Dow fell 20, advancers 4-3 ahead of decliners & NAZ gained 1. The Financial Index was up a fraction today, 5 in Jan.
This was a rebound day for MLPs & REITs. The indices had a good month with the MLP index up 5 to a new record & the REIT rose 12 (near its yearly highs). Junk bond funds were mixed today but also had a good month. Meanwhile, Treasuries rose sharply. Heavy buying caused the yield on the 10 year Treasury to drop 15 basis points, a very big move! Oil slipped a little, but gold, another safe haven investment, rose almost 10%.
![Live 24 hours gold chart [Kitco Inc.]](http://www.kitco.com/images/live/gold.gif)
Greece's Finance Minister Venizelos
Photo: Yahoo
Greece's private sector creditors could take a loss of more than 70% in a planned debt swap, Finance Minister Evangelos Venizelos said. "There is a very serious discussion based on new facts. We are talking about a PSI much greater than the original," he told lawmakers, referring to private sector involvement in the deal. "We are talking about a haircut on the net present value exceeding 70 percent," he said. Unfortunately, this could trigger a default from the credit agencies. Conditions remain fluid as Greece hopes to win friends by "trying harder."
Greek Bondholders Set to Get GDP Sweetener
The US budget deficit is expected to shrink $1.1T this year according to the Congressional Budget Office. That would be down from last year’s $1.3T & will fall because of strengthening tax revenue & a slowdown in spending. Outlays this year will climb 0.1% ($3B) while tax revenue will be up 10%. However, it would be the 4th consecutive year the gov runs a 1T$ deficit. “How much and how quickly the deficit declines will depend in part on how well the economy does over the next few years,” the report said. “Probably more critical, though, will be the fiscal policy choices made by lawmakers as they face the substantial changes to tax and spending policies that are slated to take effect within the next year.” Income-tax cuts first enacted under Pres Bush are scheduled to expire at the end of 2012, while $1T in automatic spending cuts will begin taking effect next Jan (AFTER THE ELECTIONS). The CBO said the economy will expand this year by 2% while the unemployment rate will probably climb to 8.9 % from the current 8.5%.
Deficit Will Shrink to $1.1 Trillion This Year, CBO Says
Pfizer, a Dow stock, reported sharply lower quarterly earnings, hurt by generic competition of its Lipitor cholesterol drug, & it trimmed its 2012 forecasts because of negative effects of the stronger dollar. Q4 EPS was 19¢ which compares with 36¢ a year earlier. Excluding special items, EPS was 50¢, beating expected EPS of 47¢. Q4 results appeared so unfavorable largely because of a big tax benefit in the year-earlier period. Revenue fell 4% to $16.7B, but above expectations of $16.6B. Global Q4 sales of Lipitor fell 24% to $2B, including a 42% decline in the US. But some of the other biggest drugs scored moderate sales gains, helped by price increases. As in Q3, the strongest gains came from its nutritional products & animal health units, noncore businesses that it aims to possibly sell or spin off. CEO Read said that any separation of the 2 businesses would occur after Jul. Sales of animal health brands rose 13% to $1.1B, while sales of nutritional products -- including baby formula & maternity supplements -- jumped 22% to $598M. PFE forecast 2012 EPS of $2.20-$2.30, excluding items, down from its prior outlook of $2.25-$2.35. The company lowered its 2012 revenue forecast to $60.5-$62.5B, from its earlier outlook of $62.2-$64.7B. The stock fell 18¢.
S&P 500 Financials Sector Index
| Value | 189.19 | |
| Change | 0.79 (0.4%) |
This was a rebound day for MLPs & REITs. The indices had a good month with the MLP index up 5 to a new record & the REIT rose 12 (near its yearly highs). Junk bond funds were mixed today but also had a good month. Meanwhile, Treasuries rose sharply. Heavy buying caused the yield on the 10 year Treasury to drop 15 basis points, a very big move! Oil slipped a little, but gold, another safe haven investment, rose almost 10%.
Alerian MLP Index
| Value | 395.19 | |
| Change | 1.92 (0.5%) |
Click below for the latest market update:
Treasury yields:
U.S. 3-month | 0.051% | |
U.S. 2-year | 0.215% | |
U.S. 10-year | 1.799% |
| CLH12.NYM | ....Crude Oil Mar 12 | ...98.25 | ... 0.53 | (0.5%) |
Photo: Yahoo
Greece's private sector creditors could take a loss of more than 70% in a planned debt swap, Finance Minister Evangelos Venizelos said. "There is a very serious discussion based on new facts. We are talking about a PSI much greater than the original," he told lawmakers, referring to private sector involvement in the deal. "We are talking about a haircut on the net present value exceeding 70 percent," he said. Unfortunately, this could trigger a default from the credit agencies. Conditions remain fluid as Greece hopes to win friends by "trying harder."
Greek Bondholders Set to Get GDP Sweetener
The US budget deficit is expected to shrink $1.1T this year according to the Congressional Budget Office. That would be down from last year’s $1.3T & will fall because of strengthening tax revenue & a slowdown in spending. Outlays this year will climb 0.1% ($3B) while tax revenue will be up 10%. However, it would be the 4th consecutive year the gov runs a 1T$ deficit. “How much and how quickly the deficit declines will depend in part on how well the economy does over the next few years,” the report said. “Probably more critical, though, will be the fiscal policy choices made by lawmakers as they face the substantial changes to tax and spending policies that are slated to take effect within the next year.” Income-tax cuts first enacted under Pres Bush are scheduled to expire at the end of 2012, while $1T in automatic spending cuts will begin taking effect next Jan (AFTER THE ELECTIONS). The CBO said the economy will expand this year by 2% while the unemployment rate will probably climb to 8.9 % from the current 8.5%.
Deficit Will Shrink to $1.1 Trillion This Year, CBO Says
Photo: Bloomberg
Pfizer, Inc. (PFE)
The stock markets had a good month. Dow advanced 420, making the bulls happy. But it was not all rosy. After a strong start, it has been essentially treading water for 2 weeks, a time time when the inability to resolve the Greek debt mess has dominated the news & earnings season began. High yielding sectors have done well: MLPs, REITs & junk bonds as investors looked for attractive yields. But the classic flight to safety investments, Treasuries & gold, were also in demand. For the moment, risk averse thinking has the upper hand, stocks may have more head winds to deal with.
Dow Industrials
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