Dow was off 9, decliners barely ahead of advancers & NAZ added 12. The MLP index fell 4 to the 217s & the REIT index gave back 3+ to the 414s after a strong advance in early trading. Junk bond funds fluctuated & Treasuries were even today. Oil dropped 1+ to the 56s (more below) & gold was steady at 1558.
AMJ (Alerian MLP Index tracking fund)
![Live 24 hours gold chart [Kitco Inc.]](https://www.kitco.com/images/live/gold.gif?0.2180338269244485)
Pres Trump said he & China’s Xi Jinping are “getting along,” but he’s not afraid to ax the phase one portion of the US-China trade deal & slap additional tariffs on the nation if it breaks trade promises. Trump, during an interview, said he's fully aware that China hasn't been trustworthy in the past, but phase one has a “tremendous policing action” that's the “strongest anyone’s ever had,” & if China steals intellectual property, he will “terminate the deal” & “charge tremendous tariffs.” “China has a reputation for being cute,” Trump added. “But I have a great relationship with President Xi – I don’t think it’s going to happen.” Though not included in the deal, Trump believes that pressure to shut down the illicit supply of fentanyl, a dangerous drug similar to morphine involved in overdose deaths in the US, is having a “big impact.” “I said [to Xi] you’ve got to do me a favor – you’ve got to stop the fentanyl,” said Trump, & he added that now China is placing criminal penalties on the drug, “which they’ve never had before." Trump said phase 2 of US-China trade would begin “right away.” Phase one was recently signed & includes China's agreement to protect intellectual property, holding back from currency manipulation, coope
rate in financial services & purchase more than $200B of US products over the next 2 years.
China coronavirus deaths rise to 17, heightening global alarm
Supply of homes for sale hits record low, and prices suddenly jump
Johnson & Johnson (JNJ), a Dow stock & Dividend Aristocrat, reported fiscal Q4 profit that beat expectations but missed slightly on revenue. “We delivered strong underlying sales and earnings growth in 2019, driven by the strength of our pharmaceutical business, accelerating performance in our medical devices business and improved profitability in our consumer business,” CEO Alex Gorsky said. Adjusted EPS was $1.88 versus $1.87 expected & revenue was $20.74B versus $20.8B expected. The pharmaceutical business posted revenue of $10.54B, a 3.5% increase year over year. The unit, which makes beauty products such as Neutrogena, generated $3.5B in revenue, up 0.9% from a year earlier. The medical device unit reported revenue of $6.63B, down 0.5% from last year. The consumer product brands division, is facing numerous lawsuits ranging from claims that its talc-based baby powder causes cancer to allegations that it helped fuel that nationwide opioid epidemic. Litigation expenses dramatically fell to $264M in the qtr, compared with a massive $1.29B a year earlier. Sales of rheumatoid arthritis drug Remicade increased 5.4% in Q4 to $3.5B, while sales of its multiple myeloma drug Darzalex increased by 9.1% to $2.7B. Sales of cancer drug Imbruvica increased by 42.1% to $830M & Stelara grew 6.6% to $515. The company sees 2020 EPS of $8.95-9.10, with revenue of $85.4-86.2B. The stock fell 1.09.
If you would like to learn more about JNJ, click on this link:
club.ino.com/trend/analysis/stock/JNJ?a_aid=CD3289&a_bid=6ae5b6f7
Johnson & Johnson beats Wall Street expectations on profit, misses on revenue
Oil futures fell to mark their lowest settlement in about 7 weeks as fears of an oversupply of crude, & potential hit to demand on the back of the coronavirus outbreak in China, outweighed a disruption to Libyan production. West Texas Intermediate crude for Mar delivery fell $1.64 (2.8%) to settle at $56.74 a barrel. That was the lowest settlement for a front-month contract since Dec 3. Mar Brent crude lost $1.38 (2.1%) to finish at $63.21 a barrel—the lowest since Dec 4. Oil had rallied early yesterday after Libya's largest oil field shut down production after a pipeline was cut off, but ended the day lower. The topic of supplies was underlined by remarks yesterday by Intl Energy Agency Executive Director Fatih Birol on the sidelines of the World Economic Forum. Birol said he sees “an abundance of energy supply in terms of oil and gas. It’s the reason that recent incidents we have seen — with the Iranian general, Qassem Soleimani, killed, Libya unrest — didn't boost international oil prices.” In its annual World Energy Outlook report today, the IEA said increasing US shale output will continue to blunt the influence of other energy producers, including members of OPEC. In a monthly report issued yesterday, the Energy Information Administration forecast a monthly rise in US shale oil production of 22K barrels a day to 9.2M barrels a day in Feb.
The bulls went home after a strong market in early trading. But the stock averages remain close to their record highs (shown below). The virus in China is making some traders nervous along with the goings on in DC. Given the Dow's strong advance in recent months, it would be entitled to a rest period.
Dow Jones Industrials
AMJ (Alerian MLP Index tracking fund)
Pres Trump said he & China’s Xi Jinping are “getting along,” but he’s not afraid to ax the phase one portion of the US-China trade deal & slap additional tariffs on the nation if it breaks trade promises. Trump, during an interview, said he's fully aware that China hasn't been trustworthy in the past, but phase one has a “tremendous policing action” that's the “strongest anyone’s ever had,” & if China steals intellectual property, he will “terminate the deal” & “charge tremendous tariffs.” “China has a reputation for being cute,” Trump added. “But I have a great relationship with President Xi – I don’t think it’s going to happen.” Though not included in the deal, Trump believes that pressure to shut down the illicit supply of fentanyl, a dangerous drug similar to morphine involved in overdose deaths in the US, is having a “big impact.” “I said [to Xi] you’ve got to do me a favor – you’ve got to stop the fentanyl,” said Trump, & he added that now China is placing criminal penalties on the drug, “which they’ve never had before." Trump said phase 2 of US-China trade would begin “right away.” Phase one was recently signed & includes China's agreement to protect intellectual property, holding back from currency manipulation, coope
rate in financial services & purchase more than $200B of US products over the next 2 years.
Trump reveals how he'll respond if China breaks trade agreement
Deaths from China's new virus rose to 17 with more than 540 cases confirmed, increasing fears of
contagion from an infection suspected to originate from illegally-traded
wildlife. The previously unknown, flu-like coronavirus strain is
believed to have emerged from an animal market in central Wuhan city,
with cases now detected as far away as the US. Contrasting
with its secrecy over the 2002-03 Severe Acute Respiratory Syndrome
(SARS) that killed nearly 800, China's communist gov has
this time given regular updates to try to avoid panic as Ms travel
for the Lunar New Year. “The rise in the mobility of the public
has objectively increased the risk of the epidemic spreading,” National
Health Commission vice-minister Li Bin said. The World Health Organization (WHO) was meeting to rule if the outbreak was a global health emergency. After
official appeals to stay calm, many Chinese were cancelling trips,
buying face masks, avoiding public places such as cinemas & shopping
centres & even turning to an online plague simulation game or
watching disaster movie “The Flu” as a way to cope. “The best way to conquer fear is to confront fear,” said one commentator on China’s Twitter-like Weibo. The virus has spread from Wuhan around China to population centers including Beijing, Shanghai, Macau & Hong Kong.
