Dow climbed 13, advancers over decliners 5-4 & NAZ fell 32. The MLP index slid 2 to the 336s & the REIT index lost 1 to the 312s. Junk bond funds were bid up & Treasuries rallied. Oil jumped up to the 48s (it was in the 44s last week) & gold also rose.
AMJ (Alerian MLP Index tracking fund)
![Live 24 hours gold chart [Kitco Inc.]](http://www.kitco.com/images/live/gold.gif?0.2662688842170191)
Microsoft, a Dow stock, introduced its first laptop, wading deeper into hardware to spur adoption of its Windows 10 operating system. The Surface Book laptop has a detachable screen, allowing it to be used like a tablet, & a battery that can last up to 12 hours. It is faster than the competition & its price will start at $1500 for the 13" laptop, which will go on sale this month. The company also introduced 3 Lumia phones & a Surface Pro 4 tablet. The success of Windows 10 is central to CEO Satya Nadella's strategy of building a unified platform & moving toward cloud-driven software to transform the image of MSFT. In releasing the new phones, tablet & laptop, the company is seeking to attract consumers & developers to the operating system, which works across a variety of devices from phones to game consoles. More than 110M devices run the operating system, about 2 months after its release, & the goal is to reach 1B in 2018. The Surface Pro 4 tablet, 30% faster than the previous version, is 8.4 millimeters thick & comes with 1TB of storage. The attached stylus comes in 5 colors & interchangeable tips to mimic a variety of writing tools, from ballpoint to felt-tip pens. The new product starts at $899. The Lumia 950 & 950 XL smartphones have 2 antennas to improve signal detection & allow users to glance at the locked screen for information without using the battery. The Lumia 950, priced at $549 & the XL, at $649, will be available in Nov. It also introduced a lower-end Lumia 550 for $139. The handsets are the first released since the CEO said in Jul that MSFT would write down almost the entire value of the acquired Nokia handset unit & lay off almost 8K. Under the new plan, MSFT will release fewer than 10 phones a year targeted in 3 categories: business phones, high-end models & value devices. The stock rose 12¢. If you would like to learn more about MSFT, click on this link:
club.ino.com/trend/analysis/stock/MSFT?a_aid=CD3289&a_bid=6ae5b6f7
US exports took a hit from an ailing global economy in Aug & imports from China surged, fueling the largest expansion of America's trade deficit in 5 months. The report from the Commerce Dept illustrates the US economy's vulnerabilities to a strong dollar & weak demand in foreign markets, which could impose further caution on the Federal Reserve's plans to hike interest rates. The trade deficit swelled 15.6% to $48.3B. The scope of the increase was accentuated by the unusually narrow trade deficit registered in Jul. But the size of the gap stands well above the average levels seen in recent years. This puts the onus on US consumers to deliver stronger economic growth because the rest of the world will probably be a drag. Overall exports fell 2% to their lowest level since Oct 2012. Exports to Mexico fell $1.5B & the EU bought $500M less from America than it did in Jul. The declines are partly due to expectations of higher interest rates in the US that have pushed the value of the dollar higher, reflecting the strength of America's economy relative to its trading partners. Weaker demand abroad is playing a role, & Treasury Secretary Jack Lew will ask policymakers from other countries gathering in Lima this week to stimulate their economies to kick-start global growth. A 3% increase in imports from China also factored into the widening of the trade deficit. The yuan currency has devalued sharply in recent months amid concerns of a possible crash in the Chinese economy. The widening US trade deficit surpassed the $47.4B forecast. This suggests the economy was growing a little more slowly in Q3 than expected. Until recently it appeared that the US economy was largely shrugging off weakness abroad. But last week new data showed a sharp slowdown in employment growth in Aug & Sep which has fueled doubts over Fed Chair Janet Yellen's assertion 2 weeks ago that the economy would be strong enough to warrant an interest rate hike this year. In Aug, imports rose 1.2%, even though America bought the least petroleum from abroad since Sep 2004. Imports of consumer goods rose $4B, of which slightly more than ½ were cell phones & other household goods.
PepsiCo, a Dividend Aristocrat, reported a better-than-expected quarterly profit as its commodity costs fell & demand for snacks & beverages rose in North America. The company also raised its target for 2015 adjusted EPS growth to 9% from 8%, on a constant-currency basis. Revenue from the North America beverages business rose 4% in Q3, accounting for a 1/3 of its total revenue, while revenue from its snacks business in the region increased 1%. This is the first time PEP has broken out its North America quarterly beverage sales numbers. EPS was 36¢, down from 1.32 a year earlier (when it took a charge of $1.4B, or 92¢ per share, as it changed its accounting method for Venezuela operations). Excluding items, EPS was $1.35. Net revenue fell 5.2% to $16.3B, the 4th straight quarterly decline. Analysts had expected EPS of $1.26 on revenue of $16.1B. The stock rose 1.26. If you would like to learn more about PEP, click on this link:
club.ino.com/trend/analysis/stock/PEP?a_aid=CD3289&a_bid=6ae5b6f7
There was no dramatic news today so traders could spend more time thinking about earnings season that will kick into high gear next week. Stocks have been hot for a week & some of those profits were cashed in. Dow is up 500 in Oct, not bad.
