Dow inched up 35, advancers over decliners 5-4 & NAZ climbed 26. The MLP index rose 2+ to the 461s (matching the record reached last week) & the REIT index was up fractionally to 307. Junk bond funds gained while Treasuries pulled back. Oil fell
for a 2nd day as the dollar climbed, reducing the appeal of
raw materials priced in the US currency. The strong US dollar brought more selling to gold.
AMJ (Alerian MLP Index tracking fund)
![Live 24 hours gold chart [Kitco Inc.]](http://www.kitco.com/images/live/gold.gif)
Photo: Bloomberg
The US posted its widest budget surplus in 5 years in Apr, swelled by stronger individual & corp income-tax receipts. The surplus for the month when tax payments are due increased to $113B, the biggest since Apr 2008, from $59B a year earlier, the Treasury said. The forecast was for a surplus of $112B. A strengthening economy is helping narrow a fiscal deficit that has exceeded $1T in each of the past 4 years & pushed the Treasury near its legal borrowing limit. Employers added 1.4M workers in Oct-Apr, boosting gov revenue & reducing the need to sell debt. For the first 7 months of fiscal 2013, the deficit shrank 32% to $487B from the same period from a year before. Revenue rose 28% from the same month a year earlier, to $407B & spending increased 13% to $294B. The pres in Feb signed legislation suspending the $16.4T debt limit thru May 18. The debt limit will increase on May 19 to account for the deficits that accrued during the suspension period. The Treasury will then have to use its extraordinary measures to extend its borrowing authority & keep paying bills, unless the limit is raised or suspended again. A $59B div that Fannie Mae will pay the Treasury by the end of Jun will help avoid breaching the limit until at least Sep 2. The US projects it will pay down debt this qtr for the first time in 6 years as tax receipts exceed forecasts & spending diminishes. The Treasury has kept quarterly refunding auctions unchanged at $72B since Nov 2010.
G7 financial leaders are gathering in the UK to discuss how to shore up the global recovery just as the stimulus measures of one its members, Japan, has caused its currency to take a dramatic slide. Supporting the global economy & the role of central banks are set to be the key points of this weekend's discussions among ministers & officials from the US, Germany, Japan, the UK, Italy, France & Canada. But attention will also turn the financial markets, which are dominated by developments surrounding the ¥ & the Bank of Japan's super-aggressive monetary policy. The dollar just breached the 100 ¥ mark, the first time in a little over 4 years. Over the past few months, the ¥ has dropped sharply as its new gov tries to bring an end to the country's 2-decade stagnation. Treasury Secretary Jacob Lew said the G-7 discussions should center on how to boost growth & generate jobs, & added that the US economy was healing but not at a fast enough pace. "We're moving in the right direction but while growth is encouraging it's not sufficient," he said. Lew singled out Europe as a laggard & said there was a need for policymakers there to get the right balance between austerity & growth.
Central Banks Keep Easing After Cuts Fail to Spur Growth
Groupon Q1 revenue surpassed estimates, buoyed by increased coupon sales thru its mobile applications. Sales rose 7.5% to $601M, above the $591M projected. The net loss narrowed to $3.99M, or 1¢, from $11.7M, or 2¢ a year earlier. Analysts had estimated a 2¢ loss. Co-Chief Executive Officers Eric Lefkofsky & Ted Leonsis have helped stabilize the company while they search for a replacement for Andrew Mason, the company's co-founder ousted as CEO in Feb amid faltering growth. North American revenue climbed 42% to $339M, while intl sales fell 18% to $261M. That drop also represented the 4th straight sequential decline in overseas revenue. Coupons sold on mobile devices accounted for 45% of all transactions in North America in March, up from less than 30% a year earlier, driven by product improvements such as mobile search as well as growth in the number of local deals offered via wireless devices, CFO Jason Child said. “Mobile is the key story in North America,” Child said. The company makes money by offering consumers discounts -- known as Groupons, from businesses such as restaurants & nail salons. It then shares the revenue with the businesses. The stock was up a few pennies.
Groupon Surges After Revenue Beats Estimates on Mobile Gains
Stocks had another strong week after Dow & S&P 500 reached new records last week. As I've been saying all week, nothing is driving the rally other than investors scrambling to get on a moving train so they won't be left behind. The strong Dow today was due to UnitedHealth (UNH), Hewlett-Packard (HPQ) & Cisco (CSCO), each rose at last 1%. With the close, Dow is up over 3K in less than 12 months. Hard to believe!
