Dow slid 2, decliners slightly ahead of advancers & NAZ lost 1. MLPs lost steam in the PM again, taking the index down 1+ to the 524s, & the REIT index was off fractionally to the 308s. Junk bond funds eased back & Treasuries sold off. Oil was down more than 1 & gold fell to the lowest in 5 weeks as the outlook for an improving global
economy reduced demand for a haven.
AMJ (Alerian MLP Index tracking fund)
![Live 24 hours gold chart [Kitco Inc.]](http://www.kitco.com/images/live/gold.gif?0.9659011642048994)
Caterpillar, a Dow stock, forecast full-year sales & earnings that fell short of estimates as it said there’s no sign of an upturn in the industry in 2014. Profit excluding restructuring costs will be $6.20 a share, below the $6.23 estimate. Revenue will be as much as $56B, compared with the $56.3B estimate. Mining companies have cut $B of capital spending amid surplus commodities production & a drop in prices for coal, iron ore & other metals. CAT said the industry remains “weak” & order levels are still low. “We are seeing our customers defer maintenance,” CEO Doug Oberhelman said. “The bottom is just behind us. Our numbers are minuscule in terms of ticking up, but they are ticking up.” Sales of mining machinery thru dealers dropped 38% in Q2, with declines in every region except North America. Q2 sales dropped 3.2% to $14.2B, trailing the $14.5B estimate. EPS was $1.57 verus $1.45, a year earlier. EPS excluding one-time items was $1.69, beating the $1.52 estimate. CAT, the largest manufacturer of machinery for construction, saw an improvement in that segment with sales up 11%. A slowdown in construction equipment sales in China, the former Soviet republics, Africa & the Middle East region is offsetting the company’s sales outlook. The company said dealer sales of its machines fell 10% in Q2, a slower pace of decline than the 12% drop in the 3 months thru May. In the resources industries segment, retail machinery sales dropped 38% compared with a 46% decline in the 3 months thru May. For construction industries, machinery sales growth slowed to 3% from 4%. The decline in sales for energy & transportation accelerated to 10%. For construction industries, sales growth slowed to 3% from 4%. The stock sank 3.34. If you would like to learn more about CAT click on this link:
club.ino.com/trend/analysis/stock/CAT?a_aid=CD3289&a_bid=6ae5b6f7
Caterpillar Sees No Sign of Upturn in Mining Industry
Fewer US new homes than forecast were sold in Jun & data for the prior month was revised down by a record, painting a troubling picture of a market struggling to gain traction. Sales declined 8.1% to a 406K annualized pace, the fewest since Mar & lower than any projection economists, according to the Commerce Dept. That followed a May rate of 442K that was 12.3% less than estimated last month. Restrictive lending rules, limited land supply, higher mortgage rates & more expensive properties are restraining housing, underscoring the Federal Reserve concern that the industry is underperforming. The forecast called for a decrease to 475K & the estimates were 440K-525K. The May reading was revised down from a previously reported 504K pace that would have been the strongest since Jun 2008. Purchases decreased in all 4 regions, with a 20% drop in the Northeast & a 9.5% decline in the South leading the way. The supply of homes at the current sales rate climbed to 5.8 months, the highest since Oct 2011, from 5.2 months in May. There were 197K new houses on the market at the end of Jun, the most since Oct 2010.
Sales of U.S. New Homes Fell in June After Large Revision
Following the data above, DR Horton, the largest US homebuilder, fell after saying it’s increasing incentives to boost orders, reducing profitability as the broader new-home market stumbles. EPS dropped to 32¢ from 42¢ a year earlier. The estimate was 49¢. “The biggest impediment to the housing industry continues to be job growth,” CEO Donald Tomnitz said. “Part-time workers are not looking for a house. They’re looking for a full-time job.” Home-sales gross margin in the fiscal Q3 was 20.7%, down from 21.4% a year earlier as the company increased incentives 90 basis points. Margins will remain close to 20% as the company tries to push volume, Tomnitz said. “Our number one focus is generating a 20 percent return on investment community by community,” he said. “That requires us balancing our pace, our pricing, our incentives and our margin against volume to maximize, really, the return. And so, yes, we’ll give some incentive to achieve a 25% sales increase.” Net orders rose to 8551 homes worth $2.4B, a 25% increase in volume & 32% jump in value. The company’s contract backlog, an indication of future sales, climbed 15% to 11,365 homes. Homebuilding revenue rose to $2.1B in the qtr from $1.6B a year earlier & the number of completed home sales climbed 19% to 7676. The stock sank 2.86. If you would like to learn more about DHI click on this link:
club.ino.com/trend/analysis/stock/DHI?a_aid=CD3289&a_bid=6ae5b6f7
D.R. Horton Falls Most in Five Years After Earnings Drop
News today was mediocre at best. Weak new home sales tells a story that people with low paying or part time work are not shopping for new homes. A sluggish economic recovery in the US & overseas is taking its toll. Gloomy news on conflicts nearby the Middle East are making the macro picture look more threatening. But the Dow & S&P 500 are still near record highs & NAZ needs just one more good move up to reach record territory. The fundamentals do not support all this enthusiasm.
Dow Jones Industrials
AMJ (Alerian MLP Index tracking fund)
| CLU14.NYM | ....Crude Oil Sep 14 | ....102.22 |  ...0.90 | (0.9%) |
Caterpillar, a Dow stock, forecast full-year sales & earnings that fell short of estimates as it said there’s no sign of an upturn in the industry in 2014. Profit excluding restructuring costs will be $6.20 a share, below the $6.23 estimate. Revenue will be as much as $56B, compared with the $56.3B estimate. Mining companies have cut $B of capital spending amid surplus commodities production & a drop in prices for coal, iron ore & other metals. CAT said the industry remains “weak” & order levels are still low. “We are seeing our customers defer maintenance,” CEO Doug Oberhelman said. “The bottom is just behind us. Our numbers are minuscule in terms of ticking up, but they are ticking up.” Sales of mining machinery thru dealers dropped 38% in Q2, with declines in every region except North America. Q2 sales dropped 3.2% to $14.2B, trailing the $14.5B estimate. EPS was $1.57 verus $1.45, a year earlier. EPS excluding one-time items was $1.69, beating the $1.52 estimate. CAT, the largest manufacturer of machinery for construction, saw an improvement in that segment with sales up 11%. A slowdown in construction equipment sales in China, the former Soviet republics, Africa & the Middle East region is offsetting the company’s sales outlook. The company said dealer sales of its machines fell 10% in Q2, a slower pace of decline than the 12% drop in the 3 months thru May. In the resources industries segment, retail machinery sales dropped 38% compared with a 46% decline in the 3 months thru May. For construction industries, machinery sales growth slowed to 3% from 4%. The decline in sales for energy & transportation accelerated to 10%. For construction industries, sales growth slowed to 3% from 4%. The stock sank 3.34. If you would like to learn more about CAT click on this link:
club.ino.com/trend/analysis/stock/CAT?a_aid=CD3289&a_bid=6ae5b6f7
Caterpillar Sees No Sign of Upturn in Mining Industry
Caterpillar (CAT)
Fewer US new homes than forecast were sold in Jun & data for the prior month was revised down by a record, painting a troubling picture of a market struggling to gain traction. Sales declined 8.1% to a 406K annualized pace, the fewest since Mar & lower than any projection economists, according to the Commerce Dept. That followed a May rate of 442K that was 12.3% less than estimated last month. Restrictive lending rules, limited land supply, higher mortgage rates & more expensive properties are restraining housing, underscoring the Federal Reserve concern that the industry is underperforming. The forecast called for a decrease to 475K & the estimates were 440K-525K. The May reading was revised down from a previously reported 504K pace that would have been the strongest since Jun 2008. Purchases decreased in all 4 regions, with a 20% drop in the Northeast & a 9.5% decline in the South leading the way. The supply of homes at the current sales rate climbed to 5.8 months, the highest since Oct 2011, from 5.2 months in May. There were 197K new houses on the market at the end of Jun, the most since Oct 2010.
Sales of U.S. New Homes Fell in June After Large Revision
Following the data above, DR Horton, the largest US homebuilder, fell after saying it’s increasing incentives to boost orders, reducing profitability as the broader new-home market stumbles. EPS dropped to 32¢ from 42¢ a year earlier. The estimate was 49¢. “The biggest impediment to the housing industry continues to be job growth,” CEO Donald Tomnitz said. “Part-time workers are not looking for a house. They’re looking for a full-time job.” Home-sales gross margin in the fiscal Q3 was 20.7%, down from 21.4% a year earlier as the company increased incentives 90 basis points. Margins will remain close to 20% as the company tries to push volume, Tomnitz said. “Our number one focus is generating a 20 percent return on investment community by community,” he said. “That requires us balancing our pace, our pricing, our incentives and our margin against volume to maximize, really, the return. And so, yes, we’ll give some incentive to achieve a 25% sales increase.” Net orders rose to 8551 homes worth $2.4B, a 25% increase in volume & 32% jump in value. The company’s contract backlog, an indication of future sales, climbed 15% to 11,365 homes. Homebuilding revenue rose to $2.1B in the qtr from $1.6B a year earlier & the number of completed home sales climbed 19% to 7676. The stock sank 2.86. If you would like to learn more about DHI click on this link:
club.ino.com/trend/analysis/stock/DHI?a_aid=CD3289&a_bid=6ae5b6f7
D.R. Horton Falls Most in Five Years After Earnings Drop
D.R. Horton (DHI)
News today was mediocre at best. Weak new home sales tells a story that people with low paying or part time work are not shopping for new homes. A sluggish economic recovery in the US & overseas is taking its toll. Gloomy news on conflicts nearby the Middle East are making the macro picture look more threatening. But the Dow & S&P 500 are still near record highs & NAZ needs just one more good move up to reach record territory. The fundamentals do not support all this enthusiasm.
Dow Jones Industrials
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