Thursday, December 26, 2013

Higher market on jobless claims data

Dow climbed 58 to a new record, advancers over decliners almost 3-2 & NAZ was up 6.  The MLP index shot up 4+ to the 457s (although it remains in its sideways range since late Mar) & the REIT index went up 1 to 257.  Junk bond funds were mixed to higher & Treasuries were flattish with the yield on the 10 year Treasury closing in on 3%.  Oil is closing in on 100, up nicely this month, & gold went back over above 1200 in what has been its dreariest year in some time.

AMJ (Alerian MLP Index tracking fund)

stock chart

Treasury yields:

U.S. 3-month


U.S. 2-year


U.S. 10-year


CLG14.NYM...Crude Oil Feb 14...99.40 Up ...0.18 (0.2%)

GCZ13.CMX...Gold Dec 13...1,215.70 Up ...10.60 (0.9%)

Jobless Claims in U.S. Decreased More Than Forecast Last Week
Photo:   Bloomberg

Jobless claims declined 42K to 338K in the latest week, according to the Labor Dept, topping the forecast which called for a drop to 345K.  Year-end holidays make it difficult to adjust for fluctuations in applications for jobless benefits.  In the prior week, claims rose to a revised 380K from a previously reported 379K.  The 4 week moving average rose to 348K from 343K.  The number continuing to receive benefits increased 46K to 2.92M, the highest since Aug.  The continuing claims figure does not include the number of Americans receiving extended benefits under federal programs.  Those who’ve used up their traditional benefits & are now collecting emergency & extended payments decreased by 40K to 1.33M in the latest week.  While the numbers are fuzzy, bigger picture is that claims remain at low levels.

Jobless Claims in U.S. Fell More Than Forecast Last Week

China estimates that growth slowed to 7.6% this year, with mounting challenges putting pressure on the its traditional growth model of investment-led spending, according to the official Xinhua News Agency.  The calculation for the GDP gain in GDP compares with a gov target of 7.5% Xinhua reported.  A 7.6% pace would mark a 3rd straight annual drop in the expansion rate.  “We cannot deny a downward pressure on economic growth,” Xu Shaoshi, minister in charge of the National Development & Reform Commission, said.  The State Council listed among the looming challenges a worsening in pollution & social conflicts.  Xu said the nation’s traditional growth pattern is challenged by rising labor & environmental costs.  27 Chinese provinces & cities raised the minimum wage in 2013 by an average of 17%..  The GDP release came as China’s central bank sought to ease a liquidity crunch in the market for loans between banks, as financial markets were roiled by the 2nd spike in borrowing costs this year.  The People’s Bank of China (PBOC) 2 days ago conducted its first reverse-repurchase operation in 3 weeks, stepping up efforts to provide lenders with cash after the biggest surge in rates since 2011 sparked a sell-off in Chinese shares.  President Xi Jinping's gov is attempting to strengthen the role of the private sector & domestic demand in an economy that’s been propelled by debt-fueled public investment in recent years.  Xinhua reported that the service sector contributed 44.6% of GDP in 2012, up from 43.2% in 2010, which compares with a 2015 target of 47%.

China Estimates Growth at 7.6% for 2013 as Challenges Seen Ahead

As predicted, the bears are in hibernation, so the bulls have command in very light trading.  Overall, this rise doesn't mean much.  At the same time, early signals are that retail holiday sales came in disappointing.  But markets aren't concerned with negative reports.  Dow is up a staggering 3.3K (25%) YTD supported by easy money & a less than robust economy.

Dow Jones Industrials

stock chart

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