Friday, February 4, 2011

Dow rose every day last week

After weakness in the AM, stocks gained strength to close at their highest levels of the day.  Dow finished up 29 (highest close since mid 2008), but decliners were modestly ahead of advancers & NAZ gained 15.  Bank stocks also rose in the PM, the Financial Index ended losing only a few pennies.


Value 223.52 One-Year Chart for S&P 500 FINANCIALS INDEX (S5FINL:IND)
Change   -0.09  (-0.0%)

The MLP index fell 1+ to 372 in profit taking & the REIT index was down 2¼ to 230.  Junk bond funds were slightly higher but Treasuries continued very weak.  The yield on the 10 year Treasury bond rose a whopping 11 basis points to 3.65%, last seen more than 9 months ago.

Treasury yields:

U.S. 3-month
U.S. 2-year
U.S. 10-year

Alerian MLP Index   ---   YTD

Dow Jones REIT Index   ---   YTD

10-Year Treasury Yield Index   ---   YTD

Oil remained weak on perceived strength in the US economy.  Gold declined on speculation that an economic recovery will curb demand for the metal as an alternative investment.  So far it has gained little momentum from the unrest in the Mideast.

CLH11.NYM...Crude Oil Mar 11...88.96 ...Down 1.58  (1.8%)

GCG11.CMX...Gold Feb 11.......1,348.40 ...Down 3.60  (0.3%)

*** Gold Super Cycle ***  

The plunge in unemployment over the past 2 months may indicate payrolls are about to pick up or may already have, is a widely held belief. The jobless rate unexpectedly dropped by 0.4% in Jan for a 2nd month of declines, bringing it down to 9.0%, the lowest level since Apr 2009. The survey showed employment climbed 589K, swamping the 36K increase in payrolls reported by a separate poll of employers.  The improvement underlying the drop in the unemployment rate is in sync with reports that show the economy is gathering momentum, which in turn would bolster job growth in coming months. Gains in income-tax receipts, the downward trend in claims for jobless benefits & employment measures in surveys like the ones from the Institute for Supply Management seems to corroborate the brighter outlook.  In addition, the unemployment rate is subject to much smaller revisions over time than the payroll count, making it a better gauge of long-term trends.  Optimists are looking for more favorable reports in Feb & Mar. 

Lower Jobless Rate Points to U.S. Payroll Gains, Economists Say

Simon Property (SPG), shopping mall owner,.reported Q4 results rose 30% on higher occupancy, sales & rent, topping expectations.  Funds from operations (FFO) rose to $1.78 per share in Q4 from $1.40 in the prior year. Excluding certain cash impairments, FFO was $1.80 per share beating expectations of $1.74.  Revenue increased 9% to $1.12B from $1.03B in the previous year. Occupancy at the its properties was 94.2%, up from 93.4% in the prior year. Sales per square foot increased to $494 from $452, while the average rent edged up to $38.87 per square foot from $38.47 per square foot.  For the year, FFO inched up to $1.76 compared with $1.75 in 2009. Excluding certain impairment charges, 2010 FFO was $6.03 per share & revenue rose 5% to $3.96B from $3.78B in 2009.  For 2011, SPG is guiding FFO between $6.45-6.60 per share (analysts are forecasting $6.51). The stock fell $1.23.

Simon Property 4Q results rise 30 percent AP

Simon Property   ---   1 year

Dow closed higher each day last week despite all the unrest in Egypt & the rest of the Mideast.  In contrast, even red hot MLPs saw selling in the last 2 days. There is data which says that money is flowing out of Asia to the US, US stocks are being considered as a safe haven investment.  If that is the case, this has to be considered volatile & not committed to long term investing here.

Dow Jones Industrials   ---   YTD

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