Dow fell back during trading to a gain of only 77, advancers over decliners 3-2 & NAZ lost 2 as continued weakness in Apple (AAPL) hurt the average. The MLP index rose a very big 3½ to the 408s (3 shy of its record) & the REIT index slipped 2 to 260. Junk bond funds were higher & Treasuries inched up. Oil had a modest gain & gold lost much of its AM gains (see chart below).
![Live 24 hours gold chart [Kitco Inc.]](http://www.kitco.com/images/live/gold.gif)
Photo: Bloomberg
Ben Bernanke renewed a pledge to sustain record stimulus even after the US expansion gains strength, while saying policy makers don’t expect the economy to remain weak through 2015. “We expect that a highly accommodative stance of monetary policy will remain appropriate for a considerable time after the economy strengthens,” Bernanke said in Indianapolis. Policy makers’ forecast to hold the main interest rate near zero until at least mid-2015 “doesn’t mean that we expect the economy to be weak through” that year. The FOMC said last month it will buy $40B of mortgage debt a month in a 3rd round of quantitative easing until the labor market shows “sustained improvement” & extended its horizon for low interest rates from a previous date of late 2014. He has deployed the most aggressive monetary policies since the founding of the Federal Reserve (FED) nearly a century ago as he battled the 2007-2009 financial crisis, helped pull the nation out of the worst recession since the 1930s & sought to keep the expansion going. 5 years of low interest rate policies “have not led to increased inflation,” & the public’s expectations for price gains “remain quite stable,” Bernanke said. The FED has the necessary tools to tighten when needed to prevent “inflationary pressures down the road,” he said. He said last month he wants stronger growth & improvement in the labor market, which he characterized as a “grave concern.” The US economy added 96K jobs in Aug, less than forecast & down from a 141K increase in Jul. The Fri jobs report may show employers added only 115K jobs in Sep.
Photo: Bloomberg
Manufacturing from Europe to China contracted in Sep as the euro region’s fiscal crisis eroded investor confidence & clouded global growth prospects. A gauge of manufacturing in th euro region was 46.1, slightly above an initial estimate of 46 on Sep 20, Markit Economics said. A reading below 50 indicates contraction. A Chinese factory index was at 49.8 for Sep, a statistics bureau report showed. In the US manufacturing unexpectedly returned to growth last month. Economies around the globe are cooling as European govs toughen spending cuts to restore investor confidence as the region’s economic slump deepens. Euro-area unemployment held at a record 10.4% in Aug & Japan's Tankan index of large manufacturers’ confidence dropped to minus 3 in Q3. At least 5 euro-member states are already in recession. Economic confidence unexpectedly declined in Sep & service industries also contracted last month. The macro economic picture is gloomy.
Global Manufacturing Weakness Spreads as Debt Crisis Persists: Economy
Households in the US are facing an average tax increase of $3446 in 2013 if Congress doesn't avert the so- called fiscal cliff, according to the nonpartisan Tax Policy Center. The top 1% of households face some of the largest tax increases & would see their average federal tax rates hit 40.5%, up 7.2 percentage points from this year, translating to an average increase of $120K. About 88% of households would see their taxes increase in 2013, with a typical middle-income household facing a tax increase of about $2K. After the Nov 6 election, Congress is scheduled to return to debate the automatic spending cuts & tax increases starting in Jan. For calendar year 2013, taxes would increase $536B (about 20%). If Congress does nothing, tax rates on income, capital gains, dividends & estates would increase, & the alternative minimum tax would spread to almost 22M households, up from 4M this year. The top statutory tax rate on ordinary income would reach 39.6%, up from 35%, & the top rate on capital gains would be 23.8%, up from 15%. Also a 2 percentage point payroll tax cut is set to expire at the end of 2012. The guys in DC agree they should extend the income tax cuts for most households. But Reps want to keep all the income & estate tax cuts for 2013 & begin overhauling the tax code while Dems want to let most of the tax cuts lapse for the top 2% of households (largely individuals making more than $200K a year & married couples making more than $250K). Uncertainty on taxes is causing businesses to hold up on expansion plans & adding more workers.
Households Face Tax Increase From 2013 Fiscal Cliff Bloomberg
Big Ben didn't say anything new, but markets were not impressed & lost steam. The macro economic picture is not pretty, maybe some of that reality is getting thru to traders. In the PM, Dow gave up almost 100 of its AM advance. But MLPs are strong & its index is inches from setting a new record. The comparable index which includes reinvested income is about 1270, which compares with a starting value of 100 at the beginning of 1996. Try to find a security that can match that record!
