Monday, March 30, 2015

Higher markets on hopes for stimulus in Asia

Dow shot up 247, advancers over decliners 5-2 & NAZ gained 31. The MLP index rose 3+ to the 429s (stuck in the low end of its trading range this year) & the REIT  index went up 1+ to 338.  Junk bond funds did little & Treasuries were slightly higher.  Oil was pennies higher & gold sank further below 1200. 

AMJ (Alerian MLP Index tracking fund)

CLK15.NYM...Crude Oil May 15...48.34 Down .....0.53  (1.1%)

GCJ15.CMX....Gold Apr 15.......1,185.10 Down ...14.70  (1.2%)

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Consumer purchases rose less than projected in Feb, indicating the biggest part of the economy will find it hard to sustain momentum after the best qtr since 2006.  The 0.1% gain followed a 0.2% drop the prior month, according to the Commerce Dept.  The forecast was for a 0.2% gain.  Adjusted for inflation, spending declined for the first time in almost a year.  Frigid temperatures & snow in much of the Northeast & Midwest last month emptied malls & auto-dealer lots as Americans huddled at home to keep warm.  While warmer weather may bring out shoppers, steady gains in payrolls have yet to foster bigger wage gains, which would help bolster spending.  Incomes climbed 0.4% in Feb for a 2nd month, propelled by a jump in divs.  The prior month’s income figure was previously reported as a 0.3% gain.  Wages & salaries increased 0.3% after a 0.6% gain in Jan.  The in purchases during Q4 will be difficult to match this qtr as American consumers decided to squirrel away the extra cash from cheaper fuel.  The saving rate increased to 5.8% last month, the highest since Dec 2012, from 5.5%.  The report also showed that adjusting consumer spending for inflation, which generates the figures used to calculate GDP, purchases declined 0.1%, the first drop since Apr, after a 0.2% increase in the previous month.  Durable goods purchases, including automobiles, decreased 1.1% after adjusting for inflation, the worst performance since Dec 2013.  Spending on non-durable goods, which include gasoline, was little changed.  The biggest surprise may have been outlays on services, which rose 0.1% after adjusting for inflation, the smallest gain since Jul.  The category includes utilities, so economists were projecting a jump to help offset the weaker readings elsewhere.  Americans, especially those living in the east, felt the pinch from higher heating bills that came due this month.  23 states had a top-10 coldest Feb & 9 had their 2nd-coldest

Consumer Spending in U.S. Rises Less Than Forecast

Greek Prime Minister Tsipras, facing euro-area demands for a credible economic plan, is fending off allies at home who are spoiling for a fight.  With the premier due to address parliament amid a deepening cash crunch, a pair of his ministers warned against retreating from election promises to end austerity.  Adding to the confusion, Euclid Tsakalotos, intl economic-affairs minister, said Greece won’t abandon its anti-austerity philosophy in return for aid.  He spoke as talks were taking place in Brussels over the reform measures.  Greece wants a deal but will go its own way “in the event of a bad scenario,” he said.

Tsipras Presses Allies for Support as Greek Cash Crunch Deepens

More Americans than forecast signed contracts to purchase previously owned homes in Feb, indicating a pickup in the housing market ahead of the spring selling season.  The index of pending sales increased 3.1% to 106.9, the highest since Jun 2013, after a 1.2% gain the prior month that was smaller than initially estimated, according to the National Association of Realtors.  The forecast called for a 0.3% rise.  Employment gains & rising rents encouraged buyers to take advantage of cheap borrowing costs even as some contended with frigid weather.  Stronger wage growth & an increase in the number of homes for sale would help provide an additional boost for the market this spring, when buying interest typically heats up.  “Pending sales showed solid gains last month, driven by a steadily improving labor market, mortgage rates hovering around 4 percent and the likelihood of more renters looking to hedge against increasing rents,” the NAR said.  “These factors bode well for the prospect of an uptick in sales in coming months.”  2 of 4 regions saw an increase, reflecting an 11.6% jump in the Midwest & a 6.6% gain in the West.  The index increased 12% on an unadjusted basis versus a year earlier, after a 6.1% gain in the prior 12-month period.  It was projected to climb 8.7%.

Pending Sales of U.S. Homes Rose More Than Forecast in February

News remains drab, but hopes are high for stimulus, especially in China.  The Greek drama plays out with no resolution in sight.  Yemen descends into chaos as Saudi Arabia is fighting to restore a sense of order.  Fri brings the big jobs report (for Mar) & that should bring good jobs numbers as in recent months.  Then comes Q1 earnings.  Hard to believe, but buyers are firmly in command of the markets today.,

Dow Jones Industrials

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