Dow dropped 12, decliners over advancers 5-2 & NAZ fell 4. The MLP index continues weak, losing 3 to 446, & the REIT index lost 2+ the 286s. Junk bond funds fell & Treasuries were also lower, raising the yield on the 10 year Treasury to 2.16%. Oil & gold also saw selling.
AMJ (Alerian MLP Index tracking fund)
Photo: Yahoo
Greater optimism over the economic outlook & personal finances in the midst of record stock market prices pushed US consumer sentiment to its highest level in nearly 6 years in May. While upper income households continued to set the pace, confidence also began to improve among middle & lower income households in the latter part of the month. Wealthier households are more likely to be invested in equities & reap the benefits of this year's sharp stock market rally. The Thomson Reuters/University of Michigan's final reading on the overall index on consumer sentiment rose to 84.5 from 76.4 in Apr, the highest level since Jul 2007. Expectations called for a reading of 83.7 (May's preliminary figure). The barometer of current economic conditions jumped to its highest level since Aug 2007 at 98.0 from 89.9, while the gauge of consumer expectations climbed to 75.8 from 67.8. "The data clearly suggest a faster pace of growth in consumer spending during the year ahead than was anticipated even one month ago," survey director Richard Curtin said. The index of buying conditions for durable goods rose to 147 from 137 as 58% said the economy had improved.
Photo: Bloomberg
US consumer spending unexpectedly declined in Apr as incomes stagnated, putting the biggest part of the US economy on shaky ground at the start of Q2. Household purchases, which account for about 70% of the economy, dropped 0.2%, after a 0.1% rise the prior month that was smaller than previously estimated, according to the Commerce Dept. The estimate was for no change. The drop in spending was the first since May 2012. The saving rate was unchanged at 2.5% even as spending dropped, reflected the lack of income growth. Wages & salaries were also unchanged in Apr. The price index tied to spending, the gauge tracked by the Federal Reserve, fell 0.3%, the biggest drop since Dec 2008, as fuel costs retreated. The core price measure, which excludes food & fuel, was unchanged from the prior month & up 1.1% from Apr 2012, matching a record low.
Consumer Spending in U.S. Unexpectedly Declined in April
Dell will hold a shareholder vote on Jul 18 on a $24.4B leveraged buyout offer by founder Michael Dell & Silver Lake. DELL recommended the offer be accepted after no better offer came during the “go-shop” period. A majority of shareholders, excluding Michael Dell’s 15.6% stake, will have to approve the buyout for it to pass. The vote will determine whether Michael Dell & Silver Lake will get the chance to run the world’s 3rd-largest PC maker as a private company. As earnings & sales decline amid a shift in demand to smartphones & tablets, the buyers are seeking to accelerate the company’s shift toward selling more products & services for corp data centers. The Silver Lake-led group offered $13.65 a share for DELL stock. Billionaire financier Carl Icahn has proposed a competing offer that would pay investors $12 a share in cash or stock while letting them retain stakes in a public company. Icahn, who along with Southeastern owns almost 13% of Dell shares, said this month that he would look to replace Michael Dell as CEO if he prevails. Financing for Icahn’s proposal will come from existing cash at the PC maker & about $5.2B in new debt. A special board committee is seeking more details about this proposal. In the event that a special committee of Dell directors concludes that the new proposal isn’t superior, Icahn has said he plans a proxy battle to install his own slate of directors. The stock was up 8¢.
Dell Sets July 18 Shareholder Vote on CEO’s $24.4 Billion Leveraged Buyout
There is little going on in the markets although the momentum is negative. Leading the way lower are the yield stocks. The MLP index is down 22 from its high last week while the REIT index is off a huge 28 from its recent highs. Investors are nervous about a change in the bond buying program by the Federal Reserve, although junk bond funds have held pretty well. With no additional news in the PM, markets will probably drift lower in the PM on low volume. Longer term, the markets are vulnerable.