China coronavirus deaths rise to 17, heightening global alarm
Buyers are trolling the nation's neighborhoods
looking for homes at the fastest pace in nearly 2 years, making an
already critical shortage of inventory even worse. Sales of
existing homes rose a steeper-than-expected 3.5% in Dec compared
with Jan, according to the National Association of Realtors. Demand
is surging because mortgage rates are about a full percentage point
lower than they were a year ago, & the largest generation,
millennials, are aging into their homebuying years. That demand
has pushed the supply of homes for sale down 8.5% annually to the lowest
level since the Realtors began tracking inventory in 1982. At the
current sales pace, the total supply would sell out in just 3
months. A 6 months' supply is considered a balanced market. The huge imbalance between supply & demand caused the median home
price in Dec to jump 7.8% annually, the biggest annual increase in
almost 4 years. Prices were up just 5.4% annually in Nov. The
inventory shortfall is worst at the lowest end of the market, &, as a
result, that is where prices are surging most. “It will reach a
choking point,” said Lawrence Yun, chief economist for the Realtors,
suggesting that higher prices will soon sideline a growing number of
buyers. Sales
of homes priced below $100K were down 7.7% annually in Dec,
while every other price category saw increased sales. That is because
there is so few for sale at the entry level. Investors have been very
active in this category, turning these homes into lucrative rentals.
Supply of homes for sale hits record low, and prices suddenly jump
Johnson & Johnson (JNJ), a Dow stock & Dividend Aristocrat, reported fiscal Q4 profit that beat expectations but missed slightly on revenue. “We delivered strong underlying sales and earnings growth in 2019, driven by the strength of our pharmaceutical business, accelerating performance in our medical devices business and improved profitability in our consumer business,” CEO Alex Gorsky said. Adjusted EPS was $1.88 versus $1.87 expected & revenue was $20.74B versus $20.8B expected. The pharmaceutical business posted revenue of $10.54B, a 3.5% increase year over year. The unit, which makes beauty products such as Neutrogena, generated $3.5B in revenue, up 0.9% from a year earlier. The medical device unit reported revenue of $6.63B, down 0.5% from last year. The consumer product brands division, is facing numerous lawsuits ranging from claims that its talc-based baby powder causes cancer to allegations that it helped fuel that nationwide opioid epidemic. Litigation expenses dramatically fell to $264M in the qtr, compared with a massive $1.29B a year earlier. Sales of rheumatoid arthritis drug Remicade increased 5.4% in Q4 to $3.5B, while sales of its multiple myeloma drug Darzalex increased by 9.1% to $2.7B. Sales of cancer drug Imbruvica increased by 42.1% to $830M & Stelara grew 6.6% to $515. The company sees 2020 EPS of $8.95-9.10, with revenue of $85.4-86.2B. The stock fell 1.09.
If you would like to learn more about JNJ, click on this link:
club.ino.com/trend/analysis/stock/JNJ?a_aid=CD3289&a_bid=6ae5b6f7
Johnson & Johnson beats Wall Street expectations on profit, misses on revenue
Oil futures fell to mark their lowest settlement in about 7 weeks as fears of an oversupply of crude, & potential hit to demand on the back of the coronavirus outbreak in China, outweighed a disruption to Libyan production. West Texas Intermediate crude for Mar delivery fell $1.64 (2.8%) to settle at $56.74 a barrel. That was the lowest settlement for a front-month contract since Dec 3. Mar Brent crude lost $1.38 (2.1%) to finish at $63.21 a barrel—the lowest since Dec 4. Oil had rallied early yesterday after Libya's largest oil field shut down production after a pipeline was cut off, but ended the day lower. The topic of supplies was underlined by remarks yesterday by Intl Energy Agency Executive Director Fatih Birol on the sidelines of the World Economic Forum. Birol said he sees “an abundance of energy supply in terms of oil and gas. It’s the reason that recent incidents we have seen — with the Iranian general, Qassem Soleimani, killed, Libya unrest — didn't boost international oil prices.” In its annual World Energy Outlook report today, the IEA said increasing US shale output will continue to blunt the influence of other energy producers, including members of OPEC. In a monthly report issued yesterday, the Energy Information Administration forecast a monthly rise in US shale oil production of 22K barrels a day to 9.2M barrels a day in Feb.
Oil prices at 7-week low on forecast for surplus in crude supplies
The bulls went home after a strong market in early trading. But the stock averages remain close to their record highs (shown below). The virus in China is making some traders nervous along with the goings on in DC. Given the Dow's strong advance in recent months, it would be entitled to a rest period.
Dow Jones Industrials
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