Wednesday, August 2, 2017

Mixed markets after Apple reports earnings

Dow is up only 9 (but off its highs above 22k), decliners over advancers 2-1 & NAZ lost 39.  The MLP index index fell 1+ to the 298s & the REIT pulled back 2+ to the 354s.  Junk bond funds were slightly lower & Treasuries are about even.  Oil was a little lower (more below) & gold was off a tad from its recent high.

AMJ (Alerian MLP Index tracking fund)

CL=FCrude Oil49.18


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The gain in hiring at companies in Jul, along with upward revisions to the prior month, is consistent with moderate growth in US employment, according to data from the ADP Research Institute.   Private payrolls rose by 178K (est. 190K); gain in Jun revised to 191k from 158k.  Payrolls in goods-producing industries, which include builders & manufacturers, advanced 4K &.service providers added 174K to payrolls  The results showed steady job growth across a swath of industries from professional & business services to financial activities, construction & mining.  Businesses are expanding their workforce with new hires, indicating sustained job-market progress that is helping underpin consumer spending, the biggest part of the economy.  “The American job machine continues to operate in high gear,” Mark Zandi, chief economist at Moody's Analytics said (Moody's produces the figures with ADP).  “Job gains are broad-based across industries and company sizes, with only manufacturers reducing their payrolls. At this pace of job growth, unemployment will continue to quickly decline.”  “Job gains continued to be strong in the month of July,”  ADP Research Institute added.  “However, as the labor market tightens employers may find it more difficult to recruit qualified workers.”

ADP Data on Company Hiring in Sync With Moderate U.S. Job Growth

Apple's (AAPL) surprisingly strong quarterly results & forecast pushed the shares to a record high, helping the Dow breach the 22K mark for the first time.  The stock rose to $156 but off its highs of $159, boosting the market capitalization of the world's most valuable company to over $800B.  At least 8 brokerages raised their price targets on the stock with a median price target of $165.  Apple reported better-than-expected Q3 results & indicated that its upcoming 10th-anniversary iPhone lineup was on schedule.  AAPL is widely tipped to adopt higher-resolution OLED displays for the latest iPhone, along with better touchscreen technology & wireless charging, which could come with a $1K plus price tag.  Sales of iPad made a surprise comeback, up 15% from a year earlier.  The company also hit a milestone of 1.2B iPhones sold.  Revenue from emerging markets, excluding China, rose 18% & remained a bright spot.  Greater China, however, reported its 6th straight decline in revenue, hurt by customers switching to locally made phones. 
If you would lke to learn more about AAPL, click on this link:

Apple hits record high, powers Dow past 22,000

Oil shook off a raft of bearish headlines, as investors & traders took advantage of earlier losses & pushed the price of Brent back towards $52 & this week's 8-week highs.  West Texas Intermediate crude edged up  penny to $49.17 a barrel.  Both contracts fell sharply the previous day after a refinery fire in the Netherlands.  Traders are awaiting the release of official US gov data on weekly crude inventory levels after an independent survey showed an unexpected rise of 1.8M barrels.  Meanwhile, production from OPEC hit a 2017 high of 33M bpd in Jul, despite the group's pledge to restrict output along with other non-OPEC producers.

Oil dodges bears, climbs back towards $52 per barrel

Out of the gate, stocks were higher taking the Dow over 22K.  The AAPL earnings report powered that advance.  However the stock is sliding lower as the report is being digested by analysts & the stock market may finish in the red.  Meanwhile the goings on in DC are important as Congress tries tp figure put what it wants to do next, choosing between more investigations or passing legislation.

Dow Jones Industrials


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