Monday, July 17, 2017

Markets fluctuate while waiting for earnings

Dow lost 4, advancers over decliners 4-3 & NAZ added 12.  The MLP index was off fractionally in the 303s & the REIT index gave back a fraction in the 349s.  Junk bond funds were little changed & Treasuries crawled higher.  Oil was pennies lower in the 46s & gold climbed 6 to 1234 (negative bets on the stock market).

AMJ (Alerian MLP Index tracking fund)

CL=FCrude Oil46.40

GC=FGold   1,234.10

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Manufacturing in NY state grew for a 2nd month in Jul but at a much slower pace, as new orders & shipments both slipped.  The Federal Reserve Bank of NY says its Empire State manufacturing index dropped to 9.8 from 19.8 in Jun (any reading above zero signals expansion).  The Jul drop comes after the index reached a 2-year high in Jun.  Still, the reading is at a mostly healthy level.  While the index measures sentiment among NY firms, it is closely followed because it provides an early read on factory output nationwide.  A measure of new orders dropped to 13.3 from 18.1, while a gauge of shipments dropped to 10.5 from 22.3.  Hiring also slowed sharply.

New York manufacturing activity slows sharply in July

China's economy grew faster than expected in Q2 as industrial output & consumption picked up & investment remained strong, the National Bureau of Statistics said.  The economy grew 6.9% from a year earlier, the same rate as Q1, but analysts expect slower growth over the rest of the year as policymakers seek to reduce financial risk.  Analysts had expected the economy to expand 6.8% in Q2.  On a quarterly basis, growth picked up to 1.7% from 1.3% in Q1, in line with expectations.  Growth in China's economy this year has beaten expectations as exports recover & property construction remains strong, though many analysts expect the world's 2nd-largest economy to lose steam later in the year as policy measures to rein in red-hot housing prices and a rapid build-up in debt take a greater toll on growth.

China 2Q GDP growth tops forecasts

A Rep push to pass a sweeping health-care law experienced another setback as Senate leaders said they would delay a vote set for this week, sparking fresh doubts about whether congressional leaders can muster support for a marquee GOP policy priority.  Pres Trump & party leaders were hoping the Senate would vote this week on a plan to overturn parts of the 2010 ObamaCare & make other changes to the health system.  But Senate leaders announced a delay after Sen John McCain said he would recover in Arizona from surgery removing a blood clot above his left eye, leaving supporters short of the votes needed to move ahead with the bill.  The delay prolongs the uncertainty over the bill's prospects.  Meantime, insurance companies, state governors & congressional critics continued to line up against the bill, with their objections running the ideological gamut.  Governors, including some Reps, have said they are concerned about its proposed cuts to the growth of Medicaid spending, while 2 top insurance industry groups objected to a change to the GOP bill proposed by Sen. Ted Cruz of Texas as "unworkable."  Senate Majority Leader Mitch McConnell, who can't afford more than 2 defections among the 52 GOP senators, has been balancing demands by more-centrist lawmakers for additional money for Medicaid & consumer subsidies with a push by conservatives to pare back requirements on insurers in order to lower premiums for younger, healthier people.

GOP push to pass health-care law faces new setback

There is very little for the stock market to do while waiting for earnings.  Expectations are higher, so any surprises will tend to be negative.  Chaos in DC continues, especially while the new healthcare legislation lies in limbo.  That is a negative sign for getting approval by the Senate.  Bigger picture is the popular stock averages remain near record levels.  The bulls are keeping their fingers crossed.

Dow Jones Industrials

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