Friday, December 19, 2014

Markets climb cautiously as oil prices increase

Dow rose 39, advancers over decliners 3-2 & NAZ added 12.  The MLP index slid 2+ to the 451s & the REIT index went up a fraction in the 326s.  Junk bond funds rose & Treasuries also advanced.  Oil rebounded from the lowest closing levels in 5+ years as comments from Saudi Arabia’s oil minister yesterday added to the most volatile market in 3 years (see below).  Gold inched higher.

AMJ (Alerian MLP Index tracking fund)

CLK15.NYM...Crude Oil May 15...56.47 Up ....1.05 (1.9%)

GCZ14.CMX...Gold Dec 14.......1,197.70 Up ...3.00 (0.3%)

3 Stocks You Should Own Right Now - Click Here!

China offered enhanced economic ties with Russia at a regional summit this week as its northern neighbor struggled to contain a currency crisis.  “To help counteract an economic slowdown, China is ready to provide financial aid to develop cooperation,” Premier Li Keqiang said on Mon.  While the remark applied to any of the 5 other nations represented at the meeting of the Shanghai Cooperation Organization group, it was directed at Russia.  Any rescue package for Russia would give China the opportunity of exercising the kind of great-power leadership the US has demonstrated for a century, sustaining other economies with its superior financial resources.  Pres Xi Jinping last month called for China to adopt “big-country diplomacy” as he laid out goals for elevating his nation’s status.  Russia isn’t in talks with China about any financial aid, said a spokesman for pres Puitn & added he didn’t know if China is preparing to offer aid.  China’s Foreign Ministry, asked about assisting Russia, said yesterday the country is ready to work with all members of the SCO group to strengthen economic cooperation.

China Offers Enhanced Cooperation as Russia Struggles

Saudi Arabia & OPEC would find it “difficult, if not impossible” to give up market share by cutting crude production, the country’s oil minister said.  Global oil markets are experiencing “temporary” instability caused mainly by a slowdown in the world economy, Oil Minister Ali Al-Naimi  said, according to the Saudi Press Agency.  He reiterated the country’s intention to maintain output amid plunging prices.  “In a situation like this, it is difficult, if not impossible, that the kingdom or OPEC would carry out any action that may result in a reduction of its share in market and an increase of others’ shares,”  Al-Naimi said.  Saudi Arabia, the largest producer in OPEC, will stick to its oil policies, he said.  Steady global economic expansion will resume, spurring oil demand, Al-Naimi said, leading him to be “optimistic about the future.”  Increased supply from regions outside OPEC, where oil-production costs are higher, is affecting the market, Al-Naimi added.  OPEC’s decision to maintain output fanned speculation that Saudi Arabia & other members want North American shale drillers & other producers outside the group to be the first to cut production.  Saudi Arabia & Iran this month cut the official price levels of their main light crude grades for sale to Asia to the lowest in at least 14 years.

Saudi Arabia Says Difficult for OPEC to Give Up Market Share

Nike Inc.
Photo:   Bloomberg

Nike fell after it guided that future orders would trail estimates, hurt by slowing demand in western Europe & emerging markets.  Orders for delivery from Dec thru Apr rose 11%, excluding the effects of foreign-currency exchange-rate fluctuations.  Analysts estimated an 11.3% gain, according to Consensus Metrix.  Orders are closely watched because they are viewed as a proxy for future sales.  In North America, its largest market, orders rose 13%, compared with an estimate of 13.1%.  In western Europe, they also increased 13%, trailing an estimate of 15%.  Orders in emerging markets advanced 1%, below the estimate of 7%.  EPS in the qtr thru Nov 30 rose to 74¢ from 59¢ a year earlier.  The estimate was 70¢.  Revenue jumped 15% to $7.4B, beating projections for $7.15B.  The stock slumped 2.68.  If you would like to learn more about NKE, click on this link:

Nike Drops as Brand’s Future Orders Trail Analysts’ Estimates

Nike (NKE)

After 2 days of massive gains, the stock market is taking a breather.  However, buyers still have the upper hand.  The Saudi comments about oil add fuzziness to what is already an unclear future for oil prices.  MLPs have lost their "darling" status enjoyed for many years & now are like stocks, they go up & down.  In addition, they have to live with higher volatility.

Dow Jones Industrials

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