Dow Jones Industrials
AMJ (Alerian MLP Index tracking fund)
Treasury yields:
U.S. 3-month |
0.04% | |
U.S. 2-year |
0.24% | |
U.S. 10-year |
1.90% |
| CLM13.NYM | Crude Oil Jun 13 | 95.86 |  0.53 (0.6%) |
Photo: Bloomberg
The US posted its widest budget surplus in 5 years in Apr, swelled by stronger individual & corp income-tax receipts. The surplus for the month when tax payments are due increased to $113B, the biggest since Apr 2008, from $59B a year earlier, the Treasury said. The forecast was for a surplus of $112B. A strengthening economy is helping narrow a fiscal deficit that has exceeded $1T in each of the past 4 years & pushed the Treasury near its legal borrowing limit. Employers added 1.4M workers in Oct-Apr, boosting gov revenue & reducing the need to sell debt. For the first 7 months of fiscal 2013, the deficit shrank 32% to $487B from the same period from a year before. Revenue rose 28% from the same month a year earlier, to $407B & spending increased 13% to $294B. The pres in Feb signed legislation suspending the $16.4T debt limit thru May 18. The debt limit will increase on May 19 to account for the deficits that accrued during the suspension period. The Treasury will then have to use its extraordinary measures to extend its borrowing authority & keep paying bills, unless the limit is raised or suspended again. A $59B div that Fannie Mae will pay the Treasury by the end of Jun will help avoid breaching the limit until at least Sep 2. The US projects it will pay down debt this qtr for the first time in 6 years as tax receipts exceed forecasts & spending diminishes. The Treasury has kept quarterly refunding auctions unchanged at $72B since Nov 2010.
G7 financial leaders are gathering in the UK to discuss how to shore up the global recovery just as the stimulus measures of one its members, Japan, has caused its currency to take a dramatic slide. Supporting the global economy & the role of central banks are set to be the key points of this weekend's discussions among ministers & officials from the US, Germany, Japan, the UK, Italy, France & Canada. But attention will also turn the financial markets, which are dominated by developments surrounding the ¥ & the Bank of Japan's super-aggressive monetary policy. The dollar just breached the 100 ¥ mark, the first time in a little over 4 years. Over the past few months, the ¥ has dropped sharply as its new gov tries to bring an end to the country's 2-decade stagnation. Treasury Secretary Jacob Lew said the G-7 discussions should center on how to boost growth & generate jobs, & added that the US economy was healing but not at a fast enough pace. "We're moving in the right direction but while growth is encouraging it's not sufficient," he said. Lew singled out Europe as a laggard & said there was a need for policymakers there to get the right balance between austerity & growth.
Central Banks Keep Easing After Cuts Fail to Spur Growth
Groupon Q1 revenue surpassed estimates, buoyed by increased coupon sales thru its mobile applications. Sales rose 7.5% to $601M, above the $591M projected. The net loss narrowed to $3.99M, or 1¢, from $11.7M, or 2¢ a year earlier. Analysts had estimated a 2¢ loss. Co-Chief Executive Officers Eric Lefkofsky & Ted Leonsis have helped stabilize the company while they search for a replacement for Andrew Mason, the company's co-founder ousted as CEO in Feb amid faltering growth. North American revenue climbed 42% to $339M, while intl sales fell 18% to $261M. That drop also represented the 4th straight sequential decline in overseas revenue. Coupons sold on mobile devices accounted for 45% of all transactions in North America in March, up from less than 30% a year earlier, driven by product improvements such as mobile search as well as growth in the number of local deals offered via wireless devices, CFO Jason Child said. “Mobile is the key story in North America,” Child said. The company makes money by offering consumers discounts -- known as Groupons, from businesses such as restaurants & nail salons. It then shares the revenue with the businesses. The stock was up a few pennies.
Groupon Surges After Revenue Beats Estimates on Mobile Gains
Groupon (GRPN)
Stocks had another strong week after Dow & S&P 500 reached new records last week. As I've been saying all week, nothing is driving the rally other than investors scrambling to get on a moving train so they won't be left behind. The strong Dow today was due to UnitedHealth (UNH), Hewlett-Packard (HPQ) & Cisco (CSCO), each rose at last 1%. With the close, Dow is up over 3K in less than 12 months. Hard to believe!
Dow Jones Industrials
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