Dow jumped 108, advancers ahead of decliners 2-1 & NAZ advanced 31. The MLP index up a pennies in the 454s & the REIT index added 1+ to the 272s (where it was in Jun). Junk bond funds fluctuated & Treasuries were lower. Oil gained on hopes for an improving US economy & gold lost a little ground.
AMJ (Alerian MLP Index tracking fund)
![Live 24 hours gold chart [Kitco Inc.]](http://www.kitco.com/images/live/gold.gif)
Photo: Bloomberg
The Senate approved a stopgap spending bill to keep federal gov funding, from lapsing tonight, with a 86-14 vote. It extends funding for US agencies & departments thru Sat & is designed to allow time for Congress to enact later this week a $1.1T measure that would set new spending levels thru Sep 30. By passing the 3 day extension, lawmakers avoid a repeat of the gov shutdown in Oct. The House is scheduled to vote later today on the spending bill. In a victory for Dems, Reps dropped demands to include provisions derailing some regulatory initiatives & denying funds for implementation of Obamacare. Negotiators agreed on a $1.01T base spending level in Dec as part of a 2 year, bipartisan budget agreement. The longer-term spending measure also includes $573B for defense spending in the current fiscal year, with $85.2B for overseas combat operations in Afghanistan, about $2B less than in fiscal 2013. However, the bill to extend long term unemployment benefits that expired 3 weeks ago has stalled.
Senate Clears Three-Day Funding Measure to Avert Shutdown
Photo: Bloomberg
China's broadest measure of new credit fell in Dec while money-supply growth & new yuan loans trailed estimates amid a cash crunch & gov efforts to curb speculative lending. Aggregate financing was 1.23T yuan ($204B), according to the People’s Bank of China (PBOC). That compared is down from 1.63T yuan a year earlier. The foreign exchange reserves, the world’s largest, rose to a record $3.8T at year-end from $3.66B in Sep. A record decline in new credit in H2 signals limits on the pace of economic expansion this year as policy makers focus on controlling financial risks & implementing the broadest reforms since the 1990s. The jump in reserves highlights China’s challenge in coping with capital inflows while trying to reduce intervention in the currency. New yuan loans were 482.5B yuan in Dec & M2 money supply rose 13.6% from a year earlier, the PBOC said. Analysts projected aggregate financing of 1.14T yuan, new local-currency loans of 570B yuan & money-supply growth of 13.9%. The drop in new credit underscores China’s willingness to accept slower economic growth as the gov rebalances the economy away from debt-fueled investment in favor of consumption. At least 9 Chinese provinces have set lower growth targets for 2014, state media said. For H2, aggregate financing totaled 7.14T yuan, a decline of 851B yuan from a year earlier, the biggest half-year drop in figures dating to 2002.
Stocks are having a good run this week, allowing to Dow to recover much of this year's decline. But it's still down about 100 in Jan. The early days of earnings season got off to a good start. The bulls say that a $10B decline in FED monthly bond purchases is understood. If that pace is maintained, it will take most of the year to end the program. Next is raising the interest rates, which is a long way off for many (the major driving force for the stock advance this week). Based on the initial response to earnings from the big banks, good enough earnings (helped by accounting adjustments) may keep the bulls happy so they can take the Dow to new records.
