Dow rebounded 195, advancers over decliners 2-1 & NAZ went up 71. The MLP index added 2+ to the 272s & the REIT index was fractionally lower to the 338s. Junk bond funds were purchased & Treasuries slid lower bringing higher yields. Oil climbed 1 to the 69s & gold inched higher to 1230.
AMJ (Alerian MLP Index tracking fund)
Stocks rebound on earnings reports
China's 3Q GDP growth slowest since 2009
Existing home sales fall for sixth straight month in September
Procter & Gamble (PG), a Dow stock & Dividend Aristocrat, jumped after the quarterly sales helped propel higher-than-expected revenue growth during. It also maintained its profit outlook for the full year.
* EPS: $1.12, adjusted, vs. $1.09 expected
* Revenue: $16.69B vs. $16.46B expected
“This keeps us on track to deliver our top-and bottom-line targets for the fiscal year,” CEO David Taylor said. It reported organic sales growth, which strips out the impact of currency & other adjustments, of 4%, better than expectations for an increase of 1.6% & fueled by growth in its beauty division. The company owns major brands in this category. “There isn’t a piece of beauty that isn’t growing right now,” CFO Jon Moeller said. PG said beauty net sales rose 5%, while sales in its fabric & home-care division (largest unit by sales) climbed 2%. That helped offset net sales declines of 1% in the grooming category, a drop of 3% in health care & a 3% decline in baby, feminine & family care. Profit margins have also been squeezed, hurt by rising commodity costs, shipping expenses & foreign exchange rates. Moeller said that PG will need to raise prices in the coming qtrs to offset these cost pressures. “These are costs retailers understand. They face the same issues,” he added. He said, “We expect the revenue progress we are making and the bottom-line progress to hold up. There is a very strong underlying economy and we are seeing — despite some of that angst that exists — increases in the rate of market growth, which you expect with the unemployment situation and eventually the wage situation increasingly significantly.” PG is anticipating organic sales growth of 2-3% for fiscal 2019. It expects core EPS to rise 3-8%, up from 2018 core EPS of $4.22. The stock rose 5.88 (7%).
If you would like to learn more about PG, click on this link:
Procter & Gamble shares jump on earnings beat as beauty business boosts sales
Today is the 30th anniversary of the 1987 crash. There is a new generation of traders & they feel more optimistic in 2018. The volatile intl scene has quieted down a bit, at least for the time being, & a flock of buyers are making this a winning day. However the rally (if you call it that) is short of impressive & macro issues of US-China trade relations along with higher interest rates have not gone away. The Dow remains down 900 in Oct.
Dow Jones Industrials
AMJ (Alerian MLP Index tracking fund)
| CL=F | Crude Oil | 69.73 | +1.08 | +1.6% |
| GC=F | Gold | 1,230.50 | +0.40 | +0.0% |
Stocks opened higher as investors
digested the latest earnings reports. On the economic calendar, a reading on existing home sales was released. In Sep, sales declined 4.1%. Stocks fell yesterday after Treasury Secretary Steve Mnuchin
tweeted that he will not attend a Saudi investor summit. He joined a
growing list of global business & world leaders that have canceled
their attendance at the Future Investment Initiative summit in Saudi
Arabia next week, in response to Saudi Arabia's potential involvement in
the disappearance of journalist Jamal Khashoggi. Economic data released yesterday included weekly jobless claims which dropped 5K to a seasonally adjusted 210K in the latest week, matching expectations. In Asian markets, China's Q3 economic growth slowed to its weakest pace since the global financial crisis. It
missed expectations at 6.5% as a years-long campaign to tackle
debt risks & the trade war with the US began to take hold. Beijing
moved to mitigate rising risks to the economy. Regulators pledged
steps aimed at calming markets & supporting struggling firms. China's Shanghai Composite rose 2.6% after dipping to near 4-year lows. Hong Kong's Hang Seng index had a volatile morning but was up about 0.5% in late PM trading. Nikkei ended the day down 0.6%, recording a 3rd week of losses. In Europe, London's FTSE up 0.1%, Germany's DAX was lower by 0.4% & the France CAC was higher by 0.9%.
Stocks rebound on earnings reports
China's growth continues to slow. Its Q3 economic growth slowed to its weakest pace since the global financial crisis,
missing expectations at 6.5% as a years-long campaign to tackle
debt risks & the trade war with the US began to take hold. The forecast called for the economy to expand 6.6%. The
GDP reading was the weakest year-on-year quarterly growth since Q1-2009 at the height of the global financial crisis. On
a quarterly basis, growth slowed down to 1.6% from a revised 1.7% in Q2, in line with expectations. Q2 sequential growth was also revised down from the previously reported 1.8%. That means the economy carried over less momentum into H2 than had been expected. The full-year growth is expected to come
in at 6.6%, which would meet the gov forecast
of 6.5%. The US & China
imposed new tariffs against each other's goods in late
Sep, the latest escalation in a heated trade war between them. The
administration placed tariffs of 10% on $200B of
Chinese products, with the tariffs to go up to 25% by year-end. Beijing's new levies will be 5-10%. The 2 countries already exchanged tariffs on $50B worth of each other's goods earlier this year. Economists
warn that a protracted dispute will eventually stunt growth not just in
the US & China but across the broader global economy.
China's 3Q GDP growth slowest since 2009
US home sales fell in Sep by the most in
over 2 years as the housing market continued to struggle despite
strength across the broader economy. The National Association of
Realtors (NAR) said that existing home sales dropped 3.4% to a
seasonally adjusted annual rate of 5.15M units last month. Home
sales have now fallen for 6 straight months. A dearth of properties
for sale has pushed up prices, sidelining many would-be homeowners.
Sales dropped the most in the South & the decline in the West left
sales there down 12.2% from a year earlier. NAR Chief Economist Lawrence Yun said the overall decline appeared related to a rise in interest rates. Supply
has also been constrained by rising building material costs as well as
land & labor shortages, while rising mortgage rates are expected to
slow demand. The Federal Reserve raised borrowing costs in
Sep for the 3rd time this year & is widely expected to hike
rates again in Dec. The forecast
called for existing home sales falling to 5.3M from a previously reported
5.34M. Existing home sales make up about 90% of US home
sales. There were 1.88M homes on the market in Sep, an increase of 1.1% from a year ago. At
the Sep sales pace, it would take 4.4 months to clear the current
inventory. A supply of 6-7 months is viewed as a healthy
balance between supply & demand. The median house price increased 4.2% from one year ago to $258K in Sep.
Existing home sales fall for sixth straight month in September
Procter & Gamble (PG), a Dow stock & Dividend Aristocrat, jumped after the quarterly sales helped propel higher-than-expected revenue growth during. It also maintained its profit outlook for the full year.
* EPS: $1.12, adjusted, vs. $1.09 expected
* Revenue: $16.69B vs. $16.46B expected
“This keeps us on track to deliver our top-and bottom-line targets for the fiscal year,” CEO David Taylor said. It reported organic sales growth, which strips out the impact of currency & other adjustments, of 4%, better than expectations for an increase of 1.6% & fueled by growth in its beauty division. The company owns major brands in this category. “There isn’t a piece of beauty that isn’t growing right now,” CFO Jon Moeller said. PG said beauty net sales rose 5%, while sales in its fabric & home-care division (largest unit by sales) climbed 2%. That helped offset net sales declines of 1% in the grooming category, a drop of 3% in health care & a 3% decline in baby, feminine & family care. Profit margins have also been squeezed, hurt by rising commodity costs, shipping expenses & foreign exchange rates. Moeller said that PG will need to raise prices in the coming qtrs to offset these cost pressures. “These are costs retailers understand. They face the same issues,” he added. He said, “We expect the revenue progress we are making and the bottom-line progress to hold up. There is a very strong underlying economy and we are seeing — despite some of that angst that exists — increases in the rate of market growth, which you expect with the unemployment situation and eventually the wage situation increasingly significantly.” PG is anticipating organic sales growth of 2-3% for fiscal 2019. It expects core EPS to rise 3-8%, up from 2018 core EPS of $4.22. The stock rose 5.88 (7%).
If you would like to learn more about PG, click on this link:
Procter & Gamble shares jump on earnings beat as beauty business boosts sales
Today is the 30th anniversary of the 1987 crash. There is a new generation of traders & they feel more optimistic in 2018. The volatile intl scene has quieted down a bit, at least for the time being, & a flock of buyers are making this a winning day. However the rally (if you call it that) is short of impressive & macro issues of US-China trade relations along with higher interest rates have not gone away. The Dow remains down 900 in Oct.
Dow Jones Industrials
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