Tuesday, March 24, 2015

Steady markets on mixed economc data

Dow rose 2, decliners over advancers 4-3 & NAZ went up 14.  The MLP index dipped 1+ to 431, still stuck in the lower end of its recent trading range, & the REIT index was off 1+ to the 345s.  Junk bond funds climbed higher & Treasuries did little.  Oil & gold inched higher.

AMJ (Alerian MLP Index tracking fund)

CLK15.NYM...Crude Oil May 15...47.63 Up ...0.18 (0.4%)

GCH15.CMX...Gold Mar 15......1,190.00 Up ...2.00 (0.2%)

3 Stocks You Should Own Right Now - Click Here!

The cost of living in the US excluding food & fuel rose more than forecast in Feb, reflecting broad-based gains that helped keep a floor under inflation.  The core consumer-price index climbed 0.2% for a 2nd month, according to the Labor Dept.  The forecast called for a 0.1% increase.  Prices overall also climbed 0.2%, the first advance in 4 months, as fuel costs stabilized.  An improving job market is helping underpin consumer confidence, giving American companies a little more pricing power.  The FMOC is looking for inflation to accelerate & close in on the 2% target as it weighs the timing of their first interest rate increase since 2006.  On a year-over-year basis, core prices climbed 1.7% in Feb after rising 1.6% in the 12 months thru Jan.  Consumer prices were little changed in the 12 months ended Feb after falling 0.1% in the year through Jan.  Fed officials are keeping a close eye on inflation & need to be “reasonably confident” price growth will move toward their goal before they raise benchmark interest rates.  The Fed’s preferred measure of price pressures, linked to consumer spending, climbed 0.2% in Jan from a year before, the weakest reading since Oct 2009.  It hasn’t reached the central bank’s 2% goal since Apr 2012.  Energy costs climbed 1% in Feb after declining for 7 consecutive months.  Gasoline rose 2.4%, the most since Dec 2013.  Food costs increased 0.2 percent in Feb.  The advance in core prices was broad-based.  Owners-equivalent rent, one of the categories designed to track rental prices, increased 0.2% in Feb.  Costs for used & new automobiles, airline fares & clothing all increased.  Men’s apparel showed the biggest gain on record.  One source of weakness was the cost of medical-care services, which dropped for the first time since 1975.

Core Consumer Prices in U.S. Increase More Than Projected

Purchases of new homes in the US unexpectedly rose in Feb to a 7-year high as stronger job gains helped bolster industry activity amid severe weather.  Sales climbed 7.8% to a 539K annualized pace, the most since Feb 2008, according to the Commerce Dept.  The reading exceeded even the most optimistic forecast.  Americans withstood weaker income gains & higher property prices, braving a chillier-than-usual Feb to go out & buy a house last month.  Further healing in the labor market & a boost in inventory should provide stronger support to an industry entering its busiest sales season.  The forecast called for the pace to fall to 464K.  The Commerce Dept revised the Jan reading up to a 500K pace from a previously estimated 481K.  The median sales price of a new house increased 2.6% from Feb 2014 to $275K.  The strengthening in demand last month was led by a record 153% surge in the Northeast & a 10.1% gain in the South.  The supply of homes dropped to 4.7 months at the current sales pace, the lowest since Jun 2013, from 5.1 months in Jan.  There were 210K new houses on the market at the end of Feb, the fewest since Oct.  Acceleration in property values is limiting participation among would-be home buyers, while a lack of inventory is giving Americans fewer properties from which to choose.  Sluggish income gains also are a restraint on purchases

Sales of New U.S. Homes Unexpectedly Climb to Seven-Year High

Euro-area business activity expanded faster than forecast this month, signaling that a fragile recovery in the 19-nation region is becoming more sustained.  A Purchasing Managers Index for the manufacturing & services industries across the region rose to 54.1 from 53.3 in Feb, Markit Economics said.  The forecast was for a reading of 53.6.  Markit said its surveys suggest the euro-region economy grew 0.3% this qtr, supported by a 0.4% expansion in Germany, Europe’s largest economy.  The currency bloc’s economy, overcoming its longest recession, is gathering strength as the ECB starts its large-scale asset-purchase program.  While it may be too early to declare victory over the threat of a deflationary spiral of falling prices & households postponing spending, ECB pres Mario Draghi has said that a sustained recovery is taking hold.  A gauge of euro-area services rose to 54.3 in Mar from 53.7 in Feb.  A similar index for manufacturing increased to 51.9 from 51.  The composite gauges for Germany & France were both well above the 50-point mark that divides expansion from contraction.  The German index advanced to 55.3 from 53.8, marking a 23rd straight month of growth.  In France, the index slipped to 51.7 from 52.2.  While that signals “modest” growth of about 0.2% this qtr, the country is still seeing its best performance since 2011, according to Markit.  The report also showed that euro-area employment growth picked up this month, & prices charged for goods & services fell at a slower pace.

Germany Lifts Euro-Area Economy With Sustained Recovery

This is another quiet day in the stock market.  The intl scene has the usual chaos that the markets have gotten used to.  Putin is flexing muscles, especially in the Ukraine.  And the MidEast slips from bad to worse.  The US market continues to report uneven data with its modestly upward basis.  That is  good enough for the bulls who have bid up popular averages to near rear record highs.  The question becomes, how long will the euphoria last?

Dow Jones Industrials

No comments: