Tuesday, March 12, 2013

Markets slip on profit taking

Dow inched up 2 to a new record, decliners ahead of advancers 3-2 & NAZ lost 10.  The Financial Index fell 1+ to the 245s.  The MLP index was off a fraction to 436 & the REIT index slipped 1+ to 282.  Junk bond funds lost ground & the Treasury 10 year bond finally saw buying.  Gold pulled back from AM gains & gold capped the longest rally in 6 months as signs of slowing growth in Europe increased speculation that central banks will expand stimulus measures, boosting demand for precious metals as a store of value.

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CLJ13.NYM...Crude Oil Apr 13...92.53 ....Up 0.47 (0.5%)

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Job Openings Increased in January as U.S. Labor Market Improved

Photo:   Bloomberg

The fewest workers on record were laid off in Jan as job openings rebounded, showing employers are gaining confidence the US. expansion will be sustained even as DC battles to trim the federal deficit.  1.51M were let go in the month, down from 1.57M in Dec & the least in data going back 12 years, according to the Labor Dept.  The number of positions waiting to be filled climbed 81K to 3.69M after slumping 177K in Dec.  The report shows recent payroll gains are being driven more by a reduction in dismissals than a surge in hiring, indicating sales are strong enough for companies to retain current staff.  But acceleration in employment is needed for the labor market to make further progress & push down the 7.7% unemployment rate.  The pace of layoff has probably slowed further going into this month.  The number filing for unemployment benefits declined to a 6-week low in the week ended Mar.  An average 348K a week filed jobless claims over the past month, the fewest in 5 years.  The number of openings in Jan was still short of the 4-year high of 3.85M reached last Mar.  Help wanted waned in Dec as the administration & Congress locked horns over how to prevent the tax increases & budget cuts (the fiscal cliff).

Job Openings Increase as U.S. Labor Market Improves

IMF Staff Recommends Extending Fund’s Emergency Resources Pool

Photo:   Bloomberg

The IMF should prolong an emergency lending pool activated after the global financial crisis because permanent resources alone are insufficient to respond to another bout of instability, according to the fund’s staff.  Expiration of the supplemental financing at the end of the month would leave the fund with lending capacity of about $150B compared with $338B now.  The note was prepared for the IMF board & for contributors of the New Arrangements Borrow that are weighing whether to extend the pool for another 6 months.  “Such a decline in the fund’s lending capacity would not be consistent with ongoing global risks and could further intensify market instability,” according to the staff note.  “This implies that maintaining the fund’s lending capacity can in itself be a tool of crisis prevention.”  The US & Japan are the 2 largest contributors to the NAB facility, with emerging markets such as China & Brazil also contributing.  The IMF in Jan cut its global growth forecasts & projected a 2nd year of contraction in the euro area as progress in battling the debt crisis fails to produce an economic recovery.  It has since warned that predictions for the US would also be lowered next month to reflect spending cuts that started to take effect in Mar.

IMF Staff Recommends Extending Fund’s Emergency Resources Pool

 Obama Says U.S. on Way to Goal of Doubling Exports

Photo:   Bloomberg

The pres said the US is “well on our way” toward doubling exports by the end of 2014, a goal aided by pressing ahead with new trade agreements in Asia & Europe.  Obama told business executives who are part of his advisory council on exports that he’s “modestly optimistic” that US & EU negotiators can reach a trans-Atlantic accord in the wake of Europe’s financial crisis.  “They are hungrier for a deal than they have been in the past” as European nations struggle to reignite economic growth, Obama said.  “You’re going to see more pressure from more countries” to get an accord and set aside agricultural protections that have been a barrier to deals in the past.  Obama created the council 2 years ago, laying out a goal of doubling US exports to about $3.1T by the end of 2014 from $1.57T in 2009.  He said reaching the goal would support 2M additional jobs.  Obama is placing a focus on trade with South Korea, Colombia & Panama that were already negotiated.  “Small businesses stand to benefit immensely from this process,” he said.

After a 7 day rally, stocks paused.  It's difficult to call selling today meaningful.  But the stocks lost their upward momentum.   Lines are being drawn over the budget battle which will intensify & it's hard to see how this fight will benefit the stock market.  Dow had an impressive 7 day rally.  In this overbought condition, it may need a more substantial correction.  Apple (AAPL), with the largest market cap in the world, fell 9 to 428, near a 13 month low.  That's not suppose to happen in a bull market.
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