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Friday, March 4, 2016
Higher market after the unemployment report
Dow went up 63, advancers over decliners more than 3-2 & NAZ rose 9. The MLP index lost pennies in the 264s & the REIT index was also off pennies in the 322s. Junk bond funds had good gains & Treasuries were sold. Oil rose above the important 35 level (see below) & gold inched higher to a 13 month high.
At the recent conference, Boeing (a Dow stock) CEO Dennis Muilenburg argued that the aerospace industry was
"differentiated" & had different growth dynamics compared to other
industrial sectors. Given the industrial slowdown in the global economy,
this means he sees aerospace as able to buck the trend. The 3 reasons he said BA will grow are:
Ongoing airline profitability will lead to commercial aircraft orders as the 2 are correlated.
Low oil prices increase airline profitability, & airlines buy new planes for more reasons than just fuel efficiency.
Markets such as China are "underserved" & therefore capable of growing more than GDP.
Oil ended sharply higher, with the benchmark posting
a weekly gain of almost 10% as traders turned their focus from a
global glut to signs of slowing US production amid continued hopes
major producers will discuss a potential output freeze. West Texas
Intermediate crude rose
$1.35 to settle at $35.92 a barrel, maintaining gains after
data showed the number of active US oil rigs fell for an 11th
straight week.
China intervened to support its stock market today, helping the
benchmark index cap its best weekly gain of 2016 before policy makers
meet to approve a 5-year road map for the economy. State-backed funds
bought primarily bank shares, while some local branches of the
securities regulator asked listed companies, mutual funds & brokerages
to stabilize the market during the National People’s Congress & the
Chinese People's Political Consultative Conference.
China's
biggest banks, seen as prime targets for state support because of their
large weightings in benchmark indices, paced gains in the $5.5T even as small-capitalization shares tumbled. China's
stock market has become one of the most visible symbols of anxiety
toward Asia's largest economy after a $5T crash last summer
rattled global investors. By publicly intervening to support equity
prices in 2015, pres Xi Jinping’s gov has staked some of its
credibility on the state's ability to
stabilize one of the volatile market. The
Shanghai Composite Index rose 0.5% today, reversing an
earlier decline of 1.8% extending & this week's gain to 3.9%.
In 4 weeks, the Dow has risen almost 1K. However it's still in the red YTD. Oil prices are a big driver for the stock market & today it went above 35. Hopes are high that producing countries will come up with a plan to limit (or even reduce) oil production. This weekend more should be learned about any plan. The Chinese biggies hope come come up with a 5 year plan which will restart the sluggish economy. The stock market is assuming the best from these meetings. That optimism has taken the Dow back over 17K.
![Live 24 hours gold chart [Kitco Inc.]](http://www.kitco.com/images/live/gold.gif?0.7968863712436014)
...1.11 
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