Monday, July 28, 2014

Markets waffle, ahead of FOMC meeting

Dow crawled up 22, decliners ahead of advancers 4-3 & NAZ lost 4.  The MP index fell a fraction to the 522s & the REIT index went up 2+ to the 308s.  Junk bond funds fluctuated & Treasuries were sold.  Oil dropped as the flow of oil from the Middle East was unaffected by the surge in violence in Libya & Iraq.  Gold hardly budged.

AMJ (Alerian MLP Index tracking fund)

CLU14.NYM....Crude Oil Sep 14....101.63 Down ...0.46  (0.5%)

Live 24 hours gold chart [Kitco Inc.]

Ukrainian Military Forces
Photo:   Bloomberg

Pres Obama & 4 four major US allies in Europe intend to adopt “new measures” against Russia over the fighting in Ukraine, the French pres’s office said.  Note that the announcement comes from France, not US!!  Obama spoke with the leaders of France, the UK, Germany & Italy today by telephone, as the Ukrainian gov made further advances in the eastern part of the country against pro-Russian rebels.  A spokesman for the separatists said their leader had traveled to Moscow for an unspecified period.  “Despite numerous appeals to President Putin, Russia has not effectively put pressure on the separatists to force them to negotiate, and has not taken the concrete steps asked of it to control the Ukraine- Russia border,” according to a statement from Hollande’s office. “The five heads of state and government confirmed, under these conditions, their intention to adopt new measures toward Russia.”  The US says the crash of Malaysian Air Flight 17 was probably caused by rebels using a Russian-supplied surface-to-air missile.  The disaster has deepened what was already the worst standoff between the US along with European allies & Russia.  Russian pres Putin denies his gov is helping the separatists.  Huh??  Fighting near the Malaysian Air crash site in east Ukraine again prevented Dutch & Australian investigators from reaching the area as Merkel said Europe must agree to new Russia sanctions by tomorrow.  Experts turned back after trying for a 2nd day to get to where the plane went down because of fighting between Ukrainian forces & rebels.  Ukrainian gov troops entered the towns of Torez, near where Flight 17 crashed, & Shakhtarsk, in a push to encircle the pro-Russian rebels holed up in Donetsk & Horlivka, the Defense Ministry in Kiev said.  Merkel is prepared to interrupt her holiday to take part in an EU summit on Ukraine if necessary, the gov said.

Obama, Allies Plan ‘New Measures’ Against Russia

Chinese regulators met with managers at Microsoft, a Dow stock, offices in 4 cities in preparation for a potential probe into whether the company engaged in monopolistic practices, said.  Regulators may start a probe into MSFT’s possible monopoly in China’s operating system market.  China is stepping up scrutiny of US technology companies, & excluded Windows 8 from a gov purchasing order in May.  US tensions with China escalated after prosecutors indicted 5 Chinese military officers for allegedly stealing secrets of American companies.  “Microsoft is happy to answer the government’s questions,” the company said in an e-mail.  China said in May it will vet technology companies for potential national security breaches, after the gov threatened retaliation for a US indictment of Chinese military officers on cyberspying claims.  The State Internet Information Office said in May that “governments and enterprises of a few countries” are taking advantage of their monopoly status and technological edge to collect sensitive information.  MSFT stock fell 53¢.  If you would like to learn more about MSFT, click on this link.

Microsoft’s China Offices Visited by Regulator, Sina Reports

Microsoft (MSFT)

JPMorgan, another Dow stock, agreed to sell about $1.3B of loans & securities to Sankaty Advisors as it pares back non-essential holdings.  The unit of Bain Capital will acquire the assets from JPMorgan’s Global Special Opportunities Group & the transaction should close by the end of the year.  It won’t have a material impact on earnings.  Wall Street firms are unloading assets to comply with regulations requiring that they bolster capital & reduce investments made with their own money.  CEO Jamie Dimon said in Dec that he’s “pruning” businesses that the bank doesn’t need.  The portfolio contains mezzanine loans in North America & Europe, as well as loans & related “special situations” investments in Australia & across Asia valued at about $1B.  The Hong Kong based unit employs 35, mostly in Asia & was run by Chris Nicholas for JPM.  It invested bank money in distressed debt, non-performing loans & private equity.  JPM is also in advanced talks with Lexington Partners & Carlyle Group to sell half of about $4.5B in assets that its One Equity Partners buyout arm manages for the bank.  The stock went up pocket change.  If you would like to learn more about JPM, click on this link.

JPMorgan to Sell $1.3 Billion of Assets to Sankaty Advisors

J P Morgan(JPM)

This is another summer day without a lot happening, at least in the US.  Eastern Europe is a mess & fighting in Gaza looks like it will last a long time.  But here eyes are on the FOMC meeting during the next 2 days.  As usual, traders are biting their fingernails trying to guess what hints about higher interest rates will be given.  Chances are there will be no major announcements following the meetings.  Earnings season is winding down with the usual muddy results.  Mixed earnings are not what stock averages at record levels suggest.  Drab earnings are the result of the weak economic recovery.  GDP results for Q2 will be released before the market open on Wed.  Those results should be good, but short of great.

Dow Jones Industrials

This Undervalued Energy Stock is Set to Soar! Special Report

3 Stocks You Should Own Right Now - Click Here!

No comments: