As expected, it has been an uneventful day in the markets.

However, I'd like to take a moment to wish an early Happy Thanksgiving to all our subscribers, contributors, editors and management.

I prefer to stick to the stock market in my Diary musings, but a lot of great things have happened to my family in the last few weeks for which I am truly grateful.

To all my friends, have a healthy holiday and enjoy the time with your families.

Photo credit: Wikimedia Commons

Here's a good pre-Black Friday Knowledge@Wharton article on the changing U.S. consumer.

I'm at the zoo on a family outing right now ... and missing nothing on Wall Street.

Investors traded more than 500,000 shares of the Blackstone/GSO Strategic Creditclosed-end fund (BGB) in each of the past two trading days. That's quite a lot.

I've added to my BGB long almost every day in the last few weeks. I'm hopeful that we're seeing something of a selling climax or a peak in tax-loss selling.

Retail has begun to act better in the last two trading days.

So, I've expanded my long positions in Bed Bath & Beyond (BBBY), Best Buy (BBY), Macy's (M) and Wal-Mart (WMT). (I recently made detailed cases for buying Bed Bath & Beyond, Best Buy and Macy's.)

Peter Boockvar parses the flood of domestic data out this morning:

"Durable goods orders in October rose .5% m/o/m ex transports, which was two-tenths better than expected, and September was revised up by a few tenths. Importantly, the core measure -- as defined as non-defense durable-goods orders ex aircraft -- rose 1.3%, well better than the forecast of up .2%. And September was revised from -.1% (revised in factory orders) to up .4%.

Orders for vehicles and parts fell by 2.9% and are down for the 2nd month in the past three, and I can only wonder whether this is in response to the buildup seen in business inventories in this space. We'll see, but vehicle orders are still up 4.2% y/o/y.

Orders for computers/electronics rose, as did machinery and primary metals (but down 18% y/o/y). Orders for electrical equipment fell for a 3rd straight month (and are down 10% y/o/y). Shipments of core goods, which gets plugged into GDP, fell .4% m/o/m, about in line with the estimate if taken with the revision to September.

Bottom line, the core rate of spend was the pleasant surprise relative to expectations and the absolute level of spending is at the best level since January. But they are still down 1.2% y/o/y. If these better orders can be shipped before year end, we'll see a boost to 4Q GDP estimates -- but we know the overall level of capital spending still remains muted relative to historical trends.

With respect to inventory relative to shipments, this ratio ticked up to 1.66 from 1.64, which is in line with the average seen over the past years. Businesses now await whether Congress will renew tax extenders for the R&D tax credit and bonus depreciation, which typically results in some year-end lift to spending to take advantage.

Initial jobless claims fell 12k to 260k, 10k less than expected, and the four-week average remained unchanged at 271k because a 260k print five weeks ago falls out of the average. Continuing claims rose by 34k, off near the lowest level in 15 years. My bottom line week after week remains the same in that the pace of firings remain low as employers (outside of oil/gas and manufacturing) hold on tight to their employees with a participation rate down to 62.4%.

Personal spending in October rose just .1% m/o/m, two-tenths less than expected. And with the headline PCE inflation deflator also up .1%, real spending was unchanged, which may lead to a downward revision to 4Q GDP estimates.

Spending on durable goods fell, and spending on services moderated. Health-care spending has been a big influence on the services component over the past year. As income rose .4%, in line, the savings rate rose to 5.6%, the highest since December '12. Within income, private sector wages/salaries rose .6% m/o/m, which matches the best level since May and 5.3% y/o/y (5.9% growth was seen in July).

With respect to inflation, the core PCE was flat m/o/m and up just 1.3% y/o/y, a large six-tenths below core CPI because of the differences in methodology. A key difference is the calculation of health care, where CPI counts what consumers actually spend while PCE counts government-set price payments for Medicare and Medicaid. Also, housing is a larger component of CPI (as it should be with an inflation gauge). The Fed should be better explain why PCE is therefore a better gauge of inflation than CPI.

Bottom line, today is just another reminder that consumers are more interested in saving than spending -- and we should stop the discussion of when consumers will spend their savings at the gas pump, because it's either being saved or spent on other things like rent, healthcare, property taxes, etc. Hopefully, if workers become more confident with wage increases, this will change. From a corporate perspective, higher labor costs are another sign that profit margins have topped out.

As all of the above wasn't that much different than expectations, we continue on the path of a December rate hike. The 2-yr note's yield is up to .94% and would be a new closing high. The 2s/10s spread is little changed at 130 bps."

I've added to my short of the SPDR S&P 500 ETF (SPY) in premarket trading at $209.73 (as noted earlier in Columnist Conversation).

On any further strength, I plan to scale in to what will be close to my largest short exposure in quite a while.

I've been watching a Bloomberg interview with Terry Lundgren, CEO of Macy's (M).

Macy's flagship store lies in New York's landmark Herald Square/Times Square area, and I for one find the idea that such sites are safe from terrorism to be a total illusion -- something Mark J. Grant has harped on in recent days:

"In America we live in a gilded cage.

We read the headlines, we see the killings in Mali, the devastation that occurred in Paris and the warnings that were issued for Brussels today. We read it all, and yet many of us feel as if it is all 'over there' and not 'here.' Many of us feel removed from all of this and relatively safe as we trod the streets of our cities in the United States. We believe we are unaffected -- will be unaffected -- and so the equity markets rally as we ignore what we believe may be someplace else, but not on our own soil.

This, I am afraid, will turn out to be a huge mistake, and the brighter minds amongst us will be preparing now before our gilded cage is brutally shattered.

There is no threat, no move by any central bank, no governmental action short of out-and-out war that is a greater threat to the markets now than terrorism. I do not write about terrorism for its own sake, I assure you. I write about it because I consider it to be the greatest single danger currently and directly in front of us for the financial markets. All of them.

'At the approach of danger, there are always two voices that speak with equal force in the heart of man: one very reasonably tells the man to consider the nature of the danger and the means of avoiding it; the other, even more reasonable, says that it is too painful and harassing to think of the danger, since it is not a man's power to provide for everything and escape from the general march of events; and that it is therefore better to turn aside from the painful subject till it has come and to think of what is pleasant. In solitude a man generally yields to the first voice; in society to the second.'

-- Leo Tolstoy, War and Peace

I fervently pray, as I am sure all of you do, that more acts of terrorism will not take place. Having said that, we would be idiots to believe it -- and Wall Street does not suffer idiots lightly.

In my opinion, we now find ourselves at war. Not the kind of war that we are used to in the last 500 years, but a war none the less. This is not one nation or nations at war for money or power, but a war being waged upon all Western civilizations by a fanatical group of people willing to blow themselves or their children up for an ideology in direct opposition to basic American and European values. Get it through your heads -- we are at war!

Consequently, we must come first to that realization, and then we must turn our attention to the preparations that are now demanded. There is really no other choice. We don't want to get ready because we don't want to believe it could happen, but like the possibility of a hurricane hitting the South Florida coast, we must be ready to protect ourselves from the possible terrorist acts that may come.

It is in the nature of human beings to think: 'It can't happen here.' It is in our nature to ignore what we don't wish to hear, to reject what makes us uncomfortable and to find bliss in ignorance. It is the Annie Hall part of our lives.

I am afraid that our make-believe time has now past. The fairy tale, where the prince shows up with the glass slipper and saves the day, will not take place. Tinker Bell is staring into the mirror and Captain Hook is back!

Preservation of capital -- always my No. 1 priority -- and Grant's Rules 1-10 have never been more important than they are now. Heinous crimes enacted on a large scale will shake both the equity and debt markets to their core, in my view, as people and institutions run for cover. It might not be 'devastation now,' but we must get ready in case it is 'devastation soon.' To not do so, in my estimation, would be just plain madness.

Whatever may happen will send Treasuries higher in price, in my opinion, and this may be contrary to many bets that may have been placed given the Fed's likely liftoff in December. You could get whip-sawed and severely injured, so I point this out with particular gravity. The 10-year Treasury yield could very quickly head back down under 2% if something awful happens. Another strategy that could be employed is buying long Treasuries as a hedge against any gruesome occurrences.

If something does take place, equities and risk-on assets will not fare well in my opinion. A flight to safety will ensue, and with great rapidity, I believe. There will also be a downdraft in commodity prices as economies freeze up, in my opinion, if more terrorism is on our horizon.

That is my viewpoint, and companies that will get affected by this must be measured for potential problems. American-centric corporations, municipal bonds and taxable municipal bonds may all appreciate in value and price if the conflict escalates, while big international corporations' equity and debt head in the opposite direction.

You should be examining your portfolios now, and not later, to make crucial decisions about what you own with all of this firmly in mind. 'Later' will not work. 'Tomorrow' will not work -- you should do it now, before it's too late!

'You know, it's at times like this when I'm stuck in a Vogon airlock with a man from Betelgeuse, and about to die of asphyxiation in deep space, that I really wish I'd listened to what my mother told me when I was young.

'Why, what did she say?'

'I don't know, I didn't listen.'

 -- Douglas Adams, "The Hitchhiker's Guide to the Galaxy"

Please listen!"

-- Mark J. Grant, Our Gilded Cage

Herald and Times Square are fortified with police these days, but New York City is plainly just too large and bustling for us to fool ourselves into thinking we're safe. I appreciate we can't live in fear and need to go about our lives, but I feel we're much too optimistic that we're safe.

We can be vigilant, but it looks to me from a 10,000-foot view that it's impossible to protect ourselves from those who truly want to cause our great nation harm.

I've been a person who always questions what I'm told, but I'm also a realist -- and frankly, it's time we all get real. The world powers are less in sync each minute and day that passes, while economically we are a fooling ourselves and geopolitically we are at odds.

The new question I ask each morning is: "In this unknown environment, how can anyone safely travel the rapids that are surely in front of us in these markets?"

