Thursday, February 5, 2015

Markets surge as oil rises again

Dow jumped 211 closing at the highs, advancers over decliners 3-1 & NAZ rose 47.  The MLP index went up 7+ to 457s (near a 2 month high) & the REIT index advanced 4 to 352.  Junk bond funds climbed higher & Treasuries dropped.  Oil surged more than 4% to go over 50 & gold was up only pocket change.

AMJ (Alerian MLP Index tracking fund)

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CLH15.NYM....Crude Oil Mar 15....50.47 Up ...2.02 (4.2%)

Live 24 hours gold chart [Kitco Inc.]

The US trade deficit in Dec widened sharply to its highest level since 2012 as imports rose despite a lower energy bill, which could see Q4 growth estimate revised down.  The Commerce Dept said the trade deficit jumped 17% to $46.6B, the largest since Nov 2012.  It was the biggest percentage increase since Jul 2009.  The shortfall in Nov was revised up to $39.8 from a previously reported $39B.  The forecast was for the trade deficit falling to $38B.  When adjusted for inflation, the deficit widened to $54.7B from $48B in Nov.  Dec's surprise surge in the trade gap suggested a downward revision to Q4 GDP estimate.  The gov reported last week that GDP expanded at a 2.6% annual rate, with trade estimated to have subtracted 1.02 percentage point from growth.  In Dec, imports rose 2.2% to $241B, with imports of non-petroleum products surging to a record high, a sign of strengthening in the domestic economy.  It also reflected the strength of the dollar.  Exports slipped 0.8% to $194.9B.  Exports have been hurt by slowing growth in Asia & Europe, a strengthening dollar, as well as a labor dispute at West Coast ports, which has been cited by some manufacturers as causing delays in the movement of goods.  Exports to Canada & Mexico, the main US trading partners, fell in Dec while exports to Japan, China & the EU rose.  The US-China trade deficit fell 5.5% to $28.3B.

Trade Gap in December Largest Since 2012

The number of Americans filing new claims for unemployment rose less than expected last week, a sign that the labor market continues to strengthen.  Initial claims for state unemployment benefits increased 11K to a seasonally adjusted 278K, according to the Labor Dept.  The increase left intact the bulk of the prior week's huge decline, which had taken claims to the lowest level since Apr 2000.  Claims for the prior week were revised to show 2K more applications received than previously reported.  The forecast called for claims rising to 290K.  Claims have been volatile in recent months because of difficulties adjusting the data for seasonal variations.  Still, they have continued to point to a firming labor market.  The 4-week moving average of claims fell 6K to 292K.  The number still receiving benefits after an initial week of aid edged up 6K to 2.4M.

Weekly Jobless Claims Rise Less Than Expected

Ralph Lauren fiscal Q3 net income fell 9% as the company spent more on opening new stores & marketing while revenue stayed nearly flat.  The results missed expectations & the company trimmed its 2015 revenue forecast.  The clothing & home goods maker said EPS fell to $2.41 from $2.57 last year.  The estimate was for EPS of $2.52.  Revenue edged up less than 1% to $2.03B from $2.02B, also short of forecasts.  Analysts expected $2.11B.  The company has been investing in its infrastructure & increasing spending on marketing & advertising to promote new products to help improve results.  CEO Ralph Lauren said the investments are the "right organizational changes to ensure a strong & healthy future for the company" in an "increasingly complex global environment."  He said the fact that the company is raising its div 11% to 50¢ is a sign the company is committed to its growth objectives.  RL now expects revenue to rise about 4% in 2015, excluding currency fluctuations, down from a previous outlook for 5-7% growth.  After trading lower in the AM, then stock rallied & finished up 2.06.  If you would like to learn more about RL, click on this link:

Ralph Lauren (RL)

At the low levels, oil is finally attracting buyers.  It's up from the mid 40s & is trying to establilsh 50 as a floor.  Perhaps the worst is over.  The fortunes of oil are controlling the stock market.  Dow is now in the black YTD after its strong start in Feb.  Tomorrow AM the jobs report is expected to show a gain of 230K jobs, similar to recent months.

Dow Jones Industrials

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