Dow lost 28, decliners over advancers 3-2 & NAZ sank a big 42. The MLP index was off 1+ to the 459s & the REIT index went up 2+ to 283. Junk bond funds were mixed as were Treasuries. Oil & gold rose.
AMJ (Alerian MLP Index tracking fund)
![Live 24 hours gold chart [Kitco Inc.]](http://www.kitco.com/images/live/gold.gif)
Photo: Bloomberg
The dire economic & political landscape cited by S&P when it downgraded the US AAA credit rating in 2011 is proving to be unfounded. Fitch Ratings increased its outlook on the AAA credit-ranking today to stable from negative, joining Moody’s & even S&P in assigning stable outlooks. S&P’s dropping of its rating to AA+ contributed to an equity rout that erased about $6T from global stocks. Since the Aug 2011 downgrade, record budget deficits have shrunk, economic growth accelerated, the dollar rallied, stocks climbed to all-time highs & Treasuries strengthened their hold as the world’s preferred haven from turmoil. Deficits have fallen from $1T as stronger economic growth is forecast by a gov agency to reduce the budget shortfall to a 7-year low as a share of GDP. Tax revenue needed to pay the bills is forecast to grow this year more than 3 times as fast as spending. The fiscal 2014 deficit should narrow to $514B (3% of GDP), from $680B last year, the CBO said last month. That's down from 9.8% of GDP in 2009, the widest in records dating back to 1974 & close to the average of the past 4 decades. While the CBO report showed a short-term improvement, it also sees deficits swelling again over the next decade as a result of rising health-care costs & interest payments on gov debt.
U.S. Keeps AAA by Fitch, Outlook Raised on Debt Pact
Photo: Bloomberg
Russia completed its annexation of Crimea as the EU signed an accord with Ukriane & expanded sanctions, escalating the worst standoff between Russia & the West since the Cold War. Pres Putin signed legislation to absorb the Black Sea peninsula & its port, Sevastopol, from Ukraine. The EU & Ukraine sealed the political part of an association agreement, whose rejection last year by ousted Ukrainian President Yanukovych triggered the dispute between Russia & its former Soviet-era enemies. The euro bloc also blacklisted 12 Russian & Crimean political & military figures. “I want to congratulate you, all the residents of the country, the citizens of the Russian Federation, residents of Crimea and Sevastopol, on this momentous event,” Putin said after the signing ceremony. German Chancellor Merkel called the Brussels event “a signal of solidarity” with Ukraine demonstrating “jointly held values.” The massing of Russian troops near Ukraine’s border & protests by pro-Russian activists in the east & south of Ukraine have raised concerns that Putin may push further into the 2nd most populous former Soviet republic. The EU, moving more slowly than the US on sanctions, expanded to 51 individuals its list of Russians & Ukrainians punished with asset freezes & travel bans.
Putin Clears Crimea Annexation as Ukraine Signs EU Pact
After posting third-quarter profit & sales that topped estimates, Nike signaled that momentum may slow as a strong dollar hampers its performance abroad. Sales this qtr will grow at a high single-digit percentage rate, CFO Donald Blair said. Analysts had estimated a 12% gain. NKE, with 45% of its sales outside of the US, is contending with a stronger dollar that reduces the value of its revenue & profit generated internationally. That phenomenon will hamper results even more in the current period. Foreign-exchange “headwinds have been a significant drag on EPS growth so far this year, & we expect to face ongoing pressure” in Q4 & into next year, Blair added. The forecast came after company posted EPS of 76¢, beating the 72¢ forecast. NKE had been benefiting from consumers increasingly buying athletic gear to wear every day, not just when working out or playing sports. That helped it continue to generate growth in mature markets such as North America, where sales gained 12%. Revenue rose 13% to $6.97B, above the $6.81B projection. Sales increased in every geographic region, including China, which posted a decline last fiscal year. Orders for the Nike brand from this month to Jul rose 14%, excluding the effects of foreign-currency exchange-rate fluctuations. Analysts estimated a 12.7% gain, closely watched as a proxy for future sales. The company said there were a couple points of concern. North America future orders rose 9%, marking the first time they hadn’t recorded a double-digit percentage gain since 2010. Orders in greater China, which the company has been trying to turn around, declined 3%. Analysts had expected a gain of 2.7% in China & 11.2% in North America. Gross margin expanded 0.3 percentage point to 44.5%, trailing projections of 44.7%. The expansion was the 5th straight after 2 years of declines. Fiscal Q3 net income fell 21% to $685M from $866M a year earlier, when it booked a gain from the sale of its Cole Haan & Umbro businesses. The stock tumbled 4.05 (5%). If you would like to learn more about NKE, click on this link for Trend Analysis:
http://club.ino.com/trend/?symb=NKE&a_aid=CD3289&a_bid=6ae5b6f7
Nike Profit Tops Estimates as North American Sales Climb 12%
Stocks sold off after Russia completed its annexation of Crimea, not a good way to start the weekend. Trading was also subject to unexpected swings because of quadruple witching, when futures & options contracts on indices & individual stocks expire. Apple stock (flattish) did not contribute to the sharp decline for NAZ. InterCloud Systems (ICLD) led that decline with a 29% decline. Dow still was able to manage a weekly gain of 250.
AMJ (Alerian MLP Index tracking fund)
Treasury yields:
U.S. 3-month |
0.05% | |
U.S. 2-year |
0.43% | |
U.S. 10-year |
2.77% |
| CLK14.NYM | ....Crude Oil May 14 | ....99.73 |  ...0.83 | (0.8%) |
The dire economic & political landscape cited by S&P when it downgraded the US AAA credit rating in 2011 is proving to be unfounded. Fitch Ratings increased its outlook on the AAA credit-ranking today to stable from negative, joining Moody’s & even S&P in assigning stable outlooks. S&P’s dropping of its rating to AA+ contributed to an equity rout that erased about $6T from global stocks. Since the Aug 2011 downgrade, record budget deficits have shrunk, economic growth accelerated, the dollar rallied, stocks climbed to all-time highs & Treasuries strengthened their hold as the world’s preferred haven from turmoil. Deficits have fallen from $1T as stronger economic growth is forecast by a gov agency to reduce the budget shortfall to a 7-year low as a share of GDP. Tax revenue needed to pay the bills is forecast to grow this year more than 3 times as fast as spending. The fiscal 2014 deficit should narrow to $514B (3% of GDP), from $680B last year, the CBO said last month. That's down from 9.8% of GDP in 2009, the widest in records dating back to 1974 & close to the average of the past 4 decades. While the CBO report showed a short-term improvement, it also sees deficits swelling again over the next decade as a result of rising health-care costs & interest payments on gov debt.
U.S. Keeps AAA by Fitch, Outlook Raised on Debt Pact
Russia completed its annexation of Crimea as the EU signed an accord with Ukriane & expanded sanctions, escalating the worst standoff between Russia & the West since the Cold War. Pres Putin signed legislation to absorb the Black Sea peninsula & its port, Sevastopol, from Ukraine. The EU & Ukraine sealed the political part of an association agreement, whose rejection last year by ousted Ukrainian President Yanukovych triggered the dispute between Russia & its former Soviet-era enemies. The euro bloc also blacklisted 12 Russian & Crimean political & military figures. “I want to congratulate you, all the residents of the country, the citizens of the Russian Federation, residents of Crimea and Sevastopol, on this momentous event,” Putin said after the signing ceremony. German Chancellor Merkel called the Brussels event “a signal of solidarity” with Ukraine demonstrating “jointly held values.” The massing of Russian troops near Ukraine’s border & protests by pro-Russian activists in the east & south of Ukraine have raised concerns that Putin may push further into the 2nd most populous former Soviet republic. The EU, moving more slowly than the US on sanctions, expanded to 51 individuals its list of Russians & Ukrainians punished with asset freezes & travel bans.
Putin Clears Crimea Annexation as Ukraine Signs EU Pact
After posting third-quarter profit & sales that topped estimates, Nike signaled that momentum may slow as a strong dollar hampers its performance abroad. Sales this qtr will grow at a high single-digit percentage rate, CFO Donald Blair said. Analysts had estimated a 12% gain. NKE, with 45% of its sales outside of the US, is contending with a stronger dollar that reduces the value of its revenue & profit generated internationally. That phenomenon will hamper results even more in the current period. Foreign-exchange “headwinds have been a significant drag on EPS growth so far this year, & we expect to face ongoing pressure” in Q4 & into next year, Blair added. The forecast came after company posted EPS of 76¢, beating the 72¢ forecast. NKE had been benefiting from consumers increasingly buying athletic gear to wear every day, not just when working out or playing sports. That helped it continue to generate growth in mature markets such as North America, where sales gained 12%. Revenue rose 13% to $6.97B, above the $6.81B projection. Sales increased in every geographic region, including China, which posted a decline last fiscal year. Orders for the Nike brand from this month to Jul rose 14%, excluding the effects of foreign-currency exchange-rate fluctuations. Analysts estimated a 12.7% gain, closely watched as a proxy for future sales. The company said there were a couple points of concern. North America future orders rose 9%, marking the first time they hadn’t recorded a double-digit percentage gain since 2010. Orders in greater China, which the company has been trying to turn around, declined 3%. Analysts had expected a gain of 2.7% in China & 11.2% in North America. Gross margin expanded 0.3 percentage point to 44.5%, trailing projections of 44.7%. The expansion was the 5th straight after 2 years of declines. Fiscal Q3 net income fell 21% to $685M from $866M a year earlier, when it booked a gain from the sale of its Cole Haan & Umbro businesses. The stock tumbled 4.05 (5%). If you would like to learn more about NKE, click on this link for Trend Analysis:
http://club.ino.com/trend/?symb=NKE&a_aid=CD3289&a_bid=6ae5b6f7
Nike Profit Tops Estimates as North American Sales Climb 12%
Nike (NKE)
Stocks sold off after Russia completed its annexation of Crimea, not a good way to start the weekend. Trading was also subject to unexpected swings because of quadruple witching, when futures & options contracts on indices & individual stocks expire. Apple stock (flattish) did not contribute to the sharp decline for NAZ. InterCloud Systems (ICLD) led that decline with a 29% decline. Dow still was able to manage a weekly gain of 250.
Dow Jones Industrials
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