Higher markets on prospects for continued low interest rates

Dow gained 83 (closing below the highs), advancers over decliners 2-1 & NAZ added 22.  The MLP index went up 3+ to the 265s & the REIT index surged 8+ to the 338s.  Junk bond funds edged higher & Treasuries traded lower.  Oil climbed higher, but AM gains were pared, & gold pulled back.

AMJ (Alerian MLP Index tracking fund)

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CL.NYM

....Crude Oil May 16

....38.32

...0.04

(0.1%)

Boeing, a Dow stock, will eliminate 4K jobs in its commercial airplanes division by the middle of this year & another roughly 550 jobs in a division that conducts flight & lab tests.  The planemaker will reduce 1.6K positions in the commercial airplanes division thru voluntary layoffs, while the rest of the cuts are expected to be completed by leaving open positions unfilled.  "While there is no employment reduction target, the more we can control costs as a whole the less impact there will be to employment," a spokesman said.  Job cuts, which will include hundreds at executive & managerial positions, will not be done thru involuntary layoffs.  The company will also cut about 10% of approximately 5.7K jobs in its test & evaluation division, which conducts flight & lab tests.  The stock fell 2.30.  If you would like to learn more about BA, click on this link:
club.ino.com/trend/analysis/stock/BA?a_aid=CD3289&a_bid=6ae5b6f7

Boeing to Cut More Than 4,500 Jobs

Boeing (BA)

US cruise operator Carnival reported a better-than-expected quarterly profit, helped by higher prices & lower fuel costs.  Revenue rose 3.4% to $3.65B, marginally beating average estimates of $3.63B.  CCL also raised the lower end of its full year EPS forecast to $3.20-$3.40 from its previous range of $3.10-$3.40.  EPS tripled to 18¢, for its Q1, from 6¢ a year earlier.  Excluding items, EPS was 39¢, beating the estimate of 32¢.  The stock rose 2.73.  If you would like to learn more about CCL, click on this link:
club.ino.com/trend/analysis/stock/CCL?a_aid=CD3289&a_bid=6ae5b6f7

Carnival Reports First Revenue Rise in Five Quarters

Carnival (CCL)

Microsoft's, a Dow stock, latest version of Windows operating system has 270M active users 8 months after launch.  The number represents a solid start for Windows 10 after the tepid reaction to its predecessor, Windows 8.  Getting its Windows strategy right is a key part of its plans to stay relevant in a mobile-centric world.  One reason for the rapid take-up is that Windows 10, released in Jul, is free for individual consumers who download it during its first year.  Enterprise customers must pay for Windows 10.  An anniversary upgrade to be released this summer will also be free for users already running Windows 10.  The giveaway is effectively an admission by the company that few individuals are willing to pay for software, & represents a shift to a strategy embraced by most tech startups of attracting as many users as possible & nailing down how to make money later.  MSFT laid out its business case last year: the more consumer devices run on Windows, the more potential targets it gains for advertising sales & for its own paid-for applications & services.  The launch was aiming for 1B devices running Windows 10 within a few years.  Technology research firm IDC is forecasting that smartphones running Windows will account for only 1.6% of the global market this year.  The stock climbed 34¢.  If you would like to learn more about MSFT, click on this link:

club.ino.com/trend/analysis/stock/MSFT?a_aid=CD3289&a_bid=6ae5b6f7

Microsoft's Windows 10 reaches 270 million users, no mobile numbers

Microsoft (MSFT)

Stocks had another good day.  Optimism from the thought that Janet will extend low interest rates for months, if not longer, are bringing out buyers.  Tomorrow closes out Q1 which can bring out volatility when money managers adjust books for appearance's sake.  Already Dow is up 10% from its low last month, nothing short of an eye popping advance, & is up 300 in Q1.  Not bad after the ugly start early this year.

Dow Jones Industrials

 

 

Markets extend rally on Yellin's dovish comments

Dow shot up 129, advancers over decliners 5-2 & NAZ gained 47.  The MLP index jumped 7+ to the 268s & the REIT index soared 10 to 340.  Junk bond funds climbed higher & Treasuries retreated with a rising stock market.  Oil is heading back up towards 40 (see below) while gold slid lower.

AMJ (Alerian MLP Index tracking fund)

CL.NYM

...Crude Oil May 16

...39.13

...0.85

(2.2%)

GC.CMX

...Gold Apr 16

......1,232.90

...2.90

(0.2%)

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Companies took on 200K workers in Mar, adding to evidence of a firming labor market.  The increase in employment followed a revised 205k gain the prior month, according to ADP Research Institute.  The forecast called for a 195k advance.  Persistent hiring will be critical in sparking bigger gains in the household spending that makes up the bulk of a economy beset by struggling overseas demand.  “The job market continues on its amazing streak,” Moody's Analytics said (Moody's produces the figures with ADP).  “The only industry reducing payrolls is energy, as has been the case for over a year. All indications are that the job machine will remain in high gear.”  Goods-producing industries, which include manufacturers & construction companies, increased headcount 9K.  Employment in construction rose 17K, while factories added 3K jobs.  Trade, transportation & utilities hired 42K workers, the most since Jun & payrolls at service providers advanced 191K.

Companies employing more than 500 or more workers added 39K jobs.  Medium-sized businesses, with 50-499 employees, took on 75K & the smallest companies increased payrolls by 86K.  The ADP report is based on data from businesses with almost 24M workers on their combined payrolls.

ADP Says Payrolls at Companies in U.S. Rose 200,000 in March

German inflation unexpectedly climbed above zero in Mar, a sign that domestic demand & ECB stimulus may be starting to spur price gains.  Consumer prices rose 0.1% from the prior year, data from the Federal Statistics Office.  That’s higher than the estimate of zero & compares with a rate of minus 0.2% in Feb.  Prices rose 0.8% from the previous month.  Budding inflation in Europe's largest economy will come as welcome news to monetary-policy makers, who are trying to fuel price pressures in the 19-nation euro area.  ECB pres Mario Draghi announced additional stimulus in Mar, the latest stage in the central bank's war to offset weak demand & global headwinds.  Before the report, economists projected that euro-area inflation stood at minus 0.1% in Mar, compared with a minus 0.2% reading the prior month.  In Mar, the ECB predicted inflation in the region would accelerate to 1.3% in 2017 & 1.6% in 2018.  The goal is to reach medium-term inflation of just under 2%.

German Inflation Rate Turns Positive in Sign of Euro-Area Pickup

Oil edged up to near $40 per barrel as a weaker $ spurred interest in riskier assets & the International Energy Agency said expectations for a deluge of oil from Iran were misplaced.  The $ index fell, after slipping to an 8-day low in the previous session on dovish comments by Janet Yellen about possible interest rate rises.  A weaker $ makes greenback-denominated commodities cheaper for holders of other currencies.  Oil prices fell about 3% in the previous session after Kuwait & Saudi Arabia said they would resume production at the jointly operated 300K-barrels-per-day Khafji field even as oil producers plan to meet on Apr 17 to consider an output freeze.  The International Energy Agency, which oversees energy policies of industrialized nations, forecasts the global stock build to continue this year.  But it said on today Iran was not adding as many barrels into the market as expected despite the easing of intl sanctions in Jan.

U.S. Crude Rises With Riskier Assets on Weak Dollar

Stocks are closing out Q1 in a rally mode. Much of the enthusiasm is from Janet Yellin's comments about going easy on raising interest rates.  That probably means interest rate hikes are finished for the rest of the year.  Dow is up over 300 in Q1 & within striking distance of setting a new record.  Hard to believe given the drab economic data behind it. 

Dow Jones Industrials