Friday, April 24, 2015

Markets waffle but Nasdaq reaches a new record

Dow lost 9, advancers barely ahead of decliners & NAZ added 35 to a new record high.  The MLP index was up fractionally in the 446s & the REIT index rose 1+ to the 332s.  Junk bond funds did little & Treasuries gained, bringing lower yields.  Oil pulled back after its recent advance & gold slid lower in the 1100s.

AMJ (Alerian MLP Index tracking fund)

CLM15.NYM...Crude Oil Jun 15...56.88 Down ......0.86  (1.5%)

GCK15.CMX...Gold May 15...1,176.90 Down ...17.10  (1.4%)

3 Stocks You Should Own Right Now - Click Here!

Euro-area finance ministers hurled abuse at Greek Finance Minister Varoufakis behind closed doors as they shut down his bid to find a shortcut to releasing financial aid.  The Dutch chairman of the euro-zone finance chiefs’ group categorically ruled out making a partial aid payment in exchange for a narrower program of reforms after a stormy meeting in Latvia, in which Varoufakis was heavily criticized by his euro-area colleagues over his failure to deliver economic reforms.  Euro-area finance chiefs said Varoufakis’s handling of the talks was irresponsible & accused him of being a time-waster, a gambler & an amateur, according to a leaker.  “It was a very critical discussion and it showed a great sense of urgency around the room,” the chairman said after the meeting.  Asked if there was any chance of a partial disbursement, he said, “The answer can be very short: No.”  Greece said it is aiming for a deal as soon as possible.  ECB pres Mario Draghi added to the pressure on the Greek finance chief warning that policy makers may review the conditions of the emergency funding keeping his country’s banks afloat.  Euro-area governors will “carefully monitor” the haircuts imposed on Greek banks’ collateral when borrowing from the Bank of Greece, Draghi said, to take into account the “change in the environment.”  The governing council is due to discuss the matter on May 6.  “The higher are the yields, the bigger is the volatility, the more collateral gets destroyed,” he said.  “Time is running out as the president of the Eurogroup said, and speed is of the essence.”  The 19-nation bloc’s finance ministers were riled after Greek Prime Minister Tsipras tried to bypass their veto on financial aid with an appeal to Angela Merkel yesterday.  Tsipras sought to circumvent the finance ministers’ authority, pleading his case with the German Chancellor & French President Francois Hollande on the sidelines of a summit on immigration in Brussels.  Under euro-area procedures, it’s the finance ministers who have to sign off on any aid disbursement and Merkel said last month she’s not prepared to override those controls.  “I would describe today’s meeting as a complete breakdown in communication with Greece,” Maltese Finance Minister Edward Scicluna said.

Greece's Varoufakis Takes Hammering From Riled EU Ministers

German business confidence jumped to a 10-month high in Apr in a sign that growth in Europe’s largest economy is set to pick up on the back of record stimulus & a favorable exchange rate.  The Ifo institutes’s business climate index rose for a 6th month to 108.6 from 107.9 in Mar.  The estimate was for an increase to 108.4.  Germany is important to the 19-nation euro area’s economic health because it accounts for nearly 29% of GDP.  While the Bundesbank has expressed confidence that economic growth this year will be “quite robust,” declines in investor sentiment & a gauge of manufacturing & services activity serve as a reminder that the country’s recovery isn’t immune to risks.  Ifo’s gauge of current conditions rose to 113.9 from 112.1 in Mar, while a measure of expectations slipped to 103.5 from 103.9.  The ECB, which is supporting the 19-nation economy with record-low interest rates & a €1.1T ($1.2T) asset-purchase plan, is urging all euro-area governments to make their economies more competitive & increase potential growth.

German Business Climate at 10-Month High as Stimulus Kicks In

Microsoft, a Dow stock, posted a 12% drop in Q3 earnings, although it topped estimates.  Profit fell to $4.99M from $5.66M a year earlier.  EPS fell 7¢ to 61¢ & revenue rose 6% to $21.73.  Analysts projected EPS of 51¢ on revenue of $21.06B.  The company, along with other multinationals, is facing a stronger US dollar that’s taking a bite out of earnings overseas.  MSFT said the dollar’s strength had a significant impact on its quarterly results.  For instance, revenue would have grown 9% excluding the effect of currency volatility.  Higher costs also weighed on the bottom line.  Fiscal Q3 earnings included $190M in restructuring expenses, equivalent to a penny for EPS.  The devices & consumer segment recorded sales growth of 8%, despite weaker sales for Windows software.  MSFT benefited from a larger subscriber base for Office 365 & Xbox Live.  Meanwhile, Surface tablet sales climbed 44% to $713M, driven by the Surface Pro.  Commercial sales were up 5% on higher cloud revenue.  Server products & services booked a stronger quarter as well.  The stock rose 3.11.  If you would like to learn more about MSFT, click on this link:

Microsoft Unveils Fiscal 3Q Earnings Beat

Microsoft (MSFT)

While many stocks are just kicking dirt, but tech shares are flying higher.  It took NAZ 15 years to reach a new record & that comes from stocks that didn't exist in 2000.  Besides MSFT, Google (GOOG) & Amazon (AMZN) reported earnings that were warmly greeted by investors.  However, earnings season is not a great success with most multi nationals hurt by the strong dollar & bland organic sales growth.  Then there is the Greek debt problem that is going from bad to worse.  Many euro partners have given up on the country & nobody knows what effect this disaster will have on the euro & global economies.  Dow is only about 200 away from setting a new record.

Dow Jones Industrials

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