Friday, April 10, 2015

GE leads the markets advance

Dow gained 98, advancers over decliners 3-2 & NAZ added 21.  The MLP index went up 2+ to the 437s & the REIT index fell fractionally to the 331s.  Junk bond funds inched higher & Treasuries rose.  Oil jumped to the high 51s & gold closed above 1200.

AMJ (Alerian MLP Index tracking fund)

3 Stocks You Should Own Right Now - Click Here!

CLK15.NYM....Crude Oil May 15....51.40 Up ...0.61 (1.2%)

Live 24 hours gold chart [Kitco Inc.]

Real estate investment trust Excel Trust (EXL) said it would be bought by Blackstone Property Partners, part of Blackstone Group (BX) for about $2B in cash.  BX will pay $15.85 per share EXL has 38 retail properties housing supermarkets, drug stores & department stores."  Appetite for high-quality retail real estate is strong with cap rates and REIT stock multiples approaching historic levels and we did not believe the market accurately reflected the value of the assets," EXL CEO Gary Sabin said.  Real estate has overtaken private equity as BS's most high-profile & lucrative business, & the company now has the world's biggest private real estate investment business.  Real estate accounted for 43% of its economic net income in 2014.  BX  stock went up 82¢ & EXL stock jumped 1.98 to 15.82.  If you would like to learn more about BX, click on this link:

Blackstone to Buy Excel Trust for About $2B

The Blackstone Group (BX)

The number of US rigs drilling for oil fell the most in a month, a sign that America's cutbacks aren't over yet.  Drillers idled 42 oil rigs (excluding gas rigs), reducing the number to 760, Baker Hughes reported.  The rig count has dropped 53% since Oct, an unprecedented retreat, as the decline in oil prices has made production less profitable.  The forecast was for a reduction of 9 rigs.  Production isn't slowing yet.  New efficiencies in drilling & pumping may make raw numbers of rigs in the field misleading.  The US will pump 9.2M barrels a day this year, the most since 1972, despite the fewest rigs in the field in almost four years, according to the Energy Information Administration.

Oil Rigs Tumble Again, Showing the Cuts Aren't Over Yet

Investors are facing the prospects of declining corp earnings, slower economic growth & higher interest rates.  Yet a gauge of market volatility is showing a level of comfort not felt in almost 2 years.  The Chicago Board Options Exchange Volatility Index, which is derived from the price of hedges on the S&P 500 Index, closed yesterday more than 10% below its 10-day, 50-day & 200-day moving averages.  Before Mar, the gauge of US equity trader anxiety hadn’t fallen that much since Jul 2013. Some investors anxiety has been alleviated as a slew of weaker economic data has signaled the Federal Reserve may have reason to delay raising interest rates beyond this summer.  Minutes from last month’s Fed meeting showed policy makers were divided over whether they would raise interest rates in Jun, a debate that occurred before disappointing payroll figures were disclosed Apr 3.  While some participants argued for higher rates in Jun, others said a rate increase should be delayed until later in the year.  A couple said the economy probably wouldn’t be ready for tighter policy until 2016.  The debate over borrowing costs comes as analysts have slashed corp profit projections, predicting a slump thru Sep.  Earnings are expected  to fall 5.6% in Q1.  This is the 2nd time the VIX has dropped this far below the 3 levels of resistance in the past 30 days.  Today it lost 48¢ to 12.61.

VIX Finds Comfort Zone as Fed Soothes Investors’ Profits Anxiety

General Electric, a Dow stock, jumped 11%, after announcing it was selling lending operations which would help finance a large stock repurchase program.  New hopes for delays in raising interest rates were also a factor, bringing out buyers.  After cracking thru 18K again, the Dow is still more than 200 away from setting records ahead of earnings season which starts next week.

Dow Jones Industrials


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