Dow dropped 125, decliners over advancers better than 2-1 & NAZ gave back 59. The MLP index was fractionally lower in the 257s & the REIT index tumbled 5 to 324. Junk bond funds were lower & Treasuries remained weak, taking the yield on the 10 year Treasury up to 2.94%. Oil was off fractionally to the 68s after Trump complained about high oil prices (more below) & gold sank 10 to 1337.
AMJ (Alerian MLP Index tracking fund)
Stocks slumped on weakness in technology shares as investors digested the latest batch of corp results. The $ extended its weekly gain, while crude slipped after Pres Trump complained that prices were too high. Technology shares again weighed on American equities, with chipmakers under pressure on concern over a spate of recent weak earnings. The NAZ 100 pared a weekly gain. Industrial companies advanced, with General Electric (GE & a Dow stock) results jolting shares higher. Treasury yields continued to march higher, on track for the biggest 5-day surge since Feb.
American crude erased a gain after Trump said oil prices kept “artificially very high” by OPEC “will not be accepted.” In Europe, personal & household-goods stocks led the Stoxx Europe 600 lower. UK shares outperformed as the £ weakened after Bank of England Governor Mark Carney dampened expectations for a rate hike next month. While investors debate the cause of the decline in sovereign debt, bond market gauges showed an increase in expectations for US inflation after the recent torrid gains in metals from aluminum to nickel. Trade remains in focus with the Treasury Dept considering using an emergency law to curb Chinese investments in sensitive technologies.
Pres Trump slammed OPEC for inflating oil prices after the cartel showed a willingness to further tighten crude markets. “Looks like OPEC is at it again,” he said on Twitter, not long after energy ministers finished their meeting in Jeddah, Saudi Arabia. “Oil prices are artificially Very High! No good and will not be accepted!” Trump's ire followed a stream of bullish signals from a meeting of oil producers in Saudi Arabia, chiefly from the kingdom’s Energy Minister Khalid Al-Falih. The crude glut that’s weighed on prices for 3 years has almost been wiped out by OPEC's production cuts, but instead of celebrating victory the group is finding reasons to keep going & drive fuel inventories even lower. Brent crude, the intl benchmark, fell 69¢ at the time of the tweet, before trading down 0.8% at $73.17 a barrel. The purpose of the shift in OPEC's target was clear: There’s capacity for prices to rise even further beyond their current 3-year high, Al-Falih said. “We have seen prices significantly higher in the past, twice as much as where we are today” & the global economy has the ability to absorb costlier crude, the Saudi minister added. Intl oil prices surged to almost $75 a barrel this week & US gasoline is the highest in almost 3 years. Yet OPEC's choke-hold on its own production is only getting tighter. Saudi Arabia is said to desire crude closer to $80. The closest US allies within OPEC rejected Trump's accusation. Prices aren't artificially high, said UAE Oil Minister Suhail Al Mazrouei. Saudi Arabia's Al-Falih echoed that view. “We are doing our role to correct the market,” Al Mazrouei said. “There are many things affecting the market, not just supply and demand,” including geopolitics that are beyond OPEC's control, he said. Russia, Saudi Arabia's most important ally in the production cuts, gave its backing to continuing the cuts until their end-2018 expiry. There's no obligation to stop just because the pact’s initial goal, stockpiles in industrialized nations back in line with the 5-year average, is at hand, said Energy Minister Alexander Novak.
Trump Slams OPEC After Cartel Pushes Harder for High Oil Prices
General Electric (GE, a Dow stock) stuck with its 2018 profit forecast, powering shares to the biggest gain in 3 years as the beleaguered manufacturer defied expectations of a cut. Strength in aviation & health care is shoring up confidence in the outlook for adjusted EPS of $1-1.07, GE said, just 2 months after its finance chief said the company was headed toward the low end of the range. Even that would be above the 95¢ estimates. “I’m excited about the path we’re on,” CEO John Flannery said when discussing GE's plan to turn itself around by cutting costs & strengthening the manufacturing operations. Flannery sees “green shoots” at GE, reprising former Federal Reserve Chairman Ben Bernanke's phrase as the US was emerging from the last recession. GE topped estimates by the widest margin on record. The steady outlook offered a measure of comfort to investors who are reeling from one of the deepest slumps in GE's 126-year history. Flannery, who took over last year, is weighing all options, including a breakup, as he seeks to turn around the maker of jet engines & power equipment. GE's new structure will give individual business units more autonomy. Corp operations, meanwhile, will narrow focus on “strategy, governance, capital allocation and talent.” The broad review of GE's portfolio remains under way. Adjusted EPS was 16¢ in Q1, topping the 12¢ estimate. Sales rose 6.6% to $28.7B compared with expectations of $27.5B. The company recently announced the $1.05B sale of a piece of the health-care business as part of a plan to sell $20B of assets. GE said that it expects to finalize plans to unload its transportation unit in Q2. GE also confirmed that it plans a disposition of the distributed power business, which includes the Jenbacher & Waukesha gas-engine operations. The company’s finance arm, GE Capital, came under scrutiny during Q1 after GE revealed problems with an old portfolio of long-term care insurance policies. The situation, which led GE to take a significant charge & set aside $15B for loss reserves, spooked investors & raised questions about what other liabilities the company would have to deal with. Flannery said that GE recorded a $1.5B reserve related to a US investigation into GE's defunct subprime mortgage unit. The stock rose 63¢ (4%).
If you would like to learn more about GE, click on this link:
club.ino.com/trend/analysis/stock/GE?a_aid=CD3289&a_bid=6ae5b6f7
GE Surges After Brushing Off Wall Street’s Worries
Profit taking continues after the recent mini stock rally of almost 2 weeks. Earnings have been fairly good but dark clouds associated with trade negotiations are not going away. Redefining trade rules will make for a very bumpy road over the short term. Treasury yields are rising, a major worry for new investors who have become addicted to low interest rates. After coming close to 25K, the Dow now needs more than 500 to top that level. The bulls have plenty of challenges if they want to take the Dow to new records.
Dow Jones Industrials
AMJ (Alerian MLP Index tracking fund)
| CL=F | Crude Oil | 67.73 | -0.56 | -0.8% |
| GC=F | Gold | 1,338.80 | -10.00 | -0.7% |
Stocks slumped on weakness in technology shares as investors digested the latest batch of corp results. The $ extended its weekly gain, while crude slipped after Pres Trump complained that prices were too high. Technology shares again weighed on American equities, with chipmakers under pressure on concern over a spate of recent weak earnings. The NAZ 100 pared a weekly gain. Industrial companies advanced, with General Electric (GE & a Dow stock) results jolting shares higher. Treasury yields continued to march higher, on track for the biggest 5-day surge since Feb.
American crude erased a gain after Trump said oil prices kept “artificially very high” by OPEC “will not be accepted.” In Europe, personal & household-goods stocks led the Stoxx Europe 600 lower. UK shares outperformed as the £ weakened after Bank of England Governor Mark Carney dampened expectations for a rate hike next month. While investors debate the cause of the decline in sovereign debt, bond market gauges showed an increase in expectations for US inflation after the recent torrid gains in metals from aluminum to nickel. Trade remains in focus with the Treasury Dept considering using an emergency law to curb Chinese investments in sensitive technologies.
Tech Drags Stocks Lower; Oil Falls as Dollar Gains: Markets Wrap
Pres Trump slammed OPEC for inflating oil prices after the cartel showed a willingness to further tighten crude markets. “Looks like OPEC is at it again,” he said on Twitter, not long after energy ministers finished their meeting in Jeddah, Saudi Arabia. “Oil prices are artificially Very High! No good and will not be accepted!” Trump's ire followed a stream of bullish signals from a meeting of oil producers in Saudi Arabia, chiefly from the kingdom’s Energy Minister Khalid Al-Falih. The crude glut that’s weighed on prices for 3 years has almost been wiped out by OPEC's production cuts, but instead of celebrating victory the group is finding reasons to keep going & drive fuel inventories even lower. Brent crude, the intl benchmark, fell 69¢ at the time of the tweet, before trading down 0.8% at $73.17 a barrel. The purpose of the shift in OPEC's target was clear: There’s capacity for prices to rise even further beyond their current 3-year high, Al-Falih said. “We have seen prices significantly higher in the past, twice as much as where we are today” & the global economy has the ability to absorb costlier crude, the Saudi minister added. Intl oil prices surged to almost $75 a barrel this week & US gasoline is the highest in almost 3 years. Yet OPEC's choke-hold on its own production is only getting tighter. Saudi Arabia is said to desire crude closer to $80. The closest US allies within OPEC rejected Trump's accusation. Prices aren't artificially high, said UAE Oil Minister Suhail Al Mazrouei. Saudi Arabia's Al-Falih echoed that view. “We are doing our role to correct the market,” Al Mazrouei said. “There are many things affecting the market, not just supply and demand,” including geopolitics that are beyond OPEC's control, he said. Russia, Saudi Arabia's most important ally in the production cuts, gave its backing to continuing the cuts until their end-2018 expiry. There's no obligation to stop just because the pact’s initial goal, stockpiles in industrialized nations back in line with the 5-year average, is at hand, said Energy Minister Alexander Novak.
Trump Slams OPEC After Cartel Pushes Harder for High Oil Prices
General Electric (GE, a Dow stock) stuck with its 2018 profit forecast, powering shares to the biggest gain in 3 years as the beleaguered manufacturer defied expectations of a cut. Strength in aviation & health care is shoring up confidence in the outlook for adjusted EPS of $1-1.07, GE said, just 2 months after its finance chief said the company was headed toward the low end of the range. Even that would be above the 95¢ estimates. “I’m excited about the path we’re on,” CEO John Flannery said when discussing GE's plan to turn itself around by cutting costs & strengthening the manufacturing operations. Flannery sees “green shoots” at GE, reprising former Federal Reserve Chairman Ben Bernanke's phrase as the US was emerging from the last recession. GE topped estimates by the widest margin on record. The steady outlook offered a measure of comfort to investors who are reeling from one of the deepest slumps in GE's 126-year history. Flannery, who took over last year, is weighing all options, including a breakup, as he seeks to turn around the maker of jet engines & power equipment. GE's new structure will give individual business units more autonomy. Corp operations, meanwhile, will narrow focus on “strategy, governance, capital allocation and talent.” The broad review of GE's portfolio remains under way. Adjusted EPS was 16¢ in Q1, topping the 12¢ estimate. Sales rose 6.6% to $28.7B compared with expectations of $27.5B. The company recently announced the $1.05B sale of a piece of the health-care business as part of a plan to sell $20B of assets. GE said that it expects to finalize plans to unload its transportation unit in Q2. GE also confirmed that it plans a disposition of the distributed power business, which includes the Jenbacher & Waukesha gas-engine operations. The company’s finance arm, GE Capital, came under scrutiny during Q1 after GE revealed problems with an old portfolio of long-term care insurance policies. The situation, which led GE to take a significant charge & set aside $15B for loss reserves, spooked investors & raised questions about what other liabilities the company would have to deal with. Flannery said that GE recorded a $1.5B reserve related to a US investigation into GE's defunct subprime mortgage unit. The stock rose 63¢ (4%).
If you would like to learn more about GE, click on this link:
club.ino.com/trend/analysis/stock/GE?a_aid=CD3289&a_bid=6ae5b6f7
GE Surges After Brushing Off Wall Street’s Worries
Profit taking continues after the recent mini stock rally of almost 2 weeks. Earnings have been fairly good but dark clouds associated with trade negotiations are not going away. Redefining trade rules will make for a very bumpy road over the short term. Treasury yields are rising, a major worry for new investors who have become addicted to low interest rates. After coming close to 25K, the Dow now needs more than 500 to top that level. The bulls have plenty of challenges if they want to take the Dow to new records.
Dow Jones Industrials
No comments:
Post a Comment