Friday, November 15, 2013

Higher markets on bets Yellen will maintain low interest rates

Dow went up 85 (closing at the highs to a new record), advancers over decliners 2-1 & NAZ gained 13.  The MLP index jumped another 5+ to the 454s & the REIT index was up only pocket change in the 272s.  Junk bond funds were mixed & Treasuries slid back a tad.  Oil was flattish & gold was only able to inch higher.

AMJ (Alerian MLP Index tracking fund)

stock chart

Treasury yields:

U.S. 3-month


U.S. 2-year


U.S. 10-year


CLJ14.NYM....Crude Oil Apr 14....95.08 Up ...0.08 (0.1%)

Live 24 hours gold chart [Kitco Inc.]

Factory activity declined in New York state earlier this month & employment in the sector failed to grow for the first time since Jun, signs that US manufacturing may have lost a step.  The New York Fed's "Empire State" index of business conditions at factories fell to minus 2.21 from 1.52 in Oct, the first negative reading since May.  The forecast called for an index of 5.00 (a reading above zero indicates expansion).  The report underscores the headwinds facing the US economy, where the recovery remains fragile.  The survey of manufacturing plants in the state is one of the earliest monthly guideposts to US factory conditions.  If the weakness in New York also appears in other major manufacturing regions, it would mark a setback after data in Oct showed relatively robust hiring across the economy & strong expansion at factories.  The federal gov shutdown in Oct had been expected to drag on growth, but data in the wake of that congressional impasse has been mixed.

NY factories slow down in November in bad sign for U.S. economy

EU Criticizes Spending Plans of Four Biggest Euro-Area Nations

Photo:    Bloomberg

The EU confronted the euro area’s biggest economies over their spending plans for next year as austerity demands restrain the bloc’s recovery from the longest recession in its history.  The EU said that Gernmany, Europe’s largest economy, has made “no progress” in following recommendations to spur domestic demand, that Spain’s budget risked missing deficit targets & that Italy’s 2014 plan was in danger of breaching debt-reduction rules.  The budget plans of the countries “still do not pay sufficient attention” to fiscal consolidation, EU Economic & Monetary Affairs Commissioner Olli Rehn said.  “Continued progress with sound public finances should be supported by growth-friendly structural measures.”  The assessments reveal EU officials’ determination to ensure that govs do not become complacent following forecasts that the euro-area economy will grow next year for the first time since 2011.  While the bloc came out of a recession with a 0.3% expansion in Q2, growth slowed to 0.1%t in Q3, with France’s GDP shrinking & Germany’s economy slowing, data showed yesterday.  Germany, the fiercest defender of the austerity-led response to the sovereign-debt crisis, came in for criticism 2 days after the European Commission opened an in-depth probe into German current-account surpluses.  While the German budget meets the debt & deficit rules, the EU reiterated its concern that the nation’s trade surplus is hindering other euro-area economies.

Four Biggest Euro Economies Criticized Over Budget Plans as Recovery Fades

Obama News Conf.: Health Care, Philippines, Iran

Photo:   Bloomberg

Americans seeking cheap insurance on the Obamacare health exchanges may be in for sticker shock if they get sick next year, as consumers trade lower premiums for out-of-pocket costs that can top $6K a person.  Expenses for some policies can reach $6350 for a single person & $12,700 per family, the most allowed by the health-care law, according to a survey by HealthPocket of 7 states, including California & Ohio.  That’s 26% higher than the average deductible in the 7 states.  Private employers have been raising deductibles & co-pays for years to help control costs on health coverage for their workers.  Now insurers are using the tactic to lower premiums on the gov run exchanges.  While that has allowed the pres to tout the affordability of plans, it poses a choice: Do consumers gamble they won’t face a major medical bill, or boost monthly premiums just in case?  On California’s state-run exchange site, the standard low-premium “bronze” plan carries a $5K deductible per person, a $60 co-pay to see a doctor & a 30% fee, known as coinsurance, on hospital care.  In Rhode Island, Blue Cross Blue Shield’s bronze plan has a $5,800K while Missouri's US-run exchange offers plans by Anthem Blue Cross with the maximum-allowable $6,350 in out-of-pocket costs.  This is an added tax on a great many & it's not recognized in today's markets.

Obamacare Deductibles 26% Higher Make Cheap Rates a Risk

This has been another quiet day in the markets & the buyers are calling the shots.  Dow, up better than 2.8K YTD, is within spitting distance of 16K & there doesn't seem like anything can stop it from going over.  Until the reality of the budget debate in DC & sluggish holiday sales reaches the markets, the buyers will keep taking markets higher.  Even the yield sectors have been in demand for the last few months.  Enjoy the weekend when you look at your portfolios.

Dow Jones Industrials

stock chart

I’m a huge fan of INO, & 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 & 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: