Friday, May 16, 2014

Markets fluctuate on mixed economic data

Dow lost 6, advancers barely ahead of decliners & NAZ fell 13.  The MLP index rose 1+ to 489 & the REIT index was up pennies in the 287s.  Junk bond funds did little & Treasuries slid back.  Oil & gas had modest gains.

AMJ (Alerian MLP Index tracking fund)

Treasury yields:

U.S. 3-month


U.S. 2-year


U.S. 10-year


CLM14.NYM...Crude Oil Jun 14...101.72 Up ...0.22 (0.2%)

GCK14.CMX...Gold May 14.....1,296.60 Up ...3.10 (0.2%)

3 Stocks You Should Own Right Now - Click Here!

Consumer confidence unexpectedly fell in May from a 9-month high, showing Americans are being shaken by rising grocery bills & elevated fuel costs.  The Thomson Reuters/University of Michigan preliminary sentiment index decreased to 81.8 from 84.1 in Apr & was below the projection of 84.5.  Food prices have risen & the cost of gasoline has held near its highest level of the year, making buyers less secure in their finances.  Falling unemployment, rising home prices & near-record stock indices could provide support for sentiment, giving Americans the wherewithal to boost the spending that makes up 70% of the economy.

U.S. Consumer Confidence Unexpectedly Drops From Nine-Month High

The pace of US home construction jumped in Apr to its highest level since Nov, led by a jump in starts on multifamily projects, showing builders returned to sites after freezing temperatures restrained work earlier this year.  Housing starts climbed 13.2% to a 1.07M annualized rate following a Mar 947K pace, according to the Commerce Dept.  Starts exceeded all forecasts, with the median estimate of a 980K rate.  Permits for future projects increased, a sign activity might accelerate in coming months.  An almost 40% increase in construction starts on multifamily projects such as condominiums & apartment buildings accounted for almost all of the gain.  Single-family activity was held back by declining affordability.  Hiring gains may spur a rebound in residential real estate after unusually harsh weather held back construction at the start of the year.  Building permits climbed 8% to a 1.08M annualized pace, but were projected to rise to 1.01M.  Multifamily construction starts jumped to a 423K annual rate from 303K in Mar, while work on single-family properties rose 0.8% to a 649K rate from 644K the prior month.  Home construction increased in every region, led by the Midwest, with a 42.1% increase.  Starts jumped 28.7% in the Northeast, 11.1% in the West & 1.5% in the South.

Home Starts Jump as U.S. Builders Freed From Slowdown

Pro-Russian Checkpoint
Photo:   Bloomberg

NATO says Putin still has 40K troops on Ukraine’s border & hasn’t fulfilled a promise last week to pull them back.  The US & UK vowed yesterday to punish Russia with industrywide sanctions if the presidential election is undermined as Kiev gov forces moved to flush out separatists in the east.  “If Russia or its proxies disrupt the elections,” the U.S. and its allies “will impose sectoral economic sanctions as a result,” Secretary of State Kerry said after meeting his counterparts from Britain, Italy, France & Germany.   Pro-Russian separatists “are literally sowing mayhem,” seeking to “speak for everyone through the barrel of a gun.”  The United Nations high commissioner for refugees said today a report just produced shows “an alarming deterioration in the human rights situation in the east of the country.”  The monitors criticized “repeated acts of violence against peaceful participants of rallies, mainly those in support of Ukraine’s unity” as well as “targeted killings, torture and beatings, abductions, intimidation and some cases of sexual harassment –- mostly carried out by well-organized and well-armed anti-government groups in the east.”  Russia’s Foreign Ministry said the report wasn’t objective & used double standards.  In eastern Ukraine, gov troops eliminated 2 rebel bases, acting pres Turchynov said yesterday.  “The anti-terrorist operation can stop after weapons are surrendered and hostages released,” Turchynov added.  “We’re conducting dialogue with those who’re prepared for conversation and cooperation.  We’re working on changes to the constitution to expand powers to local self-government.  At the same time, those who conduct war will receive an adequate answer.”  Russian calls to include rebels in national unity talks that began May 14 were rejected by the gov, & the meetings opened without separatist leaders’ participation.  Even as the US & the EU threaten more sanctions after the May 25 election, Russian Foreign Minister Lavrov has said it’s “ridiculous” to hold his country’s gov responsible.

Russia Can’t Be Trusted Over Ukraine, NATO Chief Says

Little is being accomplished in today's trading & those conditions should remain for the balance of the day.  Dow & the S&P 500 are hovering near record highs while NAZ has been struggling for months.  Yield securities are doing well, but that's called defensive investing when interest have been all but promised to remain low for at least a couple of years.  With low volume, it looks like some traders have already started their weekends.

Dow Jones Industrials

No comments: