Tuesday, November 18, 2014

Higher markets on rising German investor confidence

Dow shot up 40, advancers over decliners 2-1 & NAZ added 31.  The MLP index rose 3+ to 510 & the REIT index went up 1+ to the 318s.  Junk bond funds were mixed & Treasuries saw buying today.  Oil sank into the 74s & gold climbed to a 2-week high topping 1200 briefly after Russia added to reserves, fueling speculation that a rebound in demand for bars, coins & jewelry will help stem this year’s drop.

AMJ (Aleian MLP Index tracking fund)

3 Stocks You Should Own Right Now - Click Here!

CLZ14.NYMCrude Oil Dec 1474.44 Down 1.20 (1.6%)

Live 24 hours gold chart [Kitco Inc.]

Ukraine Readies for ‘Total War’ as EU Defers on Sanctions
Photo:   Bloomberg

Ukraine & Russia clashed over how to move toward a new cease-fire agreement, after pres Poroshenko said his country is ready for “total war” with Russian forces.  As NATO Secretary General Stoltenberg criticized Russia for staging a “serious military buildup” & sending troops & weapons across its border, Ukrainian Prime Minister Yatsenyuk advocated new “Geneva format” talks including the US to de-escalate the crisis.  Russia said that framework, which followed Apr that excluded pro-Russian separatists, would skirt a process that led to a Sep 5 cease-fire.  “There is the Minsk format,” Russian Foreign Minister Lavrov said today.  “Attempts to dissolve this format, to present it in a way that the insurgents, representatives of the southeast, may sit aside while the ‘grownups’ agree on what to do -- such attempts are completely illusory.”  Lavrov, who later met German Foreign Minister Steinmeier, called on the US, EU & all other parties to uphold the Sep agreements & urged the gov in Kiev to pursue dialogue with the rebels.  There can be no military resolution, Steinmeier added.   “I can understand your skepticism,” Steinmeier said.  “But I believe we should keep working to carry out the Minsk protocol.”  The conflict shifted into a higher gear after the separatists held Nov 2 elections condemned by Ukraine, the US & EU as illegitimate.  As Russia denies military involvement in the former Soviet republic, it’s still funneling troops & weapons into Ukraine.  6 Ukrainian troops were killed & 9 wounded in the past 24 hours, a Ukrainian military spokesman said.  Rebels shelled gov positions 28 times in the past day, the Defense Ministry said.

Russia, Ukraine Dispute Truce Format as NATO Sees Buildup

Beijing home prices fell for the first time in almost 2 years as China’s property slowdown deepened, prompting developers to offer discounts to cut inventories.  New-home prices dropped in Oct in 67 cities of 70 tracked by the gov from a year earlier, & in 69 from Sep, the National Bureau of Statistics said.  Prices in Beijing declined 1.3%, the first annual decrease since Nov 2012 & a reversal from the 14.7% jump in Jan from the previous year.  Home prices will continue to decline “modestly” next year as developers offer promotions or discounts to reduce stock that will remain high, according to Moody’s Investors Service.  Housing sales slumped 10% in the first 10 months of this year from the same period in 2013 amid tight credit & an economic slowdown, prompting the gov to ease curbs on an industry that has become a drag on growth.  Hangzhou, the capital of southeastern Zhejiang province, had the biggest drop on a year-on-year basis among all cities, with a 8.7% decline.  Zhengzhou, the capital of central Henan province, was the only city where prices didn’t fall, remaining unchanged from the previous month.  In Sep, prices fell in 69 of the 70 cities from the previous month for the first time since Jan 2011 when the gov changed the way it compiles the data.  The central bank in Sep eased mortgage rules for homebuyers who have paid off existing loans.  The move reversed a 4-year campaign to contain home prices as Premier Li Keqiang seeks to prevent economic growth from drifting too far below the gov 7.5% annual target.  All but 5 of 46 cities that had imposed home-purchase restrictions removed or relaxed such limits in recent months.

Beijing Home Prices Drop for First Time in 2 Years

A “large” production cut by OPEC to prop up crude prices isn’t in the group’s interest because it’s likely to bolster an expansion of US shale oil, according to Goldman Sachs Group.  While the slide in prices into a bear market increases the chances of a reduction, trimming output by more than 500K barrels a day would mean further cuts are needed starting 2016 as higher prices prompt more US drilling, Goldman said.  Some members of the OPEC including Saudi Arabia have resisted calls to decrease supply while others seek action to support crude.  OPEC members have stepped up diplomacy before the meeting.  The group last cut quotas in Dec 2008, trimming its target by 2.46M barrels a day in response to the global financial crash.  It produced 30.97M barrels daily last month.  Some OPEC members have cut prices of supplies to defend market share & stimulate demand amid the shale boom in North America.  US daily crude output climbed to 9.06M barrels last week, the most since weekly records began in 1983.  Iraq, which pumped 3.3M barrels a day last month, will be reluctant to enact production cuts, given the ongoing domestic instability, military funding needs & Kurdistan’s desire & ability to increase exports.  The Kurdistan Regional Government (KRG) last Thurs announced an agreement on exports with Iraq, in which the semi-autonomous region’s oil will be exchanged for revenues from the administration in Baghdad.  The KRG has placed 150K barrels a day of crude at the disposal of the central gov.

Goldman Says OPEC in Dilemma as Output Cut Seen Helping U.S.

Stocks had another good day following a mediocre time in the prior week.  There is no dramatic new news, but conflicts around the globe are on the rise.  The Ukraine situation goes from bad to worse & there were killings in Jerusalem earlier today.  The ISIL situation drones on with more beheadings yesterday.  US retailers are pushing pre holiday sales very hard because they are not sure what to expect regarding consumer spending.  Today 7 Dow stocks rose more than 1% each.  But Dow is only up 74 in the last 6 trading days while it has been reaching new records.

Dow Jones Industrials

This Undervalued Energy Stock is Set to Soar! INO.com Special Report

No comments: