Wednesday, September 3, 2014

Markets meander after US auto sales data

Dow climbed 10, decliners over advancers 5-4 & NAZ lost 25.  The MLP index slipped a fraction to 537 & the REIT index rose pocket change to the 312s.  Junk bond funds were lower & Treasuries gained.  Oil had a major rebound after weeks of selling & gold finally found buyers.

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CLV14.NYM....Crude Oil Oct 14....95.58 Up ...2.70 (2.9%)

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Chrysler reported its best Aug for US vehicle deliveries in 12 years, while Ford (F), Toyota, Honda & Nisson also posted results that surpassed projections.  Chrysler sales rose 20%, Nissan deliveries rose 12%, & Ford’s gained 0.4%.  Chrysler forecast an annualized sales pace for the market in Aug of 17.4M, including medium & heavy-duty trucks that typically account for at least 200K annual sales.  The sales rate hasn’t exceeded 17M since Jul 2006, when it was 17.2M, according to researcher Autodata.  Chrysler, wholly owned by Fiat, is on an unprecedented winning streak that now stretches to almost 4½ years.  As its Jeep brand benefits from consumers’ renewed attraction to SUVs, the group also has been aided by strong demand for Ram trucks & Town & Country minivans.  Group sales were projected to rise 12%. Jeep sales rose 49% in Aug.  Ford had its best Aug sales in 8 years, with Fusion & Escape models setting records for the month.  F-Series pickup sales fell 4.2% as the automaker closed one of 2 factories that makes the truck last month to begin preparations for a new, aluminum-bodied model.  The automaker said it reduced incentives on its pickups by $650 in Aug for an average price of about $41K.  General Motors (GM) sales slid 1.2%, worse than the 0.1% decline predicted.  While the automaker reported declines for 3 of its 4 brands, including an 18% drop by Cadillac, its profitable trucks did well.  Chevrolet Silverado pickup sales rose 13% to 49K, Cadillac Escalade SUV sales rose 89% & GMC Yukon sales more than doubled.

Chrysler Leads Automakers Topping Sales Estimates in August

CVS Caremark halted sales of tobacco products almost a month ahead of schedule, started a smoking-cessation campaign, & changed its name to position itself as health-care provider in the growing US market.  CVS Health, as the company now calls itself, will forgo $2B in annual revenue as it becomes the first national pharmacy chain to end tobacco sales.  None of its rivals have followed suit.  CVS, the biggest US seller of prescription drugs, is seeking to emphasize its health-care offerings as Obamacaret added 8M to insurance rolls nationwide.  CVS operates 7.7K drugstores, 900 walk-in medical clinics & a pharmacy-benefits manager with almost 65M members.  CVS has put information about its smoking cessation program in the coveted spot behind the checkout counters that used to house cigarettes & chewing tobacco.  Company officials have said they don’t plan to cut back on other unhealthy products, such as high-fat snacks & sugar-laden soft drinks that are a staple of the stores.  “By eliminating cigarettes and tobacco products from sale in our stores, we can make a difference in the health of all Americans,” CEO Larry Merlo said.  “Consumers are increasingly taking control of their own health and, through our 26,000 pharmacists and nurse practitioners, we are helping people on their path to better health.”  In the last decade, CVS has expanded in health care by opening 860 in-store clinics in 38 states & the DC with nurses & physician assistants who can diagnose & write prescriptions for minor illnesses.  The company plans to add at least 150 new clinics this year.  It also has alliances with 40 major health systems in the US, which streamlines the coordination of care between traditional doctor’s offices, hospitals & the clinics.  The stock rose 63¢.  If you would like to learn more about CVS, click on this link:


Pres Obama said a video showing the beheading of a 2nd American journalist by Islamic State underscores the need for a global alliance to confront the extremist group.  The recording shows the execution of captured freelance journalist Steven Joel Sotloff by the militant Sunni group that controls a swath of eastern Syria & northern Iraq.  “It’s not only that we’re going to be bringing to justice those that perpetrated this terrible crime against these fine young men,” Obama said today.  “The United States will continue to lead a regional and international effort against the barbaric” & “empty” vision of Islamic State, he said.  The recording, which Obama’s administration judged authentic, ends with another prisoner kneeling in an orange jumpsuit -- just as Sotloff was shown at the end of the recording on Foley’s killing.  The captive in the new video is identified as David Cawthorne Haines, a British citizen.  US lawmakers responded by urging Obama to step up his efforts to forge a coalition of nations to take on Islamic State & some called for him to increase the limited airstrikes over Iraq & expand them into neighboring Syria.  Some administration officials have said they & Obama are wary of expanding the direct US military role.  Doing so risks assisting the extremists’ efforts to portray the conflict as part of a centuries-old war against Islam by Christian crusaders & Jews.  UK Prime Minister Cameron, calling Sotloff’s murder “despicable and barbaric,” said yesterday that Islamic State terrorists “speak for no religion.  They threaten Syrians, Iraqis, American & British people alike & make no distinction between Muslims, Christians or any other faith.”  Obama is sending administration officials, including Sec Kerry, to the Mideast to seek support from countries in the region.  Obama said airstrikes have halted Islamic State advances in Iraq, while acknowledging that it will take time to “degrade and destroy” the militant movement.  “This is not going to be a one-week or one-month or six-month proposition,” he added.

Obama Says Beheading Shows Need for Global Bid to Confront Islamic State

NAZ was hurt by Apple (AAPL) selling off 4+ from its record highs, on anxiety about next week's meeting with major product launches.  The intl scene remains gloomy.  The Ukraine situation may be calming down, although it's difficult to see that as fighting continues.  The new Islamic state adds tensions in the MidEast where tensions are already high.  US auto sales looked good last month, but consumer attitudes & spending have been inconsistent.  Dow & S&P 500 remain inches from record highs in spite of all these worries.

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