Dow rose all of 2, advancers over decliners 2-1 & NAZ added 4. The MLP index jumped up 6+ to the 308s (a 2016 high) & the REIT index was fractionally higher in the 341s. Junk bond funds rose & Treasuries ran into selling. Oil finished higher (in the 49s) on rumors about production quotas & gold slid lower.
AMJ (Alerian MLP Index tracking fund)
![Live 24 hours gold chart [Kitco Inc.]](http://www.kitco.com/images/live/gold.gif?0.35406299802660857)
The US economy expanded at a modest pace across most of the country since mid-Apr, causing the labor market to tighten as employers continued adding jobs & nudging wages higher, a Federal Reserve report showed. “Employment grew modestly since the last report, but tight labor markets were widely noted,” according to the Fed's latest Beige Book. “Wages grew modestly, and price pressures grew slightly in most districts.” Fed officials have made clear they expect to raise interest rates in the coming months, possibly as early as this month, if the economy continues to improve. The FOMC meets Jun 14-15. Prices in federal funds futures contracts imply that investors see a 24% chance of a rate increase this month, with odds rising to 53% by the FOMC's Jul session. This Beige Book may do little to change outlook for the economy. It characterized the economy as slowly gaining ground, using versions of the word “modest” or “moderate” 23 times in the 6-page summary. The terms were used to describe gains in overall growth, consumer spending, employment, loan demand & financial services. Manufacturing results were reported as mixed, while the energy industry, still ailing form the decline in the price of oil, remained weak. Several districts reported rising demand for labor, particularly for high-skilled workers. Atlanta & Richmond noted that low-skilled positions were also becoming harder to fill. “Wages grew modestly since the last report, with increases concentrated in areas of labor tightness,” the report stated. Economic data have shown steady if unspectacular improvement in the US following a disappointing Q1. The Commerce Dept said yesterday that consumer spending in Apr rose by the most in almost 7 years.
Demand for new cars, trucks & SUVs fizzled in May, but the month was likely just a speed bump as US auto sales remain on track to challenge last year's all-time record. General Motors (GM), Ford (F) & Toyota (TM) posted weaker monthly sales, meeting expectations for a rough May for automakers. Even with Memorial Day promotions, sales couldn't overcome a difficult comparison to May 2015, which included 5 weekends versus this year's 4. The calendar quirk led forecasters to warn of sales declines for most major automakers. The industry sold an estimated 17.47M new vehicles in 2015, the best sales year on record. Kelley Blue Book reiterated its projection for total US sales of 17.5-17.8M this year, which would set a new high mark. LMC Automotive, another industry researcher, dropped its forecast for the full year to 17.7M vehicles from 17.8M, also pointing to a record year in 2016. Analysts note that consumers continue to flock toward larger, higher-margin vehicles, & cheaper gas prices across the country should help sustain that momentum.
Coca-Cola, a Dow stock & Dividnd Aristcorat, & Coca-Cola FEMSA (KOF) have entered into an agreement with Unilever (UL) to acquire UL's Latin American soy-based beverage business, AdeS, for $575M. AdeS generated $284M in revenue in 2015. After the transaction closes, AdeS will become part of the non-carbonated beverage platforms that KOF shares with KO in its franchise territories. KO stock was up a dime. If you would like to learn more about KO, click on this link:
club.ino.com/trend/analysis/stock/KO?a_aid=CD3289&a_bid=6ae5b6f7
Stocks continued the sideways trading trend. At the ½ way mark in 2016, Dow is up 2% YTD, not bad considering the ugly start. The threat of an interest rate hike this month is spooking the market, not a good sign for the bulls. More data from May is coming this week, highlighted by the jobs report on Fri.
Dow Jones Industrials
AMJ (Alerian MLP Index tracking fund)
| CLN16.NYM | ....Crude Oil Jul 16 | ....48.85 |  ...0.25 | (0.5%) |
The US economy expanded at a modest pace across most of the country since mid-Apr, causing the labor market to tighten as employers continued adding jobs & nudging wages higher, a Federal Reserve report showed. “Employment grew modestly since the last report, but tight labor markets were widely noted,” according to the Fed's latest Beige Book. “Wages grew modestly, and price pressures grew slightly in most districts.” Fed officials have made clear they expect to raise interest rates in the coming months, possibly as early as this month, if the economy continues to improve. The FOMC meets Jun 14-15. Prices in federal funds futures contracts imply that investors see a 24% chance of a rate increase this month, with odds rising to 53% by the FOMC's Jul session. This Beige Book may do little to change outlook for the economy. It characterized the economy as slowly gaining ground, using versions of the word “modest” or “moderate” 23 times in the 6-page summary. The terms were used to describe gains in overall growth, consumer spending, employment, loan demand & financial services. Manufacturing results were reported as mixed, while the energy industry, still ailing form the decline in the price of oil, remained weak. Several districts reported rising demand for labor, particularly for high-skilled workers. Atlanta & Richmond noted that low-skilled positions were also becoming harder to fill. “Wages grew modestly since the last report, with increases concentrated in areas of labor tightness,” the report stated. Economic data have shown steady if unspectacular improvement in the US following a disappointing Q1. The Commerce Dept said yesterday that consumer spending in Apr rose by the most in almost 7 years.
Economy Grows at ‘Modest’ Pace as Job Market Tightens, Fed Says
Demand for new cars, trucks & SUVs fizzled in May, but the month was likely just a speed bump as US auto sales remain on track to challenge last year's all-time record. General Motors (GM), Ford (F) & Toyota (TM) posted weaker monthly sales, meeting expectations for a rough May for automakers. Even with Memorial Day promotions, sales couldn't overcome a difficult comparison to May 2015, which included 5 weekends versus this year's 4. The calendar quirk led forecasters to warn of sales declines for most major automakers. The industry sold an estimated 17.47M new vehicles in 2015, the best sales year on record. Kelley Blue Book reiterated its projection for total US sales of 17.5-17.8M this year, which would set a new high mark. LMC Automotive, another industry researcher, dropped its forecast for the full year to 17.7M vehicles from 17.8M, also pointing to a record year in 2016. Analysts note that consumers continue to flock toward larger, higher-margin vehicles, & cheaper gas prices across the country should help sustain that momentum.
Despite Gloomy May, Auto Sales Still on Track for Record Year
Coca-Cola, a Dow stock & Dividnd Aristcorat, & Coca-Cola FEMSA (KOF) have entered into an agreement with Unilever (UL) to acquire UL's Latin American soy-based beverage business, AdeS, for $575M. AdeS generated $284M in revenue in 2015. After the transaction closes, AdeS will become part of the non-carbonated beverage platforms that KOF shares with KO in its franchise territories. KO stock was up a dime. If you would like to learn more about KO, click on this link:
club.ino.com/trend/analysis/stock/KO?a_aid=CD3289&a_bid=6ae5b6f7
Coca-Cola To Acquire Unilever's Soy-based Beverage Business For $575M
Coca-Cola (KO)
Stocks continued the sideways trading trend. At the ½ way mark in 2016, Dow is up 2% YTD, not bad considering the ugly start. The threat of an interest rate hike this month is spooking the market, not a good sign for the bulls. More data from May is coming this week, highlighted by the jobs report on Fri.
Dow Jones Industrials
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