Lower markets on increased fighting in Ukraine

Dow fell 66, decliners over advancers almost 3-2 & NAZ lost 3.  The MLP index went up 2+ to the 523s & the REIT index inched up in the 308s.  Junk bond funds gained & Treasuries rallied, taking the yield on the 10 year bond down to 2.32%.  Oil saw buying after yesterday's sell-off & gold sank below 1300.

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American consumer confidence unexpectedly declined in Aug to a 9-month low, repressed by stock volatility & gloomy wage growth perceptions. The Thomson Reuters/University of Michigan preliminary index of sentiment dropped to 79.2, the lowest since Nov, from 81.8 in Jul.  The projection in called for an 82.5 reading.  Unstable stock prices, mixed labor market data & geopolitical instability have shaken consumer confidence, unmitigated by lower energy prices, which have served as a bright spot.  The Michigan sentiment survey’s measure of expectations 6 months from now decreased to 66.2, the lowest since Oct, from 71.8 the prior month.  The current conditions index, which measures Americans’ assessment of their personal finances, rose to 99.6, the highest since Jul 2007, from 97.4.  At the same time, Americans expected an inflation rate of 3.4% over the next year, up from 3.3% in Jul.

Consumer Sentiment in U.S. Fell in August to Nine-Month Low


Factory production increased in Jul at the fastest pace in 5 months as capital spending climbed & motor vehicle demand surged, indicating the industry is helping propel the US economy.  The 1% gain at manufacturers followed a 0.3% increase in the prior month that was more than initially estimated, according to the Federal Reserve.  Total industrial production, which also includes mines & utilities, advanced 0.4% for a 2nd month in Jul.  Production lines have shifted into higher gear as Americans replace aging autos & companies grow more confident about expanding.  Stronger demand in overseas markets, which has been a missing ingredient for American producers, would help provide additional momentum.  Total industrial production was projected to rise 0.3%.  Manufacturing, which makes up 75% of total production, was forecast to increase 0.4%.

Factory Production in U.S. Jumps 1% on Equipment Demand


Coca-Cola, a Dow stock & Dividend Aristocrat, agreed to swap some brands & buy a 17% stake in Monster Beverage (MNST) for about $2.15B, increasing its bet on the burgeoning energy-drink market.  The move is part of a deal that will include the transfer of KO energy drinks NOS, Full Throttle, Burn, Mother & Play to MNST.  MNST, meanwhile, will shift Hansen’s natural sodas & juices, Peace tea & Hubert’s lemonade to KO.  Under the agreement, the 2 companies will share marketing, production & distribution.  KO, which already distributes Monster in the US & Canada, will expand the arrangement globally, helping the energy brand grow overseas.  KO has the right to purchase as much as 25% of Monster.  The investment fits into the KO strategy of taking equity stakes in promising new brands & technologies, especially as its main source of revenue is under threat from a shift to healthier habits.  “There is a pattern here, and this is what we are talking about in terms of a different approach to innovative partnerships,” KO CEO Muhtar Kent said.  “We look at deploying capital in an intelligent and efficient manner to get us a very important footprint in growth categories.”  KO stock rose 70¢ & MNST shot up 21.65.  If you would like to learn more about KO, click on this link:
club.ino.com/trend/analysis/stock/KO?a_aid=CD3289&a_bid=6ae5b6f7

If you would like to learn more about MNST, click on this link:
club.ino.com/trend/analysis/stock/MNST?a_aid=CD3289&a_bid=6ae5b6f7

Coca-Cola to Acquire 17% Stake in Monster Beverage

Coca-Cola (KO)

 

Monster Beverage (MNST)

There were reports that Ukraine’s military attacked a military convoy that entered the country from Russia.  Increased fighting around the world is a dark cloud over the markets which is not going away.  Meanwhile the consumer sentiment data was glum.  However, Dow is up 270 this week, a nice rebound after tough times falling from its record highs above 17K.  But tough times lie ahead for stocks.

Dow Jones Industrials