Dow was down 7 (closing above earlier lows), advancers 5-2 over decliners & NAZ jumped 18. The MLP index fell 1 to 453 & the REIT index rose almost 3 to just over 270. Junk bond funds advanced about 1% & Treasuries had a strong rally, taking the yield on the 10 year Treasury down 10 basis points. Oil went up on expectation of more tapering & gold had a good gain after the payroll data.
AMJ (Alerian MLP Index tracking fund)
![Live 24 hours gold chart [Kitco Inc.]](http://www.kitco.com/images/live/gold.gif)
The surprising drop in unemployment to the lowest level in more than 4 years gives Big Ben little to cheer about. Employers in Dec added to payrolls at the slowest pace in 3 years, & workers leaving the labor force accounted for much of the plunge in the jobless rate to 6.7 % from 7%. The Federal Reserve (FED) tied its target interest rate to economic indicators in Dec 2012 with a statement that the rate would remain near zero at least as long as unemployment exceeded 6.5% & the outlook for inflation didn’t rise beyond 2.5%. At last month's meeting, officials considered lowering the unemployment threshold to 6%. Instead, the FOMC decided to emphasize that rates would remain low even after the jobless rate declined to 6.5%. In its post-meeting statement, the committee said it “likely will be appropriate to maintain the current target range for the federal funds rate well past the time that the unemployment rate declines below 6.5 percent.” Policy makers “generally” saw “the benefit of avoiding tying the committee’s decision too closely to the unemployment rate alone,” according to the minutes. The 6.7% jobless rate in Dec is the lowest since Oct 2008. The decline came as workers quit the labor force, falling off the rolls of people who are counted as either employed or unemployed. The share of Americans in the labor force declined to 62.8%, matching the lowest level since 1978. When policy makers first set the 6.5% threshold, they forecast the rate wouldn’t hit that level until mid-2015. Anybody have advice for the FOMC on what to do next?
Surprising Jobless Decline Gives Bernanke Little to Cheer About
PC shipments fell 10% in 2013, marking the worst-ever decline after lackluster holiday sales underscored how consumers & businesses are shunning machines for mobile devices, 2 research firms said. Manufacturers shipped 315.9 M units, returning to 2009 levels & making it the “worst decline in PC market history,” Gartner said. IDC also said shipments had a record decline. US consumers omitted PCs from their holiday shopping lists while buyers in Asia opted for smartphones & tablets. More computing tasks are moving to websites & applications tailored for wireless gadgets, rather than software installed on laptops and desktops. The annual drop eclipsed the previous record decline of 3.9% in 2012, Gartner said. “Consumer spending during the holidays did not come back to PCs as tablets were one of the hottest holiday items,” Mikako Kitagawa at Gartner said. “In emerging markets, the first connected device for consumers is most likely a smartphone, and their first computing device is a tablet.” Global sales fell 6.9% in Q4, the 7th straight quarterly drop, to 82.6M units, Gartner said. IDC reported a decline of 5.6% in the same period. Lenovo maintained the #1 spot worldwide with 18.1% market share in Q4, helped by a 6.6% increase in shipments, according to Gartner. HP (HPQ), a Dow stock, was #2 with a 16.4% share as shipments declined 7.2%. Dell was #3. “We are extremely optimistic about the future of the $200 billion-plus PC industry,” Lenovo said. “We continue to outperform the market while steadily improving profit and margin.” Lenovo shipped 14 million PCs in Q4. Growth in the PC market has become dependent on consumers & businesses replacing existing machines, rather than wooing new buyers. Enterprise demand is being driven in part by Microsoft’s, a Dow stock, plan to end support for its 13-year-old Windows XP in Apr, compelling businesses to buy new PCs along with software upgrades. US shipments shrank 7.5% in Q4 to 15.8M units, Gartner said. Unit sales in Europe, the Middle East & Africa fell 6.7% to 25.8M, while the Asia-Pacific region saw a 9.8% decline to 26.5M.
PC Sales Mark ‘Worst-Ever Decline’ in 2013 as Shipments Plunge 10 Percent
Target, a Dividend Aristocrat, cut its US the Q4 forecast & said the recent security breach affected more people & more information than previously thought. Names, home & e-mail addresses for as many as 70M were taken. TGT previously said credit & debit card data of 40M accounts was stolen. It’s likely that the 2 groups overlap, though it’s unclear to what extent, TGT said. Target is trying to keep customers’ loyalty after their card data was stolen while they made purchases in stores during the holidays, retailers’ most important season of the year & a time when many shoppers already were showing restraint. The company said it couldn’t estimate the breakdown’s costs & they may have a material adverse effect on Q4 results. Sales in the US were “meaningfully weaker” after the data theft was disclosed, the company said. US same-store sales will fall about 2.5% in the qtr ending in Jan, compared with an earlier projection they would be little changed. Adjusted EPS will be $1.20-$1.30, down from a previous estimate of at least $1.50. The company also said it would close 8 US stores in May. The breach occurred when a computer virus infected the point-of-sale terminals where shoppers swipe a credit or debit card to make a purchase. The breach affected many types of credit & debit cards used at the stores, not just Target-branded cards. The stock fell 74¢.
Target Data Breach Affected More Shoppers Than Thought, Slowing U.S. Sales
The 2 biggest drags in the Dow were Chevron (CVX) & UnitedHealth Group (UNH), each down almost 2%. Half the Dow stocks were lower in what was otherwise a slightly up day for the market. Traders need more time to evaluate the jobs data, &, more importantly for the bull market, how the data will influence tapering. Dow is down 140 in the new year, not a good start.
