Friday, February 12, 2010

Potential China slowdown spreads around the world

Stocks were under water all day, but tried to make a comeback. Dow spent most off the day with a 100+ loss, closing down a more moderate 45, decliners over advancers 3-2 & NAZ was up 6. Banks continued to be one of the weakest sectors as the Financial Index just can't get "no respect."


% Change

MLPs continued their gains from yesterday. The Alerian MLP Index gained 2½ to the 283s, getting over the 280 ceiling. The REIT gained 1½. Junk bond funds were mixed. Treasuries found buyers looking for safety. The yield on the 10-year Treasury bond dropped 4 basis points to 3.69%.

Alerian MLP Index --- 1 year

Dow Jones REIT Index --- 1 year

Nothing like a slowdown in the Chinese economy (the biggest buyer of about every commodity) to bring selling to the commodity markets. At least gold held up pretty well all considered thanks to frightened money seeking a safe haven.

CLH10.NYM..Crude Oil Mar 10..74.07 ..Down 1.21

GCG10.CMX..Gold Feb 10..1,092.00 ..Down 2.20

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Sales for retailers rose more than anticipated in Jan but consumer confidence unexpectedly fell from a 2-year high. Retail purchases increased 0.5% for the 3rd gain in the 4 months. However the Reuters/University of Michigan’s consumer sentiment gauge dropped to 73.7 (not shown in the graph below) from 74.4 in Dec. Economic expansion is from gains in business investment due to growing demand from overseas & efforts to rebuild inventories. But Americans are slow to regain the confidence needed to spearhead the next phase of the recovery.

U.S. Retail Sales Climb, Confidence Slips in Sign Spending Will Be Gradual

Monthly retail sales- 1 year

Consumer sentiment - 1 year

Constellation Energy (CEP) will be one of the last MLPs to report 2009 results with an announcement on Feb 22. Delays can bring anything, but I worry about their having trouble getting the numbers together. The risk takers should love this MLP. If they get their finances together, there will be big rewards for a $4 MLP.

Constellation Energy --- 1 year

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There were no shortages of worries in trading, but the intl sphere took center stage. A slowdown in China will be felt everywhere, starting with lower commodity prices. Europe is evolving into a mess. Some are even saying the € (Euro) may come unglued which would be felt all over the world. The sluggish recovery in the US (as shown in the consumer sentiment data) got only minimal attention, but that is not going away anytime soon.

Dow Jones Industrials --- 1 year

Nasdaq --- 1 year

1 comment:

Life Insurance BC said...

Thank you for all the great posts from last year! I look forward to reading your blog, because they are always full of information that I can put to use. Thank you again, and God bless you in 2010.