S&P 500 FINANCIALS INDEX
| Value | 201.60 |  |
| Change | -1.60 (-0.8%) |
MLPs fell back in profit taking. The index dropped 1½ to the 331s, also hurt by ex-distributions such as Enbridge Energy (EEP). The REIT index fell 2 to the 211s, after yesterday's big day. Junk bond funds were flat to higher at their lofty levels. The VIX, volatility index, was up a fraction in the 21s. Treasuries were strong again. The yield on the 10-year Treasury bonds dropped 6+ basis points to 2.90% while the 2 year Treasury note yields a measly 52 basis points (the annual rate). These low rates are worrying with negative implications for stock markets. The € is flattish, just under $1.32, but up a good 12¢ since horrible May.
Alerian MLP Index --- 2 weeks
Dow Jones REIT Index --- 2 weeks
VIX --- 2 weeks
10-Year Treasury Yld Index --- 2 weeks
Oil is hanging in there above the important 80 resistance level while gold is doing very little.
| CLU10.NYM... | Crude Oil Sep 10 | ...81.45 | ... 0.11 .......(0.1%) |
| GCQ10.CMX | ...Gold Aug 10 | ...1,188.80 | ... 5.40 .......(0.5%) |
Consumers did not boost spending in Jun & their incomes failed to increase, further evidence that the economic recovery slowed in the spring. Americans also saved at the highest rate in nearly a year. Personal spending was unchanged in Jun, the Commerce Dept reported, the 3rd straight month of lackluster consumer demand. Incomes were also flat, the weakest showing in 9 months. The personal savings rate rose to 6.4% of after-tax incomes in Jun, the highest reading in nearly a year. The savings rate is now about 3 times the 2.1% average for all of 2007, before the recession began. While income growth was flat, incomes posted solid gains in Apr & May. But households chose to save the extra money rather than spend it. Higher savings restrain spending in the near term but the extra resources allow households to repair balance sheets.
Consumer Spending and Incomes in U.S. Unexpectedly Stagnate
Personal Income --- 1 year
Photo: Yahoo
Pfizer (PFE), Dow stock, reported a 9% increase in Q2 profits, sharply ahead of expectations as revenue jumped due to its acquisition of Wyeth last Oct. EPS for the Q2 ending Jul 4 was 31¢ versus 34¢ last year when there were fewer shares. The increase in shares is from selling stock to help fund the Wyeth purchase. PFE, the world's biggest drugmaker, said revenue totaled $17.3B, up 58%. Excluding 31¢ worth of one-time items, EPS was 62¢. Those items included $1.1B (pretax) for integration of Wyeth's systems, employee severance & other restructuring, along with $2.1B (pretax) for asset write-downs & other accounting charges related to the Wyeth purchase. This figure easily beat expectations of 52¢ on revenue of $16.6B. PFE reaffirmed its profit forecast for 2010, saying it expects revenue of $67-69B & EPS of 95¢ -$1.10, or $2.10-2.20, excluding one-time items. "We continue to make solid progress on the Wyeth integration while we remain focused on delivering strong business performance," CEO Jeff Kindler said. The stock was up 81¢.
Pfizer Profit Beats Analyst Estimates on Higher Sales
Pfizer --- 2 years
Procter & Gamble (PG), another Dow stock, posted lower-than-expected quarterly profit as higher spending on marketing more than offset sales growth. PG said investment in new products released this year, Pampers Dry Max diapers, the Fusion ProGlide razor & Crest 3D White tooth-whitening strips, outpaced a 5% growth in net sales. "Next year is another big year of innovation for us, and we'll be investing behind that," Jon Moeller CFO said. EPS in FY Q4 ended Jun 30 fell to 71¢ from 80¢ a year earlier, expectations were for 73¢. Net sales rose 5% $18.9B compared with forecasts of $19.1B. The company forecast Q1 earnings (this qtr) of 97¢-$1.01 & organic sales are expected to grow 3-5%. Unfavorable currency exchange rates are expected to reduce net sales growth by about 3%. The stock dropped 2 & now yields 3¼%.
P&G Profit Forecast Trails Estimates as Shoppers Limit Spending
Procter & Gamble --- 2 years
There's not a lot of action today but the consumer numbers were dismal. Earnings are coming in mixed so the averages are entitled to a quiet period. MLPs remain red hot, with the index just a little below its record. Few can make such a statement. But Treasuries are even hotter. Extremely low rates do not tie with the stock markets gains in recent weeks. The disconnect will have to be resolved.
Dow Jones Industrials --- 2 weeks
