Dow was of 4, decliners barely ahead of advancers & NAZ fell 13, hurt by Apple (see below). The Financial Index fell 1+ to the 229s, as investors are nervous about bank earnings this week. The MLP index rose a fraction to the 414s, pennies from a new record, & the REIT index was flat at 274. Junk bond funds were a little lower & Treasuries were higher after selling off for months. Oil pulled back but gold is having a good day.
Photo: Yahoo
The US economy is expected to grow by 2.5% in 2013, improving to 3.5% growth in 2014, top FED official Charles Evans said this AM. He also forecast the US unemployment rate would be 7.4% this year, easing to about 7% in 2014. "One good indicator of labor market improvement would be if we saw payroll employment increase by 200,000 each month for a number of months. We've been averaging about 150,000, but it's been very uneven ... we need a higher pace of employment growth and less volatility in that pace," the Chicago Fed President said. The creation of 1M jobs over 6 months would be a "substantive" improvement, but bringing unemployment down to the key level of 6.5% was likely to take much longer, probably until mid-2015, he said. The FED decision last year to tie monetary policy to specific economic conditions should help boost the recovery without letting inflation take hold, said Evans. It also provides additional accommodation by assuring markets that rates will remain low even after the economy perks up, he added. "Given more explicit conditionality, markets can be more confident that we will provide the monetary accommodation necessary to close the large resource gaps that currently exist," he said. "Additionally, the public can be more certain that we will not wait too long to tighten if inflation were to become a substantial concern." This is current thinking by the FED.
U.S. Economy to Grow 2.5% This Year: Fed's Evans
Photo: Bloomberg
Apple declined to the lowest price in almost a year after it said that it curbed iPhone production on weak demand. Can you spell, Uh-Oh?" AAPL reduced its original target to order 65M iPhone 5 displays this qtr by about half according to a supplier. IPhone sales are slowing because smartphones have saturated developed markets. AAPL is facing increasing competition from Android phones in emerging markets, because they are cheaper than the iPhone. Q1 iPhone shipments may decline 25% from the previous period. The Q2 revenue estimate may drop about $4-$5B & the EPS projection may decline by more than $1. AAPL is learning the hard way about competition. The stock dropped another 17 to 503 & is down more than 200 from its peak when in introduced iPhone 5 in Sep.
Apple Drops to 11-Month Low on Reports of IPhone Production Cuts in Asia
Photo: Yahoo
Toyota has once again dethroned General Motors as the world's top-selling automaker selling 9.7M cars & trucks worldwide in 2012 (although it's still counting). GM sold 9.29M. Both companies saw higher sales, but TM growth was far larger as it rolled out new versions of popular models like the Camry. GM promised sales growth this year, especially in the US Both companies say publicly that they don't care about who wins, but concede that the crown is an important morale booster for employees. GM's global sales rose 2.9% last year & TM sales rose 22%. TM rose 43¢ while GM lost 42¢.
Toyota retakes global auto sales crown from GM AP
Stocks are awaiting developments on the earnings front. The big banks will be reporting in the next few days & there is a lot of nervousness about those earnings. However, MLPs continue in demand with the index essentially at its record. Few securities can make that claim. Dow is less than 200 from setting a new 5 year high & is having a tough time reaching it. Gloomy thoughts about AAPL, with the largest market cap, are not helping matters.
AMJ (Alerian MLP Index tracking fund)
| CLG13.NYM | ...Crude Oil Feb 13 | ...93.68 | ... 0.12 | (0.1%) |
| GCF13.CMX | ...Gold Jan 13 | ......1,664.10 | ... 4.10 | (0.3%) |
Photo: Yahoo
The US economy is expected to grow by 2.5% in 2013, improving to 3.5% growth in 2014, top FED official Charles Evans said this AM. He also forecast the US unemployment rate would be 7.4% this year, easing to about 7% in 2014. "One good indicator of labor market improvement would be if we saw payroll employment increase by 200,000 each month for a number of months. We've been averaging about 150,000, but it's been very uneven ... we need a higher pace of employment growth and less volatility in that pace," the Chicago Fed President said. The creation of 1M jobs over 6 months would be a "substantive" improvement, but bringing unemployment down to the key level of 6.5% was likely to take much longer, probably until mid-2015, he said. The FED decision last year to tie monetary policy to specific economic conditions should help boost the recovery without letting inflation take hold, said Evans. It also provides additional accommodation by assuring markets that rates will remain low even after the economy perks up, he added. "Given more explicit conditionality, markets can be more confident that we will provide the monetary accommodation necessary to close the large resource gaps that currently exist," he said. "Additionally, the public can be more certain that we will not wait too long to tighten if inflation were to become a substantial concern." This is current thinking by the FED.
U.S. Economy to Grow 2.5% This Year: Fed's Evans
Photo: Bloomberg
Apple declined to the lowest price in almost a year after it said that it curbed iPhone production on weak demand. Can you spell, Uh-Oh?" AAPL reduced its original target to order 65M iPhone 5 displays this qtr by about half according to a supplier. IPhone sales are slowing because smartphones have saturated developed markets. AAPL is facing increasing competition from Android phones in emerging markets, because they are cheaper than the iPhone. Q1 iPhone shipments may decline 25% from the previous period. The Q2 revenue estimate may drop about $4-$5B & the EPS projection may decline by more than $1. AAPL is learning the hard way about competition. The stock dropped another 17 to 503 & is down more than 200 from its peak when in introduced iPhone 5 in Sep.
Apple Drops to 11-Month Low on Reports of IPhone Production Cuts in Asia
Apple (AAPL)
Photo: Yahoo
Toyota has once again dethroned General Motors as the world's top-selling automaker selling 9.7M cars & trucks worldwide in 2012 (although it's still counting). GM sold 9.29M. Both companies saw higher sales, but TM growth was far larger as it rolled out new versions of popular models like the Camry. GM promised sales growth this year, especially in the US Both companies say publicly that they don't care about who wins, but concede that the crown is an important morale booster for employees. GM's global sales rose 2.9% last year & TM sales rose 22%. TM rose 43¢ while GM lost 42¢.
Toyota retakes global auto sales crown from GM AP
Toyota (TM)
General Motors (GM)
Stocks are awaiting developments on the earnings front. The big banks will be reporting in the next few days & there is a lot of nervousness about those earnings. However, MLPs continue in demand with the index essentially at its record. Few securities can make that claim. Dow is less than 200 from setting a new 5 year high & is having a tough time reaching it. Gloomy thoughts about AAPL, with the largest market cap, are not helping matters.
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