Tuesday, April 8, 2014

Higher markets as tech shares rebound

Dow rose 30, advancers ahead of decliners almost 2-1 & NAZ recovered 31 after recent selling.  The  MLP index climbed 2+ to the 471s & the REIT index slipped back fractionally in the 287s.  Junk bond funds were mixed & Treasuries did little ahead of their auctions this week.  Oil was higher & gold went above 1300.

AMJ (Alerian MLP Index tracking fund)

Treasury yields:

U.S. 3-month


U.S. 2-year


U.S. 10-year


CLK14.NYM...Crude Oil May 14.........101.08 Up ...0.64 (0.6%)

ZGJ14.CBT......Gold 100 oz. Apr 14...1,289.10 Down ...8.90  (0.7%)

Stronger US growth this year & next will help the world economy withstand weaker recoveries in emergoing markets, the IMF said.  The US is providing a “major impulse” to global growth that’s still lumbering amid weakness in Japan & parts of Europe.  While the UK & Germany are adding to momentum, developing nations face new risks & Russia’s takeover of Crimea last month injects geopolitical tension that’s “casting a pall” on the region, the fund said.  The IMF urged emerging markets to prepare for flows of capital back to advanced economies, & advised the ECB that more monetary easing is needed now to keep deflation at bay.  The US will benefit from a longer period of record-low interest rates, strong private demand & the end of a fiscal drag that slowed growth last year.  “For the most part, the brakes are gone” in the US, IMF chief economist Oliver Blanchard said in.  “The U.S. recovery is the strongest among advanced economies and therefore in a way it’s pulling the world.”  The IMF predicted global growth of 3.6% this year, compared with an estimate of 3.7% in Jan.  Next year, the expansion will accelerate to 3.9%, unchanged from the prior forecast..  Global activity has broadly strengthened & is expected to improve further in 2014–15, with much of the impetus coming from advanced economies,” according to the report.  “Activity in many emerging-market economies has disappointed in a less favorable external financial environment.”  The IMF sees the US accelerating to a 2.8% expansion this year & 3% in 2015, unchanged from forecasts.  US GDP increased 1.9 % last year.  The forecasts are based on the assumption that the Fed’s first interest-rate increase will occur in Q3 of 2015 & that its bond-buying program will end later this year.  In what it called a “worrying development,” the fund lowered predictions for Brazil, Russia, South Africa & Turkey.  Brazil was reduced to 1.8% this year from 2.3%, & South Africa was cut to 2.3% from 2.8%.  Russia is seen growing 1.3%, down from 2% estimated in Jan, as the Ukraine crisis worsened an economy already weakened by volatile capital flows.  If sanctions from the US & the EU intensified, contagion could spread.  The IMF, which is preparing a loan program for Ukraine, considers the country’s debt sustainable.

IMF Says U.S. Driving World Growth Amid Weak Brazil, Russia

Greece will overcome a Q1 shortfall in tax income & meet its full-year targets as the economy recovers, said the official in charge of the country’s public revenue.  A tax-revenue hole of €200M ($275M) to €300M since the beginning of 2014 stems mainly from temporary disruptions caused by administrative overhauls & changes in payment deadlines, said Haris Theoharis, Greece’s secretary general for public revenue. 
“Macroeconomic data seem to be on our side,” Theoharis said.  “Greece met its budget-revenue targets in 2013 for the first time after 15 years and I see no reason to doubt we will make it again this year.”  Greece is trying to wean itself off €240 in intl emergency aid since 2010, emerge from a 6-year recession & qualify for further debt relief from the euro area.  Tax revenue for the first 2 months of 2014 totaled €6.9B, which was €454M, or 6.2 %, below target.  Theoharis is the public face of Greece’s push to tackle decades of tax evasion, lax revenue collection & overspending that triggered the European debt crisis & led to the biggest sovereign-debt restructuring in history.  The EU is due later this month to confirm Greece’s budget figures for 2013.  Although below target, Greek tax income so far this year is higher than it was in the same period in 2013.  The collection of overdue claims from taxpayers & companies has increased more than 40%.  This troubled economy is on the mend, at least so far.

Greece to Hit 2014 Tax-Income Targets, Revenue Chief Says

China’s Ministry of Commerce approved Microsoft's, a Dow stock, bid to take over Nokia's phone business after winning pledges from both that the transaction won’t mean higher fees for the nation’s smartphone makers.  MSFT pledged not to raise fees for its patents after the deal is complete & Nokia pledged no large changes in its current compensation structure for standard-essential patents.  Chinese regulatory approval follows sign-off from the ECB, the US Justice Dept & other jurisdictions.  The transaction shoulc close this month.  Chinese phone makers had asked China to set conditions on the deal.  MSFT won’t ban Chinese phone makers from using patents needed to comply with a technical standard.  The stock fell 31¢.   

China Approves Microsoft, Nokia Deal With Conditions on Prices

Microsoft ((MSFT)

Stocks were not meant to go down forever, so bargain hunters have returned.  But not all is well in the markets.  Dow & S&P 500 remain down YTD.  Russia is flexing its muscles again which is adding to global tensions.  Earnings season begins tonight when Alcoa (AA) announces earnings.  Analysts are looking for EPS of a nickel & the stock is up a dime ahead of earnings.  JPMorgan (JPM), a Dow stock, announces on Fri & that should be more informative about what the earnings season will look like.

Dow Jones Industrials

No comments: