Chart Source: CalculatedRiskBlog.com

Retail sales rose 1.3% for the month of November following a 1.1% gain in October, reinforcing consumer confidence in the market. After the GDP rose 2.8% in the 3rd quarter Analysts forecasted slow growth for the 4th quarter and half of the 1st quarter of 2010. Analysts believe that a double digit unemployment, currently at 10% would weaken consumer spending. Data from the 4th quarter will be a better indicator to forecast next year. Quick break down of sales for November as follows;

Auto Sales –>  +1.6%

Department Store Sales –> +0.7%

Electronic/Appliance Store Sales –> +2.8%

Hardware Store Sales –> +1.5%

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Initial claims for the week ending on Dec. 5 unexpectedly rose by 17000 to 474000. However, in the last 5 weeks the average claims filed have fallen to the lows of the year. This can be seen as an indication that companies are gaining confidence in the economy, and given that most companies have trimmed the fat enough to maintain day to day operations making more cut unrealistic. Therefore, one can justify a peak has occurred or by the first quarter of next year! Don’t be frightened if there is a spike in claims next month that will attributed seasonal employees. Keep in mind just because we hit a peak doesn’t mean were out of the water, economy still has 10% of unemployed Americans looking for jobs. That’s where the challenge lies!

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The Federal Open Market Committee (FOMC) predicts maximum and minimum outcomes in regards to GDP, unemployment rate, and inflation.

Last month the Federal Reserve forecasted economic growth and lower unemployment for next year. The Fed’s have projected unemployment to improve as follows:

• 2010: 9.3%-9.7%
• 2011: 8.2%-8.6%
• 2012: 6.8%-7.5%
• Post 2012: 5%-5.2%

What do you think? Are the Fed’s overly optimisitc, on target, or out of the water?

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Check out this animation showing the progression of unemployment from Jan. 2007 to present. This animation does a great job of identifying worst hit regions as a result of the current economic conditions. Its organized by counties.

Click on Image for Animation

Source: AmericanObserver

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AIG crashes nearly 15% to settle at $28.40 as a result of a report released by analyst Todd Bault of Bernstein Research. Todd Bault told investors that he downgraded AIG’s target price from $20 to $12 because of significantly deficient loss reserves. Bault foresees AIG’s loss reserves are short $11 billion, which translates close to $10 per share. Bault was also quoted saying that this was a “big surprise” with “significant implications.”

AIG has received $82 billion in taxpayer bailout funds. Therefore, one can classify this company as government owned. This wouldn’t be a stock I would recommend investing in for the long run. However, if you’re a day trader this would be a stock for you!

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On Thursday Ben Bernanke the Federal Reserve chairman will testify in front of the Senate Banking Committee in regards to his nomination for a second 4 year term. This might play out as a bumpy road for the chief, given this weekend Senator Bernie Sanders announced that he would not vote for Bernanke. Stating that Bernanke “didn’t do anything to preventing us from sinking into this disaster that Wall Street caused,” and that Bernanke was part of the problem.

Now Senator Sanders is an independent so it will be very interesting to see how republican and democratic senators will feel this week.

The Fed’s role in the economy has greatly grown with new powers, one obvious example would be the financing of emergency bailout bills for major financial institutions. Politicians have begun to criticize the Fed’s policies and power and want to expose its decisions. The question to ask is, “is this a renomination for Ben Bernanke or for the Federal Reserves new policies?”

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Cell Therapeutics (CTIC) is a biopharmaceutical company based in Seattle, WA since 1991. Cell Therapeutics Mission Statement; “CTI is committed to developing, acquiring, and commercializing innovative treatments for cancer. In our pursuit of making cancer more treatable, we are developing a diversified portfolio of oncology products focused on identifying and developing new, less toxic, and more effective ways to treat cancer.”

CTI has 3 promising cancer drugs on the horizon.

1. Pixantrone, which is under phase III clinical trial. Pixantrone has recently been sent and accepted to the U.S. Food and Drug Administration (FDA) for standard review their New Drug Application (NDA) with a Prescription Drug User Fee Act (PDUFA) action date of April 23, 2010.

Pixantrone was developed for potential treatment for non-Hodgkin’s Lymphoma.

2. OPAXIO™, which is under phase III clinical trial is being studied as a potential treatment for ovarian, non-small cell lung (NSCLC), and other cancers.

3. Brostallicin, which is under phase II clinical trial. Brostallicin was developed with the intentions of being a useful combination with newer/targeted cancer therapies and treatment for common tumor types.

Major Partnership

Novartis headquarter in Basel, Switzerland is one of the world’s largest healthcare/pharmaceutical companies. Novartis has shown great interest in CTI, in 2006 both companies agreed on a partnership deal. Novartis would have exclusive worldwide development and commercialization of OPAXIO, and in addition to that, the agreement allows Novartis the option to develop and commercialize Pixantrone. The agreement resulted in a $15 million equity investment in CTI.

Additional Partnerships

In 2007 CTI acquired System Medicine. Including collaborations with;

Nerviano Medical Sciences, Milan

The Translational Genomics Research Institute (TGen)

The Cancer Drug Development Laboratory

TGen Drug Development Services

The Molecular Profiling Institute

Critical Path Institute

For a long term investment CTIC with a stock price under $1 is a steal! It has a lot of potential for growth, success and profit. Oh! And did I mention a possible buyout will always be on the table, especially with Novartis’s strategic partnership. So lookout for surprises after the FDA’s decision on Pixantrone in April 2010!

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