Dow slid 5, advancers ahead of decliners 4-3 & NAZ gained 14. The MLP index lost a fraction to below 251 & the REIT index rose 1+ to go over 306. Junk bond funds were mixed & Treasuries pulled back ahead of 3 auctions this week. Oil continued strong, heading for 100 again, & gold had a modest gain.
AMJ (Alerian MLP Index tracking fund)
![Live 24 hours gold chart [Kitco Inc.]](http://www.kitco.com/images/live/gold.gif)
Photo: Bloomberg
ECB Pres Mario Draghi said policy makers are ready to cut interest rates again if needed after reducing them to a record low last week. “We will be looking at all the data that arrives from the euro-area economy in the coming weeks and if necessary, we are ready to act again,” Draghi said. “Monetary policy will remain accommodative.” “The Governing Council has decided for the first time to look openly at the possibility of reducing the interest rate on the deposit facility to less than zero,” he said today. “There are many complications. There are many consequences that we must take into account and study closely. The Governing Council has decided to analyze these consequences in order to be ready to act if needed.” He said last week’s decision was supported by the fact that “macro-economic weakness has spread to parts of euro area where so far the transmission of monetary policy has never been questioned.” To help ensure its low rates are reaching the parts of the economy that need them, the ECB announced last week that it will continue to provide banks with as much liquidity as they want until at least mid-2014, & that it is working with European institutions to encourage lending. The ECB’s measures to date “helped to overcome much of the fragmentation that characterized the funding of the banking system until mid-2012,” Draghi said. Still, the creation of a single bank supervisor & a common resolution framework “are the most effective initiatives to break the link between bank & sovereign debt that is the basis of the current fragmentation,” he said. The € extended losses, to under $1.31, as Draghi made these comments.
Draghi Says ECB Ready to Cut Interest Rates Again If Needed
Photo: Yahoo
The Treasury said it will begin another round of sales of the General Motors (GM) stock it acquired during the gov bailout of the auto sector. The move follows a registration statement by GM last month making it easier for the Treasury to sell its remaining 242M shares, 18%, of common stock in the #1 US automaker. It also will bring GM a step closer to eliminating the stigma of gov ownership. After GM's Nov 2010 IPO, the Treasury's share of stock fell to 32%. Last week, GM came within 56¢ of its $33 IPO price after it reported better-than-expected Q1 earnings. "We are pleased with the progress to date and will continue exiting this investment in accordance with our previously announced plan and timetable, and in a manner that maximizes returns for taxpayers," Tim Massad, Treasury assistant secretary for financial stability, said. In Dec, GM repurchased 200M shares from the Treasury for $5.5B. By the end of Mar, the gov had recovered $30.4B of the $49.5B used to bail out GM under the Troubled Asset Relief Program (TARP). GM execs have said that putting this issue behind them will improve the company's image & boost sales as they believe some consumers have held the bailout against them. The stock fell 27¢.
Treasury to Begin Selling Remaining GM Stake
Photo: Bloomberg
US banks eased standards & terms on loans to businesses as commercial lending led a credit thaw, according to a Federal Reserve (FED) survey. “Domestic banks, on balance, reported having eased their lending standards and having experienced stronger demand in several loan categories over the past three months,” the FED said in its quarterly survey of senior loan officers. The fraction of banks easing standards for business loans was described as “relatively large.” The FMOC reviewed the report at a meeting last week before reiterating that economic growth will probably “proceed at a moderate pace” even against a headwind from gov spending cuts & signaled it may step up monthly bond buying beyond $85B if the need arises to overcome a slump in growth or a decline in inflation. “Bank credit for households and businesses is critical to continued economic expansion,” Big Ben said last month. “It is positive for the recovery that banks are also notably stronger than they were a few years ago.” Demand for business loans increased even as “such reports were less widespread than in the previous survey,” today’s report showed. Banks that eased standards for business loans “generally cited increased competition for such loans as an important reason for having done so.” Banks have boosted lending as the economy gains strength. The total value of loans at US banks climbed 4.1% in the past year to $7.3T in Mar. Lending to businesses has led the way, with commercial & industrial loans climbing to $1.54T, an increase of 11% from a year earlier. “On the household side, the survey results were more mixed.” A “few” banks eased standards on prime residential mortgages, & demand for prime mortgages rose for the 5th consecutive time, the FED said.
Fed Loan Officer Survey Says Business Loans Lead Credit Thaw
Dow had a mixed day while the rest of the market saw limited buying. The biggest gainers in the Dow were: Bank of America (BAC), UnitedHealth Group (UNH), Home Depot (HD) & JPMorgan (JPM). The 2 big losers were: Merck (MRK) & Johnson & Johnson (JNJ). On the one hand, the S&P reached a record high, but hardly with an impressive gain. The chart below shows Dow is overbought after 1 year of a pretty much straight up gain with only mixed data to support the rise. It looks like buyers will take any stock div yield because it is higher than zero at the bank.
