Phil's Financial Tip of the Day:
As usual, the best deals take place after Black Friday. Here are more reasons why I will never ever shop on Black Friday!
Attention holiday shoppers: the deals have only just begun-From CNN Money
On the heels of a record Black Friday followed by a Cyber Monday that went down as the highest-grossing online shopping day in U.S. history, there's one thing retailers know for sure -- shoppers love a good deal.
To encourage shoppers to keep spending between now and the end of the year, expect retailers to keep slashing prices, said Marshal Cohen, chief industry analyst at the NPD Group.
"This is not the season to be standing on principal," said Joel Bines, managing director in the global retail practice at AlixPartners. "All retailers need to have their foot on the gas in terms of promotions."
Even though Black Friday weekend and Cyber Monday notched new records, those key shopping days were not enough to lift retailers out of the doldrums, they said.
Persistently high unemployment and uncertainty about the economy continue to weigh on shoppers, especially in the lower income brackets.
"We've got dual economies -- the middle and upper middle class are spending and the lower part of the spectrum is having a very difficult time," Bines explained.
Holiday Money
That was reflected in November's same-store sales reports -- an important gauge of a retailer's health, which measures sales at stores that have been open for at least a year.
While high-end consumers showed still had an appetite for luxury goods, with department stores like Saks and Nordstrom beating expectations, discounters and big-box stores like Kohl's, Target and J.C. Penney disappointed.
"It's the higher income consumers that are carrying the day and the luxury stores that show the results," added Alison Paul, vice-chairman of Deloitte's retail & distribution sector.
Target's same-store sales fell short of estimates despite an extremely busy Black Friday shopping weekend, when high-end items like the 8GB iPod Touch, Westinghouse's 46-inch LCD HDTV and the Leapster Lappad were among the bestsellers.
I braved Black Friday!
Doorbuster deals and promotions may have driven foot traffic and sales to retailers like Target at the end of November, but as most consumers reconsider their budgets, there will likely be a lull in the next few weeks, Bines said. "We're not off to the races, let's put it that way."
For now, the National Retail Federation said it is sticking with its earlier forecast for overall holiday retail sales to increase 2.8% to $465.6 billion during the months of November and December.
To keep consumers in the shopping spirit, here are some of the post-Black Friday deals retailers are rolling out:
Target announced another toy sale Thursday, where shoppers can buy one get one half off from Dec. 4 through Dec. 10. The discount giant also said it would feature one deeply-discounted toy a day in stores and online until Christmas.
Toys R Us said it will kick off "Super Sale Saturday" starting at 6 a.m. Dec. 3, with over 85 doorbusters like $30 off Razor scooters, buy one get one free on packs of Moshi Monsters and buy one get one half off on Uglydolls.
Best Buy is offering free smart phones throughout December with the purchase of a two-year plan and Amazon is launching "Holiday Flurry Deals Week" starting Sunday, Dec. 4. That's in addition to free shipping offers throughout the month from retailers across the board, including Wal-Mart
In the Markets today:
Stock and bond markets opened a crucial week flitting between hope and worry on Monday as conflicting news from Europe left investors puzzled over a possible solution to the euro zone's debt crisis.
Wall St up but warning on Europe chills rally-From Reuters
Socks gained on Monday, but the day's rally was dampened by news that Germany and other top-rated European nations could see their credit ratings cut.
Stocks have tied their fortunes to a hoped-for resolution of the European debt crisis. Optimistic investors bought shares in the morning after French President Nicolas Sarkozy said Germany and France had come to an agreement on tighter fiscal controls for the euro zone, to be voted on Friday.
But the Financial Times and other reports of potential downgrades for every euro-zone nation hit markets hard by late afternoon, erasing part of the day's gains.
After the market's close, Standard & Poor's placed the sovereign ratings of Germany, France and other euro zone nations on "credit watch negative," the step that precedes a downgrade. Stock index futures edged lower after the news.
"The market felt in some ways it was past these worries for the time being, and now they'll have to revisit them, or at least churn them over in their minds," said Bruce Zaro, chief technical strategist at Delta Global Asset Management in Boston.
Markets have struggled with the euro zone's crisis for months. Hope that European policymakers were entering an endgame sent the S&P 500 to its best week in almost three years last week with a rise of 7.4 percent.
The S&P financial sector (.GSPF), up 2.1 percent, still led gains for the day. Shares of Citigroup (NYSE:C) rose 5.9 percent to $29.83, while shares of Morgan Stanley (NYSE:MS) gained 6.8 percent to $16.57.
The Dow Jones industrial average (DJI:^DJI) was up 78.41 points, or 0.65 percent, at 12,097.83. The Standard & Poor's 500 Index (SNP:^GSPC) was up 12.80 points, or 1.03 percent, at 1,257.08. The Nasdaq Composite Index (Nasdaq:IXIC) was up 28.83 points, or 1.10 percent, at 2,655.76.
All three indexes were trading well above 1 percent around midday.
After the close, stocks futures inched lower with the announcement of the possible downgrades euro zone nations. S&P 500 futures slipped 0.5 point and were about even with fair value.
"At this point I can't say anybody would be surprised. All of these governments have fairly significant debt as a percentage of their GDPs," said Fred Dickson, chief market strategist at the Davidson Cos. in Lake Oswego, Oregon.
Still, investors are hoping the EU agreement will pave the way for the European Central Bank to buy large amounts of government bonds.
