Thursday, March 26, 2015

Markets finish lower in a choppy session

Dow fell 40, decliners over advancers 3-2 & NAZ gave up 13.  The MLP index was fractionally higher in the 428s & the REIT index was off 1+ to the 336s.  Junk bond funds did little & Treasuries pulled back, taking the yield on the 10 year Treasury just over 2%.  Oil jump over 2 to the 51s (not seen in 3 weeks) & gold held above 1200 after backing off from earlier highs.

AMJ (Alerian MLP Index tracking fund)

CLK15.NYM....Crude Oil May 15....51.30 Up ...2.09 (4.3%)

Live 24 hours gold chart [Kitco Inc.]

The US may allow Iran to run hundreds of centrifuges in a fortified underground bunker as part of a nuclear deal, according to the AP.  The site would be subject to intl inspections & Iran would not be permitted to do work that could result in an atomic bomb.  In exchange, Iran would agree to limit research & development at other sites.

U.S. May Allow Iran to Run Centrifuges In Fortified Bunker: AP

Consumer confidence climbed last week to match the 2nd-highest level since Jul 2007, propelled in part by gains among lower-income earners & job seekers as the labor market improves.  The Bloomberg Consumer Comfort Index rose to 45.5 in the week ended Mar 22 from 44.2 the prior week.  Measures of the economy, buying climate & households’ financial well-being all improved.  Spirits brightened for those making less than $50K a year in wake of bigger Feb job gains in services that include the retail & restaurant industries.  More confidence about finances signals consumers may be inclined to step up purchases & drive the economy after a projected slowdown Q1.  A strengthening labor market & still-cheap gasoline are also delivering a boost to household spending, which accounts for about 70% of the economy.  Among the 3 components of the index, the gauge of Americans’ views on the state of the economy rose to 37.7 from 37.2.  An index of the buying climate, showing whether this is a good time to purchase goods & services, increased by 1.5 points to 39.8, matching the 2nd-highest reading in 8 years.  A measure of personal finances climbed to 58.9 from 57.1.  Confidence improved for 3 of 4 groups of wage earners making less than $50K a year.  Sentiment among Americans making $25-$40K was the strongest since Feb 2007.  Women were more optimistic than at any time since Jul 2007, while confidence among seniors, the unemployed & renters was the highest since the start of the last recession.  The comfort index for Democratic voters was the highest in 14 years.  The Bloomberg Comfort Index has been presented on a scale of zero to 100 since May 2014, rather than the previous minus 100 to 100, with the midpoint shifting to 50 from zero.  The change is also reflected in the gauge’s components.  It doesn’t affect the measures’ relationship to each other or their correlation with other economic indicators.  Historical data has been revised & analysis of trends, values & other variables also aren’t affected.

Consumer Comfort in U.S. Matches Second-Highest Level Since 2007

ConAgra Foods, the packaged food company, reported a better-than-expected fiscal Q3 profit & provided an upbeat full-year outlook.  For the qtr ended Feb, the company swung to a net per share loss of $2.23, from EPS of 52¢, in the year-earlier period.  Excluding non-recurring items, such as a large impairment charge, adjusted EPS came in at 59¢, beating estimate of 52¢.  Revenue slipped 1.8% to $3.88B, just shy of the $3.87B projection, weighed by a 2% sales decline in its consumer foods business.  For fiscal 2015, the company expects adjusted EPS of $2.15-$2.19, above analysts forecast of $2.14.  The stock lost 19¢.  If you would like to learn more about CAG, click on this link:

ConAgra Foods stock gains after better-than-expected profit, upbeat outlook

ConAgra Foods (CAG)

Stocks began the day with selling, recovered in the PM, but late day selling returned taking the averages back into the red.  Increased fighting in the MidEast is weighing on the markets.  Higher oil prices are helping MLPs.  One thought on them, the producers, which extract oil from the ground, may see see acquisition activity when the energy companies get used the present level of oil prices.   Dow is back to where it was in mid Nov after dropping 450 this month.

Dow Jones Industrials

Markets decline on increased fighting in the MidEast

Dow lost 45, decliners over advancers 2-1 & NAZ dropped 23 as the tech sector remains weak.  The MLP index went up 1+ to the 429s (still stuck near recent lows) & the REIT index fell 1+ to the 326s.  Junk bond funds were mixed & Treasuries retreated.  Oil rose to 50 & gold is back over 1200.

