MORNING COFFEE

Today is the last day of trading for 2009 and the markets a poised to post a remarkable comeback for the year.  From the March lows the Dow has gained over 60% and should post a 20% return for the year.  While the S&P 500 is set to post 25% returns for the year.

GMAC Gets More Cash.  As expected auto and mortgage lender GMAC, which is jointly owned by Cerberus and General Motors received an additional $3.8 billion in bailout funds bringing the total received by the company to over $12 billion. The Tresuary also said it would convert enough existing preferred stock into common equity to raise its stake to 56% from 35%, making it the majority shareholder. This was the third bailout the troubled company received for its Ally Bank and ResCap units.

No Fox Network On New Year’s Day.  It appears that a deal will not be in place between News Corp. (NWS) and Time Warner Cable (TWC) setting the stage for NWS programming to be pulled on News Years Day.  This would leave millions without the college football bowl games and Fox News. News Corp wants TWC to pay $1 per subscriber per month for its shows, which would set a new precedent in an industry that has thus far relied primarily on ad revenue.

Chicago ISM Topps Estimates.  Midwest business activity expanded far more than expected in December, hitting an almost four-year high.  The ISM’S Chicago index rose to 60 from 56.1 in November, vs. economist consensus of 55.1. Employment posted the biggest monthly gain in more than a year.  All index components are now in expansion, except for inventories, but the most encouraging news came from the labor component, which jumped to 51.2 from 41.9, breaking the 50 threshold for the first time in 24 months. 

·         Futures at 8:36: Dow 10501.0 +11.00 S&P 1124.3 +2.2001, Nasdaq 1879.0 +2.25
30-year Tsy -0.27% to 115-18. 10-year -0.13%. 5-year -0.09%.
Euro +0.6% vs. dollar. Yen +0.3%. Pound +0.8%.
Crude +0.2% to $79.40. Gold +1.3% to $1,106.60.

·         Asia: Shanghai +0.5% to 3277. BSE +0.7% to 17465. Hong Kong and Japan were closed.

·         Europe at midday: FTSE +0.1% to 5402. CAC +0.2% to 3944. Frankfurt is closed.