Friday, July 31, 2015

Markets attempt to crawl higher, led by tech stocks

Dow inched up 13, advancers over decliners almost 3-1 & NAZ added 25.  The MLP index fell 3+ to the 382s & the REIT index rose 4+ to 320.  Junk bond funds edged higher & Treasuries advanced, bringing the yield on the 10 year Treasury below 2.2%.  Oil slid back in the 48s & gold was flattish under 1100.

AMJ (Alerian MLP Index tracking fund)

CLV15.NYM....Crude Oil Oct 15...48.77 Down ...0.14  (0.3%)

GCQ15.CMX...Gold Aug 15.....1,097.60 Up ...9.20 (0.9%)

3 Stocks You Should Own Right Now - Click Here!

China’s stocks fell, capping the biggest monthly drop for the index in 6 years, as the gov struggles to rekindle investor interest amid a $3.5T rout.  The Shanghai Composite Index slid 1.1% to 3663, dragged down by energy & industrial companies.  The gauge tumbled 15% this month, the biggest loss among 93 global benchmark gauges, as margin traders cashed out & new equity-account openings tumbled amid concern valuations are unsustainable.  While unprecedented state intervention spurred a 18% rebound from the Jul 8 low, volatility returned on Mon when the gauge plunged 8.5%.  Outstanding margin debt on mainland bourses has fallen about 40% since mid-Jun, while the number of new stock investors shrank last week to the smallest since the gov started releasing figures in May.  Turnover has fallen as volatility surged.  The value of shares traded on the Shanghai exchange on Thurs was 53% below the Jun 8 peak, while a 100-day measure of price swings on the Shanghai Composite climbed to its highest level in 6 years on Fri.  At the market’s peak in Jun, investors were opening more than 1M accounts a week.  Margin debt surged 5X over the preceding 12 months, propelling the Shanghai Composite to a 150 % advance.  The outstanding balance of loans backed by share purchases fell to 881B yuan ($142B) on the Shanghai Stock Exchange Tues, the lowest level since Mar 16.  To shore up markets, the gov has armed a state-run financing agency with more than $480B to bolster the market, allowed hundreds of companies to suspend share trading & banned major shareholders from selling stocks.

China’s Stocks Fall to Cap Worst Monthly Decline in Six Years

The University of Michigan's final Jul reading on the overall index on consumer sentiment came in at 93.1, down from 96.1 in Jun.  It was lower than the survey's preliminary reading of 93.3.  The final reading was the lowest since May & was below the forecast of 94.0.

Consumer Sentiment Gauge Ticks Lower in July

Exxon Mobil, a Dow stock & Dividend Aristocrat, reported lower-than-expected Q2 results as tumbling crude prices halved profit at the world's largest publicly traded oil company.  Profit at its exploration & production business fared even more poorly with a profit of $2B, down sharply from $7.9B a year earlier.  Crude prices in the qtr fell more than 40% from a year earlier, hit by growing global supplies & worries about slowing demand from China.  EPS fell to $1.00 from $2.05 last year.  Analysts had expected EPS $1.11.  Oil & gas output grew 3.6% to 4M barrels oil equivalent per day (boed).  The stock sank 3.76 (almost 5%).  If you would like to learn more about XOM,click on this link:

Exxon profit halved by tumbling crude price; shares drop

Exxon Mobil (XOM)

After all is said & done, Dow is up about 1% in Jul slightly in the red YTD.  Earnings season, largely over, was sluggish, & that's being kind.  The oil giants & MLPs are getting clobbered.  There have been div cuts & the best are eking out quarterly increases of a penny to maintain a string of higher divs.  A slightly higher market today does not change Dow's status, it's still on defense.  For the time being, tech stocks are the darlings, attracting buyers.

Dow Jones Industrials

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