Dow rose 21, advancers barely ahead of decliners & NAZ gained 20. The Financial Index was flat, just under 198. The MLP index was up pocket change in the 398s but the REIT index fell back 2+ to to the 265s. Junk bond funds were mixed & Treasuries slipped back after their recent rally. Oil continued on its winning ways & gold rose although it has failed to top 1600 for a month.
Photo: Bloomberg
The number of filing new claims for unemployment benefits rebounded last week, returning to levels consistent with only modest job growth after a seasonal quirk caused a sharp drop in the prior period. Initial claims for state unemployment benefits increased 34K to 386K, according to the Labor Dep. Claims had dropped 24K in the prior week & a combined 36K over the previous 2 weeks. The forecast was for claims rising to 365K. The 4-week moving average for new claims fell 1K to 375K, staying in the middle of the range it has held for much of 2012. Claims data is volatile in Jul because of the timing of the annual auto plant shutdowns for retooling. Automakers have not embarked on wholesale plant shutdowns this year, throwing off the model used to smooth the data for typical seasonal patterns.
Jobless Claims in U.S. Rise as Auto Layoff Effects Ease
AMJ (Alerian MLP Index tracking fund)
Treasury yields:
U.S. 3-month | 0.076% | |
U.S. 2-year | 0.214% | |
U.S. 10-year | 1.499% |
| CLQ12.NYM | ...Crude Oil Aug 12 | ...91.34 | .... 1.47 | (1.6%) |
| GCN12.CMX | ...Gold Jul 12 | .......1,584.80 | ... 14.40 | (0.9%) |
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The number of filing new claims for unemployment benefits rebounded last week, returning to levels consistent with only modest job growth after a seasonal quirk caused a sharp drop in the prior period. Initial claims for state unemployment benefits increased 34K to 386K, according to the Labor Dep. Claims had dropped 24K in the prior week & a combined 36K over the previous 2 weeks. The forecast was for claims rising to 365K. The 4-week moving average for new claims fell 1K to 375K, staying in the middle of the range it has held for much of 2012. Claims data is volatile in Jul because of the timing of the annual auto plant shutdowns for retooling. Automakers have not embarked on wholesale plant shutdowns this year, throwing off the model used to smooth the data for typical seasonal patterns.
Jobless Claims in U.S. Rise as Auto Layoff Effects Ease
Photo: Yahoo
Americans bought fewer homes in Jun than May, indicating the weak economy could make a modest housing recovery choppy. The National Association of Realtors said that sales of previously occupied homes fell 5.4% to an annual rate of 4.37M homes, the fewest since Oct. But sales are up 4.5% from a year ago, evidence that the market is still recovering. However the annual sales pace is below 6M expected in a healthy economy. The number of first-time buyers, critical to a housing recovery, made up just 32% of sales, down from 34% in May. In healthy markets, first-time buyers make up more than 40% of the market. The median home price rose 5% to $189K, mostly because sales of more expensive homes rose, while sales of cheaper homes fell. Other recent reports have indicated that the housing market is slowly recovering, even as the broader economy struggles.
Sales of Existing U.S. Homes Unexpectedly Decreased in June
Spain's 5-year borrowing costs surged as the gov pushed thru spending cuts in the face of public protests, while France paid record-low yields of less than 1% to sell securities of the same maturity. Spanish 5-year notes yielded an average 6.459% at auction, up from 6.072% a month ago. French yields fell to 0.86%, almost half last month’s level. Spanish Prime Minister Rajoy, who didn’t turn up to defend his cuts in parliament, secured passage of the plan with 180 votes, indicating none of the opposition in the 350-seat chamber supported it. The premier, who asked other euro nations for as much as €100B ($123B) last month to bail out banks, is fighting to maintain access to capital markets. Lawmakers in Germany, where borrowing costs have turned negative as investors opt for the safest assets, are set to vote on the Spanish bailout agreement today. “The danger to the financial sector in Spain can turn into danger for the financial stability of the euro area,” German Finance Minister Schaeuble told lawmakers. Spain’s 10-year benchmark bond yields surged thru the 7% threshold that prompted sovereign bailouts in Greece, Ireland & Portugal. The debt traded at 7.018%. in Madrid. While the Treasury sold €2.98B of notes, in line with its maximum target, demand for 2-year securities was 1.9 times the amount sold, compared with 4.26 times at a sale last month. Spain, Greece - the euro debt mess is not going away anytime soon.
Spain Struggles to Sell Debt as French Yields Fall to Record
Dow is up 165 this week, a fairly good response to the initial earnings reports which haven't been all that impressive. But the macro picture is not pretty. The euro debt mess is stuck in neutral, China is trying to accelerate its economy & the US economy gets a grade of C (being generous). After digesting all this, buyers have the upper hand. Dow needs to inch a little higher to top its high of 12950 made 2 weeks ago. If the bulls are serious, they need to push it over that ceiling in the PM.
Dow Jones Industrials
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