Thursday, March 26, 2015

Markets decline on increased fighting in the MidEast

Dow lost 45, decliners over advancers 2-1 & NAZ dropped 23 as the tech sector remains weak.  The MLP index went up 1+ to the 429s (still stuck near recent lows) & the REIT index fell 1+ to the 326s.  Junk bond funds were mixed & Treasuries retreated.  Oil rose to 50 & gold is back over 1200.

AMJ (Alerian MLP Index tracking fund)

CLK15.NYM...Crude Oil May 15...50.57 Up ...1.36 (2.8%)

GCH15.CMX...Gold Mar 15......1,204.90 Up ...7.60 (0.6%)

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Fewer Americans than forecast filed applications for unemployment benefits last week as improved weather conditions ushered in labor-market stabilization.  Jobless claims fell 9K to 282K in the latest week, the lowest level since mid-Feb, according to the Labor Dept.  The forecast called for 290K.   A sustained low level of applications, which shows that employers are holding on to workers, typically coincides with more hiring.  Continued gains in employment was one of the 2 signals, along with a pickup in inflation, that Federal Reserve officials last week said were necessary before raising rates.  The 4-week moving average, a less volatile measure than the weekly numbers, declined to 297K last week, from 304K.  The number continuing to receive jobless benefits dropped 6K to 2.42M & the unemployment rate among people eligible for benefits held at 1.8% (where it’s been all year).

Jobless Claims in U.S. Decline to Lowest Level in Five Weeks

Greece is trying to accelerate the disbursement of financial aid as its coffers run low & it remains largely locked out of the bond market.  The country faces the risk of failing to secure adequate funds to pay its debts.  Here are the major dates to watch thru just next month.
  • Mar 30: The Greek gov may submit a comprehensive list of proposed reforms by this date in order to secure more bailout funds.  The aim of meeting this deadline would be to speed up the disbursement of money from the schedule agreed on in Feb, when the European Commission, ECB & the IMF granted a 4-month extension of the existing bailout agreement.
  • Apr 9: Greece will have to make a payment to the IMF of about 360M Special Drawing Rights (SDRs)  that equal about €458M.
  • Apr 14: Greece must roll over €1.4B of Treasury bills.
  • Apr 17: Greece must roll over €1B of Treasury bills.
  • End-Apr: Under the Feb extension agreement, Greece must provide further details on its promised reforms & these must be approved by the ECB, the IMF & the European Commission.
And there are many more deadlines after these.

Here Are the Most Important Dates Ahead in the Greek Crisis

Saudi Arabia led a coalition of 10 Sunni-ruled nations in air strikes against Yemen’s Shiite Houthi rebels as it seeks to stop the spread of Iranian influence on its southern border.  Saudi Arabia may send ground troops to Yemen, Saudi state TV reported.  The air strikes come after forces loyal to the rebel group marched on the southern port city of Aden, the stronghold of Yemen’s President Abdurabuh Mansur Hadi. Huge blasts were heard around the capital Sana’a & at the al-Dailami air base near the city.  Yemen has emerged as the latest battleground for Saudi Arabia & Iran in their tussle for regional supremacy.  Saudi Arabia, the world’s top oil exporter, has accused Shiite Iran of fomenting unrest in country.  The 2 powers have already clashed over Syria & Bahrain, although both are fighting Islamic State extremists in Syria & Iraq.  Yemen’s southern tip, called the Bab el-Mandeb, is a choke-point in intl shipping & the global energy trade.  Saudi’s military offensive will expand “terrorism & insecurity” in the region and deepen the crisis in Yemen, the state-run IRNA news agency reported.  Saudi Ambassador to the US Adel al-Jubeir said earlier that the operation seeks to protect “the legitimate government from a takeover by the Houthis.”  Saudi Arabia, the United Arab Emirates, Kuwait, Bahrain & Qatar said they responded to a request from Hadi.

Saudi Arabia, Gulf Allies Bomb Shiite Houthi Targets in Yemen

Fighting in the MidEast has not gone away just because there have been few reports.  Yemen has descended into chaos which has gotten Saudi Arabia to strike back.  Saudi & its allies represent a large chunk of oil for the rest of the world & this turmoil is affecting oil prices even though the global glut is not going away soon.  The US in its limited war in the area is bombing more sites in Iraq.  Dow is down almost 500 in Mar as earnings season approaches.

Dow Jones Industrials

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