Monday, April 11, 2016

Higher markets as oil goes above $40

Dow shot up 152, advancers over decliners 6-1 & NAZ gained 44.  The MLP index added  to the 273s & the REIT index went up 3+ to 340, closing in on last year's highs.  Junk bond funds went up & Treasuries were sold.  Oil topped 40 & gold also gained. 

AMJ (Alerian MLP Index tracking fund)

CL.NYM...Light Sweet Crude Oil Futures,M...40.17 Up ...0.45 (1.1%)

GC.CMX...Gold Futures,Apr-2016............1,251.30 Up ...8.80 (0.7%)

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Oil traded near a 4-month high as Iraq said it raised output to a record in Mar while US production fell.  OPEC's 2nd-biggest producer, increased output 2% & exports by 18% last month.  US production slid for the 10th time in 11 weeks, while crude stockpiles fell, according to data from the Energy Information Administration.  Oil has rebounded amid signs that a global glut will ease as US output declines.  Saudi Arabia said it will agree to a freeze only if it's joined by other suppliers including Iran, while Kuwait said a deal can be done without Tehran’s support.  The number of active rigs targeting oil in the US fell for the 15th time in 16 weeks, dropping by 8 to 354.  Drillers have idled more than 180 machines this year.  Venezuela said the first priority of global suppliers meeting on Sun should be to cap production, while Azerbaijan gave its backing to the freeze.

Oil Trades Near Four-Month High as Iraq Ramps Up, U.S. Declines

China stocks rose more than 1%, led by resource shares, as lower-than-forecast inflation data fanned optimism Beijing will continue with loose monetary policies.  The blue-chip CSI300 index rose 1.4%, to 3230, while the Shanghai Composite Index gained 1.7%, to 3033.  Chinese market gains had been curbed by fears that accelerating inflation would limit room for monetary easing, after the consumer price index (CPI) in Feb rose at its fastest pace in more than a year.  But that concern eased a bit after the annual Mar consumer price figure came out surprisingly unchanged from the previous month at 2.3%, while wholesale prices remained stubbornly in deflation, down 4.3%, although the pace of decline eased.  Most sectors rose, with energy & raw material shares among the biggest gainers.

China Shares End Up on Policy Support Optimism

Treasury Secretary Jacob Lew says Americans have reaped significant benefits from the intl architecture put in place after World War II & the US would be making a serious mistake to retreat from its global leadership role.  In a speech, Lew sought to counter arguments that Americans are losing badly in competition with China & other countries in the global economy.  Lew said that the US needed to embrace new players on the global economic stage & make sure they meet the standards of the trading system that the US help create.  He said that the "worst possible outcome would be to step away from our leadership role."

Lew: US retreat from global economic state would be mistake

Alcoa (AA) kicks of earnings season tonight, but the stock market is more concerned with rising oil prices.  There is nothing behind higher oil prices other than blind optimism.  The meeting aimed at limiting or reducing oil production will go nowhere, as has been the case during modern times.  And earnings season can be glum starting with dreary earnings from energy companies.

Dow Jones Industrials


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