Dow slid 22, decliners over advancers 5-2 & NAZ was up 12 (helped by a strong Apple stock, see below). The MLP index fell 1+ to the 258s & the REIT index was off 3+ to the 288s. Junk bond funds pulled back & Treasuries fell. Oil & gold did little.
AMJ (Alerian MLP Index tracking fund)
The Markit Economics preliminary index of US manufacturing increased to 53.2 in Jul from a final reading of 51.9 a month earlier. The forecast called for a gain to 52.6. A reading greater than 50 for the purchasing managers’ measure indicates expansion. Markit’s purchasers figure is based on replies from 85-90% of American manufacturers who respond to a poll of the more than 600 companies. The Markit gauge of US manufacturing debuted in May 2012, & the company surveys purchasing managers in more than 30 countries & regions, which also include Europe & China. Manufacturing in the euro area expanded in Jul for the first time in 2 years, led by Germany. The encouraging news from Europe contrasted with China, where manufacturing weakened more than forecast, a separate Markit report showed.
Markit Index of Manufacturing in U.S. Increased to 53.2 in July
Photo: Bloomberg
Americans purchased new homes in Jun at the fastest pace in 5 years, a sign the housing recovery is strengthening. The Commerce Dept said that sales rose 8.3% last month to an annual pace of 497K, up from an annual pace of 459K in May (which was revised lower). While sales are still below the 700K pace consistent with healthy markets, they have risen 38% in the past 12 months. That's the biggest annual gain since Jan 1992. One concern is that rising mortgage rates could slow sales in the coming months. The average rate on the 30-year fixed was 4.37% last week, a full percentage point higher than in early May. At the same time, mortgage applications to purchase homes have fallen in the past few weeks. Still, other indicators suggest housing should continue to support the economy this year. Sales of previously occupied homes slipped in Jun to an annual rate of 5.08M but stayed near the 3½ year high reached in May. Homebuilders are more confident about the housing recovery than at any time in 7 years, suggesting home construction should keep increasing. Customer traffic & builders' outlook for single-family home sales over the next 6 months are at the highest levels since the housing bubble burst in 2006.
New-Home Sales in U.S. Rise More Than Forecast to Five-Year High
Photo: Bloomberg
Apple CEO Time Cook will need to look to updated devices & fresh ways to distribute its products to return to growth. It managed to top earnings projections in fiscal Q3, even as profit declined from a year earlier & sales crawled up less than 1%. The company is slated to release updated versions later this year of its iPhone & iPad, its top-selling devices. Cook also aims to wring more revenue from AAPL services, applications & 408-store retail network. Revenue rose to $35.3B, narrowly beating the $35B estimate, & net income fell 22% to $6.9B. To get faster growth, Cook mentioned a number of levers he can pull, regardless of whether new products prove as popular as the iPhone or iPad. The company can expand its retail store network, increase efforts to sell to businesses in emerging markets & India, & boost the amount of software & services for consumers. Cook also said AAPL could win its share of price-conscious shoppers by continuing to push its older iPhone 4 model. Though iPhone sales topped estimates, the device’s average selling price fell 4% from a year earlier. The stock shot up 22 because earnings beat mediocre expectations.
Stocks continue to meander. Earnings beat expectations, which have been lowered, so they look fairly good. But improved profits rely more on one time accounting adjustments than on higher revenue. The report by Caterpillar (CAT) yesterday, was chilling. A weak performance by CAT sends a negative message about the global economy. AAPL, now with the 2nd largest market cap in the world, had a nothing special report. It is no longer a leader in tech. Raising the debt ceiling (which must be dealt with in the next few months) is getting more attention because that looks like another ugly fight. But Dow & the S&P 500 remain essentially at record levels.
Dow Jones Industrials
AMJ (Alerian MLP Index tracking fund)
Treasury yields:
U.S. 3-month |
0.03% | |
U.S. 2-year |
0.34% | |
U.S. 10-year |
2.57% |
| CLU13.NYM | ...Crude Oil Sep 13 | ...106.60 |  ...0.63 | (0.6%) |
| GCN13.CMX | ...Gold Jul 13 | .........1,341.00 | ...5.90 | (0.4%) |
The Markit Economics preliminary index of US manufacturing increased to 53.2 in Jul from a final reading of 51.9 a month earlier. The forecast called for a gain to 52.6. A reading greater than 50 for the purchasing managers’ measure indicates expansion. Markit’s purchasers figure is based on replies from 85-90% of American manufacturers who respond to a poll of the more than 600 companies. The Markit gauge of US manufacturing debuted in May 2012, & the company surveys purchasing managers in more than 30 countries & regions, which also include Europe & China. Manufacturing in the euro area expanded in Jul for the first time in 2 years, led by Germany. The encouraging news from Europe contrasted with China, where manufacturing weakened more than forecast, a separate Markit report showed.
Markit Index of Manufacturing in U.S. Increased to 53.2 in July
Photo: Bloomberg
Americans purchased new homes in Jun at the fastest pace in 5 years, a sign the housing recovery is strengthening. The Commerce Dept said that sales rose 8.3% last month to an annual pace of 497K, up from an annual pace of 459K in May (which was revised lower). While sales are still below the 700K pace consistent with healthy markets, they have risen 38% in the past 12 months. That's the biggest annual gain since Jan 1992. One concern is that rising mortgage rates could slow sales in the coming months. The average rate on the 30-year fixed was 4.37% last week, a full percentage point higher than in early May. At the same time, mortgage applications to purchase homes have fallen in the past few weeks. Still, other indicators suggest housing should continue to support the economy this year. Sales of previously occupied homes slipped in Jun to an annual rate of 5.08M but stayed near the 3½ year high reached in May. Homebuilders are more confident about the housing recovery than at any time in 7 years, suggesting home construction should keep increasing. Customer traffic & builders' outlook for single-family home sales over the next 6 months are at the highest levels since the housing bubble burst in 2006.
New-Home Sales in U.S. Rise More Than Forecast to Five-Year High
Photo: Bloomberg
Apple CEO Time Cook will need to look to updated devices & fresh ways to distribute its products to return to growth. It managed to top earnings projections in fiscal Q3, even as profit declined from a year earlier & sales crawled up less than 1%. The company is slated to release updated versions later this year of its iPhone & iPad, its top-selling devices. Cook also aims to wring more revenue from AAPL services, applications & 408-store retail network. Revenue rose to $35.3B, narrowly beating the $35B estimate, & net income fell 22% to $6.9B. To get faster growth, Cook mentioned a number of levers he can pull, regardless of whether new products prove as popular as the iPhone or iPad. The company can expand its retail store network, increase efforts to sell to businesses in emerging markets & India, & boost the amount of software & services for consumers. Cook also said AAPL could win its share of price-conscious shoppers by continuing to push its older iPhone 4 model. Though iPhone sales topped estimates, the device’s average selling price fell 4% from a year earlier. The stock shot up 22 because earnings beat mediocre expectations.
Apple (AAPL)
Stocks continue to meander. Earnings beat expectations, which have been lowered, so they look fairly good. But improved profits rely more on one time accounting adjustments than on higher revenue. The report by Caterpillar (CAT) yesterday, was chilling. A weak performance by CAT sends a negative message about the global economy. AAPL, now with the 2nd largest market cap in the world, had a nothing special report. It is no longer a leader in tech. Raising the debt ceiling (which must be dealt with in the next few months) is getting more attention because that looks like another ugly fight. But Dow & the S&P 500 remain essentially at record levels.
Dow Jones Industrials
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