Thursday, March 3, 2016

Markets egde higher ahead of Friday jobs report

Dow added 44 finishing at the highs, advancers over decliners almost 3-1 & NAZ added 4.  The MLP index rose 6+ to the 265s & the REIT index gained 1+ to the 322s after its recent rise.  Junk bond funds continued mixed & Treasuries were higher.  Oil slid back & & gold gained again (more on both below).

AMJ (Alerian MLP Index tracking fund)

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CLJ16.NYM....Crude Oil Apr 16....34.68 Up ...0.02 (0.1%)

Live 24 hours gold chart [Kitco Inc.]

Dallas Federal Reserve pres Robert Kaplan called for the central bank to be patient when it comes to raising interest rates, citing the effect of tighter financial conditions on US economic growth.  Global factors like the drop in stock markets, the decline in the price of oil, the rise in the $ since the beginning of the year are acting like a brake on economic recovery, similar to the effect of an interest-rate increase, he said.  "While I believe that excessive accommodation carries a cost in terms of distortions and imbalances in hiring, asset allocation and investment decisions, I also believe that, at this juncture, the Fed needs to show patience in decisions to remove accommodation," Kaplan said.  A sharply slowing global economy, volatile financial markets & a world oil-supply glut have conspired to change that picture, has some Fed officials saying they now see more risks to their outlook than before.  Kaplan expects the economy to be "resilient" this year, with consumer spending buoyed by lower gas prices, among other factors.  He forecast about 1.9% GDP growth for this year, enough to push down the unemployment rate, now at 4.9%.  He added, while monetary policy remains accommodative, it is "somewhat" less so than it was at the beginning of the year "in light of tightening global financial conditions."  Kaplan does not expect the economy to fall into recession this year & suggested that the table is set for stronger household spending.  "Nationwide, the data that we look at suggests the consumer is in pretty good shape,” he said.

Fed's Kaplan Calls for Patience on Hiking Rates

Oil settled had a slight loss, with prices failing to finish above the key $35-a-barrel level as traders weighed the likelihood of an agreement this week among major producers to stabilize output.  West Texas Intermediate was pennies lower at $34.57 a barrel.  Prices had posted gains in each of the last 3 trading sessions, settling yesterday at a 2-month high.

Oil Ends Lower For The First Time In Four Sessions

Gold was higher as weakness in the $ & downbeat economic data helped the metal post its best finish in more than a year.  Gold rose $16.40 (1.3%) to settle at $1258.  The settlement was the highest since Feb 5, 2015.

Gold Futures Finish At Their Best Level In Over a Year

In the last 2 days, stocks have barely kept their rally intact.  Of course, that makes the overbought condition more extreme.  There has been no dramatic news to account for this substantial rise other than hopes oil will continue to rise as the exporting countries take some action to reduce output.  I don't know.  They're meeting right now with no announcements.  Meanwhile gold has had a major move upward this year, negative bets on the stock market.  The Fri jobs report will be a major driver tomorrow.

Dow Jones Industrials


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