Wednesday, February 4, 2015

Lower markets on Greek debt concerns

Dow fell 21, decliners over advancers 2-1 & NAZ lost 27.  The MLP index dropped 5+ to below 451 & the REIT index lost 1+ to the 348s.  Junk bond funds slid lower &Treasuries sold off again.  Oil pulled back to below 51 after this brief rally & gold went up.

AMJ (Alerian MLP Index tracking fund)

CLH15.NYM...Crude Oil Mar 15...50.77 Down ...2.28  (4.3%)

GCH15.CMX...Gold Mar 15.....1,265.90 Up ...5.90 (0.5%)

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Companies added more than 200K workers to payrolls in Jan for a 5th consecutive month, signaling steady labor market growth.  The 213K increase in employment followed a 253K Dec gain that was larger than initially reported, according to ADP Research Institute.  The projection called for an advance of 223K.  The US labor market is demonstrating that it can keep adding jobs even as slumping energy prices hurt industries exposed to oil.  Goods-producing industries, which include manufacturers & builders, boosted headcounts by 31K.  Hiring in construction increased 18K, while factories added 14K.  Service providers increased staff by 183K.  Companies with 500 or more employees added 40K jobs.  Medium-sized businesses, employing 50-499 workers, increased headcount 95K, while small company payrolls rose 78K.  “Employment posted another solid gain in January, although the pace of growth is slower than in recent months,” Mark Zandi, chief economist at Moody’s Analytics said.  Moody’s produces the figures with ADP.  “All indications are that the job market will continue to improve in 2015.”  The ADP report is based on data from businesses with almost 24M workers on their combined payrolls.

Hiring in U.S. Tops 200,000 for Fifth Straight Month as Recovery Quickens

General Motors reported a 91% jump in its Q4 profit, relying on strong US growth to exceed expectations & cap a tumultuous year for a new CEO wrestling with vehicle recalls & losses in Europe.  The company plans to boost its div starting in Q2.  It will later this month pay about 48K US hourly workers profit-sharing checks of $9K based on its 2014 financial performance, representing one of the biggest such payouts in the history of the auto industry.  EPS excluding some charges was $1.19, handily beating estimates of 83¢.  Revenue for was $39.6B, down from $40.5B a year ago.  GM intends to raise its div in Q2 by 20% to 36¢.  "Our intention to increase the dividend is consistent with our balanced capital allocations strategy and reflects the confidence we have in growing the strength of our business," CEO. Barra.  The stock jumped 1.07.  If you would like to learn more about GM, click on this link:

GM's profits beats estimates, raises dividend

General Motors (GM)

German Chancellor Angela Merkel indicated that a diplomatic offensive by newly elected Greek Prime Minister Alexis Tsipras to ease bailout-aid requirements is failing to win over converts.  “I don’t think that the positions of the member states within the euro area with regard to Greece differ, at least in terms of substance,” Merkel said.  While Tsipras has retreated from demands for a writedown of Greece’s debt, yielding to virtually unanimous opposition in the 19-member bloc, his pledge to increase spending & roll back austerity threatens to collide with conditions of aid commitments totaling €240B ($275B).  Tsipras & his finance chief, Yanis Varoufakis, fanned out this week across Europe after their Syriza party’s anti-austerity campaign swept them into office.  Their demands for overhauling the terms of Greece’s bailout package have been met with resistance & alarm in the EU.  “We want to re-correct this framework, not to smash this framework,” Tsipras said after meeting with the European Parliament President.  “We believe that with this framework, we would find a common viable solution for our peoples, a common perspective.”  Varoufakis met today with ECB pres Mario Draghi & said he had “very fruitful” talks over the ECB’s support of the Greek banking system.  Merkel said she’s “looking forward” to meeting Tsipras at a meeting of the EU next week.  She said she’s also spoken to Italian Prime Minister Matteo Renzi & French President Francois Hollande regarding the euro area’s position on Greece.

Merkel Says Greek Diplomatic Offensive Is Failing

The short rally was not made to last.  A pullback today is understandable.  Oil retreated & the rise in oil has had a lot to do with the rally.  But there were no fundamental changes in the oil market.  The MidEast has gotten more  frightening after yesterday, not good for the stock market.  Fighting in Ukraine drones on as Russia is trying to figure out how to support its side while it is entering a recession.  The US economy continues to look good & the jobs report on Fri is expected to show 230K jobs were created in Dec.  However even here, consumer data continues uneven.  Over the short term, there should be more profit taking with Dow still in the red YTD.

Dow Jones Industrials

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