Dow lost 42, decliners over advancers 3-2 & NAZ was slid 1. The MLP index sank 6 to the 456s but the REIT index rose 4 to 281. Junk bond funds were 1-2% lower (big in this world) & Treasuries saw a little buying. Oil neared
$100 as trading reached the highest level in months on growing Mideast tensions. Gold declined for the first time in 3 sessions as improving US economic data strengthened the
case for the Federal Reserve to slow the pace of stimulus & as
a rising dollar cut the appeal of alternative investments.
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 Bank (FED) of New York President William C. Dudley said economic growth will probably quicken in 2014, possibly warranting a reduction in the central bank’s bond purchase program. “A strong case can be made that the pace of growth will pick up notably in 2014,” Dudley said. “The private sector of the economy should continue to heal, while the amount of fiscal drag will begin to subside,” Dudley said in prepared remarks. Policy makers are debating when to dial back accommodation following comments by Big Ben on Jun 19 that the FED may cut buying bonds this year & halt purchases around mid-2014. Monthly buying has pushed up FED assets to a record $3.5T. Dudley said in reply to an audience question that he “wouldn’t want to rule out” asset purchases exceeding the current monthly level of $85B if the central bank were to be “surprised on the downside” by weaker economic data. “Inflation expectations are still pretty firmly anchored consistent with our 2 percent inflation objective and it’s really important that we keep it that way,” Dudley said. “Our policy is basically designed to prevent, to reduce to the absolute minimum amount possible, any risk of a Japanese-style outcome here in the United States.”
Fed’s Dudley Sees Faster Growth in 2014 as Fiscal Drag Wanes
General Motors said US sales rose 6% in Jun on continuing strong demand for large pickups. Sales of the Chevrolet Silverado & GMC Sierra increased 29% & 33%, respectively, over last Jun. The newly updated pickup trucks began arriving at dealerships last month & are selling quickly, averaging just 10 days on dealers' lots. Cadillac sales gained 15% thanks to the new ATS & XTS sedans, while Chevrolet sales were up 7%. Sales of the Chevrolet Cruze small car jumped 73%, while the Volt electric car rose 53%. GMC sales rose 4.5%. But Buick brand sales dropped 4% as weak sales of sedans offset double-digit sales increases for the Verano small car & Enclave SUV. The stock was up pennies.
GM's US sales up 6 pct. in June Associated Press
Photo: Bloomberg
Junk-rated companies agreed to boost interest rates on more US loans than any time since at least 2011, as lenders extracted more compensation with prices of the floating-rate debt tumbling from a 6-year high. Companies that sweetened terms on $17.7B of loans in Jun, accounting for 43% of total deals, according to Standard & Poor’s Capital IQ Leveraged Commentary & Data. That’s 10 times greater than in May & the highest in data going back to Jan 2011. Twenty issuers failed to get loan financing, versus 22 for the first 5 months of the year, as the average price of the senior-ranking debt fell by the most since May 2012. Investors are demanding more in interest to fund the $550B market for leveraged loans. Funds are flowing out of junk bond funds. For the week ended Jun 26, investors pulled $3.1B from US junk-bond funds, putting the month on track to set a new record of about $16B of outflows, according to a Jun 27 report from Bank of America. Junk bonds are stocks with high yield.
Junk-Loan Rates Soar on Record 43% on Debt as Buyers Balk
Political unrest in Egypt caused selling in the PM. Dow fell more than 100 after going over 15K. Those tensions brought out oil buyers which took oil to prices not seen since Sep. Selling in junk bonds is worrisome. What can be viewed as the riskiest stocks have lost favor. Less risky stocks, the ones we all watch, may be next to lose investor favor. Q2 earnings season begins next Mon evening.
Dow Jones Industrials
AMJ (Alerian MLP Index tracking fund)
Treasury yields:
U.S. 3-month |
0.01% | |
U.S. 2-year |
0.34% | |
U.S. 10-year |
2.47% |
| CLQ13.NYM | ...Crude Oil Aug 13 | ...99.50 |  ...1.51 | (1.5%) |
Photo: Bloomberg
Federal Reserve Bank (FED) of New York President William C. Dudley said economic growth will probably quicken in 2014, possibly warranting a reduction in the central bank’s bond purchase program. “A strong case can be made that the pace of growth will pick up notably in 2014,” Dudley said. “The private sector of the economy should continue to heal, while the amount of fiscal drag will begin to subside,” Dudley said in prepared remarks. Policy makers are debating when to dial back accommodation following comments by Big Ben on Jun 19 that the FED may cut buying bonds this year & halt purchases around mid-2014. Monthly buying has pushed up FED assets to a record $3.5T. Dudley said in reply to an audience question that he “wouldn’t want to rule out” asset purchases exceeding the current monthly level of $85B if the central bank were to be “surprised on the downside” by weaker economic data. “Inflation expectations are still pretty firmly anchored consistent with our 2 percent inflation objective and it’s really important that we keep it that way,” Dudley said. “Our policy is basically designed to prevent, to reduce to the absolute minimum amount possible, any risk of a Japanese-style outcome here in the United States.”
Fed’s Dudley Sees Faster Growth in 2014 as Fiscal Drag Wanes
General Motors said US sales rose 6% in Jun on continuing strong demand for large pickups. Sales of the Chevrolet Silverado & GMC Sierra increased 29% & 33%, respectively, over last Jun. The newly updated pickup trucks began arriving at dealerships last month & are selling quickly, averaging just 10 days on dealers' lots. Cadillac sales gained 15% thanks to the new ATS & XTS sedans, while Chevrolet sales were up 7%. Sales of the Chevrolet Cruze small car jumped 73%, while the Volt electric car rose 53%. GMC sales rose 4.5%. But Buick brand sales dropped 4% as weak sales of sedans offset double-digit sales increases for the Verano small car & Enclave SUV. The stock was up pennies.
GM's US sales up 6 pct. in June Associated Press
General Motors (GM)
Photo: Bloomberg
Junk-rated companies agreed to boost interest rates on more US loans than any time since at least 2011, as lenders extracted more compensation with prices of the floating-rate debt tumbling from a 6-year high. Companies that sweetened terms on $17.7B of loans in Jun, accounting for 43% of total deals, according to Standard & Poor’s Capital IQ Leveraged Commentary & Data. That’s 10 times greater than in May & the highest in data going back to Jan 2011. Twenty issuers failed to get loan financing, versus 22 for the first 5 months of the year, as the average price of the senior-ranking debt fell by the most since May 2012. Investors are demanding more in interest to fund the $550B market for leveraged loans. Funds are flowing out of junk bond funds. For the week ended Jun 26, investors pulled $3.1B from US junk-bond funds, putting the month on track to set a new record of about $16B of outflows, according to a Jun 27 report from Bank of America. Junk bonds are stocks with high yield.
Junk-Loan Rates Soar on Record 43% on Debt as Buyers Balk
Political unrest in Egypt caused selling in the PM. Dow fell more than 100 after going over 15K. Those tensions brought out oil buyers which took oil to prices not seen since Sep. Selling in junk bonds is worrisome. What can be viewed as the riskiest stocks have lost favor. Less risky stocks, the ones we all watch, may be next to lose investor favor. Q2 earnings season begins next Mon evening.
Dow Jones Industrials
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