AMJ (Alerian MLP Index tracking fund)
Click below for the latest market update:
Treasury yields:
U.S. 3-month |
0.081% | |
U.S. 2-year |
0.234% | |
U.S. 10-year |
1.621% |
| CLX12.NYM | ...Crude Oil Nov 12 | ...92.51 | ... 0.32 | (0.4%) |
Photo: Bloomberg
Ben Bernanke renewed a pledge to sustain record stimulus even after the US expansion gains strength, while saying policy makers don’t expect the economy to remain weak through 2015. “We expect that a highly accommodative stance of monetary policy will remain appropriate for a considerable time after the economy strengthens,” Bernanke said in Indianapolis. Policy makers’ forecast to hold the main interest rate near zero until at least mid-2015 “doesn’t mean that we expect the economy to be weak through” that year. The FOMC said last month it will buy $40B of mortgage debt a month in a 3rd round of quantitative easing until the labor market shows “sustained improvement” & extended its horizon for low interest rates from a previous date of late 2014. He has deployed the most aggressive monetary policies since the founding of the Federal Reserve (FED) nearly a century ago as he battled the 2007-2009 financial crisis, helped pull the nation out of the worst recession since the 1930s & sought to keep the expansion going. 5 years of low interest rate policies “have not led to increased inflation,” & the public’s expectations for price gains “remain quite stable,” Bernanke said. The FED has the necessary tools to tighten when needed to prevent “inflationary pressures down the road,” he said. He said last month he wants stronger growth & improvement in the labor market, which he characterized as a “grave concern.” The US economy added 96K jobs in Aug, less than forecast & down from a 141K increase in Jul. The Fri jobs report may show employers added only 115K jobs in Sep.
Manufacturing from Europe to China contracted in Sep as the euro region’s fiscal crisis eroded investor confidence & clouded global growth prospects. A gauge of manufacturing in th euro region was 46.1, slightly above an initial estimate of 46 on Sep 20, Markit Economics said. A reading below 50 indicates contraction. A Chinese factory index was at 49.8 for Sep, a statistics bureau report showed. In the US manufacturing unexpectedly returned to growth last month. Economies around the globe are cooling as European govs toughen spending cuts to restore investor confidence as the region’s economic slump deepens. Euro-area unemployment held at a record 10.4% in Aug & Japan's Tankan index of large manufacturers’ confidence dropped to minus 3 in Q3. At least 5 euro-member states are already in recession. Economic confidence unexpectedly declined in Sep & service industries also contracted last month. The macro economic picture is gloomy.
Global Manufacturing Weakness Spreads as Debt Crisis Persists: Economy
Households in the US are facing an average tax increase of $3446 in 2013 if Congress doesn't avert the so- called fiscal cliff, according to the nonpartisan Tax Policy Center. The top 1% of households face some of the largest tax increases & would see their average federal tax rates hit 40.5%, up 7.2 percentage points from this year, translating to an average increase of $120K. About 88% of households would see their taxes increase in 2013, with a typical middle-income household facing a tax increase of about $2K. After the Nov 6 election, Congress is scheduled to return to debate the automatic spending cuts & tax increases starting in Jan. For calendar year 2013, taxes would increase $536B (about 20%). If Congress does nothing, tax rates on income, capital gains, dividends & estates would increase, & the alternative minimum tax would spread to almost 22M households, up from 4M this year. The top statutory tax rate on ordinary income would reach 39.6%, up from 35%, & the top rate on capital gains would be 23.8%, up from 15%. Also a 2 percentage point payroll tax cut is set to expire at the end of 2012. The guys in DC agree they should extend the income tax cuts for most households. But Reps want to keep all the income & estate tax cuts for 2013 & begin overhauling the tax code while Dems want to let most of the tax cuts lapse for the top 2% of households (largely individuals making more than $200K a year & married couples making more than $250K). Uncertainty on taxes is causing businesses to hold up on expansion plans & adding more workers.
Households Face Tax Increase From 2013 Fiscal Cliff Bloomberg
Big Ben didn't say anything new, but markets were not impressed & lost steam. The macro economic picture is not pretty, maybe some of that reality is getting thru to traders. In the PM, Dow gave up almost 100 of its AM advance. But MLPs are strong & its index is inches from setting a new record. The comparable index which includes reinvested income is about 1270, which compares with a starting value of 100 at the beginning of 1996. Try to find a security that can match that record!
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