Higher markets led by techs and financials

Dow added 213 (closing near the highs), advancers over decliners 3-1 & NAZ soared 95.  The MLP index lost 2+ to the 301s & the REIT index gained 3+ to the 338s.  Junk bond funds edged higher & Treasuries retreated.  Oil climbed higher in the 48s & gold ran into selling. 

AMJ (Alerian MLP Index tracking fund)

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CLN16.NYM

....Light Sweet Crude Oil Futures,J

....48.64

...0.56

(1.2%)

Increased mortgage borrowing was behind a 1.1% rise in US household debt in Q1, with slowdowns in other areas such as credit-card balances and auto loans, according to the Federal Reserve Bank of NY.  Total mortgage debt rose 1.5% from Q4-2015 to $8.37T, marking the highest level since Q3-2011.  Auto-loan debt rose to a record high of $1.07T in data going back to 2003, but logged the smallest percentage increase since 2012.

“Delinquency rates and the overall quality of outstanding debt continue to improve,” the NY Fed said.  5% of outstanding debt was in some stage of delinquency, the lowest amount since 2007.  Credit-card balances fell in Q1 from the previous period, but were up 4.1% from a year earlier.  Student-loan debt rose to a record high of $1.26T, but the 6.1 % rise from a year earlier marked the slowest pace of growth on record.

U.S. Households’ Mortgage Debt Rises to Four-Year High, Fed Says

Apple CEO Tim Cook went to India last week to push his bestselling iPhones, but the trip may not have paid off.  India's Foreign Investment Promotion Board ruled AAPL must comply with regulations to procure 30% of components locally if it wants to sell through its own retail stores, according to leakers.  The company makes most of its products in China & doesn't currently meet that criteria.  While India can provide waivers for cutting-edge technology companies, the panel decided it can't certify AAPL for that exception.  The FIPB decision needs to be ratified by the gov & it could still be overruled.  Cook is trying to capitalize on growth prospects for India, where a billion new smartphones are projected to be sold in the next 5 years as consumers increase their incomes & adopt new technologies. AAPL trails rivals, in part because its products are relatively expensive.  Cook has likened India to China a decade ago, as the company faces slowing growth in established markets.  While coming off a low base, with about 2% of shipments, iPhone sales surged 56% in Q1 consumers from India’s burgeoning middle-class aspire to its devices.  AAPL sells its products at a premium in India.  More than 80% of phones sold in the country cost less than $150 while the cheapest new iPhone from Apple is the 4-inch iPhone SE at 39K rupees ($577).  The laggard Dow stock went up 1.47.  If you would like to learn more about AAPL, click on this link:
club.ino.com/trend/analysis/stock/AAPL?a_aid=CD3289&a_bid=6ae5b6f7

Apple Hits Setback in Push to Open Retail Stores in India

Apple (AAPL)

Oil climbed before the release of US gov data that is forecast to show crude inventories declined, easing a glut.  Futures are near an 8-decade high as oil inventories probably slid 2M barrels last week.  Disruptions have curbed output from Canada, Nigeria & Libya over the past month.

Oil futures have surged more than 80% from a 12-year low earlier this year on signs the global glut will ease amid declining output in Nigeria & non-OPEC countries including in the US.  OPEC is unlikely to set an output target when it meets next week as it sticks with Saudi Arabia’s strategy of squeezing out rivals.  Crude inventories at Cushing, Oklahoma, the delivery point for WTI & the biggest US oil-storage hub, probably decreased by 500K barrels last week.  Nationwide stockpiles rose to 541M barrels in the latest week, near the highest level since 1929.  In Alberta, all of the oil-sands facilities that workers fled last week as a wildfire spread are being allowed to prepare for restart as cool, humid weather has helped contain the inferno.  The province lifted mandatory evacuation orders for the last of the accommodation and production sites on Mon.

• Stocks Climb as Financial Shares Lead Gains; Dollar Strengthens

Dow needs to go up another 300 to top the 18K ceiling, not to mention much more to do it in a meaningful way.  There are bets on movements for oil prices & whether or not the Fed will increase interest rates next month.  Dow's chart below shows that it is still below where it was a year ago.  That services as a reminder that the economy & earnings have not been performing as the bulls would have liked.

Dow Jones Industrials