Dow Jones Industrials
AMJ (Alerian MLP Index tracking fund)
Treasury yields:
U.S. 3-month |
0.04% | |
U.S. 2-year |
0.39% | |
U.S. 10-year |
2.88% |
| CLG14.NYM | ...Crude Oil Feb 14 | ...94.35 |  ...1.76 | (1.9%) |
A Federal Reserve (FED) survey shows
economic growth remained healthy in most US regions in late Nov & Dec, helped by gains in consumer spending & factory output. 9 of the Fed's 12 banking
districts described growth as moderate, according to the Beige Book
survey. That's up from 7 districts in Oct
thru early Nov. And 2 of those districts said growth had
accelerated since the previous report. Only 2 districts, Boston & Philadelphia, said growth was modest, while Kansas City said it "held steady." Three-quarters of the
districts said shoppers spent more over the winter holidays & all but
Kansas City said manufacturing production grew. The report showed little
signs of the slowdown in hiring that was reported last Fri. The FED survey, however,
said 2/3 of the districts reported increased hiring which may
bolster a view that the slowdown in hiring during Dec
was temporary & partly the result of bad weather. There have been other signs that the economy is growing at a
solid pace. Americans increased their spending at retailers in Nov & Dec at a faster pace than the previous year, according to the
National Retail Federation. Greater consumer spending is
a key reason that growth forecatsed are being raised to top a 3% annual rate in Q4, a 2nd
straight qtr of healthy growth after a 4.1% expansion in Q3. Several districts reported
significant improvement in manufacturing, suggesting businesses &
consumers are spending more. Most districts also said
home sales, construction & prices continued to rise. Several districts
said the housing recovery was boosting output "all the way from raw
materials like lumber to finished products like kitchen cabinets."
The Senate approved a stopgap spending bill to keep federal gov funding, from lapsing tonight, with a 86-14 vote. It extends funding for US agencies & departments thru Sat & is designed to allow time for Congress to enact later this week a $1.1T measure that would set new spending levels thru Sep 30. By passing the 3 day extension, lawmakers avoid a repeat of the gov shutdown in Oct. The House is scheduled to vote later today on the spending bill. In a victory for Dems, Reps dropped demands to include provisions derailing some regulatory initiatives & denying funds for implementation of Obamacare. Negotiators agreed on a $1.01T base spending level in Dec as part of a 2 year, bipartisan budget agreement. The longer-term spending measure also includes $573B for defense spending in the current fiscal year, with $85.2B for overseas combat operations in Afghanistan, about $2B less than in fiscal 2013. However, the bill to extend long term unemployment benefits that expired 3 weeks ago has stalled.
Senate Clears Three-Day Funding Measure to Avert Shutdown
China's broadest measure of new credit fell in Dec while money-supply growth & new yuan loans trailed estimates amid a cash crunch & gov efforts to curb speculative lending. Aggregate financing was 1.23T yuan ($204B), according to the People’s Bank of China (PBOC). That compared is down from 1.63T yuan a year earlier. The foreign exchange reserves, the world’s largest, rose to a record $3.8T at year-end from $3.66B in Sep. A record decline in new credit in H2 signals limits on the pace of economic expansion this year as policy makers focus on controlling financial risks & implementing the broadest reforms since the 1990s. The jump in reserves highlights China’s challenge in coping with capital inflows while trying to reduce intervention in the currency. New yuan loans were 482.5B yuan in Dec & M2 money supply rose 13.6% from a year earlier, the PBOC said. Analysts projected aggregate financing of 1.14T yuan, new local-currency loans of 570B yuan & money-supply growth of 13.9%. The drop in new credit underscores China’s willingness to accept slower economic growth as the gov rebalances the economy away from debt-fueled investment in favor of consumption. At least 9 Chinese provinces have set lower growth targets for 2014, state media said. For H2, aggregate financing totaled 7.14T yuan, a decline of 851B yuan from a year earlier, the biggest half-year drop in figures dating to 2002.
Stocks are having a good run this week, allowing to Dow to recover much of this year's decline. But it's still down about 100 in Jan. The early days of earnings season got off to a good start. The bulls say that a $10B decline in FED monthly bond purchases is understood. If that pace is maintained, it will take most of the year to end the program. Next is raising the interest rates, which is a long way off for many (the major driving force for the stock advance this week). Based on the initial response to earnings from the big banks, good enough earnings (helped by accounting adjustments) may keep the bulls happy so they can take the Dow to new records.
Dow Jones Industrials
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