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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.
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:
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: club.ino.com/trend/analysis/stock/CPB?a_aid=CD3289&a_bid=6ae5b6f7
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.
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