Dow Jones Industrials
AMJ (Alerian MLP Index tracking fund)
Treasury yields:
U.S. 3-month |
0.03% | |
U.S. 2-year |
0.31% | |
U.S. 10-year |
2.17% |
| CLN13.NYM | ....Crude Oil Jul 13 | ...92.54 |  ......1.07 | (1.1%) |
| GCM13.CMX | ...Gold Jun 13 | .....1,393.30 | ...18.20 | (1.3%) |
Photo: Yahoo
Greater optimism over the economic outlook & personal finances in the midst of record stock market prices pushed US consumer sentiment to its highest level in nearly 6 years in May. While upper income households continued to set the pace, confidence also began to improve among middle & lower income households in the latter part of the month. Wealthier households are more likely to be invested in equities & reap the benefits of this year's sharp stock market rally. The Thomson Reuters/University of Michigan's final reading on the overall index on consumer sentiment rose to 84.5 from 76.4 in Apr, the highest level since Jul 2007. Expectations called for a reading of 83.7 (May's preliminary figure). The barometer of current economic conditions jumped to its highest level since Aug 2007 at 98.0 from 89.9, while the gauge of consumer expectations climbed to 75.8 from 67.8. "The data clearly suggest a faster pace of growth in consumer spending during the year ahead than was anticipated even one month ago," survey director Richard Curtin said. The index of buying conditions for durable goods rose to 147 from 137 as 58% said the economy had improved.
Consumer Sentiment Strongest in Nearly Six Years in May Reuters
Photo: Bloomberg
US consumer spending unexpectedly declined in Apr as incomes stagnated, putting the biggest part of the US economy on shaky ground at the start of Q2. Household purchases, which account for about 70% of the economy, dropped 0.2%, after a 0.1% rise the prior month that was smaller than previously estimated, according to the Commerce Dept. The estimate was for no change. The drop in spending was the first since May 2012. The saving rate was unchanged at 2.5% even as spending dropped, reflected the lack of income growth. Wages & salaries were also unchanged in Apr. The price index tied to spending, the gauge tracked by the Federal Reserve, fell 0.3%, the biggest drop since Dec 2008, as fuel costs retreated. The core price measure, which excludes food & fuel, was unchanged from the prior month & up 1.1% from Apr 2012, matching a record low.
Consumer Spending in U.S. Unexpectedly Declined in April
Dell will hold a shareholder vote on Jul 18 on a $24.4B leveraged buyout offer by founder Michael Dell & Silver Lake. DELL recommended the offer be accepted after no better offer came during the “go-shop” period. A majority of shareholders, excluding Michael Dell’s 15.6% stake, will have to approve the buyout for it to pass. The vote will determine whether Michael Dell & Silver Lake will get the chance to run the world’s 3rd-largest PC maker as a private company. As earnings & sales decline amid a shift in demand to smartphones & tablets, the buyers are seeking to accelerate the company’s shift toward selling more products & services for corp data centers. The Silver Lake-led group offered $13.65 a share for DELL stock. Billionaire financier Carl Icahn has proposed a competing offer that would pay investors $12 a share in cash or stock while letting them retain stakes in a public company. Icahn, who along with Southeastern owns almost 13% of Dell shares, said this month that he would look to replace Michael Dell as CEO if he prevails. Financing for Icahn’s proposal will come from existing cash at the PC maker & about $5.2B in new debt. A special board committee is seeking more details about this proposal. In the event that a special committee of Dell directors concludes that the new proposal isn’t superior, Icahn has said he plans a proxy battle to install his own slate of directors. The stock was up 8¢.
Dell Sets July 18 Shareholder Vote on CEO’s $24.4 Billion Leveraged Buyout
Dell (DELL)
There is little going on in the markets although the momentum is negative. Leading the way lower are the yield stocks. The MLP index is down 22 from its high last week while the REIT index is off a huge 28 from its recent highs. Investors are nervous about a change in the bond buying program by the Federal Reserve, although junk bond funds have held pretty well. With no additional news in the PM, markets will probably drift lower in the PM on low volume. Longer term, the markets are vulnerable.
Dow Jones Industrials
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