Dow slipped 14, decliners ahead of advancers 3-2 & NAZ was up 4. The Financial Index slipped 1 to the 234s. The MLP index rose 3+ to the 427s (nothing stopping MLPs this year) & the REIT index was even at 281. Junk bond funds were a tad lower & Treasuries fell, taking yields even higher. Oil advanced to a 4-month high as orders for durable goods in the US jumped, adding to economic optimism. Gold retreated to a 2-week low amid signs that the global economy is improving, easing pressure on central banks to announce more stimulus measures.
AMJ (Alerian MLP Index tracking fund)
Euro-area jobless data this week will expose the social cost of last year’s debt crisis & recession on southern European economies as unemployment across the region probably rose to a record in Dec. Unemployment in the 17-nation bloc climbed for a 5th month to 11.9%, according to the median estimate. The result, due on Fri, would show the highest jobless rate since records began in 1995. By contrast, German unemployment data the day before may show the jobless rate held steady for a 4th month at 6.9% in Jan. While measures to stem the region’s debt turmoil have helped reduce sovereign bond yields from Spain to Greece, the recession & crisis have led to job cuts by companies & govs. The ECB predicts the bloc’s economy will shrink 0.3% this year & President Mario Draghi said last week that the “jury is still out” on whether investor optimism can be reflected in economic momentum. Spanish data last week showed a record 26% of the workforce without jobs in Q4, bringing the total close to 6M. In Greece, the rate was even higher in Oct, at 26.8%, also a record. Troubling signs from Europe even though the bank crisis is healing.
Euro Crisis Seen Reaping Social Toll With Record Jobless
Economists are increasingly, but cautiously, optimistic about growth in the year ahead with hiring expected to pick up in coming months. A quarterly survey by the National Association for Business Economics just released shows half of the economists polled now expect real GDP to grow 2-4% in 2013, up from 36% who felt the same way 3 months earlier. About half expect sluggish or negative performance, down from 65% in Oct. The latest survey found that 34% of firms now expect to expand their payrolls in the next 6 months, the highest percentage since Apr of last year. Meanwhile, 2% said they expect their companies to cut payrolls through layoffs, while 14% see payrolls trimmed thru attrition. A quarter of respondents also said employment grew at their firms in Q4, which is comparable to the levels seen in the first half of 2012. The same percentage also reported a rise in wages at their firms in Q4, up 10 percentage points from the last survey. Overall sales growth was stable in Q4 with results mixed across industries. For instance, growth slowed in the services, finance, insurance & real estate sectors, but rose in the transportation, utilities, information & communications sectors. I'm not sure if they factored in effects from the debt debate in DC.
Economists Growing More Upbeat About Year Ahead
As gov regulators investigate the 787 Dreamliner from Boeing (BA), a Dow stock, & company engineers search for solutions, investors wonder: How much will the plane’s grounding cost? The answer depends on what the probes uncover, with scenarios ranging from a quick resolution if a few defective parts have to be swapped out to a drawn-out inquiry that requires a fundamental redesign. The worst case scenario: The Dreamliner’s problems run so deep that BA has to write off about $5B in anticipated revenue. However the costs are likely to be much less, in the hundreds of millions of dollars. That would let BA, which reports 2012 earnings on Wed, reap the rewards of a $25B investment in the plane. US investigators are still searching for what caused the fire in the lithium-ion batteries on a Japan Airlines 787 in Boston & a fault that forced an All Nippon Airways plane to make an emergency landing in Japan on Jan 16. After the jet's debut in 2011, 50 jets have been delivered. The stock fell $1.03.
Boeing (BA)
Stocks couldn't make up their minds where to go after having an outstanding Jan. Earnings results are being overrated. Profits after excluding one time items (why don't they count?) are not that great & sales growth has been lacking. Apple (AAPL), after being beaten up, rebounded 12 to 452. But it's still down an unbelievable 250 from its highs 4 months ago. It's difficult to forecast how far up the markets can go with AAPL selling off.
Dow Jones Industrials
AMJ (Alerian MLP Index tracking fund)
Treasury yields:
U.S. 3-month | 0.063% | |
U.S. 2-year | 0.282% | |
U.S. 10-year | 1.977% |
Euro-area jobless data this week will expose the social cost of last year’s debt crisis & recession on southern European economies as unemployment across the region probably rose to a record in Dec. Unemployment in the 17-nation bloc climbed for a 5th month to 11.9%, according to the median estimate. The result, due on Fri, would show the highest jobless rate since records began in 1995. By contrast, German unemployment data the day before may show the jobless rate held steady for a 4th month at 6.9% in Jan. While measures to stem the region’s debt turmoil have helped reduce sovereign bond yields from Spain to Greece, the recession & crisis have led to job cuts by companies & govs. The ECB predicts the bloc’s economy will shrink 0.3% this year & President Mario Draghi said last week that the “jury is still out” on whether investor optimism can be reflected in economic momentum. Spanish data last week showed a record 26% of the workforce without jobs in Q4, bringing the total close to 6M. In Greece, the rate was even higher in Oct, at 26.8%, also a record. Troubling signs from Europe even though the bank crisis is healing.
Euro Crisis Seen Reaping Social Toll With Record Jobless
Economists are increasingly, but cautiously, optimistic about growth in the year ahead with hiring expected to pick up in coming months. A quarterly survey by the National Association for Business Economics just released shows half of the economists polled now expect real GDP to grow 2-4% in 2013, up from 36% who felt the same way 3 months earlier. About half expect sluggish or negative performance, down from 65% in Oct. The latest survey found that 34% of firms now expect to expand their payrolls in the next 6 months, the highest percentage since Apr of last year. Meanwhile, 2% said they expect their companies to cut payrolls through layoffs, while 14% see payrolls trimmed thru attrition. A quarter of respondents also said employment grew at their firms in Q4, which is comparable to the levels seen in the first half of 2012. The same percentage also reported a rise in wages at their firms in Q4, up 10 percentage points from the last survey. Overall sales growth was stable in Q4 with results mixed across industries. For instance, growth slowed in the services, finance, insurance & real estate sectors, but rose in the transportation, utilities, information & communications sectors. I'm not sure if they factored in effects from the debt debate in DC.
Economists Growing More Upbeat About Year Ahead
As gov regulators investigate the 787 Dreamliner from Boeing (BA), a Dow stock, & company engineers search for solutions, investors wonder: How much will the plane’s grounding cost? The answer depends on what the probes uncover, with scenarios ranging from a quick resolution if a few defective parts have to be swapped out to a drawn-out inquiry that requires a fundamental redesign. The worst case scenario: The Dreamliner’s problems run so deep that BA has to write off about $5B in anticipated revenue. However the costs are likely to be much less, in the hundreds of millions of dollars. That would let BA, which reports 2012 earnings on Wed, reap the rewards of a $25B investment in the plane. US investigators are still searching for what caused the fire in the lithium-ion batteries on a Japan Airlines 787 in Boston & a fault that forced an All Nippon Airways plane to make an emergency landing in Japan on Jan 16. After the jet's debut in 2011, 50 jets have been delivered. The stock fell $1.03.
Boeing (BA)
Stocks couldn't make up their minds where to go after having an outstanding Jan. Earnings results are being overrated. Profits after excluding one time items (why don't they count?) are not that great & sales growth has been lacking. Apple (AAPL), after being beaten up, rebounded 12 to 452. But it's still down an unbelievable 250 from its highs 4 months ago. It's difficult to forecast how far up the markets can go with AAPL selling off.
Dow Jones Industrials
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