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Friday, December 18, 2015
Markets tumbled with oil at 7 year lows
Dow sank 368 (closing at the lows & selling into the close), decliners over advancers a relatively mild 2-1 & NAZ dropped 79 (well below 5K). The MLP index rose 3+ to the 256s & the REIT index was off 2+ to the 319s. Junk bond funds were mixed to higher & Treasuries went higher. Oil slipped to multi year lows & gold had a big gain as stock & commodity markets sold off.
Payrolls climbed in 35 states & the unemployment rate fell in 27 as
an improving economy continued to absorb slack in the US labor market
last month. Florida led the nation with a 35K gain in employment, followed by a 16K increase in Texas, according to the Labor Dept. Vermont
showed the biggest percentage gain in employment last month with a 0.9% advance, followed by Idaho at 0.7%. Nevada saw the
biggest percentage decrease. While Texas posted the 2nd-biggest gain in total payrolls, the collapse in
crude prices has taken a toll on the oil industry’s employment in the
Lone Star State. Other states have been just as unfortunate.
North
Dakota had the lowest jobless rate at 2.7%, while New Mexico had the highest at 6.8%.
Boeing fell the most in the Dow Jones Industrials after analysts warned that cheap oil & rising interest rates
could clip near-term aircraft sales & hamper the strong cash
generation. Global economic
concerns may weigh sales over the next couple of years.
The
planemaker has drawn investors for the cash it should generate as it
speeds factory output of models such as its single-aisle 737, a
workhorse for low-cost carriers, & the 787, whose carbon composite
hull brings fuel savings to carriers & lessens the effects of jet lag
for travelers by enabling higher humidity levels. The stock tumbled 5.98. If you would like to learn more about BA, click on this link:
J.P. Morgan Chase, another Dow stock, will pay $307M in fines to settle charges the bank’s
investment advisors pushed company products on clients without
disclosing the conflicts of interest. JPM also took the unusual step of agreeing to admit wrongdoing in the settlement. The SEC said an investigation found
that investment advisors working for 2 JPM subsidiaries
“preferred to invest clients in the firm’s own proprietary investment
products without properly disclosing this preference.” By doing so, the advisors deprived the bank’s clients of “information they needed to make fully informed investment decisions.” In other words, the advisors invested their
clients’ money in mutual funds & other investments with direct
connections to JPM without telling those clients or providing
other investment options. JPM agreed to pay $267M to the SEC & an
additional $40M to the Commodities Futures Trading Commission to
settle related allegations. The SEC statement said JPM advisors “willfully” violated
federal securities laws related to required disclosures & that the 2
bank subsidiaries “admitted” the allegations and “acknowledged” the
actions violated federal laws. The stock dropped 1.88. If you would like to learn more about JPM, click on this link: club.ino.com/trend/analysis/stock/JPM?a_aid=CD3289&a_bid=6ae5b6f7
The gov funding bill was signed off in DC, awaiting Obama's signature. This is one ugly market. With so many options expiring today, it is difficult to tell how much of the decline is from those short term influences. However the plunge in oil prices is the main driver for stocks & more selling is coming. Next week will have only 3½ days of trading & there is nothing in the wings to bring out buyers. The outlook for oil can only be described as dreary. Prepare for a difficult weeks for stocks, Dow is already down 600+ in Dec. Santa will have to wait for next year to bring goodies for investors.
![Live 24 hours gold chart [Kitco Inc.]](http://www.kitco.com/images/live/gold.gif?0.7333599869858696)
...0.29 
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