Thursday, September 26, 2013

Markets rose following the longest losing streak of the year

Dow went up 55, advancers over decliners 5-4 & NAZ gained 26.  The MLP index shot up 4+ to the 448s & the REIT index was up 1+ to the 272s.  Junk bond funds were mixed to higher & Treasuries declined.  Oil advanced for the first time in 6 days after US jobless claims unexpectedly fell while the economy expanded at a faster pace last qtr.  Gold fell for the 4th time in 5 sessions after jobless claims last week dropped unexpectedly, boosting speculation that the Federal Reserve will scale back stimulus soon.

AMJ (Alerian MLP Index tracking fund)

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Treasury yields:

U.S. 3-month


U.S. 2-year


U.S. 10-year


CLX13.NYM...Crude Oil Nov 13....102.92 Up ...0.26 (0.3%)

Live 24 hours gold chart [Kitco Inc.]

U.S. Probably Created 345,000 More Jobs in Year to March 2013

Photo:   Bloomberg

The Labor Dept’s preliminary estimate of employment in the year ended Mar 2013 was revised up by 345K workers, reflecting the addition of employees who weren’t previously counted in the monthly payrolls report.  Current estimates show 2.03M jobs were added in the 12-month period.  A reclassification of workers into another category of establishments inflated the estimate by 469K.  The Quarterly Census of Employment & Wages program reviewed businesses that provide non-medical, home-based services for the elderly, an industry that wasn’t reflected in the monthly payrolls calculations.  It reclassified those workers into a category that provide services for older Americans, which the Labor Dept includes in its payrolls measure.  The result moved almost half a million workers into the education & health-care services industry.  Without this adjustment, the number of employees added to payrolls would have declined 124K.  The downward revision is probably the more accurate figure because the level of payrolls in Mar 2012 has not yet been calculated to incorporate the change, Kirk Mueller, national benchmark branch chief for the Labor Dept, said.  The final annual benchmark revisions to payrolls will be issued with the Jan employment data to be released in Feb 2014.  The Labor Dept uses records from state jobless benefit tax records to benchmark its employment data.

Labor Estimate Shows U.S. Payrolls Revised Up in Year to March

The IMF urged US lawmakers to quickly find a fiscal agreement to avoid a federal gov shutdown & raise its $16.7T borrowing limit.  “This is important for the continuation of the recovery in the U.S. and beyond that in the global economy,” IMF spokesman Gerry Rice said.  The pres & congressional Reps are deadlocked over the federal budget in a confrontation that could prompt a gov shutdown next week.  That showdown could influence the next set of negotiations over raising the borrowing limit, which the Treasury Dept has said will be reached by Oct 17.  Rice also said that IMF Managing Director Christine Lagarde yesterday met with Iranian President Hassan Rouhani on the sidelines of the United Nations’ General Assembly.  They discussed the gov’s economic priorities & how the relationship with the IMF could be deepened.

IMF Urges U.S. Congress to Find Agreement to Avoid Shutdown

JPMorgan Chase & Co.

Photo:   Bloomberg

JPMorgan's, a Dow stock, is negotiating with federal & state authorities to resolve a series of investigations tied to mortgage bonds are focusing on a potential $11B figure, including $4B for consumer relief.  The amount isn’t final.  Those involved include the Justice Dept, the Dept of Housing & Urban Development, & NY Attorney General Eric Schneiderman, who is co-chairman of a federal & state working group on residential mortgage-backed securities.  Jamie Dimon, CEO of JPM spent 2 hours at the Justice Dept in DC, to personally discuss the settlement with US Attorney General Holder.  Federal officials rejected a proposal from the bank earlier this week to pay $3-$4B to settle the probes.  The talks are still fluid & the size of the settlement keeps changing because they weren’t sure which claims may be resolved.  The bank is trying to resolve as many probes as possible before the end of Q3.  The stock went up 19¢.

JPMorgan Said to See $11 Billion Mortgage Deal as Jamie Dimon Joins Talks

J P Morgan Chase (JPM)

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Stocks are looking for direction.  This week the Dow has been steady, staying close to 15.4K with a slight downward bias.  The goings on in DC are heated & conditions will get even hotter over for the rest of the month.  The budget battle will be resolved at the last minute with an extension.  Instead of annual budgets, this multi $T budget has been limping along with extensions for 5 years because the concept of an annual budget has been discarded.  Mon is the last day of the fiscal year & that's when the politicos will come up with money to pay for the first 20% of the fisal year.  In Dec, they will have to go thru this anguish again.  Is this any way to run a gov?

Dow Jones Industrials

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