Monday, October 15, 2012

Markets crawl higher on improved US retail sales

Dow rose 41, advancers just ahead of decliners & NAZ gained 6.  The Financial Index rose 1 to the 213s.  The MLP index was off a fraction to the 407s & the REIT index gained 1 to the 262s where it has traded for 3 weeks.  Junk bond funds inched higher & Treasuries were pretty much even.  Oil fell for a 2nd day as commodities plunged on concern that the global economy is weakening, reducing demand for raw materials.  Gold also was hit with selling.

AMJ (Alerian MLP Index tracking fund)

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U.S. 2-year


U.S. 10-year


CLX12.NYM...Crude Oil Nov 12...89.97 .....Down 1.89  (2.1%)

GCV12.CMX...Gold Oct 12......1,732.30 ...Down 25.70  (1.5%)

Retail Sales in U.S. Increased More Than Forecast in September

Photo:   Bloomberg

US retail sales. rose more than projected in Sep, reflecting broad-based gains that indicate household spending helped bolster economic growth in Q3.  The 1.1% advance followed a revised 1.2% increase in Aug, the biggest since Oct 2010 & larger than previously reported according to the Commerce Dept.  The forecast called for a 0.8% rise. A drop in joblessness & firming home prices are leading to gains in consumer confidence.  But rising energy costs & concern about looming tax changes at the end of the year may prevent consumer spending from strengthening much more.  A 0.6% increase in goods on hand followed a 0.8% gain in Jul.  Sales at factories, wholesalers & retailers climbed 0.5% after advancing 0.9% in the prior month.

Retail Sales in U.S. Climbed More Than Forecast in September

Greece's finance minister said talks with the country's bailout creditors over austerity measures are unlikely to have concluded in time for this week's EU summit meeting, as originally hoped.  Yiannis Stournaras said the marathon negotiations, on which hinges the release of a sorely needed rescue loan installment, will continue after Thurs & the Fri Brussels summit.  Asked whether there can be a deal before that, Stournaras said: "We're trying, but I don't think so."  Greece has depended on bailouts since losing access to bond markets in 2010.  Payments are conditional on Greece sticking to a strict debt reduction program.  Current talks with representatives of the EU, IMF & ECB are centered on a new €13.5B ($17.5B) package of cutbacks for 2013-14.  Delays are not encouraging.

Greece says austerity talks to overshoot EU summit AP

Markets are edging higher but without conviction.  Macro economic events & the constant worry about the fiscal cliff are limiting bullish sentiment.  Earnings reports should dominate news this week, although there is always the possibility of significant developments in Europe where austerity measures threaten domestic stability.  Dow has not strayed far from 13½K for a month, not a good sign as earnings season starts..

Dow Jones Industrials

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