Friday, May 20, 2016

Higher markets on rebound Friday

Dow recovered 112, advancers over decliners  & NAZ gained 60.  The MLP index slid back pennies to 301 & the REIT index is back to the 334s   Junk bond funds crawled higher & Treasuries were a little lower.  Oil pulled back to the 47s & gold was slightly lower.

AMJ (Alerian MLP Index tracking fund)

Crude Oil   48.40    0.24 (0.50%)

Gold     1,254.30   -0.50 (-0.04%)

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Sales of previously owned homes increased in Apr to a 3-month high, led by a surge in the Midwest & indicating further improvement in the housing market during the busy spring-selling season, according to the National Association of Realtors.  Contract closings rose 1.7%T to a 5.45M annual rate (the forecast was 5.4M).  Purchases climbed 4.9% from Apr 2015, before seasonal adjustment.  The median price of an existing home rose 6.3% from Apr 2015 to $232K, the highest since Jun 2015.  Sales in the Midwest jumped 12.1% to a 1.39M pace, the strongest since Dec 2006 & purchases were also up in the Northeast.  Inventory of available properties dropped 3.6% from Apr 2015 to 2.14M units.  The increase caps a 6-month period of greater-than-usual volatility in purchases & may indicate that the housing industry is returning to a more stable growth path on the back of solid hiring & cheap borrowing costs.  At the same time, limited inventory is keeping prices elevated, while first-time buyers have been slow to enter the market, curbing housing's contribution to economic growth.

Deere cut its profit outlook & reported a decline in quarterly earnings as a global farm recession & weak construction equipment markets led to lower sales of the its machinery.  DE reduced its fiscal-year forecast for net income to $1.2B from $1.3B & its shares.  The company also forecast a fiscal-year sales decline of 9%, less steep than the 10% it had previously expected.  EPS fell to $1.56 in its 2nd qtr from $2.03 a year earlier.  Global net sales & revenue decreased by 4% to $7.88B.  Equipment sales in the US & Canada fell 6%, while intl sales decreased by 1%.  The stock lost 3.58. If you would like to learn more about DE, click on this link:

Deere Posts Lower 2Q Results, Cuts Profit Outlook

Deere (DE)

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Quarterly profit at Campbell Soup grew due to a gain from a legal settlement which helped offset a 2% slide in sales.  EPS in its fiscal Q3 was 59¢, up from 57¢ last year.  Adjusted for a $25M gain from a legal settlement & other items, EPS fell to 65¢ from 66¢ in the year-ago period.  The forecast called for 64¢.  Sales fell by 2 % to $1.87B from $1.9B a year earlier.  CEO Denise Morrison said she was unsatisfied with Q3 organic sales growth, citing a weak US soup season & weather-related disruptions to the carrot supply.  Still, the company, which also makes Pepperidge Farm cookies & Goldfish crackers, was optimistic for the full year, expecting adjusted EPS to grow 11-13%, up from a prior forecast for 9-12% growth. The stock sank 3.98. If you would like to learn more about CPB, click on this link:

Campbell Profit Climbs on Legal Gain but Sales Drop 


Campbell Soup (CPB)

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Dow bounced off a 6 week low, that was to be expected.  Nothing special is going on in the markets & the next Fed meeting is still one month away.  The chart below shows the Dow has had tough sledding in Q2 & that trend is not likely to end anytime soon.

Dow Jones Industrials


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