Friday, November 27, 2015

Markets fluctuate on low holiday volume

Dow fell 14, advancers over decliners 3-2 & NAZ added 11.  The MLP index lost 1+ to 301 & the REIT index rose 2+ to the 324s.  Junk bond funds fluctuated & Treasuries were bid higher.  Oil is back in the 41s & gold dropped, still sloshing around the mid 1100s.

CLF16.NYM...Crude Oil Jan 16....41.71 Down ...1.33  (3.1%)

Live 24 hours gold chart [Kitco Inc.]

This was a quiet semi holiday with very little done.  Have a:

Happy Holiday!!

Dow Jones Industrials

Mixed markets after China stocks drop

Dow dropped 28, advancers over decliners 5-4 & NAZ climbed all of 1.  The MLP index lost 1+ to the 301s & the REIT index went up 3+ to the 324s.  Junk bond funds inched higher & Treasuries also rose.  Oil pulled back below 342 on China worries & gold sold off again into the mid 1100s.

AMJ (Alerian MLP Index tracking fund)

CLF16.NYM...Crude Oil Jan 16...42.14 Down .....0.90  (2.1%)

GCZ15.CMX...Gold Dec 15....1,056.20 Down ...13.80  (1.3%)

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For 3 weeks, China’s stock investors have kept their cool as the gov dialed back an unprecedented campaign to prop up share prices.  But today, they suddenly decided to head for the exits.  While the Shanghai Composite Index had barely flinched since Nov 6 as authorities lifted a freeze on IPOs, raised margin requirements & scrapped an order for securities firms to hold net-long positions, news of a widening regulatory probe into the brokerage industry sparked a 5.5% tumble on Fri.  While some of the triggers for the plunge were out of authorities’ hands, a report showed industrial profits slumped in Oct & 2 companies said they might not be able to make debt repayments.  The slump illustrates the challenge facing Chinese officials as they seek to wean the equity market off government support without precipitating another crash.

That feat will be made even harder by fresh signs that the economy is weakening.  The earliest economic indicators for Nov show a deterioration from the previous month, while industrial profits slid 4.6% last month.  Fri's losses pared the Shanghai Composite’s gain since its Aug. 26 low to 17.  On Fri, there was little sign that gov-run funds had stepped in to ease the selloff.

China Stock Bulls Hit Breaking Point as State Dials Back Support

Crowds were thin at US stores & shopping malls in the early hours of Fri, initial spot checks showed, as shoppers responded to early Black Friday discounts with a mix of enthusiasm & caution.  Many shoppers headed out to stores on Thanksgiving evening, a month before Christmas, reflecting the new normal in US holiday shopping, which was traditionally kicked off the next day, Black Friday.  In an effort to attract the most eager holiday shoppers & fend off competition on the internet, retailers have increasingly extended their holiday deals by opening stores on the evening of Thanksgiving.  Shoppers spent more than $1B online, 22% more than last year, between midnight & 5 pm ET on Thurs, according to the Adobe Digital Index, which tracked 100M visits to 4½K US retail sites.  As much as 20% of holiday shopping is expected to be done over the Thanksgiving weekend this year.  The 4-day shopping burst will help set the tone for the rest of the season, signaling to retailers whether they need to drop prices or change promotions.

Black Friday Crowds Thin After Early Openings

The Walt Disney (a Dow stock) sports network ESPN saw a 3.2% fall in subscribers from the previous fiscal year, in a market where viewers are migrating to newer forms of sports coverage.  The number of ESPN subscribers fell to 92M as at Oct 3, from 95M on Sep 27, 2014.  CEO Bob Iger said in Aug it was seeing "modest" declines in ESPN subscribers as viewers move to cheaper digital platforms, but was confident of navigating the shifts.  The company earlier this month reported higher quarterly profit that beat forecasts as cable networks including ESPN brought in higher advertising revenue & collected more fees from pay TV distributors.  Live sports are one of the few types of programming that still draw massive audiences at one time, making them valuable to advertisers.  And for many customers, sports is the reason they keep their pay TV subscriptions.  The stock slumped 3.95.  If you would like to learn more about DIS, click on this link:

Disney Shares Drop as ESPN Subscribers Fall

Walt Disney (DIS)

The China market decline is worth watching, but otherwise there is not a lot happening with very light volume.  Markets close after lunch & little movement is expected in the remainder of the trading day.

