S&P 500 FINANCIALS INDEX
| Value 211.53 | Change -2.99 | % Change -1.4% |
The Alerian MLP Index dropped 5 to the 291s (28 below the highs a couple of weeks ago). Make no mistake, this involves more than the usual loss from ex-distributions. The Gulf spill is shaking some investors. Higher yields on European debt may also be bleeding thru to MLPs. Their only connection is investors looking for high yields with a global vision might be tempted by high yields overseas. The REIT index sold off again, down 4½ to the 205s & down 14 from its recent highs. Junk bond funds are off 2+%, a big drop for them & down 5+% from yearly highs in the last month. The yield on the 10-year Treasury bond fell another 6 basis points to 3.49%.
Alerian MLP Index --- 1 week
Dow Jones REIT Index --- 2 weeks
10-Year Treasury Yld Index - 1 year
The massive oil spill which is bleeding a lot of oil every day into the Gulf is depressing for oil traders. BP is trying to plug one of the 3 underwater wells, but this mess is not going away soon & will bring more gov meddling. But financial chaos in Europe is bringing buyers back to gold. While other markets are operating under stress, gold is nearing its record highs from last Dec!
| CLM10.NYM | ...Crude Oil Jun 10 | ...79.22 | ... 0.75 .......(0.9%) |
| GCK10.CMX | ...Gold May 10 | ...1,185.60 | ... 11.00 .......(0.9% |
GLD (ETF) --- 1 month
Retail sales figures for April were more muted than March's torrid pace. Discounters including Costco (COST) & BJ's (BJ) as well as luxury retailers had better sales in Apr along with Limited Brands (LTD) & Macy's (M). But teen merchants including American Eagle Outfitters (AEO) & Abercrombie & Fitch (ANF) continue to struggle with declines. Retailers should be pleased with the spring selling season even if it's at a reduced pace from Mar. But they continue to worry that the consumer spending recovery is still likely to be slow amid persistent high unemployment & tight credit. According to the International Council of Shopping Centers Index of 30 retailers, the same store sales were up 0.8%, compared with a 2.7% decline last year. That followed a 9% gain in Mar, the strongest since Mar 1999. For Mar & Apr combined, the index rose 4.9%, above the average pace of 4.1% since Jan. Big losers were: COST down 2, ANF down 3, BJ down ½ & LTD down 1¼.
Teen Retailers Aeropostale, Abercrombie Report April Sales Drop
The Greek debt story drones on. Greece is trying to figure out how to make painful budget cuts with a population that won't accept less service. Germany is taking the lead in this bailout, but they understand budget cuts & are demanding Greece learn to accept austerity. This mess is fluid & problems are not going to be solved soon. The € sank to another 14 month low, $1.27.
•Greece Debates Budget Cuts as Nation Mourns Three Killed in Athens Protest
•Trichet Resists Calls to Consider Purchasing Bonds, Urges Cuts in Deficits
•Banks in Portugal, Spain, Italy, U.K. Face Contagion Threat, Moody's Says
Markets are finally paying attention to the chaos in Greece, & selling off. The markets have had one off their greatest runs in history, so retrenching has to be expected especially when the strength of the economic recovery is still in question. The rise in gold is great for the owners of gold, but just one more sign that the financial markets are in difficult times. Junk bond funds have probably been the biggest flyers & are seeing selling pressure, the first time since its rally began last year.
Dow Jones Industrials --- 2 weeks
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