Dow lost 20, advancers just ahead of decliners & NAZ slid 2. The Financial Index was up pocket change in the 237s. The MLP index rose 1+ to the 431s & the REIT index was off fractionally to the 279s. Junk bond funds were mixed & there was modest buying in Treasuries. Oil fell almost 1 & gold is back in the 1500s.
AMJ (Alerian MLP Index tracking fund)
![Live 24 hours gold chart [Kitco Inc.]](http://www.kitco.com/images/live/gold.gif)
Photo: Bloomberg
Senators plan a pair of symbolic votes that won’t head off spending cuts scheduled to begin tomorrow. Neither proposal is expected to advance. Instead, today’s votes are designed to give Dems & Reps political cover when the across-the-board reductions take effect. One more reminder that politics rules the outcome of this budget mess! “The Republicans want the sequester to go forward,” Harry Reid said today. “They’ve said so, and any efforts at a reasonable approach to this, they won’t let us do it.” John Boehner reiterated his opposition to new tax revenue in any spending-cut plan on the eve of a meeting with the pres at the White House. “How much more money do we want to steal from the American people to fund more government?” Boehner said. “I’m for no more.” He said House Reps have “laid our cards on the table; we’ve showed we can pass bills to replace the sequester,” referring to bills passed by the House last year that have since expired. Senate Dems propose replacing this year’s part of the spending reduction with a smaller cut to defense programs, a halt in direct payments to farmers, & a tax increase that would impose a minimum 30% rate on top earners. The bill, supported by the White House, but will go nowhere in the House.
Senate Plans Symbolic Votes as Spending Cut Set to Begin
Photo: Bloomberg
Business activity in the US unexpectedly expanded in Feb at the fastest pace in almost a year. The MNI Chicago Report business barometer rose to 56.8, the highest level since Mar, after a reading of 55.6 in Jan. Numbers greater than 50 signal expansion. The forecast called for 54. Manufacturing, which makes up about 12% of the economy, is regaining its footing after slipping in mid 2012 as overseas markets heal, companies spend more on equipment & auto sales improve. Strength in the factory sector indicates producers are still seeing demand even amid higher taxes on consumers & signs that DC lawmakers won’t come to agreement on a budget deal.
Pump prices for gasoline in the US have jumped 49¢ since Dec, a record increase for the period, & may rise further, the AAA said. It added that refinery seasonal maintenance will continue to pressure gasoline prices. “Gas prices increased at a dramatically faster pace than expected in February,” the AAA said in a statement. “There is a lot of uncertainty on where gas prices will go over th e next few weeks, but hopefully the worst of the price spikes are behind us for now.” The national average for regular gasoline at the pump today is $3.78, the highest-ever level for this time of year. The average of $3.65 in Feb was a record & prices are 6.6¢ above a year ago. The 2012 high was $3.93 on Apr 4.
U.S. Pump Prices May Continue Rising in Weeks Ahead, AAA Says
With Dow just a breath away from setting a record, the bulls were unable to take it higher Europe is on a back-burner, but it represents a dark cloud to worry about. The fiscal debate is center stage & both sides have dug in. There will be no last minute (even 1 day) solution. Discussions will drag on & budget cuts will begin to pinch the economy. Revised GDP reminded us that defense cuts are already hurting. However, the cuts are not as large as some suggest because they will be phased in over time. What will make them hard to take is gov employees want to make them as unkind as they can. The dept of waste & the dept of useful stuff will each be cut 7%. That's how the gov "works." The DC confusion caused Dow to sink 100 in the last 90 mins of trading. Tomorrow may not be a pretty day for the markets.
