Monday, December 23, 2013

Markets rise on improved consumer confidence

Dow clmbed 72 to another record, advancers over decliners 3-1 & NAZ was up 32.  The MLP jumped 5 to the 451s & the REIT index rose 1+ to the 266s.  Junk bond funds were about 1% higher& Treasuries were a bit soft.  Oil settled back & gold is fluctuating around 1200, the important support level.

AMJ (Alerian MLP Index tracking fund)

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Treasury yields:

U.S. 3-month


U.S. 2-year


U.S. 10-year


CLG14.NYM...Crude Oil Feb 14...98.91 Down ...0.41  (0.4%)

GCZ13.CMX...Gold Dec 13.....1,199.60 Down ...5.50  (0.5%)

Consumer confidence in the US rose to a 5 month high in Dec, indicating Americans will keep spending early next year.  The Thomson Reuters/University of Michigan final index of consumer sentiment climbed to 82.5 from 75.1 in Nov.  The forecast called for 83 & the preliminary reading for Dec was 82.5.  A pickup in employment, higher property values & stock-market gains are bolstering household wealth & underpinning sentiment.  The index averaged 89 in the 5 years leading up to the slump that began in Dec 2007 & 64.2 during the 18-month recession that ended in Jun 2009.  The Michigan sentiment survey’s current conditions index, which takes stock of Americans’ view of their personal finances, rose to a 5 month high of 98.6 in Dec, from 88 in Nov.  The measure of expectations 6 months from now increased to 72.1 from 66.8 last month.  Americans expect an inflation rate of 3% over the next year, compared with 2.9% in the prior month.  Over the next 5 years, they expect a 2.7% rate of inflation, down from 2.9% seen in Nov.  Cheaper fuel is providing relief to households. The cost of a gallon of regular-grade gasoline averaged $3.25 in the first 20 days of Dec, compared with the 2013 high of $3.79 reached in Feb.

Consumer Sentiment in U.S. Rose to Five-Month High in December

Apple struck a deal to sell the iPhone thru China Mobile, giving both companies a means to fight declining share in the market of 1.2B wireless subscribers.  China Mobile will sell the iPhone 5s & 5c models in its retail stores starting Jan 17 & the phones for China Mobile’s network will also be available in AAPL retail stores in China under the multiyear accord.   AAPL now has access to all carriers in the world’s biggest handset market, where Samsung leads & smartphones using the Android operating system dominate sales.  For China Mobile, with 763M users, the deal may help draw high-end subscribers to the new 4th generation network while the company faces its first annual profit decline in more than a decade.  China Unicom, the nation’s 2nd-largest carrier, began offering the iPhone in Nov 2009 & 3rd-ranked China Telecom followed in Mar 2012.  China Mobile had 62% of China’s total mobile subscribers at the end of Oct, down from 64% a year earlier & 67% at the same time in 2011.  The stock jumped 19 after a good run in the last 6 months.

Apple Reaches Deal to Sell IPhones Through China Mobile

Apple (AAPL)

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It looks like stocks will close the year on an up note with little news expected to get in the way of that prediction.  I keep reminding you all that yield stocks are well off their highs & have not had a good year.  Obamacare will be taking a bite out of the economy.  But easy money rules the markets & that is not going away anytime soon.

Dow Jones Industrials

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