Consider Microsoft Corp. During its three fiscal years ending in June, 2005, the company reported spending $18 billion to buy back 674 million shares. At the same time it issued 666 million shares for $8 billion. In the end, Microsoft, which has some 10.6 billion shares outstanding, had reduced its total count by a negligible 8 million shares and had spent just $10 billion—$6.6 billion after tax. Yet Microsoft execs present the gross sums they spend repurchasing stock as being on par with dividends they pay, including the huge $33 billion special dividend in December, 2004. "Many companies are very vocal about the money they spent buying back stock, but they're not very vocal about what percentage of that money goes to counteract options," says Merrill's Osha. Microsoft responded in a written statement that it regularly evaluates its buybacks and dividends to "best meet the interests of its diverse shareholder base."

Annualized 5 year return by asset class

In the government's most comprehensive assessment yet of December consumer spending, the Commerce Department on Friday said sales of $358 billion represented a 6.4% increase from a year earlier -- less than the 8.7% growth seen in December 2004.

But December's sales were up just 0.7% from November on a seasonally adjusted basis, and much of the gain came from a bounce in auto showrooms, where sales had dropped sharply between July and October, and from a jump in sales at gasoline-service stations. Excluding those categories, retail sales inched up just 0.1%.

Sales also appeared to decline in several important categories from November, including general merchandisers, department stores, electronics stores and building-supply stores. The estimates were preliminary and will be updated by the government in February.

Meanwhile, the National Retail Federation, a trade group, said holiday sales started out well in November, thanks in part to heavy promotions at the beginning of the shopping season. But sales ended up flat in December after a lull in the early part of the month. Its figures, which exclude car sales and sales at gas stations and restaurants, show December sales rising 5.7% from a year earlier.

The agreement came as fears over a serious threat to oil supplies from Iran began to rattle the market yesterday, and after India’s Oil and Natural Gas Corp lost out to Chinese rivals in the race to acquire fields in Angola, Nigeria, Kazakhstan and Ecuador. But a recent joint purchase of a stake in a Syrian oilfield by ONGC and the state-owned China National Petroleum Corp could set a pattern for future deals.

On 30-year, fixed-rate mortgages, rates dropped to 6.15 percent this week. That was down from 6.21 percent last week and the lowest level for a 30-year mortgage since late October

Producer Price Index m/m for Dec came in at 0.9% vs 0.4%; PPI ex-food & energy m/m came in at 0.1% vs 0.2% exp.

Producer Price Index y/y for Dec came in at 5.4% vs 4.9% exp; PPI ex-food & energy y/y came in at 1.7% vs 1.8% exp.

Advanced retail sales for Dec came in at 0.7% vs 0.9% exp; Prior reading was revised to 0.8% from 0.3%.

Retail sales ex-autos came in at 0.2% vs 0.4% exp. Prior reading was revised to (0.4%) from (0.3%).

Trade balance for Nov came in at ($64.2) vs (66.1 bln) exp. Prior reading was revised to ($68.1 bln) from ($68.9 bln).

Import price index m/m for Dec came in at (0.2%) vs 0.2% exp; Prior reading was revised to (1.8%) from (1.7%).

Import price index y/y came in at 7.9% vs 6.5% prior (revised from 7.0%).

Initial jobless claims for the week ending Jan 7 came in at 309k vs 315k exp; Prior reading was revised to 292k from 291k.

Continuing jobless claims for the week ending Dec 31 came in at 2702k vs 2681k exp. Prior reading was revised to 2690k from 2718k.

The NASDAQ is battling against the last big high of 2001.  Previous highs gave offered some minor resistance and marked points where the index either consolidated gains or pulled back after slightly surpassing the high.   Overall though, it's tough to be long-term bearish as the index breaks out from such a large triangle consolidation...

In addition, the NYSE is leading all indexes higher.  The NYSE is actually at all-time highs.  But the market is now approaching the upper trendline of the channel it's been carving out since 2004. 

The BLS numbers always talk about people leaving the labor force, if healthy and able, why would one leave the labor force?

To help answer that question, here's a view of who is leaving the labor force:

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Source: Northern Trust

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Who's leaving the Labor Force?  Students, Child Rearing Women, Over-qualified mid-level employees. Who's joining the labor pool? Babyboomers and Retirees. Interesting in these times of uber low interest rates retirees can't make ends meet on their savings therefore, are piling back into the sales force to increase cash flow and pay the bills.

• Fed policy cannot be used to pop bubbles
• Fed policy has to take asset values into account
• Current Fed policy complicated by asset prices
• Asset price doubts widen the the range of neutral Fed rate
• Low risk premium for assets complicates the Fed's outlook

John Succo has correctly pointed out that it takes more and more money creation to keep the asset machine rolling. One can only wonder what M3 growth will be when Big Ben takes over next month.

According to Reuters, Kirk Kerkorian advisor Jerry York says General Motors (GM) is a "voracious consumer" of cash, and the company needs to funnel it into funding a restructuring. York also says the company should cut its annual $2 dividend by half.

York says GM needs to conserve cash. It was earlier reported, and has been widely expected that York, during his speech at the Auto Show today, would recommend GM cut its dividend.

S&P expects 53.7% growth in energy firms' fourth-quarter profits.

Van Dijk looks at the median firm in a sector, instead of on a total earnings basis. He expects technology to show continued strength, while health care "will kind of chug along."

Health care profits are expected to climb 25.3%, according to S&P, while tech earnings rise 10.8%. Financials are slated to gain 6.3%.

Consumer discretionary profits are expected to grow 6.3% while consumer staples actually fall 5%, says S&P.