Dow slipped 12, advancers & decliners were equal while NAZ fell 3. The Financial Index was up a few pennies in the 195s.
The MLP index rose 1+ to 370 (the highest level this month) & the REIT index gained a fraction to 257. Junk bond funds were mixed to lower & Treasuries lost ground. Oil dropped for a 3rd day on speculation that US supplies may have shrunk less than estimated, while investors awaited the outcome of a Federal Reserve meeting on monetary policy. Gold also fell back, hanging in just above $1600.
Photo: Bloomberg
The 3 parties that back Greece's commitments to bailout creditors have agreed in principle to form a coalition gov & are negotiating the final details. The agreement follows protracted negotiations between the conservative New Democracy party, the Socialist PASOK & the smaller Democratic Left party, after a national election on Sun. New Democracy won the vote but needs other parties to form a majority coalition. Democratic Left spokesman Gerasimos Georgatos said his party is committed to joining a gov headed by the conservatives. "We are offering a vote of confidence, not a vote of tolerance," he said. "We will be part of the government. That means that even if we disagree on a specific draft law, we will not withdraw our support or bring down the government." The parties are still discussing the new gov policy platform & who will be given cabinet positions. "We will have a government today," said a PASOK spokesman.
Greek Leaders Agree on Three-Way Coalition Led By Samaras
Photo: Bloomberg
Procter & Gamble, a Dow stock& Dividend Aristocrat, lowered its Q4 earnings & revenue forecasts, hurt by unfavorable foreign exchange rates, continued slow growth in developed markets & a slowdown of growth in China. The guidance cut is the 2nd time in 3 months that PG has lowered its outlook as it is trying to balance growth in emerging markets (30% of sales) with the realities of an uncertain global economy & lackluster market share growth. It's a sign that expanding abroad is a complicated task for even the largest consumer product companies. CEO Bob McDonald reiterated that strategy as well as the company's cost cutting program, aimed at saving $10B by fiscal 2016. "We are making the necessary adjustments to our growth strategy to increase focus on our core business and to achieve more balanced growth across geographies, product categories and the top and bottom lines," he said. PG expects adjusted Q4 earnings of 75-79¢, down from its previous estimate of 79-85¢. Revenue is anticipated to drop 1-2% compared with a prior outlook for a 1-2%. The new guidance implies revenue in a range of $20.45-$20.66B. Analysts are forecasting EPS of 82¢ on revenue of $20.62B. PG reaffirmed a plan announced last month, that it will prioritize investments in its biggest product innovations, its biggest & most profitable markets & its biggest emerging countries. It also plans to keep investing in new markets. For fiscal 2013, PG expects adjusted earnings to be up by a mid-to-high single digits percentage rate. The stock sank 1.98, near its lowest level in the last 12 months..
P&G Cuts Forecasts as Sales Growth Slows in Europe, U.S
The euro debt mess is hurting all of Europe (not to mention the rest of the world). UK unemployment claims unexpectedly rose in May. Jobless- claims climbed 8K from Apr to 1.6M according to the Office for National Statistics, worse than the forecast for a drop of 4K. The unemployment rate, measured by Intl Labour Organization, was unchanged at 8.2% in the 3 months though Apr. The figures suggest the labor-market recovery is running out of steam, increasing pressure on budget cuts that have been blamed by the opposition for pushing the UK into its first double-dip recession since the 1970s. Bank of England Governor King & 3 other policy makers were overruled 2 weeks ago in a push to expand the bank’s bond- purchase program. A majority said more stimulus was likely to be needed as risks from the crisis mounted. This is a big economy in Europe & more difficulties are not welcome.
U.K. Jobless Claims Unexpectedly Rise as Euro Crisis Bites
The Federal Reserve (FED) is seen as expanding Operations Twist instead of a beginning a new QE3 program. That would probably disappoint traders. Europe remains under a dark cloud. Spain paid 5.07% to sell 12-month Treasury bills & 5.11% to sell 18-month paper, an increase of about 200 basis points from the last auction a month ago. Yields on longer-term bonds are over 7%. The UK economy has problems, different than Spain, but it's hurting. The PG reduction in earnings guidance is troubling for the markets because this would not have been necessary if economies in developed countries were strong. But Dow is hanging there, praying for favorable word from the FED later today.
