Monday, June 18, 2012

Markets vacillate after Greek election

Dow dropped 25, advancers ahead of decliners 3-2 & NAZ was up 22, helped with a pop of 12 by Apple (AAPL).  Banks were soft, with the Financial Index falling 1 to the 192s. 

The MLP index fell pocket change to 362 & the REIT index rose 2 to the 255s.  Junk bond funds were mixed & Treasuries were also flattish.  Oil dropped for the first time in 3 days on concern that the worsening European debt crisis will slow global economic growth & reduce demand for crude.  Gold hardy budged after its recent rise, taking it back over $1600.

AMJ (Alerian MLP index tracking Fund)

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CLN12.NYM...Crude Oil Jul 12...82.76 ...Down 1.27  (1.5%)

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Europe Crisis Imperils U.S. Sales

Photo:   Bloomberg

American exporters are preparing for a further decline in demand from Europe as the region’s deepening debt crisis threatens to derail a source of strength for the US economy.  Forecasts for Q2 growth are being cut around ½% (annualized), in part because of a deteriorating trade balalnce.  US exports to the EU dropped 4.8% in the year ended Apr, the worst 12-month performance since Nov 2009, according to the Commerce Dept.  By comparison, total US exports were up 3% in Apr from the same time last year.  The slump in Europe coincides with slowing growth in other major markets for US goods, such as China & Brazil.  Weaker European sales are also reflected in outbound container volumes from East Coast ports, which fell 2.6% in Apr from a year earlier after a 0.9% drop in Mar. And the decline in demand from Europe is just starting to show up in trade data because it typically takes 3-6 months for goods to be shipped after an order is placed.  May data will be worse.  The Europe debt mess is being felt around the world.

Microsoft Aims at IPad Hold Over $79 Billion Tablet Market

Photo:   Bloomberg

Microsoft, a Dow company, needs to shed its image as the world’s biggest supplier of software & draw on its success selling the Xbox gaming console if it wants a shot at introducing a tablet to challenge Apple (AAPL).  It is expected to preview a company-branded tablet later today.  The devices may run Microsoft’s latest operating system, Windows 8, & different versions may be powered by either processors based on designs from ARM Holdings or x86 chips from Intel (INTC), another Dow company.  As the primary pitchman for its own tablets, it needs to assemble a compelling lineup of applications at an attractive price, which may be tough given the least expensive current iPad sells for $499.  However, MSFT has sold 67M Xbox 360s in 7 years on the market, making it the most popular game platform, which could the basis for marketing its new tablet.  The stock fell 18¢.

Microsoft Takes Aim at Apple Dominance in $79 Billion Tablet Market: Tech

Microsoft (MSFT)

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This was another quiet day in the stock market.  There is a realization that the Greek election results, while not as terrible as they could have been, did not really solve problems.  The country still has an awful mess on its hands.  EU & IMF should be ready with more bailout money.  Then there's Spain, followed by Italy with the largest economy in this group.  FOMC has its big meeting on Tues & Wed.  I don't think it will do anything this time around, especially since the economy is growing (at a modest rate).  Dow's recent rally looks tired & 13K, once again, will be an important level to cross if the bulls want to take it higher. 

Dow Jones Industrials

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