Goldman Sachs removes eBay (EBAY) from its Conviction Buy list, but keeps the stock's Buy rating, with a $33 price target.

As Goldman puts it: "Since being added to the Americas Conviction List on 12/14/11, EBAY is up 128% vs. the S&P up 72% and we now see 14% upside vs. 31% average for our Buy-rated names.

"With a more focused strategy after the PayPal separation, renewed investment in technology, marketing to support Marketplaces and ongoing capital returns fueled by $2 billion+ in FCF each year, we believe the risk/reward in owning eBay remains favorable and remain Buy-rated."

Peter Boockvar's commentary this morning centers on the euro's dive, investor sentiment and more:

"The euro is trading down to about 1.06 after Reuters reported that ECB officials are considering 'introducing a two-tier penalty charge on banks that park money with the ECB,' in addition to expanding the sphere of bond buying (as we all expect). The penalty on banks right now is a straight 20 bps.

Creating a second-tier negative deposit rate would likely depend on how much money is left at the ECB. Since German and French banks have the most amount of money with the ECB, this step could be used to try to soften the impact particularly on them. I still have to ask, though, if European banks are raising the cost of funds to borrowers to offset the penalty.

The article also quotes two officials 'with knowledge of the talks,' and here are some of the quotes: 'They are still trying to figure out what will be in the package. A lot of people have different views. There are some who say you should surprise markets. But you cannot surprise indefinitely. Sooner or later, you are bound to disappoint.' A second official said: 'We have deflation, so you have to do something. How this all looks in a few years, nobody knows.' Comforting.

The ECB is about to turn their markets and economy even further upside down. What is especially bizarre about the ECB today is the bank also released its biannual Financial Stability Review report and said this: 'Prolonged period of low interest rates is posing material challenges for banks' net interest income generation. ... Similar to banks, the insurance sector faces profitability challenges.' And they are about to make that even worse, all because they want 2% inflation.

European sovereign bonds are rallying across the board ahead of more QE, with the German 10-yr yield back below .50%. The German 2-yr yield is down another 3 bps to almost -.41%. Investors have to pay the French .33% to lend them money.

The INSEE released its consumer confidence index for France in November, with the caveat that only 7% of respondents answered after the November 13th attacks. The index held steady at 96, which is just a point off matching the best level since '07 and compares with the long-term average of 100. Unfortunately, there will be a hit to the December figure just as the French economy has shown signs of not getting any worse. It's hard to argue that it's gotten much better.

Even though the average U.S. 30-yr mortgage rate backed off a multimonth high, there was no follow through on last week's bounce in mortgage applications. Purchases were basically flat, falling .5% w/o/w, while refis were down by 4.8% to a 10-week low. This comes ahead of new home sales at 10 a.m. ET, where another historically depressed number is expected to be reported.

The bull/bear spread widened a touch, according to Investors Intelligence, with bulls up by 2.1 pts to 45.4% while bears were unchanged at 26.8%. The spread is at the highest level since mid-August, before you-know-what.

Income, spending, PCE inflation, durable goods, claims, Markit's services PMI and the UoM confidence indicator all await us today."

After falling last month to the lowest level since this survey began in 2007, the Westpac MNI China consumer confidence number rebounded somewhat to 113.1 from 109.7 in October and is back to the year-to-date average of 113.2. Components in this index consist of personal finances, business conditions and durable buying conditions, and all rose m/o/m -- but also all remain below where they were in September.

Westpac said this: 'Although we viewed last month's sharp drop as mainly an overdue correction bringing Chinese consumer confidence more in line with the softer tone coming from other economic data, there was a risk that sentiment could have gone on to register a deeper shock. A timely easing in policy appears to have helped spur this month's rally. Despite this, Chinese consumers are clearly still anxious about the outlook for the economy and jobs.'

As China is trying to shift more to consumer spending, the confidence data becomes more relevant. But it still gets back to the same story of confidence figures generally in that how one feels doesn't necessarily translate into how they act.

The Shanghai index rallied .9% overnight to just off the best close since August, but the H share index in Hong Kong was down about .25%. The premium of the A shares to the H shares still remains very high at 39%, as the difficulty in shorting the A shares limits the ability to arb the difference (notwithstanding the Shanghai-Hong Kong Connect)."

Some important reads:

• Reuters reports that Russian President Vladimir Putin is warning of "serious consequences" to Turkey's downing of a Russian warplane.

• Tiffany no longer shines, according to Reuters.

• The New York Timesreports that regulators say bad loans are weighing on European banks.

• New York Post columnist John Crudele calls non-GAAP accounting the "secret stock-market accounting trick."

• The Federal Reserve looks at the discount and advance rates.

• Bloomberg says European governments are boosting defense budgets by $50 billion to fight the Islamic State.

• Elite funds prepare for reflation and a bloodbath in bonds, according to Britain's Telegraph newspaper.

• The Wall Street Journal (subscription required) checks out Donald Trump's secret weapon.

The most important overnight news is that the German two-year note's yield sank to a new low.

Bloomberg currently quotes it at around -0.410% (the yield has been negative since August 2014).