Friday, July 9, 2010

Markets claw their way higher

Stocks are trying to rise but it's been a struggle. Dow is up 500 this week & needs a rest. Today it's down 4, advancers ahead of decliners 2-1 & NAZ gained 3. High yielders are doing well. Banks also had a modest gain as the Financial Index is back into its longer term 190-210 trading zone.


Value 193.32 One-Year Chart for S&P 500 FINANCIALS INDEX (S5FINL:IND)
Change 0.85 (0.4%)

The Alerian MLP Index rose another 1+ to 318, sooo near the 319 high reached in late Apr. There has been a lot of new money flowing into MLPs in the last few months from the new mutual funds & ETNs investing in MLPs. The REIT index is up 1½ to the 192s. Junk bond funds were generally a little higher. Like stocks, they are feeling their way thru the recovery but the yields look good when other securities (even REITs) yield much less. The VIX, volatility index, fell ½ to 25 on easing investor tensions. Treasuries also sold off. The yield on the 10-year Treasury bond rose 4 basis points to 3.06%.

Alerian MLP Index --- 2 weeks

Dow Jones REIT Index -- 2 weeks

VIX --- 2 weeks

10-Year Treasury Yld Index --- 2 weeks

Oil was flattish while gold found a few buyers bring it back over 1200.

CLQ10.NYM...Crude Oil Aug 10...75.62 ...Up 0.18

GCN10.CMX...Gold Jul 10...1,203.50 ...Up 7.70

Gold Super Cycle!!
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Wholesale inventories rose for a 5th consecutive month in May but sales fell for the first time in more than a year, giving mixed signals about the strength of the recovery. Inventories increased 0.5% while sales dropped 0.3% (the first decline since Mar 2009), according to the Commerce Dept. This sales decline is the latest sign that the economic recovery could be losing momentum as it enters H2 of 2010. But even with the gain, wholesale inventories are 2.1% below where they were a year ago. Manufacturing has been among the strongest industries coming out of the recession, but there have been signs recently that the recovery could be faltering. Both consumer spending & business hiring have slowed while the housing market has struggled since tax incentives for homebuyers ended in Apr.

Wholesale Inventories in U.S. Increased 0.5% in May

% change in inventories - 1 year

One-Year Chart for Monthly % Change (MWINCHNG:IND)

Photo: Reuters

Google (GOOG) has been given the green light to continue operating its Chinese search page, averting a potential shutdown in the world's biggest internet market. GOOG said last week that it would stop automatically rerouting users to its uncensored Hong Kong-based search page, explaining that Beijing had indicated it would not renew its Internet Content Provider (ICP) license if it continued to do so. It's viewed as good news for the Chinese consumer & good news for the Chinese internet industry that Google is still available in the country. China had more than 384M web users at the end of 2009, according to gov data. GOOG rose 11 to 467.

Google Says China Renews Its Internet License

Google --- 2 years

The € lost a little strength, falling below $1.26½, but it's coming off a strong rebound in recent weeks as investors are less worried about gov sovereign debt problems. The US recovery is muddling along with mixed signals about the recovery. More are talking about a slower growth rate in H2. Next week earnings season begins & the following week MLPs will start reporting. Their reports should be more of the same with some distributions hikes (qtr over qtr).

Dow Jones Industrials -- 2 weeks

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