Beta Trade Is Waning

This current rally is not progressing at the same rate as earlier ones,according to Carter Worth of Oppenheimer.The good eating's been had.We're not getting quite the torque that you would anticipate,given the news.The market keeps bumping up against 1100 on the S&P.People are rotating out of the beta trade-the speculative trade-into the more established,recognizable names.It's a maturing of the rally,Mr.Worth believes.
Everything is starting to participate,in Carter Worth's view.That's where you get into the stall speed.You should double back and pick up large cap laggards such as Wal-Mart.2003 was a big recovery year.By 2004,hyper-correlation broke down.We think this everything trade starts to break down in 2010,Mr.Worth noted.
In fact, the S&P did break above 1100 this morning.It remains to be seen,though,if it can close there.

Pfizer's R&D Empire

Drug colossus Pfizer has a sprawling research and development segment.Within its two R&D divisions,PharmaTherapeutics and BioTherapeutics,the company is investigating treatments for a host of ailments.The research units in each of the divisions include Allergy and Respiratory;Antibacterials;Biocorrection;Cardiovascular Metabolic&Endocrine Diseases;Genitourinary;Inflammation and Immunology;Neuroscience;Oncology;Pain;Tissue Repair;and Vaccine Research.PharmaTherapeutics is concerned with small molecule therapies,while BioTherapeutics handles large molecule therapies.
Pfizer recently closed on its acquisition of rival Wyeth and is busy integrating the two firms' research and development activities.This will result in the shuttering of six facilities and some 2,000 layoffs.Facilities to be closed are located in New York,North Carolina,New Jersey and the U.K.The company is headquartered in New York City,under CEO Jeff Kindler.

Trade Group Tracks Progress

The Institute for Supply Management,a buyers' trade group,has recorded gains in the manufacturing sector for the third straight month.The October reading for the sector came in at 55.7,up from 52.6 in September.The October estimate had been 53.0.Readings above 50 indicate growth in manufacturing.October's number was the highest since April 2006.
The growth tracked by the ISM was attributed to stronger U.S. exports,inventory restocking and government stimulus programs.It manifested itself in expansion of manufacturing employment for the first time in 15 months,registering at 53.1 in October,up from September's 46.2.
The ISM is located in Tempe,Arizona,which is adjacent to Phoenix.Its reports are based on surveys of hundreds of businesses.

Federal Reserve Stays Friendly

The slower pace of job destruction is good news,says Paul McCulley,Managing Director at PIMCO,but the rate north of 10 bakes in the cake that the Federal Reserve is gonna be friendly for a very extended period of time,which is very good for price-to-earnings values.The recent employment data reinforce the idea that the recovery will be slow.
We're gonna see the extension of various government programs,Mr.McCulley predicts,not a mega-package.If the unemployment rate continues to go up,however,we will see a mega-package in the next 6-12 months.The Fed can be incredibly patient and nurturing of this economy.It is being responsible in being accommodating.Money is being horded,given the 10% unemployment rate,which prevents inflation.
Bonds have had an amazing run,Mr.McCulley observed.Investors should start harvesting gains.The train has not only left the station;it's at the next station,in Paul McCulley's opinion.
The stock market surged this morning,apparently as comfortable with Federal Reserve policy as Mr.McCulley.

Coke Continues Health Push

Coca-Cola is continuing its healthy lifestyle marketing campaign.Coke understands what Americans need today,and is there to meet that need,not just peddle random products.With its signature brand,Coke is offering both low calorie options Diet Coke and Coke Zero,and Coke portion-control cans.
Coke is even introducing a new,all-natural no-calorie sweetener.Rebiana is derived from the stevia leaf and is part of the sweetening for 50-calorie Sprite Green and 10-calorie vitaminwater10.Coke says that,for nearly every beverage brand it sells,it has developed a low or no-calorie alternative.In the U.S. alone,it offers more than 650 sparkling beverages,water,juices,teas and sport drinks.People want variety and choices in all the beverages they drink,the company believes.They have committed themselves to continually providing a variety of options that help people make the right choices for themselves and their families.
Coke has set up a website for this campaign at www.livepositively.com

U.S. Steel Grew Stronger

U.S. Steel posted stronger results in Q3.The Pittsburgh manufacturer's net loss of 303 million dollars,or -2.11 a share,was better than Q2's net loss of 392 million,or -2.92 a share.Its shipments of 4.2 million tons were up 41% from Q2,and net sales of 2.8 billion dollars were up 32% from Q2.Year to date cash flow was 118 million from operations,maintaining the company's strong liquidity position of 12.5 billion in cash and 2.7 billion in total liquidity.
U.S. Steel projected another loss in Q4,although still less of one than Q3's.Output will remain the same.CEO John Surma said that although they currently have more of their facilities operating,with more of their people back to work,demand trends remain uncertain as both the U.S. and global economies struggle to recover.Indeed,U.S. Steel is idling plants in Indiana and Illinois to prevent excess production.The company has major production operations in the U.S.,Canada and Central Europe.

Rally Likely At Peak

The recent stock market uptick is likely at its peak,according to Bill Gross,co-CEO and co-Chief Investment Officer at PIMCO with Mohamed El-Erian.We're seeing the new normal for the economy:slower growth,about half what it used to be.Mr.Gross admitted they try and keep their heads relatively small and shrunken in this business.Overconfidence is the spell of doom.
One may expect a very low return on assets,Bill Gross feels.We've re-normalized,although the price-to-earnings ratios tend to fake us out.To the extent that we see Gross Domestic Product growth at 2% in real terms,versus the old normal of 4%,assets will return less.We're living in an economy of deleveraging.Loans will be less available.Homeowners must put 20% down now,for example.There is a very significant shift in terms of risk preferences and regulation.
Mr.Gross' views are at least partially echoed by other observers of the financial markets.Christine Romer,Chairman of the White House Council of Economic Advisors,says the consensus for GDP growth is in the range of 2-3% for the next four quarters.