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Wednesday, May 25, 2016
Markets rise as oil approaches $50
Dow jumped up 166, advancers over decliners almost 3-1 & NAZ rose 34. The MLP index rose 4+ to the 305s & the REIT index is still in the 338s. Junk bond funds are higher & Treasuries are not doing much of anything. Oil is now in the 49s & gold fell again on Fed interest rate bets.
US home prices rose 5.7% in Q1 from a year earlier as buyers competed for a limited supply of listings. Prices
climbed 1.3% on a seasonally adjusted basis from the previous 3 months, the 19th consecutive quarterly gain, according to the Federal Housing
Finance Agency. Home
prices have risen as job growth brings out more buyers in a market
starved for choices. There were 1.98M houses for sale at the end
of Mar, down 1.5% from the same month last year, according to
the National Association of Realtors. While the US has a whole had
robust gains, prices fell from the previous qtr. “Home
price appreciation was somewhat less widespread than in recent
quarters,” the FHFA said.
While price drops were modest, “such declines are notable given the
pervasive and extraordinary appreciation we have been observing for many
years.” Prices in Mar rose 0.7 percent on a seasonally adjusted
basis from Feb. The national median price of an
existing single-family home was $217K in Q1, up 6.3% from a year earlier, National Association of Realtors data show.
Oil extended its advance to near $50 a barrel as weekly US industry data showed crude stockpiles declined, easing a glut. Futures
rose for a 2nd day
of gains. US oil inventories, near the highest in 80 years,
dropped by 5.14M barrels last week, the American Petroleum
Institute said. That would be the biggest decline since
Dec.
Oil
has surged more than 85% from a 12-year low earlier
this year on signs the global glut will ease amid declining supply in
Nigeria & non-OPEC countries including the US. While some of the
world's biggest producers continue to pump crude at near-record levels,
OPEC is unlikely to set an
output target when it meets next week as it sticks with Saudi Arabia's
strategy of squeezing rivals. Crude
stockpiles at Cushing, Oklahoma, the
biggest U.S. oil-storage hub, declined 189K barrels last week.
Nationwide inventories probably dropped by 2M barrels thru May
20, according to an estimate.
Tiffany stock dropped
after it missed fiscal Q1 sales
expectations & provided a downbeat profit outlook, citing lower
spending by tourists. For the qtr, EPS fell to 69¢ from 81¢ last year. The forecast was 68¢ & revenue declined to $891M from $962M, below the $917M estimate. Same-store
sales declined 9%, compared with an expected 4.8% drop.
For the full fiscal year, TIF expects EPS to decline in the
mid-single-digit percentage range, while analyst forecast is for $3.76
implies a 1.8% decline. "As expected, this was a difficult quarter in
terms of both sales and earnings growth. We faced numerous challenges,
including continued pressure from foreign tourist spending in Europe,
the U.S. and Asia, particularly in Hong Kong," said CEO
Frederic Cumenal. The stock fell 1.01. If you would like to learn more about TIF, click on this link: club.ino.com/trend/analysis/stock/TIF?a_aid=CD3289&a_bid=6ae5b6f7
Stocks are having another good day as oil hits another 2016 high. But more pain lies ahead for energy companies as many have major problems even at these prices levels. Additionally, Dow is still looking up at 18K while it is stuck in a sideways trading range.
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