Friday, January 25, 2013

S&P 500 posts 8 day winning streak

Dow rose 70, advancers ahead of decliners almost 3-2 & NAZ added 19.  The Financial Index was fractionally higher to nearly 235, a new multi year high.  The MLP index rose 2+ to the 423s, essentially matching its record high this week, & the REIT index rose a fraction going over 280.  Junk bond funds were generally higher & Treasuries sold off with the yield on the 10 year Treasury reaching 1.95%.  Oil completed a 7th weekly gain, the longest run of advances in almost 4 years, on speculation that stronger economic growth will boost demand.  Gold dropped to a 2-week low as Germany’s business confidence rose more than forecast, bolstering the outlook for Europe’s largest economy & eroding the appeal of the precious metal as a haven.

AMJ (Alerian MLP Index tracking fund)

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Treasury yields:

U.S. 3-month


U.S. 2-year


U.S. 10-year


Live 24 hours gold chart [Kitco Inc.]

Outgoing Treasury Secretary Tim Geithner thinks the US economy will strengthen this year, as long as Congress avoids cutting spending too deeply in a budget deal & Europe's economy gradually improves.  He said, "The economy is stronger than people appreciate" &  agrees with many private forecasters that growth will accelerate this year, in part because the US economy is no longer being held back by oil shocks & Europe's debt crisis has subsided.  Geithner ruled out the possibility that he would return to DC as chairman of the Federal Reserve next year.  "There are lots of people more qualified than me," Geithner said.

Geithner sees US economy strengthening gradually AP

Verizon Wireless is selling space on the airwaves to AT&T, both Dow stocks, in exchange for $1.9B & the transfer of some airwave rights from AT&T.  The sale of spectrum rights will let AT&T expand its capacity for wireless broadband in areas that include Chicago, Los Angeles, Miami, Oklahoma City & Cincinnati.  In return, it's getting other frequencies in Los Angeles, Fresno, Calif., Phoenix & Portland, Ore.  The deals are part of a year-long spectrum reshuffling process for VX & AT&T.  AT&T is on the hunt for more spectrum, while VZ has been optimizing its holdings to make them easier to use with wireless service.  AT&T was up 20¢. & VZ rose 8¢.
AT&T (T)

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Verizon (VZ)

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ECB Says Banks to Make 137 Billion-Euro Loan Repayment Next Week

Photo:   Bloomberg

The ECB said banks will next week repay more of its emergency 3-year loans than had been forecasted, another sign the region’s debt crisis is abating.  278 financial institutions will return €137B euros ($184B) on Wed, the first opportunity for early repayment of the initial 3-year loan.  That compares with a forecast of 84B.  The ECB’s first loan totaled 489 & banks can continue to make early repayments in coming weeks.  The  rose about half a penny to $1.34+, the highest since last Feb.  The ECB flooded financial markets with Longer Term Refinancing Operations totaling more than 1T a year ago after banks stopped lending to each other because of the debt crisis.

Banks Will Repay Greater-Than-Forecast $184 Billion of ECB Emergency Loans

Stocks have been on fire in Jan.  Dow has risen an astounding 790 for one of its best months in history.  The reason given is that earnings have been good.  I don't think so.  At the start of the month, Congress avoided going over the cliff & that was postponed until AFTER the last minute.  Earnings have been so-so & revenue gains have been tougher to come by.  Huge hurdles remain in DC & the markets are clearly overbought.  But bulls are happy & traders are following their lead.

Dow Jones Industrials

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1 comment:

Martin said...

I agree that the markets are very overbought and we may expect a correction, but the question is when. As the market is growing, more and more investors who were scared (mainly by unknown impacts by Obama's second term and his Obamanomics) and now they are buying every dip. I am waiting sitting on cash and enjoying the ride of those stocks I already own. When the markets get into the correction i will start buying more shares.