Wednesday, May 4, 2016

Lower markets on concerns over global growth

Dow was off 99 (finishing near the lows), decliners over advancers 3-2 & NAZ dropped 37.  The MLP index fell 6+ to the 287s & the REIT index shot up 4+ to the 443s.  Junk bond funds declined & Treasuries rallied again.  Oil finished higher (but still in the 43s) & gold continued weak (see below).

AMJ (Alerian MLP Index tracking fund)

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CLM16.NYM....Light Sweet Crude Oil Futures,J....43.48 Down ...0.17  (0.4%)

  Live 24 hours gold chart [Kitco Inc.]

There are currently no proposals on the table for OPEC to revive limits on crude output at its Jun meeting after the failure of talks to freeze production last month, according to 6 leakers.  A meeting of reps from OPEC today discussed how the fundamentals of oil supply & demand are improving.  The proposal to freeze output has been overtaken by changes in the market & may no longer be necessary.  Oil has rebounded after slumping to the lowest since 2003 earlier this year on signs the global glut is easing as US output declines.  Prices gained even though OPEC itself has been without a production target since Dec, & talks with other producers to freeze output fell apart last month.  Global supply & demand will move close to balance in H2 as lower prices take their toll on production outside OPEC.  US crude output fell to 8.83M barrels a day last week, the 8th consecutive weekly decline.  In a sign of continuing discord within OPEC, members of the group were unable to finish their long-term strategy report at the meeting because of differences over the wording of the document.

OPEC Gives Up on Its Oil Freeze Plan

Apple, a Dow stock, is planning sweeping changes to its year-old music streaming service after the first iteration of the product was met with tepid reviews & several executives brought in to revive the music strategy departed.  AAPL is altering the user interface of Apple Music to make it more intuitive to use.  It also plans to better integrate its streaming & download businesses & expand its online radio service.  The reboot is expected to be unveiled at the company’s Worldwide Developers Conference in Jun.  The changes will be accompanied by a marketing blitz to lure more customers to the $10-per-month streaming service.  The company is attempting to reclaim its dominance in music.  It acquired Beats Music 2 years ago in part to rethink its approach to the music business by blending its technological expertise with the entertainment industry experience of Beats executives.  But the combination hasn't yet fulfilled its potential.  CEO Tim Cook is banking on services like Apple Music to reignite growth as the stock has off on concerns about slowing iPhone sales.  The stock was off 99¢.  If you would like to learn more about AAPL, click on this link:

Apple to Revamp Streaming Music Service After Mixed Reviews, Departures

Apple (AAPL)

Gold futures extended losses to settle lower as a rebound in the $ pressured the precious metal.  The greenback had earlier slid on weak employment data but has recovered to edge higher.  The private sector added 156K jobs in Apr, according to Automatic Data Processing, missing the 193K projected.  A stronger buck works against metals denominated in the $ as it makes them more expensive.

Gold Extends Losses As U.S. Dollar Rebounds

The stock market is finally reacting to disappointing & uncertain economic data.  Even after selling this week, Dow is up 10% form the low in Feb & within about 600 of setting a new record high.  There will be more pain coming from the energy sector which has been hurt badly by the lower prices for oil & gas.  That pain has not been priced into the stock market.

Dow Jones Industrials


1 comment:

Anonymous said...

Great post!

Have a look at the longer term chart of gold here =>

That is an amazing chart, and historical. It means BIG THINGS ARE COMING for
currency and the ECONOMY. WOW!