Dow Jones Industrials
AMJ (Alerian MLP Index tracking fund)
| CLJ13.NYM | ...Crude Oil Apr 13 | ...92.16 | ... 0.60 | (0.7%) |
Treasury yields:
U.S. 3-month |
0.104% | |
U.S. 2-year |
0.240% | |
U.S. 10-year |
1.885% |
Photo: Bloomberg
Senators plan a pair of symbolic votes that won’t head off spending cuts scheduled to begin tomorrow. Neither proposal is expected to advance. Instead, today’s votes are designed to give Dems & Reps political cover when the across-the-board reductions take effect. One more reminder that politics rules the outcome of this budget mess! “The Republicans want the sequester to go forward,” Harry Reid said today. “They’ve said so, and any efforts at a reasonable approach to this, they won’t let us do it.” John Boehner reiterated his opposition to new tax revenue in any spending-cut plan on the eve of a meeting with the pres at the White House. “How much more money do we want to steal from the American people to fund more government?” Boehner said. “I’m for no more.” He said House Reps have “laid our cards on the table; we’ve showed we can pass bills to replace the sequester,” referring to bills passed by the House last year that have since expired. Senate Dems propose replacing this year’s part of the spending reduction with a smaller cut to defense programs, a halt in direct payments to farmers, & a tax increase that would impose a minimum 30% rate on top earners. The bill, supported by the White House, but will go nowhere in the House.
Senate Plans Symbolic Votes as Spending Cut Set to Begin
Photo: Bloomberg
Business activity in the US unexpectedly expanded in Feb at the fastest pace in almost a year. The MNI Chicago Report business barometer rose to 56.8, the highest level since Mar, after a reading of 55.6 in Jan. Numbers greater than 50 signal expansion. The forecast called for 54. Manufacturing, which makes up about 12% of the economy, is regaining its footing after slipping in mid 2012 as overseas markets heal, companies spend more on equipment & auto sales improve. Strength in the factory sector indicates producers are still seeing demand even amid higher taxes on consumers & signs that DC lawmakers won’t come to agreement on a budget deal.
Pump prices for gasoline in the US have jumped 49¢ since Dec, a record increase for the period, & may rise further, the AAA said. It added that refinery seasonal maintenance will continue to pressure gasoline prices. “Gas prices increased at a dramatically faster pace than expected in February,” the AAA said in a statement. “There is a lot of uncertainty on where gas prices will go over th e next few weeks, but hopefully the worst of the price spikes are behind us for now.” The national average for regular gasoline at the pump today is $3.78, the highest-ever level for this time of year. The average of $3.65 in Feb was a record & prices are 6.6¢ above a year ago. The 2012 high was $3.93 on Apr 4.
U.S. Pump Prices May Continue Rising in Weeks Ahead, AAA Says
| Regular | Mid | Premium | Diesel | E85 | **E85 MPG/BTU adjusted price |
|
| Current Avg. | $3.782 | $3.941 | $4.093 | $4.142 | $3.349 | $4.407 |
| Yesterday Avg. | $3.786 | $3.942 | $4.093 | $4.144 | $3.360 | $4.421 |
| Week Ago Avg. | $3.778 | $3.925 | $4.074 | $4.142 | $3.342 | $4.398 |
| Month Ago Avg. | $3.364 | $3.518 | $3.670 | $3.914 | $3.088 | $4.063 |
| Year Ago Avg. | $3.731 | $3.870 | $4.004 | $4.052 | $3.192 | $4.201 |
With Dow just a breath away from setting a record, the bulls were unable to take it higher Europe is on a back-burner, but it represents a dark cloud to worry about. The fiscal debate is center stage & both sides have dug in. There will be no last minute (even 1 day) solution. Discussions will drag on & budget cuts will begin to pinch the economy. Revised GDP reminded us that defense cuts are already hurting. However, the cuts are not as large as some suggest because they will be phased in over time. What will make them hard to take is gov employees want to make them as unkind as they can. The dept of waste & the dept of useful stuff will each be cut 7%. That's how the gov "works." The DC confusion caused Dow to sink 100 in the last 90 mins of trading. Tomorrow may not be a pretty day for the markets.
Dow Jones Industrials
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