Friday, September 19, 2014

Markets cautiously rise on leading economic data

Dow rose 50, decliners barely ahead of advancers & NAZ added 3.  The Alerian MLP index was up pennies in the 534s & the REIT index went up pennies in the 297s.  Junk bond funds climbed higher & Treasuries were flattish.  Oil & gold continued sliding, drifting lower.

AMJ (Alerin MLP Index tracking fund)

CLV14.NYM....Crude Oil Oct 14...92.93 Down ...0.14  (0.2%)

GCQ15.CMX...Gold Aug 15.....1,226.50 Down ....3.60  (0.3%)

The Conference Board’s index of US leading economic indicators, a gauge of the outlook for the next 3-6 months, climbed 0.2% in Aug after increasing 1.1% in the prior month.  The forecast called for an advance of 0.4% & estimates ranged from gains of 0.2-0.7%.

Leading Economic Indicators in U.S. Increased 0.2% in August

Australian Treasurer Joe Hockey
Photo:   Bloomberg

Global finance chiefs gathering in Australia, face growing pressure to take steps to bolster growth as the global economic outlook dims.  The G-20 economies will share plans of finance ministers & central bankers on ways to boost GDP by 2% over 5 years, a commitment that the group will reiterate, an official said, citing the draft communique.  G-20 delegates see the global growth outlook as less positive than early this year, he said.  The global economic recovery has faltered since a Feb G-20 meeting, with Europe showing signs of slipping into deflation, Japan’s revival blunted by a sales tax increase in Apr & China's 7.5% growth target for 2014 becoming harder to attain.  Some officials, like Treasury Sec Lew, are pressing members to consider more immediate measures to boost demand.  “Overall, the global economy continues to underperform. This is particularly true in the Euro area and Japan,” Lew said.  “More work is needed to achieve faster and more balanced growth, to boost demand especially in surplus countries, and to promote employment.”  OPEC this week trimmed its growth forecasts for the biggest developed economies.  Euro-area GDP is expected to expand 0.8% this year, down from 1.2% forecast in May, while the US will expand 2.1% instead of 2.6%.  Growth in the G-20 slipped in Q2 to 3.2% from a year earlier, down from 3.4% in Q1.  G-20 members have come up with measures that bring the largest economies close to the GDP goal set in Feb, while not meeting the target yet.

Biggest Economies Seek Agreement on Growth as Outlook Dims

Russia plans next week to discuss contingency measures to cut the country off from the global Internet in what the Kremlin called a necessary step to shield the nation from the U.S.-controlled worldwide Web.  Russia’s state security council will examine ways to ensure domestic users can be redirected to servers inside the country rather than relying on the US-managed Internet domain-names system.  “We need to defend ourselves from the U.S. and Europe,” pres Putin's spokesman said .  “This is not about isolating ourselves, it’s about getting ready for possible cut-offs as countries that regulate the Web may act unpredictably.”  Russia, on the brink of recession after US & EU sanctions provoked by the worst geopolitical rift in decades, has been tightening control of the Internet this year.  Putin, a former KGB colonel who’s centralized power since he became president in 2000, has called the Internet a creation of US spy agencies.  Russia may urge its telecommunication operators to adjust their equipment to enable access to the Russian Internet autonomously in case of war or mass protests, according to a Russian newspaper.  The entire global system of Internet domain names & IP addresses is managed by the Internet Corp for Assigned Names &Numbers, or ICANN.  Putting a block on the worldwide Internet doesn’t present technical challenges & is only a matter of political will, said a blogger in Russia.  Russia last month banned anonymous access to the Internet in public spaces & expanded the regulation of media to the blogosphere, requiring those with at least 3K daily readers to register their real names & contact information.  In Feb the authorities had passed a law allowing them to close webpages without a court decision if material is deemed “extremist.”  Russian opposition leader Alexey Navalny, who used to criticize Putin & reveal corruption among his inner circle, was the first victim of that law when his blog on was shut in Mar.  Recent legislation requires Internet companies to store Russian users’ information on servers in the country, similar to Chinese regulations.

Russia Plans Break From Global Web as U.S. Rift Deepens

The markets are waiting for Alibaba (BABA) to make its debut.  In the meantime, not much is going on.  Financial bigwigs are meeting, trying to come up with plans to accelerate growth.  As usual, don't expect much to come from this meeting other than hot wait.  Until BABA stock is released for trading, little will happen in the markets.

Dow Jones Industrials

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