Monday, December 28, 2015

Markets drift lower as oil falls to the $36s

Dow was down 23 (above session lows), decliners above advancers almost 2-1 & NAZ fell 7.  The MLP index dropped 6+ to the 283s as oil sold off again & the REIT index went up 1+ to the 326s.  Junk bond funds pulled back after recent strength & Treasuries rose.  Oil dropped to the 36s & there was selling in gold.

AMJ (Alerian MLP Index tracking fund)

CLG16.NYM....Crude Oil Feb 16....36.78 Down ...1.32  (3.5%)

Live 24 hours gold chart [Kitco Inc.]

Amazon has been a prime beneficiary of more consumers doing their holiday shopping online & procrastinating.  Amazon Prime, the company's $99-a-year loyalty program that includes unlimited free 2-day shipping, gained 3M new members in the 3rd week of Dec alone.  Meanwhile, the number of Prime members shopping via mobile more than doubled this holiday season, according to AMZN.  Christmas Eve was the biggest day yet for deliveries by the company's Prime Now service, which now offers free 2-hour delivery to more than 20 metropolitan areas.  When Prime Now launched last year, it only delivered within Manhattan.  The company shipped a record number of items worldwide for the holidays, with items going to 185 countries.  The 20-year-old company is profiting from major trends reshaping holiday shopping in the US.  More people do part or even all of their shopping online, increasingly using mobile devices such as tablets & smartphones to "window shop" & then buy items from their couch or their desk at work.  Retailers are deluging consumers with e-mail offers for online-only deals.  And procrastinators, once stuck dealing with huge crowds at shopping malls & big-box stores right before Christmas, now can do last-minute shopping online.  AMZN & some other retailers promised that items ordered as late as the morning of Christmas Eve would arrive by midnight.  Nearly 70% of its customers this holiday used a mobile device to shop.  Worldwide, on Cyber Monday alone, those customers ordered more than 35 electronic items per second & Adele's new CD, "25," every 3 seconds.  Cyber Monday, the Mon following Thanksgiving, has seen online purchases jump since its founding a decade ago.  Meanwhile, the number of shoppers going to stores on Black Friday has decreased as major retailers open on Thanksgiving evening & many retailers offer deals before then.  The stock shot up 12+ (after doubling this year).  If you would like to learn more about AMZN, click on this link:

Amazon holiday shipping, Christmas Eve deliveries set recordAP (AMZN)

China stocks tumbled more than 2% on Mon, their biggest loss in a month, as weak industrial profit data & a looming revamp of how companies will be listed, weighed on the market.  Sentiment was also soured at the start of a holiday-shortened trading week by a slump in B shares, stocks traded in Shanghai & Shenzhen but denominated in hard currencies.  The blue-chip CSI300 index tanked 2.9%, to 3727, while the Shanghai Composite Index lost 2.6%, to 3533 (their biggest one-day percentage fall since Nov 27).  Investors are concerned about the impact of imminent changes to the system for IPOs, which could see China moving from an approval-based system, toward a US-style registration-system, potentially boosting share supply.  In a major step toward reform, China's top legislature just a proposal to reform the IPO system, authorizing the gov to kick-off the changes as early as Mar.  Investors drew little solace from data released yesterday that showed a 6th consecutive month of decline in industrial company profits in Nov.  The slump in B shares was partly triggered by profit-taking, as the index had risen for 13 sessions in a row, & surged nearly 50% over the past 3 months.

China Stocks Have Worst Day in a Month

FedEx attributed its failure to deliver some Christmas packages to volumes that “far exceeded all previous records” after warning last week that bad weather would be to blame for some gifts showing up late.  “An unprecedented surge of last-minute e-commerce shipments” flooded in ahead of the holiday, FDX said, going beyond the company’s focus on storms in a Dec 24 forecast of tardy Christmas deliveries.  United Parcel Service (UPS) reported completing all the deliveries it had promised ahead of Dec 25.  Operations have returned to normal after the deployment of thousands of workers on Christmas Day, FDX said.  The Express unit, which offers expedited delivery, also expanded Sat service on Dec 26 to handle late parcels as well as normal business.  Details weren't given on why or how its network of jets, sorting facilities & delivery vehicles was unable to handle the increase.  The stock lost 1.24.  If you would like to learn more about AMZN, click on this link:

FedEx Cites ‘Unprecedented’ E-Commerce Surge in Christmas Delays

FedEx (FDX)

Stocks wandered aimlessly on low volume.  In this semi-holiday week (with only 4 days of trading), price movements can not be considered meaningful on reduced trading volume.  The market has had one spectacular rise from the lows in Mar 2009, but this year it is coming to an end.  Dow is in the red by 300 YTD.  At the same time AMZN has doubled (with elusive profits).  Next year rising interest rates will take their toll on any market advance.

Dow Jones Industrials

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