Monday, May 19, 2014

Markets edge higher on easing tensions in Ukraine

Dow inched up 4, advancers over decliners 3-2 & NAZ gained 18 after recent weakness. The MLP index went up 1 to 490 & the REIT index slid fractionally to the 299s.  Junk bond funds were higher & Treasuries rose a tad.  Oil climbed higher as did gold although it remains below 1300.

AMJ (Alerian MLP Index tracking fund)

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CLM14.NYM...Crude Oil Jun 14...102.82 Up ...0.80 (0.8%)

GCK14.CMX...Gold May 14.....1,296.60 Up ....3.30 (0.3%)

Pres Putin ordered Russian troops near the Ukrainian border back to base, the Kremlin said, signaling a possible easing of tensions six days before Ukraine's presidential election on Sun.  Russian forces in the Rostov, Belgorod & Bryansk regions were told to return to their bases after completing exercises.  The pres welcomed contacts last week between the gov in Kiev & supporters of a decentralization of powers to the country’s regions, including the mainly Russian-speaking east.  The comments came as Ukrainian forces continued skirmishes with pro-Russian insurgents after separatists in the Donetsk & Luhansk regions said they planned their own elections later this year.  Putin, whom the Ukrainian gov accuses of fomenting unrest in the east & who annexed Crimea in Mar, promised a withdrawal of Russian forces from the border 2 weeks ago.  NATO Secretary General Anders Fogh Rasmussen said today he’s yet to see any sign troops have been pulled back.  “I think it’s the third Putin statement on withdrawal of Russian troops, but so far we haven’t seen any withdrawal at all,” Rasmussen said.  I strongly regret that because a withdrawal of Russian troops would be a first important contribution to de-escalating the crisis.’’  NATO says Putin has 40K troops on the border & has expressed concern that events in eastern Ukraine may be a precursor to a land grab similar to the annexation of Crimea.  A spokesman for Ukraine’s Border Service, though, said it had seen a reduction in Russian activity on the frontier in the past week.  Ukrainian Prime Minister Yatsenyuk said the gov will try to ensure the May 25 presidential election goes ahead throughout the country, though any difficulties in some regions won’t affect the legitimacy of the poll.

Russia Says It Has Ordered Troops Near Ukraine Back to Base

Campbell Soup cut its annual forecast, saying US shoppers aren’t buying enough soup -- especially the condensed varieties that have long been a staple of American pantries.  The company now expects sales to grow about 3%, compared with a previous range of as much as 5%.  CPB is struggling to rekindle Americans’ appetite for soup despite a push to promote the products in Q4.  While cooking broth & sauces posted sales gains in the period, condensed soup decreased 3% & ready-to-serve soups, which don’t require adding water, dropped 1%.  “I am disappointed that our plans did not drive stronger sales results in U.S. soup,” CEO Denise Morrison said.  “Despite an increase in the frequency of our promotional activity in the third quarter, we did not realize the anticipated lifts in a challenging consumer environment.”  The US soup division had a 14% sales gain in the year-earlier qtr, making it tough to maintain growth.  Still, the latest performance fell short of the company’s expectations, Morrison said.  CPB also said that EPS will be at the low end of its previously announced range of $2.53-$2.58, excluding some items.  Analysts were already predicting $1.63.  The company has been working to cut costs by closing 2 plants & eliminating 700 full-time jobs.  The stock dropped 1.53.  If you would like to learn more about CPB,
Click here for a FREE analysis of CPB and be sure to notice the intermediate time frame

Campbell Soup Shares Drop After Company Cuts Sales Forecast

Campbell Soup (CPB)

China's new-home prices rose in Apr in the fewest cities in a year & a half as developers offered discounts & the economy slowed, prompting the easing of property curbs in some places.  Prices last month climbed in 44 of the 70 cities tracked by the gov compared with 56 in Mar, the fewest metropolitan areas with price gains since Oct 2012 when increases were recorded in only 35.  After 4 years of gov restrictions to cool the housing market, home sales & property construction are sliding & have become a drag on the country’s economy, which recorded its slowest growth in 6 qtrs in Q1.  The central bank last Tues called on the biggest lenders to accelerate the granting of mortgages as developers cut property prices to lure homebuyers.  Home-price growth moderated both in first-tier & less affluent cities.  Prices in Beijing rose 0.1% from Mar, the National Bureau of Statistics said, the slowest since Sep 2012, while Shanghai prices increased 0.3%, the smallest gain since Nov 2012.  Home sales fell 18% last month from Mar, the statistics bureau reported last week, & private data also showed the housing market is cooling.  Prices climbed 9.1% in Apr, slowing for a 4th month.  At least 6 smaller cities have started relaxing local curbs on speculative & investment-driven home buying since Apr.

China Home-Price Growth Slowdown Spreads on Discounting

Stocks are having a quiet day.  Maybe some of those traders who began their weekends early have not returned yet.  AT&T (T), a Dow stock & Dividend Aristocrat, wants to buy Direct TV (DTV, but both stocks are down.  Easing tensions in Ukraine ahead of the important election this weekend are encouraging although that situation remains fluid.  Dow is back in the red, down 100 YTD.,

Dow Jones Industrials

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