Dow began the day higher & then drifted lower. It finished up 89, advancers over decliners almost 4-1 & NAZ rose 25. The Financial Index was up 2+ to the 204s.
The MLP Index gained 1+ to the 383s (still 28 below its record highs in Feb) & the REIT index shot up 3 to 246. Junk bond funds were mixed (still near recent multi year highs) & Treasuries pulled back after their 3 week rally. Oil had good day, keeping the pressure on gas prices to continue near $4 a gallon. Gold marked time.
![Live 24 hours gold chart [Kitco Inc.]](http://www.kitco.com/images/live/gold.gif)
In Q1 the economy in China probably expanded at the slowest pace in almost 3 years, setting the stage for monetary loosening & aid to exporters to drive a rebound & fuel global growth. GDP growth is forecasted at 8.4%, following an 8.9% increase in Q4. The data may also show that industrial production & retail sales accelerated in Mar while spending on fixed assets slowed. But predictions are that the economy will pick up in Q2 as Premier Wen Jibao cuts banks’ required reserves & directs funds to infrastructure projects & smaller companies. That would help a global expansion clouded by US job gains that trailed forecasts in Mar & renewed concern over Europe's sovereign-debt crisis. China has allowed the yuan to weaken 0.2% this year against the dollar, following 2011’s 4.7% gain, amid a slowdown in exports. The benchmark Shanghai Composite Index of stocks has advanced 5% this year, compared with 8% rise for the MSCI Asia Pacific Index. Economic indicators have diverged so far this year. An official manufacturing index showed a 4th straight month of expansion in Mar, contrasting with a similar survey by HSBC& Markit Economics that recorded the worst contraction since Nov. Import growth in Mar trailed forecasts even as exports exceeded estimates, signaling cooling domestic demand. Because of its size, everybody is watching Chinese economic data.
China’s Growth May Have Slowed Ahead of Wen Revival
The Federal Reserve (FED) survey (Beige Book) of business conditions across the US suggests last month's pullback in hiring may prove temporary. The survey showed that each of the 12 bank districts grew steadily from mid-Feb thru Apr 2 & noted that hiring was stable or increased in most of the country. This contrasts with data last week from the Labor Dept which showed hiring slowed in Mar to half the pace from the previous 3 months. However, the FED survey, which is anecdotal, didn't reflect that slowdown. The survey noted that job gains occurred in manufacturing, shipping, information technology & professional business services. Businesses expressed concerns about rising gas prices & retailers in 5 districts said they were worried that pricier gas would drag on consumer spending in coming months. But consumers are still spending. Retail sales increased in almost all districts & 4 districts said the short-term outlook for retail spending is positive. Residential real estate activity improved in most areas as developers built more apartments & banks said that demand for loans is increasing. When the FED meets Apr 24-25, members are expected to stick with their plan to hold short-term interest rates at record lows until at least late 2014. They will likely note the slower hiring pace reported by the gov.
Fed survey shows US growth, hiring improves AP
The US budget deficit is running slightly lower than last year's thru the first 6 months of the fiscal year but is still on track to top $1T for a 4th straight year. The Treasury Dept said that the deficit in Mar totaled $198B, a record for that month (what was considered a large annual deficit not too long ago). That left the gap thru H1 at $779B, down 6% from a year earlier. The Congressional Budget Office forecasts a deficit of $1.17T for fiscal 2012, which began Oct 1, a small improvement from last year's $1.3T deficit. In H1of this year, revenue totaled $1.06T, up 4.4% from the prior year. Individual & corp tax receipts are both up, reflecting the improving economy. However, spending through H1 totaled $1.84T, slightly less than a year earlier. The Treasury will still need to borrow large amounts to finance these deficits.
US budget deficit hits a record high for March AP
Enthusiasm from the favorable Alcoa (AA) earnings report diminished during the session even though AA stock had a good day, up 58¢ (6%). What's there to say? Markets are nervous waiting for earnings reports. Banks will be the first biggies & expectations are guarded to say the least. MLPs have receded into the background after being market leaders for almost 3 years, off the depths from recession lows. The rise for the index reduced its yield to below 6%, now 6.2% after its decline. Below 6% has been difficult to hold in the past. On the other side, distribution announcements will begin next week which should feature more increases. Today's rally was largely a function of oversold markets. Dow remains well under 13K & S&P 500 is 32 below 1400. Not good for the bulls.
The MLP Index gained 1+ to the 383s (still 28 below its record highs in Feb) & the REIT index shot up 3 to 246. Junk bond funds were mixed (still near recent multi year highs) & Treasuries pulled back after their 3 week rally. Oil had good day, keeping the pressure on gas prices to continue near $4 a gallon. Gold marked time.
JPMorgan Chase Capital XVI (AMJ)
Click below for the latest market update:
Treasury yields:
U.S. 3-month | 0.081% | |
U.S. 2-year | 0.290% | |
U.S. 10-year | 2.030% |
| CLK12.NYM | ...Crude Oil May 12 | ...102.62 | ... 1.60 | (1.6%) |
In Q1 the economy in China probably expanded at the slowest pace in almost 3 years, setting the stage for monetary loosening & aid to exporters to drive a rebound & fuel global growth. GDP growth is forecasted at 8.4%, following an 8.9% increase in Q4. The data may also show that industrial production & retail sales accelerated in Mar while spending on fixed assets slowed. But predictions are that the economy will pick up in Q2 as Premier Wen Jibao cuts banks’ required reserves & directs funds to infrastructure projects & smaller companies. That would help a global expansion clouded by US job gains that trailed forecasts in Mar & renewed concern over Europe's sovereign-debt crisis. China has allowed the yuan to weaken 0.2% this year against the dollar, following 2011’s 4.7% gain, amid a slowdown in exports. The benchmark Shanghai Composite Index of stocks has advanced 5% this year, compared with 8% rise for the MSCI Asia Pacific Index. Economic indicators have diverged so far this year. An official manufacturing index showed a 4th straight month of expansion in Mar, contrasting with a similar survey by HSBC& Markit Economics that recorded the worst contraction since Nov. Import growth in Mar trailed forecasts even as exports exceeded estimates, signaling cooling domestic demand. Because of its size, everybody is watching Chinese economic data.
China’s Growth May Have Slowed Ahead of Wen Revival
The Federal Reserve (FED) survey (Beige Book) of business conditions across the US suggests last month's pullback in hiring may prove temporary. The survey showed that each of the 12 bank districts grew steadily from mid-Feb thru Apr 2 & noted that hiring was stable or increased in most of the country. This contrasts with data last week from the Labor Dept which showed hiring slowed in Mar to half the pace from the previous 3 months. However, the FED survey, which is anecdotal, didn't reflect that slowdown. The survey noted that job gains occurred in manufacturing, shipping, information technology & professional business services. Businesses expressed concerns about rising gas prices & retailers in 5 districts said they were worried that pricier gas would drag on consumer spending in coming months. But consumers are still spending. Retail sales increased in almost all districts & 4 districts said the short-term outlook for retail spending is positive. Residential real estate activity improved in most areas as developers built more apartments & banks said that demand for loans is increasing. When the FED meets Apr 24-25, members are expected to stick with their plan to hold short-term interest rates at record lows until at least late 2014. They will likely note the slower hiring pace reported by the gov.
Fed survey shows US growth, hiring improves AP
The US budget deficit is running slightly lower than last year's thru the first 6 months of the fiscal year but is still on track to top $1T for a 4th straight year. The Treasury Dept said that the deficit in Mar totaled $198B, a record for that month (what was considered a large annual deficit not too long ago). That left the gap thru H1 at $779B, down 6% from a year earlier. The Congressional Budget Office forecasts a deficit of $1.17T for fiscal 2012, which began Oct 1, a small improvement from last year's $1.3T deficit. In H1of this year, revenue totaled $1.06T, up 4.4% from the prior year. Individual & corp tax receipts are both up, reflecting the improving economy. However, spending through H1 totaled $1.84T, slightly less than a year earlier. The Treasury will still need to borrow large amounts to finance these deficits.
US budget deficit hits a record high for March AP
Enthusiasm from the favorable Alcoa (AA) earnings report diminished during the session even though AA stock had a good day, up 58¢ (6%). What's there to say? Markets are nervous waiting for earnings reports. Banks will be the first biggies & expectations are guarded to say the least. MLPs have receded into the background after being market leaders for almost 3 years, off the depths from recession lows. The rise for the index reduced its yield to below 6%, now 6.2% after its decline. Below 6% has been difficult to hold in the past. On the other side, distribution announcements will begin next week which should feature more increases. Today's rally was largely a function of oversold markets. Dow remains well under 13K & S&P 500 is 32 below 1400. Not good for the bulls.
Dow Industrials
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