Dow was off a whopping 310 (closing near the lows), decliners over advancers almost 8-1 & NAZ declined 111 (well below 5K). The MLP index sank 16+ to the 253s & the REIT index fell 1+ to the 312s. Junk bond funds plummeted, dropping about 3%, & Treasuries had a strong rally. Oil is not entrenched in the 35s & gold had a modest gain.
AMJ (Alerian MLP Index tracking fund)
![Live 24 hours gold chart [Kitco Inc.]](http://www.kitco.com/images/live/gold.gif?0.39949722226182927)
Oil futures extended their tumble, with crude prices hitting their worst levels since the 2008/9 credit crunch, after the International Energy Agency (IEA) warned that global oversupply could worsen next year. Mild pre-winter weather that reduced heating demand & a plummeting US stock market ahead of a widely expected interest rate hike this month added to the drag. West Texas Intermediate futures entered the $35 territory for the first time since Feb 2009. US weather forecasts call for warmer-than-normal temperatures thru Christmas that would curb heating demand, boosting US gasoline futures higher than heating oil prices in Dec for the first time in at least 5 years. Gasoline's premium to heating oil for the Jan contracts widened as the heating oil contract slumped by over 4% while gasoline fell 0.6%. IEA, which advises developed nations on energy, warned that demand growth was starting to slow.
Dow Chemical & DuPont, a Dow stock, will join in an all-stock merger of equals that’s the first step in a plan to create 3 new businesses. The pact will lead to $3B in cost savings. The deal is the largest ever in the chemicals industry & will create a $130B company that combines products from both companies in agriculture, commodity chemicals & specialty products to create the new businesses. The merged company, to be called DowDuPont, will be owned 50-50 by current shareholders of both companies. DD said it plans its own round of efficiencies next year that include cutting 10% of a workforce that numbers about 63K. DOW has about 53K workers. Investors will get one DowDuPont share for each DOW share, & 1.282 DowDuPont shares for each one of DD. The eventual breakup of DowDuPont into 3 independent, publicly traded companies thru tax-free spin-offs is expected over 18-24 months following the completion of the merger in H2-2016. Despite its size & complexity, the deal could overcome antitrust concerns with modest divestitures. The product overlap isn’t extensive & the focus will probably be on seeds & crop chemicals. Additionally, Dow will buy out Corning (GLW) to become the full owner of their 72-year-old silicones joint venture, Dow Corning. DOW stock was off 1.54 & DD stock fell 4.11 (both stocks were bid up early in the week on rumors). If you would like to learn more about DOW, click on this link:
club.ino.com/trend/analysis/stock/DOW?a_aid=CD3289a_bid=6ae5b6f7
If you would like to learn more about DOW, click on this link:
club.ino.com/trend/analysis/stock/DD?a_aid=CD3289a_bid=6ae5b6f7
Ford plans to invest an additional $4.5B by 2020 in programs to broaden its offerings of hybrids & electric vehicles, CEO Mark Fields said. It will launch late next year a new version of its Ford Focus electric car that has a 100-mile range & can recharge in 30 minutes. Ford also plans to add 13 new plug-in hybrid, hybrid or electric vehicles to its lineup by 2020, moving to more than 40% the share of the company's vehicle lines that will be electrified. Fields said the company sees plug-in hybrid systems, which allow drivers to operate part of the time on batteries recharged from the grid, & part of the time on gasoline - as the solution many customers will prefer. The batteries for plug-in hybrids are not as heavy or expensive as those required to deliver 200-mile or more range in an all-electric vehicle. Ford lost 32¢. If you would like to learn more about Ford, click on this link:
club.ino.com/trend/analysis/stock/F?a_aid=CD3289a_bid=6ae5b6f7
Ford to Invest $4.5 Billion More in Electric Car Plan by 2020
Stocks had their worst week of the year. The Dow dropped almost 600. I have said before, while not officially in a bear market, it sure feels that way. Oil is leading the way lower. Not only is the psychological damage hurting the stock market, but it is shaking up the economy. Capital expenditures for oil companies are being cut sharply, employees laid off & supplier companies are suffering. As if that weren't enough, the stock market has to deal with Janet next week when she raises interest rates (the first time in a decade). Junk bond funds have been in a major bear market (selling off again today) & they are just stocks with high yields. Next week will not be pretty.