Among other gainers, MetLife Inc's (NYSE:MET) stock advanced 3.7 percent to $32.92 after the largest U.S. life insurer forecast 2012 earnings growth of as much as 7 percent, though its fourth-quarter outlook was below expectations.
Shares of SuccessFactors (NYSE:SFSF) surged 51 percent to $39.75 after Germany's SAP (SAPG.DE) announced a $3.4 billion cash deal to buy the Web-based software company.
About 7.18 billion shares traded on the New York Stock Exchange, NYSE Amex and Nasdaq, below the current daily average of 7.96 billion shares traded per day.
Advancing stocks outnumbered declining ones on the NYSE by a ratio of about 4 to 1 and on the Nasdaq by about 9 to 4.
Top financial story of the day:
Ratings Firm, Criticized for Laxity During Financial Crisis, Cites 'Systemic Stresses' in the Region.
S&P Warns on 15 Euro-Zone Nations-From The Wall Street Journal
Monday's euro-zone downgrade warning by Standard & Poor's Ratings Services is a muscular move by a firm that was pilloried for its supposed laxity in the financial crisis.
S&P put the long-term sovereign-debt ratings of 15 euro-zone nations, including struggling Italy and Spain, on negative watch. That typically means there is at least a 50% chance of a downgrade within 90 days, but the firm said Monday that it expected to announce any rating changes "as soon as possible" following this week's European Union summit, where policy makers are expected to lay out plans to enforce stricter budget rules.
S&P said the long-term ratings on Germany, Belgium, Austria, Finland, Luxembourg and the Netherlands aren't likely to fall by more than one notch, if at all. But it flagged a potential two-notch downgrade for France and other euro-zone nations.
S&P appears to view the summit as a "make or break" event for the euro zone, said Kathy Jones, a strategist for Charles Schwab & Co.
Some investors warn that the threat of lower ratings could intensify market pressure on stretched government borrowers such as Italy. Its 10-year bond yield soared last month above a market pain point of 7%, before retreating in the past week.
"The timing is bad," said Douglas Coté, chief market strategist for ING Investment Management. "The trajectory was positive for fixing the euro zone" before Monday's action, he said.
The firm said in its report Monday that the move was "prompted by our belief that systemic stresses in the euro zone have risen in recent weeks to the extent that they now put downward pressure on the credit standing of the euro zone as a whole."
S&P and its chief rival, Moody's Investors Service, have been criticized for assigning overly optimistic ratings to mortgage-linked securities that later imploded during the financial crisis. That scrutiny has picked up as the euro crisis has intensified, leaving some investors questioning Monday's move. "It does seem as though they are being particularly aggressive in terms of their ratings changes," said Ms. Jones of Charles Schwab.
Moody's declined to comment Monday on S&P's move.
The European Commission has sought to push back against the rating firms' downgrades this year, with commission officials criticizing a series of rating moves and questioning in particular the motives behind the timing of some decisions.
Last month, the commission published a third round of proposed regulation of the industry, including efforts to tighten oversight of the ratings firms' methods and to force companies to rotate the firms they use. But Internal Markets Commissioner Michel Barnier was forced to shelve at the last minute a proposal that would have allowed the EU's main supervisory agency to suspend the ratings firms from issuing sovereign ratings if a country was in talks on a bailout.Those proposals still are awaiting debate by member states.
The commission also promised to ensure lessons would be learned from an incident in which S&P erroneously announced it had downgraded France's triple-A-rated sovereign debt, saying that this underlined investors' overreliance on a small group of dominant ratings firms.
That episode—along with S&P's controversial August downgrade of the U.S.'s triple-A rating—has increased scrutiny of the firm.
The Securities and Exchange Commission is probing possible insider trading within S&P and by investors ahead of its downgrade of the U.S., according to people familiar with the matter.
S&P has said it has "robust policies" in place to prevent insider trading. The firm has also said that it is in "regular communication" and cooperates with inquires made by regulators.
S&P has continued to face criticism of its downgrade of the U.S. But after the failure of the so-called supercommittee in Congress to agree to budget cuts, some investors said the firm's reasoning was prescient. That failure was triggered by the same kind of political gridlock that led S&P to cut the
U.S.'s rating amid concerns that lawmakers aren't able to effectively tackle the country's growing debt.
Since then, S&P has had at least two additional—albeit less high-profile—errors. On Nov. 16, S&P said it had assigned a B-plus rating to Ukrainian bonds that don't exist. Two days later, S&P said in a statement that it "corrected this error and removed all references to these notes and these ratings."
On Nov. 17, S&P erroneously said in the headline of a report that it had upgraded Brazil's rating to triple-B-minus—the rating the country already had. S&P later sent out a report with the correct headline—that it had upgraded Brazil to triple-B.
Despite the controversy attached to many of the firm's moves, there are questions about how much ratings actually matter in the market. The yield on the 10-year U.S. Treasury note, for instance, has dropped to around 2.04% recently from 2.58% in the days before the S&P downgrade.
"What the markets have told you, is that maybe S&P's sovereign ratings don't matter that much in terms of pricing," said Bonnie Baha, head of global developed credit at DoubleLine Capital LP.
Quote of the Day from Dave Ramsey.com:
I've learned that you shouldn't go through life with a catcher's mitt on both hands; you need to be able to throw something back. — Maya Angelou
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