Monday, June 9, 2014

Markets edge higher with deal activity.

Dow went up 12 to a new record, advancers over decliners 2-1 & NAZ gained 7.  The MLP index rose a fraction to the 504s & the REIT index inched up into the 306s.  Junk bond funds did little & Treasuries retreated.  Oil & gold gained along with stocks.

AMJ (Alerian MLP Index tracking fund)

CLN14.NYM...Crude Oil Jul 14...103.39 Up ....0.73 (0.7%)

GCM14.CMX..Gold Jun 14.......1,256.00 Up ...3.90 (0.3%)

Photo:   Bloomberg

China's exports rose more than estimated in May, helping to cushion the economy from a deeper slowdown as an unexpected slump in imports highlighted risks to growth.   Overseas shipments gained 7% from a year earlier, the customs administration said, & exceeded the 6.7% forecast.  Imports fell 1.6%, leaving a $35.9B trade surplus, the biggest in 5 years.  Stronger exports may bolster Chinese leaders’ confidence that a recovery in demand from the US & Europe will support economic growth & reduce the need for stronger stimulus.  On Fri, Premier Li Keqiang told officials from 8 areas to be proactive in supporting their local economies, saying the gov wants a “reasonable” rate of expansion.  Li told the governors that while the gov doesn’t put GDP above everything else “this doesn’t mean we don’t want a reasonable economic growth rate.”.  The nation aims for a full-year expansion of 7.5%.

China’s Export Gains to Cushion Growth as Imports Slump

McDonald's Corp. Sales Rise 0.9% in May

Photo:   Bloomberg

McDonald's, a Dow stock & Dividend Aristocrat, sales at stores open at least 13 months rose 0.9% in May as a gain in Asia helped cushion a prolonged slump in the US, topping the 0.8% increase forecast.  In the US, sales fell 1% versus the estimate for a gain of 0.1%.  MCD, which gets more than 30% of revenue from the US, has struggled to attract Americans after slowing its kitchen last year with too many new & complex items. The chain also has faced more domestic competition.  Sales in the Asia Pacific, Middle East & Africa region rose 2.5%, topping estimates, as positive results in China helped boost the division.  In China, MCD has focused on expanding its delivery & breakfast businesses & plans to open about 300 stores this year.  May’s decline marks the 7th month without domestic growth.  Recently, MCD has advertised breakfast items & gave away free McCafe coffees to attract American diners.  It also began selling higher-priced bacon Clubhouse burgers & chicken sandwiches in the US.  Same-store sales rose 0.4% in Europe, under the 0.5% estimate.  The company has had difficulty luring customers in  Germany, where same-store sales slid last month.  Meanwhile, it’s had success selling value lunch sandwiches in France & expanding its breakfast business in the UK.  The stock slipped pocket change.  If you would like to learn more about MCD,
Click here for a FREE analysis of MCD and be sure to notice the intermediate time frame

McDonald's (MCD)

Analog Devices, a maker of semiconductors used in cars, smartphones & televisions, agreed to buy smaller chipmaker Hittite Microwave (HITT) for about $2B to expand its offerings.  ADI will pay $78 a share in cash & HITT jumped $17.18 (28%) to $77.74.  The boards of both chipmakers approved the transaction.  The acquisition will give ADI a broader line of chips & signal processors used in wireless communications.  The company aims to accelerate growth in the industrial, communications infrastructure & automotive markets & the transaction will increase EPS.  “Hittite’s product focus is highly complementary to our own,” ADI CEO said.  “From a growth perspective, this transaction expands product offerings in our key end markets and allows us to address new opportunities.”  The deal is the 3rd acquisition for more than $1B this year, & the largest.  ADI stock jumped 2.97.  If you would like to learn more about ADI,  
Click here for a FREE analysis of ADI and be sure to notice the intermediate time frame

Analog Devices (ADI)

Stocks are having another good day.  If Dow holds this gain, this will be the 5th straight day in the black & it's up more than 500 in the last couple of weeks.  That is an impressive advance without a lot of economic support.  OK, the Ukraine has quieted down for the time being.  Also, sluggish China seems to be a little stronger & Europe is mending.  Let's see if then bulls can keep control of the markets in the PM.

Dow Jones Industrials

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