Dow dropped 138, decliners over advancers almost 4-1 & NAZ lost 28. The MLP index inched up pennies in the 364s & the REIT index was off 2 to the 323s. Junk bond funds were mixed to lower & Treasuries were weak. Oil is sloshing around the 42s & gold gained a little.
AMJ (Alerian MLP Index tracking fund)
The cost of living in the US rose in Jul at the slowest pace in 3 months, casting doubt on how quickly inflation will return toward the Federal Reserve’s goal. The consumer price index climbed 0.1% after a 0.3% gain the month before, according to the Labor Dept. The forecast projected a 0.2% increase. Excluding food & fuel, costs also rose less than projected. Oil has plunged more than 30% from this year’s closing peak in Jun amid a global supply glut that will probably hold down inflation in the coming months. When combined with a stronger dollar & slower growth overseas, the energy slump will make the Fed’s price goal even more elusive. Consumer costs over the past 12 months increased 0.2%. Energy costs rose just 0.1% in Jul after a 1.7% increase in Jun. A short period of stabilization in energy prices appears to be over, as a global supply glut that’s expected to last through 2016 weighs on oil. Excluding food & fuel, the core index climbed 0.1% following a 0.2% increase the prior month. That index was up 1.8% from Jul 2014, after advancing 1.8% in the year thru Jun. Higher prices for shelter, including rents & hotel rates, are helping prop up inflation, offsetting declines in a broad stretch of categories, including air fares, new & used cars & household furnishings. Expenses for shelter climbed 0.4%, the most since Feb 2007, driven mainly last month by hotel rates. Air fares plunged 5.6%, the most since 1995, showing how falling fuel costs can ripple thru the economy. Fed policy makers have twin goals of maximum sustainable employment & inflation of around 2%, progress toward which will dictate when, & how often, they’ll raise interest rates.
China will provide tax breaks to more small companies as policy makers seek ways to spur domestic consumption & boost an economy growing at the slowest pace in more than 2 decades. The companies will benefit from a preferential policy on corp income taxes following an expansion of the program, the State Council, or cabinet, said. The preferential policy, under which corp income taxes will be cut by half, will be extended to small companies with annual taxable income of no more than 300K yuan ($47K), compared with 200K yuan previously. Pressure is growing on the gov to bolster growth after data showed exports falling in Jul, while industrial production, investment & retail sales all missed estimates. The central bank devalued the yuan by the most in 2 decades this month. Small businesses “are a main source of employment & a key driver of development,” the cabinet said. The tax breaks will “provide further tax support to small and micro businesses and allow the government’s proactive fiscal policy to have a greater impact.” The tax breaks will take effect from Oct 1 & continue thru 2017.
Lowe's reported better-than-expected quarterly same-store sales, helped by higher demand for items such as appliances & outdoor power equipment. Same-store sales rose 4.3% in Q2, stronger than the 3.9% expected. Lowe's sells a range of outdoor power equipment including chainsaws, lawn mowers & branch trimmers, & appliances such as refrigerators, dishwashers & washing machines. EPS rose to $1.20 from $1.04 a year earlier. Net sales rose 4.5% to $17.35B. Analysts had expected EPS of $1.24 on revenue of $17.27B. The stock rose 27¢. If you would like to learn more about LOW, click on this link:
club.ino.com/trend/analysis/stock/LOW?a_aid=CD3289&a_bid=6ae5b6f7
Stocks are having another dreary day. This is late Aug, so it's difficult to make anything meaningful from the decline, but this is turning out to be a tough month in what is a tough year. Traders are waiting for minutes from the last FOMC meeting to get clues about what will happen at next month's meeting. Even if there is a 25 basis pint rate hike, it has been well advertised for month & should not come as a shock. The Dow chart below looks gloomy.
