Wednesday, February 11, 2015

Lower markets ahead of Greek bailout decision

Dow fell 67, decliners over advancer 2-1 & NAZ rose 7.  The MLP index dropped 4+ to the 444s & the REIT index was off pennies in the 341s.  Junk bond funds were mixed & Treasuries slid lower.  Oil fell to the 49s & gold saw more selling.

AMJ (Alerian MLP Index tracking fund)

CLH15.NYM...Crude Oil Mar 15...49.65 Down ...0.37  (0.7%)

GCH15.CMX...Gold Mar 15.....1,233.50 Up ...1.80 (0.2%)

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Greek Finance Minister Varoufakis headed for a showdown with euro zone finance ministers after his new leftist-led gov won a parliamentary confidence vote for its refusal to extend an intl bailout.  He said he was ready for a clash with euro zone paymaster Germany & its allies over Greece's determination to scrap austerity measures, end cooperation with the "troika" of EU/ECB/IMF officials overseeing the bailout program & demand a "haircut" restructuring its debt.  "If a debt can no longer be paid off then that leads to a haircut," Varoufakis said.  "What is critical is that Greece's debt cannot be paid off in the near future."  German Finance Minister Schaeuble has said that if Greece is not willing to request an extension of its €240B bailout, the biggest in financial history, "then that's it," ruling out further assistance or debt forgiveness.  He & other euro zone ministers said they wanted to hear Greece's ideas at a Eurogroup meeting today, but they warned that time was short since the bailout program expires at the end of this month & no solution is in sight.  EU leaders will take up the issue at their first summit with Greek Prime Minister Alexis Tsipras on tomorrow.  EU officials said they would be briefed on the talks but there would be no room for debt negotiation at a summit mostly devoted to the Ukraine-Russia conflict, fighting terrorism & longer-term reform of the euro zone's governance.  Tsipras struck a defiant tone in parliament late on Tues, saying that "little Greece" was changing Europe by casting off austerity.  "We are not negotiating the bailout; it was canceled by its own failure," he declared before winning the confidence vote with the backing of 162 lawmakers in the 300-seat chamber.  "I want to assure you that there is no going back. Greece cannot return to the era of bailouts."

Greek Finance Minister Ready to Spar Over Debt

Apple shares at $122 yesterday, gave the maker of iPhones & iPads a market value of more than $700B, the first company to close above that mark.  Its market value is based on the company's 5.8B shares outstanding.  The market value is nearly double each of the next 3 largest companies in the S&P 500.  The iPhone maker first passed Exxon Mobil (XOM), a Dow stock & Dividend Aristocrat, in value in Aug 2011 & has remained larger since Aug 2013.  AAPL's mark comes nearly 2 weeks after the company reported earnings of $18B on revenue of $74.6B during the holiday qtr . The qtr was driven by a 46% increase in sales of iPhones.  In 2007, when former CEO Steve Jobs first showed off the iPhone, its market value was $76B.  The stock went up 1+ to the 123s.  If you would like to learn more about AAPL, click on this link:

Apple Becomes First $700B U.S. Company

Apple (AAPL)

Crude oil prices fell for the first time in 4 sessions on Tues after the International Energy Agency (IEA) warned that ample supplies will raise global inventories before investment cuts begin to significantly dent production.  Oil stockpiles at OPEC countries may approach a record 2.8B barrels by mid-2015, said the IEA.  The IEA also predicted that demand for oil from the OPEC will hold at 29.4M barrels per day (bpd) this year, & said US shale oil output growth will pause before regaining momentum.  The IEA's outlook was more bearish than OPEC's monthly report on Mon which forecast 2015 demand for oil from its members will rise to 29.2M bpd, up 430K bpd from an earlier forecast.  The US Energy Information Administration (EIA) added to the bearish sentiment in a separate report yesterday that kept its 2015 & 2016 domestic oil production expectations virtually unchanged from the previous month.  Ahead of weekly oil inventory reports, analysts estimated that US. crude stockpiles likely rose 3.7M barrels last week, pushing stockpiles to a fresh record high.

Oil Slips as IEA Warns Stocks Could hit All-Time High

The stock market is waiting to hear what the biggies decide to do about refinancing Greek debt.  Prospects for a favorable decision are not good.  Meanwhile, oil is heading lower on gloomy reports about high inventories around the globe.  The MLP index has been sloshing around under 450 for more than 2 months as the darling securities have lost favor.  Fracking has been responsible for much of the increased oil production in the US.  It's expensive & that collides with low oil prices which can remain for months. 

Dow Jones Industrials

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