession (a small possibility of depression but we don’t know yet because nobody knows how bad the asset quality is behind the mortgage-backed securities). In other words, deflation is a process we are likely going to be talking about, as Richard Russell has been doing, apparently, in his Dow Theory Letters. The worst of it is that inflation is going to stay with us too. Like AC:DC can work different machinery at the same time, I think we are no longer going to call this the Goldilocks Economy (smiley here for CNBC’s Kudlow who likes to say meaningless things like ‘not too hot, not too cold’). No, it’s going to be called the AC:DC economy. Prices of residential and commercial real estate, oil and some other commodities, and most manufactured goods as well are going to sink, financial assets (stocks and bonds) are going to sink (lower earnings and higher risks of failure during recessions/depressions). That’s deflation.

But prices of property taxes, insurance, education, healthcare, building infrastructure, social programs, sophisticated war materials, public transit, mail service, heat, water and power, and on and on… they will also continue to escalate… credit card debt as people get deeper into the banks… wages of skilled labor because people in need will demand more income in order to meet their bills and to live like their bosses, etc… unions becoming more powerful, with labor strikes and stoppages in order to obtain more wages so their people can just survive… you get the picture. That’s inflation.

And wars will continue because that’s politics. And fiat money will continue to be printed at multiple rates of GNP growth, which devalues the currency and (ultimately) drives up the price of gold.

….Traders, though, are starting to pay attention. They know that in the words of Richard Russell, “Almost every sector that I examine or study is overpriced -- from the US stock market selling at over 18 times earnings to the Shanghai stock market selling at a ridiculous 55 times earnings. Housing is overpriced, commercial real estate is overpriced, land almost everywhere is overpriced, stocks everywhere are overpriced, most currencies are overpriced. You name it today, and it's probably overpriced.”

Just like in the summer of 2005 when I promised readers there would be lessons learned from the melt-up in residential real estate prices, suggesting deflation would follow, so too am I saying this market is at a peak. But the topping out process can be a rolling one as individual stocks, groups and sectors get hit. That is a dangerous time to be in markets or at least positioned in stocks that are susceptible to surprises.

Surprises, like the one yesterday with Sears Holding (SHLD) are not treated kindly. That’s because traders are nervous. They are waiting for the day that HB&B says “enough heavy lifting already”. That will be a long, sad day for the Bulls.

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Links & Charts

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International Economics Review

US Economic Calendar.

US 3Q Gross Domestic Product Report.

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Cara 100 Daily RSI-7 Charts

RSI > 70 (6)

RSI < 30 (2)

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International Equity Markets Review

Europe

Here is the latest session data for the bourses of Europe.

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Here is the latest session data for the London stock exchange FTSE.

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Here is the latest session data for the German DAX.

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Here is the latest session data for the French CAC 40.

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Here is the latest session data for the Milan Italy stock exchange MIBTEL.

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Here is the latest session data for the Swiss market index.

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Asia-Pacific

Here is the latest session data for the Asia-Pacific stock exchanges.

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Here is the latest chart for the Japanese Nikkei 225 index.

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Here is the latest chart for the Singapore index .

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Here is the latest chart for the Shanghai Composite index .

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Here is the latest chart for the Hong Kong Hang Seng index .

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Here is the latest chart for the India BSE 30 index .

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Here is the latest chart for the Australian All Ordinaries index .

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US Equity Markets Review

DJIA (interactive) chart

NASDAQ Composite (interactive) chart

Table: Dow 30 List

Sorted by 1-Week Price Performance

Symbol	Close	1Day Change	1Day %Change	1W %Change	2W %Change	4W %Change	YTD %Change	3M %Change	6M %Change	12M %Change
AIG	57.33	-0.39	-0.68%	11.69%	-3.53%	-9.17%	-20.54%	-13.31%	-20.25%	-18.25%
GM	28.78	0.39	1.37%	9.06%	-7.76%	-26.56%	-2.28%	-5.92%	-4.39%	-2.44%
JPM	43.65	-0.31	-0.71%	7.30%	-3.32%	-7.13%	-9.19%	-1.09%	-15.77%	-6.47%
INTC	26.34	0.15	0.57%	6.94%	1.90%	-2.08%	29.43%	4.98%	18.12%	24.01%
BA	93.21	-0.40	-0.43%	6.64%	0.45%	-5.46%	4.53%	-3.81%	-5.37%	4.86%
MRK	59.92	-0.04	-0.07%	6.02%	4.57%	2.85%	36.12%	20.03%	12.21%	34.47%
WMT	47.54	0.31	0.66%	5.97%	2.21%	5.15%	-0.02%	7.58%	1.28%	1.39%
PFE	23.60	0.16	0.68%	5.59%	-0.04%	-4.10%	-10.23%	-4.34%	-14.37%	-12.82%
CAT	71.72	0.53	0.74%	5.56%	2.41%	-3.87%	17.27%	-4.42%	-5.32%	15.57%
IBM	107.50	0.13	0.12%	5.17%	3.92%	-7.42%	10.52%	-6.17%	1.50%	17.46%
C	32.29	0.00	0.00%	5.08%	-11.17%	-22.94%	-41.56%	-31.22%	-41.19%	-35.24%
MO	75.98	1.89	2.55%	4.93%	5.21%	4.18%	17.04%	8.85%	6.50%	20.05%
AXP	56.89	-0.52	-0.91%	4.69%	-3.74%	-6.66%	-5.75%	-2.15%	-11.58%	-3.20%
HPQ	51.05	0.32	0.63%	4.44%	4.04%	-1.22%	22.66%	5.43%	12.05%	29.60%
DIS	32.81	0.12	0.37%	4.16%	2.98%	-5.26%	-4.06%	-3.19%	-7.81%	-0.21%
AA	36.55	0.34	0.94%	3.92%	-0.84%	-7.68%	24.62%	0.44%	-9.46%	17.94%
DD	46.09	0.05	0.11%	3.92%	0.39%	-6.91%	-6.02%	-5.36%	-10.07%	-4.28%
UTX	75.44	-0.41	-0.54%	3.65%	0.69%	-1.50%	20.11%	1.47%	9.35%	16.53%
MMM	83.61	0.20	0.24%	2.92%	4.24%	-3.18%	6.84%	-5.80%	-4.24%	3.25%
PG	74.15	0.24	0.32%	2.62%	3.65%	6.66%	14.89%	13.87%	16.50%	17.31%
GE	38.14	-0.32	-0.83%	2.61%	-2.23%	-7.34%	0.45%	-1.47%	1.98%	7.89%
JNJ	68.40	0.05	0.07%	1.88%	2.26%	4.96%	3.01%	10.57%	8.49%	3.32%
HON	54.88	-0.70	-1.26%	1.80%	-6.22%	-9.15%	21.69%	-3.72%	-4.31%	28.46%
XOM	88.59	0.67	0.76%	1.78%	2.64%	-3.70%	19.54%	3.94%	7.23%	16.52%
MCD	58.35	0.38	0.66%	1.78%	2.91%	-2.34%	33.01%	18.62%	15.29%	39.43%
T	38.03	0.53	1.41%	1.55%	-3.33%	-9.00%	8.81%	-5.40%	-6.08%	13.52%
VZ	42.48	0.07	0.17%	1.26%	-2.39%	-7.79%	12.32%	0.59%	-1.67%	21.75%
KO	62.79	-0.20	-0.32%	0.87%	2.33%	1.67%	29.25%	17.34%	20.33%	34.63%
HD	27.88	-0.39	-1.38%	-0.61%	-3.96%	-11.52%	-32.12%	-23.72%	-27.87%	-25.89%
MSFT	33.59	-0.11	-0.33%	-1.87%	-1.00%	-8.75%	12.49%	17.49%	9.09%	13.59%

You can do this table yourself by entering the following string into the Summaries window at www.billcara2.com and then clicking on the link for Performance.

AA AIG AXP BA C CAT DD DIS GE GM HD HON HPQ IBM INTC JNJ JPM KO MCD MMM MO MRK MSFT PFE PG T UTX VZ WMT XOM

Here are the links to interactive Dow charts from Billcara2.com that I broke into groups of ten, which you can add technical indicators for as well. (list one) (list two) (list three)

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The Americas

Here is the latest session data for the exchanges of the Americas.

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Here is the latest chart for the Brazilian Bovespa stock exchange in Sao Paulo.

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Here is the latest session data for the Toronto Stock Exchange composite index.