AMJ (Alerian MLP Index tracking fund)

CLK15.NYM...Crude Oil May 15...50.57 Up ...1.36 (2.8%)

GCH15.CMX...Gold Mar 15......1,204.90 Up ...7.60 (0.6%)

3 Stocks You Should Own Right Now - Click Here!

Fewer Americans than forecast filed applications for unemployment benefits last week as improved weather conditions ushered in labor-market stabilization.  Jobless claims fell 9K to 282K in the latest week, the lowest level since mid-Feb, according to the Labor Dept.  The forecast called for 290K.   A sustained low level of applications, which shows that employers are holding on to workers, typically coincides with more hiring.  Continued gains in employment was one of the 2 signals, along with a pickup in inflation, that Federal Reserve officials last week said were necessary before raising rates.  The 4-week moving average, a less volatile measure than the weekly numbers, declined to 297K last week, from 304K.  The number continuing to receive jobless benefits dropped 6K to 2.42M & the unemployment rate among people eligible for benefits held at 1.8% (where it’s been all year).

Jobless Claims in U.S. Decline to Lowest Level in Five Weeks

Greece is trying to accelerate the disbursement of financial aid as its coffers run low & it remains largely locked out of the bond market.  The country faces the risk of failing to secure adequate funds to pay its debts.  Here are the major dates to watch thru just next month.
  • Mar 30: The Greek gov may submit a comprehensive list of proposed reforms by this date in order to secure more bailout funds.  The aim of meeting this deadline would be to speed up the disbursement of money from the schedule agreed on in Feb, when the European Commission, ECB & the IMF granted a 4-month extension of the existing bailout agreement.
  • Apr 9: Greece will have to make a payment to the IMF of about 360M Special Drawing Rights (SDRs)  that equal about €458M.
  • Apr 14: Greece must roll over €1.4B of Treasury bills.
  • Apr 17: Greece must roll over €1B of Treasury bills.
  • End-Apr: Under the Feb extension agreement, Greece must provide further details on its promised reforms & these must be approved by the ECB, the IMF & the European Commission.
And there are many more deadlines after these.

Here Are the Most Important Dates Ahead in the Greek Crisis

Saudi Arabia led a coalition of 10 Sunni-ruled nations in air strikes against Yemen’s Shiite Houthi rebels as it seeks to stop the spread of Iranian influence on its southern border.  Saudi Arabia may send ground troops to Yemen, Saudi state TV reported.  The air strikes come after forces loyal to the rebel group marched on the southern port city of Aden, the stronghold of Yemen’s President Abdurabuh Mansur Hadi. Huge blasts were heard around the capital Sana’a & at the al-Dailami air base near the city.  Yemen has emerged as the latest battleground for Saudi Arabia & Iran in their tussle for regional supremacy.  Saudi Arabia, the world’s top oil exporter, has accused Shiite Iran of fomenting unrest in country.  The 2 powers have already clashed over Syria & Bahrain, although both are fighting Islamic State extremists in Syria & Iraq.  Yemen’s southern tip, called the Bab el-Mandeb, is a choke-point in intl shipping & the global energy trade.  Saudi’s military offensive will expand “terrorism & insecurity” in the region and deepen the crisis in Yemen, the state-run IRNA news agency reported.  Saudi Ambassador to the US Adel al-Jubeir said earlier that the operation seeks to protect “the legitimate government from a takeover by the Houthis.”  Saudi Arabia, the United Arab Emirates, Kuwait, Bahrain & Qatar said they responded to a request from Hadi.

Saudi Arabia, Gulf Allies Bomb Shiite Houthi Targets in Yemen

Fighting in the MidEast has not gone away just because there have been few reports.  Yemen has descended into chaos which has gotten Saudi Arabia to strike back.  Saudi & its allies represent a large chunk of oil for the rest of the world & this turmoil is affecting oil prices even though the global glut is not going away soon.  The US in its limited war in the area is bombing more sites in Iraq.  Dow is down almost 500 in Mar as earnings season approaches.

Dow Jones Industrials