Dow climbed 74, advancers over decliners 2-1 & NAZ added 26. The MLP index lost 2+ to the 461s & the REIT index fell 1+ to the 283s. Junk bond funds were mixed & Treasuries rose. Oil cut its AM losses & gold rose after Janet Yellen said recent data have pointed to
“softness” in the US economy, increasing demand for the
precious metal as an alternative investment.
AMJ (Alerian MLP Index tracking fund)
![Live 24 hours gold chart [Kitco Inc.]](http://www.kitco.com/images/live/gold.gif)
In Q4 US retailers suffered their darkest days since the recession. With results in from 62 of 122 retail chains, the industry has posted its first profit quarterly drop since the economic contraction that ended in 2009, according to Retail Metrics. Revenue also rose at the lowest rate since that year. The results paint a grim picture of an industry hit hard by the sluggish job recovery & slow wage growth, which have turned US consumers into a nation of penny pinchers. Earnings are expected to drop 6.1% during the holiday qtr while the S&P 500 Index companies are estimated to see profit rise of 8.5%. “It was a very tough season for the retailers, no question about it,” Ken Perkins, president of Retail Metrics, said. “They were facing pressure on multiple fronts.” In Q4, total revenue is expected to climb 1%, the smallest gain since Q3-2009. The lack of wage gains restrained many consumers from making discretionary purchases. To cope, some chains cut prices by 50-60%. The industry hasn’t seen such heavy discounting since the “fire sale” that took place during the Q4-2008. Teen retailers were the hardest hit. Their profit is decreasing 37 %, Retail Metrics found. Electronics chains are down 17%, & discounters are dropping 12%. 34% of the retailers missed estimates, compared with a 13-year average of 20%. While many retailers have yet to report their results, those chains are smaller & unlikely to affect the overall picture.
U.S. Retail Chains See First Profit Decline Since Recession
Federal Reserve (FED) Chair Janet Yellen said the central bank is likely to keep trimming asset purchases, even as policy makers monitor data to determine if recent weakness in the economy is temporary. “Unseasonably cold weather has played some role,” she said. “What we need to do, and will be doing in the weeks ahead, is to try to get a firmer handle on exactly how much of that set of soft data can be explained by weather and what portion, if any, is due to softer outlook.” Yellen repeated FED statements that the central bank intends to reduce asset purchases at a measured pace, & she said in response to a separate question that the bond-buying program was likely to end in the fall. At the same time, “if there’s a significant change in the outlook, certainly we would be open to reconsidering, but I wouldn’t want to jump to conclusions here.” Yellen, in the 2nd day of her semi-annual testimony on the economy & monetary policy, also repeated the FED pledge to keep the benchmark interest low at least as long as unemployment stays above 6.5% & the outlook for inflation doesn’t exceed 2.5%. Policy makers, at the Jan meeting, said they would soon have to modify the year-old commitment, according to minutes released last week.
Yellen Repeats Fed Likely to Keep Trimming Asset Purchases
However, troubled JC Penney did better. The stock surged after forecasting an increase in annual revenue & margin expansion, prompting CEO Mike Ullman to predict its turnaround will be completed this year. Same-store sales will rise by a mid-single digit percentage & gross margin will “significantly” improve this year he said. Liquidity at the end of 2014 is projected to remain at $2B. Ullman’s attempt to revive the department-store chain gained traction during a holiday season marked by a discount war among retailers seeking to attract tentative shoppers. Following losses & plummeting sales caused by a former CEO, Ullman returned to the helm in Apr & helped the chain post its first same-store sales gain in Q3 since 2011. The chain also posted its first profit in more than 2 years, benefiting its traditional discounting strategy and reviving popular private-label brands. EPS was 11¢, compared with a loss per share of $2.51 a year earlier. Excluding the sale of assets & tax benefits, such as a $270M change in the value of its pension, the company posted a loss of 68¢ per share. The estimate was for a loss of 86¢. The company has been improving its finances & operations, & now is ready to return to growth & profitability, Ullman said. “The most challenging parts of the turnaround are behind us,” Ullman said. Liquidity became a concern after the company substantial losses & spent heavily on trying the transformation of the century-old retailer. After Ullman returned in Apr, the company raised almost $4B in cash thru borrowings & a secondary offering of shares. Revenue fell 2.6% to $3.78B, trailing the $3.86B estimate. Excluding sales during an extra week a year earlier, revenue would have risen 1.6%. Same-store sales had the first gain since Q1-2011. Revenue by that measure (including online sales) may increase by as much as 5% this qtr, the best performance since the period in 2006. The stock jumped $1.51 (25%). If you would like more information on JCP, click on this link:
http://club.ino.com/trend/?symb=JCP&a_aid=CD3289&a_bid=6ae5b6f7
J.C. Penney Gains as Sales Forecast Signals Turnaround
There is nothing like encouraging words from the FED on its easy money policy to send stocks higher. But she said nothing new & the subsequent rally has become routine. The current intentions about reducing the bond buying program is pretty much in place unless major events disturb present conditions. Higher interest rates will follow which seems far away right now. In the meantime, even though some retailers had good earnings reports, that industry is soggy. Higher sales are tough to come by & that is surprising considering the recession is a faded memory for many. While Dow is up more than 500 in Feb, it remains in the red YTD.
AMJ (Alerian MLP Index tracking fund)
Treasury yields:
U.S. 3-month |
0.04% | |
U.S. 2-year |
0.32% | |
U.S. 10-year |
2.64% |
| CLJ14.NYM | ....Crude Oil Apr 14 | ....102.44 |  ....0.15 | (0.2%) |
In Q4 US retailers suffered their darkest days since the recession. With results in from 62 of 122 retail chains, the industry has posted its first profit quarterly drop since the economic contraction that ended in 2009, according to Retail Metrics. Revenue also rose at the lowest rate since that year. The results paint a grim picture of an industry hit hard by the sluggish job recovery & slow wage growth, which have turned US consumers into a nation of penny pinchers. Earnings are expected to drop 6.1% during the holiday qtr while the S&P 500 Index companies are estimated to see profit rise of 8.5%. “It was a very tough season for the retailers, no question about it,” Ken Perkins, president of Retail Metrics, said. “They were facing pressure on multiple fronts.” In Q4, total revenue is expected to climb 1%, the smallest gain since Q3-2009. The lack of wage gains restrained many consumers from making discretionary purchases. To cope, some chains cut prices by 50-60%. The industry hasn’t seen such heavy discounting since the “fire sale” that took place during the Q4-2008. Teen retailers were the hardest hit. Their profit is decreasing 37 %, Retail Metrics found. Electronics chains are down 17%, & discounters are dropping 12%. 34% of the retailers missed estimates, compared with a 13-year average of 20%. While many retailers have yet to report their results, those chains are smaller & unlikely to affect the overall picture.
U.S. Retail Chains See First Profit Decline Since Recession
Federal Reserve (FED) Chair Janet Yellen said the central bank is likely to keep trimming asset purchases, even as policy makers monitor data to determine if recent weakness in the economy is temporary. “Unseasonably cold weather has played some role,” she said. “What we need to do, and will be doing in the weeks ahead, is to try to get a firmer handle on exactly how much of that set of soft data can be explained by weather and what portion, if any, is due to softer outlook.” Yellen repeated FED statements that the central bank intends to reduce asset purchases at a measured pace, & she said in response to a separate question that the bond-buying program was likely to end in the fall. At the same time, “if there’s a significant change in the outlook, certainly we would be open to reconsidering, but I wouldn’t want to jump to conclusions here.” Yellen, in the 2nd day of her semi-annual testimony on the economy & monetary policy, also repeated the FED pledge to keep the benchmark interest low at least as long as unemployment stays above 6.5% & the outlook for inflation doesn’t exceed 2.5%. Policy makers, at the Jan meeting, said they would soon have to modify the year-old commitment, according to minutes released last week.
Yellen Repeats Fed Likely to Keep Trimming Asset Purchases
However, troubled JC Penney did better. The stock surged after forecasting an increase in annual revenue & margin expansion, prompting CEO Mike Ullman to predict its turnaround will be completed this year. Same-store sales will rise by a mid-single digit percentage & gross margin will “significantly” improve this year he said. Liquidity at the end of 2014 is projected to remain at $2B. Ullman’s attempt to revive the department-store chain gained traction during a holiday season marked by a discount war among retailers seeking to attract tentative shoppers. Following losses & plummeting sales caused by a former CEO, Ullman returned to the helm in Apr & helped the chain post its first same-store sales gain in Q3 since 2011. The chain also posted its first profit in more than 2 years, benefiting its traditional discounting strategy and reviving popular private-label brands. EPS was 11¢, compared with a loss per share of $2.51 a year earlier. Excluding the sale of assets & tax benefits, such as a $270M change in the value of its pension, the company posted a loss of 68¢ per share. The estimate was for a loss of 86¢. The company has been improving its finances & operations, & now is ready to return to growth & profitability, Ullman said. “The most challenging parts of the turnaround are behind us,” Ullman said. Liquidity became a concern after the company substantial losses & spent heavily on trying the transformation of the century-old retailer. After Ullman returned in Apr, the company raised almost $4B in cash thru borrowings & a secondary offering of shares. Revenue fell 2.6% to $3.78B, trailing the $3.86B estimate. Excluding sales during an extra week a year earlier, revenue would have risen 1.6%. Same-store sales had the first gain since Q1-2011. Revenue by that measure (including online sales) may increase by as much as 5% this qtr, the best performance since the period in 2006. The stock jumped $1.51 (25%). If you would like more information on JCP, click on this link:
http://club.ino.com/trend/?symb=JCP&a_aid=CD3289&a_bid=6ae5b6f7
J.C. Penney Gains as Sales Forecast Signals Turnaround
J.C. Penney (JCP)
There is nothing like encouraging words from the FED on its easy money policy to send stocks higher. But she said nothing new & the subsequent rally has become routine. The current intentions about reducing the bond buying program is pretty much in place unless major events disturb present conditions. Higher interest rates will follow which seems far away right now. In the meantime, even though some retailers had good earnings reports, that industry is soggy. Higher sales are tough to come by & that is surprising considering the recession is a faded memory for many. While Dow is up more than 500 in Feb, it remains in the red YTD.
Dow Jones Industrials
I’m a huge fan of INO & from what I have seen so far, their service Marketclub! This isn’t a stripped down version, everything in MarketClub is available to you. I don’t want to give everything away, but you’ll have unlimited access to my favorite 3 tools: Trade Triangles, Smart Scan & Alerts! The best part is that the MarketClub customer support team will be providing UNLIMITED support! You can call or email for an instant response to any question, comment or concern.
Here’s that link again:
https://club.ino.com/join/specialtrial/index_free.html?a_aid=CD3289&a_bid=359ef9a3
I’d recommend you jump on this now.
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