Wednesday, July 2, 2014

Markets fluctuate after consumer confidence data

Dow climbed 2, decliners over advancers nearly 3-2 & NAZ went up 2.  Profit taking took the MLP index down almost 2 to the 524s & the REIT index lost 1+to the 302s.  Junk bond funds pulled back & Treasuries sold off.  Oil slid back & gold crawled higher.

AMJ (Alerian MLP Index tracking fund)

CLQ14.NYM...Crude Oil Aug 14...104.78 Down ...0.56  (0.5%)

GCN14.CMX...Gold Jul 14.........1,326.90 Up ...0.50 (0.0%)

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Consumer sentiment improved in Jun as higher stock prices & an improving labor market helped bolster Americans' views of the economy.  The Thomson Reuters/University of Michigan’s final sentiment index climbed to 82.5 from 81.9 in May.  The forecast called for an increase to 82 after a preliminary reading of 81.2.  More employment opportunities, record stock prices & improved property values are giving consumers cause for enthusiastic attitudes, reducing the odds that consumers will retrench.  At the same time, Americans are paying more at gas pumps & grocery-store checkout lines, underscoring the need for bigger wage gains.  The Michigan sentiment survey’s index of current conditions, which measures Americans’ views of their personal finances, increased to 96.6 this month from 94.5 in May.  The preliminary reading was 95.4.  The gauge of expectations 6 months from now was little changed at 73.5 after 73.7 the prior month.  The initial reading was 72.2 for Jun.

Consumer Sentiment in U.S. Increased in June From Month Earlier

ADP Says Companies in U.S. Added 281,000 Workers in June
Photo:   Bloomberg

Employment at companies climbed in Jun by the most since Nov 2012, a sign the job market is strengthening along with demand.  The 281K surge exceeded the most optimistic forecast & followed a 179K increase in May, according to the ADP Research Institute.  The estimate called for a 205K advance.  Businesses are taking on more workers & limiting dismissals, bolstering projections that the economy will strengthen after a Q1.  Companies employing 500 or more workers added 49K jobs.  Medium-sized businesses, with 50-499 employees, took on 115K workers & small companies increased payrolls 117K, the most since Feb 2012.  Tomorrow’s data from the Labor Dept may also show overall payrolls, which include gov agencies, rose 215K workers in Jun after climbing 217K the prior month & the unemployment rate probably held at an almost 6-year low of 6.3%.

ADP Says Companies in U.S. Add Most Workers Since 2012

Separatist rebels in eastern Ukraine continued to violate a truce extended today by the country’s gov after the EU gave Russia 3 days to stop the insurgency or face deeper sanctions.  EU leaders demanded that the separatists, whom Ukraine and its allies say are backed by pres Putin's gov, release hostages & start talks to implement a peace plan drawn up by Ukrainian pres Poroshenko by Jun 30.  While rebel leaders agreed to the extension yesterday, the Defense Ministry in Kiev said they continued to fire on Ukrainian gov positions overnight.  “Despite peace initiatives by Ukraine’s leadership and a unilateral cease-fire, the situation in the Eastern regions continues to escalate,” the ministry said.  “Insurgents are ignoring the peace plan to ease the situation in Ukraine’s east and keep attacking troops.”  The EU leaders said that failure to meet their demands will result in “further significant restrictive measures” against Russia.  “If no visible progress is made on these points, then we are prepared to take further decisions, including drastic measures,” German Chancellor Merkel said.  “We expect progress to come really in the hours ahead.”  The US also blames Putin for supporting rebels & stoking violence that has killed more than 400 in the country of more than 40M.  The US is preparing sanctions against Russia on technology aimed at exploiting & producing oil & gas products, a major part of that country’s economy.  While the separatists are intent on controlling the territory they’ve seized, the US was pushing Ukraine into conflict with Russia, Russian Foreign Minister Lavrov said, adding that Putin seemed to be trying to ease tensions & said the gov in Kiev must consult with the regions on devolving power.

EU Tells Russia to Stop Ukraine Rebels or Face New Costs

Stocks are back to meandering afters yesterday's advance which lacked conviction.  Favorable jobs numbers tomorrow are already baked into the market.  Economic data which s encouraging is being tempered by the messes in Ukraine & Iraq which can end a market rally very quickly.

Dow Jones Industrials

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