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 (NYS: 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 (NYS: 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.
The article This Stock Is No Turkey originally appeared on Fool.com.
Alex Dumortier, CFA has no positions in the stocks mentioned above; you can follow him @longrunreturns. The Motley Fool owns shares of Citigroup Motley Fool newsletter services recommend Lowe's Companies. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.
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