Dow retreated 22, decliners over advancers 3-2 & NAZ gave up 4. The MLP index rose 1+ to the 458s & the REIT index fell 2+ to the 305s. Junk bond funds were mixed & Treasuries saw more selling. Oil & gold lost ground.
AMJ (Alerian MLP Index tracking fund)
![Live 24 hours gold chart [Kitco Inc.]](http://www.kitco.com/images/live/gold.gif)
Photo: Yahoo
A little over a week after Federal Reserve policymakers overwhelmingly endorsed a plan to keep buying bonds to spur economic growth & hiring, they are airing their differences over their super-easy policy. "I think we should try as hard as we can" to turn things around, Chicago Federal Reserve Bank (FED) President Charles Evans said, in a forceful defense of the bond-buying program (QE3) because it is the 3rd round of quantitative easing in 5 years. Crediting QE3 for a "definitely" improved labor market, he said the FED should not back away from the program. "I'd like to have confidence we can sustain that improvement in the labor market through this summer," he said. However Philadelphia FED President Charles Plosser, a policy hawk & unlike Evans not a voting member of the FED policy committee this year, took the opposite tack & called the effects of the bond-buying program "dubious." "I've never felt that our asset purchases have been that effective in addressing what's the biggest problem we face in this country, which is the employment market and the labor market," he said. "I'd like to stop but I would particularly like to see us begin to slow the pace down, gradually ease our way out of this if we possibly can. Strong differences of opinion among policymakers at the central bank are not unusual, & Plosser & Evans in particular have long sparred from opposite ends of the policy spectrum.
Photo: Bloomberg
The ECB will refrain from cutting its interest rate again until at least 2015, according to economists surveyed after Mario Draghi's pledge last week to deliver another reduction if needed. The Frankfurt-based central bank will leave its main refinancing rate at a record low 0.5% until the end of 2014, according to their forecasts. The same survey shows that 27 of 32 economists predict no cut in the benchmark by the end of 2013, while 5 see a reduction to 0.25%. Draghi said on May 2 that the ECB remains ready to act again after it lowered its key rate by a quarter-point the same day. While economists in today’s survey reduced forecasts for euro-region GDP this year, data suggest the euro zone may return to growth after industrial production & factory orders in Germany jumped more than forecast. In the euro area, the annual inflation rate dipped to 1.2% in Apr from 1.7% a month earlier, the lowest since Feb 2010. The ECB predicts prices to rise 1.6% this year & 1.3% in 2014. The forecasts for inflation for the next 3 qtrs & for 2014 were also reduced. But there is a worse outlook for GDP this year with a contraction seen of 0.5% instead of 0.4% followed by 1% growth predicted for 2014.
ECB Seen Desisting From Further Rate Cut Until 2015
Photo: Bloomberg
News Corp is planning to split in 2, rose the most in more than 10 months after Q3 profit beat estimates. Net income tripled to $2.85B in fiscal Q3. EPS excluding some items was 36¢, versus the 35¢ estimate. Results at the television businesses underscore the decision to cleave entertainment from the declining publishing unit, where earnings sagged 35%. Cable-network revenue rose 17%, led by intl growth in fees from pay-TV systems & advertising. Payments to rebroadcast the Fox Network on cable & satellite TV almost doubled. EPS, amounting to $1.22, was boosted by gains from transactions involving the Sky satellite-TV business in Germany, New Zealand & the UK. In the year-earlier period, EPS was 38¢. Operating income rose 3.8% as sales advanced 14% to $9.54B, surpassing the $9.17B estimate. The proposed split should happen “near the end” of the fiscal year that runs through Jun. The plan to divide News Corp creates a new company, 21st Century Fox, that will own the 20th Century Fox film studio & the Fox pay-TV & broadcast networks as well as Fox Sports 1, the cable sports channel. The parent company of the Wall Street Journal & the Sun newspaper will retain the News Corp. name. NWSA shot up 1.44 to a new record.
News Corp. Third-Quarter Profit Beats Estimates on TV Show Licensing Fees
This was another quiet day in the markets. Thoughts about an ending to QE3 gave the bulls an excuse for profit taking. Overall little was decided. YTD Dow is up an incredible 2K even though DC approved higher taxes & federal budget cuts in 2013. The US economy continues to grow at a sluggish rate while Europe is trying to gets its financial house in order. The "what can go wrong" thinking is not going to last. Then stocks will see selling.
Dow Jones Industrials
AMJ (Alerian MLP Index tracking fund)
Treasury yields:
U.S. 3-month |
0.04% | |
U.S. 2-year |
0.22% | |
U.S. 10-year |
1.80% |
| CLM13.NYM | ...Crude Oil Jun 13 | ...96.15 |  ...0.47 | (0.5%) |
Photo: Yahoo
A little over a week after Federal Reserve policymakers overwhelmingly endorsed a plan to keep buying bonds to spur economic growth & hiring, they are airing their differences over their super-easy policy. "I think we should try as hard as we can" to turn things around, Chicago Federal Reserve Bank (FED) President Charles Evans said, in a forceful defense of the bond-buying program (QE3) because it is the 3rd round of quantitative easing in 5 years. Crediting QE3 for a "definitely" improved labor market, he said the FED should not back away from the program. "I'd like to have confidence we can sustain that improvement in the labor market through this summer," he said. However Philadelphia FED President Charles Plosser, a policy hawk & unlike Evans not a voting member of the FED policy committee this year, took the opposite tack & called the effects of the bond-buying program "dubious." "I've never felt that our asset purchases have been that effective in addressing what's the biggest problem we face in this country, which is the employment market and the labor market," he said. "I'd like to stop but I would particularly like to see us begin to slow the pace down, gradually ease our way out of this if we possibly can. Strong differences of opinion among policymakers at the central bank are not unusual, & Plosser & Evans in particular have long sparred from opposite ends of the policy spectrum.
Keep On, or Enough Already? Fed Officials Spar Over QE3 Reuters
Photo: Bloomberg
The ECB will refrain from cutting its interest rate again until at least 2015, according to economists surveyed after Mario Draghi's pledge last week to deliver another reduction if needed. The Frankfurt-based central bank will leave its main refinancing rate at a record low 0.5% until the end of 2014, according to their forecasts. The same survey shows that 27 of 32 economists predict no cut in the benchmark by the end of 2013, while 5 see a reduction to 0.25%. Draghi said on May 2 that the ECB remains ready to act again after it lowered its key rate by a quarter-point the same day. While economists in today’s survey reduced forecasts for euro-region GDP this year, data suggest the euro zone may return to growth after industrial production & factory orders in Germany jumped more than forecast. In the euro area, the annual inflation rate dipped to 1.2% in Apr from 1.7% a month earlier, the lowest since Feb 2010. The ECB predicts prices to rise 1.6% this year & 1.3% in 2014. The forecasts for inflation for the next 3 qtrs & for 2014 were also reduced. But there is a worse outlook for GDP this year with a contraction seen of 0.5% instead of 0.4% followed by 1% growth predicted for 2014.
ECB Seen Desisting From Further Rate Cut Until 2015
Photo: Bloomberg
News Corp is planning to split in 2, rose the most in more than 10 months after Q3 profit beat estimates. Net income tripled to $2.85B in fiscal Q3. EPS excluding some items was 36¢, versus the 35¢ estimate. Results at the television businesses underscore the decision to cleave entertainment from the declining publishing unit, where earnings sagged 35%. Cable-network revenue rose 17%, led by intl growth in fees from pay-TV systems & advertising. Payments to rebroadcast the Fox Network on cable & satellite TV almost doubled. EPS, amounting to $1.22, was boosted by gains from transactions involving the Sky satellite-TV business in Germany, New Zealand & the UK. In the year-earlier period, EPS was 38¢. Operating income rose 3.8% as sales advanced 14% to $9.54B, surpassing the $9.17B estimate. The proposed split should happen “near the end” of the fiscal year that runs through Jun. The plan to divide News Corp creates a new company, 21st Century Fox, that will own the 20th Century Fox film studio & the Fox pay-TV & broadcast networks as well as Fox Sports 1, the cable sports channel. The parent company of the Wall Street Journal & the Sun newspaper will retain the News Corp. name. NWSA shot up 1.44 to a new record.
News Corp. Third-Quarter Profit Beats Estimates on TV Show Licensing Fees
News Corp (NWSA)
This was another quiet day in the markets. Thoughts about an ending to QE3 gave the bulls an excuse for profit taking. Overall little was decided. YTD Dow is up an incredible 2K even though DC approved higher taxes & federal budget cuts in 2013. The US economy continues to grow at a sluggish rate while Europe is trying to gets its financial house in order. The "what can go wrong" thinking is not going to last. Then stocks will see selling.
Dow Jones Industrials
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