S&P 500 FINANCIALS INDEX
| Value | 182.08 | |
| Change | -1.00 (-1.1%) |
AM gains were trimmed in the PM for MLPs, but their index managed a gain of 1½ to 306. After all the turmoil in the markets, it's still up 21 YTD. The Dow Jones REIT Index fell 2 to the 185s & also has a gain YTD. Junk bond funds were pretty much even on the day. The VIX fell 3½ to 29½. That decline is hard to explain, maybe the stronger € & weaker Treasuries are responsible. The 10-year Treasury sold off, bringing its yield up 5 basis points to 2.98% (still near the 14 month low).
Alerian MLP Index -- 1 year
Dow Jones REIT Index -- 1 year
VIX --- 1 year
10-Year Treasury Yld Index --- 1 year
With the decline, oil is at its lowest level in a month. Hurricane season is on & this week the Gulf had to deal with its first storm. Gold eked out a gain & bulls are happy 1200 held.
| CLQ10.NYM | ..Crude Oil Aug 10 | ..72.11 | .. 0.84 ......(1.2%) |
| GCN10.CMX | ..Gold Jul 10 | ..1,207.80 | .. 3.70 ......(0.3%) |
“The economy is slowing, not just in the United States, but globally,” Bill Gross, co-chief investment officer at Pimco, said a Bloomberg radio interview. “It’s a ‘new normal’ type of phenomenon. I don’t think the Federal Reserve can raise interest rates in the face of unemployment near 10 percent.” Gross in May boosted holdings of US Treasuries to the highest level in 6 months as Europe’s sovereign debt crisis increased the refuge appeal of the securities. The fund’s investment in the debt was increased to 51% of assets in May, from 36% Apr. Gross cut holdings of non-U.S. developed debt to 6% from 13%, the lowest since Nov & increased emerging market debt to a record 9. That change proved to be very profitable!
Gross, Rosenberg Say Jobs Growth an Illusion
Below are 3 quality companies which have suffered this year. Chevron (CVX) & Exxon Mobil (XOM) are the 2 Dow oils & Walgreen (WAG) is the largest drugstore chain in the US. XOM & WAG are Dividend Aristocrats while CVX should join the group in a couple of years. The oils are out of favor, partially related to the oil mess from BP (BP). But they are doing well, with CVX yielding 4+% & XOM yielding 3+%. Walgreen had a dispute with another major chain & that looks to be resolved. They are buying Duane Reade in a couple of months which will give them a larger presence in the NYC area. Because of a modest payout ratio, which could be increased going forward, their yield is only 2+%. These are companies value investors can watch for attractive buying points with higher yields.
Chevron --- 1 year
Exxon Mobil --- 1 year
Walgreen --- 1 year
The jobs report has a lot of numbers which require time to assimilate. One key statistic is that the US needs 100K jobs per month just for the population expansion. 200K jobs & more are needed to reduce the unemployment rate. If 200K jobs are created monthly, it will take on the order of 6 years to recover all the jobs lost during the recession. This year, the economy is struggling trying to fill the first 100K jobs per month, an uncomfortable thought. The € was flattish at $1.25½, giving it a nice rally in recent weeks. Dow is waffling around prices last seen in Oct. Investors will have a lot to think about over the long weekend. There will be helpful clues when overseas markets trade on Mon.
Dow Jones Industrials -- 1 year
Happy July 4!!!
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