Dow dropped 64, decliners over advancers 3-2 & NAZ fell 9. The Financial Index slipped a fraction to the 244s. The MLP index was up 1+ to the 448s for a new record (although below AM highs) & the REIT index was even in the 283s. Junk bond funds were mixed & Treasuries gained on concerns about the impact of the Cyprus bailout. Oil had a good day & gold went below $1600.
AMJ (Alerian MLP Index tracking fund)
![Live 24 hours gold chart [Kitco Inc.]](http://www.kitco.com/images/live/gold.gif)
Photo: Bloomberg
The € fell to a 4-month low after a euro leader said the Cyprus bailout may be a precedent, spurring doubts about the safety of other bond holdings & deposits. The currency fell against all 16 of its most- traded peers as Dutch Finance Minister Jeroen Dijsselbloem said Europe is “going down the bail-in track.” The bailout accord will see Cyprus Popular Bank Plc wound down, wiping out bondholders, & will impose losses on some depositors. The € lost a penny to $1.28½, touching a 4 month low. The Cyprus accord spares bank accounts below the insured limit of €100K ($128K). It imposes losses that 2 EU officials said would be no more than 40% on uninsured depositors at Bank of Cyprus, which will take over the viable assets of Cyprus Popular Bank. “If there is a risk in a bank, our first question should be ‘Okay, what are you in the bank going to do about that? What can you do to recapitalize yourself?’” said Dijsselbloem, who heads the group of euro-area finance chiefs. “If the bank can’t do it, then we’ll talk to the shareholders and the bondholders, we’ll ask them to contribute in recapitalizing the bank, and if necessary the uninsured deposit holders.” Early AM celebration was premature.
Photo: Yahoo
Bernanke Says Easing by Advanced Nations Helps World Economy
A Boeing 787 made a test flight to see if a redesigned battery system works properly while the plane is in the air. This is an important step to convince safety regulators to allow airlines to resume using the plane. New 787s have been grounded since Jan, when a lithium-ion battery on one plane caught fire after it landed in Boston & the battery on another began smoking during a flight in Japan, forcing an emergency landing. Insulation was added around battery cells & a steel casing on the outside to prevent fires. The cause of the smoldering batteries may never be known. BA, a Dow stock, hopes to get the planes back in the air within weeks, not months. The National Transportation Safety Board plans to hold a forum next month in DC on the use of lithium-ion batteries in transportation & will focus on design & performance of the batteries along with regulation of their manufacturing & use. The stock was up 3 pennies.
Boeing 787 makes test flight to check battery AP
For 2 weeks Dow has been treading water, going nowhere. The euro debt mess had been quieting down, but Cyrpus is a reminder that fundamental problems have not been solved. This is a very dark cloud that even the bulls will have to learn to live under. The US economy is back to stumbling. Recent data has shown improvement, but nobody is sure how higher taxes, increased Obamacare costs & gas price hikes will affect the consumer. Business leaders may be expanding, but in a cautious manner. Without prodding from the outside, the Dow may continue sideways until earnings season begins on Apr 8.
Dow Jones Industrials
AMJ (Alerian MLP Index tracking fund)
Treasury yields:
U.S. 3-month |
0.063% | |
U.S. 2-year |
0.248% | |
U.S. 10-year |
1.914% |
| CLK13.NYM | ...Crude Oil May 13 | ...94.82 | ... 1.11 | (1.2%) |
Photo: Bloomberg
The € fell to a 4-month low after a euro leader said the Cyprus bailout may be a precedent, spurring doubts about the safety of other bond holdings & deposits. The currency fell against all 16 of its most- traded peers as Dutch Finance Minister Jeroen Dijsselbloem said Europe is “going down the bail-in track.” The bailout accord will see Cyprus Popular Bank Plc wound down, wiping out bondholders, & will impose losses on some depositors. The € lost a penny to $1.28½, touching a 4 month low. The Cyprus accord spares bank accounts below the insured limit of €100K ($128K). It imposes losses that 2 EU officials said would be no more than 40% on uninsured depositors at Bank of Cyprus, which will take over the viable assets of Cyprus Popular Bank. “If there is a risk in a bank, our first question should be ‘Okay, what are you in the bank going to do about that? What can you do to recapitalize yourself?’” said Dijsselbloem, who heads the group of euro-area finance chiefs. “If the bank can’t do it, then we’ll talk to the shareholders and the bondholders, we’ll ask them to contribute in recapitalizing the bank, and if necessary the uninsured deposit holders.” Early AM celebration was premature.
Photo: Yahoo
Big Ben defended the Federal Reserve's (FED) aggressive easing of monetary policy, saying while it was aimed
at bolstering the economic recovery & that was helping other countries as
well. The FED asset purchase programs, aimed at keeping
long-term borrowing costs down & spurring investment, have been
criticized overseas for their adverse impact on emerging market
currencies. But he
countered the rhetoric about "currency wars," though he did not use the
term specifically. Bernanke said the integrated nature of the global economy meant the
whole world benefits from a sturdier outlook. "Because stronger growth in each economy confers
beneficial spillovers to trading partners, these policies are not
‘beggar-thy-neighbor' but rather are positive-sum, ‘enrich-thy-neighbor'
actions," he said. Domestic critics say the central bank's vastly expanded
balance sheet, now topping $3.1T, risks future inflation. But
Bernanke has noted that inflation is forecast to remain at or below the
central bank's 2% target for the foreseeable future. Economic growth, meanwhile, remains more of a question
mark, particularly with the combination of sharp spending cuts at home & turbulence in euro financial markets casting a pall over better recent US economic data. GDP is expected to expand
around 2% this year (but sub-par), while the FED sees 2013 growth of
2.3-2.7%. "The distinction
between monetary policies aimed at domestic objectives and
trade-diverting exchange rate devaluations and other protectionist
measures is critical," Bernanke said.
Bernanke Says Easing by Advanced Nations Helps World Economy
A Boeing 787 made a test flight to see if a redesigned battery system works properly while the plane is in the air. This is an important step to convince safety regulators to allow airlines to resume using the plane. New 787s have been grounded since Jan, when a lithium-ion battery on one plane caught fire after it landed in Boston & the battery on another began smoking during a flight in Japan, forcing an emergency landing. Insulation was added around battery cells & a steel casing on the outside to prevent fires. The cause of the smoldering batteries may never be known. BA, a Dow stock, hopes to get the planes back in the air within weeks, not months. The National Transportation Safety Board plans to hold a forum next month in DC on the use of lithium-ion batteries in transportation & will focus on design & performance of the batteries along with regulation of their manufacturing & use. The stock was up 3 pennies.
Boeing 787 makes test flight to check battery AP
Boeing (BA)
For 2 weeks Dow has been treading water, going nowhere. The euro debt mess had been quieting down, but Cyrpus is a reminder that fundamental problems have not been solved. This is a very dark cloud that even the bulls will have to learn to live under. The US economy is back to stumbling. Recent data has shown improvement, but nobody is sure how higher taxes, increased Obamacare costs & gas price hikes will affect the consumer. Business leaders may be expanding, but in a cautious manner. Without prodding from the outside, the Dow may continue sideways until earnings season begins on Apr 8.
Dow Jones Industrials
No comments:
Post a Comment