The MLP index rose 1+ to 370 (the highest level this month) & the REIT index gained a fraction to 257. Junk bond funds were mixed to lower & Treasuries lost ground. Oil dropped for a 3rd day on speculation that US supplies may have shrunk less than estimated, while investors awaited the outcome of a Federal Reserve meeting on monetary policy. Gold also fell back, hanging in just above $1600.
AMJ (Alerian MLP Index tracking fund)
Treasury yields:
U.S. 3-month | 0.086% | |
U.S. 2-year | 0.286% | |
U.S. 10-year | 1.667% |
| CLN12.NYM | ....Crude Oil Jul 12 | ...83.57 | ..... 0.46 | (0.6%) |
| GCM12.CMX | ...Gold Jun 12 | .....1,604.20 | ... 18.00 | (1.1%) |
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The 3 parties that back Greece's commitments to bailout creditors have agreed in principle to form a coalition gov & are negotiating the final details. The agreement follows protracted negotiations between the conservative New Democracy party, the Socialist PASOK & the smaller Democratic Left party, after a national election on Sun. New Democracy won the vote but needs other parties to form a majority coalition. Democratic Left spokesman Gerasimos Georgatos said his party is committed to joining a gov headed by the conservatives. "We are offering a vote of confidence, not a vote of tolerance," he said. "We will be part of the government. That means that even if we disagree on a specific draft law, we will not withdraw our support or bring down the government." The parties are still discussing the new gov policy platform & who will be given cabinet positions. "We will have a government today," said a PASOK spokesman.
Greek Leaders Agree on Three-Way Coalition Led By Samaras
Procter & Gamble, a Dow stock& Dividend Aristocrat, lowered its Q4 earnings & revenue forecasts, hurt by unfavorable foreign exchange rates, continued slow growth in developed markets & a slowdown of growth in China. The guidance cut is the 2nd time in 3 months that PG has lowered its outlook as it is trying to balance growth in emerging markets (30% of sales) with the realities of an uncertain global economy & lackluster market share growth. It's a sign that expanding abroad is a complicated task for even the largest consumer product companies. CEO Bob McDonald reiterated that strategy as well as the company's cost cutting program, aimed at saving $10B by fiscal 2016. "We are making the necessary adjustments to our growth strategy to increase focus on our core business and to achieve more balanced growth across geographies, product categories and the top and bottom lines," he said. PG expects adjusted Q4 earnings of 75-79¢, down from its previous estimate of 79-85¢. Revenue is anticipated to drop 1-2% compared with a prior outlook for a 1-2%. The new guidance implies revenue in a range of $20.45-$20.66B. Analysts are forecasting EPS of 82¢ on revenue of $20.62B. PG reaffirmed a plan announced last month, that it will prioritize investments in its biggest product innovations, its biggest & most profitable markets & its biggest emerging countries. It also plans to keep investing in new markets. For fiscal 2013, PG expects adjusted earnings to be up by a mid-to-high single digits percentage rate. The stock sank 1.98, near its lowest level in the last 12 months..
P&G Cuts Forecasts as Sales Growth Slows in Europe, U.S
Procter & Gamble (PG)
The euro debt mess is hurting all of Europe (not to mention the rest of the world). UK unemployment claims unexpectedly rose in May. Jobless- claims climbed 8K from Apr to 1.6M according to the Office for National Statistics, worse than the forecast for a drop of 4K. The unemployment rate, measured by Intl Labour Organization, was unchanged at 8.2% in the 3 months though Apr. The figures suggest the labor-market recovery is running out of steam, increasing pressure on budget cuts that have been blamed by the opposition for pushing the UK into its first double-dip recession since the 1970s. Bank of England Governor King & 3 other policy makers were overruled 2 weeks ago in a push to expand the bank’s bond- purchase program. A majority said more stimulus was likely to be needed as risks from the crisis mounted. This is a big economy in Europe & more difficulties are not welcome.
U.K. Jobless Claims Unexpectedly Rise as Euro Crisis Bites
The Federal Reserve (FED) is seen as expanding Operations Twist instead of a beginning a new QE3 program. That would probably disappoint traders. Europe remains under a dark cloud. Spain paid 5.07% to sell 12-month Treasury bills & 5.11% to sell 18-month paper, an increase of about 200 basis points from the last auction a month ago. Yields on longer-term bonds are over 7%. The UK economy has problems, different than Spain, but it's hurting. The PG reduction in earnings guidance is troubling for the markets because this would not have been necessary if economies in developed countries were strong. But Dow is hanging there, praying for favorable word from the FED later today.
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