Dow went up 13, advancers ahead of decliners 4-3 & NAZ jumped 25. The MLP index slipped a fraction in the 457s (about where it was in Mar) & the REIT index inched up a fraction to the 287s. Junk bond funds crawled higher & Treasuries were flat to down a tad. Oil & gold also had modest gains, with gold back over 1300.
AMJ (Alerian MLP Index tracking fund)
![Live 24 hours gold chart [Kitco Inc.]](http://www.kitco.com/images/live/gold.gif)
Photo: Yahoo
General Motors says Japanese automakers are using the weak ¥ to cut prices in Southeast Asia & Australia, taking a bite out of its profits there. Sales tailed off in India as well. A subpar Q2 performance in the intl operations division pulled overall profit down 16% from last year, offsetting gains in North America & a stark improvement in Europe. EPS was 75¢, down from 90¢ a year ago. But that handily beat predictions when one-time items were excluded. On that basis, EPS was 84¢, 9¢ better than forecasted. In North America, strong sales of pickup trucks drove pretax profit up 4% to almost $2B. US sales of big pickups boomed in H1, rising 23% as the housing industry started to recover from the recession & small businesses started buying again. CFO Dan Ammann said he expected improved performance in H2 as GM gets the full benefit of rolling out the new trucks, as well as the 2014 Chevy Corvette sports car, an all-new Cadillac CTS sedan and other new models. "That's going to give us a good tail wind into the second half," he said. But he also described headwinds in Asia-Pacific countries outside of China, saying Japanese rivals used a weaker ¥ to cut prices, forcing GM to respond in kind & lowering its profits. Although pretax income rose in China, the Intl Operations profit fell $400M to $228M. GM expects the trend to continue, & is trying to counteract it with new products. Weakness in auto markets in India & Russia also contributed to the decline in intl profits. In Europe, GM cut $284M off its loss from last year, narrowing it to $110M as cost cuts kicked in & new products such as the Opel Mokka small crossover SUV & Adam subcompact car sold well. The stock lost pocket change.
Photo: Bloomberg
Facebook CEO Mark Zuckerberg's decision last year to bet big on mobile software is paying off, with sales of ads on wireless devices now on track to surpass revenue from desktop PCs. Surging demand for mobile advertising helped profit & revenue top estimates in Q2. Revenue rose 53% to $1.8B & EPS was 19¢. Analysts had projected EPS of 14¢ on sales of $1.6B. Over 350M shares changed hands, more than 7 times the average this year. FB, which had priced its IPO at $38 a share, saw its stock slump as low as the 17s in Sep. However, the stock is trading at more than 100 times EPS, more expensive than virtually all companies in the S&P 500 Index. Mobile ads, which made up 30% of revenue in Q1, will soon account for more than half of advertising dollars, Zuckerberg said. The number of mobile users expanded 51% to 819M. The total number of FB members was 1.15B, compared with 1.11B in the earlier period. The stock soared 7.96 (up 30%) to 34.47, its highest level since the rapid fall after the IPO last year.
Facebook Rallies as Soaring Sales Silence Zuckerberg’s Mobile-Ad Skeptics
China ordered more than 1400 companies in 19 industries to cut excess production capacity this year, part of efforts to shift toward slower, more-sustainable economic growth. Steelmaking, ferroalloys, electrolytic aluminum, copper smelting, cement production & papermaking are among areas affected, the Ministry of Industry & Information Technology said. Excess capacity must be idled by Sep & eliminated by year-end. Premier Li Keqiang said last week that China will focus on economic restructuring when growth & inflation are within limits, which weren’t specified. The ministry said on Jul 24 that China will accelerate the phase out of overcapacity in H2. The world’s 2nd-largest economy is struggling to meet its annual economic growth target amid signs of weakening manufacturing. A preliminary reading for purchasing managers released by HSBC Holdings & Markit Economics showed 47.7 on Jul 24. The index, if confirmed in the final report on Aug, would be the lowest in 11 months. Readings below 50 indicate contraction. This news is not good for the global economy.
China Cuts Capacity in Some Industries to Reshape Economy
Stocks can't makes up their minds what to do next because earnings are sending unclear & varied signals. However some of the biggest global companies are coming in with less than robust earnings & soggy assessments about the rest of 2013. The cyclical sector is disappointing. China is clearly sputtering. It has new leadership that does not know how to deal with a soft economy. Meanwhile, Dow remains a smidgen below its record on Tues. The disconnect can not last.
