Friday, November 20, 2015

Markets rise on hopes for more European stimulus

Dow gained 146, advancers over decliners better than 2-1 & NAZ added 32.  The MLP index lost 2+ to the 306s & the REIT index rose 3 to 321.  Junk bond funds did little & Treasuries crawled higher.  Oil fell again, nearing the 40 support level, & gold hardly budged.

AMJ (Alerian MLP Index tracking fund)

CLZ15.NYM....Crude Oil Dec 15...40.12 Down ...0.42  (1.0%)

GCX15.CMX...Gold Nov 15.....1,082.90 Up ...4.90 (0.5%)

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ECB pres Mario Draghi set the scene for further stimulus in 2 weeks, saying the institution will do what’s necessary to reach its inflation goal rapidly.  “If we decide that the current trajectory of our policy is not sufficient to achieve that objective, we will do what we must to raise inflation as quickly as possible,” Draghi said.  “In making our assessment of the risks to price stability, we will not ignore the fact that inflation has already been low for some time.”  These comments underline the ECB’s concern that the inflation rate in the 19-nation euro area, currently 0.1%, will slip further from its target of just under 2% amid a high degree of economic slack & slumping oil prices.  Policy makers are weighing the need for an expansion to the €1.1T ($1.2T) QE program that started in Mar, or measures such as taking the deposit rate further below zero.  The ECB Governing Council will meet on Dec 3 for its next monetary-policy meeting.  While Draghi & the institution’s chief economist, have indicated more easing is in the cards, some governors have expressed unease.

Draghi Says ECB Will Do What It Must to Raise Inflation Quickly

Aetna said its business that includes individual Obamacare health plans had performed as expected, following on earlier news that UnitedHealth (UNH), a Dow stock, might exit the unprofitable market.  AET said that its individual business had continued to perform in line with its projections thru Oct.  It backed its full-year 2015 EPS forecast of $7.45-7.55.  In Oct, AET had said it was not making money from the business, which sells gov-subsidized plans on exchanges created under the Obamacare but that profitability could improve next year.  It had about 815K members in plans on the exchanges & 275K in plans sold off the exchanges.  Enrollment for 2016 exchange plans opened earlier this month. In Oct, the Dept of Health & Human Services forecast about 10M would have plans in 2016, significantly below industry expectations of 20M.  The stock rose 3.83.  If you would like to learn more about AET,click on this link:

Aetna Reaffirms 2015 Profit Forecast

Aetna (AET)

Nike approved a new $12B share buyback program & a 2-1 split of its class A & class B shares.  The company also raised its quarterly div 14% to 32¢.  The company already has an $8B share repurchase program that is expected to be completed by the end of May.  The new 4-year program will start after the existing plan expires.  The stock split will be in the form of a stock div.  NKE said in Oct that it is set to grow faster over the next 5 years than it had in the previous 5 & expects revenue to increase 63% to $50B by fiscal 2020, boosted by growth in its e-commerce, women's & Jordan brand businesses.  The company's e-commerce business, which brings in just over $1B per year, is expected to grow to $7B by 2020.   The stock jumped up 6.69.  If you would like to learn more about NKE,click on this link:

Nike Plans $12B Buyback, Two-for-One Split

Nike (NKE)

Nothing like the hint of more euro stimulus, whether needed or not, to get the bulls excited.  Chaos around the word is growing (including a hostage event in Africa today), but that gets little attention.  Economic data continues mediocre at best.  However Dow is up 200 in Nov & in the black YTD, barely.

Dow Jones Industrials


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