Wednesday, October 9, 2013

Markets waffle, awaiting developments in DC

Dow went up 16, decliners ahead of advancers 3-2 & NAZ lost 16.  The MLP index slipped a fraction to 439 & the REIT index rose 2 to 267.  Junk bond funds were mixed & Treasuries marked time.  Oil pulled back & gold dipped below 1300.

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...102.74 Down .....0.75  (0.7%)

GCV13.CMX...Gold Oct 13........1,308.40 Down ...15.80  (1.2%)

U.S. President Barack Obama

Photo:   Bloomberg

The pres opened the door to talks with Reps on topics ranging from health care to entitlement programs if they end the impasse over the US debt ceiling.  Some possible paths out of the partisan impasse are starting to emerge as the gov enters the 9th day of a partial shutdown, with less than a week before US borrowing authority lapses on Oct 17.  Each option is tentative & lawmakers remain far from an agreement amid verbal sparring between Obama & John Boehner.  Senate Dems started setting up a test vote for later this week on a plan that would push the next debt-limit fight into 2015.  Obama said he could accept a short-term increase without policy conditions that set the terms for future talks.  The support of at least 6 Senate Reps is needed to overcome procedural obstacles to a debt-limit increase without conditions, & that’s far from guaranteed.  Boehner rejected the idea of passing a debt-ceiling increase now & negotiating later, labeling that “unconditional surrender” & instead sought immediate talks with Obama.  “There’s going to be a negotiation here,” Boehner said.  “It’s time to have that conversation.”  Obama invited House Dems to the White House today at 4:30 PM. to discuss the fiscal standoff.  Obama said yesterday he was willing to consider a short-term debt ceiling increase without conditions to buy time to negotiate.  But a House Rep leader's aide said party leaders won’t agree to a short-term increase unless it contains Rep policy priorities.  The pres insisted again that he wouldn’t negotiate against the threat of default or a gov shutdown, comparing Reps to hostage-takers & extortionists.  This conflict gets uglier day by day.

Obama Seeks Post-Debt Talks With Senate Republicans Open

  • FILE - In this Monday, June 3, 2013, file photo, Janet Yellen, vice chair of the Board of Governors of the Federal Reserve System, answers a question from a participant at the International Monetary Conference in Shanghai, China. President Barack will nominate Yellen to replace Federal Reserve Chairman Ben Bernanke. (AP Photo/Eugene Hoshiko, File )
Photo:   Yahoo

The pres will nominate Janet Yellen, the Federal Reserve's (FED) vice chair, to be chairman of the central bank, succeeding Ben Bernanke at a pivotal time for the economy & monetary policies.  If confirmed by the Senate, Yellen would be the first Dem chosen to lead the FED since Paul Volcker was picked in 1979.  Bernanke will serve until his term ends Jan 31, completing a remarkable 8 year tenure in which he helped pull the US economy out of the worst financial crisis & recession since the 1930s.  Under his leadership, the FED created extraordinary programs that are credited with helping save the US banking system after the financial crisis erupted in 2008.  A close ally of the chairman, Yellen has been a key architect of the efforts under Bernanke to keep interest rates near record lows to support the economy, & she likely would continue steering that policy in the same direction as Bernanke.

Yellen is Obama choice to succeed Bernanke at Fed Associated Press

Apple's iPad

Photo:   Bloomberg

Apple will update its lineup of iPads at an Oct 22 event as the company works to remain ahead of rivals in the increasingly crowded tablet market. The company is expected to unveil a new version of the original 9.7" iPad as well as the smaller iPad mini.  And a new Mac operating system, called Mavericks, and Mac Pro PC, will be introduced.  The event will feature changes to the bigger iPad that include a thinner design.  A new iPad mini will sport the high-definition screen now on the iPhone & bigger iPads.  In the absence of a new iPad, the tablet market shrank in Q2, suggesting pent-up demand for the new models.  Global tablet unit sales fell 9.7% to 45M, with iPad shipments falling to 14.6M units from 19.5M in Q1, according to IDC.  The stock was up 1+.

Apple Is Said to Debut New IPads at Oct. 22 Event Amid Rising Competition

Apple (AAPL)

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DC remains stuck in the mud with no signs of solving fundamental fiscal issues.  Both sides are name calling which makes it difficult to imagine how a compromise can be reached.  Janet Yellen's nomination was well advertised, a non event for the markets.  Not much to do but watch the screaming from DC, as the first bank earnings are coming in the next few days.

Dow Jones Industrials

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