Dow rose 75, advancers over decliners almost 3-1 & NAZ gained 28. The MLP index was up 2+ to 264, another record, & the REIT index added a fraction to 301. Junk bond funds advanced & Treasuries were little changed. Oil was up & oversold gold had another big pop to the mid 1400s.
AMJ (Alerian MLP Index tracking fund)
Photo: Bloomberg
The number of Americans filing new claims for unemployment benefits fell last week by 16K. Initial claims dropped to 339K, according to the Labor Dept. But the prior week's number was revised to show 3K more applications than previously reported. Analysts had expected 351K. The report runs counter to several weeks of signals that economic activity has softened in Mar & early Apr, a phenomena that has been dubbed the spring swoon because it also happened in the previous 2 years. The 4-week moving average fell 4K to 357K. That could help to further ease concerns of a deterioration in labor market conditions after nonfarm payrolls posted their smallest increase in 9 months in Mar. However, claims around this time of the year are difficult to adjust for seasonal swings.
Initial Jobless Claims in U.S. Fell Last Week to 339,000
The IMF said that monetary policy should remain accommodative to boost growth in advanced economies, while complaints about competitive currency devaluation appear “overstated.” “Unconventional policies continue to provide essential support to demand and have lessened bank vulnerabilities in advanced economies,” the IMF said in a report. “But vigilance is needed to ensure that a prolonged period of low interest rates and expanding central bank balance sheets does not give rise to fresh financial excesses.” The G-20 last week backed the Bank of Japan’s recent stimulus push, signaling its focus on supporting domestic demand was strong enough for them to ignore the side-effects of a sliding ¥. At the same time, nations from the Phillipines to South Korea have enacted or are considering policies to curb the effects of capital inflows. Global recovery remains unbalanced with growth prospects in the US strengthening even as the euro area remains stuck in “low gear” & Japan's economic expansion may be “sluggish” after the effects of its stimulus measures wear off, the IMF said. Advanced economies require more progress with medium- and long-term fiscal adjustment plans, entitlement reform and balance sheet repair, according to the report.
IMF Says Monetary Policy Should Remain Accommodative for Growth
Photo: Bloomberg
3M, a Dow stock & long time Dividend Aristocrat, cut its annual earnings forecast after quarterly profit trailed estimates for the first time in 1½ years amid a slowing global economy. It said profit for 2013 will be $6.60-6.85, down from previous guidance of $6.70-$6.95. Analysts are predicting $6.83. Currency translation will reduce sales by about 1.5%. MMM, an economic bellwether with sales in diverse industries, faced a “low-growth economic environment” in Q1, CEO Inge G. Thulin said. The company made 65% of 2012 revenue outside the US & gets fewer dollars when converting sales from countries with weaker currencies. In 2012, Asia Pacific accounted for 30% of sales & Europe. the Middle East & Africa for 23%. The € has weakened 1.4% & the ¥ has slid 13% against the dollar this year. EPS missed estimates for the first time since the Q3 of 2011. EPS was $1.61, trailing the average prediction by 4¢ & sales rose 2% to $7.63 B, below the average forecast of $7.81B. They fell 0.5% in Asia Pacific because of lower prices & currency impact, especially from the ¥. Revenue from the Europe region was unchanged as acquisitions made up for a 1.1% decline in volume. The electronics & energy unit was the largest drag on earnings, with sales declining 3.3% & operating profit falling 16% to $196M. The stock sank 3.37.
3M Cuts 2013 Profit Forecast on Slowing Demand
Stocks are doing well as earnings are getting a better reception this week. However some of the biggest companies with global businesses have been disappointing, such as MMM. MLPs continue to be red hot with the index up more than 110 since last Jun, eye popping for any security. Investors are most interested in their high yields, which have been reduce substantially in the last year. The yield on the index has fallen to 5.6%, close to the record low yield of 5.37% back in 2007. Dow needs another 100 for a new record which it has not been able to attain during earnings season.
