Friday, March 25, 2011

Markets rise on revised GDP data

Dow gained 50 (AM gains were trimmed by late day selling), advancers ahead of decliners 2-1 & NAZ added 6. Bank stocks were marginally higher.

S&P 500 FINANCIALS INDEX

Value	220.06
Change	0.47 (0.2%)

The Alerian MLP Index shot up 1½ to the 378s, just 5 below its record reached earlier in Mar, & the REIT index rose 1½ to the 231s. Junk bond funds were a tad higher. Treasuries eased back taking the yield on the 10 year Treasury bond to its highest level in 2 weeks. Oil edged lower as crude failed to breach technical resistance at its 30-month high & on concerns that the European debt situation & the crisis in Japan will curb fuel demand. Gold futures fell on bets that the rally yesterday to a record was overdone. Bloomberg TV had an gold "expert" on who predicted gold will average $1495 this year which implies it will top $1500 in the coming months.

JPMorgan Chase Capital XVI (AMJ)

Treasury yields:

U.S. 3-month		0.08%
U.S. 2-year		0.75%
U.S. 10-year		3.44%

CLK11.NYM

...Crude Oil May 11

...105.58

...

0.02

(0.0%)

GCH11.CMX

...Gold Mar 11

........1,426.10

...

8.70 (0.6%)

Federal Reserve Bank of Atlanta President Dennis Lockhart

Dennis Lockhart
Photo: Bloomberg

The US economic recovery is on solid ground, making it unlikely the Federal Reserve (FED) will extend its bond-buying stimulus program according to Dennis Lockhart, Atlanta Federal Reserve Bank President. "I remain satisfied that the current stance of monetary policy is appropriately calibrated to the current and projected state of the economy," Lockhart told a conference. The remarks suggested the FED plans to continue its program of $600B in gov bond purchases to the Jun deadline, but has no plans to extend the program beyond that. When asked about the chances of an extension (i.e. QE3), Lockhart said: "It's a high bar." Lockhart fought back against the notion that Fed officials exclude inconveniently high costs such as food and energy from their policy calculus. "Contrary to popular opinion, Federal Reserve officials do actually eat and fill up their gas tanks," Lockhart said.

Lockhart Supports Fed's Monetary Policy, Would Tighten to Curb Inflation

RIMM's Blackberry tablet - PlayBook
Photo: Yahoo

Research In Motion (RIMM) is facing skeptical investors unsure it can pull off a difficult transition as it promises strong growth based on a tablet & operating system few have seen. RIMM has spent heavily developing & marketing the device, designed to snatch some glory away from the iPad, which virtually invented the now-crowded tablet market. To cushion the blow, RIMM took the unusual step of providing a forecast for full-year earnings that topped the expectations of all but the most optimistic pundit. The number supported RIM's contention that the pain surrounding the PlayBook launch would set the stage for long-term gain. But investors & analysts were largely not buying the argument. The stock plunged $7+ to the 56s.

RIM shares dive as outlook signals tough road ahead

Research in Motion Limited (RIMM)

Markets had an excellent week after a 3 day drubbing last week. Dow gained 362. The MLP index rose 12, one of its biggest gains in history. Problems around the world are of little bother to market bulls. Meanwhile, gold touched record highs above $1440, yesterday. Both markets should not rise at the same time. MLPs are yield securities & their yields are below 6% again. The average price for gas at the pump is still $3.55 & that is haunting all stock markets.