Market Talk

On Tomorrow’s News Today, Eduardo Kaplan and Madeleine Lim discuss some positive economic reports, including the latest US housing data, and economic figures from the Organization for Economic Cooperation and Development.

Yes, all twenty of us don't feel too hardy.

We know, it sounds like a broken record, but the weak US dollar continues to help fuel sporty advances for US stocks. And with nothing to bolster the buck in the foreseeable future, expect this dynamic to remain, with some short-term reversals.

While gold also ran higher again on USD’s debility, and oil futures enjoyed an early pop, it was interesting to see a lack of conviction toward the black gold; it ended the session with just a paltry gain.

Good rally for US stocks, though volume remains unimpressive and they finish below session highs, which came shortly after October existing home sales printed a 10% gain.

And while the supply of existing homes appears to be culled considerably, the Mortgage Bankers Association noted last week that the number of seriously delinquent mortgage loans rivals the number of new and existing homes currently for sale. Doesn’t bode well for a bottom in prices.

Revised 3Q GDP, Case-Shiller Sept home-price index, consumer confidence a few items on tomorrow’s calendar.

DJIA rises 132.79 to 10450.95, and Nasdaq Comp climbs 29.97 to 2176.01. S&P 500 ends 14.86 higher at 1106.24.

By Steven Russolillo and John Shipman

Peter Schiff’s accuracy in predicting the housing bust, and his free-market views are well-documented. And so are his views on abolishing the Fed, so it was hard to pass up a chance to see him share a panel discussion in Manhattan last night with St. Louis Fed President James Bullard and former Fed Vice Chairman Alan Blinder.

Topic was financial regulation in response to the crisis, but in a way it was “The Peter Schiff Show.” After Bullard and Blinder offered up thoughts and some proposals on regulation, Schiff, the head of Euro Pacific Capital, wasn’t shy about sharing his disdain for the Fed and government interference in financial markets in general.

“It’s funny, Blinder has worked for two entities (Council of Economic Advisors and the Fed) who I would love to see abolished,” Shiff said, drawing a smirk from Blinder.

The economy should’ve been allowed a “cleansing recession” after the tech bubble burst, Schiff said, but the Bush administration and Fed were loathe to allow it. Instead, they inflated a real estate bubble via prolonged low interest rates. And now the Fed and Obama administration are making the same mistake again by “rewarding debt and punishing saving, which needs to end,” he said.

Certainly, leaving market forces to act and the economy to fix itself after the tech bubble would’ve probably resulted in a longer, more painful recession, he admits, but the nation wouldn’t now be saddled with massive debt spiraling higher, which ultimately will further weigh down the dollar.

Schiff sees an impending currency crisis in addition to the financial crisis, and rather than individuals losing their money, “the money will lose its value.”

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Should News Corp cram all this print into Bing?

The reported discussions between Microsoft (MSFT) and News Corp (NWS NWSA) concerning a partnership that would remove newspaper web content from Google (GOOG) is a bold move that likely has several hurdles to overcome.

Essentially, Microsoft would pay News Corp to exclusively feature its newspaper content on its online properties, which would bolster Bing’s presence in the search market. But this exclusivity would likely come at a steep price for Microsoft, and it’s not known how much the software giant would be willing to splurge on such a deal. And newspapers would also have to deal with the lost traffic that comes with avoiding Google.

“While there is a lot of mutual interest, it’s doubtful Microosft is going to pay to ‘rent’ a corpus of content that it does not own,” one source close to the situation told All Things D reporter Kara Swisher. “The economics are not there for anyone.”

News Corp owns Dow Jones, publisher of this blog.

The idea “merits high marks for creativity,” Newsosaur blogger Alan Mutter says, but also seems unlikely it’ll actually happen.

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US dollar index sharply lower, while gold, oil and stocks all spike higher in a now all-too-familiar market dynamic.

Brief but busy week ahead, with loads of economic data jammed into the next couple of days; this morning brings October existing home sales at 10:00am, expected to be up 2.3%. Hewlett-Packard reports fiscal 4Q results after the close.

Equities markets generally higher in Asia overnight and currently strong in Europe. US dollar index down 0.7% at 75.11. S&P futures up 11.50; Dow futures up 96; 10-yr lower, yield at 3.38%.

St. Louis Fed President James Bullard’s comments late Sunday that he’d like to see the Fed’s asset-purchase program extended — albeit at low level — beyond end-1Q cutoff may be contributing to pushing the dollar lower.

The comments also contrast with Friday’s comments by European Central Bank President Jean-Claude Trichet, who flagged eventual withdrawal of liquidity support.

Gold and EUR/USD got a boost from Bullard; publication of FOMC minutes Tue will shed more light on how far the debate has evolved on topic within Fed.

(Madeleine Lim contributed to this post.)