Dow sank 364 (near session lows), decliners over advancers a massive 7-1 & NAZ dropped 159. The MLP index plunged once again, 15+ to the 238s, & the REIT index fell 4+ to 309s. Junk bond funds had a big drop & Treasuries rallied as stocks were sold. Oil was about even, reversing AM gains (see below), & gold crawled higher.
AMJ (Alerian MLP Index tracking fund)
![Live 24 hours gold chart [Kitco Inc.]](http://www.kitco.com/images/live/gold.gif?0.8206183249418607)
The US economy expanded across most of the country in the past 6 weeks as the job market showed strength that’s failing to stoke broad wage pressures, a Federal Reserve survey showed. The Beige Book economic survey, based on reports from late Nov to early Jan, showed that 2 of the 12 Fed districts posted “moderate” growth & 7 described the expansion as “modest.” Boston contacts were described as “upbeat,” while the NY & Kansas City Fed districts reported “essentially flat” economic activity. The report underscores the challenge facing Fed policy makers heading into their meeting later this month: The labor market is strengthening without triggering signs of higher wages or inflation more broadly. The anecdotes could help to color policy makers’ reading of the economy as they move toward a potential increase in Mar. “Labor markets continued to improve, with employment increases evident in reports from seven Districts,” according to the Beige Book. “Districts reported little overall change in wage and price pressures, with wage increases running from flat to moderate, while price increases tended to be minimal.” “Just two districts -- New York and San Francisco -- indicated some acceleration in upward wage pressures,” the report said. 6 districts cited a boost to pay from state minimum-wage increases & from labor shortages or turnover among entry-level positions in banking, retail & hospitality. “Nearly all districts reported that overall price pressures were minimal.” Falling oil is holding down inflation & hurting energy producers. “Suppliers to the oil and gas exploration sector reported weak, and sometimes deteriorating, demand” in several districts. The report later said that “most segments of the energy sector struggled further.
General Motors raised its earnings expectations for 2016 & lifted its quarterly div, saying the rollout of new products & additional growth in China will buoy the automaker. GM announced full-year adjusted EPS should come in at $5.25-$5.75. Its previous guidance called for $5-$5.50. The company is also projecting higher-than-expected profit margins before interest & taxes. The Q1 div was raised to 38¢, an increase of 6%. It also disclosed a larger share repurchase program, adding $4B to its current program thru 2017. The industry shipped more vehicles than ever before in 2015, selling 17.47M cars, trucks & SUVs amid low interest rates & cheap gasoline. The sharp decline in gas prices is unlikely to reverse itself in 2016 as oil trades near 12-year lows. However, concerns over rising interest rates have weighed on automotive stocks. GM expects another strong year. “The prospects of our company are not yet fully reflected in our stock price,” pres Dan Ammann said. GM believes 2016 will mark a 2nd consecutive year of record industry sales. Also GM announced the upcoming launch of a new online service designed for used-car buyers. Its Factory Pre-Owned Collection will list a national inventory of 30K Chevrolet, Buick, GMC & Cadillac vehicles that were formerly leased, rented or owned by GM employees. Buyers will complete the purchase online & take delivery at their dealer of choice. The stock rose 19¢ in an ugly market. If you would like to learn more about GM, click on this link:
club.ino.com/trend/analysis/stock/GM?a_aid=CD3289&a_bid=6ae5b6f7
Oil prices turned slightly lower after the US Energy Information Administration reported that supplies of gasoline & distillates jumped last week, even as crude stockpiles also edged higher. Crude inventories climbed 200K barrels. The American Petroleum Institute yesterday reported a 3.9M-barrel decline. Analysts expected supplies to be up 2M barrels. Gasoline supplies increased 8.4M barrels, while distillate stockpiles added 6.1M barrels last week, according to the EIA.
Stocks dropped sharply in the 2nd half of the trading day. They can not find any friends. Oil was weak, but that's nothing new. The Alerian MLP index has fallen to where it was more than a decade ago. High yield sectors (MLPs, REITs & junk bond funds) sold off sharply because very high yields are shaking up investors. Dow is down more than 1.2K in Jan & has an ugly chart.
