Dow rose 15, advancers over decliners 6-5 & NAZ lost 1. The MLP index shot up 2+ to the 535s, for another record, & the REIT index added pocket change above 310. Junk bond funds were mixed to higher & Treasuries rallied, taking the yield on the 10 year Treasury down to 5.36%. Oil did little & gold was a tad lower.
AMJ (Alerian MLP Index tracking fund)
![Live 24 hours gold chart [Kitco Inc.]](http://www.kitco.com/images/live/gold.gif?0.015067509761698128)
Pres Obama authorized the US to conduct surveillance flights over Syria, a necessary preparation for possible air attacks on Islamic State targets there, according to a Defense Dept official. Obama hasn’t decided whether to expand the fight against the militant group in Iraq into neighboring Syria his spokesman said. “We have to use our power wisely,” Obama said in remarks to the American Legion. “History teaches about the dangers of overreaching.” Without referring to Syria, Obama said that rooting out the “cancer” of the Islamic State “won’t be easy & won’t be quick.” “Our reach is long” against those who harm Americans, Obama said. Islamic State beheaded James Foley this month & has said it will kill a 2nd journalist, Steven Sotloff, unless Obama stops airstrikes against the group. An official said that the flights have begun. Surveillance of Iraqi territory by American aircraft flying along the country’s borders with Iraq & Turkey has been going on for many months, another official said. One issue for the administration is whether it can conduct airstrikes against the Islamic militants in Syria without bolstering Syrian pres Assad, whom the US opposes. The administration backs what it calls moderate Syrian rebels, while opposing Islamic militants such as Islamic State & the al-Nusra Front, an al-Qaeda offshoot that freed one American hostage this week. They are the most powerful anti-gov factions in Syria’s civil war. The intelligence-gathering flights initially will be carried out by drones at lower altitudes & U-2 spy planes flying above the range of Syrian anti-aircraft missiles. After more than 2 months of territorial gains in Iraq, Islamic State made its latest breakthrough over the weekend in Syria, seizing an air base & dislodging Assad’s forces from their last stronghold in the northeastern Raqqa province. That prompted the Syrian gov to call for a joint effort against the Islamist threat, while warning the US against taking unilateral action.
Obama Authorizes Syria Surveillance Flights: Official
The US budget deficit will narrow less than forecast this year even as it falls to the lowest level since 2007 as a share of the economy, according to the Congressional Budget Office (CBO). The projected shortfall will be $506B in the 12 months ending Sep 30, compared with an Apr prediction for $492B & a $680B gap posted last year, the CBO said. In 2015 it’s projected to shrink for a 6th straight year, to $469B, capping the longest stretch of fiscal improvement since 2000, near the end of an era of surpluses. A declining jobless rate that’s lifting individual & corp tax revenue will help narrow the gap next year to about a 1/3 of the record $1.4T deficit reached in 2009. The report today shows a fiscal picture that’s improving in the near term before starting to deteriorate, with deficits swelling again starting in 2018. “The federal budget deficit has fallen sharply during the past few years and is on a path to decline further this year and next,” CBO Director Douglas Elmendorf said. “But later in the coming decade, under current law, the gap between spending and revenues would grow again relative to the size of economy, and federal debt would climb.” The deficit will be 2.9% of GDP this year & 2.6% next year, the CBO said. In 2007, it was 1.1% of GDP. The report predicted the economy will expand 1.5% in Q4 compared with the same period in 2013, less than half the 3.1% growth the CBO predicted in Feb. “The economy will grow slowly this year, on balance, and then at a faster but still moderate pace over the next few years.” Unemployment this year will average 6.2% before declining to an average of 5.9%. Slack in the labor market “is expected to largely disappear by the end of 2017,” the CBO said. The CBO projects the rate on 3-month Treasury bills will remain near zero until H2-2015, & increase to an average of 2.1% in 2017. The yield was 0.03% today. Monetary policy will “continue to support an improvement in economic growth during the next few years because some slack will persist in the labor market and inflation will stay below the Federal Reserve’s goal,” the CBO said. The budget deficit over the first 10 months of this fiscal year was $460B, 24% slimmer than it was during the same period a year earlier, according to the latest Treasury data. Revenue over that period rose 8% compared with a year earlier, while spending gained 1.2%.
