Dow rose 72, advancers over decliners 2-1 & NAZ moved up 27. The MLP index slipped fractionally to the 447s after yesterday's big drop & the REIT index gained 1+ to the 303s, a new multi year high. Junk bond funds were mixed & Treasuries inched higher. Oil gained
for the first time in 3 days as the number filing claims for jobless benefits dropped & the ECB cut interest rates to a record low. Gold is also having a good day.
AMJ (Alerian MLP Index tracking fund)
Photo: Yahoo
The ECB cut interest rates for the first time in 10 months, driven to act by an economy wallowing in recession & freed to do so by sharply falling inflation. The main interest rate was lowered by ¼ point to a new record low of 0.50% in response to a drop in inflation well below its target level, & rising unemployment. The cut was widely expected, after ECB President Mario Draghi said last month the bank stood ready to act. Economic data over the last month have bolstered the case for action, with unemployment hitting a record high in Apr, when inflation saw its biggest monthly drop in over 4 years, to 1.2%. The sudden slump in price pressures has also raised the possibility of the ECB having to look at policy tools beyond interest rates to counter any further slide in inflation.
Photo: Bloomberg
The number seeking unemployment aid fell last week to 324K, the lowest since Jan 2008. The drop points to fewer layoffs & possibly more hiring. The Labor Dept said that weekly applications fell 18K, the 2nd straight sharp drop & the 4-week average plummeted 16K to 342K, close to a 5-year low. The forecast is for 160K jobs added in Apr (data released tomorrow)). That would be much better than the 88K added in Mar, but below last year's pace of nearly 185K per month. The unemployment rate is expected to remain unchanged at 7.6%. Nearly 5M received unemployment aid in the latest week, down from nearly 5.1M in the previous week.
Jobless Claims in U.S. Unexpectedly Decline to Five-Year Low
Photo: Bloomberg
Detroit's boom & bust history was built on a dependence on big, fuel-thirsty vehicles. Now, with freshly stocked showrooms of new cars & more-efficient trucks, US automakers are gaining ground on their Asian competitors with the best lineup in a generation. General Motors (GM), Ford (F) & Chrysler, which all gained market share in Q1 for the first time in 20 years, exceeded sales forecasts last month & led the industry to its best Apr since 2007. Sales successes came across the board. Ford had a record Apr in Fusion family car sales, which rose 24% & topped Nissan's Altima. GM’s hot-selling new Cadillac ATS sports sedan drove a 34% increase in the surging luxury line’s sales. Chrysler’s redesigned Ram 1500 pickup jumped 49%. Combined market share for GM, Ford & Chrysler rose to 46.2% so far this year, from 44.7% a year earlier, according to researcher Autodata. Toyota (TM), Honda Motor Co. & Nissan’s combined share fell to 31.8%, from 32.3%. Good news for the auto industry.
Detroit Beats Estimates in Best U.S. Sales Since ’07
Stocks resumed their upward climb after the data on lower jobless claims & the ECB rate cut. However, the yield on the 10 year Treasury was lower with plenty of investors still seeking safety in Treasuries, a significant disconnect from the rising stock market.. Investors are also looking for higher yields which has raised prices for MLPs, REITs & junk bond funds. The problem is that the US economy is sputtering with federal budgets cuts, unlikely to end anytime soon, pinching hard.
Dow Jones Industrials
AMJ (Alerian MLP Index tracking fund)
Treasury yields:
U.S. 3-month |
0.048% | |
U.S. 2-year |
0.202% | |
U.S. 10-year |
1.626% |
| CLM13.NYM | ...Crude Oil Jun 13 | ...91.62 |  ......0.59 | (0.7%) |
| GCK13.CMX | ...Gold May 13 | ....1,471.20 | ...24.90 | (1.7%) |
Photo: Yahoo
The ECB cut interest rates for the first time in 10 months, driven to act by an economy wallowing in recession & freed to do so by sharply falling inflation. The main interest rate was lowered by ¼ point to a new record low of 0.50% in response to a drop in inflation well below its target level, & rising unemployment. The cut was widely expected, after ECB President Mario Draghi said last month the bank stood ready to act. Economic data over the last month have bolstered the case for action, with unemployment hitting a record high in Apr, when inflation saw its biggest monthly drop in over 4 years, to 1.2%. The sudden slump in price pressures has also raised the possibility of the ECB having to look at policy tools beyond interest rates to counter any further slide in inflation.
Photo: Bloomberg
The number seeking unemployment aid fell last week to 324K, the lowest since Jan 2008. The drop points to fewer layoffs & possibly more hiring. The Labor Dept said that weekly applications fell 18K, the 2nd straight sharp drop & the 4-week average plummeted 16K to 342K, close to a 5-year low. The forecast is for 160K jobs added in Apr (data released tomorrow)). That would be much better than the 88K added in Mar, but below last year's pace of nearly 185K per month. The unemployment rate is expected to remain unchanged at 7.6%. Nearly 5M received unemployment aid in the latest week, down from nearly 5.1M in the previous week.
Jobless Claims in U.S. Unexpectedly Decline to Five-Year Low
Photo: Bloomberg
Detroit's boom & bust history was built on a dependence on big, fuel-thirsty vehicles. Now, with freshly stocked showrooms of new cars & more-efficient trucks, US automakers are gaining ground on their Asian competitors with the best lineup in a generation. General Motors (GM), Ford (F) & Chrysler, which all gained market share in Q1 for the first time in 20 years, exceeded sales forecasts last month & led the industry to its best Apr since 2007. Sales successes came across the board. Ford had a record Apr in Fusion family car sales, which rose 24% & topped Nissan's Altima. GM’s hot-selling new Cadillac ATS sports sedan drove a 34% increase in the surging luxury line’s sales. Chrysler’s redesigned Ram 1500 pickup jumped 49%. Combined market share for GM, Ford & Chrysler rose to 46.2% so far this year, from 44.7% a year earlier, according to researcher Autodata. Toyota (TM), Honda Motor Co. & Nissan’s combined share fell to 31.8%, from 32.3%. Good news for the auto industry.
Detroit Beats Estimates in Best U.S. Sales Since ’07
Stocks resumed their upward climb after the data on lower jobless claims & the ECB rate cut. However, the yield on the 10 year Treasury was lower with plenty of investors still seeking safety in Treasuries, a significant disconnect from the rising stock market.. Investors are also looking for higher yields which has raised prices for MLPs, REITs & junk bond funds. The problem is that the US economy is sputtering with federal budgets cuts, unlikely to end anytime soon, pinching hard.
Dow Jones Industrials
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