ISM! Construction Spending! Dead Birds!

We have metrics on a Monday morning! Inconceivable![1] This is not a normal thing.

And what is it we're going to have? The Institute for Supply Management's manufacturing survey for December 2010 (expected to climb 60 bps to a level of 52.2) and Construction Spending (expected to be increasing, but with the rate of increase slipping to be up only 0.1%). The ISM survey is a huge market mover, because its seen as indicating the health of the manufacturing sector. Construction spending isn't as huge, although it is still examined. Rising construction spending is seen as an indicator of economic health and stability, but it doesn't point to the same sort of economic trickle-down that you would expect from - say - new home sales. Still, the Street will be disappointed if construction spending is unexpectedly bad. Particularly if the manufacturing survey misses expectations.

How did we actually do? The ISM Manufacturing Index came in at 57.0, missing expectations (but not badly). Construction spending handily beat expectations, coming in at 0.4% increase.

Looking to the news, China[2] has committed to continue to prop up Spanish soverign debt. "China is a responsible, long-term investor in the European financial market and particularly in Spain, and we have confidence in the Spanish financial market, which has meant the acquisition of its public debt, something which we will continue to do in the future," was the statement from Chinese Vice Premier Li kequiang.

Barron's has decided to join the "well, duh" club early with a news item predicting that, when the government begins selling off the $70 billion worth of AIG stock it owns, the price per share of AIG could drop. I'm sure everyone appreciates their insightful commentary.

Bank of America is back in the news, this time paying $1.28 billion to Freddie Mac as part of an agreement to end all claims related to mortgages sold by Countrywide[3], and also plans to record a Q4 "goodwill impairment charge" of $2 billion to its home loans unit. On the plus side for BofA, these particular bad loans weren't their fault. On the minus side, I'm not sure how much good will they have left to impair.

Look for the commercial real estate market to boom, based on the fact that the Association of Foreign Investors in Real Estate found that the United States is overwhelmingly the number 1 investment choice for overseas investors. That (probably) means climbing construction spending in 2011.

Oil is up above $92 a barrel, with some investors anticipating it will get as high as $100 per barrel. Coincidentally,[4] Russian Energy Ministry data showed that Russian oil output rose 2.2% in 2010 to a record 10.145 million barrels per day.

And finally, the city of Beebe, Arkansas rang in the New Year by watching about a thousand dead red-winged blackbirds drop out of the sky. Stone dead. For no reason anyone has been able to figure out, yet. Charles Fort would be proud.

[1] "You keep using that word. I do not think it means what you think it means."

[2] Still not wanting to replace the US as the sole economic and military superpower in the world.

{3] Specifically described as mortgages sold with faulty paperwork and other problems.

[4] I think not.

Trading In A Winter Wonderland. Sorta. More Or Less.

Stock performance on Wall Street was mixed today (the Dow was down 18.46, the NASDAQ was up 1.67, the S&P 500 up 0.77, and the 10 Year Treasury Yield Index down 0.42), with blame being placed squarely on God and China.

God gets the blame because of a series of blizzards that have brought the Fimbulvetr[1] to the eastern coast of Canada and the United States. It's cancelled over 2000 flights, disrupted road and rail traffic, left tens of thousands of homes across the eastern seaboard without power, and - worst of all - threw a monkey wrench in the post-Christmas holiday sales. Yes, that's right. This massive blizzard could "push December 26 out of the running for one of the top 10 shopping days of the year." Sure puts that whole blizzard in perspective, doesn't it?

And China[2]? Well, they get the blame because - in what is obviously a Communist plot[3] - went and raised their benchmark lending rate and their benchmark deposit rate by 25 basis points each. Never mind that the Chinese central bank has been concerned about inflation, and so is taking steps to reign it in and keep their economy healthy. No, this was obviously a Communist plot deliberately timed to strike our economy at the same time as the blizzard[4].

Of course, things happened throughout the world without regard to the blizzard. Let's see what else is going on.

H&R Block was down 7% today on news that, thanks to the Office of the Comptroller of the Currency, they will not be allowed to offer tax refund anticipation loans. (Well, specifically, HSSBC can't offer them, and H&R Block uses HSBC.)

18 alleged militants were killed by missiles fired by US drones at the Mir Ali village in Pakistan. The people of Pakistan are not particularly amused.

Anyone remember AIG? Practically the poster child for the 2008 financial collapse? Something like 30 banks have banded together under the administration of JPMorgan Chase & Co to loan them $4.3 billion. That's "billion". With a "b". Assuming they can pay off their Federal Reserve Bank of New York credit line ($20 billion) by March 31.

Also, according to the European Union Times, it appears that WikiLeaks is set to reveal that the United States has been in a covert war against Antarctican UFOs since 2004.

[1] "Hard is it on earth, with mighty whoredom;

"Axe-time, sword-time, shields are sundered,

"Wind-time, wolf-time, ere the world falls,

"Nor ever shall men each other spare" sure seems to describe the current state of the economy.

[2] Still not wanting to replace the United States as the single dominant economic and military superpower in the world.

[3] Obviously.

[4]