Dow was off 26 (but well below early lows), advancers slightly ahead of decliners & NAZ rose 18. The MLP index was flattish in the 217s & the REIT index rebounded 3+ to the 418s (near record territory). Junk bond funds inched higher & Treasuries continued in demand by investors. Oil fell 1+ to the 55s (more below) & gold gained 4 to 1561.
AMJ (Alerian MLP Index tracking fund)
![Live 24 hours gold chart [Kitco Inc.]](https://www.kitco.com/images/live/gold.gif?0.2180338269244485)
White House has started work on second round of tax cuts to boost growth, Mnuchin says
Procter & Gamble (PG), a Dow stock & Dividend Aristocrat, reported quarterly revenue that fell short of estimates for the first time in 5 qtrs, hurt by a stronger $ & a struggling baby segment, which includes Pampers diapers. But the consumer giant also raised its 2020 forecast & beat earnings estimates. “We continue to face the challenges of a very volatile macro and geopolitical landscape and a competitive response to our growth, but all-in, we’re continuing to make progress behind a set of integrated and mutually reinforcing strategies,” CFO & COO Jon Moeller said. PG reported fiscal Q2 EPS of $1.41, up from $1.22 a year earlier. Excluding items, the consumer giant EPS was $1.42, topping the $1.37 expected. Net sales rose 5% to $18.24B, falling short of expectations for $18.37B. Stripping out the impacts of foreign exchange, acquisitions & divestitures, organic sales increased 5%, helped by strong growth in its health care & beauty units. China & the US are P&G's 2 largest markets. Moeller said that the company will be monitoring the coronavirus spreading in China because it can also effect consumer confidence & travel. The company expects sales growth of 4-5% in fiscal 2020, up from its prior range of 3-5%. It also expects core EPS to increase of 8-11%, up from its prior range of 5-10%. The company expects to buy back more shares during fiscal 2020. It raised its repurchase $7-8B, up from a prior estimate of $6-8B. During its Q2, PG bought back $3.5B of common stock. The stock fell 58¢.
If you would like to learn more about PG, click on thjis link:
club.ino.com/trend/analysis/stock/PG?a_aid=CD3289&a_bid=6ae5b6f7
Procter & Gamble sales fall short, hurt by weak diaper demand, but company raises full-year
The economy slowed toward the end of last year, but it's still growing at a roughly 2% pace that's prevailed since the US exited its last recession 11 years ago, according to an index that measures the nation's economic health. The leading economic index fell 0.3% in Dec to mark the 4th decline in the past five months, the Conference Board said. The drop in the index largely stemmed from an increase in jobless claims & a decline in building permits for new houses, but claims have fallen since then & the weakness in permits is seen as temporary. The leading index fell last month after a spike in jobless claims in late Nov & early Dec, but applications for unemployment benefits have already returned close to a 50-year low. Building permits were also weak in Dec, but construction on new homes actually hit a 13-year high. Permits are trending well above year-ago levels, & with mortgage rates falling again, are likely to rebound in Jan. The US economy is not growing as fast as it was early in the Trump administration, but the reduced trade tensions with China, lower US interest rates & the strongest labor market in decades is likely to extend what is already the longest expansion in American history.
The number of Americans who applied for unemployment benefits in mid-Jan rose slightly, but layoffs remain near a 50-year low & there's no sign of deterioration in the strongest US labor market in decades. Initial jobless claims increased 6K to 211K last week, the gov said. The figures are seasonally adjusted. The more stable monthly average that filters out the weekly ups & downs slipped 3K to 213K. New unemployment claims are seen as a rough measure of how many people are losing their jobs. They briefly fell under 200K last Apr to a 50-year low & have hovered in the low 200Ks since then. Weekly increases largely reflect seasonal swings after the holiday season that typically fade away by Feb. New claims were slightly lower compared to the same week one year ago, however. Meanwhile, the number of people already collecting unemployment benefits (continuing claims) fell 37K to 1.73M. The US economy is growing more slowly, but it hasn't stopped consumers from spending. As a result, companies face little pressure to slash payrolls with sales still growing & skilled labor in such short supply. That bodes well for the health of the labor market — & the broader economy — in 2020.
