Stocks opened the week with churning action as the Dow and NASDAQ traded both sides of the ledger. The Dow closed the day off 34 points at 17,705 on lighter trading volume. IBD says that markets are now under pressure.
In a move that is sure to activate taste buds, German owned Luxembourg-based private equity firm JAB announced it was buying North Carolina based Krispy Kreme Donuts for $1.35 billion. JAB recently purchased Keurig Coffee and holds stakes in Pete’s Coffee as well. With this latest move JAB is looking to expand into the fast growing breakfast segment in the US thereby increasing the competition with Starbucks and McDonalds. Krispy Kreme’s stock was up 24% on the news making it almost as sweet as those “melt in your mouth” donuts they make.
Markets in China were off hard thanks to weak import and export data while German manufacturing came in better than expected sending the DAX higher. Greece voted on a new austerity budget but along with it plans to ask for debt relief at meetings this week with the EU.
WTI oil fell almost 3% as traders assessed the combined effects of the fire in Canada and a continued build in US stockpiles. The fires in Alberta have caused Canadian production to fall by about one third or one million barrels per day and that’s a lot of loonies left on the table. WTI crude fell 2.8% to $43.38 a barrel.
Gold fell as the US dollar gained strength and the metal failed last week to break above $1,300 an ounce. Gurus like Jeff Gundlach, Denis Gartman and the good folks over at ABM Amero feel that as central banks lean towards “easy money” and keeping rates low, gold and silver could continue to creep higher over the long term with target prices close to the $1,450 an ounce range. While these people could be right it is important to remember that gold is risky and could go the other direction. Gold today finished down $29.50 an ounce to $1,264.50.