Tuesday, February 19, 2013

Markets edge higher as hombuilder confidence slips

Dow gained 41, advancers over decliners 2-1 & NAZ was up 8.  Bank stocks continue strong, taking the Financial Index up 1+ to over 240.  The MLP index was up 1+ to the 431s & the REIT index rose a fraction to 281.  Junk bond funds were higher, Treasuries were flattish & commodities also did little.

AMJ (Alerian MLP Index tracking fund)

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CLH13.NYM...Crude Oil Mar 13...,95.78 ...Down 0.08  (0.1%)

GCG13.CMX...Gold Feb 13.......1,605.80 ...Down 3.00  (0.2%)

Confidence among US homebuilders slipped this month from the 6½ year high it reached in Jan as many builders reported less traffic by prospective customers before the critical spring home-buying season.  The National Association of Home Builders/Wells Fargo builder sentiment index fell one point to 46 from 47 in Jan, the first monthly decline in the index since Apr.  Readings below 50 suggest negative sentiment about the housing market.  The last time the index was at 50 or higher was in Apr 2006, when it was 51.  It began trending higher in Oct 2011, when it was 17.  Measures of traffic by prospective customers & current sales conditions both declined from Jan readings. Builders' outlook of sales in the next 6 months improved however.

Homebuilder Confidence in U.S. Unexpectedly Fell in February

German Chancellor Angela Merkel

Photo:   Bloomberg

Chancellor Merkel said that European countries burdened by the fallout of the euro-area debt crisis can learn from East Germany’s experiences of economic overhaul after the fall of the Berlin Wall.  She said in a speech to professionals & trade-chambers representatives that her East German background had taught her there is no way around enacting reforms to become more competitive.  “When we became part of the Federal Republic of Germany we had to carry out massive reforms to restructure our economy, also with great upheaval,” Merkel said.  “But this was necessary to create a solid basis of small and medium-sized companies in the new states.”  While the eastern German regions have since been eligible for special EU funds & subsidies, “at the end of a structural reform there must be a competitive company,” she said.  Merkel has been at the forefront of pressing euro states hurt by the debt crisis to overhaul labor markets & carry out other reforms to better compete in a globalized world. 

Merkel Cites East German Lessons for EU’s Problem States

Google stock price surpassed $800 for the first time as mobile-computing bolsters growth.  The stock has gained 31% in the past year, compared with a 12% increase for the S&P00.  GOOG is benefiting from rising demand as marketers seek to advertise via mobile devices & local services.  Q4 EPS, excluding certain items, rose to $10.65, above the estimate of $10.50.  GOOG had more than 41% of all digital ad revenue in the US in 2012, according to EMarketer.  In mobile, Google holds a 53% share & it dominates the US search-based advertising market, with a 75% share.  The stock rose $8 to just over $800.

Google (GOOG)

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There is nothing dramatic going on in the markets.  But the Mar 1 deadline is getting nearer & that's when automatic budget cuts will begin.  Next congress has to raise the debt ceiling.  Little has been done in DC, but talk will heat up & that will impact the markets.  Dow has been trading sideways for near 14K for 3 weeks.  More indecisive trading will probably continue as talks about the budget mess go nowhere.

Dow Jones Industrials

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