Smith & Wesson cut its full-year sales & profit forecasts as unsold guns piled up at dealers, underscoring strains on the industry. Sales fell 23% to $132M in fiscal Q1, missing the $134M projection. But EPS was 26¢, beating the 25¢ estimate. Falling sales of long guns, including modern sporting rifles, drove 87% of the revenue decline. The company said it saw strong demand for small, polymer pistols & revolvers. Sales will be $530-$540M in the fiscal year ending in Apr, the company said, backing off a previous forecast of $585-$600M & EPS will be 89-94¢, instead of the $1.30-$1.40 seen earlier. Requests for crminal background checks for gun purchases, a gauge of interest in firearms, averaged 1.75M a month in 2014 thru Jul, according to FBI data, down 3.8% from a year earlier. Sluggish demand & the buildup of stock will have the biggest impact this year on fiscal Q2, SWHC. For the current period, the company forecast sales of $100-$110M & EPS of 4-8¢, short of the analyst projections of $137M in sales & EPS of 28¢. The stock fell 1.78 (13%). If you would like to learn more about SWHC, click on this link:
club.ino.com/trend/analysis/stock/SWHC?a_aid=CD3289&a_bid=6ae5b6f7
AMJ (Alerian MLP Index tracking fund)
| CLV14.NYM | ....Crude Oil Oct 14 | ....93.82 |  ...0.04 | (0.0%) |
Pres Obama authorized the US to conduct surveillance flights over Syria, a necessary preparation for possible air attacks on Islamic State targets there, according to a Defense Dept official. Obama hasn’t decided whether to expand the fight against the militant group in Iraq into neighboring Syria his spokesman said. “We have to use our power wisely,” Obama said in remarks to the American Legion. “History teaches about the dangers of overreaching.” Without referring to Syria, Obama said that rooting out the “cancer” of the Islamic State “won’t be easy & won’t be quick.” “Our reach is long” against those who harm Americans, Obama said. Islamic State beheaded James Foley this month & has said it will kill a 2nd journalist, Steven Sotloff, unless Obama stops airstrikes against the group. An official said that the flights have begun. Surveillance of Iraqi territory by American aircraft flying along the country’s borders with Iraq & Turkey has been going on for many months, another official said. One issue for the administration is whether it can conduct airstrikes against the Islamic militants in Syria without bolstering Syrian pres Assad, whom the US opposes. The administration backs what it calls moderate Syrian rebels, while opposing Islamic militants such as Islamic State & the al-Nusra Front, an al-Qaeda offshoot that freed one American hostage this week. They are the most powerful anti-gov factions in Syria’s civil war. The intelligence-gathering flights initially will be carried out by drones at lower altitudes & U-2 spy planes flying above the range of Syrian anti-aircraft missiles. After more than 2 months of territorial gains in Iraq, Islamic State made its latest breakthrough over the weekend in Syria, seizing an air base & dislodging Assad’s forces from their last stronghold in the northeastern Raqqa province. That prompted the Syrian gov to call for a joint effort against the Islamist threat, while warning the US against taking unilateral action.
Obama Authorizes Syria Surveillance Flights: Official
The US budget deficit will narrow less than forecast this year even as it falls to the lowest level since 2007 as a share of the economy, according to the Congressional Budget Office (CBO). The projected shortfall will be $506B in the 12 months ending Sep 30, compared with an Apr prediction for $492B & a $680B gap posted last year, the CBO said. In 2015 it’s projected to shrink for a 6th straight year, to $469B, capping the longest stretch of fiscal improvement since 2000, near the end of an era of surpluses. A declining jobless rate that’s lifting individual & corp tax revenue will help narrow the gap next year to about a 1/3 of the record $1.4T deficit reached in 2009. The report today shows a fiscal picture that’s improving in the near term before starting to deteriorate, with deficits swelling again starting in 2018. “The federal budget deficit has fallen sharply during the past few years and is on a path to decline further this year and next,” CBO Director Douglas Elmendorf said. “But later in the coming decade, under current law, the gap between spending and revenues would grow again relative to the size of economy, and federal debt would climb.” The deficit will be 2.9% of GDP this year & 2.6% next year, the CBO said. In 2007, it was 1.1% of GDP. The report predicted the economy will expand 1.5% in Q4 compared with the same period in 2013, less than half the 3.1% growth the CBO predicted in Feb. “The economy will grow slowly this year, on balance, and then at a faster but still moderate pace over the next few years.” Unemployment this year will average 6.2% before declining to an average of 5.9%. Slack in the labor market “is expected to largely disappear by the end of 2017,” the CBO said. The CBO projects the rate on 3-month Treasury bills will remain near zero until H2-2015, & increase to an average of 2.1% in 2017. The yield was 0.03% today. Monetary policy will “continue to support an improvement in economic growth during the next few years because some slack will persist in the labor market and inflation will stay below the Federal Reserve’s goal,” the CBO said. The budget deficit over the first 10 months of this fiscal year was $460B, 24% slimmer than it was during the same period a year earlier, according to the latest Treasury data. Revenue over that period rose 8% compared with a year earlier, while spending gained 1.2%.
Smith & Wesson cut its full-year sales & profit forecasts as unsold guns piled up at dealers, underscoring strains on the industry. Sales fell 23% to $132M in fiscal Q1, missing the $134M projection. But EPS was 26¢, beating the 25¢ estimate. Falling sales of long guns, including modern sporting rifles, drove 87% of the revenue decline. The company said it saw strong demand for small, polymer pistols & revolvers. Sales will be $530-$540M in the fiscal year ending in Apr, the company said, backing off a previous forecast of $585-$600M & EPS will be 89-94¢, instead of the $1.30-$1.40 seen earlier. Requests for crminal background checks for gun purchases, a gauge of interest in firearms, averaged 1.75M a month in 2014 thru Jul, according to FBI data, down 3.8% from a year earlier. Sluggish demand & the buildup of stock will have the biggest impact this year on fiscal Q2, SWHC. For the current period, the company forecast sales of $100-$110M & EPS of 4-8¢, short of the analyst projections of $137M in sales & EPS of 28¢. The stock fell 1.78 (13%). If you would like to learn more about SWHC, click on this link:
club.ino.com/trend/analysis/stock/SWHC?a_aid=CD3289&a_bid=6ae5b6f7
Smith & Wesson Drops After Cutting Forecast on Gun Demand
Smith & Wesson Holding Corporation (SWHC)
This was another day in the markets when the best course of action was to take a nap. Eastern Ukraine remains in a state of war while the truce in Israel is holding. The mess in Iraq-Syria drones on, killing more, & now Libya, an oil exporter, may revert to civil war. American business lumbers along with good but not great data. Consumer spending drives the US economy & that has been uneven for some time because of a sluggish rise in household earnings & income following the recession. A majority of households do not benefit from rising stock prices because they do not own stocks (at least directly). Dow & S&P 500 are hovering around record highs. Go figgah!
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:
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I’d recommend you jump on this now.
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