Friday, March 14, 2014

Markets slide lower on failed Ukraine talks

Dow dropped 43, advancers almost 3-2 over decliners & NAZ fell 15.  The MLP index rose 3+ to 459 & the REIT index was up fractionally in the 283s.  Junk bond funds climbed & Treasuries were flattish.  Oil is pushing to reach 100 again & gold climbed, on its way to 1400.

Dow Jones Industrials

Treasury yields:

U.S. 3-month


U.S. 2-year


U.S. 10-year


CLJ14.NYM....Crude Oil Apr 14....98.78 Up ...0.58 (0.6%)

Live 24 hours gold chart [Kitco Inc.]

Russia remained on collision course with the West over Ukraine's separatist Crimea region as 6 hours of talks between the country’s top diplomat & his John Kerry failed to ease tensions.  President Putin “is not prepared to make any decision regarding Ukraine until after the referendum on Sunday” on joining Russia, Sec Kerry said.  Russia “will respect the will of the Crimean peoples,” Russian Foreign Minister Lavrov said, adding that there’s “no common vision” on resolving the crisis.  The US & EU are threatening sanctions against Russia if it doesn’t back down from annexing Crimea.  Ukraine’s cabinet in Kiev says Russia has taken over the southern region & is massing troops on its border.  Estonia’s defense minister said today the Kremlin is preparing to invade the east of Ukraine.  Kerry repeated that Russia faces “consequences” if it doesn’t change course & that there’s a better way for the gov in Moscow to pursue its “legitimate interests” in Ukraine, the 2nd most populous former Soviet republic.  Lavrov expressed outrage over deadly clashes yesterday between pro-Russian & anti-Russian demonstrators in eastern Ukraine, while adding that “the Russian Federation has no plans to invade.”  The biggest dispute between Russia & the West since the fall of the Iron Curtain is shaking markets & threatening to upset more than 2 decades of economic & diplomatic integration between the former Cold War enemies.

Kerry Fails to Resolve Ukraine Standoff in Six-Hour Lavrov Talks

General Mills fell the most in almost 6 months after posting preliminary Q3 profit that trailed estimates.  the company said EPS in last qtr was 61-62¢, below the 68¢ estimate, & sales fell about 1%, hurt by foreign-currency exchange-rate fluctuations & food-industry trends in developed markets.  GIS plans to report full Q3 results next week.  The stock sank 1.23 after having a tough year.  If you would like to learn more about GIS, click on this link:

General Mills Falls After Profit Trails Analysts’ Estimates

General Mills (GIS)

China's industrial-output, investment & retail-sales growth cooled more than estimated in Jan & Feb, signaling an economic slowdown that makes the gov 2014 expansion target harder to reach.  Factory production rose 8.6% in the 2 month period from a year earlier, the National Bureau of Statistics said, the weakest start to a year since 2009.  Retail sales advanced 11.8%, the slowest pace for the period since 2004, while the 17.9% increase in fixed-asset investment was a 13-year low for the months.  Chinese stocks fell following the data, which came 2 hours after Premier Li Keqiang indicated he was confident the nation would meet what he said was a flexible growth target of “about” 7.5%.  The slowdown may test the Communist Party’s commitment to give market forces a bigger role in the economy while confronting overcapacity, debt & pollution.  China combines data for industrial output, retail sales & fixed-asset investment for Jan-Feb, citing distortions from the weeklong Lunar New Year holiday, whose timing differs each year.  Previously released data for Feb showed exports unexpectedly plunged by the most since the global financial crisis, producer-price deflation deepened & credit growth trailed estimates.  Data today from the statistics bureau also showed that the value of homes sold fell 5% from the same 2 months a year earlier.  That compared with an almost doubling in sales in the first 2 months of 2013.

China Data Show Economy Cooling

Tensions in eastern Europe are on the rise, making all markets nervous.  Market breadth is holding up better, but the popular averages are sinking because all they can do is watch these events.  The disappearance of the Malaysian airliner is adding to anxieties in the stock market.  However high yield stocks are doing well.  Junk bond funds stocks are up about 5% YTD while Dow is down almost 4%.  Unsettled markets will bring more selling next week.

Dow Jones Industrials

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