Dow inched up 14, advanvers just ahead of decliners & NAZ was flat. The Financial Index was flat at 201. The MLP index fell 2+ to the 289s & the REIT index was off 2 to the 263s. Junk bond funds slipped lower & Treasuries were flattish. Oil pared gains as fuel demand fell for the first time in 4 weeks in an gov report. Gold continued its sideways trend.
Mario Draghi's bid to bring down Spanish & Italian yields may spur the nations to sell more short-dated notes, swelling the debt pile that needs refinancing in the coming years. Yields on Italian & Spanish 2-year plunged after Draghi said last week the ECB may buy debt on the “short-end of the yield curve” as part of a broader crisis-fighting plan. The gap between Spain’s 2-year & 10-year yields rose to the widest in at least 2 decades, while the spread between similar Italian securities also approached a record. The average maturity of Spanish debt is the shortest since 2004 as Spain, like Italy, hasn’t issued 15 or 30-year bonds all year. As Prime Ministers Monti & Rajoy fight to avoid bailouts that may threaten the euro’s survival, the ECB’s plan risks adding to pressure on the 2 nations’ treasuries. The average maturity of Italy’s debt is 6.7 years, the lowest since 2005 & the target this year is to keep that average at just below 7 years. In Spain, where the 10-year benchmark bond yields 6.94%, the average life is 6.3 years, the lowest since 2004. This is another example of solving today's problems today, tomorrow will take care itself. Not good.
ECB’s Rescue Worsens Spain, Italy Maturity Crunch: Euro Credit
Photo: Bloomberg
McDonald's, a Dow stock & Dividend Aristocrat, said a key revenue figure came in flat in Jul as diners pulled back amid a tough economy. After years of outperforming expectations, even through the recession, the stall is the latest sign that the world's biggest hamburger chain is starting to feel the effects of the global economic volatility. In the US, promotions failed to drive growth, revenue at restaurant open at least 13 months dipped 0.1%. Its facing a tough comparison from a year ago, when it launched the mango pineapple smoothie. The figure dipped 0.6% in Europe because of weakness in Germany & several Southern European markets. It fell 1.5% in the Asia Pacific, Middle East & Africa region, a key growth area. Sales in Latin America & Canada, which are not reported separately, helped pull overall results even with last year. In economically hard-hit regions, MCD has been working to emphasize the value of its meals to get penny-pinching consumers to eat out more often. The company noted last month that in Europe, which accounts for 40% of its business, guest traffic was down in several regions. The stock dropped 1.40.
McDonald’s July Sales Trail Analysts’ Estimates
With little significant news to drive the markets, they are drifting. But the bulls will be happy to point out the lack of very bad news out of Europe. Of course, the drab same store sale from MCD, with so much of its sales in that region, is a vivid reminder that all is not well in Europe. Dow is digesting its recent gains fairly well. Its next major test will;be an assault on its 2012 high of 13.4K, about 200 away.
AMJ (Alerian MLP Index tracking fund)
Treasury yields:
U.S. 3-month | 0.101% | |
U.S. 2-year | 0.268% | |
U.S. 10-year | 1.632% |
| CLU12.NYM | ...Crude Oil Sep 12 | ...94.12 | ... 0.45 | (0.5%) |
| GCQ12.CMX | ...Gold Aug 12 | .....1,613.40 | ... 3.70 | (0.2%) |
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Mario Draghi's bid to bring down Spanish & Italian yields may spur the nations to sell more short-dated notes, swelling the debt pile that needs refinancing in the coming years. Yields on Italian & Spanish 2-year plunged after Draghi said last week the ECB may buy debt on the “short-end of the yield curve” as part of a broader crisis-fighting plan. The gap between Spain’s 2-year & 10-year yields rose to the widest in at least 2 decades, while the spread between similar Italian securities also approached a record. The average maturity of Spanish debt is the shortest since 2004 as Spain, like Italy, hasn’t issued 15 or 30-year bonds all year. As Prime Ministers Monti & Rajoy fight to avoid bailouts that may threaten the euro’s survival, the ECB’s plan risks adding to pressure on the 2 nations’ treasuries. The average maturity of Italy’s debt is 6.7 years, the lowest since 2005 & the target this year is to keep that average at just below 7 years. In Spain, where the 10-year benchmark bond yields 6.94%, the average life is 6.3 years, the lowest since 2004. This is another example of solving today's problems today, tomorrow will take care itself. Not good.
ECB’s Rescue Worsens Spain, Italy Maturity Crunch: Euro Credit
McDonald's, a Dow stock & Dividend Aristocrat, said a key revenue figure came in flat in Jul as diners pulled back amid a tough economy. After years of outperforming expectations, even through the recession, the stall is the latest sign that the world's biggest hamburger chain is starting to feel the effects of the global economic volatility. In the US, promotions failed to drive growth, revenue at restaurant open at least 13 months dipped 0.1%. Its facing a tough comparison from a year ago, when it launched the mango pineapple smoothie. The figure dipped 0.6% in Europe because of weakness in Germany & several Southern European markets. It fell 1.5% in the Asia Pacific, Middle East & Africa region, a key growth area. Sales in Latin America & Canada, which are not reported separately, helped pull overall results even with last year. In economically hard-hit regions, MCD has been working to emphasize the value of its meals to get penny-pinching consumers to eat out more often. The company noted last month that in Europe, which accounts for 40% of its business, guest traffic was down in several regions. The stock dropped 1.40.
McDonald’s July Sales Trail Analysts’ Estimates
McDonald's (MCD)
With little significant news to drive the markets, they are drifting. But the bulls will be happy to point out the lack of very bad news out of Europe. Of course, the drab same store sale from MCD, with so much of its sales in that region, is a vivid reminder that all is not well in Europe. Dow is digesting its recent gains fairly well. Its next major test will;be an assault on its 2012 high of 13.4K, about 200 away.
Dow Jones Industrials
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