Dow Jones Industrials
AMJ (Alerian MLP Index tracking fund)
| CLG16.NYM | ....Crude Oil Feb 16 | ....30.52 |  ...0.08 | (0.3%) |
The US economy expanded across most of the country in the past 6 weeks as the job market showed strength that’s failing to stoke broad wage pressures, a Federal Reserve survey showed. The Beige Book economic survey, based on reports from late Nov to early Jan, showed that 2 of the 12 Fed districts posted “moderate” growth & 7 described the expansion as “modest.” Boston contacts were described as “upbeat,” while the NY & Kansas City Fed districts reported “essentially flat” economic activity. The report underscores the challenge facing Fed policy makers heading into their meeting later this month: The labor market is strengthening without triggering signs of higher wages or inflation more broadly. The anecdotes could help to color policy makers’ reading of the economy as they move toward a potential increase in Mar. “Labor markets continued to improve, with employment increases evident in reports from seven Districts,” according to the Beige Book. “Districts reported little overall change in wage and price pressures, with wage increases running from flat to moderate, while price increases tended to be minimal.” “Just two districts -- New York and San Francisco -- indicated some acceleration in upward wage pressures,” the report said. 6 districts cited a boost to pay from state minimum-wage increases & from labor shortages or turnover among entry-level positions in banking, retail & hospitality. “Nearly all districts reported that overall price pressures were minimal.” Falling oil is holding down inflation & hurting energy producers. “Suppliers to the oil and gas exploration sector reported weak, and sometimes deteriorating, demand” in several districts. The report later said that “most segments of the energy sector struggled further.
U.S. Economy Expands Even as Wages Stay Flat, Beige Book Says
General Motors raised its earnings expectations for 2016 & lifted its quarterly div, saying the rollout of new products & additional growth in China will buoy the automaker. GM announced full-year adjusted EPS should come in at $5.25-$5.75. Its previous guidance called for $5-$5.50. The company is also projecting higher-than-expected profit margins before interest & taxes. The Q1 div was raised to 38¢, an increase of 6%. It also disclosed a larger share repurchase program, adding $4B to its current program thru 2017. The industry shipped more vehicles than ever before in 2015, selling 17.47M cars, trucks & SUVs amid low interest rates & cheap gasoline. The sharp decline in gas prices is unlikely to reverse itself in 2016 as oil trades near 12-year lows. However, concerns over rising interest rates have weighed on automotive stocks. GM expects another strong year. “The prospects of our company are not yet fully reflected in our stock price,” pres Dan Ammann said. GM believes 2016 will mark a 2nd consecutive year of record industry sales. Also GM announced the upcoming launch of a new online service designed for used-car buyers. Its Factory Pre-Owned Collection will list a national inventory of 30K Chevrolet, Buick, GMC & Cadillac vehicles that were formerly leased, rented or owned by GM employees. Buyers will complete the purchase online & take delivery at their dealer of choice. The stock rose 19¢ in an ugly market. If you would like to learn more about GM, click on this link:
club.ino.com/trend/analysis/stock/GM?a_aid=CD3289&a_bid=6ae5b6f7
GM Sees Stronger Profits After Record Sales Year for Autos
General Motors (GM)
Oil prices turned slightly lower after the US Energy Information Administration reported that supplies of gasoline & distillates jumped last week, even as crude stockpiles also edged higher. Crude inventories climbed 200K barrels. The American Petroleum Institute yesterday reported a 3.9M-barrel decline. Analysts expected supplies to be up 2M barrels. Gasoline supplies increased 8.4M barrels, while distillate stockpiles added 6.1M barrels last week, according to the EIA.
Oil Turns Lower As EIA Reports Hefty Increases In Gasoline, Distillate Supplies
Stocks dropped sharply in the 2nd half of the trading day. They can not find any friends. Oil was weak, but that's nothing new. The Alerian MLP index has fallen to where it was more than a decade ago. High yield sectors (MLPs, REITs & junk bond funds) sold off sharply because very high yields are shaking up investors. Dow is down more than 1.2K in Jan & has an ugly chart.
Dow Jones Industrials
No comments:
Post a Comment