Briefing.com Monthly Brief for 21-Jan-11 11:28 ET
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Volume: 12 Number: 01

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Page One: Markets Navigate Through Year-End Volatility

Ahead of the Curve: General Motors Still a Concern

The Big Picture: The Earnings Slowdown That Isn't So Slow

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Page One: Markets Navigate Through Year-End Volatility
There is much to cheer about this holiday season. Both the S&P 500 and the Dow gained over 10% year-to-date while the Nasdaq is posting returns of over 15%. U.S. equity markets by far outpaced the major indices of other developed markets. Underscoring the performance is equity fundamentals that include earnings growth, attractive valuations, dividend yields, and a corporate sector flush with cash. While the year still has a few trading days left, the new year will do little to alter this picture.

That's not to say 2011 won't have its share of excitement. Rest assured market volatility will remain -- the European fiscal crisis is nowhere near resolution and the Chinese government-instituted slowdown will continue. Those are just the "knowns".

The volatility bell is ringing today two days after the S&P 500 reached levels not seen since September 2008.

First off, market participants are digesting news out of FedEx (FDX) of a $0.15 per share miss. We'd point to the fact that the shortfall was largely attributed to higher compensation and benefits costs due to the company restarting programs curtailed during the recession, which in turn negatively impacted margins.
 
Read the full Page One here.
 

Ahead of the Curve: General Motors Still a Concern
Much of the media focus on GM's IPO tends to paint it as the successful re-launch of the icon of American industry and an example of how the government bailout was successful. This rosy picture ignores the fact that the company's new business direction emphasizes GM's weaknesses instead of its strengths, overlooks the $27 billion liability in unfunded pensions, and ignores the fact that the Treasury's sale of their stock is actually occurring at a loss. If anything, the new GM has become even more of an icon of the problems facing the United States, not a shining example of solving those problems. Read the full Ahead of the Curve here.

The Big Picture: The Earnings Slowdown That Isn't So Slow
Given that we are more than two-thirds of the way through the fourth quarter, it may surprise some readers to know that we still haven't reached the end of the third quarter earnings reporting period -- not in an absolute sense anyway.

For all intents and purposes, the stock market has moved past the third quarter earnings reports even though six companies in the S&P 500 still haven't reported their results for the October quarter.

What is acknowledged today is that a plethora of positive surprises were produced in the third quarter reporting period.
Read the full Big Picture here.

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Dec 15, 2010 – NPR.org - Economist Jeff Rosen provides insight on the day’s CPI release. Listen to the podcast now.


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