Dow soared 175, advancers over decliners a relatively mild 3-1 & NAZ rose 32. The Financial Index jumped 4 to the 237s. The MLP index surged 4+ to the 429s & the REIT index was up 2+ to 280. Junk bond funds were mixed & Treasuries sold off in a rising stock market. Oil rallied in the PM & gold dropped, heading for
the longest run of monthly declines in 16 years, as confidence
that the US economy is recovering curbed demand for the metal
as an investment hedge.
AMJ (Alerian MLP Index tracking fund)
![Live 24 hours gold chart [Kitco Inc.]](http://www.kitco.com/images/live/gold.gif)
Photo: Bloomberg
ECB President Graghi signaled the bank has no intention of tightening monetary policy anytime soon with inflation projected to undershoot its 2% target next year. While its balance sheet may shrink naturally as confidence returns to financial markets & banks repay emergency loans, policy makers are “far” from considering an exit from monetary stimulus, Draghi said. “We foresee for next year an inflation rate which is significantly lower than 2 percent.” The ECB has cut its benchmark interest rate to a record low of 0.75%, extended over €1T ($1.3T) in cheap loans to banks & pledged to buy the bonds of debt- strapped nations if they agree to economic reforms. The ECB in Dec forecast the euro economy will contract 0.3% this year & inflation will slow to 1.4% in 2014. While conditions on financial markets are improving, Draghi said the euro-area economy is still “weak” & the ECB’s accommodative policy will help to drive a “gradual recovery” in the course of 2013.
Draghi Signals ECB in No Rush to Tighten Monetary Policy Soon
Photo: Bloomberg
Apple CEO Tim Cook said he’s in “very, very active” talks about what to do with the company’s growing cash pile, did little to assuage investors seeking more clarity on his plans. AAPL shares slipped as Cook ended the company’s annual meeting without giving any additional insight on what he’ll do with $137B in cash & investments. He's under growing pressure to use higher divs, stock buybacks or a new class of preferred shares to compensate investors after the shares tumbled by more than 1/3 from a Sep peak. The calls grew louder amid signs of slowing sales & profit growth & increasingly acute competition from Samsung & Google (GOOG). The stock lost 4+ to the 444s with major selling in the last hour (after the annual meeting ended).
AMJ (Alerian MLP Index tracking fund)
Treasury yields:
U.S. 3-month |
0.104% | |
U.S. 2-year |
0.244% | |
U.S. 10-year |
1.904% |
| CLJ13.NYM | ...Crude Oil Apr 13 | ....92.75 | ... 0.12 (0.1%) |
Photo: Bloomberg
ECB President Graghi signaled the bank has no intention of tightening monetary policy anytime soon with inflation projected to undershoot its 2% target next year. While its balance sheet may shrink naturally as confidence returns to financial markets & banks repay emergency loans, policy makers are “far” from considering an exit from monetary stimulus, Draghi said. “We foresee for next year an inflation rate which is significantly lower than 2 percent.” The ECB has cut its benchmark interest rate to a record low of 0.75%, extended over €1T ($1.3T) in cheap loans to banks & pledged to buy the bonds of debt- strapped nations if they agree to economic reforms. The ECB in Dec forecast the euro economy will contract 0.3% this year & inflation will slow to 1.4% in 2014. While conditions on financial markets are improving, Draghi said the euro-area economy is still “weak” & the ECB’s accommodative policy will help to drive a “gradual recovery” in the course of 2013.
Draghi Signals ECB in No Rush to Tighten Monetary Policy Soon
Photo: Bloomberg
Apple CEO Tim Cook said he’s in “very, very active” talks about what to do with the company’s growing cash pile, did little to assuage investors seeking more clarity on his plans. AAPL shares slipped as Cook ended the company’s annual meeting without giving any additional insight on what he’ll do with $137B in cash & investments. He's under growing pressure to use higher divs, stock buybacks or a new class of preferred shares to compensate investors after the shares tumbled by more than 1/3 from a Sep peak. The calls grew louder amid signs of slowing sales & profit growth & increasingly acute competition from Samsung & Google (GOOG). The stock lost 4+ to the 444s with major selling in the last hour (after the annual meeting ended).
Apple’s ‘Very Active’ Cash Talks Won’t Assuage Investors
Apple (AAPL)
Photo: Yahoo
Facing criticism from Reps, Big Ben stood behind the Federal Reserve's (FED) low-interest-rate policies & sought to reassure members of congress that the FED has a handle on the risks. In his 2nd day of testimony, Bernanke said that the bond purchases are needed to boost a still-weak economy & have helped create jobs for average Americans. The bond purchases are intended to lower long-term interest rates which encourages more borrowing and spending that generates growth. But some Reps warned that by continually pumping more money into the financial system, the bond purchases could eventually ignite inflation. Bernanke said the FED is weighing the costs & benefits of its bond purchases & noted that the FED has a dual mandate: to both maximize employment & maintain low inflation. He argued that the low-interest-rate policies are giving crucial support to an economy still burdened by high unemployment & also acknowledged the risks of keeping rates low indefinitely. But he expressed confidence that such risks pose little threat now & gave no signal that the FED might shift away from those policies.
Bernanke Says Higher Rates May Signal Stronger Economy
Markets had another great day as Dow has gained about 300 in just 2 days. Today's rally is the biggest in almost year. Buyers are saying "What could possibly go wrong?" The answer is, plenty. While Europe is recovering, it's still in a recession. Then there's the US which has to deal with federal budget cuts (that the the bulls are not taking seriously), raising the debt ceiling AGAIN & passing legislation for funding the gov in a deeply divided DC. Even though unemployment has come down from recent highs, it remains at stubbornly high levels. In addition, the effects of the tax increases & higher priced gas are unknown. But with the Dow at a 5 year high, Why Worry? Maybe you should ask an AAPL, with the largest market cap in the world, shareholder.
Dow Jones Industrials
Dow Jones Industrials
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