Stocks are off to a strong start to this Thanksgiving week: The Dow Jones Industrial Average (INDEX: ^DJI ) and the broader S&P 500 (INDEX: ^GSPC ) are up 1.16% and 1.4%, respectively, as of 10:15 a.m. EST
The macro view
On the macro front, political risk is garnering more attention as the conflict between Hamas and Israel becomes difficult to ignore -- a "risk-off" factor. Meanwhile, on the fiscal-cliff beat, the Financial Times reports that the White House is eyeing corporate tax breaks worth $150 billion over 10 years for repeal. According to the report, President Obama made phone calls to a who's who of CEOs over the weekend, including Berkshire Hathaway's Warren Buffett and Jamie Dimon of JPMorgan Chase, to discuss deficit reduction. Eliminating corporate tax breaks would be a negative for stocks inasmuch as it lowers corporate profits. However, investors would have to balance that with the reduced uncertainty tied to a resolution to the fiscal cliff.
The micro view
Lowe's (NYSE: LOW ) reported results that beat expectations this morning. The nation's second-largest home improvement retailer earned $0.40 ex-items in its fiscal third quarter ended Nov. 2, ahead of the $0.35 consensus estimate. Lowe's also beat on the top line, with revenue of $12.1 billion versus expectations of $11.9 billion. These results are more evidence that the housing market is turning around, although Hurricane Sandy was also a contributing factor. The market likes what it sees: Lowe's shares are up 7% so far today.
Another day, another financial settlement by a top bank harking back to the financial crisis. Citigroup (NYSE: C ) has agreed to pay $360 million to the estate of failed investment bank Lehman Brothers. The payment will end a dispute concerning $1 billion in collateral that Lehman had posted with Citi in the run-up to its bankruptcy. This news is another reminder of why Citi is, in the words of financials analyst Matt Koppenheffer, "not a stock for the faint of heart." To get his full assessment of Citi's risks -- and potential upside -- click here to receive his newly released premium report on the shares, which includes 12 months of updates.