Dow Jones Industrials


Wednesday, November 25, 2015

Markets crawl higher ahead of the holiday

Dow edged up all of 1, advancers over decliners over decliners 3-2 & NAZ were up 13.  The MLP index was fractionally higher to the 302s & the REIT index added 1+ to the 321s.  Junk bond funds did not do much & Treasuries rose.  Oil inched higher & gold retreated.

AMJ (Alerian MLP Index tracking fund)

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CLF16.NYM....Crude Oil Jan 16....42.65 Down ...0.22  (0.5%)

Live 24 hours gold chart [Kitco Inc.]

While US consumers are more optimistic about the outlook for the economy & their personal finances than they were in the aftermath of the housing bust, their confidence doesn't measure up to previous cyclical peaks:

The Nov final reading of the Univ of Mich index of sentiment came in at 91.3, a slight gain from the Oct level, but fell relative to the initial report for the month.  The director of the survey, Richard Curtin said this relatively subdued confidence & high savings rate reflect the notion that future generations might not see an increase in their standard of living:  Retailers will face headwinds based on consumers' demands that purchases of durable goods would be contingent upon price discounts.  "In only nine surveys in our long history, and this goes back more than a half a century, have more consumers mentioned their insistence on price discounts than in this current survey," added Curtin.  As such, the holiday shopping season won't be terrible, according to the professor, but retailers will have to deal with more margin compression than they may have anticipated.

UMich Survey Director: We're Witnessing the Decline of American Economic Aspirations

New US single-family home sales surged in Oct & the inventory of properties for sale was the highest since early 2010, which could allay concerns of a significant slowdown in housing.  The Commerce Dept said sales increased 10.7% to a seasonally adjusted annual rate of 495K units.  The Sep sales pace was revised down to 447K units from the previously reported 468K units.  Economists had forecast new home sales, which account for about 8% of the housing market, rebounding to a rate of 500K units.  Sales were up 4.9% compared to Oct of last year.  Though new home sales tend to be volatile month-to-month because they are drawn from a small sample, this bounce back should offer some assurance that the housing market remains on solid ground despite declines last month in home resales, housing starts & confidence among builders.  New home sales vaulted a record 135.3% in the Northeast to their highest level since Jan 2010.  Sales rose 8.9% in the populous South & were up 5.3% in the Midwest.  They fell 0.9% in the West.  The inventory of new homes on the market increased 1.3% to 226K, the highest since Mar 2010.  Supply still remains less than half of what it was at the height of the housing boom.  At the Oct sales pace it would take 5.5 months to clear the supply of houses on the market, down from 6.0 months in Sep.  The median price of a new home fell 6.0% from a year ago to $281K.

New Home Sales Get a Boost in October

Presi Obama said there is no specific or credible intelligence indicating a plot against US targets.  In a brief statement after meeting his national-security team, Obama said Americans should go about their normal Thanksgiving holiday activities but also urged vigilance.  "If you see something suspicious, say something," he said.  He added the US & other nations are stepping up the pressure on ISIS in the wake of the deadly attacks in Paris on Nov 13.

Obama Says No Specific Evidence Of Plot Against U.S.

On this semi holiday, volume was light & price movements were generally small. Tomorrow begins the important holiday season for retailers & the overall US economy.  With so many warnings around, there is a fair amount of worry about the strength of retail sales.  Markets will close early on Fri & little is expected with even more traders on holiday (assuming there is no terrorist strike).

Dow Jones Industrials