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Sector ETF Summary for the US equity market

The tables I show in this section 2007_11_29 are for ten (GICS) Sector Index Funds (ETF’s) only, but they cover the full spectrum of the US equity market.

Table 1: Cara ETF List is sorted by price performance Week over Week (W/W), i.e. 1W%N.

Sorted by 1-Week Price Performance

Symbol	Close	1Day Change	1Day %Change	1W %Change	2W %Change	4W %Change	YTD %Change	3M %Change	6M %Change	12M %Change
XLB	41.28	0.43	1.05%	6.01%	0.34%	-5.69%	19.27%	6.61%	2.84%	18.18%
XLF	30.25	-0.21	-0.69%	5.81%	-4.69%	-10.13%	-18.07%	-10.00%	-19.87%	-15.38%
IYH	72.60	0.58	0.81%	4.72%	2.50%	0.82%	9.24%	6.48%	0.51%	10.44%
XLI	39.21	-0.04	-0.10%	4.09%	-0.36%	-3.30%	11.30%	0.46%	1.58%	11.58%
SMH	32.65	-0.35	-1.06%	3.88%	-0.79%	-5.69%	-2.74%	-12.58%	-10.35%	-4.70%
XLY	34.14	-0.22	-0.64%	3.55%	-0.35%	-7.08%	-11.37%	-7.23%	-14.01%	-9.30%
XLP	29.05	0.05	0.17%	2.83%	2.07%	2.51%	10.54%	7.67%	4.95%	12.86%
IYZ	28.92	0.01	0.03%	2.48%	-2.43%	-10.52%	-2.49%	-12.52%	-14.97%	1.58%
XLU	42.54	-0.20	-0.47%	1.38%	2.33%	0.21%	15.54%	9.33%	3.20%	16.52%
XLE	73.12	0.84	1.16%	1.34%	0.16%	-4.48%	29.23%	6.28%	8.73%	21.77%

You can do this table yourself by entering the following string into the Summary window at Billcara2.com and then clicking on the link for Performance. XLE XLB XLI XLY XLP IYH XLF SMH IYZ XLU . You can also add more ETF’s – up to 30 in total.

For a list of components to any ETF, go to the AMEX.com web site, and click on ETF’s.

10 (energy: XLE)

15 (basic materials: XLB)

20 (industrial: XLI)

25 (consumer discretionary: XLY)

30 (consumer staples: XLP)

35 (healthcare: IYH)

40 (financial: XLF)

45 (technology, semiconductor: SMH)

50 (telecom: IYZ)

55 (utilities: XLU)

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International Equity Market USD-denominated ETF Review

Table 13: International equities via the USD-denominated ETF perspective

Sorted by 1-Week Price Performance

Symbol	Close	1Day Change	1Day %Change	1W %Change	2W %Change	4W %Change	YTD %Change	3M %Change	6M %Change	12M %Change
FXI	184.90	-0.60	-0.32%	13.08%	-1.48%	-15.46%	58.85%	24.86%	67.06%	94.73%
IFN	59.02	0.92	1.58%	10.01%	-0.56%	-8.85%	30.17%	28.81%	34.90%	22.68%
EWJ	14.05	0.06	0.43%	5.32%	2.70%	-2.09%	-1.06%	1.37%	-2.63%	2.70%
QQQQ	51.70	0.22	0.43%	4.85%	3.21%	-6.05%	19.57%	7.53%	10.45%	17.31%
EWU	25.41	-0.30	-1.17%	4.35%	-0.74%	-6.89%	7.90%	4.78%	0.59%	8.78%
SPY	147.18	0.05	0.03%	3.87%	-0.33%	-4.83%	4.11%	0.43%	-3.32%	4.78%
TRF	67.95	-0.75	-1.09%	3.74%	-1.92%	-9.27%	-23.26%	9.60%	1.34%	-11.87%
EWZ	79.45	-0.40	-0.50%	3.65%	-5.25%	-7.10%	70.13%	33.75%	36.86%	78.14%
IEV	119.88	-1.33	-1.10%	3.62%	-0.10%	-3.79%	13.52%	6.85%	2.89%	15.83%
EWC	31.21	-0.80	-2.50%	-6.16%	-12.21%	-7.72%	26.36%	8.41%	4.70%	22.68%

