Thursday, April 27, 2017

Markets fluctuate as Nasdaq reaches a new record high

Dow gained 7, advancers barely ahead of decliners & NAZ went up 19.  The MLP index lost 2+ to the 318s & the REIT index was fractionally higher to 350.  Junk bond funds hardly budged & Treasuries were even.  Oil sank 1 to the low 48s & gold prices were little changed.

AMJ (Alerian MLP Index tracking fund)

stock chart

3 Stocks You Should Own Right Now - Click Here!

The ECB kept interest rates unchanged at record lows & maintained its quantitative-easing program as officials monitor the economic recovery & the risk of political turbulence in the region.  The Governing Council reaffirmed its decision that asset purchases will continue at a monthly pace of €60B ($65B), down from €80B prior to Apr.  Policy makers left the main refinancing rate at zero along with the deposit rate & marginal lending rate at minus 0.4% & 0.25% respectively (as predicted).  The ECB also said rates will stay at present or lower levels for an extended period & well past the horizon of net asset purchases, which remain flexible in size & duration if the outlook becomes less favorable.  Political risks have dominated much of the year so far, leaving the ECB cautious even as data point to a strengthening recovery.  With one of those risks, a euro-skeptic victory in the French presidential election, looking less likely after Sunday's first round vote, officials may now have more confidence in the economy.  Some policy makers have already pushed for discussions around an eventual exit strategy, a debate Draghi has tried to stymie for now. 

ECB Keeps Policy Settings Unchanged Awaiting Political Clarity

Filings for US unemployment benefits rose to a 4-week high last week, interrupting a run of subdued firings, a Labor Dept report showed.  Jobless claims increased 14K to 257K (forecast was for 245K).  The number of people continuing to receive jobless benefits rose 10K to 1.99M.  The 4-week average of claims, a less volatile measure than weekly data, was little changed at 242K.  Even with the increase, unemployment filings remain at a relatively low level & are on par with the 1970s, when employers were more focused on adding & retaining workers than on dismissing them in a tight job market.  Also an unusually late Easter holiday this year might have affected the data in recent weeks.  The unemployment rate among people eligible for benefits remained at 1.4%.

Jobless Claims in U.S. Rise to Four-Week High
Orders for durable goods rose less than forecast in Mar as demand for automobiles, fabricated-metal products & machinery all declined, Commerce Dept data showed.  Bookings for goods meant to last at least 3 years rose 0.7% (the forecast was for a 1.3% rise) after a 2.3 % Feb advance that was higher than previously estimated.  Excluding transportation-equipment demand, which is volatile, orders fell 0.2%, the first decline since Jun, after a 0.7% rise.  Orders for non-military capital goods excluding aircraft rose 0.2% (versus a projection for a 0.5% gain).  Shipments of those non-defense, non-aircraft capital goods, which are used to calculate GDP, rose 0.4% last month after a 1.1% increase in Feb.  The figures indicate that the slowdown in auto demand from consumers & tepid business investment weighed on manufacturers & sapped some economic momentum at the end of Q1.  Traction in tax-reform legislation, following the Trump administration's release of a plan this week, might hearten businesses that have long delayed spending amid tighter regulations since the last recession.  While figures due tomorrow may show GDP an annual growth rate around 1% in the Q1, a rebound from that pace is expected in Q2.

U.S. Durable-Goods Orders Rose Less Than Forecast in March
Stocks are back to stumbling around as they wait for more earnings reports.  In addition small items such as the possible gov shutdown tomorrow, unanswered questions about the new tax plan & unknowns surrounding North Korea are dark clouds hanging over the stock market.  NAZ keeps hitting new record highs while the Dow hasn't been able to reach a new record.  Activity in DC will be center stage tomorrow.

Dow Jones Industrials

stock chart

No comments: