Ahead of Wall Street - November 28, 2011 - Ahead of Wall Street

Monday, November 28, 2011

Market sentiment is looking up today given reports of a solid start to the holiday shopping season. The headlines out of Europe also appear to be favorable this morning, but it is difficult to read much into them.

With the domestic economic scene no longer a major concern for the market, it is the unsettled European scene that is keeping everybody on edge. The Euro-zone leadership, particularly Germany, has been unable thus far to reassure the markets of its determination to turn the situation around.

Today's optimism stems from reports that leaders of Germany, France, and Italy have agreed on plans for greater budgetary integration without going through time consuming treaty changes. It is still too early to get overly excited about these reports. But any meaningful progress in tackling the Euro-zone's lack of fiscal integration will address one of the key structural weaknesses of the currency union.

On the domestic economic front, the focus this week will be on the labor market, with the November non-farm payroll report on Friday. We will get readings on housing, consumer confidence, and the manufacturing sector. The overall tone of economic readings has been quite favorable lately, effectively removing the double-dip recession fear from the market discourse.

Reports of a solid start to the holiday shopping season further confirm this trend. According to the National Retail Federation, sales over the Thanksgiving weekend were up 16% from last year's level. The total dollar spending of $54.2 billion over the Black Friday period is reportedly largest ever.

Given the positive Black Friday numbers, the odds of an even better showing on Cyber Monday have significantly improved. It will be interesting to see how Amazon ( AMZN ) does today. In other corporate news, Netflix ( NFLX ) warned on Friday of a loss in 2012 and also announced plans to raise capital through bond and equity issues.

Sheraz Mian

Director of Research

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NETFLIX INC ( NFLX ): Free Stock Analysis Report

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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