Thursday, June 5, 2014

Markets rally on hopes ECB moves will boost economies

With buying in the PM Dow surged 98 to a new record, advancers over decliners better than 3-1 & NAZ soared 44.  The MLP index inched up a fraction to almost 501 for another record & the REIT index jumped 5 to the 306s (its highest in over a year).  Junk bond funds were mixed to lower & the Treasury 10-year notes were flattish after 6 days of declines, breaking the longest losing streak since Oct, before a report expected to show that US employment growth slowed last month.  Gold rose based on the same thoughts.

AMJ (Alerian MLP Index tracking fund)

stock chart

This Undervalued Energy Stock is Set to Soar! Special Report

CLN14.NYM....Crude Oil Jul 14....102.56 Down ...0.08  (0.1%)

Live 24 hours gold chart [Kitco Inc.]

Household wealth in the US climbed in Q1, helped by labor market improvement along with gains in the stock & residential real estate markets that are giving balance sheets a lift.  Net worth for households & non-profit groups increased $1.49T, or 1.9% from the previous qtr, to $81.8T, according to the Federal Reserve in its flow of funds report.  Rising stock prices & home values helped Americans feel wealthier at the start of the year, even as unusually harsh weather battered consumer & business spending.  Bigger gains in the labor market may help further boost balance sheets & spur the household purchases & household net worth is $12.9T above its pre-recession peak of $68.9T reached in Q2-2007.  The value of financial assets owned by American households, including stocks & pension-fund holdings, increased by $721B in Q1.  Household real-estate assets climbed $758B.  Owners’ equity as a share of total household real-estate holdings increased to 53.6% from 51.6% in the prior qtr.  Automakers are enjoying a boost in industry sales as consumers feel comfortable enough to replace aging vehicles.  Cars & light trucks sold at a 16.7M annualized rate in May, the fastest since Feb 2007, according to data from Ward’s Automotive Group.  The improvement in household wealth is encouraging Americans to borrow again.  Today’s report showed household credit increased at a 2% annualized rate in Q1.  Consumer credit, including auto & student loans, climbed at a 6.6% pace, while mortgage borrowing fell at a 0.9% pace.

Household Wealth in U.S. Increases as Home Values Appreciate

Vladimir Putin has just weeks to stop supporting a pro-Russian insurgency in Ukraine or face stiffer penalties, pres Obama & UK Prime Minister Cameron said.  “The G-7 nations are ready to impose additional costs on Russia” if Putin doesn’t take concrete steps to help end the rebellion in Ukraine, Obama told reporters in Brussels.  “We will have a chance to see what Mr. Putin does over the next two, three, four weeks.”  Those steps include completing a pullback of troops from the border & working constructively with presi-elect Petro Poroshenko, Cameron said.  G-7 leaders met for the 2nd time since expelling Russia from what had been the G-8 over its annexation of Crimea from Ukraine in Mar.  “Russia’s actions are completely unacceptable and totally at odds with this group of democracies,” Cameron said, adding that it’s “vital” Putin reverses course in the next few weeks.  “The status quo is unacceptable. The destabilization of Ukraine must stop.”  Sec Kerry said the US hopes Ukraine can be a bridge between east & west, while Russian Foreign Minister Lavrov said both sides need to stop the violence, with the gov declaring a cease-fire first.  Russia this week submitted a draft UN Security Council resolution to establish corridors to supply humanitarian aid to people in the mainly Russian-speaking regions of Ukraine affected by the fighting, which has claimed almost 200 lives.

Obama Tells G-7 Putin Is Running Out of Time to Switch Course on Ukraine

Home sellers are lowering their expectations as buyer demand cools.  None of the 100 largest US metropolitan areas had increases of more than 20% in residential asking prices last month, the first time in almost 2 years that’s happened, Trulia said in a report.  That compares with 7 metro areas, including Las Vegas, Phoenix & California’s Silicon Valley, that had such year-over-year gains in May 2013.  “Big price increases mean there are fewer bargains to be found, and the closer prices get to where they should be, the less prices will rise,” Jed Kolko, chief economist at the property-data provider, said.  “I’d be surprised if we see markets getting back to 20 percent-plus gains. More inventory should be coming onto the market, investor activity is declining and affordability is worsening.”  Nationally, asking prices gained 8% last month from a year earlier, the slowest pace in 13 months, amid damped demand from both traditional buyers & investors, Trulia said.  Prices in Las Vegas & the California cities of Sacramento & Oakland rose 15%, about half the year-earlier gain.  Last month was the first time since Jul 2012 that none of the 100 largest metro areas had a 20% price increase.  Contracts to buy previously owned houses in the US rose just 0.4% in Apr, less than estimated & fell 9.2% from a year earlier.  Rent growth, meanwhile, is accelerating.  Rents are up 5.1% nationally, with apartments climbing 5.8% & single-family homes gaining 2.1%.  Among the top 25 rental markets, the biggest increases were in San Francisco, San Diego, Oakland & Denver, all of which had gains of more than 10% from a year earlier.  Rents in San Francisco jumped 15.6%, with the median monthly cost of a 2-bedroom rental reaching $3550, the highest in the US & more than the $3500 median in the New York metro area.

Home Price Gains of 20% Vanish in U.S. as Hottest Markets Cool

Stock buyers arrived around lunchtime to bid up stocks, encouraged by Mario Draghi's moves at the ECB.  That work in progress that didn't deter them.  Lost in the enthusiasm over rising stocks is that interest sensitive stocks (dull stocks with relatively high yields) had another good day.  Many are at their highest levels (lowest yields) in more than a year.  That stock buying has more to do with the Fed maintaining low interest rates than an improved economy.  Tomorrow the big jobs report will come out prior to the market's opening & expectations are for at least 215K new jobs in May (below 288K in Apr).
Dow Jones Industrials

I’m a huge fan of INO & from what I have seen so far, their service Marketclub!   This isn’t a stripped down version, everything in MarketClub is available to you. I don’t want to give everything away, but you’ll have unlimited access to my favorite 3 tools: Trade Triangles, Smart Scan & Alerts!  The best part is that the MarketClub customer support team will be providing UNLIMITED support!  You can call or email for an instant response to any question, comment or concern.

Here’s that link:

I’d recommend you jump on this now.

No comments: