Dow climbed 126, advancers over decliners 2-1 & NAZ crawled up 3. After its rally, the MLP index slipped a fraction to 467 & the REIT index went up 1+ to 281. Junk bond funds rose & Treasuries eased back. Oil had a modest retreat & gold is solidly over 1300 on tapering bets.
AMJ (Alerian MLP Index tracking fund)
![Live 24 hours gold chart [Kitco Inc.]](http://www.kitco.com/images/live/gold.gif)
Federal Reserve Bank of Dallas President Richard Fisher said the central bank should stick to its strategy of gradually reducing bond purchases even as harsh winter weather slows economic growth. “I am not persuaded continuing to taper should be altered,” Fisher said. “Obviously weather is playing a significant role here.” “If you look at activity in the West and the Southwest and Florida, you are seeing pretty robust activity,” said Fisher. “Even the Fed cannot offset Mother Nature. The economy has been moving in the right direction.” FED Chair Janet Yellen pledged this week to maintain her predecessor’s policies by trimming stimulus in “measured steps,” & signaled the bar is high for a change in that plan. Only a “notable change in the outlook” for the economy would prompt policy makers to alter the pace for tapering the $65B in monthly bond buying, Yellen said. Fisher said he will favor trims in bond buying at each FMOC meeting unless he sees “something truly frightening in the economy.” Fisher said FED officials should discuss changing their forward guidance on the possible timing for increasing the benchmark interest rate. “We need further discussion about how we refine that language,” he said. St. Louis Fed President James Bullard said this week the central bank will probably signal the path for interest rates based on “qualitative” judgments of the economy, moving away from a pledge to begin considering an increase in the main interest rate when unemployment falls below 6.5%. The 6.5% threshold is a “crude instrument,” Fisher said. The jobless rate unexpectedly declined in Jan to 6.6%.
Fisher Backs QE Tapering Even With Weather Hurting Growth
Jos. A. Banks agreed to buy the Eddie Bauer brand in deal valued at $825M. The Eddie Bauer purchase includes $564M in cash & 4.7M new shares of common stock issued at $56 apiece. The retailer also may pay an additional $50M based on Eddie Bauer’s 2014 earnings. The agreement to buy Eddie Bauer, best known for its clothing for outdoor enthusiasts, threatens to prevent a deal with Men’s Wearhouse, which has offered to buy JOSB for $1.6B. While Men’s Wearhouse (MW) has said it’s willing to raise the bid, JOSB has resisted the overtures, & the stock has fallen from the offer price. The purchase of Eddie Bauer, founded in 1920, will create a company that may generate more than $2.1B in revenue this year, according to JOSB (more than double JOSB $1.05B in sales. Golden Gate Capital, the private-equity firm that owns Eddie Bauer, will become a “significant” shareholder in JOSB. JOSB stock went up 16¢ today.
If you like to learn more about JOSB, click on this link:
http://club.ino.com/trend/?symb=JOSB&a_aid=CD3289&a_bid=6ae5b6f7
Jos. A. Bank Agrees to Acquire Eddie Bauer in Blow to Men’s Wearhouse Bid
Bad loans at Chinese banks increased for the 9th straight qtr to the highest level since the 2008 financial crisis, highlighting pressures on asset quality & profit growth as the economy slows. Non-performing loans rose 28.5B yuan ($4.7B) in Q4 to 592B yuan, the highest since Sep 2008, the China Banking Regulatory Commission said (CBRC). Bad loans accounted for 1% of total lending, up from 0.97% in the prior qtr. The banks are struggling to keep soured loans in check & extend earnings growth as the slowing economy & gov efforts to curb shadow financing make it harder for borrowers to repay debt. S&P Ratings Services said this week that loan quality will decline in 2014 as banks remain at risk from debt-laden local government financing vehicles & manufacturers with too much capacity. Chinese banks added 89T yuan of assets, mostly thru loans, in the past 5 years, equivalent to the entire US banking industry’s, CBRC data show. By comparison, US commercial banks held $14.6T of assets at the end of Sep, according to the FDIC. Investors are increasingly concerned that China’s investment thru borrowing since 2008 may trigger a financial crisis. Liabilities at nonfinancial companies may increase to more than 150% of GDP in 2014, raising default risks & the ratio of 139% at the end of 2012 was already the highest among the world’s 10 biggest economies. China’s economy grew 7.7% in 2013, the same rate as in 2012. Growth is forecast to drop to 7.4% this year, the weakest pace since 1990.
China Banks’ Bad Loans Rise to Highest Since Financial Crisis
Drab economic data is being overlooked by the bulls & they have been in command this week. Dow gained 350 this week, hardly chump change, but is still down 400 YTD. Yield stocks have been leading the way up all year, even though their movements are generally modest. Profit growth since the last recession has much larger than revenue growth. Stock buyers are less concerned about that & more interested in maintaining low interest rates. If the unemployment rate falls much further, the rise in interest may be closer than expected. And stocks will be punished when interest rates rise.
