Dow added 50 to reach another record high, advancers barely ahead of decliners & NAZ went up 8. The Financial Index was up 1+ to the 246s, a new 4½ year high. The MLP & REIT indices were fractionally changed. Junk bond funds were mixed & Treasuries sold off, taking the yield on the 10 year Treasury to levels not seen in 11 months. Oil & gold continued flattish.
AMJ (Alerian MLP Index tracking fund)
![Live 24 hours gold chart [Kitco Inc.]](http://www.kitco.com/images/live/gold.gif)
Consumers & businesses are treating higher payroll taxes & federal spending cuts as just a speed bump for a US economy which can accelerate later this year. Americans are saving less & spending more for purchases such as new automobiles, as household net worth climbs with rising home values & stock indices surge to record highs. Companies are ramping up hiring, & expanding investment & rebuilding inventories as they put profits accumulated during the recovery to work. Growth could pick up in H2 if the fallout from the budget cuts dissipates, paving the way for even stronger spending by businesses & consumers. GDP could rise at a 2% annual average pace later in the year. This is the bullish view.
Americans Absorb Payroll-Tax Rise to Keep Spending: Economy
The pres plans to speak Wed to donors & Dem activists who are building support for a nonprofit group formed to promote his agenda (spend more now). The speech will be to the founders' summit of Organizing for Action. The 2-day meeting in DC (where else?) will include addresses by OFA chairman Jim Messina, a former White House aide who served as campaign manager for Obama's re-election; David Plouffe, a former White House senior adviser & Obama's 2008 campaign manager; & Jon Carson, a former White House official. Organizing for Action is being run by former Obama advisers who have transformed his re-election campaign into a grassroots machine to support his initiatives. The group is raising millions from donors & generating support among activists for issues from gun control to immigration overhaul. Topics with include a rundown of the policy issues the pres intends to pursue & a discussion of recruitment & mobilizing strategies.
Obama to speak to Organizing for Action summit AP
Photo: Bloomberg
China’s industrial output had the weakest start to a year since 2009, & lending & retail sales growth slowed, underscoring challenges for a new leadership that wants to narrow the gap between rich & poor. Production increased 9.9% in the first 2 months & retail sales rose 12.3%, gov data showed, trailing estimates. New local-currency loans in Feb fell to 620B yuan ($99.6B), the People’s Bank of China said, lower than the estimates. Strengthening US demand after the unemployment rate fell to a 4-year low may help incoming Premier Li Keqiang achieve the 7.5% growth in GDP sought by policy makers entering the final week of their meeting. The biggest Jan-Feb gain in exports since 2010 & accelerating investment show the economy has yet to wean itself from reliance on trade & spending on fixed assets.
China’s Weaker Start to 2013 Challenges Xi Amid Strengthening U.S. Economy
Dow rose every day this month on unspectacular news. The biggest story was that Dow reached a record even though traders have no clue how the fiscal mess in DC will end. It comes down to the Reps want to cut spending (beyond slowing the rate of growth) & the Dems are looking to expand gov spending. The idea is worry about today, tomorrow will take care of itself. Dow is already up almost 400 this month. Under any circumstances, that would be an excellent monthly gain. I call that overbought & the Dow looks tired . Eventually buyers will give up & there will be a negative reaction.
Dow Jones Industrials
AMJ (Alerian MLP Index tracking fund)
Treasury yields:
U.S. 3-month |
0.094% | |
U.S. 2-year |
0.256% | |
U.S. 10-year |
2.053% |
| CLJ13.NYM | ...Crude Oil Apr 13 | ....91.86 | ... 0.09 | (0.1%) |
Consumers & businesses are treating higher payroll taxes & federal spending cuts as just a speed bump for a US economy which can accelerate later this year. Americans are saving less & spending more for purchases such as new automobiles, as household net worth climbs with rising home values & stock indices surge to record highs. Companies are ramping up hiring, & expanding investment & rebuilding inventories as they put profits accumulated during the recovery to work. Growth could pick up in H2 if the fallout from the budget cuts dissipates, paving the way for even stronger spending by businesses & consumers. GDP could rise at a 2% annual average pace later in the year. This is the bullish view.
Americans Absorb Payroll-Tax Rise to Keep Spending: Economy
The pres plans to speak Wed to donors & Dem activists who are building support for a nonprofit group formed to promote his agenda (spend more now). The speech will be to the founders' summit of Organizing for Action. The 2-day meeting in DC (where else?) will include addresses by OFA chairman Jim Messina, a former White House aide who served as campaign manager for Obama's re-election; David Plouffe, a former White House senior adviser & Obama's 2008 campaign manager; & Jon Carson, a former White House official. Organizing for Action is being run by former Obama advisers who have transformed his re-election campaign into a grassroots machine to support his initiatives. The group is raising millions from donors & generating support among activists for issues from gun control to immigration overhaul. Topics with include a rundown of the policy issues the pres intends to pursue & a discussion of recruitment & mobilizing strategies.
Obama to speak to Organizing for Action summit AP
Photo: Bloomberg
China’s industrial output had the weakest start to a year since 2009, & lending & retail sales growth slowed, underscoring challenges for a new leadership that wants to narrow the gap between rich & poor. Production increased 9.9% in the first 2 months & retail sales rose 12.3%, gov data showed, trailing estimates. New local-currency loans in Feb fell to 620B yuan ($99.6B), the People’s Bank of China said, lower than the estimates. Strengthening US demand after the unemployment rate fell to a 4-year low may help incoming Premier Li Keqiang achieve the 7.5% growth in GDP sought by policy makers entering the final week of their meeting. The biggest Jan-Feb gain in exports since 2010 & accelerating investment show the economy has yet to wean itself from reliance on trade & spending on fixed assets.
China’s Weaker Start to 2013 Challenges Xi Amid Strengthening U.S. Economy
Dow rose every day this month on unspectacular news. The biggest story was that Dow reached a record even though traders have no clue how the fiscal mess in DC will end. It comes down to the Reps want to cut spending (beyond slowing the rate of growth) & the Dems are looking to expand gov spending. The idea is worry about today, tomorrow will take care of itself. Dow is already up almost 400 this month. Under any circumstances, that would be an excellent monthly gain. I call that overbought & the Dow looks tired . Eventually buyers will give up & there will be a negative reaction.
Dow Jones Industrials
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