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Friday, July 22, 2016
Markets finish the week with a modest rally
Dow advanced 53, advancers over decliners 2-1 & NAZ went up 26. The MLP index rose 1+ to the 323s & the REIT index added almost 4 to the 375s, anther record. Junk bond funds were mixed & Treasuries had modest losses. Oil dropped to the low 44s & gold also declined.
Oil prices fell today, with losses accelerating after the US
oil rig count rose for a 4th week in a row. Crude futures were already down as investors braced for expected
growth in Iraqi crude exports that could add to the global glut. The 2 benchmarks each had a weekly loss of about 5%. The $ rally to a more than 4-month high also hurt
demand for greenback-denominated oil among holders of the € & other
currencies. Iraq's oil exports were expected to rise in Jul. If confirmed, it would put OPEC's
#2 producer back on track of supply growth after a 2-month lag. Earlier this week, the US gov reported that domestic
crude inventories were at 519.5M barrels last week, historically
high for this time of year, even after a 9th straight week of
drawdowns. On Thurs, Genscape
reported a build of 725K barrels in the latest week at the Cushing,
Oklahoma. Falling oil prices have encouraged traders to send US supplies
to Europe, counterbalancing 700K barrels per day in lost Nigerian
supply. US, European & Asian oil product stocks rose 2.35M barrels last week for a 2nd week of growth.
US oil producers continue to revive drilling in the shale patch,
adding rigs for the 4th consecutive week in the longest streak of
increases since Aug. Rigs targeting crude rose 14 to 371, after 27 had already been added since the start of the month,
Baker Hughes. Natural gas rigs declined
by 1 to 88, bringing the total for oil & gas up by 15 to 462.
After nearly doubling from a 12-year low
in Feb, a rebound in oil has prompted American producers to expand
drilling in recent weeks after idling more than 1K oil rigs since the
start of last year. Prices have since started to moderate, as West
Texas Intermediate had its 2nd weekly decline in 3
weeks. The U.S benchmark was down again today. The
return of idled rigs to service has led some to speculate that a rise
in output will follow. US. production rose by 9K barrels a day to
8.49 in the latest week, EIA data show.
VF Corp, a Dividend Aristocrat, beat Q2 earnings expectations but missed on
revenue. EPS dropped to 12¢ from 40¢ in the
same period a year ago. The latest results include a $97M loss on
the company's "contemporary brands" business, which it agreed to sell
in Q2. Adjusted EPS was 35¢,
compared with the estimate of 34¢. Revenue rose to $2.45B from $2.43 B, missing the $2.52B forecast. CEO Eric Wiseman said results
were in line with expectations "despite a challenging environment with
mixed economic and currency conditions around the world." The company
revised its outlook of a mid-single-digit percentage revenue increase
for 2016 to an increase of 3-4%. The stock fell 80¢. If you would like tgo learn more about VFC, click on this link: club.ino.com/trend/analysis/stock/VFC?a_aid=CD3289&a_bid=6ae5b6f7
Whirlpool reported revenue declines in its latest qtr as weakness abroad offset US gains. Still the company said it was well
positioned to face "global volatility" & a "challenging" global
environment as its results beat estimates. The company raised the lower end of its profit forecast for the
year, forecasting its ongoing business EPS to be $14.25-14.75, up from $14-14.75 previously. For the qtr, EPS was 4.15, up from 2.21 last year. Its ongoing operating EPS rose to 3.50 from 2.70 a year before. Sales slid 0.2% to $5.2B. Analysts had expected adjusted EPS of $3.36 on revenue of $5.13B. Sales in North America increased 3.7% to $2.8B & sales slid 3.3% to $826M in Latin America. Excluding currency fluctuations, sales increased 4%. Sales
in Europe, Middle East & Africa decreased slightly to $1.3B, & were flat with currency excluded. In Asia, sales decreased 4.7% to $363M & were flat on a currency neutral basis. The stock shot up 4.89. If you would like tgo learn more about WHR, click on this link: club.ino.com/trend/analysis/stock/WHR?a_aid=CD3289&a_bid=6ae5b6f7
Buyers returned in the PM, giving the averages another gain. The reasoning is more of the same. Earnings beating lowered expectations are good enough & tomorrow will take care of itself. Dow is up a staggering 1½K in the last month. Now it has 19K in siight. Hard to believe.
![Live 24 hours gold chart [Kitco Inc.]](http://www.kitco.com/images/live/gold.gif?0.6716024497624654)
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