Dow dropped 79, decliners over advancers 5-4 & NAZ gave up 22. The MLP index was off 1 to the 456s & the REIT index slipped 1+ to 283. Junk bond funds were mixed & Treasuries rose. Oil is pushing to go back over 100 & gold lost pocket change.
AMJ (Aleria MLP Index tracking fund)
The number filing applications for unemployment benefits unexpectedly fell last week to the lowest level since the end of Nov, a sign of further improvement in the labor market. Jobless claims dropped 9K to 315K last week, according to the Labor Dept. The forecast called for a rise to 330K as continuing claims decreased for a 3d straight week. Employers cutting back on dismissals may be encouraged to take on more workers once demand picks up. Faster gains in hiring will help to boost consumer spending, the biggest part of the economy, after harsh winter weather weighed on everything from retail sales to home purchases earlier this year. The 4 week moving average fell to 330K from 337K in the prior week. The number continuing to receive jobless benefits decreased by 48K to 2.86M, the lowest level since Dec. The unemployment rate among people eligible for benefits held at 2.2%.
Jobless Claims in U.S. Fall to Lowest Level Since November
US retail sales rose in Feb for the first time in 3 months, a sign consumers are starting to shake off the effects of the harsh weather that had curbed spending even more than previously estimated. The 0.3% advance followed a 0.6% drop in Jan that was larger than initially reported, accoriding to the Commerce Dept. The forecast called for a 0.2% advance. The rebound in demand was broad-based with 9 of 13 major categories showing increases. Americans ventured out to shop even as colder-than-normal temperatures & severe snowstorms blanketed parts of the US, showing the economic expansion is regaining momentum. Continued improvement in the labor market & gains in wages will be needed to sustain household purchases that are being spurred by rising stocks & home values. The gains in retail sales were led by non-store retailers, which include internet stores, indicating some customers were still struggling with poor weather & preferred to shop from the comfort of home. The category that includes purchases made online climbed 1.2% in Feb, the most since last Jul. Other areas showing gains included sporting goods, where purchases increased 2.5%, & department stores, which showed a 0.7% gain. Both advances were the biggest in a year.
Retail Sales in U.S. Increase for First Time in 3 Months
Mario Draghi’s beefed-up forward guidance is convincing some he won’t raise interest rates any time soon. 80% of respondents in a monthly survey said the ECB president’s promise to keep borrowing costs low for an extended period, introduced in Jul & reinforced twice this year, has been effective. The survey also showed 98% expect the ECB to keep its benchmark rate unchanged at a record low for a 5th month in Apr. Draghi is trying to sustain a recovery from a debt crisis that almost splintered the euro area by guaranteeing monetary policy will stay loose, while leaving himself room to react to any future shocks. He “firmly reiterated” his rate pledge in Jan & said this month that spare capacity in the economy, known as the output gap, means rates will stay low until the revival is entrenched. Draghi said last week, after policy makers left the main refinancing rate unchanged at 0.25%, that the economy is gradually recovering in line with the ECB’s baseline scenario. GDP increased more than expected at the end of 2013, a gauge of services & manufacturing output is at the highest level in 2½ years, & economic optimism is increasing. The premium that investors demand to hold Spanish 10-year bonds over German debt has fallen to 1.7 percentage points from a euro-era high of more than 6 percentage points in Jul 2012, indicating that the crisis has eased. The spread between Italian & German 10-year debt has dropped to 1.8 percentage points from more than 5 percentage points over the same period.
Draghi Bolstering Guidance Seen as Convincing on Rates: Economy
I took a little time off & the markets hardly missed me. After a down month followed by an up month, markets are stumbling, looking for direction in Mar. Q1 will probably show a mediocre GDP growth resulting from the cold weather. Intl uncertainties are not helping stocks. Gold is essentially at a 6 month high as tensions in the Ukraine, among other places, are on the rise. The concept of risk averse is being called into question. At a minimum, the upward momentum for stocks has been checked so far this month.
