Dow dropped 101, decliners over advancers a big 4-1 & NAZ fell 37. The MLP index gave back 2+ to 300. Junk bond funds drifted lower & Treasuries saw more selling. Oil declined to the 65s & gold was flattish at 1342.
AMJ (Alerian MLP Index tracking fund)
Treasuries extended a selloff that's taken yields to the highest since early 2014 as traders gear up for a hectic week of data & policy announcements. The $ climbed and most stocks slumped as the €, Swiss franc, ¥ & £ all retreated. The greenback advanced after capping a 7th week of losses on Fri & US stocks opened lower. The ¥ weakened as the Bank of Japan downplayed Governor Haruhiko Kuroda's comments on stronger inflation & the £ declined as pressure built on Prime Minister Theresa May over Brexit. The € retreated as German bonds dropped for a 4th day, while the Stoxx Europe 600 Index inched lower after the MSCI Asia Pacific Index edged down earlier. Janet Yellen's final policy meeting as Federal Reserve chair will be the main focus of investor attention in what's shaping up to be another active week for markets still finding their feet after the recent $ selloff. There's a string of fresh economic data due, as well as a State of the Union address from Pres Trump & earnings releases from the biggest tech companies. US oil fell, though it's at about its strongest level in 5 months relative to global benchmark Brent crude as a weaker $ & falling stockpiles boost the American marker. Metals advanced amid optimism over global growth & the impact of the softer greenback, with zinc soaring to the highest level in more than a decade.
Treasuries Slide, Dollar Gains as Busy Week Begins: Markets Wrap
US consumer spending rose at a solid pace in Dec after an upwardly revised advance a month earlier as shoppers splurged during the holiday season. While incomes also rose, the saving rate fell to a fresh 12-year low. Purchases, which account for about 70% of the economy, climbed 0.4% after a revised 0.8% advance, Commerce Dept figures showed, & matched the forecast. Incomes also rose 0.4% as worker pay climbed the most in 3 months. The data are in sync with a report last week that showed faster Q4 consumption, which put the biggest part of the economy on a firm footing entering 2018. In addition to low borrowing costs & steady hiring, Americans will benefit from lower tax rates. A pickup in wages would provide further impetus for spending. The Fed's preferred inflation gauge, tied to consumption, rose 0.1% in Dec from the previous month & 1.7% from a year earlier. Inflation has mostly missed the central bank's 2% target since 2012. Excluding food & energy core prices climbed 0.2%, matching the estimate. The core was up 1.5% from Dec 2016. While inflation remains below the Fed's goal, officials are expected to keep raising rates gradually in 2018. Investors project that policy makers will raise rates 3 times this year, possibly starting as soon as Mar. Central bank officials are meeting Tues & Wed.
US auto sales in Jan likely rose 0.8% from the same month in 2017 as automakers continued offering high consumer discounts to sell vehicles, industry consultants JD Power & LMC Automotive said. "The challenge (for automakers) in 2018 will be maintaining incentive discipline, coming off a year when incentive spending per unit reached the highest level ever recorded," Thomas King, senior VP of data & analytics at JD Power, said. Jan US new vehicle sales will likely be about 1.153M units, an increase of around 0.8% from 1.141M units a year earlier, the consultancies said. The forecast was based on the first 16 selling days of Jan. Automakers will release sales results for the month on Thurs. US new vehicle sales fell 2% in 2017 to 17.23M units after hitting a record high in 2016 & are expected to drop further in 2018 as interest rates rise & more late-model used cars come back to dealer lots to compete with new ones. LMC said it expects full-year 2018 U.S. new vehicle sales to hit 17M units. The seasonally adjusted annualized rate for Jan should be 17.1M vehicles, down nearly 2% from 17.4M units in the same month in 2017, the consultancies said. Retail sales to consumers, which do not include multiple, lower-margin fleet sales to rental agencies, businesses & gov, were set to rise a little over 1% in Nov. The average discount per vehicle in Jan hit $3733, an record for the month.
