After starting higher Dow pulled back to down 22, advancers just ahead of decliners & NAZ fell 8. The Financial Index was flattish in the 194s & pretty much where it has been for the last 3 weeks. The MLP index was flat in the 385s & the REIT index dropped 1+ to 264s. Junk bond funds were mixed & Treasuries were also little changed. Oil fell after Norway ended a strike that threatened to halt output by western Europe’s largest crude exporter & as China reduced purchases of the raw material. Gold is working its way higher, trying to get back over $1600.
Photo: Bloomberg
The EU worked towards stabilizing Spain's finances as it backed up the blueprint for the country's €100B bank bailout plan with plans to grant the country an extra year to cut its budget deficit. Finance ministers meeting in Brussels approved a one-year extension, until 2014, of Spain's deadline for achieving a budget deficit of 3%. The move comes on the heels of an overnight meeting at which the finance ministers agreed on the terms of a bailout for Spain's troubled banks, saying that the first €30B ($36.9B) in aid can be ready by the end of this month. The finance ministers for the 17 countries that use the € will return nest week to finalize the agreement, having first obtained the approval of their govs or parliaments. Meanwhile, Greece's new finance minister, Ioannis Stournaras, said his country will work to get its budget-balancing program back on track, but Greece too will need extra time to meet its targets. Call this a small amount of good news in an unstable situation.
EU to Speed $123 Billion Aid for Spanish Banks
China's imports rose less than anticipated in Jun while export growth slowed, adding pressure on the gov to support expansion after inflation data showed demand softening. Inbound shipments increased 6.3% from a year earlier, far below the 11% estimate. Overseas sales gained 11.3% & the trade surplus rose to a 3-year high of $31.7B. Growth probably decelerated in Q2 to the least in 3 years, with the IMF saying China's slowdown is among reasons the organization will reduce its estimate for global expansion. A gauge of export orders in China's official purchasing managers' index for Jun showed a contraction for the first time since Jan, suggesting that overseas shipments may slow in coming months. The nation cut its benchmark interest rates last week for the 2nd time in a month, adding to the first reduction since 2008 & 3 cuts in banks' reserve requirements since Nov. Economic growth may have slowed to 7.7% in Q2 from a year earlier after expanding 8.1% in Q1 (the 5th quarterly deceleration). Premier Wen Jiabao said authorities will intensify fine- tuning of policies as downward pressure on the economy remains "relatively large." The gov will promote steady growth in overseas sales, Wen said & he also urged Chinese exporters to explore markets throughout Asia & diversify trading partners in the face of rising protectionism.
China’s Import Growth Misses Estimates for June
Photo: Bloomberg
AMJ (Alerian MLP Index tracking fund)
Treasury yields:
U.S. 3-month | 0.081% | |
U.S. 2-year | 0.266% | |
U.S. 10-year | 1.518% |
| CLQ12.NYM | ...Crude Oil Aug 12 | ...85.67 | ... 0.32 | (0.4%) |
| GCN12.CMX | ...Gold Jul 12 | .......1,595.60 | ... 7.00 | (0.4%) |
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The EU worked towards stabilizing Spain's finances as it backed up the blueprint for the country's €100B bank bailout plan with plans to grant the country an extra year to cut its budget deficit. Finance ministers meeting in Brussels approved a one-year extension, until 2014, of Spain's deadline for achieving a budget deficit of 3%. The move comes on the heels of an overnight meeting at which the finance ministers agreed on the terms of a bailout for Spain's troubled banks, saying that the first €30B ($36.9B) in aid can be ready by the end of this month. The finance ministers for the 17 countries that use the € will return nest week to finalize the agreement, having first obtained the approval of their govs or parliaments. Meanwhile, Greece's new finance minister, Ioannis Stournaras, said his country will work to get its budget-balancing program back on track, but Greece too will need extra time to meet its targets. Call this a small amount of good news in an unstable situation.
EU to Speed $123 Billion Aid for Spanish Banks
China's imports rose less than anticipated in Jun while export growth slowed, adding pressure on the gov to support expansion after inflation data showed demand softening. Inbound shipments increased 6.3% from a year earlier, far below the 11% estimate. Overseas sales gained 11.3% & the trade surplus rose to a 3-year high of $31.7B. Growth probably decelerated in Q2 to the least in 3 years, with the IMF saying China's slowdown is among reasons the organization will reduce its estimate for global expansion. A gauge of export orders in China's official purchasing managers' index for Jun showed a contraction for the first time since Jan, suggesting that overseas shipments may slow in coming months. The nation cut its benchmark interest rates last week for the 2nd time in a month, adding to the first reduction since 2008 & 3 cuts in banks' reserve requirements since Nov. Economic growth may have slowed to 7.7% in Q2 from a year earlier after expanding 8.1% in Q1 (the 5th quarterly deceleration). Premier Wen Jiabao said authorities will intensify fine- tuning of policies as downward pressure on the economy remains "relatively large." The gov will promote steady growth in overseas sales, Wen said & he also urged Chinese exporters to explore markets throughout Asia & diversify trading partners in the face of rising protectionism.
China’s Import Growth Misses Estimates for June
Applied Materiel cut its full-year fiscal 2012 forecast because of weaker than expected demand for its semiconductor equipment business, primarily among foundry customers. For the fiscal year ending Oct 28, the company expects sales to be below the previous outlook of $9.1-$9.5B & EPS excluding some items will be less than its previous projection of 85-95¢. It is seeing weaker demand from its foundry customers, manufacturers that build chips for other companies which can be a harbinger of lower demand for the broader electronics industry. This part of a global slowdown for companies in the PC chain. The stock was off 22¢.
Applied Materials Cuts Year Full-Year Fiscal 2012 Forecast
The Aloca (AA) earnings report was mildly disappointing last night but markets were little affected. JPMorgan (JPM), a Dow stock, reports on Fri which will get a lot of attention with its explanation about the loss on its European debt mess. Europe continues to muddle by, but China is getting more attention with more signs of slowing growth. While Dow has had a nice recovery in the last month, I think it's still playing defense because it's nervous about earnings season.
Applied Materials Cuts Year Full-Year Fiscal 2012 Forecast
Applied Materials (AMAT)
The Aloca (AA) earnings report was mildly disappointing last night but markets were little affected. JPMorgan (JPM), a Dow stock, reports on Fri which will get a lot of attention with its explanation about the loss on its European debt mess. Europe continues to muddle by, but China is getting more attention with more signs of slowing growth. While Dow has had a nice recovery in the last month, I think it's still playing defense because it's nervous about earnings season.
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