Dow rose 129, advancers over decliners 2-1 & NAZ added 28. The MLP index lost a fraction to the 438s & the REIT gained a fraction in the 261s. Junk bond funds tried to crawl higher & Treasuries managed modest gains. Oil & gold had good gains.
AMJ (Alerian MLP Index tracking fund)
![Live 24 hours gold chart [Kitco Inc.]](http://www.kitco.com/images/live/gold.gif)
Members of Congress are congratulating themselves on a budget accord set to win final passage this week. But business execs aren’t celebrating, saying the deal leaves too much unfinished business. The budget plan doesn’t extend unemployment insurance for the chronically jobless & doesn’t continue more than 50 tax breaks that will lapse on Dec 31 including the R&D tax credit used by tech companies. It won’t prevent the next debt limit fight after borrowing authority is set to lapse in Feb & it does little to fix a broken process that hasn’t produced a formal budget in 4 years & has led the gov to be funded primarily through stopgap spending bills since 2011. The House in a bipartisan vote passed a $1T budget plan that’s main accomplishment is easing $63B in automatic spending cuts over 20 years & the Senate will begin considering it tomorrow. The Pres said he’ll sign it into law. Politicos are eager to show that they’ve learned their lessons from a 16-day gov shutdown in Oct & don’t want to govern from crisis to crisis. Still, one budget deal doesn’t erase years of fiscal dysfunction. Congress has passed all its individual spending bills by the deadline 4 times in only the almost 40 years, most recently in 1997. Fiscal fights aren't over.
Budget Deal Lauded by Lawmakers Belies U.S. Fiscal Rigors
A Chinese manufacturing index unexpectedly fell to a 3 month low as output gains eased & employment weakened, suggesting the economy is vulnerable to a slowdown. The preliminary reading of 50.5 for a Purchasing Managers' Index from HSBC Holdings & Markit Economics compares with a final figure of 50.8 in Nov & the 50.9 median estimate. A number above 50 indicates expansion. Chinese stocks fell the most in a month. The gov at last week’s annual economic work conference set a 2014 growth target of 7.5%, the same as in 2013. The goal may help ensure employment & a lower target would have hurt market expectations. The National Bureau of Statistics & China Federation of Logistics & Purchasing will release their own survey of purchasing managers on Jan 1. The gauge’s Nov reading was 51.4, the same as Oct, which was an 18-month high.
China Manufacturing Index Unexpectedly Declines as Xi Faces Slowdown Risks
On the other hand, the Euro-area factory output grew at a faster pace in Dec than forecast, led by Germany, as the bloc continued its gradual recovery from a record long recession. An index based on a survey of purchasing managers in the manufacturing industry increased to 52.7, a 31-month high, from 51.6 in Nov, Markit Economics said. That’s above the 51.9 estimate. The ECB left its main refinancing rate at 0.25% 2 weeks ago, based in part on its forecast for the economy to ‘‘recover at a slow pace’’ during the next 2 years. The ECB sees euro-zone GDP falling 0.4% this year & rising 1.1% in 2014. Markit’s gauge of euro-area services output fell to 51, a 4 month low, from 51.2 in Nov, while the composite index for both industries improved to 52.1 from 51.7. Euro area exports rose 0.2% in Oct to €159B ($219B) from a month earlier, while imports fell 1.2% to €144.5B, the European Union said.
Factory Output Grows in Euro Area as Germany Leads Rebound From Recession
The rally today was less robust than it seems & the gains were unspectacular. The breadth was relatively modest with yield sensitive stocks struggling to find buyers. MLPs have been red hot since the recession about 5 years ago. After reaching a record high in May, the Alerian MLP has been going sideways. Other yield indices are down from earlier highs. Now it's time for Fed watch.
Dow Jones Industrials
AMJ (Alerian MLP Index tracking fund)
Treasury yields:
U.S. 3-month |
0.06% | |
U.S. 2-year |
0.33% | |
U.S. 10-year |
2.88% |
| CLF14.NYM | ....Crude Oil Jan 14 | ....97.54 |  ...0.94 | (1.0%) |
Members of Congress are congratulating themselves on a budget accord set to win final passage this week. But business execs aren’t celebrating, saying the deal leaves too much unfinished business. The budget plan doesn’t extend unemployment insurance for the chronically jobless & doesn’t continue more than 50 tax breaks that will lapse on Dec 31 including the R&D tax credit used by tech companies. It won’t prevent the next debt limit fight after borrowing authority is set to lapse in Feb & it does little to fix a broken process that hasn’t produced a formal budget in 4 years & has led the gov to be funded primarily through stopgap spending bills since 2011. The House in a bipartisan vote passed a $1T budget plan that’s main accomplishment is easing $63B in automatic spending cuts over 20 years & the Senate will begin considering it tomorrow. The Pres said he’ll sign it into law. Politicos are eager to show that they’ve learned their lessons from a 16-day gov shutdown in Oct & don’t want to govern from crisis to crisis. Still, one budget deal doesn’t erase years of fiscal dysfunction. Congress has passed all its individual spending bills by the deadline 4 times in only the almost 40 years, most recently in 1997. Fiscal fights aren't over.
Budget Deal Lauded by Lawmakers Belies U.S. Fiscal Rigors
A Chinese manufacturing index unexpectedly fell to a 3 month low as output gains eased & employment weakened, suggesting the economy is vulnerable to a slowdown. The preliminary reading of 50.5 for a Purchasing Managers' Index from HSBC Holdings & Markit Economics compares with a final figure of 50.8 in Nov & the 50.9 median estimate. A number above 50 indicates expansion. Chinese stocks fell the most in a month. The gov at last week’s annual economic work conference set a 2014 growth target of 7.5%, the same as in 2013. The goal may help ensure employment & a lower target would have hurt market expectations. The National Bureau of Statistics & China Federation of Logistics & Purchasing will release their own survey of purchasing managers on Jan 1. The gauge’s Nov reading was 51.4, the same as Oct, which was an 18-month high.
China Manufacturing Index Unexpectedly Declines as Xi Faces Slowdown Risks
On the other hand, the Euro-area factory output grew at a faster pace in Dec than forecast, led by Germany, as the bloc continued its gradual recovery from a record long recession. An index based on a survey of purchasing managers in the manufacturing industry increased to 52.7, a 31-month high, from 51.6 in Nov, Markit Economics said. That’s above the 51.9 estimate. The ECB left its main refinancing rate at 0.25% 2 weeks ago, based in part on its forecast for the economy to ‘‘recover at a slow pace’’ during the next 2 years. The ECB sees euro-zone GDP falling 0.4% this year & rising 1.1% in 2014. Markit’s gauge of euro-area services output fell to 51, a 4 month low, from 51.2 in Nov, while the composite index for both industries improved to 52.1 from 51.7. Euro area exports rose 0.2% in Oct to €159B ($219B) from a month earlier, while imports fell 1.2% to €144.5B, the European Union said.
Factory Output Grows in Euro Area as Germany Leads Rebound From Recession
The rally today was less robust than it seems & the gains were unspectacular. The breadth was relatively modest with yield sensitive stocks struggling to find buyers. MLPs have been red hot since the recession about 5 years ago. After reaching a record high in May, the Alerian MLP has been going sideways. Other yield indices are down from earlier highs. Now it's time for Fed watch.
Dow Jones Industrials
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