Thursday, February 13, 2014

Markets fluctuate after retail sales data

Dow slid 42, decliners barely ahead of advancers & NAZ added 3.  The MLP index jumped 4+ to 470, a new record, while the REIT index was flattish in the 279s.  Junk bond funds did little & Treasuries rallied.  Oil is trying to hang in above $100 & gold hardly budged.

AMJ (Alerian MLP Index tracking fund)

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Treasury yields:

U.S. 3-month


U.S. 2-year


U.S. 10-year


CLH14.NYM...Crude Oil Mar 14...100.03 Down ...0.34  (0.3%)

GCG14.CMX...Gold Feb 14.......1,296.30 Up ....1.00 (0.1%)

More Americans than forecast filed applications for unemployment benefits last week, underscoring the uneven progress in the labor market.  Jobless claims increased 8K to 339K from 331K in the prior week a according to the Labor Dept.  The forecast called for a decrease to 330K.  Fewer dismissals are needed before hiring can accelerate & provide a bigger boost for consumer spending.  Recovery in the labor market is “far from complete,” Janet Yellen said this week, adding that the central bank would maintain policies that ensure a return to full employment & stable prices.  The 4 week average of claims increased to 337K from 333K the week before.  The number continuing to receive jobless benefits decreased 18K to 2.95M in the latest week & the unemployment rate among people eligible for benefits held at 2.3%.

Jobless Claims in U.S. Increased to 339,000 Last Week

Jan US retail sales declined by the most in 10 months as inclement weather kept consumers away from auto showrooms & stores.  The 0.4% decrease followed a revised 0.1% drop in Dec that was previously reported as an increase, according to the Commerce Dept,  The forecast called for no change.  Sales excluding automobiles were unchanged.  Some Americans stayed closer to home, limiting trips to car dealerships & malls, as colder-than-normal temperatures & snowfall gripped parts of the nation.  Job growth & wage gains the last 2 months also slowed, indicating consumers may have trouble maintaining the pace of spending after the fastest increase in 3 years in Q4.  9 of 13 major categories showed sales declines last month, led by auto dealers, sporting goods stores & apparel outlets.  Sales slumped 2.1% at automobile dealers, the most since Oct 2012, after a 1.8% decrease in the prior month.  Retail sales excluding autos were unchanged after a 0.3% gain in Dec that was weaker than initially reported.

Retail Sales in U.S. Unexpectedly Fell 0.4% in January

PepsiCo Inc. Soft Drink Bottles Sit on Display
Photo:   Bloomberg

PepsiCo, a Dividend Aristocrat, quarterly profit beat estimates & said it won’t split its beverages from foods, rejecting a proposal from activist investor Nelson Peltz.  The company said that keeping the divisions together is in the best interests of shareholders after CEO Indra Noovi began a review of the businesses in 2012.  “We are encouraged with the progress we made in North American beverages with a category that remains challenged,” Nooyi said.  She also said the company will extend a cost-cutting plan,& will reduce $5B in expenses over 5 years starting in 2015.  Q4 EPS rose to $1.12 from $1.06 a year earlier.  EPS including a 3¢ charge for investments totaled $1.05, beating the $1 estimate.  Revenue rose 0.8% to $20.1B, matching the estimate.  Snacks volume increased 3% while beverages advanced 1%.  The stock dropped 2.74.
If you would like to learn more about PEP, click on this link:

Pepsico (PEP)

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This is turning out to be another inconclusive day for trading even though the economic news was negative.  Dow was unable to crack thru the 16K ceiling, an important technical level.. The weather effects on retail sales in Jan are playing out again in Feb.  The one bright spot was the Alerian MLP index setting a new record which it should be able to hold by the close.  The index has been  in a trading zone for almost a year, making this advance important for the technical guys,

Dow Jones Industrials

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