Tuesday, August 27, 2013

Markets retreat on possible action against Syria

Dow was off 170 (closing near the lows), decliners over advancers almost 4-1 & NAZ tumbled 79.  The MLP index slipped fractionally in the 441s & the REIT index lost 1 to the 263s.  Junk bond funds slid lower & Treasuries, viewed as a safe haven investment, advanced.  Oil jumped more than $2, to above $108, after the US defense secretary said American forces were ready to act to strike Syria.  Gold shot up, topping 1400, its highest level since early May.

AMJ (Alerian MLP Index tracking fund)

stock chart

Treasury yields:

U.S. 3-month


U.S. 2-year


U.S. 10-year


CLV13.NYM...Crude Oil Oct 13...108.90 Up ...2.98 (2.8%)

Live 24 hours gold chart [Kitco Inc.]

Directors at Federal Reserve (FED) district banks said last month the US expansion continued at a “modest to moderate” pace amid strength in housing & autos, while risks remained from federal budget reductions & rising interest rates.  “Most directors noted strengthening in the housing and auto sectors, but their comments on manufacturing were mixed,” according to minutes released today.  “Directors continued to see downside risks to the outlook stemming from ongoing fiscal constraints, the elevated unemployment rate, and uncertainty about employers’ health-care costs.”  Employment gains continued even as the jobless rate was elevated.  Inflation expectations remained stable.  Some directors reported that higher long-term interest rates had “noticeably lowered residential mortgage refinancings and noted the possible effect of higher rates on economic activity more generally.”  The FOMC will debate at its next meeting Sep 17-18 whether to slow the $85B monthly pace of asset purchases.  The FED has kept the main interest rates near zero since Dec 2008.

Fed Regional Directors Saw ‘Modest to Moderate’ Economic Growth

Home Prices in 20 U.S. Cities Increased at Slower Pace in June

Photo:   Bloomberg

Residential real-estate prices increased in Jun at a slower pace, a sign the rate of improvement in the housing market is cooling.  The S&P/Case-Shiller index of property values in 20 cities rose 12.1% in Jun from the same month in 2012 after rising 12.2% in the year ended in May, which was the biggest gain since Mar 2006.  The increase matched the forecast.  Increasing property values are boosting household wealth, helping underpin consumer spending, which accounts for about 70% of the economy.  At the same time, a jump in mortgage rates shows signs of curbing sales & refinancing, which will make it more difficult to tap home equity.  The report also included quarterly figures for the market nationally.  Prices covering all of the US climbed 10.1% in Q2 from the same period in 2012, matching the year-over-year gain in Q1.  Home prices adjusted for seasonal variations rose 0.9% in Jun from the prior month after climbing 1% in May.  San Diego & Las Vegas showed the biggest adjusted monthly increase, with prices rising 2.2%.  Home prices declined in 5 cities, with Detroit showing the biggest loss at 1.4%.

Home Prices in 20 U.S. Cities Increased at Slower Pace

Tiffany reported fiscal Q2 profit that topped analysts’ estimates as price increases & declining product costs helped counter tepid sales in the Americas.  EPS rose to 83¢, from 72¢ a year earlier.  Analysts projected 74¢.  A drop in costs for precious materials helped boost profit, as did the decision to raise prices after holding them steady last year.  While wealthier customers paid for pricier baubles, less well-heeled shoppers balked, & sales in the Americas fell short of estimates.  Gross margin widened to 57.5% of sales compared with 56.3% a year earlier.  TIF joined retailers in posting sales that missed estimates.  Consumers have switched their spending from personal discretionary goods like apparel, handbags & jewelry to replacing old cars & home-related merchandise as the housing market rebounds.  Revenue advanced 4.4% to $926M, below the estimate of $942M.  Sales at stores open longer than 12 months in the Americas were unchanged, after a 3% increase in Q1.  While sales rose in dollar terms in the Americas after it increased prices & the highest-priced jewelry sold well, there were declines in unit sales in the region, particularly in moderately priced fashion jewelry.  Amid increased competition from Yurman & Ippolita, it expects fashion jewelry to lag its other categories for the rest of the year even though it is adding new products, including a redesigned Atlas collection.  The company raised its annual EPS forecast to $3.50-$3.60 , excluding some items, from $3.43-$3.53.  Analysts are estimating $3.53.  The stock fell 85¢.

Tiffany Profit Tops Estimates After Jewelry Price Increases

Tiffany (TIF)

stock chart

The stock market has been vastly overbought for months & that condition is being felt this month as the Dow has pulled back 700 from its peak at the start of the month.  Even though autos & hosuing are doing well, the rest of the economy is crawling forward slowly.  Higher interest rates on loans that help finance autos & homes should pinch those industries.  Then there is the need to raise the debt ceiling which will have to be dealt with next month.  Tied in is approving federal spending for the next year which begins Oct 1.  That's a lot for divided DC to work on.  But currently, Syria is center stage.

Dow Jones Industrials

Like many of you, I’m a huge fan of INO, and from what I have seen so far, their service Marketclub!  This isn’t a stripped down version, everything in MarketClub is available to you. I don’t want to give everything away, but you’ll have unlimited access to my favorite three tools: Trade Triangles, Smart Scan, and Alerts!  The best part is that the MarketClub customer support team will be providing UNLIMITED support!  You can call or email for an instant response to any question, comment or concern.

Here’s that link:


I’d recommend you jump on this now.

No comments: