Wednesday, January 21, 2015

Markets climb higher amid ECP speculation

Dow gained 39, advancers over decliners 3-2 & NAZ rose 12.  The MLP index shot up 12+ to the 451s & the REIT index was fractionally lower to the 346s.  Junk bond funds were mixed & Treasuries pulled back.  Oil was flattish as was gold,

AMJ (Alerian MLP Index tracking fund)

CLH15.NYM....Crude Oil Mar 15....47.84 Up ...1.37 (3.0%)

Live 24 hours gold chart [Kitco Inc.]

Europe, U.S. Stocks Erase Declines After ECB Stimulus Reports
Photo:   Bloomberg

Mario Draghi called on the ECB to make its biggest push yet to fend off deflation & revive the economy by unleashing a debt-buying spree of €1.1T ($1.3T).  He & the Executive Board proposed spending €50B a month thru Dec 2016, 2 euro-area central-bank officials said.  The plan still faces a tense debate in the Governing Council & may change before the final decision tomorrow.  By urging Fed-style quantitative easing, Draghi is remodeling the ECB as an aggressive central bank that will take risks even against the wishes of Germany, the region’s biggest economy.  Bundesbank President Jens Weidmann & Executive Board member Sabine Lautenschlaeger have argued QE isn’t needed & reduces the incentive of govs to make structural reforms.  Draghi’s intention is to expand the balance sheet to the level seen in early 2012 (€3T).  While the central bank has assets of about €2.2 currently, that may shrink as €200B of outstanding long-term loans mature in coming weeks.  The council’s debate will be complicated by arguments over whether the risks incurred in the new bond-buying plan should be shared across the region’s 19 central banks or kept within national boundaries.  Dutch central-bank Governor Klaas Knot has said any decision to mutualize risk should be taken by elected politicians, not unelected central bankers.  Tension over that issue surfaced this week at a conference in Dublin when the Irish Finance Minister said having national central banks buy gov bonds would be “ineffective.”  That drew a response from ECB Executive Board member Benoit Coeure.  “The discussion is how to design it in a way that works, in a way that makes sense,” Coeure said.  “If this is a discussion about how best to pool sovereign risk in Europe, and how to make the pooling of sovereign risk take a step forward in an environment where the governments themselves have decided not to do it, then this is not the right discussion.”

ECB Seeks to Inject Up to 1.1 Trillion Euros Into Economy in Deflation Fight

Microsoft, a Dow stock, CEO Satya Nadella showed the world the role of Windows in the future & he is taking the future part seriously.  At a preview of its Windows 10 operating system today, the software maker unveiled a version called Windows Holographic, along with a headset with glasses called HoloLens that will let users see holograms while tracking a user’s voice, motion & surroundings.  The company also showed HoloStudio, software for creating holograms, then 3-D printing & sharing them.  MSFT Is working with NASA's Jet Propulsion Laboratory on the holographic technology, & the lab will use it for Mars exploration starting in Jul.  The world’s largest software maker is the latest company to join the push into augmented & virtual reality.  Using MSFT's new holographic tools, architects could walk around their designs while clients are viewing it remotely, a spokesman for MSFT’s operating system group said.  A surgeon could learn a procedure without ever picking up a scalpel.  “In software, nothing is impossible,” he continued.  “Holographic computing enabled by Windows 10 is here.”  The company has been building the holographic technology for years & HoloLens glasses will be available “in the Windows 10 time frame.”  MSFT showed a demo today in which an employee wore the headset & created a quad-copter design while clicking & tapping in the air.  A screen showed what she could see in front of her.  A concept video also showed how holographs can be used for building work project models & for playing video-game Minecraft.  Augmented reality differs from virtual reality in that AR projects virtual images onto pictures or video of the real world.  Virtual reality is completely computer-generated.  Examples of the kind of things technology companies expect to become commonplace thru augmented reality in the future include customers taking a picture of a sofa in a store, then seeing how it looks overlaid on an image of their living room, & getting driving directions in the form of arrows & signs that appear to be on the road.  The stock fell 47¢.  If you would like to learn more about MSFT, click on this link:

Microsoft’s Windows Pushes Into Future With Holographic Glasses

Microsoft (MSFT)

Netflix's $9.5B drive to dominate video streaming worldwide is paying off after it said yesterday that it will profitably reach all 200 of the countries that have broadband internet services within 2 years.  “We then intend to generate material global profits from 2017 onwards,” CEO Reed Hastings & his finance chief, David Wells said.  The outlook reassured investors who have expressed concerns about the company’s narrow margins, widening interl losses & a budget for films & TV shows that’s swollen to $9.5B from $7.3B in the past year.  Intl subscriber growth outstripped gains in the US for the 3rd straight qtr, as Hastings raced to plant his flag before other would-be competitors.  Users outside the US expanded by a record 2.4M in Q4, reaching 18.3M.  NFLX expects to add another 2.25M intl customers in Q1.  It already has more than 5M users in Latin America, the most detailed number it has given regarding intl subscribers.  Licensing issues may inhibit Netflix’s expansion into China, he added.  The company is exploring its options, & any investment will be modest.  Q4 revenue rose 26% to $1.48B, compared with a projection of $1.49B.  EPS almost doubled to $1.35, aided by a tax benefit.  Domestically, the company added 1.9M new customers to reach 39.1M, compared with the 1.85M predicted.  That brought the worldwide total to 57.4M.  In Q1, NFLX forecasts 1.8M new US customers & EPS will be 60¢.  The stock soared more than $60 (17%).  If you would like to learn more about NFLX, click on this link:

Netflix Soars Most Since April 2013 on Talk of Profit After Rollout

Netflix (NFLX)

Traders are betting Mario will throw even more money out to stimulate economies in Europe.  Not all agree which may bring a good fight to watch tomorrow.  Free money is not what makes for bull markets that are made to last.  At least that is what they used to teach in school.  However free money in the US has given it one of the best bull markets in history.  If those rules have not changed there could be a day of reckoning.

Dow Jones Industrials

3 Stocks You Should Own Right Now - Click Here!

No comments: