S&P 500 FINANCIALS INDEX
| Value | 223.21 | |
| Change | -2.21 (-1.0%) |
The Alerian MLP Index is down pocket change in the 372s after hitting a new record high. If it reaches 375, its yield will fall to 6%, something to keep in mind. The REIT index also fell pocket change, but in the 225s. Junk bond funds were flat to lower. Treasuries sold off. The yield on the 10 year Treasury bond rose 6 basis pints to 3.39%, near where it's been for more than 2 months. .
Treasury yields:
| U.S. 3-month | 0.15% | |
| U.S. 2-year | 0.59% | |
| U.S. 10-year | 3.39% |
Alerian MLP Index --- 2 weeks
Dow Jones REIT Index --- 2 weeks
10-Year Treasury Yield Index --- 2 weeks
Oil was little changed, reversing an earlier drop of as much as 1%. Gold is working its way higher on market uncertainties.
| CLG11.NYM | ...Crude Oil Feb 11 | ...91.54 | .....0.00 (0.00%) |
| GCF11.CMX | ...Gold Jan 11 | .......1,368.40 | ... 8.00 | (0.6%) |
Gold Super Cycle Link! Click Here
Photo: Bloomberg
Citigroup reported Q4 net income of $1.3B after it recorded fewer losses from loans, allowing it to take money out of reserves it keeps aside for such loans. However, the volatile fixed-income market, pressured by the bailout of Ireland & falling bond prices, reduced earnings & results fell short of estimates. Citi EPS amounted to 4¢, while analysts were looking for 7¢. This was an improvement compared to the loss of $7.6B, or 33¢ last year. Revenue was $18.37B, compared to $5.4B last year. For 2010, it reported a profit of $10.6B on revenue of $86.6B, it's first profit since 2007.
More customers were able to meet payments on credit cards & home loans. Its credit losses of $6.9B were down $0.8B (11%) from Q3, marking the 6th consecutive qtr of decline. The reduced losses allowed the bank to release $2.3B from the reserves set aside for bad loans. As expectations of an economic recovery have increased, the bank set aside $4.8B for future losses, its lowest level since Q2-2007. This is the first time that Citi is releasing results after being partly owned by the gov for 2 years (the Treasury sold the last of its equity stake in Dec). "2010 was a year full of milestones and was critical for the turnaround of this institution," said Vikram Pandit, Citi CEO. The stock fell 25¢ to $4.88 but has had a dramatic rise off its low of $1 two years ago.
Citigroup Profit Misses Analysts' Estimates on Credit Spreads
Citigroup --- 2 years
Tim Cook, Photo: Bloomberg
Tim Cook's, a master of inventory management & has high expectations of employees, takes over leadership of Apple (AAPL) after Steve Jobs is taking a medical leave of absence. AAPL sait that CEO Cook will take charge of the iPhone &d iPad maker as Jobs focuses on his health. Unlike Jobs' half-year medical leave in 2009, during which he specified he'd return to work at the end of Jun & stuck to it, AAPL did not say when, if ever, Jobs would return. Cook has run Apple twice before: first for 2 months in 2004 while Jobs battled pancreatic cancer & once again for 5½ months in 2009 while Jobs received a liver transplant. During Cook's most recent tenure, mid-Jan to the end of Jun 2009, Apple released a new version of the iPhone & updated laptop computers on schedule. The company also announced that its iTunes app store hit a major milestone: More than 1B apps were downloaded within the first 9 months of existence. AAPLs stock rose 62% during that time. The stocks dropped 15+ today to 335 on the news, after having one of the best runs for any stock in recent years.
Apple's Tim Cook Is Left Battling Google to Fight Off IPhone Challengers
Apple --- 2 years
Dow looks strong, but the news from AAPL & Citi are testing the resolve of the bulls. I like Citi for the very long term, but it will take a time to work thru problems measured in $B. I remain cautious on AAPL. We all wish Steve Jobs well. He has done an outstanding job of turning AAPL around & hopefully will return to work soon. But increased competition from major competitors for iPhone & iPad will be felt this year with slowing growth & lower margins (which are very high). This is also earnings season for MLPs when distribution increases are announced.
Dow Jones Industrials --- 2 weeks
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