Buyers erased losses for Dow so it could eke out a gain of 3, decliners still led advancers 5-4 & NAZ added 7. The MLP index rose 2 to the 259s & the REIT index was even in the 286s. Junk bond funds continued mixed & Treasuries rallied in the PM. Oil was steady & gold had a tiny gain, remaining well above 1300.
AMJ (Alerian MLP Index tracking fund)
![Live 24 hours gold chart [Kitco Inc.]](http://www.kitco.com/images/live/gold.gif)
Photo: Bloomberg
The IMF cautioned that the Federal Reserve’s (FED) exit from unprecedented asset purchases could spur market reactions causing “excessive” interest-rate volatility. That would have “adverse global implications,” the fund said today, part of an annual review of the world’s largest economy. “Effective communication on the exit strategy and a careful calibration of its timing will be critical for reducing these risks,” it said. The IMF left its US growth forecast for this year unchanged at 1.7%, saying the housing & labor markets are improving even as the FED’s decision looms & fiscal policy remains a drag on growth. The fund projected 2014 growth of 2.7%, also unchanged from a report earlier this month. The FED has said economic data will determine the timing & pace of any reduction in monthly bond-buying. While accommodative policy “continues to provide essential support to the recovery,” the IMF said, “its financial stability implications should be carefully assessed” because a long period of extremely low interest rates could have unintended consequences for financial stability & complicates macro-policy in some emerging markets. The FED has kept the main interest rate close to zero since Dec 2008. The IMF also warned that “fiscal deficit reductionin 2013 is excessively rapid,” & that automatic spending cuts could lower medium-term potential growth.
IMF Sees Market Volatility Risk in Fed’s Exit From Record Easing
Photo: Bloomberg
Ford the 2nd-largest US automaker, fresh off record H1 profit in North America, has plenty left in the tank as it builds more of the models pacing the US auto industry’s growth. It made $4.8B in its home region during H1, driven by surging demand for Fusion family cars & F-Series pickups. Even with limited supply of models such as Fusion, Ford has gained the most share in a home market that continues to accelerate more rapidly than estimated. Industry sales in Jul may again run at an annualized pace of almost 16M, Ford said, keeping the US on pace for the most deliveries of cars & light trucks since 2007. Unlike 2007 or 2000, when US sales peaked at 17.4M, Ford’s namesake brand has a more complete lineup, including competitive small & mid-size cars. Ford raised its outlook for automotive operating margin & cash flow for the year while cutting its loss forecast for Europe. Q2 EPS was 30¢ & excluding some items, EPS was 45¢, exceeding the 37¢ estimate. The stock has a pretty chart & went up 6¢ today.
Ford’s Best to Come as Record Profit Precedes Sales Surge
Amazon reported a surprise net loss as it continued to pump money into warehouses & digital content, fueling sales growth at the expense of profits. It posted net loss of $7M, worse than the projected net income of $29M. CEO Jeff Bezos is betting that near-term investments on cloud computing & a massive delivery infrastructure that lets the company send packages anywhere in the country in 2 days will provide cash flow down the line. Operating expenses rose 23% in Q2, as AMZN built out its digital media business. The share loss of 2¢ compared with profit of a penny last year. Revenue rose 22% to $15.7B from $12.8B, matching the estimate. The sales are adding to a US e-commerce market projected to increase to $370B in 2017. Revenue in Q3 will be $15.5-$17.2B, compared with an estimate for $17B. The company is seeing more of its Prime members signing on to access TV shows & movies, CFO Tom Szkutak said. Spending on technology & content increased 47%, the most of any category, primarily from investments in Amazon Web Services, the company’s cloud-computing business, & video content, he said. Sales of digital products are increasing faster than physical items, Szkutak said, & AMZN is already making investments for the Q4 holiday shopping season & “revving up video content.” The stock roared ahead another 8+ to a new record.
Amazon Posts Surprise Loss After Spending on Digital Content, Warehouses
Dow recovered 130 from its lows early in the day, to close just below its record reached earlier this week. It's amazing that AMZN is flying high on hopes while it's struggling to beak even. That enthusiasm is what keeps buyers coming out to bid to up stocks. At the same time US GDP is crawling ahead slowly, Europe is bogged down in a recession & China is experiencing its slowest rate of growth in years. However Dow is up a startling 2.4K this year (19%).