Dow Jones Industrials
AMJ (Aleria MLP Index tracking fund)
Treasury yields:
U.S. 3-month |
0.04% | |
U.S. 2-year |
0.37% | |
U.S. 10-year |
2.71% |
| CLJ14.NYM | ....Crude Oil Apr 14 | ...98.03 |  ...0.04 | (0.0%) |
| GCH14.CMX | ...Gold Mar 14 | ....1,372.10 | ...1.80 | (0.1%) |
The number filing applications for unemployment benefits unexpectedly fell last week to the lowest level since the end of Nov, a sign of further improvement in the labor market. Jobless claims dropped 9K to 315K last week, according to the Labor Dept. The forecast called for a rise to 330K as continuing claims decreased for a 3d straight week. Employers cutting back on dismissals may be encouraged to take on more workers once demand picks up. Faster gains in hiring will help to boost consumer spending, the biggest part of the economy, after harsh winter weather weighed on everything from retail sales to home purchases earlier this year. The 4 week moving average fell to 330K from 337K in the prior week. The number continuing to receive jobless benefits decreased by 48K to 2.86M, the lowest level since Dec. The unemployment rate among people eligible for benefits held at 2.2%.
Jobless Claims in U.S. Fall to Lowest Level Since November
US retail sales rose in Feb for the first time in 3 months, a sign consumers are starting to shake off the effects of the harsh weather that had curbed spending even more than previously estimated. The 0.3% advance followed a 0.6% drop in Jan that was larger than initially reported, accoriding to the Commerce Dept. The forecast called for a 0.2% advance. The rebound in demand was broad-based with 9 of 13 major categories showing increases. Americans ventured out to shop even as colder-than-normal temperatures & severe snowstorms blanketed parts of the US, showing the economic expansion is regaining momentum. Continued improvement in the labor market & gains in wages will be needed to sustain household purchases that are being spurred by rising stocks & home values. The gains in retail sales were led by non-store retailers, which include internet stores, indicating some customers were still struggling with poor weather & preferred to shop from the comfort of home. The category that includes purchases made online climbed 1.2% in Feb, the most since last Jul. Other areas showing gains included sporting goods, where purchases increased 2.5%, & department stores, which showed a 0.7% gain. Both advances were the biggest in a year.
Retail Sales in U.S. Increase for First Time in 3 Months
Mario Draghi’s beefed-up forward guidance is convincing some he won’t raise interest rates any time soon. 80% of respondents in a monthly survey said the ECB president’s promise to keep borrowing costs low for an extended period, introduced in Jul & reinforced twice this year, has been effective. The survey also showed 98% expect the ECB to keep its benchmark rate unchanged at a record low for a 5th month in Apr. Draghi is trying to sustain a recovery from a debt crisis that almost splintered the euro area by guaranteeing monetary policy will stay loose, while leaving himself room to react to any future shocks. He “firmly reiterated” his rate pledge in Jan & said this month that spare capacity in the economy, known as the output gap, means rates will stay low until the revival is entrenched. Draghi said last week, after policy makers left the main refinancing rate unchanged at 0.25%, that the economy is gradually recovering in line with the ECB’s baseline scenario. GDP increased more than expected at the end of 2013, a gauge of services & manufacturing output is at the highest level in 2½ years, & economic optimism is increasing. The premium that investors demand to hold Spanish 10-year bonds over German debt has fallen to 1.7 percentage points from a euro-era high of more than 6 percentage points in Jul 2012, indicating that the crisis has eased. The spread between Italian & German 10-year debt has dropped to 1.8 percentage points from more than 5 percentage points over the same period.
Draghi Bolstering Guidance Seen as Convincing on Rates: Economy
I took a little time off & the markets hardly missed me. After a down month followed by an up month, markets are stumbling, looking for direction in Mar. Q1 will probably show a mediocre GDP growth resulting from the cold weather. Intl uncertainties are not helping stocks. Gold is essentially at a 6 month high as tensions in the Ukraine, among other places, are on the rise. The concept of risk averse is being called into question. At a minimum, the upward momentum for stocks has been checked so far this month.
Dow Jones Industrials
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