Dow dropped 47 (weakening in the last hour), decliners ahead of advancers 5-4 & NAZ was even helped by a big rise at Apple (see below). The Financial Index fell 3 to the 196s. The MLP index was about even in the 382s & the REIT index pulled back 1+ to the 264s from yesterday's yearly highs. Junk bond funds were mixed & Treasuries rose. Oil & gold fell, along with the stock market.
![Live 24 hours gold chart [Kitco Inc.]](https://lh3.googleusercontent.com/blogger_img_proxy/AEn0k_sFrzoCtIajwLjINhqn2sETUH_d4AeK86qTcxx0HE0WtF4dnL018NWf7acEwvK7anRHRcLlkxGZclnnFOouhCamN6gKoGbFiu9RFNSV=s0-d)
Photo: Bloomberg
China cut its benchmark interest rates for the 2nd time in a month & allowed banks to offer bigger discounts on their borrowing costs, stepping up efforts to reverse a slowdown in the world’s 2nd-biggest economy. The one-year lending rate will fall 31 basis points & the one-year deposit rate will drop by 25 basis points effective tomorrow, announced by the People’s Bank of China. The discount banks can offer on loans was widened to 30% from 20%. China is moving more aggressively to promote growth as Europe's turmoil crimps exports & domestic property restrictions curb the housing market. Today’s cuts coincided with decisions by the ECB & Bank of England (BOE) to increase monetary stimulus & preceded gove data next week that may show expansion decelerated for a 6th qtr. China announced the move at the same time as the BOE raised its asset-purchase target by £50B ($78B) to £375B, restarting its expansion of stimulus. Then the ECB cut its benchmark interest rate by a quarter percentage point to 0.75% & lowered its deposit rate to zero from 0.25%. The idea is that these moves were coordinated. However, with rates near zero, rate cuts may not have much effect.
China Cuts Benchmark Rates for Second Time in Month
Apple suppliers in Asia are preparing for mass production in Sep of a tablet computer with a smaller screen than the iPad (likely to be smaller than 8"). The current iPad's screen measures 9.7", unchanged since the first model was released 2 year ago. Suppliers said that AAPL has told them to prepare for mass production of the smaller tablet. The screen makers include LG Display of South Korea & Taiwan-based AU Optronics. A smaller tablet could help AAPL company maintain its dominance in a market that keeps getting more crowded. Competitors include Samsung Electronics & Amazon.com (AMZN). In addition, Microsoft (MSFT), Dow stock, & Google (GOOG) recently unveiled tablets. Last year, the iPad held a 62% share of the world-wide market, according to market-research firm IHS iSuppli, which expects overall tablet sales this year to surge 85% to 127M units. As the market continues to expand, consumers' choices, in size, technical specifications & price, are growing more varied. Last week, GOOG started taking orders for the Nexus 7, a tablet device with a 7" screen that will sell for $199. That matches the price of AMZN Kindle Fire, which came out last year & also has a 7" screen. AAPL rose $10.53.
Apple Said to Plan Smaller IPad to Vie With Google Nexus
Photo: Bloomberg
US retailers' same-store sales in Jun nearly matched estimates, with luxury chains such as Saks (SKS) & discounters like TJX (TJX) topping expectations while stores targeting middle-income consumers trailing projections. Same-store sales at the more than 20 companies tracked by Retail Metrics rose 0.3%, compared with the 1% average estimate, follow a 7.2% increase last year. Consumers may have been spooked by the unemployment rate staying above 8%, sending many to discount chains such as TJX, which posted a 7% sales gain. At the same time, luxury consumers have continued to spend with the stock market still up for the year. TJX, which owns discount stores TJ Maxx & Marshalls, beat estimates for a 3.7% sales increase. The company said EPS this year may be as much as $2.39, up from a previous forecast for a maximum of $2.37. Same-store sales at Limited Brands (LTD), the parent company of Victoria’s Secret, gained 7% beating the average estimate of 2.6% & sales at SKS rose 6%, topping the 4.2% estimate. But sales at Target (TGT & a Dividend Aristocrat) rose 2.1%, falling short of the 2.8% forecasted gain, & Macy's (M), the 2nd-biggest department-store chain, posted a modest 1.2% increase, missing the 2.3% estimate. Macy’s said in a statement that the “stagnant” economy & reduced spending from tourists hurt sales.
Retailers’ June U.S. Sales Little Changed While Luxury, Discounters Gain
Markets were nervous awaiting the big jobs number tomorrow. Expectations are for about 90-95K new jobs to be added, far below the 200K+ numbers that were common in Q1. The rate cuts in Europe & Asia (plus another one in Kenya) may not have much effect on stimulating economies. Bulls are hoping for a pleasant surprise in the jobs number, but recent signals are not encouraging (i.e. jobless claims data). But Dow is hanging in there, very near the highs since mid May. Aloca (AA), a Dow stock, on Mon will be the first to report earnings. Analysts are looking for a meager 6¢, down from 32¢ last year.