Dow Jones Industrials
AMJ (Alerian MLP Index tracking fund)
Treasury yields:
U.S. 3-month |
0.02% | |
U.S. 2-year |
0.32% | |
U.S. 10-year |
2.57% |
| CLU13.NYM | ...Crude Oil Sep 13 | ...104.65 |  ...0.84 (0.8%) |
Photo: Bloomberg
The IMF cautioned that the Federal Reserve’s (FED) exit from unprecedented asset purchases could spur market reactions causing “excessive” interest-rate volatility. That would have “adverse global implications,” the fund said today, part of an annual review of the world’s largest economy. “Effective communication on the exit strategy and a careful calibration of its timing will be critical for reducing these risks,” it said. The IMF left its US growth forecast for this year unchanged at 1.7%, saying the housing & labor markets are improving even as the FED’s decision looms & fiscal policy remains a drag on growth. The fund projected 2014 growth of 2.7%, also unchanged from a report earlier this month. The FED has said economic data will determine the timing & pace of any reduction in monthly bond-buying. While accommodative policy “continues to provide essential support to the recovery,” the IMF said, “its financial stability implications should be carefully assessed” because a long period of extremely low interest rates could have unintended consequences for financial stability & complicates macro-policy in some emerging markets. The FED has kept the main interest rate close to zero since Dec 2008. The IMF also warned that “fiscal deficit reductionin 2013 is excessively rapid,” & that automatic spending cuts could lower medium-term potential growth.
IMF Sees Market Volatility Risk in Fed’s Exit From Record Easing
Photo: Bloomberg
Ford the 2nd-largest US automaker, fresh off record H1 profit in North America, has plenty left in the tank as it builds more of the models pacing the US auto industry’s growth. It made $4.8B in its home region during H1, driven by surging demand for Fusion family cars & F-Series pickups. Even with limited supply of models such as Fusion, Ford has gained the most share in a home market that continues to accelerate more rapidly than estimated. Industry sales in Jul may again run at an annualized pace of almost 16M, Ford said, keeping the US on pace for the most deliveries of cars & light trucks since 2007. Unlike 2007 or 2000, when US sales peaked at 17.4M, Ford’s namesake brand has a more complete lineup, including competitive small & mid-size cars. Ford raised its outlook for automotive operating margin & cash flow for the year while cutting its loss forecast for Europe. Q2 EPS was 30¢ & excluding some items, EPS was 45¢, exceeding the 37¢ estimate. The stock has a pretty chart & went up 6¢ today.
Ford’s Best to Come as Record Profit Precedes Sales Surge
Ford (F)
Amazon reported a surprise net loss as it continued to pump money into warehouses & digital content, fueling sales growth at the expense of profits. It posted net loss of $7M, worse than the projected net income of $29M. CEO Jeff Bezos is betting that near-term investments on cloud computing & a massive delivery infrastructure that lets the company send packages anywhere in the country in 2 days will provide cash flow down the line. Operating expenses rose 23% in Q2, as AMZN built out its digital media business. The share loss of 2¢ compared with profit of a penny last year. Revenue rose 22% to $15.7B from $12.8B, matching the estimate. The sales are adding to a US e-commerce market projected to increase to $370B in 2017. Revenue in Q3 will be $15.5-$17.2B, compared with an estimate for $17B. The company is seeing more of its Prime members signing on to access TV shows & movies, CFO Tom Szkutak said. Spending on technology & content increased 47%, the most of any category, primarily from investments in Amazon Web Services, the company’s cloud-computing business, & video content, he said. Sales of digital products are increasing faster than physical items, Szkutak said, & AMZN is already making investments for the Q4 holiday shopping season & “revving up video content.” The stock roared ahead another 8+ to a new record.
Amazon Posts Surprise Loss After Spending on Digital Content, Warehouses
Amazon (AMZ)
Dow recovered 130 from its lows early in the day, to close just below its record reached earlier this week. It's amazing that AMZN is flying high on hopes while it's struggling to beak even. That enthusiasm is what keeps buyers coming out to bid to up stocks. At the same time US GDP is crawling ahead slowly, Europe is bogged down in a recession & China is experiencing its slowest rate of growth in years. However Dow is up a startling 2.4K this year (19%).
Dow Jones Industrials
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