Friday, May 9, 2014

Markets slide lower on mixed earnings

Dow fell 38, decliners over advancers almost 3-2 & NAZ lost 18 (extending 2 months of weakness).  The MLP index continued sliding, down 2 to the 483s, & the REIT index was up fractionally in the 299s (11 month high).  Junk bond funds were mixed while Treasuries fluctuated.  Oil rose as pres Putin visited Crimea for the first time since annexing the peninsula from Ukraine & the EU considered expanding sanctions on his country.  Gold did little.

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...100.78 Up ...0.52 (0.5%)

GCK14.CMX...Gold May 14.....1,289.60 Up ...2.20 (0.2%)

3 Stocks You Should Own Right Now - Click Here!

China’s Inflation Slows More Than Estimated
Photo:   Bloomberg

Consumer  inflation in China moderated to an 18-month low & the decline in factory-gate prices persisted, giving the gov more scope to loosen policies if a growth slowdown deepens.  The CPI rose 1.8% from a year earlier in Apr, the National Bureau of Statistics (NBS) said. That compares with the estimate of 2.1% & a 2.4% gain in Mar.  The PPI fell 2%, the 26th straight decline, after a 2.3% drop the previous month.  Today’s data add to signs that domestic demand remains muted, with falling commodity prices exacerbating overcapacity in industries including steel & cement.  The lack of inflationary pressure will allow the People’s Bank of China to relax monetary policy to support the economy if Premier Li Keqiang’s full-year goal of about 7.5% is threatened.  Declining prices of vegetables & pork were the main reasons for the Apr inflation reading, which is likely to be the lowest in the first half of the year, the statistics bureau said.  “Prices in the future will maintain modest growth,” the agency said.  Premier Li, in a speech yesterday, reiterated that China has the confidence & capability to achieve this year’s economic-growth goal & maintain medium- to high-speed growth in the long run.  Analysts forecast expansion of 7.3% in 2014, which would be the slowest in 24 years.  Inflation has remained at least one percentage point below the gov full-year target of 3.5% every month this year.  Food prices in Apr rose 2.3% from a year earlier, the NBS said, after a 4.1% gain in Mar.  Non-food inflation was 1.6%, compared with a 1.5% pace the previous month.

China’s Inflation Slows More Than Estimated

Russian pres Putin visited the Crimea region he annexed in Mar amid growing tensions as Ukraine said about 20 pro-Russian separatists died in clashes in the eastern port city of Mariupol.  Putin’s trip to Sevastopol, the home of the Black Sea Fleet, was his first since the Crimean peninsula seceded from Ukraine.  Ukrainian Interior Minister Arsen Avakov said at least one serviceman was killed & 5 wounded in the fighting in Mariupol after about 60 rebels attacked a police building.  The city is 37 miles from the Russian border.  The gov in Kiev & its US & European allies say Putin is fomenting unrest in east Ukraine, where separatists in the Donetsk & Luhansk regions plan autonomy referendums May 11.  There’s no sign he’s pulled back troops from Ukraine’s border as he pledged 2 days ago.  Officials said the EU is set to expand sanctions to cover some Russian companies.  “It’s a day when we all especially keenly feel what it means to be faithful to the motherland and how important it is to be able to defend its interests,” Putin said.  “It’s a holiday when the all-triumphant power of patriotism celebrates victory.”
Putin attended a parade in Sevastopol to mark the 70th anniversary of Soviet forces driving the Nazis out of the region, with ships from the Black Sea Fleet on display.  He told those attending that he was glad Crimea, which only became part of the Soviet republic of Ukraine in the 1950s, was Russian again.

Putin Visits Crimea as 20 Die in Eastern Ukraine Clashes

Ralph Lauren stock sank after forecasting Q1 sales that would be less than estimated.  Sales in the qtr thru Jun will rise as much as 5%, the company said, implying revenue of about $1.74B.  Analysts estimated $1.81B.  Retailers have been deepening discounts & seeking to create new styles to attract shoppers amid shaky consumer confidence & flagging mall traffic. Sales at stores open at least a year fell 2% in the qtr thru Mar 29, hurt by unseasonably cold weather.  EPS was $1.68, topping the $1.63 projection.  Revenue advanced 14% to $1.87B.  RL said revenue in the current year will increase 6-8% while its operating margin will narrow as it continues spending to add stores.  The company plans to open 40-45 locations this year, a pace it will maintain in the next several years, CFO Chris Peterson said.  The company intends to build 100-200 new Polo brand stores worldwide, selling both men & women’s clothing, President Jacki Nemerov said.  The stock fell 6.89 (5%).  If you would like to learn more about RL,
Click here for a FREE analysis of RL and be sure to notice the intermediate time frame

Ralph Lauren Falls After Sales Forecast Trails Estimates

Ralph Lauren (RL)

Stocks continue to meander around, going nowhere fast.  Dow has been trading sideways for 2½ weeks.  It inched up to a new high but has not been able to extend that meager gain.  That is not supposed to happen in a strong market.  Dow is down 60 YTD, another sign that the bull market looks very tired.  The US economy appears to be the strongest around the globe, but is sputtering more than it should.  Consumer confidence keeps coming up as less than satisfactory.  More earnings from retailers are coming, which will give a better picture of how the consumer is behaving.

Dow Jones Industrials

This Undervalued Energy Stock is Set to Soar! Special Report

No comments: