Friday, July 22, 2016

Markets crawl higher on sluggish earnings

Dow inched up 1, advancers over decliners 4-3 & NAZ gained 13.  The MLP index was fractionally lower in the 322s & the REIT index went up 2 to the 373s for a new record.  Junk bond funds were little changed & Treasuries were sold.  Oil & gold traded lower.

AMJ (Alerian MLP Index tracking fund)

Crude Oil Sep 16

Gold Futures,Aug-2016

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The Group of 20 nations is planning to say that it's capable of dealing with the economic fallout of Britain's vote to leave the EU.  “Members of the G-20 are well positioned to proactively address the potential economic and financial consequences stemming from the U.K. referendum,” according to a draft communique.  The document was being discussed ahead of a meeting of finance ministers & central bank governors & will be revised over the next 2 days.  Delegates from the largest economies are gathering this weekend to address issues ranging from recent terrorist attacks to the deteriorating global growth outlook.  Economic prospects were dimmed additionally by Britain's vote to leave the EU.  The Brexit vote “adds to the uncertainty in the global economy,” according to the draft.  “The global economic environment is challenging and downside risks persist, highlighted by fluctuating commodity prices, low inflation in many economies, geopolitical conflicts, terrorism and refugee flows.”  The G-20 also plans to stress the need for an “open and resilient financial system” in light of recent turbulence in financial markets & to express its commitment to finalize critical elements of the regulatory framework.

G-20 Says It’s Prepared to Deal With Brexit’s Economic Fallout

China stocks closed down today after a central bank official cast doubts on the likelihood of further interest rate cuts & investors took profits following the previous day's bounce.  The CSI300 index of the largest listed companies in Shanghai & Shenzhen fell 0.8%, to 3225 while the Shanghai Composite Index lost 0.9% to 3012.  For the week the CSI300 was down 1.6% & the Shanghai Composites was off 1.4%.

China Shares Slide to End Down Week

General Electric, a Dow stock, reported a sharp rise in adjusted net income in Q2, as its aviation, healthcare & power businesses countered weak demand for oil & gas & transportation equipment.  A boost from the sale of its appliances business also lifted earnings.  Adjusted EPS of 51¢ topped the 46¢ expected.  The figure included a gain of 20¢ from the sale of its appliances business to Qingdao Haier, which closed in Jun.  The gain was offset by 9¢ in restructuring costs & other items.  GE affirmed its 2016 operating forecast & said it expects strong growth to continue in H2.  “The diversity and scale of our portfolio enabled the company to perform well despite a volatile and slow growth economy," CEO Jeffrey Immelt.  Revenue rose 15% to $33.49B, helped by a 31% rise from the power business.  Sales from continuing industrial operations, known as organic segment revenue, fell 1% to $24.4B, less than expected.  The stock lost 65¢.  If you would like to learn more about GE, click on this link:

General Electric's Stock Slides Despite Profit Beat

General Electric (GE)

Earnings from industrials companies are coming in & they are less than impressive.  Some are even failing to meet lowered expectations.  Forward guidance is not exciting investors.  However stock averages are near record highs as if they don't have a care in the world.

Dow Jones Industrials


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