Market Wrap-Up for Dec.5 (FCX, AAPL, C, ALTR, TRV, more)

Market Wrap-Up for Dec.5 (FCX, AAPL, C, ALTR, TRV, more)


There were plenty of storylines developing in today’s tape, and the overall theme certainly had the bears feeling a bit of vindication in some areas.

First, a big double acquisition had shares of Freeport McMoran (FCX) getting hit hard (down 16%) as investors try to determine how risky a move this will end up being for the commodity giant. We also have news of 11,000 job cuts from Citigroup (C) as the company terms the move part of its “transformation.” Citi shares were indeed higher, but that’s little joy for those looking to the unemployment line.

The other big story today had Apple (AAPL) getting hit hard (down 6%) amid various reports that brokers are raising margin requirements on the shares. In an effort to reduce speculation (which likely means there have been some margin calls not being met), brokers want to require traders/hedge funds to have more capital in their accounts in the event of further share price drops. The market is certainly spooked by the news as shares of Apple are down about $25, or -4%.

In other news, semiconductor play Altera Corp (ALTR) ended lower following the company reducing its Q4 guidance. Finally, shares of Travelers (TRV) bucked the early weakness following the company updating the losses they will see from “Hurricane Sandy.” Some analysts were expecting the hit to be a bit harder on the insurance giant.

Window of Opportunity Shrinking for College Grads

Some recent student loan debt data could spell big trouble for those who fail to take advantage of the higher education they paid up for. Consider that student debt in the 30-39 year-old demographic group now exceeds the debt of the under 30 age group. Moreover, the under age 30 group now accounts for less than a third of the overall student debt.

Older student loan debt certainly seems to be sticking around much longer than it used to. Plus, career and family expectations are changing dramatically. When someone reaches their 30′s, we normally expect them to be five to ten years into their career. We’d also expect the person to be settling down (marriage, family, buying their first home, investing toward their retirement). Now we see demographic data spelling out the opposite picture.

Good jobs are getting harder to come by. More people are staying single well into their 30′s. The birth rate in the U.S. continues to drop. Buying a home isn’t even a distant consideration for many (in fact a growing number are still living at home with parents well into their 30′s). And most folks in their 30′s will probably admit they’ll likely need to work well into their 70′s.

The situation isn’t great, but success and wealth are by no means impossible to reach. I bring up these realities to help create a sense of urgency for those who aren’t following the right path (or perhaps you have children and grandchildren who need a kick in the behind). Procrastinating used to not hurt you so much years back, but in today’s world of limited opportunities, people need to focus on their goals sooner rather than later. Fortunately some will have the benefit of their parents’ good financial fortunes to help them buy time, but that line is beginning to blur much more seriously as funds can quickly dwindle.

The environment of today requires hustle, sacrifice, and persistence to achieve the financial freedom previous generations were able to nail down. Avoid the mentality that the government is waiting with check in hand. Let your ambition dictate where the real opportunities lie. The window of opportunity is closing all too quickly for far too many.

Thanks for reading everybody. I’ll see you tomorrow!

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