Dow dropped 76, decliners over advancers 3-2 & NAZ was off 20. The MLP index dropped 2+ to 442 & the REIT index was off 2+ to the 284s. Junk bond funds rose & Treasuries were mixed. Oil fell on
forecasts that US fuel inventories expanded & as the dollar
strengthened against a basket of major currencies. Gold went below 1400 again.
AMJ (Alerian MLP Index tracking fund)
![Live 24 hours gold chart [Kitco Inc.]](http://www.kitco.com/images/live/gold.gif)
Photo: Bloomberg
Federal Reserve (FED) Bank of Kansas City President Esther George urged the FED to reduce its $85B in monthly bond buying as growth quickens & low low interest rates prompt investors to take on more risk. “In light of improving economic conditions, I support slowing the pace of asset purchases as an appropriate next step for monetary policy,” George said today. “Waiting too long to acknowledge the economy’s progress and prepare markets for more-normal policy settings carries no less risk than tightening too soon,” she said. She has opposed continuing monthly purchases of $40B in mortgage-backed securities & $45B in Treasuries, saying record stimulus may destabilize financial markets & push up long-term inflation expectations. FED officials are debating when to slow the bond buying, with San Francisco FED President John Williams saying yesterday a “modest adjustment downward” in the bond buying is possible as “early as this summer.” Atlanta FED President Dennis Lockhart said “very mixed” economic data makes him “more cautious” about a near-term reduction in purchases. George said improvements in unemployment, consumer spending & business spending are helping drive the 4-year-old expansion. The economy will probably grow about 2% this year with “low inflation.” In turn, the unemployment rate will continue to fall. She predicts growth of about 3% next year.
Fed’s George Calls for Reducing QE Citing Higher Risk Taking
Anheuser-Busch has completed its $20B purchase of Mexican brewer Grupo Modelo. The world's largest brewer has been trying for almost a year to buy the half of Modelo that it did not already own. The Dept of Justice initially blocked the deal, concerned that it would hurt US beer shoppers' choices, but signed off on the combination after AB InBev agreed to sell Modelo's entire US business to a wine maker, Constellation Brands (STZ) which will sell Modelo brands including Corona in the US, effectively replacing Modelo as a competitor to AB InBev. AB InBev expects that deal to close Fri. AB InBev, based in Belgium, sells Budweiser, Stella Artois & other beers. The combined company will also sell Corona & other Modelo brands outside the US. BUD stock was 20¢.
Anheuser-Busch completes $20.1B Grupo Modelo deal AP
Dollar General declined the most in more than 5 months after reducing the top end of its full-year earnings forecast, citing “moderating” sales growth. “We have updated our outlook for the year to reflect moderating sales growth and a lower expected gross profit rate than we previously anticipated,” CEO Rick Dreiling said today. Full-year adjusted EPS will be as much as $3.22, decreased from a previous forecast of a maximum of $3.30, the company said. Analysts are projecting $3.28. The stock sank 4.25 (8%).
Dollar General Declines After Cutting Full-Year Profit Forecast
Big retailers keep lowering estimates because they are feeling effects of consumers pinched by higher taxes & gov budget cuts. After slipping & sliding, Dow is back to where it was at mid May. Volume was big on Fri when stocks sold off, but otherwise it has been nothing special. There have been a number of speeches recently by FED officials giving conflicting messages about the bond buying program. This was not accidental. Creating confusion over intentions of the FED could be a prelude to a reduction in bond buying. The yield on the 10 year Treasury has risen over 50 basis points in the last month, a very large move, because the pros are selling Treasury bonds. Lately daily swings in the stock market have been attributed to possible changes in what the FED will do next. The next meeting by the FOMC is in 2 weeks & that may prove exciting.
Dow Jones Industrials
AMJ (Alerian MLP Index tracking fund)
Treasury yields:
U.S. 3-month |
0.04% | |
U.S. 2-year |
0.29% | |
U.S. 10-year |
2.14% |
| CLN13.NYM | ...Crude Oil Jul 13 | ....93.06 |  ...0.39 | (0.4%) |
Photo: Bloomberg
Federal Reserve (FED) Bank of Kansas City President Esther George urged the FED to reduce its $85B in monthly bond buying as growth quickens & low low interest rates prompt investors to take on more risk. “In light of improving economic conditions, I support slowing the pace of asset purchases as an appropriate next step for monetary policy,” George said today. “Waiting too long to acknowledge the economy’s progress and prepare markets for more-normal policy settings carries no less risk than tightening too soon,” she said. She has opposed continuing monthly purchases of $40B in mortgage-backed securities & $45B in Treasuries, saying record stimulus may destabilize financial markets & push up long-term inflation expectations. FED officials are debating when to slow the bond buying, with San Francisco FED President John Williams saying yesterday a “modest adjustment downward” in the bond buying is possible as “early as this summer.” Atlanta FED President Dennis Lockhart said “very mixed” economic data makes him “more cautious” about a near-term reduction in purchases. George said improvements in unemployment, consumer spending & business spending are helping drive the 4-year-old expansion. The economy will probably grow about 2% this year with “low inflation.” In turn, the unemployment rate will continue to fall. She predicts growth of about 3% next year.
Fed’s George Calls for Reducing QE Citing Higher Risk Taking
Anheuser-Busch has completed its $20B purchase of Mexican brewer Grupo Modelo. The world's largest brewer has been trying for almost a year to buy the half of Modelo that it did not already own. The Dept of Justice initially blocked the deal, concerned that it would hurt US beer shoppers' choices, but signed off on the combination after AB InBev agreed to sell Modelo's entire US business to a wine maker, Constellation Brands (STZ) which will sell Modelo brands including Corona in the US, effectively replacing Modelo as a competitor to AB InBev. AB InBev expects that deal to close Fri. AB InBev, based in Belgium, sells Budweiser, Stella Artois & other beers. The combined company will also sell Corona & other Modelo brands outside the US. BUD stock was 20¢.
Anheuser-Busch completes $20.1B Grupo Modelo deal AP
Anheuser-Busch (BUD)
Dollar General declined the most in more than 5 months after reducing the top end of its full-year earnings forecast, citing “moderating” sales growth. “We have updated our outlook for the year to reflect moderating sales growth and a lower expected gross profit rate than we previously anticipated,” CEO Rick Dreiling said today. Full-year adjusted EPS will be as much as $3.22, decreased from a previous forecast of a maximum of $3.30, the company said. Analysts are projecting $3.28. The stock sank 4.25 (8%).
Dollar General Declines After Cutting Full-Year Profit Forecast
Dollar General (DG)
Big retailers keep lowering estimates because they are feeling effects of consumers pinched by higher taxes & gov budget cuts. After slipping & sliding, Dow is back to where it was at mid May. Volume was big on Fri when stocks sold off, but otherwise it has been nothing special. There have been a number of speeches recently by FED officials giving conflicting messages about the bond buying program. This was not accidental. Creating confusion over intentions of the FED could be a prelude to a reduction in bond buying. The yield on the 10 year Treasury has risen over 50 basis points in the last month, a very large move, because the pros are selling Treasury bonds. Lately daily swings in the stock market have been attributed to possible changes in what the FED will do next. The next meeting by the FOMC is in 2 weeks & that may prove exciting.
Dow Jones Industrials
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