Tuesday, April 29, 2014

Higher market on earnings reports

Dow went up 81, advancers over decliners 2-1 & NAZ added 16.  The MLP index jumped 4+ to 484 & the REIT index was up fractionally in the 292s.. Junk bond funds were mixed & Treasuries slid lower.  Oil rose after the US & EU added to sanctions against Russia over the Ukraine crisis while gold hardly budged.

AMJ (Alerian MLP Index tracking fund)

Treasury yields:

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CLM14.NYM...Crude Oil Jun 14...102.10 Up ...1.26 (1.3%)

GCK14.CMX...Gold May 14.....1,298.90 Up ...0.20 (0.0%)

Confidence among US consumers declined in Apr from a 6-year high as Americans became less optimistic about the economy & labor market.  The Conference Board’s index decreased to 82.3 from 83.9 a month earlier that was stronger than initially estimated & the highest in 6 years.  The forecast called for a reading of 83.2.  Limited gains in the stock market this year, rising prices at the gas pump & a slowdown in the housing market tied in part to higher interest rates risk leaving Americans less sanguine about their finances.  At the same time, more anticipated an increase in employment opportunities in the next 6 months, which could help keep sentiment & consumer confidence from faltering.   The Conference Board’s gauge of  present  conditions dropped to a 3-month low of 78.3 after 82.5 in Mar.  The barometer of consumer expectations for the next 6 months was little changed at 84.9 after 84.8 a month earlier.  “Consumer confidence declined slightly in April as consumers assessed current business and labor market conditions less favorably than in March,” Lynn Franco, director of economic indicators at the Conference Board, said.  “However, their expectations regarding the short-term outlook for the economy and labor market held steady.”  The share of respondents who said they expected their incomes to rise increased to an 8-month high of 17.1% from 15.3% a month earlier.  The proportion of Americans who said jobs would become more plentiful in the next 6 months climbed to 15% from 14.1.

Consumer Confidence Index in U.S. Decreased to 82.3 in April

The EU widened sanctions against Russia for its actions in Ukraine, following similar steps yesterday by the US, which called separatist violence in the country’s east “terrorism, pure and simple.”  The EU added Russian Deputy Premier Dmitry Kozak to a list of people facing travel bans & asset freezes along with others including pro-Russian separatist leader.  The US targeted 7 people, including Kozak & Igor Sechin, head of oil giant OAO Rosneff, & 17 companies yesterday linked to allies of Putin.  The EU & the US say Russia hasn’t lived up to an accord signed Apr 17 intended to defuse the confrontation between the Ukrainian gov & pro-Russian separatists.  They’ve both warned that they’ll levy penalties on Russian industries if Putin escalates by sending troops into Ukraine.  The bloc said yesterday that the people on the list are “responsible for actions which undermine or threaten the territorial integrity, sovereignty and independence of Ukraine.”  The latest names, brings the number blacklisted to 70.  EU preparations for “stage three” measures that would affect broader sectors of the Russian economy are “very advanced,” a spokeswoman for European foreign-affairs said.  “The shift toward tier three would be in the event of a very, very serious escalation of the type that you might associate with direct military invasions,” a spokesman for UK Premier Cameron said.

EU Joins U.S. With New Sanctions on Russia Over Ukraine

Coach, which has been working to refashion itself into a lifestyle brand selling everything from high-heeled shoes to trench coats, reported sales at North American stores open at least a year plunged 21% in fiscal Q3.  That’s steeper than the 15% slide projected & the 14% drop during the holiday fiscal Q2.  To make matters worse, COH said sales by that measure may slide just as much in Q4.  Fiscal Q3 revenue fell 7.4% to $1.1B, trailing the $1.13B estimate.  CEO Victor Luis added that the shift of Easter from Mar to Apr & a plan to reduce online promotions contributed to the drop.  “Our business in North America remained challenging in the period,” Luis said.  “We experienced sharply lower traffic levels in our stores while our Internet results were impacted by our strategic decisions.”  CFO Jane Nielsen said that North American same-store sales will fall as much in fiscal Q4 as they did in the last qtr.  She also said the company stopped buying back shares after spending $525M so far this year, less than the $700M it planned on spending in that timeframe, & will retain that cash to invest in the business.  Q3 EPS dropped to 68¢ from 84¢ a year earlier & the estimate was for 61¢.  The stock tumbled 4.23 (9%).  If you would like to lean more about COH, click on this link:  

Coach North American Sales Fall Amid Competition, Storms

Coach (COH)

stock chart

Earnings were generally favorable today (aside from COH) which is bringing out buyers.  Merck (MRK), a Dow stock, & Herbalife (HLF) reported good numbers.  But tensions in eastern Europe remain high & the Israeli-Palestinian peace agreement is now on hold, raising the price of oil.  Dow is approaching its record high reached at the end of 2013.

Dow Jones Industrials

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