Dow rose 33 finishing close to the lows of today's session, advancers over decliners 3-2 & NAZ added 12. The MLP index went up 1+ to the 394s (near its multi year lows) & the REIT index lost 1+ in the 311s. Junk bond funds inched higher & Treasuries declined, taking the yield on the 10 year Treasury back up to 2.3%. Oil recovered some of its recent losses, up 1+ to the 52s, & oil continued its sideways trading.
AMJ (Alerian MLP Index tracking fund)
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China’s benchmark stock index capped the biggest gain since 2009 in volatile trading as the gov battled to restore investor confidence in a market that lost almost $4T in less than a month. The Shanghai Composite Index jumped 5.8% to 3,709, erasing a loss of 3.8%. About 600 stocks rose by the daily 10% limit on the benchmark index. Another 1439 companies were halted on mainland exchanges, locking sellers out of 50% of the market. Officials have unveiled market-boosting measures almost every night over the past 2 weeks to reverse the rout in the world’s 2nd-largest stock market. Regulators yesterday banned major stockholders from selling stakes in listed companies, while announcing today banks can roll over loans backed by shares. China’s public security bureau is also stepping in to investigate “malicious” shorting of stocks. The gov widened the scope of its measures after earlier interventions failed to stop the selloff. Foreign traders sold Chinese shares at a record pace in the first 3 days this week in part due to concerns over gov meddling in the markets, while traders liquidated a record number of margin trades yesterday. A 5X surge in margin debt over the 12 months thru Jun 12 had helped propel the Shanghai index to a more than 150% gain. The CSI 300 Index rallied 6.4%. Hong Kong’s Hang Seng China Enterprises Index advanced 3.1%, while the Hang Seng Index jumped 3.7% after recording its biggest intraday decline since 2008 on Wed. The gov is intensifying efforts to combat the market turmoil as policy makers seek to maintain confidence in the nation’s leadership & prevent a crash from weighing on the weakest economic expansion since 1990. China now has more than 90M individual investors, outnumbering members of the Communist Party.
Coty agreed to buy 43 of Procter & Gamble's, a Dow stock & Dividend Aristocrat, beauty brands for $12.5B in a deal that would more than double its sales & transform it into one of the world’s largest cosmetics companies. The transaction will be conducted as a Reverse Morris Trust, meaning PG will spin or split off the business, which will then merge with a COTY subsidiary to reduce taxes for shareholders. COTY is betting it can revive brands that struggled under PG & gain greater access to markets like Brazil & Japan as well. The deal adds Hugo Boss & Gucci to COTY's fragrances unit, CoverGirl & Max Factor to its cosmetics portfolio & brings it into hair color with Wella & Clairol. The combined businesses have annual sales of more than $10B, compared with $4.55B for Coty in its most recent fiscal year. The deal will take at least a year to close. For PG, the sale is part of a plan to reinvigorate growth by divesting slower-selling brands. PG is exiting as many as 100 product lines that aren’t central to the company’s household & personal-care focus. Because of concerns about this deal, both stocks sold off. PG was down 33¢ & COTY fell 1.48.
If you would like to learn more about PG, click on this link:
club.ino.com/trend/analysis/stock/PG?a_aid=CD3289&a_bid=6ae5b6f7
If you would like to learn more about COTY, click on this link:
club.ino.com/trend/analysis/stock/COTY?a_aid=CD3289&a_bid=6ae5b6f7
The AM rally was not meant to least. The Chinese stock market may have settled down, but given its high volatility recently its deeper meaning is unclear. The Greek debt mess drones on & will continue thru tomorrow at a minimum. Alcoa (AA) reported Q2 earnings last evening. On mixed results, the stock was up pennies. The big banks will be next to report. It looks like earnings will not be giving a big lift to the stock market at a time when it desperately needs something to bring out buyers. Dow is down about 250 YTD.