Dow Jones Industrials
AMJ (Alerian MLP Index tracking fund)
| CLV15.NYM | ....Crude Oil Oct 15 | ...42.80 |  ...0.32 | (0.7%) |
| GCQ15.CMX | ...Gold Aug 15 | .....1,124.00 | ...6.90 | (0.6%) |
The cost of living in the US rose in Jul at the slowest pace in 3 months, casting doubt on how quickly inflation will return toward the Federal Reserve’s goal. The consumer price index climbed 0.1% after a 0.3% gain the month before, according to the Labor Dept. The forecast projected a 0.2% increase. Excluding food & fuel, costs also rose less than projected. Oil has plunged more than 30% from this year’s closing peak in Jun amid a global supply glut that will probably hold down inflation in the coming months. When combined with a stronger dollar & slower growth overseas, the energy slump will make the Fed’s price goal even more elusive. Consumer costs over the past 12 months increased 0.2%. Energy costs rose just 0.1% in Jul after a 1.7% increase in Jun. A short period of stabilization in energy prices appears to be over, as a global supply glut that’s expected to last through 2016 weighs on oil. Excluding food & fuel, the core index climbed 0.1% following a 0.2% increase the prior month. That index was up 1.8% from Jul 2014, after advancing 1.8% in the year thru Jun. Higher prices for shelter, including rents & hotel rates, are helping prop up inflation, offsetting declines in a broad stretch of categories, including air fares, new & used cars & household furnishings. Expenses for shelter climbed 0.4%, the most since Feb 2007, driven mainly last month by hotel rates. Air fares plunged 5.6%, the most since 1995, showing how falling fuel costs can ripple thru the economy. Fed policy makers have twin goals of maximum sustainable employment & inflation of around 2%, progress toward which will dictate when, & how often, they’ll raise interest rates.
Consumer Prices in U.S. Increased Less Than Forecast in July
China will provide tax breaks to more small companies as policy makers seek ways to spur domestic consumption & boost an economy growing at the slowest pace in more than 2 decades. The companies will benefit from a preferential policy on corp income taxes following an expansion of the program, the State Council, or cabinet, said. The preferential policy, under which corp income taxes will be cut by half, will be extended to small companies with annual taxable income of no more than 300K yuan ($47K), compared with 200K yuan previously. Pressure is growing on the gov to bolster growth after data showed exports falling in Jul, while industrial production, investment & retail sales all missed estimates. The central bank devalued the yuan by the most in 2 decades this month. Small businesses “are a main source of employment & a key driver of development,” the cabinet said. The tax breaks will “provide further tax support to small and micro businesses and allow the government’s proactive fiscal policy to have a greater impact.” The tax breaks will take effect from Oct 1 & continue thru 2017.
China to Give Tax Breaks to More Small Companies as Growth Slows
Lowe's reported better-than-expected quarterly same-store sales, helped by higher demand for items such as appliances & outdoor power equipment. Same-store sales rose 4.3% in Q2, stronger than the 3.9% expected. Lowe's sells a range of outdoor power equipment including chainsaws, lawn mowers & branch trimmers, & appliances such as refrigerators, dishwashers & washing machines. EPS rose to $1.20 from $1.04 a year earlier. Net sales rose 4.5% to $17.35B. Analysts had expected EPS of $1.24 on revenue of $17.27B. The stock rose 27¢. If you would like to learn more about LOW, click on this link:
club.ino.com/trend/analysis/stock/LOW?a_aid=CD3289&a_bid=6ae5b6f7
Lowe's 2Q Sales Beat Wall Street Views
Lowe's (LOW)
Stocks are having another dreary day. This is late Aug, so it's difficult to make anything meaningful from the decline, but this is turning out to be a tough month in what is a tough year. Traders are waiting for minutes from the last FOMC meeting to get clues about what will happen at next month's meeting. Even if there is a 25 basis pint rate hike, it has been well advertised for month & should not come as a shock. The Dow chart below looks gloomy.
Dow Jones Industrials
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