Dow Jones Industrials
AMJ (Alerian MLP Index tracking fund)
| CLX15.NYM | ....Crude Oil Nov 15 | ....48.50 |  ...2.24 | (4.8%) |
Microsoft, a Dow stock, introduced its first laptop, wading deeper into hardware to spur adoption of its Windows 10 operating system. The Surface Book laptop has a detachable screen, allowing it to be used like a tablet, & a battery that can last up to 12 hours. It is faster than the competition & its price will start at $1500 for the 13" laptop, which will go on sale this month. The company also introduced 3 Lumia phones & a Surface Pro 4 tablet. The success of Windows 10 is central to CEO Satya Nadella's strategy of building a unified platform & moving toward cloud-driven software to transform the image of MSFT. In releasing the new phones, tablet & laptop, the company is seeking to attract consumers & developers to the operating system, which works across a variety of devices from phones to game consoles. More than 110M devices run the operating system, about 2 months after its release, & the goal is to reach 1B in 2018. The Surface Pro 4 tablet, 30% faster than the previous version, is 8.4 millimeters thick & comes with 1TB of storage. The attached stylus comes in 5 colors & interchangeable tips to mimic a variety of writing tools, from ballpoint to felt-tip pens. The new product starts at $899. The Lumia 950 & 950 XL smartphones have 2 antennas to improve signal detection & allow users to glance at the locked screen for information without using the battery. The Lumia 950, priced at $549 & the XL, at $649, will be available in Nov. It also introduced a lower-end Lumia 550 for $139. The handsets are the first released since the CEO said in Jul that MSFT would write down almost the entire value of the acquired Nokia handset unit & lay off almost 8K. Under the new plan, MSFT will release fewer than 10 phones a year targeted in 3 categories: business phones, high-end models & value devices. The stock rose 12¢. If you would like to learn more about MSFT, click on this link:
club.ino.com/trend/analysis/stock/MSFT?a_aid=CD3289&a_bid=6ae5b6f7
Microsoft Introduces Three Lumia Phones, ‘Mixed Reality’ Games
Microsoft (MSFT)
US exports took a hit from an ailing global economy in Aug & imports from China surged, fueling the largest expansion of America's trade deficit in 5 months. The report from the Commerce Dept illustrates the US economy's vulnerabilities to a strong dollar & weak demand in foreign markets, which could impose further caution on the Federal Reserve's plans to hike interest rates. The trade deficit swelled 15.6% to $48.3B. The scope of the increase was accentuated by the unusually narrow trade deficit registered in Jul. But the size of the gap stands well above the average levels seen in recent years. This puts the onus on US consumers to deliver stronger economic growth because the rest of the world will probably be a drag. Overall exports fell 2% to their lowest level since Oct 2012. Exports to Mexico fell $1.5B & the EU bought $500M less from America than it did in Jul. The declines are partly due to expectations of higher interest rates in the US that have pushed the value of the dollar higher, reflecting the strength of America's economy relative to its trading partners. Weaker demand abroad is playing a role, & Treasury Secretary Jack Lew will ask policymakers from other countries gathering in Lima this week to stimulate their economies to kick-start global growth. A 3% increase in imports from China also factored into the widening of the trade deficit. The yuan currency has devalued sharply in recent months amid concerns of a possible crash in the Chinese economy. The widening US trade deficit surpassed the $47.4B forecast. This suggests the economy was growing a little more slowly in Q3 than expected. Until recently it appeared that the US economy was largely shrugging off weakness abroad. But last week new data showed a sharp slowdown in employment growth in Aug & Sep which has fueled doubts over Fed Chair Janet Yellen's assertion 2 weeks ago that the economy would be strong enough to warrant an interest rate hike this year. In Aug, imports rose 1.2%, even though America bought the least petroleum from abroad since Sep 2004. Imports of consumer goods rose $4B, of which slightly more than ½ were cell phones & other household goods.
U.S. Trade Gap Widens Sharply in August
PepsiCo, a Dividend Aristocrat, reported a better-than-expected quarterly profit as its commodity costs fell & demand for snacks & beverages rose in North America. The company also raised its target for 2015 adjusted EPS growth to 9% from 8%, on a constant-currency basis. Revenue from the North America beverages business rose 4% in Q3, accounting for a 1/3 of its total revenue, while revenue from its snacks business in the region increased 1%. This is the first time PEP has broken out its North America quarterly beverage sales numbers. EPS was 36¢, down from 1.32 a year earlier (when it took a charge of $1.4B, or 92¢ per share, as it changed its accounting method for Venezuela operations). Excluding items, EPS was $1.35. Net revenue fell 5.2% to $16.3B, the 4th straight quarterly decline. Analysts had expected EPS of $1.26 on revenue of $16.1B. The stock rose 1.26. If you would like to learn more about PEP, click on this link:
club.ino.com/trend/analysis/stock/PEP?a_aid=CD3289&a_bid=6ae5b6f7
PepsiCo 3Q Profit, Revenue Top Estimates
Pepsico (PEP)
There was no dramatic news today so traders could spend more time thinking about earnings season that will kick into high gear next week. Stocks have been hot for a week & some of those profits were cashed in. Dow is up 500 in Oct, not bad.
Dow Jones Industrials
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