AMJ (Alerian MLP index tracking fund)
Click below for the latest market update:
Treasury yields:
U.S. 3-month | 0.071% | |
U.S. 2-year | 0.286% | |
U.S. 10-year | 1.592% |
| CLQ12.NYM | ...Crude Oil Aug 12 | ...87.35 | ..... 0.31 | (0.4%) |
| GCN12.CMX | ...Gold Jul 12 | .......1,600.30 | ... 21.00 | (1.3%) |
China cut its benchmark interest rates for the 2nd time in a month & allowed banks to offer bigger discounts on their borrowing costs, stepping up efforts to reverse a slowdown in the world’s 2nd-biggest economy. The one-year lending rate will fall 31 basis points & the one-year deposit rate will drop by 25 basis points effective tomorrow, announced by the People’s Bank of China. The discount banks can offer on loans was widened to 30% from 20%. China is moving more aggressively to promote growth as Europe's turmoil crimps exports & domestic property restrictions curb the housing market. Today’s cuts coincided with decisions by the ECB & Bank of England (BOE) to increase monetary stimulus & preceded gove data next week that may show expansion decelerated for a 6th qtr. China announced the move at the same time as the BOE raised its asset-purchase target by £50B ($78B) to £375B, restarting its expansion of stimulus. Then the ECB cut its benchmark interest rate by a quarter percentage point to 0.75% & lowered its deposit rate to zero from 0.25%. The idea is that these moves were coordinated. However, with rates near zero, rate cuts may not have much effect.
China Cuts Benchmark Rates for Second Time in Month
Apple suppliers in Asia are preparing for mass production in Sep of a tablet computer with a smaller screen than the iPad (likely to be smaller than 8"). The current iPad's screen measures 9.7", unchanged since the first model was released 2 year ago. Suppliers said that AAPL has told them to prepare for mass production of the smaller tablet. The screen makers include LG Display of South Korea & Taiwan-based AU Optronics. A smaller tablet could help AAPL company maintain its dominance in a market that keeps getting more crowded. Competitors include Samsung Electronics & Amazon.com (AMZN). In addition, Microsoft (MSFT), Dow stock, & Google (GOOG) recently unveiled tablets. Last year, the iPad held a 62% share of the world-wide market, according to market-research firm IHS iSuppli, which expects overall tablet sales this year to surge 85% to 127M units. As the market continues to expand, consumers' choices, in size, technical specifications & price, are growing more varied. Last week, GOOG started taking orders for the Nexus 7, a tablet device with a 7" screen that will sell for $199. That matches the price of AMZN Kindle Fire, which came out last year & also has a 7" screen. AAPL rose $10.53.
Apple Said to Plan Smaller IPad to Vie With Google Nexus
Apple (AAPL)
US retailers' same-store sales in Jun nearly matched estimates, with luxury chains such as Saks (SKS) & discounters like TJX (TJX) topping expectations while stores targeting middle-income consumers trailing projections. Same-store sales at the more than 20 companies tracked by Retail Metrics rose 0.3%, compared with the 1% average estimate, follow a 7.2% increase last year. Consumers may have been spooked by the unemployment rate staying above 8%, sending many to discount chains such as TJX, which posted a 7% sales gain. At the same time, luxury consumers have continued to spend with the stock market still up for the year. TJX, which owns discount stores TJ Maxx & Marshalls, beat estimates for a 3.7% sales increase. The company said EPS this year may be as much as $2.39, up from a previous forecast for a maximum of $2.37. Same-store sales at Limited Brands (LTD), the parent company of Victoria’s Secret, gained 7% beating the average estimate of 2.6% & sales at SKS rose 6%, topping the 4.2% estimate. But sales at Target (TGT & a Dividend Aristocrat) rose 2.1%, falling short of the 2.8% forecasted gain, & Macy's (M), the 2nd-biggest department-store chain, posted a modest 1.2% increase, missing the 2.3% estimate. Macy’s said in a statement that the “stagnant” economy & reduced spending from tourists hurt sales.
Retailers’ June U.S. Sales Little Changed While Luxury, Discounters Gain
Markets were nervous awaiting the big jobs number tomorrow. Expectations are for about 90-95K new jobs to be added, far below the 200K+ numbers that were common in Q1. The rate cuts in Europe & Asia (plus another one in Kenya) may not have much effect on stimulating economies. Bulls are hoping for a pleasant surprise in the jobs number, but recent signals are not encouraging (i.e. jobless claims data). But Dow is hanging in there, very near the highs since mid May. Aloca (AA), a Dow stock, on Mon will be the first to report earnings. Analysts are looking for a meager 6¢, down from 32¢ last year.
Dow Jones Industrials
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