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Morning Market Roundup: Robust Holiday Sales, Bank Stock Turnarounds


Here’s what’s important in the financial world this morning:

Holiday Sales: The Thanksgiving/Black Friday weekend yielded better retail figures that expected. SOme analysts hope that this signals that retail sales could return to the robust level of the mid-2000s, before the recession began. That, in turn, would bode well for U.S. GDP above 3 percent for the final quarter of the year. The National Retail Federation said total store revenue for the weekend reached $52 billion.

“Digging deep into their holiday budgets, the average holiday shopper spent $398.62 this weekend, up from $365.34 last year,” the NRF reported. Data from Comscore indicated that online sales rose 26 percent on Black Friday itself to $816 million.

EU: The Organisation for Economic Co-operation and Development [OECD] warned that the eurozone and U.S. are teetering on the brink of recession (took them this long to notice?). The primary threat in Europe is that there will be no conclusive action taken to help weak economies that may default on their sovereign debt. This is a political problem to the extent that Germany would have to support any broad solution. The trouble in the U.S. is also political. The OECD said that Washington gridlock could prevent America from instituting policy decisions to bring down the deficit and stimulate economic growth.

U.S.: The single most important announcement for the financial markets this week will be U.S. unemployment numbers for November. Challenger Gray will announce layoffs for the month. ADP will release its private payroll figures. Then, on Friday at 8:30 AM, the federal government will post its employment statistics. Economists are not optimistic about the state of the jobs market in November.

“Payrolls climbed by 120,000 workers after rising 80,000 in October, according to the median forecast of 59 economists in a Bloomberg News survey before a Dec. 2 report from the Labor Department,” Bloomberg reports.

A possible solution to the EU crisis, at least a temporary one, will cause a rally in U.S. stocks that could last the better part of the week. Which stocks will benefit? Almost certainly those of beleaguered banks. Investors believe that the largest financial firms have more exposure to the Europe debt crisis than they have stated. There is also concern that a slowing economy will cut sharply into investment bank revenue.

Proprietary trading results have also been weak, and investment houses like Goldman Sachs (NYSE: GS) have been unable to make the amount of money that they did from this activity in the past. Watch for Bank of America (NYSE: BAC) and Morgan Stanley (NYSE: MS), which trade at multiyear lows, to rebound.

(Douglas A. McIntyre—24/7 Wall St./The Blaze)

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