Thursday, February 26, 2015

Markets drift lower on mixed economic data

Dow fell 8, decliners over advancers 5-4 & NAZ climbed 9.  The MLP index sank 8+ to 445 (following oil's decline) & the REIT index lost 2+ to 334. Junk bond funds edged higher & Treasuries were little changed to lower.  Oil dropped below 50 & gold crawled higher.

CLJ15.NYM....Crude Oil Apr 15...49.71 Down ....1.28  (2.5%)
GCH15.CMX...Gold Mar 15....1,212.70 Up ...11.70 (1.0%)


3 Stocks You Should Own Right Now - Click Here!

The number of Americans filing for unemployment benefits jumped by the most since Dec 2013 last week from a week earlier, a sign of uneven progress in the labor market.  Jobless claims increased 31K to 313K from a revised 282K in the prior period, according to the Labor Dept.  The forecast saw claims rising to 290K.  Looking past the weekly data, which can often be volatile, job-market fundamentals have improved as payroll growth accelerates & Americans stream into the labor force looking for work.  Continued improvement will be needed to generate faster wage growth & support consumer spending.  The number continuing to receive jobless benefits dropped 21K to 2.4M while the unemployment rate among people eligible for benefits held at 1.8%.  The 4-week average of claims, a less-volatile measure than the weekly figure, gained to 294K from a revised 283K the week before.

Jobless Claims in U.S. Jump by Most Since December 2013

Orders for durable goods rose in Jan for the first time in 3 months, showing manufacturing may be starting to stabilize as companies look beyond weaker global markets & cutbacks among energy producers.  Bookings for goods meant to last at least 3 years increased 2.8% after a revised 3.7% decrease the prior month, according to the Commerce Dept.  Non-military capital goods orders excluding aircraft rose 0.6% after a 0.7% decrease in Dec.  Business demand rose for equipment including machinery & computers, indicating domestic sales are underpinning manufacturing.  At the same time, orders have been held back as factories contend with tepid sales to overseas customers & a slump in oil prices prompts producers to limit investment.  Excluding transportation equipment bookings increased 0.3%.  Demand for non-defense goods rose 3% after a 3.3% drop.  Commercial aircraft orders jumped 128% in Jan after slumping 58% a month earlier.   Shipments of non-military capital goods excluding aircraft, used in calculating GDP, dropped 0.3% last month after rising 0.3% in Dec.  Business equipment spending Q4 fell at a 1.9% annualized rate, the biggest decline since Q2-2009, according to the Commerce Dept’s first estimate of GDP for the period.

Durable Goods Orders in U.S. Rise for First Time in Three Months

Ukraine signaled the latest attempt at peace in its easternmost regions is taking hold & said the military would start withdrawing heavy weapons from the front lines. There were no cease-fire breaches after midnight, the military before announcing the arms removal.  While Russian Foreign Minister Lavrov accused the US & Europe of seeking to derail dialogue, he said the peace deal was showing tangible results & there are no “ideal truces.”  The rebels said some fighting continues.  Guns falling silent would mark the biggest progress since the cease-fire in Minsk 2 weeks ago.  Since then, insurgents have seized a key transport hub & the US & EU have threatened more sanctions against Russia, which denies backing the rebels militarily.  The nation is still awaiting the first cash from a $17B IMF rescue and investors are nearing talks to ease terms on gov foreign debt.  In another drag on Ukraine’s shrinking economy, pres Putin urged the gov in Kiev Wed to ensure energy supplies to rebel-held areas & said Russian gas shipments to Ukraine would stop if the country doesn’t make prepayments, a move that may threaten transit to Europe.  State-run OAO Gazprom said today it’s ready to discuss separate shipments for Ukraine & rebel-held territory.  The separatists say they’ve removed 400 pieces of heavy arms from the front lines & urged monitoring by the Organization for Security & Cooperation in Europe.  The rebels continue to restrict access for observers, the OSCE said.

Ukraine Says Truce Takes Hold as Army Begins Weapons Pullback


Stocks are back to meandering after the Dow & S&P 5500 set new record highs.  Reducing fighting in Ukraine is a hopeful sign for peace.  But  nerves remain on edge.  The MidEast is facing increases terror as more countries are under control by ISIS.  Oil, after sinking to 45 in Jan, has been settling in around 50.  Unfortunately, price stability at this depressed level spells difficulty for this major worldwide industry.

No comments: