Monday, June 16, 2014

Markets fluctuate amid rising tensions in Iraq

Dow climbed 15, advancers ahead of  delciners 4-3 & NAZ rose 14. The MLP index jumped 3+ to the 505s, new record territory, & the REIT index was up a fraction in the 299s.  Junk bond funds edged higher & Treasuries gained.  Oil & gold just fluctuated.

AMJ (Alerian MLP Index tracking fund)

CLH15.NYM....Crude Oil Mar 15...98.54 Up ...0.18 (0.2%)

GCM14.CMX...Gold Jun 14.......1,277.40 Up ...3.70 (0.3%)

The IMF cut its growth forecast for the US economy this year & said the Federal Reserve (FED) may have scope to keep interest rates at zero for longer than investors expect.  It now sees the economy growing 2% this year, down from an Apr estimate of 2.8%.  But the 2015 prediction was left unchanged at 3%, & it doesn’t expect the US to see full employment until the end of 2017, amid low inflation.  The IMF also said it foresees longer-run potential growth averaging around 2% for the next several years, below historical averages & less than last year’s estimate.  A year ago, the IMF projected potential growth rates at 2.3% in 2015-2016 & 2.4% in 2017-2018.  For the FED, the forecast means “policy rates could afford to stay at zero for longer than the mid-2015 date currently foreseen by markets,” the fund said.  Should inflation rise more than expected with the economy below full employment, “tolerating a modest, temporary rise of inflation above the longer-term goal could be consistent with the Fed’s balanced approach as long as inflation expectations remain anchored and financial stability risks were low,” the IMF said.  This forecast comes less than a week after the World Bank reduced its 2014 growth forecast for the US, to 2.1% from 2.8%.  While a rebound is under way after a harsh winter, it’s providing “only a partial offset” to the weakness that led to a contraction in Q1.

IMF Cuts U.S. Growth Forecast, Sees Scope for Zero Rates Longer

Industrial production climbed more than forecast in May, a sign gains in manufacturing are supporting growth as the US economy picks up.  Output at factories, mines & utilities rose 0.6% after a revised 0.3% drop in Apr that was smaller than previously estimated, according to the FED.  The forecast called for a 0.5% increase.  Manufacturing, which makes up 75% of total production, also increased 0.6%.  Demand for industrial goods is improving as consumer & business spending strengthen & the economy rebounds from its worst performance in 3 years.  Bigger gains in corp investment & stronger growth in overseas markets will be needed to provide an additional lift for US producers.

Industrial Production in U.S. Increases More Than Forecast

Wal-Mart, a Dow stock & Dividend Aristocrat, has opened an e-commerce website to supply goods to mom-and-pop merchants in India as it seeks to dominate a market it estimates will be valued at $50B by 2020.  WMT is counting on its online operations to help fuel sales as it grapples with a slowdown both at home & abroad.  The Indian website is only for existing users of its members-only cash-and-carry stores & may help draw orders from small businesses more than 20 kilometers (12 miles) from outlets & that aren’t serviced by sales representatives, said the company’s CEO for India, Krish Iyer.  “The mandate from Wal-Mart for me is to focus on the cash-and-carry business.” Iyer added.  “We are into cash-and-carry for the long-haul and the prize is big.”  The retailer this month promoted Latin America executive Fernando Madeira to CEO of, the e-commerce division that’s leading the company’s battle against (AMZN).  Online revenue accounts for less than 3% of total sales.  Unlike the Sam's club & other member-based store formats, India's cash-and-carry services are only for mom-and-pop shops & other traders who need gov tax documents to become members.  Ordinary shoppers are not allowed to enter the stores or shop on this new website.  The web-based ordering platform is being being piloted in 2 cities where the company’s sales reps will train small business customers to use the website, Iyer said.  “The small mom-and-pop shops is where the challenge lies in terms of converting them into e-shoppers,” said Iyer.  “A deliberate effort is required to educate them in the whole process,”  The company aims to have 10% of orders for each store from the website within 2 years.  WMT said in Apr it will add 50 more stores in India over the next 4-5 years.  The stock hardly budged.  If you would like to learn more about WMT.
Click here for a FREE analysis of WMT and be sure to notice the intermediate time frame

Wal-Mart Woos Mom-and-Pop Indian Stores With Website for $50 Billion Prize

Wal-Mart (WMT)

The bulls are getting ready for a big jump in oil prices as the conflict in Iraq worsens.  There is no leadership except for the ISIS group (bad guys) which seems to be in command.  For the time being about all we can do is watch what happens there.  However there are other problems in the world.  Growth in the US economy is forecasted to be drab for years to come, China is struggling to boost its growth rate & the Ukraine mess has bot been solved.

Dow Jones Industrials

3 Stocks You Should Own Right Now - Click Here!

No comments: