Dow fell 104, decliners over advancers 3-1 & NAZ was off 27. The Financial Index slipped a fraction in the 191s. The MLP index dropped 3+ to the 393s & the REIT index 1+ to the 261s. Junk bond funds were mixed to lower & Treasuries rose to record highs, bringing record low yields. Oil rose on increased tensions in the MidEast & gold inched higher.
![Live 24 hours gold chart [Kitco Inc.]](http://www.kitco.com/images/live/gold.gif)
Photo: Bloomberg
China's manufacturing may contract at a slower pace in Jul after 2 interest-rate cuts & a rebound in lending spurred demand. The preliminary reading was 49.5 for a purchasing managers' index from HSBC Holdings & Markit Economics. If confirmed, that would be the highest since Feb. In Jun, the final number was 48.2. A slowdown triggered by weakness in exports, a crackdown on housing speculation & past monetary tightening has sent Chinese stocks to their lowest level since 2009. Standard Chartered estimates expansion will rebound to above 8% in Q3 after sliding to a 7.6% rate in Q2. A final reading below 50 would cap a 9-month run, the longest in the index’s 8-year history & surpassing the stretch from Aug 2008 - Mar 2009. The gov monthly index, due to be released Aug 1, had a Jun reading that was the lowest since Nov.
China Manufacturing Gauge Shows Slowdown May Be Ebbing on Easing: Economy
Simon Property says a key measure of profitability grew 18% during Q2 thanks to higher rents & fuller malls. It also raised its forecast for the year & lifted the div for the 4th straight qtr. Funds from operations (used to determine divs), or FFO, climbed to $1.89 per share, up from $1.65 last year & topped the $1.81 forecast. The company said that minimum rent per square foot rose nearly 4%, while the occupancy rate improved slightly, to 94.2%. It owns or has a stake in 336 retail properties in North America & Asia which include The Galleria at White Plains in NY & Fashion Valley in San Diego. The company raised its FFO per share guidance for the year by 10¢, to $7.60-$7.70 (analysts predict $7.63). Revenue rose 14% to $1.19B from $1.04B, beating the forecast of $1.15B. The quarterly div was raised 5¢ cents to $1.05 per share. The stock rose 1.66.
Simon Property Increases Dividend After Second-Quarter FFO Rises 18%
Photo: Yahoo
AT&T, a Dow stock & Dividend Aristocrat, posted the best profitability ever in its wireless arm, paradoxically because it sold fewer smartphones. The largest telecommunications company in the US said its subscribers are now holding on to their phones longer with the rate of upgrades to new phones at a record low in Q2. That's good news for the company because it subsidizes each smartphone to be able to sell it to customers for $99 or $199. IPhones, in particular, are expensive to sell, because Apple (AAPL) charges AT&T around $650 for each one. In Mar last year, AT&T started telling subscribers that they had to stay on contract for 20 months before they would be eligible for a new phone at the fully subsidized price. Before that, some high-paying customers had been eligible for upgrades after just 12 months. AT&T activated 5.1M smartphones in Q2, down from 5.5M last year, helping boost wireless operating income 18% to $4.9B. Analysts still expect AT&T's profits to take a dive this fall, when the new iPhone comes out. Strong wireless results helped boost EPS to 66¢ in Q2, up 8.7% from 60¢ last year. Analysts expected EPS of 63¢. Revenue edged up 0.3% to $31.6B, just under the forecast of $31.7B. If it weren't for the sale of its phone-books business in May, revenue would have risen 2%. The stock fell 75¢.
AT&T Reports Slower Quarterly Sales, While Lower Subsidies Bolster Profit
There was buying in the last hour, limiting losses, but this remained another dreary day. Tomorrow Greece has to justify to inspectors that it needs more loans to pay off loans to euro banks. It will get the money, but this remains a confusing situation. The Spanish debt picture is getting worse by the day & Italy is right behind Spain. Back to the US, earnings along with guidance are not inspiring. But stocks are holding up reasonably well. Dow continues in its sideways trading range, somewhat of a good sign for the bulls. Aug will begin next week & that can be a bad month, especially with an abundance of macro economic problems.
AMJ (Alerian MLP Index tracking fund)
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Treasury yields:
U.S. 3-month | 0.096% | |
U.S. 2-year | 0.214% | |
U.S. 10-year | 1.401% |
| CLV12.NYM | ...Crude Oil Oct 12 | ...88.68 | ... 0.25 | (0.3%) |
China's manufacturing may contract at a slower pace in Jul after 2 interest-rate cuts & a rebound in lending spurred demand. The preliminary reading was 49.5 for a purchasing managers' index from HSBC Holdings & Markit Economics. If confirmed, that would be the highest since Feb. In Jun, the final number was 48.2. A slowdown triggered by weakness in exports, a crackdown on housing speculation & past monetary tightening has sent Chinese stocks to their lowest level since 2009. Standard Chartered estimates expansion will rebound to above 8% in Q3 after sliding to a 7.6% rate in Q2. A final reading below 50 would cap a 9-month run, the longest in the index’s 8-year history & surpassing the stretch from Aug 2008 - Mar 2009. The gov monthly index, due to be released Aug 1, had a Jun reading that was the lowest since Nov.
China Manufacturing Gauge Shows Slowdown May Be Ebbing on Easing: Economy
Simon Property says a key measure of profitability grew 18% during Q2 thanks to higher rents & fuller malls. It also raised its forecast for the year & lifted the div for the 4th straight qtr. Funds from operations (used to determine divs), or FFO, climbed to $1.89 per share, up from $1.65 last year & topped the $1.81 forecast. The company said that minimum rent per square foot rose nearly 4%, while the occupancy rate improved slightly, to 94.2%. It owns or has a stake in 336 retail properties in North America & Asia which include The Galleria at White Plains in NY & Fashion Valley in San Diego. The company raised its FFO per share guidance for the year by 10¢, to $7.60-$7.70 (analysts predict $7.63). Revenue rose 14% to $1.19B from $1.04B, beating the forecast of $1.15B. The quarterly div was raised 5¢ cents to $1.05 per share. The stock rose 1.66.
Simon Property Increases Dividend After Second-Quarter FFO Rises 18%
Simon Property (SPG)
AT&T, a Dow stock & Dividend Aristocrat, posted the best profitability ever in its wireless arm, paradoxically because it sold fewer smartphones. The largest telecommunications company in the US said its subscribers are now holding on to their phones longer with the rate of upgrades to new phones at a record low in Q2. That's good news for the company because it subsidizes each smartphone to be able to sell it to customers for $99 or $199. IPhones, in particular, are expensive to sell, because Apple (AAPL) charges AT&T around $650 for each one. In Mar last year, AT&T started telling subscribers that they had to stay on contract for 20 months before they would be eligible for a new phone at the fully subsidized price. Before that, some high-paying customers had been eligible for upgrades after just 12 months. AT&T activated 5.1M smartphones in Q2, down from 5.5M last year, helping boost wireless operating income 18% to $4.9B. Analysts still expect AT&T's profits to take a dive this fall, when the new iPhone comes out. Strong wireless results helped boost EPS to 66¢ in Q2, up 8.7% from 60¢ last year. Analysts expected EPS of 63¢. Revenue edged up 0.3% to $31.6B, just under the forecast of $31.7B. If it weren't for the sale of its phone-books business in May, revenue would have risen 2%. The stock fell 75¢.
AT&T Reports Slower Quarterly Sales, While Lower Subsidies Bolster Profit
AT&T (T)
There was buying in the last hour, limiting losses, but this remained another dreary day. Tomorrow Greece has to justify to inspectors that it needs more loans to pay off loans to euro banks. It will get the money, but this remains a confusing situation. The Spanish debt picture is getting worse by the day & Italy is right behind Spain. Back to the US, earnings along with guidance are not inspiring. But stocks are holding up reasonably well. Dow continues in its sideways trading range, somewhat of a good sign for the bulls. Aug will begin next week & that can be a bad month, especially with an abundance of macro economic problems.
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