Markets fall on China trade data and the bear market in oil

Dow declined 162, decliners over advancers 2-1 & NAZ lost 3.  The MLP index recovered 6+ to the 357s (off the highs) after slumping to lows not seen in more than a decade & the REIT index fell a fraction in the 319s.  Junk bond funds sold off & Treasuries slid lower.  Oil waffled in the 37s (multi year lows) & gold fluctuated.

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CLF16.NYM

....Crude Oil Jan 16

....37.83

...0.18

(0.5%)

US stocks joined a selloff in global equities, while currencies of commodity-producing nations tumbled as fresh signs of weakness in China’s economy rekindled concern that a slowdown there could spread.  The S&P 500 fell for the 4th time in 5 days as crude fluctuated at the lowest level since 2009.  Emerging-market shares joined a selloff in European & Asian equities after China’s slowing trade intensified concern over the scope of the economy’s weakness.

China’s imports slumped for a record 13th straight month, rekindling worry the slowdown there will spread - a concern that precipitated the summer rout on global financial markets.  Oil's rout is clouding the prospects for recoveries in the US & Europe as capital spending wanes & inflation holds below central-bank targets, with the Fed poised to raise rates for the first time in a decade.

Crude, Metals Drag Down Global Stocks

China’s exports fell for a 5th month while a slump in imports moderated, as policy makers seek to spur domestic spending amid tepid global demand.  Overseas shipments dropped 6.8% in Nov in dollar terms from a year earlier, the customs administration said.  That compared to the forecast of a 5% decline & the 6.9% fall in Oct.  Imports declined for a record 13th straight month, dropping 8.7% in dollar terms versus an 18.8% slump in Oct, leaving a trade surplus of $54.1.  With sluggish trade combining with slowing residential construction, policy makers may need to keep their foot on the gas even after 6 interest rate cuts & expedited fiscal spending.  The import decline remains a drag on other nations as robust consumer demand hasn’t picked up fast enough to offset declines in rust belt industries.

The Shanghai Composite Index fell 1.9% & the yuan weakened.

China Exports Decline for Fifth Month, Import Slump Moderates

Home Depot, a Dow stock, will not pursue intl expansion or new acquisitions as part of its efforts to reach $101B in sales by 2018, CEO Craig Menear said.  Instead, it will focus its efforts on North America & a renewed emphasis on the online marketplace.  Menear says HD is the top home improvement retailer in Canada & Mexico, in addition to the $80B it has generated in US sales.  The retailer estimates it has a 15% market share of a $550B US-based home improvement industry.  “We believe we have a greater opportunity to grow sales in North America,” he said.  Aside from the $101B sales target, the retailer targeted a compounded annual sales growth rate of 4.7%, an operating margin of about 14.5% & a return on invested capital of about 35% by fiscal year 2018.  In addition, the company reaffirmed guidance for its 2015 fiscal year, with sales projected to increase by 5.7% & EPS set to increase 14% to $5.36.  Rather than adding new stores or expanding overseas, HD will focus on the development of streamlined digital sales platforms, as well as improved customer & employee experience at both online & brick-and-mortar stores.  Interconnected retail platforms are a “significant growth vehicle” for Home Depot, with digital sales expected to grow by about $1B in 2015, Menear said.  “We have to continue to connect our stores to our website and our website to our stores,” he said, adding HD would make “significant investments” to improve its digital services.  The stock lost pennies in a down market.  If you would like to learn more about HD, click on this link:
club.ino.com/trend/analysis/stock/HD?a_aid=CD3289&a_bid=6ae5b6f7

Home Depot CEO Touts U.S., Digital Growth

Home Depot (HD)

The stock market is getting ugly fast with no hope for improvement until next week, after the Fed meeting, at the earliest.  Low priced oil was supposed to give the economy a boost, but that hasn't worked out.  US GDP sputters, the euro zone is barely growing & China has not been able to jump start its economy.  And there is the specter of a rate hike next week, unsettling for a markets hoping current low rates would last forever.  Dow is down in Dec, but still up sharply in Q4 thanks to a stellar Oct.

Dow Jones Industrials