AMJ (Alerian MLP Index tracking fund)
Tresury yields:
U.S. 3-month |
0.04% | |
U.S. 2-year |
0.37% | |
U.S. 10-year |
2.86% |
| CLG14.NYM | ....Crude Oil Feb 14 | ....92.36 |  ...0.70 | (0.8%) |
The surprising drop in unemployment to the lowest level in more than 4 years gives Big Ben little to cheer about. Employers in Dec added to payrolls at the slowest pace in 3 years, & workers leaving the labor force accounted for much of the plunge in the jobless rate to 6.7 % from 7%. The Federal Reserve (FED) tied its target interest rate to economic indicators in Dec 2012 with a statement that the rate would remain near zero at least as long as unemployment exceeded 6.5% & the outlook for inflation didn’t rise beyond 2.5%. At last month's meeting, officials considered lowering the unemployment threshold to 6%. Instead, the FOMC decided to emphasize that rates would remain low even after the jobless rate declined to 6.5%. In its post-meeting statement, the committee said it “likely will be appropriate to maintain the current target range for the federal funds rate well past the time that the unemployment rate declines below 6.5 percent.” Policy makers “generally” saw “the benefit of avoiding tying the committee’s decision too closely to the unemployment rate alone,” according to the minutes. The 6.7% jobless rate in Dec is the lowest since Oct 2008. The decline came as workers quit the labor force, falling off the rolls of people who are counted as either employed or unemployed. The share of Americans in the labor force declined to 62.8%, matching the lowest level since 1978. When policy makers first set the 6.5% threshold, they forecast the rate wouldn’t hit that level until mid-2015. Anybody have advice for the FOMC on what to do next?
Surprising Jobless Decline Gives Bernanke Little to Cheer About
PC shipments fell 10% in 2013, marking the worst-ever decline after lackluster holiday sales underscored how consumers & businesses are shunning machines for mobile devices, 2 research firms said. Manufacturers shipped 315.9 M units, returning to 2009 levels & making it the “worst decline in PC market history,” Gartner said. IDC also said shipments had a record decline. US consumers omitted PCs from their holiday shopping lists while buyers in Asia opted for smartphones & tablets. More computing tasks are moving to websites & applications tailored for wireless gadgets, rather than software installed on laptops and desktops. The annual drop eclipsed the previous record decline of 3.9% in 2012, Gartner said. “Consumer spending during the holidays did not come back to PCs as tablets were one of the hottest holiday items,” Mikako Kitagawa at Gartner said. “In emerging markets, the first connected device for consumers is most likely a smartphone, and their first computing device is a tablet.” Global sales fell 6.9% in Q4, the 7th straight quarterly drop, to 82.6M units, Gartner said. IDC reported a decline of 5.6% in the same period. Lenovo maintained the #1 spot worldwide with 18.1% market share in Q4, helped by a 6.6% increase in shipments, according to Gartner. HP (HPQ), a Dow stock, was #2 with a 16.4% share as shipments declined 7.2%. Dell was #3. “We are extremely optimistic about the future of the $200 billion-plus PC industry,” Lenovo said. “We continue to outperform the market while steadily improving profit and margin.” Lenovo shipped 14 million PCs in Q4. Growth in the PC market has become dependent on consumers & businesses replacing existing machines, rather than wooing new buyers. Enterprise demand is being driven in part by Microsoft’s, a Dow stock, plan to end support for its 13-year-old Windows XP in Apr, compelling businesses to buy new PCs along with software upgrades. US shipments shrank 7.5% in Q4 to 15.8M units, Gartner said. Unit sales in Europe, the Middle East & Africa fell 6.7% to 25.8M, while the Asia-Pacific region saw a 9.8% decline to 26.5M.
PC Sales Mark ‘Worst-Ever Decline’ in 2013 as Shipments Plunge 10 Percent
Target, a Dividend Aristocrat, cut its US the Q4 forecast & said the recent security breach affected more people & more information than previously thought. Names, home & e-mail addresses for as many as 70M were taken. TGT previously said credit & debit card data of 40M accounts was stolen. It’s likely that the 2 groups overlap, though it’s unclear to what extent, TGT said. Target is trying to keep customers’ loyalty after their card data was stolen while they made purchases in stores during the holidays, retailers’ most important season of the year & a time when many shoppers already were showing restraint. The company said it couldn’t estimate the breakdown’s costs & they may have a material adverse effect on Q4 results. Sales in the US were “meaningfully weaker” after the data theft was disclosed, the company said. US same-store sales will fall about 2.5% in the qtr ending in Jan, compared with an earlier projection they would be little changed. Adjusted EPS will be $1.20-$1.30, down from a previous estimate of at least $1.50. The company also said it would close 8 US stores in May. The breach occurred when a computer virus infected the point-of-sale terminals where shoppers swipe a credit or debit card to make a purchase. The breach affected many types of credit & debit cards used at the stores, not just Target-branded cards. The stock fell 74¢.
Target Data Breach Affected More Shoppers Than Thought, Slowing U.S. Sales
Target (TGT)
The 2 biggest drags in the Dow were Chevron (CVX) & UnitedHealth Group (UNH), each down almost 2%. Half the Dow stocks were lower in what was otherwise a slightly up day for the market. Traders need more time to evaluate the jobs data, &, more importantly for the bull market, how the data will influence tapering. Dow is down 140 in the new year, not a good start.
Dow Jones Industrials
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