S&P 500 FINANCIALS INDEX
| Value | 225.04 | |
| Change | -1.74 (-0.8%) |
The Alerian MLP Index fell a fraction to under 382, yesterday's new record high. It has been reaching new highs because it's emotionally attached to the price of oil. The REIT index fell 2½, to the 238s, from yesterdays' interim highs. Junk bond funds inched higher while Treasuries fell after comments by Bernanke. The yield on the 10 year Treasury bond rose 4½ basis points to 3.46%, its first rise in more than a week.
Treasury yields:
| U.S. 3-month | 0.14% | |
| U.S. 2-year | 0.69% | |
| U.S. 10-year | 3.46% |
Alerian MLP Index --- 2 weeks
Dow Jones REIT Index --- 2 weeks
10-Year Treasury Yield Index --- 2 weeks
Oil rose from the lowest in a week as Libyan crude exports were curbed by fighting in the country while demonstrations planned in Iran raised concern of wider disruptions. Gold climbed close to a record as Mideast unrest spurred demand for the metal as an investment haven.
| CLJ11.NYM | ....Crude Oil Apr 11 | ...98.40 | .... 1.43 | (1.5%) |
| GCH11.CMX | ...Gold Mar 11 | .....1,420.50 | ... 11.20 | (0.8%) |
Gold Super Cycle Link! Click Here
CLJ (oil contract) --- 2 weeks
Photo: Bloomberg
Federal Reserve Chairman Bernanke told Congress that a prolonged rise in oil prices would pose a danger to the economy, but a more likely outcome is a temporary & modest increase in consumer prices -- not runaway inflation. He expressed confidence that economic growth would increase this year. But it won't be strong enough to quickly lower unemployment (at 9%). In addition, he cited other risks to the economy, including rising prices for oil, gasoline, food & other commodities, & further weakness in home prices. Most importantly, he said the economy still needs the support of its $600B bond-purchase program, downplaying runaway inflation risks that others have raised. The bond-purchase program is scheduled to end in Jun. Bernanke says the sharp drops in the nation's unemployment rates over the last 2 months were encouraging but it will still take "several years" for unemployment to drop back to normal - around 6%. No surprises although a reminder about the negative effects of higher gas prices sent a sobering message to the markets.
Bernanke Sees Temporary Inflation Gain From Commodities
Photo: Bloomberg
US manufacturers expanded at the fastest pace in nearly 7 years last month, as factories continue to boost economic growth. The Institute for Supply Management said its index of manufacturing activity rose to 61.4 in Feb, up from 60.8 in Jan. That's the highest reading since 61.4 in 2004. The ISM's index bottomed out at 33.3 in Dec 2008, its lowest point in nearly 30 years. A reading above 50 indicates expansion & the manufacturing sector has now expanded for 19 months. Another gauge measuring orders rose & an employment index topped 60 for only the 3rd time in a decade. But prices paid for raw materials rose for the 3rd straight month, a sign that inflation could be a problem.
Manufacturing in U.S. Expanded at Faster Pace Last Month
Photo: Bloomberg
Google (GOOG), which powers my blog, is opening new offices in Latin America & boosting staffing levels by 50% to capitalize on its fastest-growing region. Revenue from Latin America surged 80% last year, outpacing other markets. GOOG, with 500 people in the region, has opened branches in Santiago, Lima & Bogota to take advantage of the growth. Dennis Woodside, Vice President, said, “What we are seeing is the Internet coming into its own in all the Latin American markets.” He continued, “There are 650 million people in the region, and a lot of them are really coming online for the first time. Our business in Latin America is just booming.” GOOG is seeking new growth areas to offset a maturing US market & a diminished presence in China. The US & the UK accounted for about 60% of the $29.3B revenue last year, most of which was generated by ads. GOOG was off 5 to 608.
Google Boosts Its Presence in Latin America as Region's Sales Increase 80%
Google --- 1 year
Markets are taking another breather following the first major pause in the otherwise straight up 3 month advance. Dow is less than 200 away from resuming its march upward. Stocks & the high yield sectors (stocks with higher yields) continue in demand along with gold. That unusual connection has lasted for months, but I still feel there will be a day of reckoning. That could be spurred by events in the Mideast, especially if the Libya situation drags on for some time..
Dow Jones Industrials --- 2 weeks
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