Dow Jones Industrials
AMJ (Alerian MLP Index tracking fund)
Treasury yields:
U.S. 3-month |
0.048% | |
U.S. 2-year |
0.229% | |
U.S. 10-year |
1.716% |
| CLM13.NYM | ...Crude Oil Jun 13 | ...91.31 |  ....0.12 | (0.1%) |
| GCK13.CMX | ...Gold May 13 | ...1,451.30 | ...27.80 | (2.0%) |
Photo: Bloomberg
The number of Americans filing new claims for unemployment benefits fell last week by 16K. Initial claims dropped to 339K, according to the Labor Dept. But the prior week's number was revised to show 3K more applications than previously reported. Analysts had expected 351K. The report runs counter to several weeks of signals that economic activity has softened in Mar & early Apr, a phenomena that has been dubbed the spring swoon because it also happened in the previous 2 years. The 4-week moving average fell 4K to 357K. That could help to further ease concerns of a deterioration in labor market conditions after nonfarm payrolls posted their smallest increase in 9 months in Mar. However, claims around this time of the year are difficult to adjust for seasonal swings.
Initial Jobless Claims in U.S. Fell Last Week to 339,000
The IMF said that monetary policy should remain accommodative to boost growth in advanced economies, while complaints about competitive currency devaluation appear “overstated.” “Unconventional policies continue to provide essential support to demand and have lessened bank vulnerabilities in advanced economies,” the IMF said in a report. “But vigilance is needed to ensure that a prolonged period of low interest rates and expanding central bank balance sheets does not give rise to fresh financial excesses.” The G-20 last week backed the Bank of Japan’s recent stimulus push, signaling its focus on supporting domestic demand was strong enough for them to ignore the side-effects of a sliding ¥. At the same time, nations from the Phillipines to South Korea have enacted or are considering policies to curb the effects of capital inflows. Global recovery remains unbalanced with growth prospects in the US strengthening even as the euro area remains stuck in “low gear” & Japan's economic expansion may be “sluggish” after the effects of its stimulus measures wear off, the IMF said. Advanced economies require more progress with medium- and long-term fiscal adjustment plans, entitlement reform and balance sheet repair, according to the report.
IMF Says Monetary Policy Should Remain Accommodative for Growth
Photo: Bloomberg
3M, a Dow stock & long time Dividend Aristocrat, cut its annual earnings forecast after quarterly profit trailed estimates for the first time in 1½ years amid a slowing global economy. It said profit for 2013 will be $6.60-6.85, down from previous guidance of $6.70-$6.95. Analysts are predicting $6.83. Currency translation will reduce sales by about 1.5%. MMM, an economic bellwether with sales in diverse industries, faced a “low-growth economic environment” in Q1, CEO Inge G. Thulin said. The company made 65% of 2012 revenue outside the US & gets fewer dollars when converting sales from countries with weaker currencies. In 2012, Asia Pacific accounted for 30% of sales & Europe. the Middle East & Africa for 23%. The € has weakened 1.4% & the ¥ has slid 13% against the dollar this year. EPS missed estimates for the first time since the Q3 of 2011. EPS was $1.61, trailing the average prediction by 4¢ & sales rose 2% to $7.63 B, below the average forecast of $7.81B. They fell 0.5% in Asia Pacific because of lower prices & currency impact, especially from the ¥. Revenue from the Europe region was unchanged as acquisitions made up for a 1.1% decline in volume. The electronics & energy unit was the largest drag on earnings, with sales declining 3.3% & operating profit falling 16% to $196M. The stock sank 3.37.
3M Cuts 2013 Profit Forecast on Slowing Demand
3M (MMM)
Stocks are doing well as earnings are getting a better reception this week. However some of the biggest companies with global businesses have been disappointing, such as MMM. MLPs continue to be red hot with the index up more than 110 since last Jun, eye popping for any security. Investors are most interested in their high yields, which have been reduce substantially in the last year. The yield on the index has fallen to 5.6%, close to the record low yield of 5.37% back in 2007. Dow needs another 100 for a new record which it has not been able to attain during earnings season.
Dow Jones Industrials
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