Monday, September 9, 2013

Higher markets on Chinese export data

Dow rose 86, advancers over decliners 3-1 & NAZ was up 22.  The MLP index gained a fraction to the 434s & the REIT index added 1+ to the 263s.  Junk bond funds were mixed & Treasuries rose.  Oil slipped back while gold edged higher.

AMJ (Alerian MLP Index tracking fund)

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CLV13.NYM...Crude Oil Oct 13...110.14 Down ...0.39 (0.4%)

GCU13.CMX...Gold Sep 13......1,389.50 Up ...2.80 (0.2%)

Port in Shanghai

Photo:   Bloomberg

China exports increased more than estimated in Aug & inflation stayed below a gov target, helping Premier Li Keqiang sustain a rebound from a 2-qtr slowdown.  Overseas shipments rose 7.2% from a year earlier, according to the General Administration of Customs, exceeding the 5.5% estimate.  Consumer prices rose 2.6%, the statistics bureau said, leaving room for extra stimulus if needed.  The producer-price index fell by the least in 6 months while exports to the US & Eu grew for a 2nd month, underscoring improvements in demand inside & outside China.  Imports rose a less-than-estimated 7% from a year earlier, leaving a trade surplus of more than $28b.  Exports rose 5.1% in Jul.  Li, in an opinion article today, said the economy “will maintain its sustained and healthy growth,” with expansion around a 7.5% “lower limit” intended to ensure steady growth & employment.  Commerce Minister Gao Hucheng said he’s confident the nation will meet its 8% target for trade gains for the year.  The gov is seeking to keep consumer-price gains within 3.5% this year.  Li wrote that the level is in line with an “upper limit” of economic performance meant to prevent inflation.

China Trade Rebounds in Further Sign Economy Stabilizing

Rising mortgage rates probably won’t slow the housing recovery because new families are being created & homes are still affordable, according to Wells Fargo (WFC) CFO Tim Sloan said.  “We don’t believe that the recent increases in mortgage rates are going to in any way, shape or form snuff out the housing recovery,” Sloan said.  “When you look at any sort of statistics in the demographics in terms of household creation as well as household affordability, they are still very attractive and should drive a continued recovery in the housing business.”  The average rate on a 30-year fixed-rate mortgage has risen more than 1.2 percentage points since hitting a low of 3.35% in May, according to Freddie Mac data.  But that hasn’t slowed US home prices, which rose 7.7% in the year thru Jun, according to the Federal Housing Finance Agency, Freddie Mac’s & Fannie Mae’s overseer.  WFC is the largest U.S. mortgage lender, originating about 1 in 4 home loans in H1.

Wells Fargo Says Rising Rates Won’t Snuff Out Housing Recovery

Stocks rose on nervous trading.  Nobody is sure what to do with the prospect of a strike on Syria looming in the background.  A decision be Congress is a couple of days away.  The jobs data on Fri was mediocre, showing so-so growth which probably will not deter the FOMC from its plans, assuming it wants to start tapering the bond buying program.  Pres Obama will be addressing the nation on Syria & the pres of Syria gave an interview, telling his side.  In this very confusing situation, it's difficult to see the markets do very much.

Dow Jones Industrials

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