Dow Jones Industrials
AMJ (Alerian MLP Index tracking fund)
Treasury yields:
U.S. 3-month |
0.01% | |
U.S. 2-year |
0.31% | |
U.S. 10-year |
2.74% |
| CLF15.NYM | ...Crude Oil Jan 15 | ....92.54 |  ....0.31 | (0.3%) |
Federal Reserve Bank of Dallas President Richard Fisher said the central bank should stick to its strategy of gradually reducing bond purchases even as harsh winter weather slows economic growth. “I am not persuaded continuing to taper should be altered,” Fisher said. “Obviously weather is playing a significant role here.” “If you look at activity in the West and the Southwest and Florida, you are seeing pretty robust activity,” said Fisher. “Even the Fed cannot offset Mother Nature. The economy has been moving in the right direction.” FED Chair Janet Yellen pledged this week to maintain her predecessor’s policies by trimming stimulus in “measured steps,” & signaled the bar is high for a change in that plan. Only a “notable change in the outlook” for the economy would prompt policy makers to alter the pace for tapering the $65B in monthly bond buying, Yellen said. Fisher said he will favor trims in bond buying at each FMOC meeting unless he sees “something truly frightening in the economy.” Fisher said FED officials should discuss changing their forward guidance on the possible timing for increasing the benchmark interest rate. “We need further discussion about how we refine that language,” he said. St. Louis Fed President James Bullard said this week the central bank will probably signal the path for interest rates based on “qualitative” judgments of the economy, moving away from a pledge to begin considering an increase in the main interest rate when unemployment falls below 6.5%. The 6.5% threshold is a “crude instrument,” Fisher said. The jobless rate unexpectedly declined in Jan to 6.6%.
Fisher Backs QE Tapering Even With Weather Hurting Growth
Jos. A. Banks agreed to buy the Eddie Bauer brand in deal valued at $825M. The Eddie Bauer purchase includes $564M in cash & 4.7M new shares of common stock issued at $56 apiece. The retailer also may pay an additional $50M based on Eddie Bauer’s 2014 earnings. The agreement to buy Eddie Bauer, best known for its clothing for outdoor enthusiasts, threatens to prevent a deal with Men’s Wearhouse, which has offered to buy JOSB for $1.6B. While Men’s Wearhouse (MW) has said it’s willing to raise the bid, JOSB has resisted the overtures, & the stock has fallen from the offer price. The purchase of Eddie Bauer, founded in 1920, will create a company that may generate more than $2.1B in revenue this year, according to JOSB (more than double JOSB $1.05B in sales. Golden Gate Capital, the private-equity firm that owns Eddie Bauer, will become a “significant” shareholder in JOSB. JOSB stock went up 16¢ today.
If you like to learn more about JOSB, click on this link:
http://club.ino.com/trend/?symb=JOSB&a_aid=CD3289&a_bid=6ae5b6f7
Jos. A. Bank Agrees to Acquire Eddie Bauer in Blow to Men’s Wearhouse Bid
Jos. A. Bank Clothiers (JOSB)
Bad loans at Chinese banks increased for the 9th straight qtr to the highest level since the 2008 financial crisis, highlighting pressures on asset quality & profit growth as the economy slows. Non-performing loans rose 28.5B yuan ($4.7B) in Q4 to 592B yuan, the highest since Sep 2008, the China Banking Regulatory Commission said (CBRC). Bad loans accounted for 1% of total lending, up from 0.97% in the prior qtr. The banks are struggling to keep soured loans in check & extend earnings growth as the slowing economy & gov efforts to curb shadow financing make it harder for borrowers to repay debt. S&P Ratings Services said this week that loan quality will decline in 2014 as banks remain at risk from debt-laden local government financing vehicles & manufacturers with too much capacity. Chinese banks added 89T yuan of assets, mostly thru loans, in the past 5 years, equivalent to the entire US banking industry’s, CBRC data show. By comparison, US commercial banks held $14.6T of assets at the end of Sep, according to the FDIC. Investors are increasingly concerned that China’s investment thru borrowing since 2008 may trigger a financial crisis. Liabilities at nonfinancial companies may increase to more than 150% of GDP in 2014, raising default risks & the ratio of 139% at the end of 2012 was already the highest among the world’s 10 biggest economies. China’s economy grew 7.7% in 2013, the same rate as in 2012. Growth is forecast to drop to 7.4% this year, the weakest pace since 1990.
China Banks’ Bad Loans Rise to Highest Since Financial Crisis
Drab economic data is being overlooked by the bulls & they have been in command this week. Dow gained 350 this week, hardly chump change, but is still down 400 YTD. Yield stocks have been leading the way up all year, even though their movements are generally modest. Profit growth since the last recession has much larger than revenue growth. Stock buyers are less concerned about that & more interested in maintaining low interest rates. If the unemployment rate falls much further, the rise in interest may be closer than expected. And stocks will be punished when interest rates rise.
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!
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