Thursday, July 10, 2014

Markets decline on growing conflict in the Mideast

Dow dropped 100, decliners over advancers more than 3-1 & NAZ was off 32.  The MLP index lost 3 to the 513s & the REIT index added 1+ to 305.  Junk bond funds rose & Treasuries also gained ground, taking the yield on the 10 year Treasury to 2.51%.  Oil crude headed for a record-long slump as supply concerns eased in Iraq & Libya & inventories at Cushing, Oklahoma, rebounded from a 5-year low.  Gold is doing well with all the turmoil in the MidEast.

AMJ (Alerian MLP Index tracking fund)

CLQ14.NYM...Crude Oil Aug 14...102.09 Down .....0.20  (0.2%)

GCN14.CMX...Gold Jul 14..........1,341.10 Up ...17.30 (1.3%)

Fewer Americans Than Forecast Filed Jobless Claims Last Week
Photo:   Bloomberg

Fewer Americans than forecast filed applications for unemployment benefits last week, a sign the job market continues to strengthen.  Jobless claims declined 11K to 304K, the fewest in more than a month, according to the Labor Dept.  The forecast called for 315K.  Combined with data last week that showed payrolls exceeded expectations in Jun & the unemployment rate fell to an almost 6-year low, the drop in layoffs signals a rebound in H2 economic growth.  As demand improves, employers will probably take on more workers, helping to lift consumer spending.  The 4 week moving average dropped to 311K from 315K in the prior week.  The number continuing to receive jobless benefits rose 10K to 2.58M in the latest week.

Fewer Americans Than Forecast Filed Jobless Claims Last Week

EU govs plan to impose asset freezes & travel bans on an additional 11 people accused of fomenting unrest in Ukraine, where skirmishes have left hundreds dead.  Most of the new targets are Ukrainian separatists.  The sanctions will take effect if no EU gov objects by tomorrow.  The EU has already blacklisted 61 connected with the destabilization of Ukraine & Russia’s annexation of Crimea.  That list & a similar US Treasury Dept roster of individuals & entities have been dismissed by advocates of stronger action as symbolic gestures.  Ukrainian pres Poroshenko dismissed Russia’s declaration that rebels want peace talks as he pressed on with an offensive to regain territory near the frontier after 3 Ukrainian soldiers were killed & 27 wounded in yesterday’s clashes.  Russian Foreign Minister Lavrov said the militias in eastern Ukraine are ready for talks & “ultimatums and pre-conditions” must not stand in the way of peace efforts.  Andriy Parubiy, head of Ukraine’s national security & defense council, said yesterday that Russian pres Putin’s statements of non-involvement are “100 percent propaganda” aimed at Europeans.

EU May Expand Russia-Ukraine Sanctions List Amid Fighting

Boeing, a Dow stock, predicts demand in Asia will push commercial aircraft sales to $5.2T over the next 20 years, up 4.2% from a 2013 forecast, as China overtakes the US as the world’s largest aviation market.  Single-aisle jets, the workhorses of the global airline fleet, will account for about 70% of the 37K planes that will be sold by all companies thru 2033, according to its annual market outlook released today.  China is expected to account for about 40% of the 13K jets delivered to the Asia-Pacific area over that period.  North America, the next largest region, follows with an expected 7½K deliveries.  BA expects the pattern also will boost demand for long-range, twin-engine jets such as its wide-body 777, generating $1.1T in sales over 2 decades.  The redesigned 777X, which can carry a jumbo’s capacity of 400 passengers, has attracted 300 orders worth more than $100B since it was unveiled in Nov.  Some of these sales will come at the expense of the industry’s largest models, Boeing’s 747-8 jumbo jet & the A380 superjumbo from Airbus.  BA sees a diminishing role for the 4-engine planes with 620 sales worth $240B thru 2033.  Demand for smaller wide-bodies also is forecast to taper as airlines shift to the bigger 787-10 & other fuel-efficient planes that seat more than 300 people.  BA forecasts a $1.14T market for 4½K jets that seat 200-300, about the same as a year earlier.  The stock slipped pennies.  If you would like to learn more about BA,
Click here for a FREE analysis of BA and be sure to notice the intermediate time frame

Boeing Sees 20-Year Airliner Market Growing 4.2% to $5.2 Trillion on Asia

Boeing (BA)

Rockets being fired into Israel & a coming ground invasion are making for a very nervous stock market.  Of course the Iraq-Syria mess & constant worries about Iran just make matters worse.  Then there is the Dow which is long overdue for a correction.  Q2 will not bring a strong rebound in the economy & the outlook for the rest of the year is less than clear.  Dow returned again to where it was in early Jun with earnings reports from the big banks are due shortly.

Dow Jones Industrials

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