Markets barely higher on uncertainties over raising the debt ceiling

Dow is up 6, advancers 5-4 ahead of decliners & NAZ gained 16.  Bank stocks edged lower after Citi earnings were reported & were viewed as reasonably good.

S&P 500 Financials Sector Index

Value	200.20
Change	-1.22    (-0.1%)

The MLP index was up 2 to the 372s & the REIT index rose 2 to the 245s.  Junk bond funds were marginally higher while Treasuries were a little lower.  The yield on the 10 year Treasury solidly is back above 2.9%.  Oil is back on the rebound & gold is taking a day off after reaching new record highs.  But it remains very strong.

JPMorgan Chase Capital XVI (AMJ)

Treasury yields:

U.S. 3-month	0.005%
U.S. 2-year	0.355%
U.S. 10-year	2.920%

CLQ11.NYM

...Crude Oil Aug 11

...96.75

... 1.06

(1.1%)

GCN11.CMX

...Gold Jul 11

........1,583.50

... 5.50

(0.4%)

The latest daily market update below:

Photo:   Bloomberg

Consumer sentiment deteriorated in early Jul to the lowest level since Mar 2009 on increasing pessimism over falling income & rising unemployment.  Confidence in gov economic policies also curdled, according to the Thomson Reuters/University of Michigan survey.  The preliminary reading for the consumer sentiment index dropped to 63.8 in Jul from 71.5 the month before (falling far short of expectations of an increase to 72.5).  The survey's barometer of current economic conditions fell to 76.3, the lowest since Nov 2009, from 82.0. The gauge of consumer expectations was also at its lowest since Mar 2009, tumbling to 55.8 from 64.8.  These readings suggest consumers think the economy is in a recession.  The data suggests real consumer spending in H2 may be barely higher than H1.  Twice as many consumers reported hearing about new job losses compared with job gains, while half of all consumers said the economy had recently worsened.  The proportion of consumers that rated gov economic policies as poor rose to 52% in early Jul, up from 40% in Jun.  The inflation outlook improved with the survey's one-year inflation expectation easing to its lowest level since Feb at 3.4% percent from 3.8%. The 5-10-year inflation outlook fell to 2.8% from 3.0%.  Glum statistic from consumers.

Consumer Sentiment in U.S. Falls to 2-Year Low

Photo:   Bloomberg

Citigroup turned a profit for the 6th straight qtr as losses from failed loans declined & lending increased in Asia & Latin America.  Losses from bad loans fell 35% in Q2 to $5.4B, allowed the bank to release $2B from its loan loss reserves & count it as income. More of the bank's credit card & mortgage loan customers were also paid on time. Consumer loans that were delinquent by 90 days or more stood at $9.9B, down 46% compared with the same period last year.  Net income rose 24% to $1.09 on revenue of $20.6B. That compares to net income with 90¢ last yeas. EPS was adjusted to account for a reverse split, 10 shares were exchanged for one in May.  Analysts forecasted EPS of 96¢.  "We produced growth in both loans and deposits in Citicorp," said CEO Vikram Pandit.  Consumer loans increased 11% to $244B & corp loans grew 22% to $197B with much of the growth coming from emerging markets.  But investment banking & trading income fell 29%, to $1.2B.  Investment banking revenue fell 8% to $5.5B.  The results are an improvement for Citi, which was one of the hardest-hit banks during the financial crisis.  The stock slipped 11¢.

Citigroup Profit Beats Analysts’ Estimates

Citigroup Inc. (C)

Google (GOOG) reported good earnings last night & shot up $63 (12%).  Citi earnings were decent but markets are weighed down by the goings on in DC & Europe.  DC drama will play out thru next week at a minimum, an overhang that will be too much for earnings to overwhelm.  At least MLPs & REITs are having a good day.

Dow Industrials (INDU)

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