Tuesday, December 3, 2013

Markets decline while waiting for economic reports

Dow dropped 62, decliners over advancers 5-4 & NAZ was fractionally lower.  The MLP index lost 2 to the 439s (stuck in its sideways trading zone) & the REIT index was off fractionally in the 263s.  Junk bond funds slid lower while Treacheries inched higher.  Oil rose to the highest level in a week on forecasts that a gov report will show US. inventories dropped for the first time since Sep.  Gold eked out a gain

AMJ (Alerian MLP Index tracking fund)

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Treasury yields:

U.S. 3-month


U.S. 2-year


U.S. 10-year


CLF14.NYM...Crude Oil Jan 14..............94.18 Up  ....0.36 (0.4%)

ZGZ13.CBT.....Gold 100 oz. Dec 13...1,238.50 Up ...16.90 (1.4%)

Chrysler Jeep

Photo:   Bloomberg

Ford (F) & Chrysler reported  US sales gains in Nov that exceeded estimates as dealers boosted year-end promotions to trim rising vehicle inventory.  Deliveries of cars & light trucks rose 7.1% for Ford & 16% for Chrysler.  They beat the estimates for increases of 5.6% at Ford & 11% at Chrysler.  General Motors (GM) sales rose 14%, matching estimates & Toyota (TM). topped projections with a 10% gain.  Automakers entered their year-end sales push last month with their biggest supply of cars & trucks in 8 years, a buildup that’s poised to test the industry’s newfound pricing discipline.  Dealers introduced more aggressive year-end marketing campaigns than in past years to try to draw shoppers to showrooms with Black Friday promotions & cheap financing.  Black Friday ranked as one of Chrysler’s top 5 sales days of the year.  Deliveries of the new Jeep Cherokee climbed to 10K in just its 2nd month in the market, helping the company extend its streak of year-over-year sales gains to 44 consecutive months.  Sales of the Ram pickup gained 22% to 29K.  US car & light truck sales probably rose 5.2% to 1.2M, according to the estimate.  The monthly results automakers report today will include deliveries tallied thru Dec 2, helping boost the number of vehicles sold, because the month ended over the weekend.  The monthly annualized industry sales rate, adjusted for seasonal trends, may climb to an estimate of 15.8M in Nov from 15.3M a year earlier.

Chrysler, Ford Car Sales Climb on Year-End Promotions

Amazon Fulfillment

Photo:   Bloomberg

Cyber Mon sales surged, sending online shopping toward a single-day record as Amazon (AMZN) & eBay (EBAY) siphoned consumers from brick-and-mortar stores.  Online sales yesterday rose 21% from 2012, IBM (IBM), a Dow stock, said.  Retailers catering to smartphone & tablet users benefited the most, with mobile traffic accounting for 32% of site visits, a 45% gain from last year.  E-commerce is projected to be the bright spot of an otherwise tepid holiday season marked by the first Black Friday-weekend spending decline since 2009.  While internet sales may climb as much as 15%, more than 3 times faster than overall retail growth, they still account for just 14% of the total, according to the National Retail Federation (NRF).  Online spending increased 15% to a record $1.2B on Black Friday, according to Com Score.  Still, because of the in-store slump, total purchases fell 2.9% to $57.4B during the 4 days beginning with the Nov 28 Thanksgiving holiday, according the NRF.  The results reinforced declining investor optimism about US holiday sales.  Internet sales may climb to $82B in the holiday season, more than 3X faster than total retail growth of 3.9% to $602B, according to the NRF.  In terms of sales, mobile devices drove more than 17% of online purchases on Cyber Monday, IBM said. 

Cyber Monday Sales at Record as Amazon, EBay Win Shoppers

Google Headquarters

Photo:   Bloomberg

Google lowered prices for some of its cloud computing service for businesses & added features as it steps up to meet the competition.  The service, which lets customers purchase access to its computing power, is cutting prices for some of the most popular options by 10%, GOOG said.  The company is also adding broader support for customers.  The changes to Google Compute Engine service are aimed at attracting corp customers away from Amazon (AMZN), Microsoft (MSFT - a Dow stock) & others that are betting businesses will access computing power from large, centralized data centers instead of their own systems.  GOOG is boosting investments in new services & formats as it expands beyond advertisements alongside search results on desktop computers.  The stock jumped $8, taking it near another record high.

Google Cuts Cloud Service Prices While Adding Features to Challenge Amazon

Google (GOOG)

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While not significant, Dow has a broad retreat.  21 Dow stocks are lower (with modest declines).  The news for Black Friday sales is mixed.  Online, especially mobile business, was strong but the bulk of the business was down in stores & they are struggling to report sales gains.  Dow is beginning the month on negative note.

Dow Jones Industrials

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