Dow dropped 140, decliners over advancers 5-1 & NAZ fell 30. The Financial Index fell 4+ to the 204s (down 10 from the highs last month). The MLP index dropped almost 4 to the 388s & the REIT index fell about 4 to the 247s. Junk bond funds were a little weak, but Treasuries were strong (see below). Oil dropped as an employment report raised concern that US fuel demand will slow & Iran agreed to resume talks on its nuclear program. Gold befitted from the jobs report on Fri,
Photo: Bloomberg
Risk averse investing has returned to the markets. Investors are plowing into Treasuries at a record pace while the supply dwindles. Yields should remain low even if the Federal Reserve does not undertake more stimulus to fight unemployment. Buyers bid $3.19 for each dollar of the $538B in Treasuries sold this year, the most since the gov began releasing the data in 1992 & on pace to beat the high of $3.04 in 2011. The net amount of Treasury debt available will decline 30% once proceeds from maturing securities are reinvested. Skepticism about the US recovery, as well as signs Europe’s debt turmoil isn’t over, is boosting demand, enabling the Treasury to fund a 4th consecutive deficit exceeding $1T at near-record low costs. The 10 year Treasury yield has plunged from over 2¼% a couple of weeks ago to near 2% currently. Demand for gold, the other principal safe haven investment, is also strong.
Record Treasury Demand Keeps Yields Low as Supply Shrinks
Photo: Bloomberg
Inflation in China accelerated more than forecast in Mar on a pickup in food prices. Policy makers may exercise caution in adding stimulus to boost growth. Consumer prices rose 3.6% from a year earlier, the National Bureau of Statistics said (above the 3.4% estimate). Food-related costs gained 7.5%. Gov officials may need to remain alert to the risk of inflation bouncing back even after price increases stayed below the 4% target for a 2nd month. Its economy may have expanded in Q1 at the slowest pace in almost 3 years, showing the limits of the nation’s contribution to global growth as US job growth weakens & concern mounts about Europe's sovereign-debt crisis. When China sneezes, the rest of the world pays attention.
China Consumer Prices Rise Faster-Than-Estimated 3.6%
Photo: Bloomberg
AOL stock surged after it said it agreed to sell 800 of its patents & license others to Microsoft (MSFT), a Dow stock, for more than $1B & plans to return some of the sale proceeds to its shareholders. After the sale, AOL should have about $15 per share in cash. Patents have become a hot commodity in the high-tech industry in recent years. They're useful both for attack, for suing competitors, & for defense — for warding off lawsuits with threats of countersuits. Software patents can have broad applications, & thousands of patents can apply to a complicated product like a cellphone. Google (GOOG) is buying phone maker Motorola Mobility (MMI) for $12B to get hold of its patents. After the sale, AOL will still hold over 300 patents & applications covering a variety of core & strategic technologies including advertising, search, content generation, social networking, mapping, multimedia, & security among others. AOL also received a license to the patents being sold to MSFT. "The combined sale and licensing arrangement unlocks current dollar value for our shareholders and enables AOL to continue to aggressively execute on our strategy to create long-term shareholder value," said CEO Tim Armstrong. AOL intends to distribute a "significant portion" of the sale proceeds to shareholders before the sale closes by year end. The stock shot up $7.85 (42%). A short term chart is needed to show the dramatic rise today.
AOL to Sell, License Patents to Microsoft for $1.06 Billion
As predicted, this is a dismal day for the markets following slower than expected jobs growth in Mar. The European debt mess is not going away. ECB financing for Portuguese banks rose to a record in Mar. Spain needs help. Then there's earnings season which kicks off tomorrow after the market close when Alcoa (AA), a Dow stock, reports. The markets are anxious. The chart below shows Dow has been stuck around 13K for a couple of months. Today it fell below as S&P 500 dropped to 1379, solidly below the important 1400 ceiling. Prepare for a rough road ahead.
JPMorgan Chase Capital XVI (AMJ)
Treasury yields:
U.S. 3-month | 0.066% | |
U.S. 2-year | 0.318% | |
U.S. 10-year | 2.032% |
| CLK12.NYM | ...Crude Oil May 12 | ...101.42 | ...... 1.89 | (1.8%) |
| GCJ12.CMX | ....Gold Apr 12 | .........1,644.60 | ... 16.10 | (1.0%) |
Get the latest daily market update below:
Risk averse investing has returned to the markets. Investors are plowing into Treasuries at a record pace while the supply dwindles. Yields should remain low even if the Federal Reserve does not undertake more stimulus to fight unemployment. Buyers bid $3.19 for each dollar of the $538B in Treasuries sold this year, the most since the gov began releasing the data in 1992 & on pace to beat the high of $3.04 in 2011. The net amount of Treasury debt available will decline 30% once proceeds from maturing securities are reinvested. Skepticism about the US recovery, as well as signs Europe’s debt turmoil isn’t over, is boosting demand, enabling the Treasury to fund a 4th consecutive deficit exceeding $1T at near-record low costs. The 10 year Treasury yield has plunged from over 2¼% a couple of weeks ago to near 2% currently. Demand for gold, the other principal safe haven investment, is also strong.
Record Treasury Demand Keeps Yields Low as Supply Shrinks
Inflation in China accelerated more than forecast in Mar on a pickup in food prices. Policy makers may exercise caution in adding stimulus to boost growth. Consumer prices rose 3.6% from a year earlier, the National Bureau of Statistics said (above the 3.4% estimate). Food-related costs gained 7.5%. Gov officials may need to remain alert to the risk of inflation bouncing back even after price increases stayed below the 4% target for a 2nd month. Its economy may have expanded in Q1 at the slowest pace in almost 3 years, showing the limits of the nation’s contribution to global growth as US job growth weakens & concern mounts about Europe's sovereign-debt crisis. When China sneezes, the rest of the world pays attention.
China Consumer Prices Rise Faster-Than-Estimated 3.6%
AOL stock surged after it said it agreed to sell 800 of its patents & license others to Microsoft (MSFT), a Dow stock, for more than $1B & plans to return some of the sale proceeds to its shareholders. After the sale, AOL should have about $15 per share in cash. Patents have become a hot commodity in the high-tech industry in recent years. They're useful both for attack, for suing competitors, & for defense — for warding off lawsuits with threats of countersuits. Software patents can have broad applications, & thousands of patents can apply to a complicated product like a cellphone. Google (GOOG) is buying phone maker Motorola Mobility (MMI) for $12B to get hold of its patents. After the sale, AOL will still hold over 300 patents & applications covering a variety of core & strategic technologies including advertising, search, content generation, social networking, mapping, multimedia, & security among others. AOL also received a license to the patents being sold to MSFT. "The combined sale and licensing arrangement unlocks current dollar value for our shareholders and enables AOL to continue to aggressively execute on our strategy to create long-term shareholder value," said CEO Tim Armstrong. AOL intends to distribute a "significant portion" of the sale proceeds to shareholders before the sale closes by year end. The stock shot up $7.85 (42%). A short term chart is needed to show the dramatic rise today.
AOL to Sell, License Patents to Microsoft for $1.06 Billion
AOL Inc. (AOL)
As predicted, this is a dismal day for the markets following slower than expected jobs growth in Mar. The European debt mess is not going away. ECB financing for Portuguese banks rose to a record in Mar. Spain needs help. Then there's earnings season which kicks off tomorrow after the market close when Alcoa (AA), a Dow stock, reports. The markets are anxious. The chart below shows Dow has been stuck around 13K for a couple of months. Today it fell below as S&P 500 dropped to 1379, solidly below the important 1400 ceiling. Prepare for a rough road ahead.
Dow Industrials
Get your favorite symbols' Trend Analysis TODAY!
No comments:
Post a Comment