Dow gained 87, advancers over decliners 3-1 & NAZ added 21. The MLP index rose 2 to the 432s & the REIT index went up 3+ to the 343s. Junk bond funds did little & Treasuries were higher, taking the yield on the 10 year Treasury well below 1.9%. Oil is back over 50 & gold rose above 1200.
AMJ (Alerian MLP Index tracking fund)
The pace of growth in the US services sector fell in Mar to its lowest level in 3 months but exports rose to the highest level in over 2 years, according to an industry report. The Institute for Supply Management said its services index fell to 56.5 last month from 56.9 in Feb. The reading was in line with forecasts. The Mar reading was the lowest since a matching reading last Dec. A reading above 50 indicates expansion in the sector. The exports index rose, however, to 59.0 from 53.0 in Feb to mark the highest reading since Feb 2013. The employment index also rose, hitting its highest level since last Oct, with a reading of 56.6, slightly above 56.4 in Feb. Its index of business activity fell, meanwhile, to 57.5 from 59.4 in Feb & marking the lowest reading in a year. The rise in the exports index came despite the dollar's surge against a basket of major currencies of more than 20% since last May. A strong dollar typically crimps demand for US exports & reduces the value of overseas sales when they are translated back into US dollars.
Refiners are poised to make gasoline at a record pace this year, keeping the biggest US crude glut in more than 80 years from overflowing storage. They’re enjoying the best margins in 2 years as they finish seasonal maintenance of their plants before the summer driving season. They’ll increase output to meet consumer demand & have added more than 100K barrels a day of capacity since last summer, when they processed the most oil on record. Booming crude production expanded inventories this year by 86M barrels to 471M, the highest level since 1930. Storage space may run out. What looks like an oversupply to banks is turning into an all-you-can-eat buffet for those making gasoline & diesel fuel. West Texas Intermediate oil already has lost more than half its value since Jun. Inventories surged as output rose 71% over the past 5 years as drillers used techniques like horizontal drilling & hydraulic fracturing to tap previously inaccessible oil in shale rock layers. In Cushing, Oklahoma, the delivery point for WTI futures, supplies have more than tripled since early Oct to a record 59M barrels. Last July, refiners processed 16.5M barrels of crude a day, the highest level in monthly Energy Department data going back to 1961. Refining margins in Mar have averaged $28.09 a barrel, the most in 2 years. MLPs have increased pipeline capacity from Cushing to the Gulf Coast to more than 1.5M barrels a day from nothing at the beginning of 2012. Shippers may use more of that space in Apr after differentials between crudes on the Gulf Coast & Cushing widened to the highest level in more than a year.
Greece is stepping up efforts to find allies in the US & Russia as
cash reserves run dry while an agreement on additional funding from the
country’s euro partners still looks like weeks away. Finance Minister Yanis Varoufakis met with IMF Managing Director Christine Lagarde & reiterated
Greece will repay her institution about €450M ($494M)
on Thurs. He is scheduled to meet with a US Treasury
undersecretary for intl affairs before Prime
Minister Alexis Tsipras heads to Moscow a day later to discuss food
exports. Greece & euro-area authorities are negotiating a package of
measures proposed by the gov to repair the economy, a condition
for the release of more bailout funds. A meeting of euro-region finance ministers on Apr 24 must reach an
initial accord on Greece, Varoufakis said. The ministers & central bankers are scheduled
to hold informal discussions that day in the Latvia. The country won’t default on payments to the IMF this week even as a lack of bailout disbursements has left gov coffers nearly empty, according to a minister. Prime Minister Tsipras meanwhile will visit Moscow, with Russia ready to discuss easing restrictions on Greek food products .
Russia isn’t considering financial assistance to Greece.
Stocks are doing well without a lot of significant news to back up the rise. Greek debt refinancing remains in limbo where it could be for days if not weeks. Alcoa (AA) earnings, the first major company to report for Q1, should be announced after the market close on Wed. The forecast is for EPS to rise from 9¢ to 25¢ for this commodity business. Dow is up 70 so far in Apr.
Dow Jones Industrials
AMJ (Alerian MLP Index tracking fund)
| CLK15.NYM | Crude Oil May 15 | 50.44 |  1.30 | (2.7%) |
| GCJ15.CMX | Gold Apr 15 | 1,219.70 | 18.80 (1.6%) |
The pace of growth in the US services sector fell in Mar to its lowest level in 3 months but exports rose to the highest level in over 2 years, according to an industry report. The Institute for Supply Management said its services index fell to 56.5 last month from 56.9 in Feb. The reading was in line with forecasts. The Mar reading was the lowest since a matching reading last Dec. A reading above 50 indicates expansion in the sector. The exports index rose, however, to 59.0 from 53.0 in Feb to mark the highest reading since Feb 2013. The employment index also rose, hitting its highest level since last Oct, with a reading of 56.6, slightly above 56.4 in Feb. Its index of business activity fell, meanwhile, to 57.5 from 59.4 in Feb & marking the lowest reading in a year. The rise in the exports index came despite the dollar's surge against a basket of major currencies of more than 20% since last May. A strong dollar typically crimps demand for US exports & reduces the value of overseas sales when they are translated back into US dollars.
U.S. Service Sector Growth Slides in March
Refiners are poised to make gasoline at a record pace this year, keeping the biggest US crude glut in more than 80 years from overflowing storage. They’re enjoying the best margins in 2 years as they finish seasonal maintenance of their plants before the summer driving season. They’ll increase output to meet consumer demand & have added more than 100K barrels a day of capacity since last summer, when they processed the most oil on record. Booming crude production expanded inventories this year by 86M barrels to 471M, the highest level since 1930. Storage space may run out. What looks like an oversupply to banks is turning into an all-you-can-eat buffet for those making gasoline & diesel fuel. West Texas Intermediate oil already has lost more than half its value since Jun. Inventories surged as output rose 71% over the past 5 years as drillers used techniques like horizontal drilling & hydraulic fracturing to tap previously inaccessible oil in shale rock layers. In Cushing, Oklahoma, the delivery point for WTI futures, supplies have more than tripled since early Oct to a record 59M barrels. Last July, refiners processed 16.5M barrels of crude a day, the highest level in monthly Energy Department data going back to 1961. Refining margins in Mar have averaged $28.09 a barrel, the most in 2 years. MLPs have increased pipeline capacity from Cushing to the Gulf Coast to more than 1.5M barrels a day from nothing at the beginning of 2012. Shippers may use more of that space in Apr after differentials between crudes on the Gulf Coast & Cushing widened to the highest level in more than a year.
Record Gasoline Output to Curb Biggest U.S. Oil Glut in 85 Years
Greeks Pursue Talks on All Fronts as Tsipras Heads to Russia
Stocks are doing well without a lot of significant news to back up the rise. Greek debt refinancing remains in limbo where it could be for days if not weeks. Alcoa (AA) earnings, the first major company to report for Q1, should be announced after the market close on Wed. The forecast is for EPS to rise from 9¢ to 25¢ for this commodity business. Dow is up 70 so far in Apr.
Dow Jones Industrials
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