Dow Jones Industrials
AMJ (Alerian MLP Index tracking fund)
| CLQ15.NYM | ....Crude Oil Aug 15 | ....52.92 |  ...1.27 | (2.5%) |
China’s benchmark stock index capped the biggest gain since 2009 in volatile trading as the gov battled to restore investor confidence in a market that lost almost $4T in less than a month. The Shanghai Composite Index jumped 5.8% to 3,709, erasing a loss of 3.8%. About 600 stocks rose by the daily 10% limit on the benchmark index. Another 1439 companies were halted on mainland exchanges, locking sellers out of 50% of the market. Officials have unveiled market-boosting measures almost every night over the past 2 weeks to reverse the rout in the world’s 2nd-largest stock market. Regulators yesterday banned major stockholders from selling stakes in listed companies, while announcing today banks can roll over loans backed by shares. China’s public security bureau is also stepping in to investigate “malicious” shorting of stocks. The gov widened the scope of its measures after earlier interventions failed to stop the selloff. Foreign traders sold Chinese shares at a record pace in the first 3 days this week in part due to concerns over gov meddling in the markets, while traders liquidated a record number of margin trades yesterday. A 5X surge in margin debt over the 12 months thru Jun 12 had helped propel the Shanghai index to a more than 150% gain. The CSI 300 Index rallied 6.4%. Hong Kong’s Hang Seng China Enterprises Index advanced 3.1%, while the Hang Seng Index jumped 3.7% after recording its biggest intraday decline since 2008 on Wed. The gov is intensifying efforts to combat the market turmoil as policy makers seek to maintain confidence in the nation’s leadership & prevent a crash from weighing on the weakest economic expansion since 1990. China now has more than 90M individual investors, outnumbering members of the Communist Party.
China’s Stocks Cap Biggest Gain Since 2009 as Volatility Surges
Coty agreed to buy 43 of Procter & Gamble's, a Dow stock & Dividend Aristocrat, beauty brands for $12.5B in a deal that would more than double its sales & transform it into one of the world’s largest cosmetics companies. The transaction will be conducted as a Reverse Morris Trust, meaning PG will spin or split off the business, which will then merge with a COTY subsidiary to reduce taxes for shareholders. COTY is betting it can revive brands that struggled under PG & gain greater access to markets like Brazil & Japan as well. The deal adds Hugo Boss & Gucci to COTY's fragrances unit, CoverGirl & Max Factor to its cosmetics portfolio & brings it into hair color with Wella & Clairol. The combined businesses have annual sales of more than $10B, compared with $4.55B for Coty in its most recent fiscal year. The deal will take at least a year to close. For PG, the sale is part of a plan to reinvigorate growth by divesting slower-selling brands. PG is exiting as many as 100 product lines that aren’t central to the company’s household & personal-care focus. Because of concerns about this deal, both stocks sold off. PG was down 33¢ & COTY fell 1.48.
If you would like to learn more about PG, click on this link:
club.ino.com/trend/analysis/stock/PG?a_aid=CD3289&a_bid=6ae5b6f7
If you would like to learn more about COTY, click on this link:
club.ino.com/trend/analysis/stock/COTY?a_aid=CD3289&a_bid=6ae5b6f7
P&G Accepts Coty’s $12.5 Billion Offer for 43 Beauty Brands
Procter & Gamble (PG)
Coty (COTY)
Kansas City Federal Reserve Bank pres Esther George, an
inflation “hawk” who has been pushing the central bank to start raising
rates, said that with recent progress
in jobs & the broader economy, “we would be wise to act modestly but
act now.” “Starting now to move rates up slowly and deliberately will allow the
economy to adjust to a more-normal and, in my view, appropriate stance
of monetary policy that will lead to long-term growth,” George said. George is among a handful of influential inflation hawks who believe historically low
interest rates will eventually lead to dangerous asset bubbles &
runaway inflation. “I view the considerable progress in labor markets and the relatively
steady inflation rate as encouraging. However, keeping interest rates
near zero to achieve still further progress toward labor market
improvement and higher inflation is risky in my view,” George said. “More data is always on its way, and waiting for clarity too often causes decisions to be persistently postponed,” she added. Rates were widely expected to move higher in Jun, but a lackluster Q1 combined with growing financial turmoil overseas put a
rate hike on hold until at least Sep, & possibly longer. George made no specific reference to
Greece’s current debt crisis or China’s tumbling stock market, but said
“global economic concerns can pose unpredictable risks to our economy.” The Fed members may not agree on the timing of interest rate hikes,
but they do agree on the trajectory: a gradual increase over a lengthy
period is universally preferred.
KC Fed's George: Raise Rates 'Now'
The AM rally was not meant to least. The Chinese stock market may have settled down, but given its high volatility recently its deeper meaning is unclear. The Greek debt mess drones on & will continue thru tomorrow at a minimum. Alcoa (AA) reported Q2 earnings last evening. On mixed results, the stock was up pennies. The big banks will be next to report. It looks like earnings will not be giving a big lift to the stock market at a time when it desperately needs something to bring out buyers. Dow is down about 250 YTD.
Dow Jones Industrials
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