Dow Jones Industrials
AMJ (Alerian MLP Index tracking fund)
| CLF16.NYM | ....Crude Oil Jan 16 | ....35.72 |  ...1.04 | (2.8%) |
Oil futures extended their tumble, with crude prices hitting their worst levels since the 2008/9 credit crunch, after the International Energy Agency (IEA) warned that global oversupply could worsen next year. Mild pre-winter weather that reduced heating demand & a plummeting US stock market ahead of a widely expected interest rate hike this month added to the drag. West Texas Intermediate futures entered the $35 territory for the first time since Feb 2009. US weather forecasts call for warmer-than-normal temperatures thru Christmas that would curb heating demand, boosting US gasoline futures higher than heating oil prices in Dec for the first time in at least 5 years. Gasoline's premium to heating oil for the Jan contracts widened as the heating oil contract slumped by over 4% while gasoline fell 0.6%. IEA, which advises developed nations on energy, warned that demand growth was starting to slow.
Oil in Freefall, Prices Eye Eleven Year Low
Dow Chemical & DuPont, a Dow stock, will join in an all-stock merger of equals that’s the first step in a plan to create 3 new businesses. The pact will lead to $3B in cost savings. The deal is the largest ever in the chemicals industry & will create a $130B company that combines products from both companies in agriculture, commodity chemicals & specialty products to create the new businesses. The merged company, to be called DowDuPont, will be owned 50-50 by current shareholders of both companies. DD said it plans its own round of efficiencies next year that include cutting 10% of a workforce that numbers about 63K. DOW has about 53K workers. Investors will get one DowDuPont share for each DOW share, & 1.282 DowDuPont shares for each one of DD. The eventual breakup of DowDuPont into 3 independent, publicly traded companies thru tax-free spin-offs is expected over 18-24 months following the completion of the merger in H2-2016. Despite its size & complexity, the deal could overcome antitrust concerns with modest divestitures. The product overlap isn’t extensive & the focus will probably be on seeds & crop chemicals. Additionally, Dow will buy out Corning (GLW) to become the full owner of their 72-year-old silicones joint venture, Dow Corning. DOW stock was off 1.54 & DD stock fell 4.11 (both stocks were bid up early in the week on rumors). If you would like to learn more about DOW, click on this link:
club.ino.com/trend/analysis/stock/DOW?a_aid=CD3289a_bid=6ae5b6f7
If you would like to learn more about DOW, click on this link:
club.ino.com/trend/analysis/stock/DD?a_aid=CD3289a_bid=6ae5b6f7
DuPont, Dow Chemical to Combine in Merger of Equals
Dow Chemical (DOW)
E.I. du Pont (DD)
Ford plans to invest an additional $4.5B by 2020 in programs to broaden its offerings of hybrids & electric vehicles, CEO Mark Fields said. It will launch late next year a new version of its Ford Focus electric car that has a 100-mile range & can recharge in 30 minutes. Ford also plans to add 13 new plug-in hybrid, hybrid or electric vehicles to its lineup by 2020, moving to more than 40% the share of the company's vehicle lines that will be electrified. Fields said the company sees plug-in hybrid systems, which allow drivers to operate part of the time on batteries recharged from the grid, & part of the time on gasoline - as the solution many customers will prefer. The batteries for plug-in hybrids are not as heavy or expensive as those required to deliver 200-mile or more range in an all-electric vehicle. Ford lost 32¢. If you would like to learn more about Ford, click on this link:
club.ino.com/trend/analysis/stock/F?a_aid=CD3289a_bid=6ae5b6f7
Ford to Invest $4.5 Billion More in Electric Car Plan by 2020
Ford (F)
Stocks had their worst week of the year. The Dow dropped almost 600. I have said before, while not officially in a bear market, it sure feels that way. Oil is leading the way lower. Not only is the psychological damage hurting the stock market, but it is shaking up the economy. Capital expenditures for oil companies are being cut sharply, employees laid off & supplier companies are suffering. As if that weren't enough, the stock market has to deal with Janet next week when she raises interest rates (the first time in a decade). Junk bond funds have been in a major bear market (selling off again today) & they are just stocks with high yields. Next week will not be pretty.
Dow Jones Industrials
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