S&P 500 FINANCIALS INDEX
| Value | 196.53 |  |
| Change | -0.50 (-0.3%) |
The Alerian MLP Index rose .67 to the 209s, another high since early May. Some think hedge fund & money managers are buying to put them in their portfolios at qtr end. The problem is, that money is fickle. The REIT index fell 1+ to the 198s. Junk bond funds were mixed to higher. The VIX, volatility index, was up 1 to the 29s. The biggest story which is still under reported is yields on Treasuries are falling to new lows (since they recovered from record lows in early 2009). The yield on the 10-year Treasury bond fell 6 basis points to 3.05%. It's a sad state of affairs when investors want to lock up money for 10- years at 3% instead of buying stocks!
Alerian MLP Index --- 2 weeks
Dow Jones REIT Index --- 2 weeks
VIX --- 2 weeks
10-Year Treasury Yld Index - 2 weeks
Oil fell on more concerns about slowing economies, especially in Europe. But gold is strong, Frightened money not buying into Treasuries is going into a gold which should be in more portfolios.
| CLQ10.NYM | ...Crude Oil Aug 10 | ...77.90 | ... 0.96 .......(1.2%) |
| GCM10.CMX | ...Gold Jun 10 | ...1,256.80 | ... 0.40 .......(0.0%) |
Americans spent more in May but not enough to speed along the economic recovery. Consumer spending rose 0.2% last month after no change in Apr according to the Commerce Dept. Incomes rose for the 6th time in 7 months, boosting household finances & potentially providing fuel for greater future spending. However, money spent on goods declined. The increase came from spending on services, much of that likely the result of Americans using more electricity as the weather warmed up. Incomes rose 0.4%. The savings rate, or the percentage of income that wasn't spent, bumped up to 4%. Wages & salaries rose 0.5% last month, paychecks gained from recent increases in the average work week as well as temporary census hiring. Consumers aren't driving the current recovery. Instead, it has depended more on business spending & exports.
Consumer Spending in U.S. Increased in May More Than Forecast
Rise in incomes - 1 year
Over the weekend, G-20 leaders responded to the European debt crisis with deficit-reduction targets & also agreed to pursue higher capital requirements for banks once economic recoveries take hold. They hope to halve deficits by 2013 & start to stabilize debt-to-output ratios by 2016. But nations can move at their own pace as they fulfill existing stimulus plans. The US is pushing to focus on spurring growth, while the UK & Germany are already tightening spending to bolster investor confidence. The agreement still amounted to a compromise without any strength (the US continues to spend like a drunken sailor).
G-20 Responds to European Debt Crisis With Deficit-Cutting Goal
BP (BP) repurchased $37B of its stock between 2005-8. That stock investment is now down $22B, ugh! Now BP may be forced to sell some of that treasury stock to boost equity which is being depleted with enormous losses. Meanwhile, Apple (AAPL) sold 1.7M iPhones in the US, Britain, France, Germany & Japan. BP is up a fraction near multi year lows while AAPL slipped a fraction the 266s near historic highs.
BP Loses $22 Billion in Legacy of Share Buybacks
BP --- 2 weeks
Apple --- 2 weeks
The death of Senator Byrd could put a crimp in the plans for passing more legislation. Financial regulation (bank overhaul) is almost ready for a vote, but now the future for that & other bills is less certain. The € is little changed at $1.23½ & money managers are concerned about its future, looking for more slipping & sliding. The G-20 meeting accomplished little other than pointing out the differences between the US & Europe in managing the recovery (if that's what it is). More lows in Treasury yields will bring selling to stock markets.
Dow Jones Industrials --- 2 weeks
