S&P 500 FINANCIALS INDEX
| Value | 221.60 | |
| Change | 0.89 (0.4%) |
The MLP index gained 1¼ to a new record at 372, bringing the yield down to 6%. The REIT index had a fractional gain to 224 & junk bond funds were mixed. There was buying in Treasuries after the auction for 30 year bonds was completed at lunchtime. The yield on the 10 year Treasury bond fell 5 basis points to 3.30%, still fairly steady over the last month.
Treasury yields:
| U.S. 3-month | 0.14% | |
| U.S. 2-year | 0.58% | |
| U.S. 10-year | 3.30% |
Alerian MLP Index --- 3 months
Dow Jones REIT Index --- 3 months
10-Year Treasury Yield Index --- 3 months
Oil & gold slipped a little, following moves in the stock markets.
| CLG11.NYM | ...Crude Oil Feb 11 | ...91.28 | ... 0.58 (0.6%) |
| GCF11.CMX | ....Gold Jan 11 | ......1,384.50 | ... 1.20 (0.09%) |
++ Gold Super Cycle ++
The U.S. economy should grow around 3-4% this year, a healthier clip than in 2010, but not enough to bring down unemployment as much as policymakers would like, Federal Reserve (FED) Chairman Bernanke said. "We see the economy strengthening. It has looked better in the last few months. We think a 3 to 4 percent-type of growth number for 2011 seems reasonable," Bernanke continued. "Now that's not going to reduce unemployment at the pace we'd like it to, but certainly it would be good to see the economy growing and that means more sales, more business," he added. His forecast still shows how much the outlook has brightened since Nov, when the FED anticipated growth next year in a range of 3-3.6% & launched its $600B bond buying program aimed at keeping interest rates low to spur more robust growth & bring down the lofty unemployment rate. He said that it looks less likely that the recovery could stall. "We're seeing some improvement in the labor market, I think deflation risk has receded considerably and so we're moving in the right direction."
Bernanke Sees US Growing 3% to 4% in 2011- Reuters
The bleakest year in the foreclosure crisis has just begun as lenders are poised to take back more homes this year than any time since the housing meltdown began in 2006. About 5M borrowers are at least 2 months behind on their mortgages & it is expected that they will miss payments because of job losses & loans that exceed the value of their homes. One in every 45 households received a foreclosure filing last year, a record 2.9M, up 1.67% from 2009. The glut of foreclosures has compounded the problem. Foreclosures are expected to remain elevated throughout the year & could top 2010 results, when a record 1M homes were lost. This will push home prices down another 5% before finally bottoming out. The housing industry remains stuck in the mud.
Studies of vorapaxar, from Merck (MRK, a Dow stock), an anti-clotting pill that could generate $5B in annual sales, was halted & a 2nd trial narrowed in scope, limiting the drug’s possible use. All participants will stop taking the drug in the trial of 13K patients who began the medicine at the time of a heart attack or chest pain. A 2nd study, of 26K patients with prior heart problems, will be stopped for the 25% who had suffered a stroke. MRK is reviewing the results & didn't know whether it will file for the approval of the medicine. This drug is considered the highest profile pipeline drug for MRK. The stock was clobbered, down 2.46 to just above its yearly low.
Merck Blood Thinner Study Ends in Stroke Patients, Limiting Possible Salesat Bloomberg
Merck --- 1 year
Dow remains stuck in a sideways range near 10.6K as the upward momentum has reached a significant ceiling. Earnings from a few Dow stocks are due shortly which could tell us if it can break thru. I hate to repeat, but this is not the way a year should start after "everybody agreed" that it would provide more big gains for stocks.
Dow Jones Industrials --- 3 months
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