Tuesday, June 10, 2014

Markets ease lower after 4 day advance

Dow slipped 13, decliners ahead of advancers almost 2-1 & NAZ lost 2.  The MLP index was up fractionally in the 504s & the REIT index dropped 2 to 300.  Junk bond funds were mixed & Treasuries sold off again.  Oil & gold rose.

AMJ (Alerian MLP Index tracking fund)

CLN14.NYM....Crude Oil Jul 14...104.72 Up ....0.31 (0.3%)

GCM14.CMX...Gold Jun 14.......1,260.90 Up ...7.40 (0.6%)

Photo:   Bloomberg

China's inflation accelerated in May to the fastest pace in 4 months on food costs, while a decline in factory-gate prices moderated.  Consumer prices rose 2.5% from a year earlier, the statistics bureau said, exceeding the 2.4% estimate.  The producer-price index fell 1.4% after a 2% decline the previous month.  Inflation below the gov full-year target of 3.5% leaves room for more monetary easing in an economy projected to grow this year at the slowest pace since 1990.  While Premier Li Keqiang is resisting broad stimulus, limited loosening has included yesterday’s announcement of a cut in some banks’ reserve requirements, intended to support agriculture & small businesses.  Food prices rose 4.1% from a year earlier, compared with a 1.7% gain for non-food costs.  China’s economy may expand 7.3% this year, down from 7.7% in 2013 & compared with a gov target of about 7.5%.  A slide in home sales, construction & gov efforts to rein in credit risks are weighing on the nation’s expansion.  Producer prices have been falling for 2 years.

China Inflation Quickens to Fastest Pace in 4 Months

US job openings climbed to an almost 7-year high in Apr as employers sought more workers to help manage stronger demand in a rebounding economy.  The number of positions waiting to be filled rose 289K to 4.46M, the highest since Sep 2007, according to the Labor Dept.  The pace of layoffs also rose.  The figures, which are among nine labor-market measures monitored by Federal Reserve, corroborate other data that show further improvement in the job market.  The Job Openings & Labor Turnover Survey, or JOLTS, adds context to monthly payrolls data by measuring dynamics such as resignations, help-wanted ads & the pace of hiring.  Although it lags other jobs data by a month, the figures are tracked as a measure of labor-market tightness & worker confidence.  Today’s figures showed the number hired was little changed at 4.71M, keeping the hiring rate at 3.4%, compared with an average 2.8% during the previous expansion.  The gauge calculates the number of hires during the month divided by the number of employees who worked or received pay during that period.  Job openings increased at manufacturers, leisure & hospitality companies, retailers, & professional & business service providers. They fell at construction firms.  2.47M quit their jobs, up from 2.46M the prior month. The quits rate, which shows the willingness of workers to leave their jobs, held at 1.8%, down from a 2.1% reading when the recession started almost 6 years ago.

Job Openings in U.S. Climb to Highest Level Since September 2007

Russian, German & Polish officials met in Russia to advance Ukraine peace talks after President Petro Poroshenko called for an evacuation corridor so civilians can flee fighting in the country’s battle-torn east.  A day after Ukraine’s Foreign Ministry said peace talks with Russia were yielding progress, Poroshenko ordered Ukrainian regions to accept refugees from areas where gov forces are combating separatists who want to join Russia.  Ukrainian troops repelled attacks on airfields in the eastern regions, killing 43 rebels.  Clashes raged after 3-way meetings between Russia, Ukraine & the Organization for Security & Cooperation in Europe reached agreement on implementing a peace plan drawn up by Poroshenko & priorities for de-escalation in fighting.  The former Soviet republic blames Russian pres Putin for fomenting the unrest.  “We’re at the point where there is the real possibility of achieving a cease-fire,” Swiss President Didier Burkhalter, who is also the chairman of the OSCE, said today.  Russian Foreign Minister Lavrov & his German & Polish counterparts arrived in St. Petersburg.  Speaking at the start of talks, Lavrov called for an immediate end to violence in Ukraine & said it was willing to assist in talks between the gov in Kiev & its regions.  Putin will meet Gazprom CEO Miller & Energy Minister Alexander Novak before talks resume.

Ukraine Peace Talks Progress as Evacuation Route Set Up

Stocks are pausing after after a stellar advance.  Since May 20, Dow has risen more than 500 (hardly chump change).  There has been no special news to account for that run, but investors are just feeling better.  Even the staunchest bulls need time to take a breather.

Dow Jones Industrials

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