Showing posts with label Dividend Aristocrat. Show all posts
Showing posts with label Dividend Aristocrat. Show all posts

Wednesday, August 15, 2012

Markets vacillate following favorable factory data

Dow lost 9, advancers ahead of decliners 5-4 & NAZ was up 8.  The Financial Index was up a fraction in the 201s, near 3 month highs.  The MLP index fell a fraction to 391 while the REIT index was up 1 to the 263s.  Junk bond funds inched higher & Treasuries pulled back again, taking the yield on the 10 year Treasury bond up almost 40 basis points from its recent record lows.  Oil slipped & gold was a little higher. 

AMJ (Alerian MLP Index tracking fund)


stock chart

Treausry yields:

U.S. 3-month

0.097%

U.S. 2-year

0.281%

U.S. 10-year

1.779%

CLU12.NYM...Crude Oil Sep 12...92.95 ...Down 0.48  (0.5%)

GCQ12.CMX...Gold Aug 12.....1,599.70 ....Up 0.30  (0.0%)



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Homebuilder Confidence in U.S. Rose in August to Five-Year High

Photo:   Bloomberg

US homebuilders grew more confident in the housing recovery in Aug, as many reported that prospects for sales are the best they've been since the home bubble burst 5 years ago.  The National Association of Home Builders/Wells Fargo builder sentiment index rose 2 points to 37, up from 35 in Jul.  That's the highest reading since Mar 2007.  The index, which is based on responses from 478 builders, has risen steadily since Jan.  Any reading below 50 indicates negative sentiment about the housing market & the index hasn't reached that level since Apr 2006, the peak of the housing boom.  Another indication that the housing market is on the mend.



Industrial Production in U.S. Rises 0.6% on Autos, Utilities

Photo:   Bloomberg

US factories made more cars, computers & airplanes last month, a hopeful sign that manufacturing is recovering after a weak spring.  Industrial production, which includes output at factories, mines & utilities increased 0.6% in Jul from Jun, the 4th straight monthly increase, according to the Federal Reserve.  Factory output, the most important component, rose 0.5%, the 2nd straight increase.  Factory output has risen 21.9% since its recession low in Jun 2009 & is just 1.7% below the pre-recession peak for factory output reached in Apr 2007.  The Jul increase was led by a 3.3% surge in output of motor vehicles & parts.  Production of computers & primary metals such as steel also showed big gains.   Mining output, which includes oil & gas production as well as coal mining, increased 1.2%. Utility output rose 1.3%, largely because of hot weather in many parts of the country.  Manufacturing has slowed this spring as consumers cut back on spending & businesses invested less in machinery & equipment.  In another report, a survey from the Federal Reserve Bank of New York showed manufacturing conditions in the New York region shrank in Aug.  The Empire State index fell to -5.9, down from a reading of 7.4 in Jul.

Industrial Production in U.S. Rises 0.6% on Autos, Utilities


Target Quarterly Profit Tops Estimates as Store Sales Gain

Photo:   Bloomberg

Target, a Dividend Aristocrat, had higher net income in Q2 as it paves the way for an upcoming move into Canada.  It saw solid spending by customers & it raised its outlook for the year.  TGT has reached out to customers with 2 growth initiatives: offering a larger selection of foods & also a program started in 2010 which gives shoppers a 5% discount when they pay with Target-branded credit & debit cards.  It has also expanded into urban markets using smaller versions of its big-box stores.  It is pleased with the performance of its first 3 locations & is looking outside the country for growth as well.  TGT will soon begin opening the first of 125-135 stores at store locations once owned by Zellers, Canada's 2nd-largest discount chain.  EPS was $1.06 which compares with $1.03 last year.  Excluding expenses tied to Canada, EPS was $1.12, topping expectations of $1.01.  Overall revenue rose 3.5% to $16.5B.  Analysts forecasted $16.75B.  Revenue at stores opened at least a year rose 3.1%.  The company expects EPS in Q3 to be 83-93¢ & analysts expect 77¢.  TGT also raised its EPS guidance for the year by a nickel to $4.65-$4.85.  Analysts are expecting $4.30.  The stock gained 1.26 & has done well in the last year.

Target (TGT)


stock chart


Markets continue to meander looking for direction in a quiet month.  There is no dramatic news coming out, partially because Europe is on summer holiday.  But its problems have not gone away.  US economic news is a little better than it has been.  But year end is approaching & the possibility of significant tax hikes is keeping business & consumers cautious about the outlook.  Dow stays near 13K, unable to break thru its high at 13.4K.  That trend should remain thru the end off Aug.

Dow Jones Industrials


stock chart






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Friday, August 3, 2012

Markets soar on a better than expected jobs number

Dow surged 204 going over 13K, advancers over decliners 7-1 & NAZ rose 57. The Financial Index was up almost 5 to the 199s, its best level in 3 months. The MLP index added 2 to the 391s & the REIT index shot up almost 3 to the 269s (nearly matching its yearly highs).  Junk bond funds gained & Treasuries pulled back as stocks rallied.  Oil rallied, trying to get back over 90 while gold edged higher.

AMJ (Alerian MLP Index tracking fund)

stock chart

Treasury yields:

U.S. 3-month

0.076%

U.S. 2-year

0.232%

U.S. 10-year

1.551%

CLU12.NYM....Crude Oil Sep 12...89.79 ...Up 2.66  (3.1%)

GCQ12.CMX...Gold Aug 12......1,594.20 ....Up 6.80  (0.4%)



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  • <p>               FILE - In this July 25, 2012, file photo, people looking for work talk at a Primerica job booth at a job fair in San Jose, Calif. U.S. hiring was likely sluggish in July for a fourth straight month, held back by slower economic growth and an uncertain outlook. (AP Photo/Paul Sakuma, File)
Photo:   Yahoo

Employers added 163K jobs in Jul, a hopeful sign after 3 months of sluggish hiring.  But the Labor Department said that the unemployment rate rose to 8.3% from 8.2% in Jun.  Jul hiring was the best since Feb.  Still, the economy has added an average of 151K jobs a month this year, enough to keep up with population growth but not enough to drive down the unemployment rate.  A better outlook on hiring could make the Federal Reserve (FED) reluctant to take more action to spur growth.  The FED, which ended a policy meeting yesterday, signaled in a statement a growing inclination to take further steps if hiring doesn't pick up.

U.S. Payrolls Rise More Than Forecast; Unemployment 8.3%


Procter & Gamble Profit Tops Estimates Amid Price Increases

Photo:   Bloomberg

Procter & Gamble, a Dow stock & Dividend Aristocrat, posted a higher-than-expected quarterly profit despite a drop in sales, just weeks after it took the blame for its disappointing performance & said it was focusing on ways to improve.  The forecast for the current qtr (fiscal Q1) is below the estimate by analysts, suggesting it could take several more months before the bulk of the company's restructuring efforts pay off.  PG also said it would repurchase $4B worth of its shares this fiscal year.  In Jun it said it did not expect to do so because it wanted to preserve its credit rating.  CFO Moeller said PG had changed its mind because it had growing confidence in its turnaround plan & more cash on hand than it had anticipated in Jun, while interest rates continued to fall.  EPS for fiscal Q4 was $1.24, up from 84¢, a year earlier.  Excluding some items, EPS was 82¢ versus an estimate of 77¢.  The stock rose 1.78. 

Procter & Gamble Profit Tops Estimates Amid Price Increases

Procter & Gamble (PG)


stock chart


European Central Bank President Mario Draghi

Photo:   Bloomberg

After more than 2 years of incremental crisis management & false starts, a bargain is beginning to emerge between Europe's politicians & central bankers over how to calm bond markets & end the debt tumult that threatens the survival of the €.  The ECB sketched out its side of the deal yesterday, offering to buy Italian & Spanish bonds on the market as long as the bailout fund makes purchases directly from the 2 countries’ treasuries & ties them to tough conditions.  Mario Draghi offered only a glimpse of the new strategy, with the actual interventions weeks or months away & a host of obstacles standing in the way before Europe can claim to be on a path out of the crisis that emerged in Greecce in late 2009.  Investors looking for a quicker fix sold the € & stocks of at-risk countries.  The € jumped over $1.24 on the initial ECB announcement, falling back as Draghi’s caution that “it was not a decision, it was guidance” sank in.  Then the currency slipped a penny.  The yield difference between 10-year Italian bonds & similar-maturity German bunds narrowed 7 basis points to 502 basis points, after jumping 54 basis points.  Spain’s yield difference compared to bunds rose 7 basis points to 600 basis points.  Skeptics recalled the failure of European authorities to deliver on prior crisis-fighting pledges, whether by restricting the use of the original €440B ($535B) rescue fund or forcing through a restructuring of Greece’s debt after promising not to.  No quick fix here.

ECB-Politicians’ Anti-Crisis Bargain Starts to Emerge


This is a day for the bulls.  Markets loved the jobs data & buyers are in a very good mood.  However fundamental problems remain.  The euro debt mess dribbles on, the US economic recovery is not getting a passing grade & the status of the Chinese economy is unclear.  But bulls are happy to see the Dow back over 13K.  Of course, it has not strayed far from that level for months, so maybe it's not all that important of a signal.

Dow Jones Industrials


stock chart







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Monday, July 23, 2012

Euro debts rattle stock markets

Dow dropped 131, decliners over avancers almost 6-1 & NAZ lost 52.  The Financial Index fell 2½ to 191.  The Alerian MP Index fell 4+ to the 395s & the REIT index was off 3 to 261.  Junk bond funds were mixed & Treasuries were strong, being very much in demand.  Oil plunged on concern that Europe’s sovereign-debt crisis is deepening & as a Chinese central-bank adviser said the country’s economic expansion may slow further.  Gold also saw a lot of selling.

AMJ (Alerian MLP Index tracking fund)

stock chart

Treasury yields:

U.S. 3-month

0.086%

U.S. 2-year

0.210%

U.S. 10-year

1.416%

CLU12.NYM....Crude Oil Sep 12...88.33 .....Down 3.50  (3.8%)

GCU12.CMX...Gold Sep 12......1,571.80 ...Down 12.10  (0.8%)



Get the latest daily market update below:



Prime Minister Mariano Rajoy

Photo:   Bloomberg

Spain’s recession deepened in Q2 as the toughest budget cuts in the country’s history pushed the economy into a 3rd consecutive qtr of contraction, according to the Bank of Spain.  The economy shrank 0.4% from Q1, when GDP fell 0.3%.  Domestic demand “fell more sharply than in the prior quarter,” while exports showed a “moderate recovery,” the Bank of Spain said.   Prime Minister Rajoy last week announced his 4th round of tax increases & spending cuts this year as he struggles to convince investors that the nation won’t need a 2nd bailout. The planned budget cuts through 2014 now amount to more than 10% of GDP.  Spain’s 10-year note yields surged above 7.5%, breaching a level that forced Ireland, Portugal & Greece to seek external aid.  The yield on Spain’s 10-year benchmark bond surged 26 basis points to 7.57% today, resulting in a spread with similar German maturities widening to 6.42 percentage points.  The situation is grim.

Spanish Recession Probably Deepened in Second Quarter: Econom


 McDonald’s Profit Trails Estimates on Slowing U.S. Store Sales

Photo:   Bloomberg

McDonald's, a Dow stock & Dividend Aristocrat,  net income slipped 4% in Q2 as a result of unfavorable foreign currency exchange rates.  Revenue fell short of expectations in a slowing global economy.  EPS was $1.32, below $1.35 last year.  Revenue was $6.92B, barely up from $6.91B a year ago.  Expectations were for EPS of $1.38 on revenue of $6.94.  Sales at stores open at least 13 months in the US rose 3.6%, the slowest growth in 5 qtrs.  The stock dropped 2.33.

McDonald's (MCD)


  stock chart


Stocks, Euro Tumble as Commodities Decline With Spanish Bo

Photo:   Bloomberg

Gov bond yields in the US, UK. & Germany fell to records, while stocks dropped & the € traded below its lifetime average against the dollar on concern the region’s debt crisis is deepening.  The yield on the 10-year Treasury note declined to 1.41% after reaching an all- time low of 1.40%.  2-year German yields slumped to as low as minus 0.08% while Spanish & Italian yields jumped.  The € fell for a 4th day, sliding to below $1.21.  Greece’s creditors meet this week amid doubts that the country will meet its bailout commitments.  German Vice Chancellor Philipp Roesler said he’s “very skeptical” that European leaders will be able to rescue Greece.  China's economic expansion may cool for a 7th straight qtr to 7.4% in Q3.  Germany’s 2-year note yield was below zero for the 12th consecutive day.  Markets are switching from nervous to scared.

Bond Yields Fall to Records as Stocks, Euro Slide on Debt


This is a glum day for all markets (except for Treasuries & bonds of other safe haven countries).  The euro debt mess keeps going from bad to worse with no end in sight.  The Chinese economy is slowing & that is felt worldwide.  The US economy, while still growing, is stumbling.  Even the thought of a QE3 may not be good enough to restore expansion needed to bring down high unemployment.  Dow stalled at 12950, its next test may be the 12500 floor which is not that far away.

Dow Jones Industrials


stock chart






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