Markets generally adopted a slightly more defensive tone on Friday. In the US, utilities and consumer stables managed small gains, but financials, consumer cyclicals and IT fell. Intel (INTC) dropped 2.9%, the steepest retreater in the Dow, as Bank of America (BAC) said computer-chip supply may overwhelm demand. Dell (DELL) tumbled 7.2% after profit decreased by more than half and a larger than expected loss at US home builder DR Horton (DHI) hurt their stock. In aggregate the US market did manage to pare most of the losses, however, after the Labour Department reported a decline in mass layoffs. There was no first tier data. I did note that the ECRI's weekly leading indicator remains elevated, albeit with signs that it might be rolling over.

Gold surged another $13 in Asia this morning to a new high and oil is up on Iranian war games. US stocks look primed for a triple digit day with of course basic resource stocks and oil producers likely to be at the vanguard of the move with the weaker Dollar / strong commodities bullish risk assets correlation trade, again. We've also just had the Existing Home Sales data which blew expectations out of the water with a 10.1% month on month gain to 6.1 million against expectations of a 2.1% rise to 5.7m. More BBQ lighter fuel to throw on the bulls fire today.

Hewlett Packard (HPQ) (expected EPS $1.13) and Analog Devices ($0.26) report after the bell. Activity may be light, with a holiday in Tokyo and Thanksgiving on Thursday in the US.

Today's Market Moving Stories

• The US dollar was generally softer today following comments by the Fed's supposed hawk Bullard over the weekend. He said that "I have advocated to keep the asset purchase program open, but at a very low level, and wait and see what happens, and as information comes in about the economy we can adjust that program while the federal funds rate remains at zero". Bullard will be a voting FOMC member next year and his comments are in line with his dovish views expressed last week, suggesting that the Fed may not hike until 2012. These comments contrast with tighter ABS collateral rules slated for March 2010 by the ECB on Friday, and suggest a test of the peaks in EUR/USD towards 1.5050.
• A Bloomberg article notes that increasingly the big Dow components with large foreign earnings will emerge as outperformers as the value of these revenue streams when reported in Greenback terms increases. They cite McDonald's (MCD) and Caterpillar (CAT) as examples of the winners in the face of continuing Dollar weakness. In brief UPS are putting up prices and AT&T (T) may be undervalued opining that fears over their exclusive tie up with Apple (AAPL) which is due to expire next year are overdone. They also carry a piece on regional bank BB&T which claims it may be as much as 30% "undervalued".
• Overnight from China, Yu Bin, researcher at the State Council Development Research Centre said that GDP growth will reach 10% in Q4 and will grow even faster in Q1 next year (following growth of 8.9% in Q3).
• This morning, data wise, we had the Euro area advance PMI for November which saw manufacturing PMI rise to 51.0 from 50.7 in October, broadly as expected. Services PMI rose to 53.2, the highest in two years and above forecasts. Overall the estimates are consistent with activity expanding at an accelerating pace from October. However, the pace of improvement slowed.
• The UK Government might have broken international trade law with its bail-out of the British banking system, it has emerged. Under World Trade Organisation (WTO) rules, the Government may have been guilty of financial protectionism when it rescued Royal Bank of Scotland and Lloyds Banking Group. If challenged and found guilty, the UK could face trade sanctions or having to overhaul the semi-nationalised banking system significantly.