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Japanese equity market ETF: EWJ

Here is the Japanese (EWJ) equity market ETF Daily data charts:

Interactive EWJ Daily data:

Interactive EWJ Weekly data:

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U.K. equity market ETF

Here is the United Kingdom (EWU) equity market ETF Daily data charts:

Interactive EWU Daily data:

EWU Daily data:

Interactive EWU Weekly data:

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Canada’s equity market

Here is the Canadian (EWC) equity market ETF Daily data charts:

Interactive EWC Daily data:

Interactive EWC Weekly data:

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Bonds & Yields Review

Table 10: US Treasury Yields

US Treasury Bonds

Maturity	Yield	Yesterday	Last Week	Last Month
3 Month	2.85	2.93	2.97	3.81
6 Month	3.16	3.24	3.16	3.88
2 Year	3.04	3.18	2.99	3.80
3 Year	2.99	3.11	2.89	3.79
5 Year	3.40	3.49	3.34	4.05
10 Year	3.94	4.03	4.01	4.38
30 Year	4.34	4.43	4.46	4.67

Municipal Bonds

Maturity	Yield	Yesterday	Last Week	Last Month
2yr AA	3.16	3.21	3.23	3.32
2yr AAA	3.23	3.24	3.27	3.34
2yr A	3.36	3.36	3.39	3.36
5yr AAA	3.29	3.33	3.38	3.44
5yr AA	3.30	3.28	3.31	3.40
5yr A	3.40	3.43	3.49	3.59
10yr AAA	3.70	3.71	3.80	3.77
10yr AA	3.60	3.56	3.68	3.72
10yr A	3.93	3.94	4.02	3.98
20yr AAA	4.41	4.38	4.44	4.38
20yr AA	4.20	4.59	4.59	4.57
20yr A	4.83	4.74	4.78	4.38

Corporate Bonds

Maturity	Yield	Yesterday	Last Week	Last Month
2yr AA	4.25	4.35	4.15	4.60
2yr A	4.59	4.68	4.28	4.71
5yr AAA	4.54	4.62	4.53	4.82
5yr AA	4.76	4.82	4.72	5.02
5yr A	4.63	4.70	4.55	5.00
10yr AAA	5.06	5.10	5.13	5.21
10yr AA	5.43	5.51	5.54	5.57
10yr A	5.55	5.59	5.54	5.66
20yr AAA	5.57	5.60	5.54	5.66
20yr AA	5.68	5.74	5.73	5.87
20yr A	6.03	6.06	6.00	6.00

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Here is the $USB 30-year Treasury Bond chart.

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US Bond Funds -- Interactive Daily Data Charts

SHY Daily data series chart:

IEF Daily data series chart:

TLT Daily data series chart:

AGG Daily data series chart:

LQD Daily data series chart:

TIP Daily data series chart:

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Table 11: Interest-sensitive securities

Sorted by 1-Week Price Performance.

Symbol	Close	1Day Change	1Day %Change	1W %Change	2W %Change	4W %Change	YTD %Change	3M %Change	6M %Change	12M %Change
FRE	29.51	0.09	0.31%	13.50%	-33.22%	-43.50%	-56.53%	-53.34%	-55.61%	-55.99%
FNM	32.39	0.09	0.28%	10.81%	-32.27%	-43.22%	-45.89%	-50.75%	-49.52%	-43.09%
TLT	94.84	0.81	0.86%	1.49%	3.74%	5.40%	6.48%	7.50%	9.82%	4.30%
IEF	87.46	0.49	0.56%	0.33%	2.15%	3.54%	5.78%	4.37%	6.98%	4.60%
AGG	101.79	0.29	0.29%	0.02%	1.15%	1.17%	1.88%	2.25%	2.55%	1.02%
TIP	106.78	0.65	0.61%	0.02%	2.00%	3.86%	7.61%	5.95%	7.34%	6.01%
SHY	82.46	0.15	0.18%	-0.04%	0.91%	1.36%	3.02%	1.69%	3.00%	2.63%
CFC	9.300	0.580	6.65%	-1.27%	-30.44%	-40.08%	-77.91%	-53.05%	-76.43%	-76.68%

Consumer Finance -USA -- Interactive Daily Data Charts

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Commodities Review

$CRB Index

Open Futures Contracts

Interactive Chart of Daily CRB Commodities Index:

Interactive Chart of Weekly CRB Commodities Index:

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Oil Review

Here is the e-miNY Jan-08 Crude Oil chart.