Dow Jones Industrialsi
AMJ (Alerian MLP Index tracking fund)
Treasury yields:
U.S. 3-month |
0.033% | |
U.S. 2-year |
0.214% | |
U.S. 10-year |
1.770% |
| CLM13.NYM | Crude Oil Jun 13 | 96.09 |  0.48 (0.5%) |
Photo: Bloomberg
ECB Pres Mario Draghi said policy makers are ready to cut interest rates again if needed after reducing them to a record low last week. “We will be looking at all the data that arrives from the euro-area economy in the coming weeks and if necessary, we are ready to act again,” Draghi said. “Monetary policy will remain accommodative.” “The Governing Council has decided for the first time to look openly at the possibility of reducing the interest rate on the deposit facility to less than zero,” he said today. “There are many complications. There are many consequences that we must take into account and study closely. The Governing Council has decided to analyze these consequences in order to be ready to act if needed.” He said last week’s decision was supported by the fact that “macro-economic weakness has spread to parts of euro area where so far the transmission of monetary policy has never been questioned.” To help ensure its low rates are reaching the parts of the economy that need them, the ECB announced last week that it will continue to provide banks with as much liquidity as they want until at least mid-2014, & that it is working with European institutions to encourage lending. The ECB’s measures to date “helped to overcome much of the fragmentation that characterized the funding of the banking system until mid-2012,” Draghi said. Still, the creation of a single bank supervisor & a common resolution framework “are the most effective initiatives to break the link between bank & sovereign debt that is the basis of the current fragmentation,” he said. The € extended losses, to under $1.31, as Draghi made these comments.
Draghi Says ECB Ready to Cut Interest Rates Again If Needed
Photo: Yahoo
The Treasury said it will begin another round of sales of the General Motors (GM) stock it acquired during the gov bailout of the auto sector. The move follows a registration statement by GM last month making it easier for the Treasury to sell its remaining 242M shares, 18%, of common stock in the #1 US automaker. It also will bring GM a step closer to eliminating the stigma of gov ownership. After GM's Nov 2010 IPO, the Treasury's share of stock fell to 32%. Last week, GM came within 56¢ of its $33 IPO price after it reported better-than-expected Q1 earnings. "We are pleased with the progress to date and will continue exiting this investment in accordance with our previously announced plan and timetable, and in a manner that maximizes returns for taxpayers," Tim Massad, Treasury assistant secretary for financial stability, said. In Dec, GM repurchased 200M shares from the Treasury for $5.5B. By the end of Mar, the gov had recovered $30.4B of the $49.5B used to bail out GM under the Troubled Asset Relief Program (TARP). GM execs have said that putting this issue behind them will improve the company's image & boost sales as they believe some consumers have held the bailout against them. The stock fell 27¢.
Treasury to Begin Selling Remaining GM Stake
Photo: Bloomberg
US banks eased standards & terms on loans to businesses as commercial lending led a credit thaw, according to a Federal Reserve (FED) survey. “Domestic banks, on balance, reported having eased their lending standards and having experienced stronger demand in several loan categories over the past three months,” the FED said in its quarterly survey of senior loan officers. The fraction of banks easing standards for business loans was described as “relatively large.” The FMOC reviewed the report at a meeting last week before reiterating that economic growth will probably “proceed at a moderate pace” even against a headwind from gov spending cuts & signaled it may step up monthly bond buying beyond $85B if the need arises to overcome a slump in growth or a decline in inflation. “Bank credit for households and businesses is critical to continued economic expansion,” Big Ben said last month. “It is positive for the recovery that banks are also notably stronger than they were a few years ago.” Demand for business loans increased even as “such reports were less widespread than in the previous survey,” today’s report showed. Banks that eased standards for business loans “generally cited increased competition for such loans as an important reason for having done so.” Banks have boosted lending as the economy gains strength. The total value of loans at US banks climbed 4.1% in the past year to $7.3T in Mar. Lending to businesses has led the way, with commercial & industrial loans climbing to $1.54T, an increase of 11% from a year earlier. “On the household side, the survey results were more mixed.” A “few” banks eased standards on prime residential mortgages, & demand for prime mortgages rose for the 5th consecutive time, the FED said.
Fed Loan Officer Survey Says Business Loans Lead Credit Thaw
Dow had a mixed day while the rest of the market saw limited buying. The biggest gainers in the Dow were: Bank of America (BAC), UnitedHealth Group (UNH), Home Depot (HD) & JPMorgan (JPM). The 2 big losers were: Merck (MRK) & Johnson & Johnson (JNJ). On the one hand, the S&P reached a record high, but hardly with an impressive gain. The chart below shows Dow is overbought after 1 year of a pretty much straight up gain with only mixed data to support the rise. It looks like buyers will take any stock div yield because it is higher than zero at the bank.
Dow Jones Industrialsi
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