S&P 500 FINANCIALS INDEX
| Value | 218.38 | |
| Change | -2.04 (-0.9%) |
The MLP index was up ¾ to 365, not far from the records set in early Nov & a few days ago. The REIT index was even at 223. Junk bond funds didn't know where to go, so they were mixed. But Treasuries were strong on the jobs report (bad economic news is considered "good" in this market). The yield on the 10 year Treasury bond fell a very big 9 basis points to 3.33%, but has not strayed far from 3.4%, a full percentage point above its recent lows.
Treasury yields:
| U.S. 3-month | 0.13 | |
| U.S. 2-year | 0.59 | |
| U.S. 10-year | 3.32 |
Alerian MLP Index --- 1 year
Dow Jones REIT Index --- 1 year
10-Year Treasury Yield Index --- 1 year
Oil recovered some its earlier losses. After all the north continues very cold, a bullish factor for oil pieces. Gold also pared its losses, bargain hunters were attracted by recent selling.
| CLG11.NYM | ...Crude Oil Feb 11 | ...88.10 | ... 0.28 | (0.3%) |
| GCF11.CMX | ...Gold Jan 11 | .......1,369.90 | ... 1.50 | (0.1%) |
$$$ Gold Super Cycle $$$
It was easier to find a tablet this week in Las Vegas than a taxi. Rivals determined to prevent Apple (AAPL) from dominating the tablet market unleashed a tidal wave of touchscreen devices at the Consumer Electronics Show (CES). However they face difficulties. Devices from Motorola (MOT) & Research in Motion (RIMM) were standouts. But none rose to iPad-killer status according to analysts. There is undoubtedly an opportunity for other tablets, particularly with different screen sizes & in the corp market, where AAPL has not traditionally been very successful. In addition, the sheer ubiquity of tablets based on Android software from GOOG makes that a platform that can't be ignored. The tablet segment is expected to more than triple to 50M units this year with AAPL the dominant vendor by far. Sony (SNE) hopes to become the world's 2nd largest vendor of tablets by next year, although it failed to show anything. Dell (DELL) is offering new tablets.
Many manufacturers are producing tablets based on Android, which is free to license. But Android tablets will face the added challenge of competing against the iPad, & also one another. Lenovo, LG Electronics & Asustek (manufacturer of the netbook I'm using now) were just a few of the companies showing off Android tablets at CES. Some tablet makers await the next version of Android, known as Honeycomb, expected in the next few months, before moving ahead (considered to be a more robust version of Android that is neded for tablet). Tablets from RIMM & Hewlett-Packard (HPQ), a Dow stock, will be closely watched precisely because they do not use Android, & may be able to offer users an experience they cannot get elsewhere. All this competition, I think, will eat away at the high profit margins at AAPL & slow the enormous growth rates they have experienced since the introduction of the iPad.
- A sea of tablets, no iPad-killer- Reuters
Photo: Reuters
KB Home (KBH), with operations focused on the East & West coasts, posted a quarterly profit without the benefit of tax gains for the first time in almost 4 years after slashing SG&A expenses by more than a third. Orders fell 25% to 1085 homes, indicating KBH owes the solid results more to its financial discipline than to an any recovery in demand for new homes. EPS was 23¢ in Q4 ended Nov 30, beating forecasts of 17¢. Last year KBH had EPS of $1.31 per share, thanks to a change in tax legislation. Housing gross margins rose to 19.1% from 6.8% a year earlier, in large part because SG&A expenses fell 35% to 55.7M. But a shrinking order rate will inevitably threaten margins, no matter how diligent the company is about cutting costs. Markets llked the news, the stock gained 92¢.
KB Home Rises After Posting Unexpected Fourth-Quarter Profit on Cost Cuts
KB Home --- 1 year
Dow ended with a 99 gain for the week, but it all came at the opening surge on Mon. After that, Dow was down a couple of points (net) for the week. The MLP index had a similar pattern, only it closed down 2 after its initial surge on Mon. My focus is on follow-thru & it was dismal at best. Next week earnings season begins when Alcoa (AA), a Dow stock, reports earnings after the market close on Mon. Analysts are looking for Q4 EPS of 19¢, up from only a penny last year. This is a commodity play & they have been strong but it also gives traders an initial glimpse into what lays ahead in earnings season.
Dow Jones Industrials --- 1 year
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