Interactive Chart of Daily Crude Oil:

Interactive Chart of Weekly Crude Oil:

Table 2: Senior oil & gas equities

Sorted by 1-Week Price Performance

Symbol	Close	1Day Change	1Day %Change	1W %Change	2W %Change	4W %Change	YTD %Change	3M %Change	6M %Change	12M %Change
CEO	185.76	0.69	0.37%	16.83%	7.78%	-14.19%	97.05%	55.53%	100.80%	107.55%
STO	32.66	-0.14	-0.43%	3.72%	3.26%	-4.17%	27.13%	17.23%	17.74%	16.98%
XOM	88.59	0.67	0.76%	1.78%	2.64%	-3.70%	19.54%	3.94%	7.23%	16.52%
CVX	86.56	0.50	0.58%	0.94%	0.48%	-5.41%	21.97%	-0.16%	7.25%	21.83%
TOT	80.33	-0.78	-0.96%	-0.66%	2.07%	-0.35%	13.19%	9.62%	7.11%	11.66%
PBR	96.55	-2.19	-2.22%	-2.51%	-6.46%	0.96%	93.76%	63.95%	80.70%	105.56%
SU	97.90	-0.51	-0.52%	-2.97%	-4.59%	-10.37%	32.46%	13.60%	13.94%	22.90%
ECA	65.43	0.00	0.00%	-2.99%	-5.45%	-6.13%	44.31%	11.56%	8.54%	24.11%
IMO	49.15	-0.35	-0.71%	-5.66%	-9.08%	-9.20%	37.83%	14.09%	5.54%	30.27%

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Gold & Precious Metals Review

Spot gold chart for the week

Interactive Chart of Daily Gold EOD Continuous Contract Index:

Interactive Chart of Weekly Gold EOD Continuous Contract Index:

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Spot silver chart for the week

Interactive daily data

Interactive Chart of Daily Silver EOD Continuous Contract Index:

Interactive chart of the Silver Bullion index.

Interactive Chart of Weekly Silver EOD Continuous Contract Index:

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Spot platinum chart for the past three days

Interactive Chart of Daily Platinum EOD Continuous Contract Index:

Interactive Chart of Weekly Platinum EOD Continuous Contract Index:

Interactive chart of the Platinum metal index.

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Spot palladium chart for the week

Interactive Chart of Daily Palladium EOD Continuous Contract Index:

Interactive Chart of Weekly Palladium EOD Continuous Contract Index:

Interactive chart of the Palladium metal index.

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Interactive Chart of Weekly Copper EOD Continuous Contract Index:

Interactive Chart of Daily Copper EOD Continuous Contract Index:

Interactive chart of the Copper metal index.

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Table 12: Senior gold equities

Sorted by 1-Week Price Performance

Symbol	Close	1Day Change	1Day %Change	1W %Change	2W %Change	4W %Change	YTD %Change	3M %Change	6M %Change	12M %Change
BVN	58.47	-0.11	-0.19%	9.58%	2.10%	1.85%	111.77%	57.56%	81.53%	108.45%
GG	33.58	-1.04	-3.00%	2.19%	0.99%	-4.41%	22.82%	44.31%	47.80%	14.61%
NEM	51.39	-0.62	-1.19%	1.64%	0.37%	0.96%	16.27%	23.30%	31.20%	12.38%
KGC	17.92	-0.26	-1.43%	1.07%	0.67%	-8.94%	56.92%	54.22%	40.44%	48.47%
MDG	36.33	-0.52	-1.41%	-0.36%	-2.29%	-11.30%	38.19%	36.99%	48.16%	21.63%
AUY	13.12	-0.28	-2.09%	-0.46%	-2.24%	-12.65%	6.41%	22.85%	-0.38%	8.70%
GFI	16.99	-0.21	-1.22%	-0.53%	-7.56%	-5.98%	-7.31%	13.49%	-0.70%	-6.55%
ABX	41.05	-0.95	-2.26%	-1.65%	-3.68%	-6.98%	37.61%	29.09%	43.48%	35.66%
AEM	49.02	-0.40	-0.81%	-3.47%