Friday, October 18, 2013

Markets gain on China growth data

Dow was up 28, advancers over decliners 5-2 & NAZ jumped 51.  The MLP index rose 3 to 451 & the REIT index slid 1 to 283.  Junk bond funds were mixed & Treasuries did little.  Oil inched higher, remaining over 100.  Gold fell from a one-week high as a rally in global equities curbed demand for the precious metal as an alternative investment.

AMJ (Alerian MLP Index tracking fund)

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Treasury yields:

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U.S. 10-year


CLX13.NYM...Crude Oil Nov 13....100.73 Up ...0.06 (0.1%)

Live 24 hours gold chart [Kitco Inc.]

Google Logo

Photo:   Bloomberg

Google reached $1000 for the first time on optimism about new advertising for wireless devices & online video.  The company is benefiting from ads for new formats after expanding beyond delivering advertisements alongside search results on desktop computers.  GOOG should take 33% of the global online-advertising market this year, up from 31% in 2012, according to EMarketer.  GOOG already has one of the highest market capitalizations in the US at about $330B, trailing only Apple (AAPL) & Exxon Mobil (XOM - a Dividend Aristorat).  As the company navigates a shift to mobile promotions from pricier search-based ads on desktops, it is relying on a simple maxim: volume, not just price.  Last qtr, the volume of clicks on advertisements climbed at the fastest pace this year, compensating for a drop in average-ad prices.  GOOG also stepped up investments to boost capacity & introduce services that encourage marketers to direct more spending toward wireless devices.  Q3 revenue, excluding sales passed on to partner sites, was $11.9B, exceeding the projection of $11.6.  EPS excluding certain items was $10.74, topping the projection of $10.36.  Net income jumped 36% to $2.97B from the year-earlier period.  The stock a startling 122 to 1011.

Google (GOOG)

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General Motors 9 month worldwide vehicle sales rose 4.6% to 7.25M as the largest US automaker vies with Toyota (TM) & Volkswagen for the top spot globally.  Q3 deliveries rose 5.5% to almost 2.4M cars & trucks with the largest gains in North America & the Intl Operations unit (which includes China).  GM, Toyota & VW are locked in a 3-way race for global sales supremacy.  Toyota recaptured the annual global lead from GM in 2012 as the Japanese automaker recovered from Asian natural disasters in the previous year.  Then GM edged out TM for the top spot in Q2-2013, narrowing TM’s lead.  TM hasn’t yet announced Q3 global sales results.  VW deliveries rose 4.8% to 7.03M cars & trucks for YTD.  The toughest battle between GM & VW is playing out in China where both have forecast sales climbing to 3M this year.  GM’s lead over VW in China narrowed to less than 1% in 2012.  VW finished Q3 ahead of GM in China.  The German automaker’s 9 months sales in China rose 18% to 2.35M, boosted by locally produced vehicles such as Audi’s Q3 & Q5 sport-utility vehicles.  But European deliveries contracted 2.4% to 2.73M vehicles.  Sales of GM & its partners in China rose 11% to 2.31M YTD over the same period a year earlier.  Deliveries of GM’s Cadillac increased 51% as the automaker works to expand the luxury brand in China.  Cadillac also helped increase GM sales in the US where deliveries rose 7.6% YTD compared with a year earlier, according to Autodata Corp.  The stock rose 21¢.

GM Nine-Month Sales Rise 4.6% to Remain Ahead of China Rival Volkswagen

General Motors (GM)

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A Boeing Co. 747-8 Jumbo Jet

Photo:   Bloomberg

Boeing, a Dow stock, will slow production of its double-decker 747 jumbo jet as demand continues to be weak.  Including cancellations, BA has not booked any new orders this year for that plane & production will slow to 18 per year, or 1½ per month.  BA originally planned to build 24 per year, but slow sales had already prompted it to make plans to cut the rate to 21 per year.  The slowdown begins early next year, & it will stay at that lower rate through 2015.  The slower rate "doesn't change our confidence in the 747-8 or our commitment to the program," said Eric Lindblad, Boeing's VP & general manager for the 747.  The 747 has been flying with airlines since 1970, & it was popular at first for its long range & large size.  But the revamped 747-8 first delivered in 2011 has not been selling well.  More than half of the orders have been for freighters, & even that market has been weak.  The 747-8 faces tough competition from the larger Airbus A380, which has been available longer.  It also competes with Boeing's smaller 777, which has been a best-seller.   BA has booked orders for a total of 107 of the jets, with 51 yet to be delivered.  The biggest buyer of the passenger version has been Lufthansa, with orders for 19, including 9 that have been delivered.  No US airlines have bought it.  The 747's list price of around $350M makes it the most expensive plane at BA.  The stock went up 16¢.

Boeing Cuts 747-8 Output Again as Jumbo-Jet Sales Slump

Boeing (BA)

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This was another quiet day in the markets.  Debt default dominated the news this week & that has faded away.  After the US muddled by, there was not a lot to do.  But the problem remains regarding the lack of will by the US to deal with  massive deficits.  Earnings from the retailers will be reported in a few weeks & those will give a better idea of how much damage the debt debate has done to retail sales & the economy.  Meanwhile the stock market is not concerned.  Tomorrow's problems will take care of themselves.

Dow Jones Industrials

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