With buying in the PM, Dow was able to break into the black. Dow finished up 19, decliners ahead of advancers 3-2 & NAZ fell 9 (led by Apple's drop of 8 on worries about its workers' conditions in China). Bank stocks sold off on Greek debt concerns. The Financial Index fell 2+ to the 211s (down 4 from its highs on Mon).
There was bargain hunting for MLPs in the PM, but the index was still down 3 to 389. Even the yearly chart for an ETF tracking the index shows a significant drop in recent weeks. Junk bond funds were little changed but Treasuries rose. Oil fell on rumors about oil being released from strategic reserves & gold did not do much.
![Live 24 hours gold chart [Kitco Inc.]](http://www.kitco.com/images/live/gold.gif)
The US economy grew at a 3% annual rate in Q4, the same as the previous estimate. But corp profits climbed at the slowest pace in 3 years, suggesting that business investment & hiring will cool. The increase in GDP was the biggest in more than a year & followed a 1.8% annualized gain in Q3, according to the Commerce Dept. Company earnings were up 0.9% from Q3, the smallest advance since Q4 2008. While the report showed business spending on new equipment & software climbed more the previously estimated, figures this month indicate outlays are slowing following the expiration of a gov tax credit. Consumers may be poised to take a leading role in the expansion as the biggest increase in employment since 2006 gives households the confidence and means to spend. Companies are likely to remain cautious about hiring & investing in new equipment if growth slows.
Economy in U.S. Grew at 3% Annual Rate in Fourth Quarter
I just came from meeting with fund managers of prominent high yield funds. The global economy should expand at a moderate pace. They are optimistic about junk bonds over the next year even though a few marginal junk bonds have come to market in recent weeks. The yields are around 7-8%, near record low levels. But low levels have lasted for long periods in the past. In addition, the spread over the 10 year Treasury is around 600 basis points, above the 450 spread which has been associated with market tops for junk bonds.
Another reminder about the price of gas. While it may level off if crude settles back, it remains in dangerously high territory which will squeeze consumer budgets.
This may sound like a broken record, the markets are very tired after a stellar run in the last 6 months. The US economy is looking good, but not great. China is so-so with an acceptable growth rate around 8%. But Europe has problems. Then there's the high prices for gas. Being the last trading day in Q1, it's difficult to guess where the markets will go. In addition, the markets are awaiting data data on consumer confidence & spending tomorrow. Chances are it will lumber along as it has done this week but Dow is up 65 this week.
There was bargain hunting for MLPs in the PM, but the index was still down 3 to 389. Even the yearly chart for an ETF tracking the index shows a significant drop in recent weeks. Junk bond funds were little changed but Treasuries rose. Oil fell on rumors about oil being released from strategic reserves & gold did not do much.
JPMorgan Chase Capital XVI (AMJ)
Click below for the latest market update:
Treasury yields:
U.S. 3-month | 0.061% | |
U.S. 2-year | 0.333% | |
U.S. 10-year | 2.157% |
| CLK12.NYM | ...Crude Oil May 12 | ...103.15 | ... 2.26 | (2.1%) |
The US economy grew at a 3% annual rate in Q4, the same as the previous estimate. But corp profits climbed at the slowest pace in 3 years, suggesting that business investment & hiring will cool. The increase in GDP was the biggest in more than a year & followed a 1.8% annualized gain in Q3, according to the Commerce Dept. Company earnings were up 0.9% from Q3, the smallest advance since Q4 2008. While the report showed business spending on new equipment & software climbed more the previously estimated, figures this month indicate outlays are slowing following the expiration of a gov tax credit. Consumers may be poised to take a leading role in the expansion as the biggest increase in employment since 2006 gives households the confidence and means to spend. Companies are likely to remain cautious about hiring & investing in new equipment if growth slows.
Economy in U.S. Grew at 3% Annual Rate in Fourth Quarter
I just came from meeting with fund managers of prominent high yield funds. The global economy should expand at a moderate pace. They are optimistic about junk bonds over the next year even though a few marginal junk bonds have come to market in recent weeks. The yields are around 7-8%, near record low levels. But low levels have lasted for long periods in the past. In addition, the spread over the 10 year Treasury is around 600 basis points, above the 450 spread which has been associated with market tops for junk bonds.
Another reminder about the price of gas. While it may level off if crude settles back, it remains in dangerously high territory which will squeeze consumer budgets.
| Regular | Mid | Premium | Diesel | 85 | **E85 MPG/BTU adjusted price | |
| Current Avg. | $3.921 | $4.059 | $4.190 | $4.162 | $3.313 | $4.360 |
| Yesterday Avg. | $3.911 | $4.048 | $4.178 | $4.159 | $3.309 | $4.355 |
| Week Ago Avg. | $3.881 | $4.021 | $4.151 | $4.153 | $3.287 | $4.326 |
| Month Ago Avg. | $3.716 | $3.854 | $3.986 | $4.041 | $3.187 | $4.194 |
| Year Ago Avg. | $3.595 | $3.729 | $3.861 | $3.961 | $3.045 | $4.007 |
This may sound like a broken record, the markets are very tired after a stellar run in the last 6 months. The US economy is looking good, but not great. China is so-so with an acceptable growth rate around 8%. But Europe has problems. Then there's the high prices for gas. Being the last trading day in Q1, it's difficult to guess where the markets will go. In addition, the markets are awaiting data data on consumer confidence & spending tomorrow. Chances are it will lumber along as it has done this week but Dow is up 65 this week.
Dow Industrials
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