This will be a big week for earnings, major tech company will be reporting. With expectations high, it is difficult for favorable surprises. Janet will have her last meeting at the Fed & the it is expected to be routine. Trump's speech can move markets, one way or the other. Gold has had a tough week but is holding even while stocks are sold today
Dow Jones Industrials
AMJ (Alerian MLP Index tracking fund)
| CL=F | Crude Oil | 65.58 | -0.56 | -0.9% |
| GC=F | Gold | 1,341.60 | -10.50 | -0.8% |
Treasuries extended a selloff that's taken yields to the highest since early 2014 as traders gear up for a hectic week of data & policy announcements. The $ climbed and most stocks slumped as the €, Swiss franc, ¥ & £ all retreated. The greenback advanced after capping a 7th week of losses on Fri & US stocks opened lower. The ¥ weakened as the Bank of Japan downplayed Governor Haruhiko Kuroda's comments on stronger inflation & the £ declined as pressure built on Prime Minister Theresa May over Brexit. The € retreated as German bonds dropped for a 4th day, while the Stoxx Europe 600 Index inched lower after the MSCI Asia Pacific Index edged down earlier. Janet Yellen's final policy meeting as Federal Reserve chair will be the main focus of investor attention in what's shaping up to be another active week for markets still finding their feet after the recent $ selloff. There's a string of fresh economic data due, as well as a State of the Union address from Pres Trump & earnings releases from the biggest tech companies. US oil fell, though it's at about its strongest level in 5 months relative to global benchmark Brent crude as a weaker $ & falling stockpiles boost the American marker. Metals advanced amid optimism over global growth & the impact of the softer greenback, with zinc soaring to the highest level in more than a decade.
Treasuries Slide, Dollar Gains as Busy Week Begins: Markets Wrap
US consumer spending rose at a solid pace in Dec after an upwardly revised advance a month earlier as shoppers splurged during the holiday season. While incomes also rose, the saving rate fell to a fresh 12-year low. Purchases, which account for about 70% of the economy, climbed 0.4% after a revised 0.8% advance, Commerce Dept figures showed, & matched the forecast. Incomes also rose 0.4% as worker pay climbed the most in 3 months. The data are in sync with a report last week that showed faster Q4 consumption, which put the biggest part of the economy on a firm footing entering 2018. In addition to low borrowing costs & steady hiring, Americans will benefit from lower tax rates. A pickup in wages would provide further impetus for spending. The Fed's preferred inflation gauge, tied to consumption, rose 0.1% in Dec from the previous month & 1.7% from a year earlier. Inflation has mostly missed the central bank's 2% target since 2012. Excluding food & energy core prices climbed 0.2%, matching the estimate. The core was up 1.5% from Dec 2016. While inflation remains below the Fed's goal, officials are expected to keep raising rates gradually in 2018. Investors project that policy makers will raise rates 3 times this year, possibly starting as soon as Mar. Central bank officials are meeting Tues & Wed.
U.S. Consumer Spending Rose in December, Saving Rate Dipped
US auto sales in Jan likely rose 0.8% from the same month in 2017 as automakers continued offering high consumer discounts to sell vehicles, industry consultants JD Power & LMC Automotive said. "The challenge (for automakers) in 2018 will be maintaining incentive discipline, coming off a year when incentive spending per unit reached the highest level ever recorded," Thomas King, senior VP of data & analytics at JD Power, said. Jan US new vehicle sales will likely be about 1.153M units, an increase of around 0.8% from 1.141M units a year earlier, the consultancies said. The forecast was based on the first 16 selling days of Jan. Automakers will release sales results for the month on Thurs. US new vehicle sales fell 2% in 2017 to 17.23M units after hitting a record high in 2016 & are expected to drop further in 2018 as interest rates rise & more late-model used cars come back to dealer lots to compete with new ones. LMC said it expects full-year 2018 U.S. new vehicle sales to hit 17M units. The seasonally adjusted annualized rate for Jan should be 17.1M vehicles, down nearly 2% from 17.4M units in the same month in 2017, the consultancies said. Retail sales to consumers, which do not include multiple, lower-margin fleet sales to rental agencies, businesses & gov, were set to rise a little over 1% in Nov. The average discount per vehicle in Jan hit $3733, an record for the month.
U.S. January auto sales seen up slightly -J.D. Power and LMC
This will be a big week for earnings, major tech company will be reporting. With expectations high, it is difficult for favorable surprises. Janet will have her last meeting at the Fed & the it is expected to be routine. Trump's speech can move markets, one way or the other. Gold has had a tough week but is holding even while stocks are sold today
Dow Jones Industrials
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