Dow Jones Industrials
AMJ (Alerian MLP Index tracking fund)
Treasury yields:
U.S. 3-month |
0.02% | |
U.S. 2-year |
0.34% | |
U.S. 10-year |
2.60% |
| CLU13.NYM | ...Crude Oil Sep 13 | ...105.53 |  ...0.14 | (0.1%) |
Photo: Yahoo
General Motors says Japanese automakers are using the weak ¥ to cut prices in Southeast Asia & Australia, taking a bite out of its profits there. Sales tailed off in India as well. A subpar Q2 performance in the intl operations division pulled overall profit down 16% from last year, offsetting gains in North America & a stark improvement in Europe. EPS was 75¢, down from 90¢ a year ago. But that handily beat predictions when one-time items were excluded. On that basis, EPS was 84¢, 9¢ better than forecasted. In North America, strong sales of pickup trucks drove pretax profit up 4% to almost $2B. US sales of big pickups boomed in H1, rising 23% as the housing industry started to recover from the recession & small businesses started buying again. CFO Dan Ammann said he expected improved performance in H2 as GM gets the full benefit of rolling out the new trucks, as well as the 2014 Chevy Corvette sports car, an all-new Cadillac CTS sedan and other new models. "That's going to give us a good tail wind into the second half," he said. But he also described headwinds in Asia-Pacific countries outside of China, saying Japanese rivals used a weaker ¥ to cut prices, forcing GM to respond in kind & lowering its profits. Although pretax income rose in China, the Intl Operations profit fell $400M to $228M. GM expects the trend to continue, & is trying to counteract it with new products. Weakness in auto markets in India & Russia also contributed to the decline in intl profits. In Europe, GM cut $284M off its loss from last year, narrowing it to $110M as cost cuts kicked in & new products such as the Opel Mokka small crossover SUV & Adam subcompact car sold well. The stock lost pocket change.
General Motors (GM)
Photo: Bloomberg
Facebook CEO Mark Zuckerberg's decision last year to bet big on mobile software is paying off, with sales of ads on wireless devices now on track to surpass revenue from desktop PCs. Surging demand for mobile advertising helped profit & revenue top estimates in Q2. Revenue rose 53% to $1.8B & EPS was 19¢. Analysts had projected EPS of 14¢ on sales of $1.6B. Over 350M shares changed hands, more than 7 times the average this year. FB, which had priced its IPO at $38 a share, saw its stock slump as low as the 17s in Sep. However, the stock is trading at more than 100 times EPS, more expensive than virtually all companies in the S&P 500 Index. Mobile ads, which made up 30% of revenue in Q1, will soon account for more than half of advertising dollars, Zuckerberg said. The number of mobile users expanded 51% to 819M. The total number of FB members was 1.15B, compared with 1.11B in the earlier period. The stock soared 7.96 (up 30%) to 34.47, its highest level since the rapid fall after the IPO last year.
Facebook Rallies as Soaring Sales Silence Zuckerberg’s Mobile-Ad Skeptics
Facebook (FB)
China ordered more than 1400 companies in 19 industries to cut excess production capacity this year, part of efforts to shift toward slower, more-sustainable economic growth. Steelmaking, ferroalloys, electrolytic aluminum, copper smelting, cement production & papermaking are among areas affected, the Ministry of Industry & Information Technology said. Excess capacity must be idled by Sep & eliminated by year-end. Premier Li Keqiang said last week that China will focus on economic restructuring when growth & inflation are within limits, which weren’t specified. The ministry said on Jul 24 that China will accelerate the phase out of overcapacity in H2. The world’s 2nd-largest economy is struggling to meet its annual economic growth target amid signs of weakening manufacturing. A preliminary reading for purchasing managers released by HSBC Holdings & Markit Economics showed 47.7 on Jul 24. The index, if confirmed in the final report on Aug, would be the lowest in 11 months. Readings below 50 indicate contraction. This news is not good for the global economy.
China Cuts Capacity in Some Industries to Reshape Economy
Stocks can't makes up their minds what to do next because earnings are sending unclear & varied signals. However some of the biggest global companies are coming in with less than robust earnings & soggy assessments about the rest of 2013. The cyclical sector is disappointing. China is clearly sputtering. It has new leadership that does not know how to deal with a soft economy. Meanwhile, Dow remains a smidgen below its record on Tues. The disconnect can not last.
Dow Jones Industrials
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