Oil futures tumbled for a 3rd session in a row, with US benchmark prices logging their lowest finish since late Nov, on fears that economic growth & oil demand may be hit by the spread of the coronavirus outbreak in China. Oversupply concerns, despite a disruption to Libyan oil production, have been additional worries for the investors of the commodity. West Texas Intermediate crude for Mar delivery fell $1.15 (2%) to settle at $55.59 a barrel. That was the lowest finish since Nov 29 for a front-month contract. Mar Brent crude lost $1.17 (1.9%) to $62.04 a barrel, the lowest since Dec 3. China has banned travel in and out of Wuhan, where the first cases of the coronavirus outbreak appeared last month. Singapore confirmed its first case of the virus today. To date 17 people have died & more than 600 have been infected. Financial markets have been rattled by developments, with China stocks tumbling today as the virus is colliding with the massive Lunar New Year holiday in Asia. Meanwhile, WTI oil prices did manage to pare some of its earlier losses after data on US petroleum supplies from the Energy Information Administration (EIA) unexpectedly revealed that US crude supplies fell by 400K barrels last week. Yesterday, the American Petroleum Institute reported a weekly supply rise of 1.6M barrels. On average, the EIA was expected to report a weekly climb of 500K barrels in US crude supplies.
Selling in the AM did not last. The bulls returned in the PM & the popular averages finished mixed, keeping them close to their record closes last Fri.
Dow Jones Industrials
AMJ (Alerian MLP Index tracking fund)
The White House has started work on a 2nd round
of tax cuts even as the budget deficit continues to grow, Treasury
Secretary Steve Mnuchin said. “The president has asked
us to start working on what we call ‘tax 2.0,’ and that will be
additional tax cuts,” Mnuchin said at the World
Economic Forum. “They’ll be tax cuts for the
middle class, and we’ll also be looking at other incentives to stimulate
economic growth.” Talk
of election year tax cuts comes amid a swelling budget deficit that
eclipsed $1T for the 2019 calendar year. In addition, total
gov debt recently passed $23T, despite Pres
Trump's promises that economic growth would wipe out the deficit &
pull down the federal IOU. Mnuchin maintained that the tax cuts
would pay for themselves even as growth has fallen well short of the
administration’s promises of 3%-4% annually. He did concede that the
level of spending needs to be curtailed. “There’s no question that we need to slow down the
rate of growth of government spending, because we cannot sustain these
deficits growing at these levels,” he added. The White House pushed
thru a bill in late 2017 that pulled the business tax down sharply & also lightened the load for many individual taxpayers. However,
economic growth has fallen below 3% & the red ink has continued to
grow. Under the plan the administration will advance this time, the cuts will be more targeted to the middle class. “The
president feels that we need to continue to incentivize the middle
class, that their taxes have been too high historically,” Mnuchin said.
“We’ve had big tax cuts already, and that’s an area that we’ll continue
to look at.” The administration still expects the tax cuts to pay
for themselves over a 10-year period, though Mnuchin acknowledged that
the reductions were “front-loaded” & thus impacting the deficit more.
He also said Trump chose to prioritize rebuilding the military, which
also has added to the shortfall. “The president’s economic program is clearly working,” Mnuchin said.
White House has started work on second round of tax cuts to boost growth, Mnuchin says
Procter & Gamble (PG), a Dow stock & Dividend Aristocrat, reported quarterly revenue that fell short of estimates for the first time in 5 qtrs, hurt by a stronger $ & a struggling baby segment, which includes Pampers diapers. But the consumer giant also raised its 2020 forecast & beat earnings estimates. “We continue to face the challenges of a very volatile macro and geopolitical landscape and a competitive response to our growth, but all-in, we’re continuing to make progress behind a set of integrated and mutually reinforcing strategies,” CFO & COO Jon Moeller said. PG reported fiscal Q2 EPS of $1.41, up from $1.22 a year earlier. Excluding items, the consumer giant EPS was $1.42, topping the $1.37 expected. Net sales rose 5% to $18.24B, falling short of expectations for $18.37B. Stripping out the impacts of foreign exchange, acquisitions & divestitures, organic sales increased 5%, helped by strong growth in its health care & beauty units. China & the US are P&G's 2 largest markets. Moeller said that the company will be monitoring the coronavirus spreading in China because it can also effect consumer confidence & travel. The company expects sales growth of 4-5% in fiscal 2020, up from its prior range of 3-5%. It also expects core EPS to increase of 8-11%, up from its prior range of 5-10%. The company expects to buy back more shares during fiscal 2020. It raised its repurchase $7-8B, up from a prior estimate of $6-8B. During its Q2, PG bought back $3.5B of common stock. The stock fell 58¢.
If you would like to learn more about PG, click on thjis link:
club.ino.com/trend/analysis/stock/PG?a_aid=CD3289&a_bid=6ae5b6f7
Procter & Gamble sales fall short, hurt by weak diaper demand, but company raises full-year
The economy slowed toward the end of last year, but it's still growing at a roughly 2% pace that's prevailed since the US exited its last recession 11 years ago, according to an index that measures the nation's economic health. The leading economic index fell 0.3% in Dec to mark the 4th decline in the past five months, the Conference Board said. The drop in the index largely stemmed from an increase in jobless claims & a decline in building permits for new houses, but claims have fallen since then & the weakness in permits is seen as temporary. The leading index fell last month after a spike in jobless claims in late Nov & early Dec, but applications for unemployment benefits have already returned close to a 50-year low. Building permits were also weak in Dec, but construction on new homes actually hit a 13-year high. Permits are trending well above year-ago levels, & with mortgage rates falling again, are likely to rebound in Jan. The US economy is not growing as fast as it was early in the Trump administration, but the reduced trade tensions with China, lower US interest rates & the strongest labor market in decades is likely to extend what is already the longest expansion in American history.
U.S. growth slowed toward the end of 2019, leading index shows, but economy is stable
The number of Americans who applied for unemployment benefits in mid-Jan rose slightly, but layoffs remain near a 50-year low & there's no sign of deterioration in the strongest US labor market in decades. Initial jobless claims increased 6K to 211K last week, the gov said. The figures are seasonally adjusted. The more stable monthly average that filters out the weekly ups & downs slipped 3K to 213K. New unemployment claims are seen as a rough measure of how many people are losing their jobs. They briefly fell under 200K last Apr to a 50-year low & have hovered in the low 200Ks since then. Weekly increases largely reflect seasonal swings after the holiday season that typically fade away by Feb. New claims were slightly lower compared to the same week one year ago, however. Meanwhile, the number of people already collecting unemployment benefits (continuing claims) fell 37K to 1.73M. The US economy is growing more slowly, but it hasn't stopped consumers from spending. As a result, companies face little pressure to slash payrolls with sales still growing & skilled labor in such short supply. That bodes well for the health of the labor market — & the broader economy — in 2020.
New jobless claims rise slightly to 211,000 in mid-January, but still show very few layoffs
Oil futures tumbled for a 3rd session in a row, with US benchmark prices logging their lowest finish since late Nov, on fears that economic growth & oil demand may be hit by the spread of the coronavirus outbreak in China. Oversupply concerns, despite a disruption to Libyan oil production, have been additional worries for the investors of the commodity. West Texas Intermediate crude for Mar delivery fell $1.15 (2%) to settle at $55.59 a barrel. That was the lowest finish since Nov 29 for a front-month contract. Mar Brent crude lost $1.17 (1.9%) to $62.04 a barrel, the lowest since Dec 3. China has banned travel in and out of Wuhan, where the first cases of the coronavirus outbreak appeared last month. Singapore confirmed its first case of the virus today. To date 17 people have died & more than 600 have been infected. Financial markets have been rattled by developments, with China stocks tumbling today as the virus is colliding with the massive Lunar New Year holiday in Asia. Meanwhile, WTI oil prices did manage to pare some of its earlier losses after data on US petroleum supplies from the Energy Information Administration (EIA) unexpectedly revealed that US crude supplies fell by 400K barrels last week. Yesterday, the American Petroleum Institute reported a weekly supply rise of 1.6M barrels. On average, the EIA was expected to report a weekly climb of 500K barrels in US crude supplies.
Oil prices fall a third day on worries about oversupply, China virus fallout
Selling in the AM did not last. The bulls returned in the PM & the popular averages finished mixed, keeping them close to their record closes last Fri.
Dow Jones Industrials
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