Tuesday, February 17, 2015

Markets fluctuate on Greek debt uncertainty

Dow inched up 28 (with a little buying at the close), decliners over advancers almost 3-2 & NAZ added 5.  The MLP index went up 1+ to the 452s (but still a choppy sideways for more than 2 months) & the REIT index fell 1 to 341.  Junk bond funds were lower & Treasuries were sold, bringing the yield on the 10 year Treasury to its highest in 2015.  Oil rebounded in the PM & is at its best level this year.  Gold continues weak.

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CLH15.NYM....Crude Oil Mar 15....53.59 Up ...0.81 (1.5%)

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German investor confidence rose to the highest level in a year in Feb, buoyed by the imminent arrival of fresh central-bank stimulus.  The ZEW Center for European Economic Research said that its index of investor & analyst expectations, which aims to predict economic developments 6 months in advance, climbed to 53.0 from 48.4 in Jan.  Economists had forecast an increase to 55.0.  Growth accelerated at the end of last year in Germany helping the rest of the currency bloc to better-than-forecast output.  With oil prices & the € sinking, & the ECB scheduled to start quantitative easing next month, investors have stayed upbeat even as the mounting risk of a crisis in Greece threatens renewed turmoil.  A gauge of the current situation climbed to 45.5 from 52.4 the previous month.  A measure of expectations for the euro area rose to 52.7 from 45.2.  The Bundesbank said that the German economy has overcome last year’s weak phase faster than expected & growth this year will probably exceed its Dec forecast.  It previously predicted the country’s economy would grow 1% in 2015.  The European Commission this month forecast an expansion of 1.5%.  The outlook remains clouded by the intensification of the Ukraine crisis & the “collision course” of Greece’s new gov, ZEW report said.  Even so, a ZEW economist said German investors are relatively sanguine on Greece.  “It is a completely new situation, but the general opinion on Greece leaving the euro zone is more or less relaxed,” it added.

German Investor Confidence Rises to One-Year High Before QE

Apple representatives met with Mexican regulators this month ahead of the debut of its smartwatches, indicating that the iPhone maker is stepping up efforts to make the new product available internationally.  5 execs from AAPL met with Mexico’s Federal Telecommunications Institute pres Contreras & other commissioners last week to "discuss advances in health-care devices."  AAPL has also faced questions from US health officials about the smartwatch, which will be able to collect health data.  The device, which is scheduled to start shipping in Apr, is part of CEO Tim Cook’s efforts to move the company’s devices further into people’s everyday lives.  The Apple Watch & related software collect & analyze personal data, such as a user’s pulse.  The company is under increasing regulatory scrutiny as it develops technologies that give its products greater access to personal information, including the Apple Pay mobile-payments system.  AAPL has stepped up US lobbying spending & has been meeting with more gov agencies.  In Dec 2013, execs met with the FDA about medical devices & in 2014 sat down with the FTC to demonstrate the Apple Watch & related health applications.  The stock went up 75¢, another new high.  If you would like to learn more about AAPL, click on this link:

Apple Meets With Mexican Regulators Ahead of Smartwatch Debut

Apple (AAPL)

New York business conditions remain moderately expansive this month, according to data released by the Federal Reserve Bank of New York, but area manufacturers are more wary about the future.  The Empire State's business conditions index edged down to 7.8 in Feb from 9.9 in Jan & the index has cooled since Sep.  The forecast was for the latest index to be little changed at 10.  A reading above zero indicates expansion.  The readings suggests "conditions for NY manufacturers improved modestly for a 2nd consecutive month."  The new orders index dropped to 1.2, indicating almost flat new demand, from 6.1 in Jan.  The shipments index increased to 14.1 from 9.59.  The employment index slowed to 10.1 from 13.7.  The workweek index remained in negative territory, although it rose to -1.1 from -8.4 in Jan.  Fewer area manufacturers are raising selling prices this month.  The prices-received index slowed to 3.4 from 12.6.  The prices-paid index edged up to 14.6 in Feb from 12.6 in Jan.  "Indexes assessing the six-month outlook, though generally positive, conveyed considerably less optimism about future business activity than in recent months," the report said.  The general business conditions expectations index for the next 6 months plunged to 25.6 this month from a high reading of 48.3 (the best level in 3 years).  The Feb reading is the lowest in more than 2 years & new orders expectations dropped to 28 from 41.  The employee expectations index fell to 24.7 from a multi-year high of 31.6 in Jan.

New York Factory Activity Slows More than Views

The latest rumor is that Greece will ask for a 6 month extension.  The idea is it will muddle by & then beg for more time later this year.  The new gov has no intention of making reforms.  The ECB does not have a strong backbone & will probably cave in, giving Greece an extension with a warning which means little.  There are no shortage of problems elsewhere.  Recent strength in oil might be related to growing violence in the MidEast.  Those oil supplies are at greater risk than usual.  In addition, the collapsing Russian economy is being watched by oil traders.  Russia is the #1 supplier of crude.  These are troubling times for the stock market while popular averages are close to or at record highs.   That's called a disconnect.

Dow Jones Industrials

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