Dow crawled higher by 2, decliners ahead of advancers 3-2 & NAZ rose 6. The MLP index was flattish in the 449s & the REIT index lost a fraction to the 284s. Junk bond funds were lower & Treasuries pulled back, taking the yield on the 10 year Treasury over 2.2% (a more than 1 year high). Oil pulled back while gold barely budged.
AMJ (Alerian MLP Index tracking fund)
Photo: Bloomberg
Standard & Poor boosted its outlook for US gov debt, citing stable gov spending levels & predicting economic improvements. The credit rating service revised its outlook to "Stable" from "Negative," which means it's less likely it will downgrade the country's debt in the near future. It also backed the US gov "AA+" long-term & "A-1+" short-term unsolicited sovereign credit ratings. S&P downgraded the US long-term credit rating in 2011 after a battle in Congress over whether to raise America's borrowing limit. Today it said that Congress managed to broker a deal late last year that allowed certain tax cuts to expire & cut spending. Meanwhile, S&P says the economy has started to improve & is expected to continue to do so.
U.S. Outlook Revised to Stable by S&P as Fiscal Risks Recede
Photo: Bloomberg
Italy’s economy shrank more than initially reported in Q1 & French industrial confidence stalled in May, as the euro area struggled to emerge from a record-long recession. Italian GDP fell 0.6% from Q4, according to the National Statistics Institute, after a May 15 estimate of a 0.5% drop. A French index of sentiment among factory managers was unchanged at 94, while an index of service companies fell to 88 from 89, according to the Bank of France. The euro-area economy contracted 0.2% in Q1, extending its recession into a 6th qtr, & is forecast to stagnate in Q2 before returning to growth. The slump has increased pressure on euro leaders & the ECB to find ways to spur growth. This gloomy economic data followed yesterday’s report that China's industrial production rose a less-than-forecast 9.2% in May from a year earlier & factory-gate prices fell for a 15th month, according to the National Bureau of Statistics in Beijing. Export gains were at a 10-month low & imports dropped. In Italy, the euro zone’s 3rd-largest economy, former Italian Prime Minister Mario Monti’s austerity measures helped bring the country’s deficit within the EU limit, while deepening the recession. Exports dropped 1.9% in Q1, the first quarterly fall in 4 years, & industrial output unexpectedly declined in Apr. Today’s French industrial confidence report came as President Francois Hollande’s tax increases weighed on domestic demand in an economy that has barely grown in 2 years. Hollande is struggling to balance demands of reviving growth & trimming the budget deficit. Yet with more than €20B ($26B) of tax increases feeding thru to companies & households, domestic demand are unlikely to fuel any recovery in the months ahead.
Italian Economy Contracts as French Confidence Stalls: Economy
Photo: Bloomberg
Cheap eats & new menu items helped McDonald's, a Dow stock & Dividend Aristocrat, boost a key sales figure in May, bouncing back from a decline the previous month. The hamburger chain said that global sales rose 2.6% at restaurants open at least a year, helped by an extra Fri in the month. In the US, the figure rose 2.4%, as the Dollar Menu & its new chicken wraps & egg white breakfast sandwiches lifted results. In Europe, the figure rose 2%, as declines in Germany & France were offset by strong results in the UK & Russia. The figure edged up 0.9% in Asia, the Middle East & Africa. With more than 34,000 restaurants, the company noted that results in China were negative because of fears about avian flu. The company is trying to attract customers by touting its Dollar Menu & other promotions, such as 2 Big Macs for the price of one. For May, MCD noted that it benefited from one less Tues & one more Fri. Fast-food chains generally take in more sales on weekends. The positive impact ranged from 0.6%-1.4%, depending on the region. The stock was up 1.76.
McDonald’s May Store Sales Rise as U.S. Gains
Stocks are back to meandering, looking for direction.. Another increase in the Treasury 10 year is disturbing, coming off a 1.6% low 5 weeks ago. These are bets that the Federal Reserve may reduce its monthly debt purchases at the meeting next week. Economies around the world are soggy. China is learning to live with slower growth, Europe is mired in a long recession & the US is only reporting mediocre growth with tax increases & federal budgets cuts pinching GDP growth. The Dow remains vastly oversold.
Dow Jones Industrials
AMJ (Alerian MLP Index tracking fund)
Treasury yields:
U.S. 3-month |
0.04% | |
U.S. 2-year |
0.31% | |
U.S. 10-year |
2.19% |
| CLN13.NYM | ....Crude Oil Jul 13 | ...95.46 |  ....0.57 | (0.6%) |
| GCM13.CMX | ...Gold Jun 13 | .....1,380.00 | ...3.00 | (0.2%) |
Photo: Bloomberg
Standard & Poor boosted its outlook for US gov debt, citing stable gov spending levels & predicting economic improvements. The credit rating service revised its outlook to "Stable" from "Negative," which means it's less likely it will downgrade the country's debt in the near future. It also backed the US gov "AA+" long-term & "A-1+" short-term unsolicited sovereign credit ratings. S&P downgraded the US long-term credit rating in 2011 after a battle in Congress over whether to raise America's borrowing limit. Today it said that Congress managed to broker a deal late last year that allowed certain tax cuts to expire & cut spending. Meanwhile, S&P says the economy has started to improve & is expected to continue to do so.
U.S. Outlook Revised to Stable by S&P as Fiscal Risks Recede
Photo: Bloomberg
Italy’s economy shrank more than initially reported in Q1 & French industrial confidence stalled in May, as the euro area struggled to emerge from a record-long recession. Italian GDP fell 0.6% from Q4, according to the National Statistics Institute, after a May 15 estimate of a 0.5% drop. A French index of sentiment among factory managers was unchanged at 94, while an index of service companies fell to 88 from 89, according to the Bank of France. The euro-area economy contracted 0.2% in Q1, extending its recession into a 6th qtr, & is forecast to stagnate in Q2 before returning to growth. The slump has increased pressure on euro leaders & the ECB to find ways to spur growth. This gloomy economic data followed yesterday’s report that China's industrial production rose a less-than-forecast 9.2% in May from a year earlier & factory-gate prices fell for a 15th month, according to the National Bureau of Statistics in Beijing. Export gains were at a 10-month low & imports dropped. In Italy, the euro zone’s 3rd-largest economy, former Italian Prime Minister Mario Monti’s austerity measures helped bring the country’s deficit within the EU limit, while deepening the recession. Exports dropped 1.9% in Q1, the first quarterly fall in 4 years, & industrial output unexpectedly declined in Apr. Today’s French industrial confidence report came as President Francois Hollande’s tax increases weighed on domestic demand in an economy that has barely grown in 2 years. Hollande is struggling to balance demands of reviving growth & trimming the budget deficit. Yet with more than €20B ($26B) of tax increases feeding thru to companies & households, domestic demand are unlikely to fuel any recovery in the months ahead.
Italian Economy Contracts as French Confidence Stalls: Economy
Photo: Bloomberg
Cheap eats & new menu items helped McDonald's, a Dow stock & Dividend Aristocrat, boost a key sales figure in May, bouncing back from a decline the previous month. The hamburger chain said that global sales rose 2.6% at restaurants open at least a year, helped by an extra Fri in the month. In the US, the figure rose 2.4%, as the Dollar Menu & its new chicken wraps & egg white breakfast sandwiches lifted results. In Europe, the figure rose 2%, as declines in Germany & France were offset by strong results in the UK & Russia. The figure edged up 0.9% in Asia, the Middle East & Africa. With more than 34,000 restaurants, the company noted that results in China were negative because of fears about avian flu. The company is trying to attract customers by touting its Dollar Menu & other promotions, such as 2 Big Macs for the price of one. For May, MCD noted that it benefited from one less Tues & one more Fri. Fast-food chains generally take in more sales on weekends. The positive impact ranged from 0.6%-1.4%, depending on the region. The stock was up 1.76.
McDonald’s May Store Sales Rise as U.S. Gains
McDonald's (MCD)
Stocks are back to meandering, looking for direction.. Another increase in the Treasury 10 year is disturbing, coming off a 1.6% low 5 weeks ago. These are bets that the Federal Reserve may reduce its monthly debt purchases at the meeting next week. Economies around the world are soggy. China is learning to live with slower growth, Europe is mired in a long recession & the US is only reporting mediocre growth with tax increases & federal budgets cuts pinching GDP growth. The Dow remains vastly oversold.
Dow Jones Industrials
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