Dow jumped 208, advancers ahead of decliners 8-1 & NAZ was up 62. The Financial Index gained 3½ to the 195s, a 6 week high.
The MLP index soared 6 to the 376s & the REIT index was up 4 to the 259s (5 below its yearly highs). Junk bond funds were higher while Treasuries pulled back. Oil surged from the lowest level in 9 months after European leaders agreed to relax conditions on emergency loans for Spanish banks & on possible help for Italy. Even though gold climbed, this is its worst qtr in 8 years.
Spain's Prime Minister Mariano Rajoy
Photo: Bloomberg
Working thru the night in the face of pressure from the embattled euro zone countries Italy & Spain, European leaders agreed to use bailout funds to recapitalize struggling banks directly, according to the European Council president, Herman Van Rompuy. The decision would allow help to banks without adding directly to the sovereign debt of countries, which has been a problem for Spain & potentially for Italy. Both countries have seen the interest rates rise to levels that would be unsustainable in the long term. If Spain & Italy could not go to the markets to roll over their debt, it was agreed that there would be an existential threat to the € in the short to medium term. Spain is seeking €100B to recapitalize its banks, damaged by a property bubble. Mr. Van Rompuy called the agreement a “breakthrough that banks can be recapitalized directly,” which represents a concession by northern European countries, including Germany. Markets liked the news, but I'm not sure how this will work out. The € shot up 2 pennies to almost $1.27 (top end of its recent trading range).
EU Leaders Ease Debt-Crisis Rules on Spain
Photo: Bloomberg
Consumer sentiment fell in Jun to the lowest level for 2012, dragged down by a sluggish job market & weak growth. The Thomson Reuters/University of Michigan index of consumer sentiment fell to 73.2 from 79.3 in May. Higher-income households said they planned to cut back on spending, accounting for much of the drop. The report echoes the Conference Board's survey of consumer confidence, which fell in Jun for the 4th straight month. Concerns about the job market are outweighing the benefits of lower gas prices.
Michigan’s Consumer Sentiment Gauge Unexpectedly Decreased to 73.2 in June
KB Home rose to a 3- month high after reporting a narrower quarterly loss as more houses were sold at higher prices. The net loss per share for fiscal Q2 was 31¢ compared with a loss of 89¢ a year earlier, better than the loss of 35¢ predicted. Record-low borrowing costs & a dwindling inventory of houses on the market are helping to strengthen new-home sales. Revenue climbed 11% to $303M & home deliveries rose 2% to 1290 houses. The average selling price jumped 9% to $233K. Orders increased 3% from a year earlier to 2049 houses. Backlog, an indication of future sales, climbed 22% from a year earlier to 2962 homes. “Entering the second half of 2012, we have a strong backlog of homes with higher selling prices and better margins to help restore profitability,” CEO Mezger said. Its transition to Nationstar is “progressing as planned” & will result in “improved mortgage origination execution” for homebuyers. The stock rose 45¢.
Bulls returned in force on news out of Europe. A temporary fix is good enough. MLPs were also bid up. After leading the markets for 3 years, the index is back to where it was 6 weeks ago. But it's still down 14 YTD. Dow is up 180 (on today's strength) this week & 500 in Jun. Any moves in the markets on the last day in a qtr are suspect, since money managers are buying & selling to even out positions. Next Fri the Jun jobs report will be released, expectation are not high.
The MLP index soared 6 to the 376s & the REIT index was up 4 to the 259s (5 below its yearly highs). Junk bond funds were higher while Treasuries pulled back. Oil surged from the lowest level in 9 months after European leaders agreed to relax conditions on emergency loans for Spanish banks & on possible help for Italy. Even though gold climbed, this is its worst qtr in 8 years.
AMJ (Alerian MLP Index tracking fund)
Treasury yields:
U.S. 3-month | 0.081% | |
U.S. 2-year | 0.313% | |
U.S. 10-year | 1.655% |
| CLQ12.NYM | ...Crude Oil Aug 12 | ...81.56 | ...... 3.87 | (5.0%) |
| GCN12.CMX | ...Gold Jul 12 | .......1,593.80 | ... 44.10 | (2.9%) |
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Photo: Bloomberg
Working thru the night in the face of pressure from the embattled euro zone countries Italy & Spain, European leaders agreed to use bailout funds to recapitalize struggling banks directly, according to the European Council president, Herman Van Rompuy. The decision would allow help to banks without adding directly to the sovereign debt of countries, which has been a problem for Spain & potentially for Italy. Both countries have seen the interest rates rise to levels that would be unsustainable in the long term. If Spain & Italy could not go to the markets to roll over their debt, it was agreed that there would be an existential threat to the € in the short to medium term. Spain is seeking €100B to recapitalize its banks, damaged by a property bubble. Mr. Van Rompuy called the agreement a “breakthrough that banks can be recapitalized directly,” which represents a concession by northern European countries, including Germany. Markets liked the news, but I'm not sure how this will work out. The € shot up 2 pennies to almost $1.27 (top end of its recent trading range).
EU Leaders Ease Debt-Crisis Rules on Spain
Consumer sentiment fell in Jun to the lowest level for 2012, dragged down by a sluggish job market & weak growth. The Thomson Reuters/University of Michigan index of consumer sentiment fell to 73.2 from 79.3 in May. Higher-income households said they planned to cut back on spending, accounting for much of the drop. The report echoes the Conference Board's survey of consumer confidence, which fell in Jun for the 4th straight month. Concerns about the job market are outweighing the benefits of lower gas prices.
Michigan’s Consumer Sentiment Gauge Unexpectedly Decreased to 73.2 in June
KB Home rose to a 3- month high after reporting a narrower quarterly loss as more houses were sold at higher prices. The net loss per share for fiscal Q2 was 31¢ compared with a loss of 89¢ a year earlier, better than the loss of 35¢ predicted. Record-low borrowing costs & a dwindling inventory of houses on the market are helping to strengthen new-home sales. Revenue climbed 11% to $303M & home deliveries rose 2% to 1290 houses. The average selling price jumped 9% to $233K. Orders increased 3% from a year earlier to 2049 houses. Backlog, an indication of future sales, climbed 22% from a year earlier to 2962 homes. “Entering the second half of 2012, we have a strong backlog of homes with higher selling prices and better margins to help restore profitability,” CEO Mezger said. Its transition to Nationstar is “progressing as planned” & will result in “improved mortgage origination execution” for homebuyers. The stock rose 45¢.
KB Home (KBH)
Bulls returned in force on news out of Europe. A temporary fix is good enough. MLPs were also bid up. After leading the markets for 3 years, the index is back to where it was 6 weeks ago. But it's still down 14 YTD. Dow is up 180 (on today's strength) this week & 500 in Jun. Any moves in the markets on the last day in a qtr are suspect, since money managers are buying & selling to even out positions. Next Fri the Jun jobs report will be released, expectation are not high.
Dow Jones Industrials
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